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BOFA CLIENTS TURN NET BUYERS OF US STOCKS AS HEDGE FUND BUYING HITS RECORD

BofA clients turned net buyers of U.S. equities last week for the first time since late May, as the S&P 500 .SPX climbed nearly 1.8%, according to BofA Securities equity and quant strategist Jill Carey Hall.

In a note out on Wednesday, Hall said that the inflows were driven by purchases of both individual stocks ($3.1 billion, the biggest since March) and equity ETFs ($1 billion). Hedge funds led the charge, extending their buying streak to four consecutive weeks. She noted that, on a four-week average basis, hedge fund net buying has reached the highest level in BofA's data history dating back to 2008. Institutional and retail clients were also net buyers.

Investors put money to work across large-, mid- and small-cap segments, with small- and micro-cap stocks posting a record week of inflows.

At the same time, corporate buybacks continued to cool, slowing for a sixth consecutive week to their lowest level since February. While buyback activity remains above levels seen between 2016 and 2023, it is running below both 2025's full-year pace and the record levels seen in 2024.

Sector flows painted a mixed picture. Clients were net buyers in six of the 11 S&P sectors, led by consumer discretionary, which posted its biggest inflows on record after four straight weeks of outflows. Tech and healthcare also attracted strong demand, marking their first inflow weeks in three and six weeks, respectively.

Financials, however, saw the largest stock outflows and now have the longest selling streak, with seven straight weeks of withdrawals. Energy and utilities also remained out of favor, extending their outflow streaks to five and four weeks.

ETF flows told a slightly different story. Clients favored large-cap and blend ETFs but sold growth, value, mid-cap, small-cap and broad-market funds. Broad-market ETF outflows were the first since March.

Among sector ETFs, financials attracted the most buying despite weakness in financial stocks, while healthcare ETFs suffered their largest withdrawals since January 2025.

(Terence Gabriel)

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