Bank of America analysts reported a variation in customer flow during the market's selloff last week.
In its equity flows clients model note this week, the bank said hedge funds and institutional clients are the majority of buyers of US stocks, while retail investors intervene as net buyers.
It was down 2.1% last week, and BofA Securities' clients are mostly U.S. stock traders, withdrawing $2.6 billion. This marks the fourth consecutive week of net sales, although the outflow was smaller compared to the previous three weeks. Hedge funds were the first sellers in two weeks, and institutional clients continued their four-week selling dance.
In contrast, BofA said private clients, who had sold shares last week, were net buyers. This reflects a growing interest among retail investors to capitalize on sinking stock prices.
Corporate purchases are said to remain strong, with BofA corporate client purchases maintaining levels similar to last week. These purchases have been above normal seasonal levels for 21 consecutive weeks.
BofA added that there were significant trends in industry flows.
“Tech saw its third consecutive week of outflows, while Comm. Services saw its 18th straight week of inflows,” reflecting a shift in investor preferences within the TMT (Technology, Media, and Telecom) sectors.
The Industrials sector experienced the longest sales volume in the past four weeks, which, along with Energy, contributed to the decline in Q3 figures.
Meanwhile, BofA clients sold equity ETFs for the first time in nine weeks but showed interest in Commodity and Fixed Income ETFs. Equity ETF sales accounted for six of the 11 sectors, with Financial ETFs seeing the largest outflows, while Tech ETFs attracted the most inflows.
