BofA: Outflows hit $2bn as clients sell equities for fourth consecutive week

Bank of America Securities said its clients were net sellers of U.S. equities for the fourth consecutive week, with outflows totaling $2 billion, despite the S&P 500 remaining flat.

Institutional clients were the only net buyers alongside corporates for a second week, while hedge funds and private clients continued their selling streaks.

Sector-wise, Technology and Communication Services saw the most significant inflows, with the former marking its fifth week of positive flows and the latter its eighth.

Conversely, Health Care experienced substantial outflows, ranking as the tenth largest in BofA’s data history since 2008. Consumer Discretionary and Staples sectors also faced continuous outflows for the past four weeks, with Discretionary stocks showing the largest four-week average outflows since April 2022.

“But we think Discretionary is better positioned than Staples if further cracks emerge in the low income consumer segment. Our economists still see a solid consumer spending outlook despite concerns during 1Q results,” strategists at Bank of America Securities said in a note.

Equity ETFs recorded their first outflows in six weeks, particularly from Small, Mid, and Large-cap ETFs, as well as Blend ETFs.

Interestingly, while Growth and Value ETFs saw inflows for the fifth consecutive week, Discretionary ETFs experienced outflows. In contrast, Health Care ETFs had the largest inflows, a stark contrast to the outflows seen in single Health Care stocks.

Corporate client buybacks surged, exceeding typical seasonal levels for the eleventh consecutive week. Year-to-date, these buybacks represent 0.41% of the S&P 500 market cap, surpassing last year’s peak at this time of 0.34%, Bofa noted.