The rotation out of AI proved a boon for the Australian marketFinancials were the surprise winners in July, can it continue? If some of the volatility in ASX-listed technology or AI momentum trades felt extreme, spare a thought for US-exposed investors. Notably, the forced liquidation of momentum AI trades inside the leveraged Situational Awareness hedge fund was, in hindsight, part of July’s broader unwind of the AI momentum trade. Some laggards in Australia, which had suffered over the last 12-months from the AI, SaaS and related sell-offs, equally rallied from the rubble. While Australia’s relative outperformance may have surprised some domestic investors, other markets outside of the USA also delivered strong returns in July.