BofA securities equity client flow trends ETFs>stocks; inflation-protected yield

• Outflows were entirely from single stocks; equity ETF inflows were the largest since late March.

• Institutional clients were the biggest net sellers (after buying the week prior) and hedge funds were also sellers for the second consecutive week. Retail clients were buyers for the second week.

• Buybacks by corporate clients decelerated slightly vs. the prior week as earnings season continued to wrap up (now is typically the seasonal peak in buyback activity during the quarter). Year to date, corporate client buybacks as a % of S&P 500 market cap are now tracking slightly above last year's levels at this time (0.09% vs. 0.08%) but below 2019 levels (0.16%).

• Clients sold stocks in seven of the 11 sectors, led by Health Care (biggest outflows since June 2021 and second-largest outflows ever; chart below) and Tech (biggest outflows since Oct 2021, ending the recent seven-week buying streak).

• Health Care outflows as a percentage of sector market cap were more than 2 standard deviations below average; prior weeks of similarly extreme outflows (18 instances since 2008) saw the sector continue to underperform, on average, over the subsequent month (-60% of the time), but outperform over the next three months >60% of the time (by a median of 70bp).

• Clients bought Consumer Discretionary, Staples, Financials and Materials stocks last week. Discretionary stocks have continued to see positive inflows most weeks since early April.

• ETF inflows were broad-based across styles (Blend/Growth/Value) and size segments (Large/Mid/Small/Broad Market). This was the first week of inflows into small cap ETFs since early April (and largest inflow since February).

• Clients bought ETFs in seven of the 11 sectors, led by -inflation-protected yield' sectors (Energy and Real Estate). In tandem with Tech single stock outflows. Tech ETFs saw the biggest sales since late December.