Clients of Bank of America Securities have recorded unprecedented sales of large-cap equities over the past two weeks, marking one of the most significant moves since 2008.
According to the bank, clients were net sellers of individual stocks for the third consecutive week, with last week’s outflows totaling $5.7 billion, following a prior week also above $5 billion. In contrast, equity exchange-traded funds (ETFs) experienced inflows of $1 billion.
“Sales of single stocks in the last two weeks were the 3rd-largest of any 2-week period since ’08, driven by large caps,” said BofA strategist Jill Carey Hall, highlighting that small- and mid-cap stocks were also sold last week after prior inflows.
Institutional investors led the selloff, recording their largest sales since early June, while hedge funds remained net sellers for a fourth consecutive week. Meanwhile, private clients who had been selling for three weeks returned to buying.
Sector flows were predominantly negative. Stocks in nine of eleven sectors were sold, led by Financials, which experienced their sixth straight week of outflows and the fourth-largest weekly withdrawal since 2008. Communication Services posted the sixth-largest outflow on record, and Energy equities saw the largest outflow since early 2022. Only Materials and Utilities attracted inflows, with Materials showing gains in nine of the past 11 weeks.
On the ETF front, investors continued to favor value over growth. “Clients bought Blend and Value ETFs for a 5th straight week and sold Growth ETFs for the 2nd straight week,” Hall noted. Energy ETFs saw the largest inflows despite heavy selling of individual energy stocks, while Technology, Health Care, and Utilities ETFs experienced outflows.
This sharp sector rotation pushed BofA’s rolling four-week average of total equity flows into negative territory at -$2.1 billion, after remaining positive since early August.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.