Bank of America said its clients moved to buy the market dip last week, producing unprecedented inflows into individual names even as the overall market fell.
"Last week (S&P 500 -2.8%), clients were net buyers of U.S. equities, driven by record single stock inflows in our weekly data history since '08," BofA strategist Jill Carey Hall wrote in a note. In the same period, equity exchange-traded funds drew about $1.5 billion in inflows.
Institutional accounts were the dominant force behind the purchases. Hall said last week represented the second-largest week of institutional buying on record in BofA's data. Private clients also participated on the buy side, marking their eighth week of purchases in nine.
Hedge funds moved in the opposite direction, remaining net sellers for a third consecutive week.
Flow patterns varied by market capitalization. Large-cap stocks absorbed the bulk of the buying through both direct purchases and ETF allocations, and mid-cap issues registered inflows as well. Smaller capitalization segments continued to see money leave: small-cap and micro-cap equities recorded outflows for a sixth straight week. Hall highlighted that the rolling four-week average of flows for the small and micro-cap segment is now "the most negative in history (-$1.0bn)," following a period of strong inflows late last year.
Sector activity also showed clear distinctions. Technology captured the largest inflows since June, while Communication Services has experienced steady buying since late December. Consumer Discretionary moved back into positive territory, receiving inflows for the first time in six weeks.
By contrast, Financials and Industrials were the biggest underperformers on flows. Financial stocks faced outflows for a ninth consecutive week, and Industrials experienced selling for a fourth week in a row.
ETF flows were generally positive across investment styles and market-cap segments, with purchases seen in growth, value and blend funds. Energy ETFs were a standout, recording their largest inflows since October 2023. BofA noted that the four-week average of energy ETF inflows is now the strongest since early 2022, at the onset of the Russia-Ukraine war.
Alongside the market-flow data, the note also referenced Investing.com's AI-driven ProPicks product. It stated that AI computing powers are reshaping stock selection and that Investing.com's ProPicks AI manages dozens of portfolios selected by its AI. The note said that year to date two out of three global portfolios are outperforming their benchmark indexes, with 88% of portfolios in positive territory. It also cited the flagship Tech Titans strategy as having doubled the S&P 500 within 18 months, and named Super Micro Computer (+185%) and AppLovin (+157%) as notable winners within that strategy.
The flow readings present a mixed picture: active buying from institutions and private clients concentrated in larger, liquid names and select sectors, set against continued selling in smaller-cap stocks and by hedge funds. Energy and Technology stood out among sectors that drew fresh capital during the week.