Bank of America Reports Significant Equity Outflows

Investing.com — Bank of America (BofA) analysts reported notable equity outflows last week, primarily driven by institutional clients.

In a recent note, BofA highlighted that the net sales by institutional clients were the second largest ever recorded since 2008 and the largest since September 2015.

The bank pointed out that institutional clients have been net sellers for five consecutive weeks, experiencing a sharp increase in outflows leading up to the October 31 deadline for mutual funds to realize capital gains.

"Clients were net sellers of US equities (-$4.1B) for a third week in a row," BofA stated, indicating the largest outflows in the past eight weeks.

The outflows primarily stemmed from large-cap equities, whereas small and mid-cap equities experienced inflows.

Private clients also reduced their exposure for the third consecutive week, while hedge funds took a different approach by increasing their equity purchases.

BofA analysts noted that corporate buybacks remain strong, continuing to "track above seasonal levels." They mentioned, "Trailing 52-week buybacks as a % of S&P 500 market cap are at an all-time high in our data history (since '10)."

The sell-off was sector-specific, with eight out of 11 sectors witnessing outflows. Technology, Financials, and Real Estate led the single stock outflows. Technology faced outflows in four of the past five weeks, while Financials saw outflows in five of the last six.

Conversely, Consumer Staples, Utilities, and Industrials enjoyed inflows, with Staples recording its first inflows in five weeks.

ETF outflows reflected this trend, with clients selling both large and small-cap ETFs, along with blend and growth funds. Financials, Technology, and Materials ETFs experienced the most significant outflows. However, Real Estate ETFs showed resilience with notable inflows.