Mutual Funds Underweight U.S. Softlines Stocks for Three Years

Evercore ISI reports that long-term investors have maintained an underweight position in U.S. softlines stocks for three years, holding the sector at approximately 76% of its S&P 500 benchmark weighting. This structural under-ownership among the 25 largest mutual funds stems from a broader shift of capital toward technology and artificial intelligence stocks.

Positioning varies significantly across the eight covered companies. Nike is the most over-owned stock in the group, held at 157% of its index weighting. Evercore suggests this creates a difficult technical setup for the company given its current challenges in athletic apparel. In contrast, TJX Companies is held at 70% of its weighting.

Ross Stores has seen improved positioning, reaching 103% of its weighting as of June. This represents the widest advantage Ross Stores has held over TJX Companies in at least three years. Evercore maintains Ross Stores in its Top 5 Outperform group, citing expectations for accelerating same-store sales growth during the second half of 2026.