Investing.com — Bank of America reported a fourth consecutive week of net inflows into U.S. equities, with clients buying $0.8 billion last week as the S&P 500 rose 1.1%.
According to the bank’s latest Equity Client Flow Trends, the buying streak follows the U.S. election and highlights sustained interest in large-cap stocks.
“Clients bought both stocks and ETFs, but flows were entirely in large caps last week,” the analysts noted.
BofA said private and hedge fund clients emerged as buyers, with private clients turning positive for the first time in two weeks, while institutional clients shifted to selling after a brief buying stint.
Meanwhile, corporate buybacks are said to have continued but showed signs of slowing. Nevertheless, they remain “above seasonal levels as a percentage of S&P 500 market cap” and are on track for a record high.
Sector flows showed a notable shift toward cyclicals, which outpaced defensives for the first time since August, according to BofA.
Technology, Communication Services, Industrials, and Utilities reportedly led the buying activity, while Health Care, Consumer Staples, and Real Estate saw the largest outflows. Real Estate’s outflow streak has now extended to three consecutive weeks.
ETF flows were said to be broad-based, with clients purchasing ETFs across all size segments, including Blend and Value ETFs. However, Growth ETFs experienced net outflows. Sector ETF inflows were led by Consumer Discretionary, Utilities, and Health Care, while Technology ETFs faced the largest outflows.
The bank also previewed December tax-loss harvesting trends. “Private clients’ selling typically peaks in December ahead of the year-end deadline for individual investors,” BofA explained, noting that institutional selling had already spiked in October as mutual funds closed their fiscal year.
