Hedge funds led a sharp rise in equity inflows at Bank of America Securities last week, even as retail investors ended a near six-month streak of net buying, according to a report by Investing.com citing the bank’s latest client flow report.
US equity inflows totalled $6bn across single stocks and ETFs, marking the fourth consecutive week of net buying—but with a notable shift in who is driving flows.
Hedge funds posted their largest weekly inflows since August, according to the bank, while institutional and private clients were net sellers. “This marks the first week of private client selling in 23 weeks, ending a record buying streak by this group,” BofA strategists led by Jill Carey Hall wrote.
Sector positioning among hedge funds also shifted, with the most notable flows directed into Industrials, which saw their largest hedge fund inflows since 2008. Financials led overall sector inflows, logging a fourth straight week of net buying, followed by Health Care.
In contrast, Technology stocks saw outflows for the first time in seven weeks, while Communication Services recorded their biggest weekly outflows since July 2023.
On the ETF side, BofA clients favoured large-cap and broad-market ETFs, while reducing exposure to small- and mid-cap ETFs. Health Care and Consumer Discretionary ETFs attracted inflows, while Tech ETFs saw net outflows for the first time since January.
BofA notes: “Tech ETF flows turning negative could signal a shift toward Health Care, potentially marking the late innings of a Tech-to-Health Care rotation.”
