Last week, during which the S&P 500 (INDEXSP:.INX) climbed 0.9 percent to end the quarter back above 1600, BAML clients were net sellers of U.S. stocks for the second consecutive week, in the amount of $533mn. Net sales were led by institutional clients, which was also the case the previous week.

Hedge funds returned to net buying following three weeks of profit-taking, while private clients were also net buyers for the fifth consecutive week. Inflows by private clients were the largest since January and the sixth-largest in BAML data history (since 2008). Private clients remain the sole net buyers YTD, though inflows have been chiefly attributable to ETFs. By size segment, small caps saw outflows last week while large and mid caps saw inflows.

BAML

BAML noted that outflows this year have been chiefly in the large caps space, though all three size segments are seeing net sales. Last year,mid caps saw inflows.

02

BAML : Weekly Flows by Sector, Client & Size

By sector, ETFs and the defensive sectors of Telecom, Staples and Utilities saw the largest inflows last week, while Financials and Materials saw the greatest outflows. Tech saw another week of net buying following last week’s record inflows (largest since 2008). Despite fears over rising interest rates, Utilities currently has the longest net buying trend at four consecutive weeks, followed by Tech at three weeks. Tech has historically benefited most from rising real rates. Financials continues to have the longest net selling trend at five consecutive weeks.

03

BAML: Mid Cap Inflows, Retail Clients Buy Single Stocks

  • ETFs and Telecom saw net buying by all three client groups last week; no sector saw net sales by all three.
  • Private clients were broad-based net buyers for the second consecutive week—only Utilities and Materials saw net sales by this group. Net buys of Financials and Energy by private clients were near record levels—the fourthand sixth-largest in our data history, respectively. This is a change from YTD trends, where private clients have bought ETFs but sold single stocks.
  • Mid caps saw net buying by all three client groups last week. No size segment saw net sales by all three groups.
  • BAML pension fund clients were broad-based net sellers for the second consecutive week, as all ten sectors plus ETFs saw outflows.