BofA says clients sold equities for largest weekly outflow since late 2020

Investing.com — BofA Securities clients were net sellers of U.S. equities in the final week of August, with $8.0 billion in outflows, marking the largest weekly exodus since late 2020 amid economic uncertainty.

This was the second consecutive week of net selling, with clients offloading both single stocks and exchange-traded funds (ETFs). These outflows affected large, mid, and small-cap stocks, BofA said in a Wednesday note.

“All major client groups (ex-corporates) were net sellers for a second week in a row,” the note says. “Selling was again led by institutional and hedge fund clients, while private clients have the longest recent selling streak (four weeks).”

The tech sector saw the largest outflows since May, following the post-Nvidia earnings sell-off, and healthcare also experienced its biggest outflow since early July.

Communication services was the only sector to see inflows, maintaining a 22-week buying streak.

Meanwhile, energy and industrials continued to see outflows, with energy experiencing a six-week selling streak and industrials seeing outflows in seven of the last eight weeks.

Corporate client buybacks slowed for the second consecutive week, falling below seasonal levels as a percentage of the S&P 500 market cap for only the second time in the past 25 weeks. Still, buybacks year-to-date remain on track for a record year based on BofA’s data.

ETFs, in the meantime, saw the first outflows since June.

These were recorded in seven out of 11 sectors, with Materials ETFs experiencing the largest outflows. As opposed to individual stocks, Consumer Discretionary ETFs attracted the highest inflows.

In terms of size and style, clients sold Blend ETFs, but they continued to buy both Growth and Value ETFs for the fourth and 24th consecutive weeks, respectively. Broad Market and Large/Mid Cap ETFs saw outflows, but Small Cap ETFs were bought for the third consecutive week.