BofA clients favored cyclicals, continued to sell Tech in May

Published 03/06/2025, 10:30
© Reuters

Investing.com -- U.S. equity flows turned positive last week as the S&P 500 rose 1.9%, with Bank of America (BofA) clients buying $2.3 billion worth of stocks following net selling the week prior.

The bank said the buying was driven largely by individual stocks, while equity exchange-traded funds (ETFs) posted outflows. Most ETF inflows were concentrated in fixed income and other non-equity products.

Hedge funds led the rebound, reversing the previous week’s selling. Private clients also added to their positions and have now been net buyers in 25 of the past 26 weeks, marking the longest streak in BofA’s data history. Institutional investors, however, remained net sellers for the fourth consecutive week.

Corporate buybacks slowed compared to the previous week and remained below seasonal norms for the third week in a row. BofA noted that buybacks typically decline after peaking during earnings season and tend to trend lower into late June.

In terms of sector flows, investors favored cyclical over defensive names, with inflows led by Financials, Consumer Discretionary, and Industrials. By contrast, Technology stocks saw the largest outflows for the third week running, with institutions, hedge funds, and retail clients all reducing exposure.

“Our positioning work suggests that Tech is close to a record underweight by active funds; we recently upgraded Tech from underweight to marketweight," said BofA strategists Jill Carey Hall and Tyson Dennis-Sharma.

ETF activity mirrored broader equity flows. While Value and Growth ETFs attracted fresh capital, Blend ETFs were sold. Broad market and mid-cap ETFs recorded modest inflows, whereas large- and small-cap funds saw outflows.

Sector ETF flows showed continued pressure on Technology, which posted a seventh consecutive week of outflows. Meanwhile, Financials and Health Care ETFs saw the strongest inflows.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.