BofA: Clients bought the dip last week amid ’historic single-stock inflows’

Investing.com -- Bank of America said its clients stepped in to buy the recent market dip last week, generating record inflows into individual stocks even as the broader market declined.

"Last week (S&P 500 -2.8%), clients were net buyers of U.S. equities, driven by record single stock inflows in our weekly data history since ‘08," BofA strategist Jill Carey Hall said in a note. Equity exchange-traded funds (ETFs) also attracted inflows of about $1.5 billion.

Institutional investors were the primary drivers of the buying. Hall said last week marked the second-largest weekly buying by institutional clients on record. Private clients were also net buyers and have now bought equities in eight of the past nine weeks.

Hedge fund clients, by contrast, were net sellers for the third consecutive week.

Large-cap stocks saw the bulk of the buying, both through direct purchases and ETF flows, while mid-cap names also recorded inflows. Smaller companies continued to lag, with small and micro-cap equities seeing outflows for a sixth straight week.

Hall noted the rolling four-week average of flows for that segment is now “the most negative in history (-$1.0bn)” after strong inflows late last year.

Sector-wise, Technology recorded the largest inflows since June, while Communication Services has seen steady buying since late December. Consumer Discretionary stocks also saw inflows for the first time in six weeks.

Conversely, Financials and Industrials were the biggest laggards. Both sectors experienced continued selling, with Financials seeing outflows for the ninth straight week and Industrials for the fourth.

ETF flows were broadly positive across styles and sizes, with investors buying growth, value and blend funds. Energy ETFs stood out in particular, posting their largest inflows since October 2023, while the four-week average of energy ETF inflows is now the strongest since early 2022, when the Russia-Ukraine war began.