Bank of America clients continued to buy U.S. equities, with a total of $1.8 billion in net purchases. This marked the 11th consecutive week of equity inflows, despite recent volatility in the S&P 500 and concerns about the Fed having to raise interest rates again.
All client categories, including Institutional clients, Retail clients, and Hedge Fund clients, contributed to these inflows. Small-cap stocks, after experiencing significant outflows in the first half of the year, have seen inflows in 14 of the last 16 weeks.
However, corporate client buybacks have decelerated since May, consistently tracking below seasonal trends. Year-to-date, corporate client buybacks as a percentage of the S&P 500 market capitalization (0.15%) remain lower than the highs observed at this time in 2022 (0.18%).
In terms of sector preferences, clients purchased stocks in six of the 11 GICS sectors. Notable inflows were observed in the Technology and Financials sectors for the third consecutive week, while the Staples sector experienced outflows.
Real Estate continued to receive inflows for the fourth consecutive week, prompting an overweight recommendation. Similarly, the Consumer Discretionary sector has seen inflows in nine of the last ten weeks, supporting its overweight status.
Cyclicals have generally outperformed defensive sectors since early August, aligning with the sector views having a cyclical tilt.
The bank’s clients continued to show interest in ETFs across all styles and sizes. They invested in Value, Blend, and Growth ETFs, as well as Small, Mid, Large, and Broad ETFs.
Value ETFs saw inflows for the 16th consecutive week, and Growth ETFs saw inflows for the 10th consecutive week. Most sector ETFs experienced outflows, with Utilities ETFs leading the way, while Communication Services ETFs saw inflows.