As we continue to navigate the complex landscape of the global economy, it’s important to recognize that not all sectors are created equal. While Artificial Intelligence (AI) has undoubtedly had a profound impact on various industries, there are other pockets of the US equity market that offer convex yet still bullish expressions of the economy. In this blog post, we’ll delve into three trades beyond AI that could provide valuable opportunities for investors looking to diversify their portfolios.

Trade 1: Capital Goods Ex-AI Basket (UBXXCPXA)
While AI has revolutionized industries such as healthcare and finance, it’s important to recognize that other sectors are still experiencing growth. The capital goods sector, which includes companies involved in the production of machinery, equipment, and vehicles, is one such area. By investing in a basket of capital goods stocks excluding AI companies (UBXXCPXA), investors can tap into the ongoing expansion of the US economy without being overly exposed to the AI sector.

Trade 2: Short Cycle Industrials
AI has had a significant impact on industries such as manufacturing and logistics, but it’s important to recognize that other sectors are still experiencing growth. The short cycle industrials sector, which includes companies involved in the production of goods with short product lifecycles, is one such area. By investing in stocks within this sector, investors can benefit from the ongoing expansion of the US economy without being overly exposed to the AI sector.

Trade 3: Software Outperformance Pain Trade
While AI has had a significant impact on various industries, it’s important to recognize that not all software companies are created equal. Some software stocks have seen an improvement in earnings revisions breadth, but remain highly shorted. By investing in these stocks, investors can benefit from the ongoing expansion of the US economy while also taking advantage of potential short-term market volatility.