Bank of America Client Activity During Election Week

During election week, Bank of America Securities clients became net buyers of US equities for the first time in five weeks, with inflows totaling $2.7 billion as the S&P 500 surged 4.7%, marking its best week in a year.

Clients purchased both individual stocks, marking the first single-stock inflows in four weeks, and exchange-traded funds (ETFs), with ETF inflows reaching their highest level in a year.

> “Despite the small-cap rally, buying was entirely in large caps (clients sold small and mid),” noted BofA strategists led by Jill Carey Hall.

Institutional and hedge fund clients led the inflows, with institutional investors seeing their first positive flows in seven weeks following substantial outflows in October linked to tax loss selling.

Hedge funds continued as net buyers for the third consecutive week, logging their largest inflows since August. Private clients, however, were net sellers, recording their highest outflows since mid-2021.

Stock purchases were seen across seven of the 11 sectors, with Technology and Health Care leading. Consumer Discretionary, last week’s best-performing sector, attracted inflows from both institutional and hedge fund clients.

Meanwhile, clients offloaded stocks in Financials, Staples, Energy, and Materials. Financials, despite a post-election rally, faced selling from all client groups and maintained its five-week selling streak.

While BofA clients sold individual Financials stocks, this sector attracted strong ETF inflows last week, the highest since February, alongside Staples and Health Care. On the other hand, Energy and Utilities ETFs faced significant outflows.

Corporate client buybacks picked up pace during the week, remaining above typical seasonal levels relative to the S&P 500's market cap. Year-to-date, corporate buybacks as a percentage of market cap are on track to reach new record highs, according to BofA.