BofA clients keep buying the dip, led by institutions
SPY•Sector flows were mixed but positive overall
Sector flows were broadly positive. Clients bought stocks in eight of 11 sectors, led by Technology, Financials and Industrials.
Industrials stood out. A sector that has suffered outflows during much of 2026 attracted record inflows last week. Hall pointed to ongoing geopolitical uncertainty and better-than-expected second-quarter earnings as potential drivers. Inflows into Financials and Technology were also near record levels.
Communication Services posted the largest outflows and has now seen money leave for four straight weeks. Commodity-oriented Energy and Materials also experienced outflows.
Institutions led, while hedge funds kept selling
Institutional investors led the charge, recording their biggest buying week since December 2020 and the second-largest on BofA's books dating back to 2008. Retail investors were also buyers for a fifth straight week. Hedge funds, meanwhile, continued to head for the exits, selling equities for a third consecutive week.
Corporate buybacks slowed during the second week of earnings season and ran below the historical average for that period when adjusted for market value. Even so, the longer-term picture remains supportive, with BofA's four-week average buyback activity running 19% above year-ago levels.
ETF demand favored large-cap and broad-market funds
ETF flows told a similar story. Clients bought both growth and value funds, added to large-cap and broad-market ETFs, and trimmed exposure to mid- and small-cap products. Sector ETF demand was widespread, with inflows into 10 of 11 sectors. Technology ETFs led the way, while Consumer Discretionary was the only sector to see outflows.
(Terence Gabriel)
