Data from Bank of America shows that despite declines in major stock indices, investors overall net sold U.S. stocks last week, but the industrial sector defied the trend and attracted record inflows.
Overall Outflow from U.S. Stocks
According to Bank of America data, the S&P 500 index fell 1.6% last week, with clients overall net selling U.S. stocks. Equity ETFs recorded approximately $1 billion in outflows, marking the largest outflow since the end of September last year.
Capital flow showed divergence:
- Hedge funds net sold for the fourth consecutive week
- Private clients turned to net selling
- Institutional investors net bought for the third consecutive week
Industrial Stocks Attract Record Funds
Despite overall market pressure, inflows into the industrial sector hit the highest record since 2008, with the proportion to sector market value at a historical high.
In addition, the technology and communication services sectors received increased holdings for the fourth consecutive week, while the consumer sector recorded inflows for the second consecutive week.
Sector and Size Divergence
The financial sector saw the most significant outflows, enduring selling for 10 consecutive weeks; the energy sector also experienced net outflows for two consecutive weeks, despite rising oil prices.
From a market cap perspective, small and micro-cap stocks have been sold off for the seventh consecutive week, while mid-cap stocks were the only ones to see ETF inflows based on size.
Macroeconomic and Market Environment
During the same period, the U.S. 10-year Treasury yield rose to about 4.23%, the dollar strengthened, oil rose by about 2%, while gold and bitcoin fell by over 2% and 4%, respectively.
Analysts point out that rising interest rates and geopolitical risks are reshaping capital allocation paths.
