Big private client-led Energy inflows
* Third week of net buying, led by private clients
Last week, during which the S&P 500 rebounded 2.1%, BofAML clients were net buyers of
US equities in the amount of $0.99bn. This was the third consecutive week of buying by
our clients, but in smaller magnitude than the previous two weeks. Similar to the prior
week, net buying was led by private clients, and hedge funds were also net buyers for the
fourth consecutive week. Institutional clients were net sellers for the second week in a
row. Net buying last week was entirely in large caps, as both small and mid-caps saw
muted sales. Buybacks by corporate clients decelerated for the second week, but remain
elevated—the four week average is the highest in 18 months. Overall, BofAML clients’
flows on a four-week average basis are their highest since January. Buybacks on an
annualized basis YTD are still tracking slightly below 2014 levels.
* Near-record Energy inflows, led by private clients
Last week, flows into US stocks by our clients were largest in the Energy sector, where
inflows were the largest since January and the fifth-largest in our data history, despite the
retreat in oil prices following their late-August rebound. Inflows were chiefly from private
clients, whose net buying of Energy stocks last week was the largest in our data history
(following record net sales of the sector in mid-August)—see chart below. Discretionary
and Health Care stocks saw the next-largest net buying by our clients last week, and ETFs
also saw inflows. Clients sold the other seven sectors, led by Financials and Tech.
Discretionary currently has the longest net buying trend with inflows during the last five
weeks; no sector has seen more than two consecutive weeks of net selling. Financials
notably saw outflows by our clients last week for only the second time in eleven weeks,
which could suggest clients are less confident the Fed will raise interest rates this month.
* Other notable flows: bifurcated Industrials flows
• Consumer Staples, Tech and Financials saw net sales by private clients, hedge funds
and institutional clients alike last week. No sector saw net buying by all three groups.
• Industrials saw bifurcated flows last week, with near-record levels of net buying by
hedge funds but near-record levels of net selling by institutional clients. (Private
clients were small net buyers of the sector).
• Pension fund clients were net buyers of US stocks last week for the seventh
consecutive week. Net buying was chiefly due to Health Care stocks; Energy and
Industrials saw the biggest net sales. This group remains a net buyer of stocks on a
cumulative basis YTD. See pg. 9 for details