In its latest weekly update on client flows, Bank of America strategists said last week saw a continuous momentum, particularly toward Communication Services stocks and small-cap exchange-traded funds (ETFs).
“Comm. Svcs. saw its second largest weekly inflow in our data history (since’18) and has seen record inflows most weeks YTD. It also has the longest recent buying streak of any sector (17 weeks),” strategists said.
While its clients showed interest in both individual stocks and ETFs, the former category attracted a larger portion of inflows, according to BofA.
In particular, institutional and hedge fund clients led the buying, while retail clients were net sellers for the third week.
Meanwhile, the Technology sector experienced its fifth consecutive week of outflows, marking the most negative rolling four-week average since June 2021.
Energy and Financials sectors saw significant inflows, whereas Consumer Staples continued to face outflows.
Equity ETFs saw inflows across all major sizes, with small-cap ETF momentum particularly notable, despite the ongoing net selling in individual small-cap stocks.
“Small-cap ETF momentum continued, with inflows in 23 of the 24 past weeks. But clients have remained net sellers of small-cap stocks YTD, despite what may be better opportunities in themes/pockets of the size segment,” the team noted.