Despite the sharpest weekly market decline since October 2008, investors poured $8 billion into U.S. equities, according to Bank of America Securities. This counterintuitive behavior marks one of the largest inflow events in over a decade—highlighting investor confidence in long-term recovery and a strategic shift toward cyclical sectors.
$8 Billion in Equity Inflows:
The fourth-largest weekly inflow since 2008 (in dollar terms) and the 31st-largest relative to market cap.
Institutional Buyers Lead:
Institutional investors recorded their biggest inflow since December, breaking a three-week selling streak.
Private Clients Remain Bullish:
Marked their 17th consecutive week of net buying—6th-largest weekly inflow on record.
Hedge Funds Turn Positive:
Modestly net buyers for the first time since early February, indicating a tentative return to risk assets.
Corporate Buybacks Rise:
Buyback activity exceeded typical seasonal levels for the first time in five weeks, showing corporate confidence.
| Sector | Inflow/Outflow | Highlights |
|---|---|---|
| Technology | Inflow | 5th-largest since 2008 |
| Industrials | Inflow | 2nd-biggest ever |
| Financials (ETFs) | Inflow | Led ETF buying |
| Consumer Disc. | Outflow | Still seen as vulnerable |
| Utilities | Outflow | Yet attractive in large-cap and SMID |
| Energy (ETFs) | Outflow | Largest among ETF sectors |
Notably, flows continued to favor cyclical sectors over defensives for the fourth week in a row, a strong signal that investors are not preparing for a recessionary downturn—despite macro uncertainty from tariffs and market corrections.
ETF Buying Broad-Based:
ETF flows were strong across market caps and investing styles, except Growth, which saw no net inflows.
Cyclical Tilt Dominates:
Financials and Consumer Discretionary ETFs attracted the most attention—despite some outflows in the latter at the stock level.
The large inflows during a steep market drop reflect a conviction that recent declines may present opportunistic entry points, especially in sectors like Tech and Industrials.
Institutional inflows signal renewed confidence in fundamentals—or at least a strategic bet that market panic is overdone.
Investors are not pricing in a recession. The tilt toward Financials, Industrials, and Tech suggests a belief in economic resilience despite policy uncertainty and geopolitical risk.
While ETF flows were broad, Growth strategies saw no inflow—pointing to a temporary pause in chasing high-multiple names amid rising interest rates or policy fears.
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BofA’s report is a fascinating look into how smart money is responding to market stress. While volatility remains high, the strong inflows across client types and sectors reflect confidence in the underlying economy—or at least in long-term U.S. equity performance. As tariff tensions unfold, all eyes are now on whether this optimism is validated or tested further.
