Where do large fund managers see opportunity?

Investing.com -- Fund managers are showing renewed appetite in cyclical sectors and giving tech the cold shoulder, according to the latest Evercore ISI fund manager survey.

The survey, which polls both long-only investors and hedge fund managers, showed a notable shift in sentiment.

Long-only investors increased their exposure to materials and financials, while trimming positions in energy, real estate and communication services.

Healthcare sector, however, remains a top pick, with 38% of institutional investors overweight the sector, well above the historical average of 19%. 

Financials, meanwhile, have swung from historically underweight to overweight.

Technology, which has led the bull market, has been given the cold shoulder, with about 17% of investors overweight the sector, down sharply from its historical average of 40%, pointing to waning appetite from institutional investors.

Energy continues to divide opinion among institutional investors and hedge funds, as the latter was particularly bullish with 53% of respondents reporting longer-than-normal positions, the survey showed.

Consumer staples, a defensive play, was also a loser among hedge funds, with 38% reporting longer-than-normal position in the sector, down from 41% the prior month. 

Consumer discretionary stocks also fell out of favor with institutional investors reporting a 17% net underweight position, a stark contrast to the sector's historical 10% overweight average.

This rotation to cyclicals suggest that increasing confidence in the economic outlook as the Federal Reserve is widely expected to cut rates next month.

Evercore ISI's survey, which serves a gauge for Wall Street sentiment, provides insights into positioning across 11 major market sectors.