Bank of America said its clients were modest net buyers of US equities last week, resulting in just $0.4 billion of inflows. Notably, for the first time in five weeks, inflows into ETFs surpassed those into individual stocks.
“Clients bought equity ETFs for a second consecutive week, with inflows across all styles (Growth/Value/Blend ETFs) and Large Cap/Small Cap/Broad Market ETFs; only Mid Cap ETFs saw outflows,” strategists noted.
Still, year-to-date, individual stock inflows have tripled those into ETFs.
Interestingly, corporate clients were the only group to exhibit net buying activity across all size segments of stocks (small, mid, and large). Without these inflows, other clients emerged as net sellers last week, including private clients for the seventh week in a row, hedge funds for the third week, and institutional clients marking their first week of net selling in six weeks.
Meanwhile, corporate client buybacks have soared to their fifth-highest level since 2010, continuing to exceed typical seasonal trends for the third consecutive week.
“YTD, corp. client buybacks as a percentage of S&P 500 market cap (0.35%) are above '23 highs (0.30%) at this time, and the rolling 52wk. total is the highest since mid-2020,” strategists said.
Despite positive sentiments around Financials due to Federal Reserve messaging, clients offloaded stocks in seven out of eleven sectors, with Financials and Consumer Discretionary leading the sales.
Health Care and Real Estate sectors faced the longest selling streaks, extending over the last six and five weeks, respectively.
Conversely, the Communication Services sector saw its 21st consecutive week of buying, while the Information Technology sector experienced its fourth week of inflows.
“Comm. Services continues to have the longest buying streak of any sector (21 weeks), while Tech saw its fourth week of inflows after seeing outflows most weeks YTD,” they wrote.