BofA weekly flows: Clients trigger the fourth-largest equity exodus

Bank of America Securities said its clients were net sellers of US equities for the fifth consecutive week, resulting in a total outflow of $5.7 billion. According to BofA, this marked the biggest exodus since last July “and the fourth-largest outflow in our data history since 2008.”

Institutional and hedge fund clients were major contributors to this sell-off, while retail clients emerged as net buyers after two weeks of selling. Institutional clients, in particular, turned net sellers for the first time in three weeks, and hedge funds continued their selling streak for the third consecutive week. Clients sold large and mid-cap stocks but showed some interest in small-cap stocks, BofA said.

Sector-wise, technology led the sales, recording the second-biggest outflow in BofA’s data history since 2008 and the largest since July 2023.

Conversely, the Communication Services sector experienced inflows for the ninth consecutive week, and Consumer Discretionary stocks saw their first inflows in five weeks, although Consumer Staples continued to face outflows.

Corporate client buybacks, although decelerated compared to the previous week, have been strong, tracking above typical seasonal levels for the 12th consecutive week.

“YTD, corp. client buybacks as a percentage of S&P 500 market cap (0.42%) are above ‘23 highs (0.34%) at this time,” BofA strategists said in a note.

Equity exchange-traded funds (ETFs) also saw outflows for the second week in a row, led by sales in small-cap and Blend/Growth ETFs, while Large/Mid/Broad Market and Value ETFs saw inflows. Real Estate ETFs had the largest inflows among the sectors.