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BOFA CLIENTS SHUN SMALL CAPS, SNAP UP JUST ABOUT EVERYTHING ELSE

BofA Securities equity and quant strategist Jill Carey Hall says that last week, with the S&P 500 index .SPX advancing about 1.5%, clients were net buyers of U.S. equities (+$2.2B) for a third-straight week.

Private clients were net buyers for the 10th week in a row, while institutional and hedge fund clients were sellers.

"Private clients are typically big net buyers in Jan., but the recent buying streak is the longest of any start-of-year since 2022, with inflows across most sectors (except Tech/Discretionary). Institutional and hedge fund clients have both sold equities most weeks since the start of 2025," writes Hall in her note.

She adds that corporate client buybacks slowed slightly week-over-week, but were at a near-record weekly level as a percentage of S&P 500 market cap.

Going forward, Hall says that data on announced S&P 500 buyback programs so far this year suggest slowing TMT buybacks vs a pick-up in financials and healthcare.

In terms of S&P 500 groups, Hall says clients bought stocks in six of the 11 sectors, led by tech, industrials, and staples.

Financials have the longest recent buying streak of any group, with inflows for the past six weeks.

Discretionary saw the largest outflows with the group having seen outflows the past four weeks. Energy stocks experienced outflows for the first week this year.

As for ETFs, Hall said clients sold small caps, and bought almost everything else (value/growth/blend ETFs and large/mid/broad market ETFs).

Six of the 11 sectors saw ETF inflows, led by tech and discretionary ETFs. Materials and energy ETFs saw the largest outflows.

(Terence Gabriel)

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