Bank of America data show that U.S. equity allocations swung into net inflows for the week ending April 10, the first such weekly result since early March. The bank emphasized that the positive flows were concentrated in exchange-traded funds (ETFs), as clients continued to reduce exposure to individual stocks for a fourth consecutive week.
During the period, the S&P 500 rose 3.6% amid market reaction to a two-week ceasefire agreement. That rally coincided with $2.9 billion of net inflows into equity ETFs - marking the third straight week of ETF purchases - while single-stock positions experienced $2.6 billion of net outflows.
BofA highlighted the composition of buyers and sellers behind the flows. Hedge funds were the primary contributors to last week's buying activity, adding equities for the first time in three weeks. Institutional clients, who had been net buyers in the prior week, returned to selling, and retail investors remained net sellers for a fifth week running.
The bank noted a divergence by market capitalization: clients sold large- and mid-cap equities while directing purchases toward small and micro-cap stocks. BofA characterized the small/micro cap demand as the largest inflow into that segment since late November.
Corporate buybacks showed week-over-week acceleration, according to the report, but the trailing 52-week total of buybacks measured as a percentage of S&P 500 market capitalization continued to decline. That trailing metric now sits at its lowest level since November 2023.
Flow dynamics differed materially across sectors. Overall, clients sold stocks in six of the 11 major sectors tracked by BofA. Financials recorded the largest single-stock outflows last week, reversing a prior-week pattern in which Financials had attracted substantial inflows ahead of earnings.
Healthcare and Technology each logged their third consecutive week of single-stock outflows. BofA added a note that Technology is still expected to drive growth this earnings season, even as weekly single-stock flows into Tech were negative.
Utilities continued a prolonged selling pattern, extending net outflows to four straight weeks. The four-week average net flow into Utilities, expressed as a percentage of the S&P 500 Utilities market capitalization, has fallen to its lowest point since October 2019. BofA described this as notable, given that Utilities and Energy typically outperform in stagflationary environments.
Energy stocks have been sold by clients since the start of the Iran conflict, the report said, while investors simultaneously bought Energy ETFs over the same period.
Industrials and Materials registered their largest inflows after both sectors had endured four consecutive weeks of outflows. Consumer sector equities saw inflows for the first time in four weeks. Separately, Technology sustained rolling four-week average inflows for a seventh consecutive week, despite negative weekly single-stock flows.
In the ETF universe specifically, clients bought across most major style and size categories. Among style buckets, Blend ETFs gathered the largest inflows, followed by Value and Growth. By market-capitalization focus, large-cap ETFs led inflows, while small-cap ETFs experienced outflows - a contrast to net buying seen in small-cap single stocks.
At the sector-ETF level, Energy and Materials ETFs led inflows, while Technology and Communication Services ETFs saw net selling. Utilities ETFs were sold for the first time in six weeks.
The flows reported by BofA depict a market where aggregate allocations have edged positive on ETF demand, but where underlying single-stock positioning and sector preferences remain fragmented across investor types.