Investing.com -- Bank of America (NYSE:BAC) Securities said that its clients were net buyers of US equities last week, adding $4.6 billion after selling the previous week, despite worries over DeepSeek’s AI breakthrough and a potential tariff war.
For the fourth consecutive week, single stocks saw inflows while exchange-traded funds (ETFs) faced outflows. “We also think this will be a year for stock picking,” BofA strategists led by Jill Carey Hall said in a note.
Private clients remained net buyers for the eighth straight week, with January inflows as a percentage of market cap running five times higher than the typical January. Financials and Health Care stocks led their purchases.
On the other hand, institutional and hedge fund clients continued selling, marking their third and ninth consecutive weeks as net sellers, respectively. Historically, both groups tend to be net sellers in January, but their selling activity this year has been larger than usual.
Despite elevated valuations and interest rates, corporate buybacks have remained strong. January’s buyback activity was the highest for the month since 2010, with rolling 52-week buybacks relative to market cap still at record levels.
According to BofA, client flows were positive across most sectors, with Communication Services seeing the largest inflows, marking the second-biggest since the sector’s creation in 2018. Earnings surprises helped drive the demand.
Technology stocks also attracted inflows, even as concerns over DeepSeek lingered, though flow patterns varied by client group.
Meanwhile, Industrials posted the largest outflows for a fifth straight week, while Materials saw its third-biggest outflow in BofA’s data history since 2008. Consumer Discretionary stocks were also net sold.
The ETF space saw broad outflows last week, though there was interest in Growth and Technology-focused ETFs.
BofA clients sold ETFs across all market caps and most sectors, with Financials and Staples experiencing the largest withdrawals. Industrials and Technology ETFs saw the strongest inflows.