US stocks have hit record highs in the past weeks – with the S&P 500 breaching 4,000 for the first time – as President Biden’s unprecedented stimulus plan has spurred renewed economic optimism.
Yet Bank of America revealed in a recent note that its institutional clients have been net sellers of shares over the past four weeks.
Communication-services stocks have been at the center of the trend, seeing several weeks of near-record outflows from all BofA client funds as the 10-year Treasury yield has climbed to more than one-year highs. The sector does, however, remain overweighted by actively managed funds.
Only two sectors saw inflows from BofA client portfolios overall: industrials and materials.
Meanwhile, private clients were buyers for the sixth week, though inflows have recently decelerated.
Buybacks by corporate clients have also slowed. The bank did note that the resurgence in buybacks in the first quarter could imply a new record for S&P 500 gross buybacks in 2021.
As for exchange-traded funds, the bank saw big buyers of equity ETFs year-to-date, especially broad market ETFs, which have seen inflows slow down every week for a month.
Growth ETFs saw outflows for the first time in four weeks.