By Senad Karaahmetovic
Bank of America clients were net buyers of U.S. equities last week, despite the benchmark index S&P 500 dropping 4.5%.
This marks the second consecutive week of inflows. Hedge funds were selling stocks while institutional and retail clients bought equities for the second straight week and the first time in three weeks, respectively.
Last week’s data continues to show that BofA’s clients are still more interested in stocks than ETFs.
“Cumulative flows YTD have also suggested stock-picking over passive with a record spread between stock inflows vs. ETF outflows so far this year,” strategists said in a note.
Hedge funds were only sellers last week while institutional and retail clients bought stocks for the second straight week and first time in three weeks, respectively. Buying was mostly occurring in Financials, which attracted the second week of inflows despite the selloff in regional banks and the drama surrounding Silicon Valley Bank (NASDAQ:SIVB).
As far as sectors are concerned, Consumer Discretionary and Communication Services experienced the largest outflows.
“Tech saw the next-largest inflows and has seen buying every week but one YTD. Clients bought Industrials for the first time in eight weeks. Materials continues to have the longest buying streak (last seven weeks) but remains underweight by long-only fund managers despite this group increasing exposure in recent months. Industrials notably saw inflows last week for the first time in eight weeks,” strategists added.
The ETF data suggests investors prefer value to growth.