Weekly Equity Purchases Rise

Investing.com — Bank of America Securities reported that clients made modest equity purchases last week, bringing in $0.6 billion after a week of outflows.

Investors focused on both single stocks and exchange-traded funds (ETFs), with the latter experiencing larger inflows, as noted by BofA in a Tuesday briefing. Large and small-cap stocks saw positive flows, whereas mid-caps encountered outflows.

Private clients and corporations were the primary net buyers, marking the first inflows from this segment since early September. In contrast, institutional and hedge fund clients continued to offload equities for the second consecutive week.

While corporate buybacks slowed, they remained above seasonal norms as a share of S&P 500 market capitalization. Current trailing 52-week buybacks, relative to the index's market cap, are at an all-time high.

As the tax-loss selling season approaches, stock sales among institutional clients typically rise, especially before the October 31 deadline for most mutual funds to realize capital gains.

“Indeed, this group has sold stocks six of the last seven weeks,” strategists commented. Retail investors typically ramp up selling in December ahead of the 12/31 cutoff for individual investors.

BofA states its clients acquired stocks across six out of the 11 sectors last week, with Consumer Discretionary, Communication Services, and Health Care leading the inflows.

Conversely, Tech and Industrials experienced the largest outflows, with net sales of Tech reaching their highest point since August. Real Estate is on a seven-week selling streak, although BofA maintains a favorable outlook for income and quality in this sector.

Among ETFs, seven of the 11 sectors noted inflows, led by Utilities. Consumer Discretionary, Real Estate, and Health Care ETFs also drew positive attention.

Clients showed interest in both Growth and Value ETFs while unloading Blend ETFs. They preferred large-cap and broad-market ETFs but were net sellers of small and mid-cap ETFs.