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Investing.com -- U.S. equity flows turned negative last week, with clients pulling $1.6 billion from the market, marking the first week of net outflows in three weeks, driven largely by selling in exchange-traded funds (ETFs).
“Client sold ETFs for the first time in five weeks but were small net buyers of single stocks after selling stocks the prior week,” BofA strategists said in a note. Size-wise, small caps saw outflows, while large and mid caps remained in demand.
Institutional and hedge fund clients continued to reduce exposure, while private clients extended their buying streak to 19 consecutive weeks— the longest start-of-year run since 2008, BofA says.
Corporate buybacks slowed slightly on a weekly basis but remained above typical seasonal trends, with expectations for further acceleration as earnings season progresses.
Selling was concentrated in four sectors, most notably Consumer Discretionary—which has now seen outflows for four straight weeks—and Financials, despite strong bank earnings.
Consumer Discretionary also leads year-to-date outflows amid renewed tariff concerns and signs of slowing growth.
On the other hand, Technology and Energy stocks attracted the most buying, while Materials continued its eight-week streak of inflows, benefiting from recent market volatility.
Overall, investor flows favored defensive sectors like Staples and Utilities over cyclicals—reversing the trend seen in most weeks since early March.
In the ETF space, BofA says its clients sold equity ETFs for the first time in seven weeks, with Blend ETFs seeing outflows while Growth and Value ETFs recorded modest inflows.
Mid-cap ETFs were the only segment to see net buying.
By sector, most ETF categories faced redemptions, led by Financials, Energy, and Consumer Discretionary. Materials ETFs stood out again with continued inflows, mirroring stock-level buying in the sector.