Bank of America: Clients bought on dips last week, with individual stock capital inflows reaching a record high

Investing.com - Bank of America said that its clients entered the market last week during the pullback, and even as the market declined, individual stocks still saw record inflows of funds.

“Last week (S&P 500 down 2.8%), client net buying of U.S. stocks reached the highest weekly inflow in our data history since 2008,” said Jill Carey Hall, a strategist at Bank of America, in a report. Exchange-Traded Funds (ETFs) also attracted about $1.5 billion in inflows.

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Institutional investors were the main drivers of this buying activity. Hall stated that last week was the second-largest weekly buying volume ever recorded by institutional clients. Private clients also net bought stocks, and have been buying for eight of the past nine weeks.

In contrast, hedge fund clients have been net sellers for three consecutive weeks.

Large-cap stocks attracted most of the buying, whether through direct purchases or ETF inflows, and mid-cap stocks also saw inflows. Small-cap stocks continued to lag, with small and micro-cap stocks experiencing outflows for the sixth consecutive week.

Hall pointed out that the four-week rolling average of fund flows in this sector is “currently the most negative in history (-$1 billion),” after a strong inflow at the end of last year.

Looking at sectors, the technology sector saw the largest inflows since June, while the communication services sector has been steadily attracting buyers since late December. Non-essential consumer stocks also saw inflows for the first time in six weeks.

Conversely, the financial and industrial sectors were the biggest laggards. Both sectors continued to see selling, with the financial sector experiencing outflows for the ninth consecutive week, and the industrial sector for the fourth week in a row.

ETF inflows across various styles and sizes were generally positive, with investors buying growth, value, and blended funds. Energy ETFs stood out, recording the largest inflows since October 2023, and their four-week average inflow is currently the strongest since the start of the Russia-Ukraine war in early 2022.

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