News > Asset Management

Institutional clients buy stocks for first time in 9 weeks: BAML

By ValueWalk
Asset Management

Last week, institutional clients turned net buyers of U.S. stocks for the first time in nine weeks, though private clients sold the rally for the fourth consecutive week, reports BofAML. After tracking BofAML equity client flow trends, Jill Carey Hall and Savita Subramanian of Bank of America Merrill Lynch published their Nov, 4 research report highlighting that small caps continued to witness negative flow trends.
Record inflows into Consumer Staples stocks
Hall and Subramanian point out that last week (10/26 to 10/30), BofAML clients were net buyers of U.S. stocks for the first time in four weeks. Though hedge funds and institutional clients had been net sellers for the last three weeks and last eight weeks respectively, they led the net buying. Even though private clientssold the rally for the fourth consecutive week, they remain the only net buyers of stocks year to date:

After analyzing the weekly flows by sector, client and size, the BofAML analysts point out that net buying last week was led by ETFs and record inflows into Consumer Staples stocks. The analysts also said that net buying was chiefly in large caps, while mid-caps also witnessed small inflows but small caps saw net sales:

Hall and Subramanian point out that small caps have continued to witness negative flow trends after they noted several weeks ago that flows in this segment looked like they were starting to roll over. The BofAML analysts continue to prefer large caps over small caps, and they anticipate that large caps will fare better in a rising rate environment:

Hedge funds – Net sellers on 4-week average basis
After tracking the data based on rolling four-week average basis in terms of sector, Hall and Subramanian point out that Telecom has witnessed net buying since mid-Oct, while Materials has witnessed net selling since late June:

Analyzing the flows based on rolling four-week average trends by client type, the BofAML analysts note that hedge funds are net sellers of U.S. stocks on a

Subscribe to our Newsletter

Be one of the first to experience the future of financial services