Bank of America’s equity clients continue to sell equities, and the pace of sales is increasing according to the bank’s weekly Equity Client Flow Trends note.
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According to the note, last week Bank of America clients were net sellers of US equities for the fourth consecutive week, selling a total of $1.4 billion in equities, the largest since this selling streak began. Every single group of investors monitored exited positions. Hedge funds, institutional clients and private clients all sold stocks and hedge funds have the longest selling streak at six consecutive weeks.
Buybacks by corporate clients picked up to their highest level in three months, but year-to-date are still tracking the lowest of any comparable period since 2013.
Even though investors sold stocks on a net basis, in what is now a recurring theme, clients continue to buy ETFs as they sold equities although purchases of ETFs declined to their lowest level since mid-September.
BOA: Clients Are Selling Equities Across The Board
In what can only be called a broad-based sell-off, Bank of America’s clients sold stocks in six of the 11 sectors tracked last week, with no clear cyclical or defensive tilt. One pattern that does seem to show through in the figures is the unwinding of the Trump trade. Equity investors aggressively brought industrial and financial stocks at the end of last year, seeking to capitalize on Donald Trump’s potential infrastructure spending plan and higher inflation but now it seems as if this trend is unwinding.
Industrials saw near-record net sales for the second straight week last week according to Bank of America, with selling led by institutional clients and private clients. Healthcare and real estate saw the next largest sales. The sectors have reported outflows for the last five and six consecutive weeks respectively. On a net basis, clients brought financial stocks for the first week since early February. However, a deeper analysis of the data shows that this was due entirely to corporate buybacks.
Here are some additional takeaways from the flows data:
Other notable flows: Broad-based large cap sales
- Net sales of large caps last week were the biggest since last April, with sales across all three client groups
- All three client groups (private clients, institutional clients, hedge funds) bought Staples last week, and sold Industrials and Financials.
- No love for REITs: four-week average net sales of this sector are the largest since it was broken out as its own sector in September.
- Pension fund clients were net sellers of US stocks following two weeks of buying. Net sales were largely in ETFs, though single stocks in six sectors saw net sales as well, led by Energy