Stock Markets June 24, 2026 08:19 AM

Institutions Unload Stocks as S&P 500 Rises; Hedge Funds Step In, BofA Says

Bank of America data shows record institutional selling in week to June 19, with mixed flows across ETFs and sectors

By Ajmal Hussain
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Bank of America reports institutional clients were net sellers of U.S. equities in the week ended June 19, driving a record week of single-stock outflows even as the S&P 500 gained 0.9%. Hedge funds were heavy buyers, retail investors continued selling, and corporate buybacks slowed further, with broad sector selling concentrated in Health Care and Industrials.

Institutions Unload Stocks as S&P 500 Rises; Hedge Funds Step In, BofA Says
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Key Points

  • Institutional clients were record net sellers in the week ended June 19, with single-stock outflows of $11.2 billion and equity ETF outflows of $3.3 billion.
  • Hedge funds recorded their largest buying week on record while retail clients were net sellers for a fifth consecutive week; all market-cap segments saw outflows.
  • Selling was broad-based across nine of eleven sectors, led by record weekly outflows in Health Care and Industrials, while Materials and Communication Services saw inflows.

Bank of America data show clients produced an unusually large wave of selling in U.S. equities in the week ending June 19, despite the S&P 500 finishing the period up 0.9%.

Measured flows were notable for their size and breadth. Single-stock outflows totaled $11.2 billion, the second-largest weekly level on record and eclipsed only by the prior week. Equity exchange-traded funds (ETFs) experienced $3.3 billion of net outflows, the largest ETF withdrawal since January 2023, according to the report.


Investor-type dynamics

Institutional clients were the primary drivers of the selling pressure for the third consecutive week, recording the second-largest outflows ever when expressed as a percentage of S&P 500 market capitalization. In contrast, hedge fund clients posted their largest buying week on record. Retail clients remained net sellers for the fifth straight week. The outflows were not confined to a single market-cap segment: all size categories registered net withdrawals.


Sector and ETF patterns

Selling was widespread across industry groups, with clients exiting positions in nine of the eleven S&P sectors. Health Care experienced the largest single-sector outflows, followed by Industrials - both sectors registering their largest weekly outflows on record. Real Estate moved back into net outflows after a run of eight weeks inflows.

Only Materials and Communication Services attracted net inflows, each for a second consecutive week.

ETF flows showed a mixed picture. Clients sold across major style categories and pulled money from large- and mid-cap ETFs, while small-cap and broad-market ETFs attracted inflows. Technology sector ETFs recorded the largest weekly ETF outflows for a third straight week. By contrast, Health Care ETFs drew the biggest ETF inflows of the week, even as single-stock selling within the Health Care sector remained heavy.


Corporate buybacks

Corporate repurchases continued to decelerate, falling to their lowest weekly level since February for a fourth straight week. On a year-to-date annualized basis, buybacks are running slightly below full-year 2025 levels and remain well below 2024 record levels, though still above the pace seen in the 2016-2023 interval.

The patterns outlined by Bank of America highlight a landscape of large institutional outflows coinciding with targeted buying by hedge funds, persistent retail selling, sector-specific pressure in Health Care and Industrials, and a decline in corporate buyback support for equity markets.

Risks

  • Reduced corporate buybacks - Buybacks fell to their lowest level since February for a fourth consecutive week, potentially removing a source of demand for equities and affecting market support (impacts equity markets broadly).
  • Concentrated sector outflows - Heavy selling in Health Care and Industrials, both posting their largest weekly outflows, may increase volatility and liquidity risk within those sectors (impacts Health Care and Industrials).
  • Investor type divergence - Large institutional selling combined with record hedge fund buying and continued retail outflows creates uncertain demand dynamics that could amplify short-term market swings (impacts market stability across cap sizes).

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