According to Citadel, beginning in 2026, investors have begun shifting their focus to real-economy assets like copper.
As the year begins, retail investors are jumping into the stock rotation, moving away from crowded growth bets and toward assets that have a direct connection to the actual economy.
The head of Citadel’s equity and equity derivatives strategy, Scott Rubner, identified a “meaningful shift in leadership” in an equity rotation that was expanding in the new year.
“Compared to cap-weighted benchmarks, equal-weight exposure is still gaining ground, indicating improved breadth and a more balanced contribution to returns. In a letter to clients released on Tuesday, Ruber stated, “This trend suggests that market gains are being driven by a wider set of constituents rather than a small group of megacap names.”
In 2026, the Invesco S&P 500 Equal Weight exchange-traded fund RSP has gained 2.4%, while the SPDR S&P 500 ETF Trust SPY has gained 0.6%. Meanwhile, worries about exorbitant prices and excessive expenditure on AI continue to plague big tech stocks.
Based on Citadel’s data, Rubner saw ongoing differences in the performance of growth-heavy benchmarks and real-economy assets. “Industrials and materials equities are outperforming, while commodity-linked exposures are breaking out, pointing to renewed demand for assets tied to physical supply, industrial activity and global reacceleration,” he stated.
Related: Stocks are indicating that there will be another commodities “supercycle” in 2026.
Last year, gold (GC00) and silver (SI00) recorded their highest annual gains since at least 1979, and linked stocks rose while the dollar DXY faltered amid persistent worries about how the United States will continue to finance its deficit. In the hope that the housing market would be strengthened by lower mortgage rates, retail investors also flooded into builder stocks in the latter part of last year.
According to Rubner, rotation is taking place despite generally positive index performances, which he believes suggests a strengthening market composition rather than a defensive move by investors. “Markets are increasingly rewarding breadth, cyclicality and real-asset exposure, signaling an early, but meaningful rotation away from the most crowded growth trades,” he stated, citing this graph:
Rubner also discussed retail flows in early 2026, pointing out that Citadel Securities platform activity is still “elevated,” with daily options contracts and average daily shares “tracking more than 40% above the 2020-2025 January average.” He pointed out that retail cash volumes, or the amount purchased in real stocks and ETFs rather than options, were at their highest level since 2021.
