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BOFA SEES RECORD STOCK OUTFLOWS AS MARKETS SLIDE

Bank of America’s latest flow data suggests last week’s market pullback prompted a notable shift in investor behavior. As the S&P 500 .SPX slid 2.6% -- its steepest weekly drop since May 2025 -- clients were record net sellers of U.S. equities, driven largely by heavy single-stock outflows totaling $14.2 billion. At the same time, they continued to add to equity ETFs, logging a modest $0.3 billion of inflows and extending a buying streak to 11 consecutive weeks.

According to BofA strategist Jill Carey Hall, institutional investors led the selling, marking their biggest outflows since mid-March after five straight weeks of buying. Hedge funds and private clients also reduced exposure, for the second and third consecutive weeks, respectively. Notably, private client selling reached its highest level since November 2024.

Selling pressure was concentrated entirely in large-cap names, with clients rotating into small- and mid-cap stocks. Meanwhile, corporate buybacks slowed for a second straight week, though the four-week average ticked up to its highest point since late March. So far this year, buybacks are running slightly below 2025 levels on an annualized basis and remain under 2024’s record pace, but still above historical norms from 2016 through 2023.

Sector-wise, clients were net sellers in eight of 11 sectors, led by a sharp pullback in technology. In fact, tech outflows were the largest in BofA’s data going back to 2008. Communication services also saw outflows, though on a smaller scale. On the other hand, industrials, real estate, and utilities attracted inflows, with real estate extending its streak to six straight weeks of gains.

In ETFs, investors favored value and blend strategies while trimming growth exposure. Healthcare ETFs led inflows, while tech and financial ETFs saw the biggest withdrawals.

(Terence Gabriel)

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