Bank of America (BofA) strategists noted there is an ongoing trend of equity inflows, extending into the 8th consecutive week.
During the previous week, despite a 1.9% decline in the S&P 500 index, the bank’s clients were net buyers of US equities, totaling $2.1 billion in inflows.
The majority of inflows for the week were directed towards exchange-traded funds (ETFs). However, clients also showed a slight preference for individual single stocks.
Retail clients, who had been sellers the week before, turned into buyers during the reported week. In contrast, hedge funds and institutional clients were net sellers.
Clients predominantly favored large and mid-cap stocks, while they sold off small-cap stocks.
“After extreme 1H outflows, small caps have seen inflows in 12 of the last 13 weeks. We see more room for a small cap catch-up rally,” the analysts wrote in a note.
In the context of sector-specific equity flows, Health Care led inflows for the third consecutive week. Staples experienced significant inflows, the highest since mid-August. On the other hand, Real Estate also attracted notable inflows.
Consumer Discretionary recorded its first week of outflows in seven weeks, despite having been upgraded to overweight in the S&P 500 sector views the previous month. The Technology sector saw the largest outflows for the second consecutive week.
Cyclical sectors experienced outflows for the first time since July. It's worth noting that cyclicals had been receiving more positive flows compared to defensive sectors since early August, aligning with a more positive outlook on cyclicals in recent months.