Small- and micro-cap stocks continued to attract strong interest. Clients bought both stocks and ETFs in the segment, lifting the four-week average of inflows to a record high. Investors were net sellers of large- and mid-cap stocks but remained buyers of ETFs tied to both groups.
Corporate buyback activity picked up last week but remained below the historical average for the first week of earnings season when adjusted for market capitalization. Year-to-date, annualized buybacks are running slightly below 2025 levels and below the record pace seen in 2024, but remain above levels recorded between 2016 and 2023.
Sector flows were mixed. Clients were net sellers in seven of the 11 S&P 500 sectors, with technology and communication services seeing the largest outflows. Consumer discretionary stocks attracted the strongest inflows, while financials benefited from strong bank earnings and energy stocks drew buying amid ongoing geopolitical tensions.
On the ETF side, clients bought funds across growth, value and blend styles, as well as most market-cap categories. However, they were net sellers of broad-market ETFs. Sector ETF flows were weaker, with investors selling ETFs in nine of the 11 sectors. Healthcare ETFs saw the largest outflows, while technology and industrial ETFs were the only sectors to attract net inflows.
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