Bank of America said its clients overall sold U.S. equities last week, with equity exchange-traded fund outflows substantially outweighing modest purchases of individual stocks. Strategist Jill Carey Hall highlighted that roughly $1 billion of ETF withdrawals eclipsed approximately $16 million of inflows into single-name shares.
The net selling trend was driven predominantly by hedge funds, which have been net sellers for four consecutive weeks. Private clients, who had been buyers for two weeks, switched to a net selling posture last week. Institutional clients were the only group that remained on the buy side, extending their buying streak to a third straight week.
Flow patterns revealed continued weakness among smaller companies. Clients reduced positions across both large-cap and small- and micro-cap segments, with small- and micro-cap equities experiencing net selling for a seventh consecutive week. By contrast, large-cap single stocks still attracted some inflows, underscoring a split in demand by market capitalization.
Sector-level activity showed that clients purchased stocks in eight of the 11 sectors. Industrials stood out with what BofA described as "record inflows" in the bank's weekly data history dating back to 2008. Buying also extended to both Consumer sectors, as well as Technology and Communication Services, each of which recorded multiple consecutive weeks of inflows.
On the sell side, Financials saw the largest outflows and remained the most consistently sold sector, marking a 10-week streak of net selling. Energy stocks registered notable outflows for a second week in a row despite ongoing geopolitical tensions; however, investors continued to add to Energy-focused ETFs.
ETF flows were mixed by style and size. Eight of 11 sectors had ETF inflows, led by Materials, Industrials and Energy, according to BofA. At the style level, clients sold Blend ETFs, representing the largest Blend outflows since early 2023, while purchases of Growth and Value ETFs persisted. Among ETF size categories, mid-cap ETFs were the only segment to post net inflows.
These flow details provide a snapshot of client positioning during the week: persistent hedge fund selling, a reversion to selling among private clients, and continued institutional buying. Sector rotation favored Industrials and certain Consumer, Technology and Communication Services names, while Financials and small-cap stocks remained under pressure.