BofA clients stay buyers as hedge funds drive equity inflows

Corporate buybacks picked up, though activity remained below the historical average for the fourth week of earnings season on a market-cap-adjusted basis. Year-to-date, annualized buybacks are running slightly below full-year 2025 levels and below the record pace seen in 2024, but still ahead of levels recorded between 2016 and 2023.

At the sector level, clients were net sellers in seven of the 11 S&P sectors. Industrials saw the largest outflows for a second straight week, while Communication Services posted its biggest weekly outflow since December.

Technology stood out on the other side of the ledger, attracting its second-largest weekly inflow on record. Consumer sectors also drew inflows.

ETF flows told a somewhat different story. Clients bought Value and Blend ETFs while selling Growth ETFs for the first time in five weeks. They also added money to ETFs across every size category, including large-, mid-, and small-cap funds, as well as broad-market products.

Within sector ETFs, clients were net sellers in six of the 11 sectors. Technology ETFs led the outflows despite near-record inflows into individual tech stocks, while Industrials ETFs attracted the strongest inflows.

BofA Securities equity and quant strategist Jill Carey Hall said clients continued to buy U.S. equities last week, extending a six-week streak of net inflows as the S&P 500 .SPX climbed 3.6%.

In a note out on Wednesday, Hall said the appetite for stocks was concentrated in equity ETFs, which pulled in $4.1 billion and notched a seventh straight week of inflows. Single stocks, by contrast, saw $2.4 billion in outflows, marking a second consecutive week of selling.

Hedge funds did most of the buying. Hall said they recorded their largest weekly purchases since 2008, according to BofA data, following near-record buying the previous week. Institutional and retail investors moved the other way, remaining net sellers for a second straight week.