Investing.com — Bank of America analysts reported equity outflows last week, led by institutional clients.
In a note, BofA highlighted that its institutional client net sales were the second largest ever recorded since 2008 and the largest since September 2015.
The bank indicated that institutional clients have been net sellers for the past five consecutive weeks, with a sharp uptick ahead of the October 31 deadline for mutual funds to realize capital gains.
“Clients were net sellers of US equities (-$4.1B) for a third week in a row,” said BofA, marking the largest outflows in eight weeks.
The outflows primarily came from large caps, while small and mid-cap equities saw inflows.
Private clients are also said to have reduced their exposure for the third consecutive week, while hedge funds took the opposite approach, buying equities.
The analysts noted that corporate buybacks remained strong, continuing to “track above seasonal levels.” They added, “Trailing 52-week buybacks as a % of S&P 500 market cap are at an all-time high in our data history (since ’10).”
The sell-off was sector-specific, with eight out of 11 sectors seeing outflows.
Tech, Financials, and Real Estate led single stock outflows, the bank stated, with Technology suffering outflows in four of the past five weeks and Financials in five of the last six.
By contrast, Consumer Staples, Utilities, and Industrials saw inflows, with Staples posting its first inflows in five weeks.
ETF outflows mirrored the trend, with clients selling both large and small-cap ETFs, as well as blend and growth funds.
Financials, Technology, and Materials ETFs experienced the largest outflows, BofA added, though Real Estate ETFs bucked the trend with notable inflows.