Bank of America Securities Report on US Equity Inflows

Investing.com — Bank of America Securities reported that its clients were significant net buyers of US equities last week, marking the sixth consecutive week of inflows totaling $7.3 billion. This was the
third-largest inflow since 2008 and the highest since October 2022.

Investment Trends

Similar to previous weeks, both single stocks and exchange-traded funds (ETFs) saw inflows, although single stocks attracted more substantial investments. BofA indicated that most activity focused on large-cap equities, while small-cap stocks experienced more modest inflows. Institutional and retail investors were net buyers for the second consecutive week, with retail flows turning positive after a brief pause.

Conversely, hedge funds shifted to net sellers after three weeks of buying. Notably, the rolling four-week average flows for institutional clients reached their highest level in nine months.

Corporate Buybacks

Corporate client buybacks, while slowing, have remained above seasonal norms as a percentage of the S&P 500’s market cap. Year-to-date, buybacks are on track to reach a record high relative to market cap.

Sector Performance

On a sector level, clients purchased equities in six of the eleven sectors, with Technology and Communication Services (TMT) leading inflows. These sectors have experienced six and seven consecutive weeks of buying, respectively.

In contrast, the Health Care and Consumer Staples sectors faced the largest outflows. Additionally, cyclicals are beginning to attract more attention, reversing earlier trends; clients previously favored defensive sectors and sold off cyclicals leading up to the election. Post-election, buying trends have shifted toward
cyclical sectors.

BofA strategists, led by Jill Carey Hall, noted, "We see more room to run for cyclicals."

ETF flows mirrored this cyclical focus, with Energy, Materials, and Industrials leading sector inflows, while Technology ETFs experienced the most significant outflows.