Bank of America client flow metrics for the most recent week reveal a pronounced move into the technology sector, even as overall demand for U.S. equities cooled. According to BofA strategists, technology registered the biggest inflows in the bank's dataset since 2008, standing out amid broad selling across most other sectors.
The week saw the S&P 500 drop 5.8% as clients were net sellers on balance. A key feature of the selling was what BofA described as "near-record single stock outflows" totaling $8.3 billion, coupled with $1.1 billion of ETF outflows, the largest ETF withdrawal in six months. Despite this widespread reduction in exposure, investors added to technology holdings while trimming positions across the majority of other sectors.
Health Care was the only sector besides technology to record net inflows, making it a second outlier in an otherwise defensive reallocation. BofA strategist Jill Carey Hall flagged that similar concentrated buying episodes in technology in the past have been followed by short-term outperformance, with the sector historically beating the S&P 500 over the ensuing one- and three-month windows.
Selling pressure was broad-based across nine of 11 sectors. Financials led the outflows and have experienced weekly withdrawals every week so far this year. Several sectors either posted record outflows or approached record levels, including Energy, Consumer Discretionary, Staples, Utilities and Materials. Communication Services registered its first outflows since late December.
Investor type analysis showed institutional clients as the primary sellers during the week, reversing three prior weeks of buying. Private clients also reduced holdings for a second consecutive week. Hedge funds were the lone net buyers, ending a four-week streak of selling.
By market-cap segmentation, single-stock selling dominated across all sizes. Small-cap and micro-cap stocks extended their recent selling streak to eight weeks, reflecting persistent down-pressure among the smallest capitalization names. ETF flows painted a different picture: clients continued to buy Growth and Value ETFs while reducing exposure to Blend ETF products.
Six of the 11 sectors attracted ETF inflows, led by Financials, Technology and Energy. Energy ETFs, in particular, have continued to draw money since the beginning of the year, even as single-stock flows in the sector remained negative. Materials ETFs experienced the largest ETF outflows.
Context and interpretation
The data indicates a concentrated repositioning toward technology via both single-stock and ETF channels, while selling pressure remains broad elsewhere. Different behavior between single-stock and ETF flows suggests investors are selectively reallocating exposures rather than uniformly exiting equity markets.