Markets saw a near-record week of small-cap inflows following the Jackson Hole conference, according to Bank of America Securities.
The bank said its clients were heavy net buyers of U.S. equities overall, with $2.3 billion flowing into single stocks and $2.1 billion into equity ETFs.
The surge was led by small and mid-cap (SMID) stocks. BofA highlighted that net buying of small caps — combining single stock and ETF flows — reached $1.49 billion, the second-largest weekly inflow in its dataset since 2008, just shy of the $1.51 billion peak that year.
“We expect small caps to outperform near-term,” strategist Jill Carey Hall said in a Tuesday note.
Buying was broad-based across client segments. Institutional investors extended their buying streak to five weeks, private clients added to a run of purchases in 35 of the last 38 weeks, and hedge funds turned net buyers for the first time in three weeks.
Corporate buybacks, by contrast, slowed for a ninth straight week and were below typical seasonal levels.
Flows skewed toward cyclical sectors for a second consecutive week. Clients bought stocks in eight of eleven sectors, led by Technology, Industrials and Communication Services.
Financials, Consumer Staples, and Utilities were the only sectors to see outflows, with Staples and Utilities both extending a three-week run of redemptions.
ETF activity showed the largest equity inflows since March. Value-focused ETFs once again outpaced growth for the fifth straight week, with Hall citing the Fed, macro conditions, and flow dynamics as “positive catalysts for Value.”
While clients sold sector ETFs in areas such as Tech, Health care, and Staples, they added to Industrials and Materials ETFs.
Notably, Hall said that near-record SMID inflows were “entirely driven by single stocks,” as investors sold small- and mid-cap ETFs while adding to large-cap and broad-market funds.
Overall, the four-week rolling average of total equity inflows rose to $3.2 billion, near the upper end of historical ranges.
Source :
https://www.investing.com/news/stock-market-news/markets-saw-nearrecord-week-of-small-cap-inflows-post-jackson-hole-4221233
