Health care (NYSEARCA:XLV) was the largest hedge fund net sector weight at the beginning of the fourth quarter.

With a 17% of total net exposure and the largest “overweight” rating relative to the Russell 3000 (IWV), up 426 basis points, the health care sector (XLV) had the largest aggregate hedge fund asset allocation, according to Goldman Sachs’s Hedge Fund Trend Monitor.

Information technology (XLK), on the other hand, remained the largest underweight, down 1,212 basis points.

During the third quarter, however, hedge funds incrementally rotated away from health care (XLV) to technology, media, and telecommunications. Funds also increased their tilts to consumer discretionary (XLY) and to financials (XLF), where hedge funds currently carry the largest overweight relative to the Russell 3000 (IWV) in at least 15 years, said Ben Snider, senior strategist of U.S. portfolio at Goldman Sachs.

“The rotation away from health (XLV) care was broad-based,” he said. “Hedge funds reduced exposure to nine of the 10 health care subsectors, with the largest declines in managed healthcare, pharmaceuticals (XPH), and biotech (XBI).”