Bank of America reported a return to net buying of U.S. equities last week after an eight-week streak of net selling, with demand concentrated in single-stock purchases.
"Clients were net buyers of U.S. equities for the first time in 8 weeks, driven by single stock inflows," strategist Jill Carey Hall said in a note, adding that small equity ETF outflows totaled about $0.5 billion.
Buying behavior was broad-based across client groups. Institutional investors reversed six weeks of net selling and returned as net buyers, while hedge funds and retail clients continued to add to positions. The combined activity pushed the overall flows into positive territory after a multi-week decline.
Sector flows showed a distinct preference for technology-related areas. Clients purchased stocks in eight of 11 sectors. Communication Services led the inflows and recorded its fourth consecutive week of net buying, while Technology logged its first weekly inflow in five weeks. By contrast, Financials registered the largest sector outflows.
Hall noted continued seller interest in Financials - clients sold Financials for three straight weeks, including record outflows a week earlier following a run-up into earnings. At the single-stock level, Industrials continued to experience pressure, even as investors demonstrated substantial appetite for Industrials ETFs.
Corporate share repurchases eased on a week-over-week basis but remained elevated on a four-week average, representing the strongest pace since May. That sustained buyback activity contributed to overall liquidity dynamics even as flows between active instruments varied.
ETF flows diverged from single-stock activity. Clients sold equity ETFs overall while increasing allocations to fixed-income ETFs. On a style basis, outflows from Growth and Value ETFs were roughly offset by inflows into Blend ETFs. Investors also showed a preference for small-cap and broad market ETFs while trimming exposure to large- and mid-cap funds.
Sector-level ETF activity did not always mirror single-stock trends. Clients sold ETFs in five of the 11 sectors, led by Technology ETF outflows despite net purchases of tech stocks. At the same time, Industrials ETFs recorded the largest inflows in Bank of America’s dataset going back to 2017.
Analysis summary - The flow picture last week was characterized by a return to single-stock buying that lifted aggregate equity purchases, a pronounced tilt toward communication and technology equities, and a distinct disconnect between equity ETF and single-stock flows, most notably with record demand for Industrials ETFs despite weakness in individual industrial names.