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Clients' large cap stock sales drive weekly outflows of $2.4bn: BofA

Published 15/10/2024, 11:16
© Reuters.
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Investing.com -- Bank of America (NYSE:BAC) Securities clients sold U.S. equities last week, offloading $2.4 billion after being net buyers the previous week.

BofA says clients sold exchange-traded funds (ETFs) but continued to purchase individual stocks. The outflows were concentrated in large-cap stocks, while small and mid-caps saw inflows.

Hedge fund, institutional, and retail clients were all net sellers, with hedge funds and institutions marking their third consecutive week of selling, while private clients turned to selling after being buyers the prior week.

The largest inflows were seen in the Communication Services and Energy sectors, with net purchases in Energy reaching their highest level since June.

Real Estate, on the other hand, had the longest recent selling streak, extending to eight weeks.

Meanwhile, ETF outflows were seen in 6 of the 11 sectors, led by Energy, which experienced the second-largest outflows since 2017, along with Technology and Health Care. In contrast, all three sectors saw inflows into individual stocks.

Consumer Discretionary ETFs also recorded significant outflows, BofA notes.

Looking ahead, strategists said institutional stock sales typically rise in October, ahead of the October 31 deadline for mutual funds to realize capital gains.

"Indeed, this group has sold stocks for the last three weeks,” they wrote. “Selling by retail investors typically picks up in December ahead of the 12/31 cutoff for individual investors."

Meanwhile, corporate client buybacks have slowed heading into earnings season, which is typical, but they are expected to increase next week.

According to BofA, buybacks continue to track above seasonal averages, with trailing 52-week buybacks as a percentage of the S&P 500 market cap reaching an all-time high.

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