Clients of Bank of America Securities emerged last week as the largest net sellers of US equities since 2015, unloading $7.0 billion worth of stocks. The bank said the selling spree was primarily driven by single stock transactions, while exchange-traded funds (ETFs) experienced only minor inflows.
Institutional clients led the charge in selling for the second consecutive week, with hedge funds also joining the trend for the first time in three weeks. In contrast, private clients were small net buyers, reversing their selling position from the previous week.
“Clients sold equities across all size segments (small/mid/large) with large cap outflows last week for the first time since May, but a second week of small-cap outflows despite the big recent rally,” BofA strategists said in a note.
Meanwhile, corporate client buybacks from BofA continue to surpass typical seasonal levels as a percentage of the market cap for the 19th straight week. The trailing 52-week buybacks are approaching the record highs observed in late 2019.
Sector-wise, Financials experienced the largest outflows for the second consecutive week, even though they have been a significant driver of the S&P 500 earnings per share (EPS) beat so far. The tech sector also saw substantial outflows, marking the first since May 2024. On the other hand, Communication Services continued to attract inflows.
Earnings reports for major Tech and Communication Services companies kick off this week, with the pace of AI monetization remaining “a key question,” the note states.
Only four sectors saw inflows last week, with clients buying into Discretionary, Health Care, and Energy sectors, alongside Communication Services.
BofA said clients continued to invest in Equity ETFs for the seventh week in a row, with inflows recorded across seven of the 11 ETF sectors. In contrast to single stock flows, Tech ETFs garnered the largest inflows, while Health Care ETFs saw the largest outflows.