Durable or Cyclical? Navigating the Global Equity Rotation

March 2026

After more than a decade of US equity dominance, the investment landscape shifted markedly in 2025. International equities delivered their strongest relative performance in nearly two decades, while the concentrated mega-cap technology leadership that defined prior years began to fracture. At the same time, the AI narrative evolved from a broad market tailwind into a more selective and demanding inquiry into monetization, capital discipline, and competitive durability. For institutions already holding diversified equity portfolios, the relevant question is not whether to diversify — it is whether the structure of that diversification still fits the market environment ahead. Against this backdrop, this paper examines the structural forces driving global equity rotation and what they may mean for institutional investors in 2026 and beyond.