BofA securities equity client flow trends

• More dip-buying: last week, during which the S&P 500 was -0.2%, clients were net buyers of US equities ($2.4B) for the fourth consecutive week.

• Opposite of the previous week - when buying was led by institutional clients -private and hedge fund clients were buyers while institutional clients sold. Private clients have been the biggest net buyers of US equities YTD (where they have been more aggressive buyers of the dip this year after missing out on what has generally been a successful strategy for much of the post-GFC (Global Financial Crisis) period). Institutional clients have also been net buyers YTD (vs. net sales by hedge funds).

• Buyback pick-up amid cheaper valuations: Buybacks by corporate clients accelerated to the highest weekly level since late Jan. following tepid trends for the majority of this earnings season so far. Year-to-date, corporate client repurchases as a percentage of the S&P 500 market are 0.07%. cap is in line with the full year 2021 level, but below the 2019 (0.13%) level.

• Clients bought stocks in six of the 11 sectors, led by Energy (largest inflows since Nov.2021) and Real Estate (third consecutive week of inflows) -two sectors that fit BofA "inflation-protected yield" theme.

• Financials and Communication Services saw the largest outflows. Rolling 4-week avg. flows for Financials turned the most negative ever last month, with more muted but continued outflows in recent weeks (Exhibit 3). BofA team notes that banks are trading on recessionary concerns; easing inflationary pressures of de-escalation of Russia-Ukraine tensions could increase investor confidence.

• Opposite of trends the last several weeks, ETF inflows outpaced single stock inflows (biggest ETF inflows since late March). Inflows were chiefly into Large Cap and Broad Market ETFs and were broad-based across styles (Blend, Growth, Value).

• Clients sold ETFs in 6 of the 11 sectors, where Communication Services ETFs saw the largest outflows. Staples-among the sectors seeing the biggest ETF outflows YTD- saw a record week of ETF inflows.