Written by Sinad Karahimetovic
Despite the rapid move in US stocks last week, Bank of America clients were net buyers of the shares ($0.5 billion). Unlike last week’s period when private clients were the only net buyers, hedge funds were buying last week while private clients switched to sellers.
On the other hand, institutional clients were selling for the second week in a row. BofA customers were also buying SMID hats while selling big ones.
“Last week, we highlighted extreme small capital outflows versus large capital outflows over the next eight weeks that were historically followed by small business leadership over the next two months,” equity strategist Jill Carrie Hall wrote in a research note.
Regarding sectors, last week’s inflows showed that clients were selling mainly consumer, energy and financial stocks. On the other hand, more defensive tactical positioning is reflected in the fifth largest inflows into healthcare since 2008.
“Healthcare has now seen inflows over the past six weeks after outflows for most of the year to date. Overall defensive sectors have seen inflows over the past six weeks versus cyclical sector outflows in five of the past six weeks (reversal vs. reversal),” Carrie Hall added. most of this year).
Institutional clients were selling ETFs and buying individual stocks.
“Stock sales could pick up in the coming weeks before the October 31 deadline for most mutual funds to achieve capital gains,” the strategist concluded.