BofA’s Private Clients Kick Off 2025 with Record-Breaking Buying Streak

Bank of America’s private clients have started 2025 with an unprecedented buying spree, setting a new record for the longest start-of-year streak in the firm’s data since 2008.

Private Clients Maintain Strong Equity Buying Streak

Last week, BofA clients remained net buyers of U.S. stocks, adding $2.5 billion to their portfolios. This marks the fifth consecutive week of positive net inflows into equities.

• Single stocks saw consistent demand for the eighth straight week, reinforcing investor confidence.
• ETFs, however, were net sold, suggesting a shift in portfolio allocation strategies.

The 12-week consecutive buying streak by private clients is now the longest on record for this period of the year.

Institutional Clients and Hedge Funds Shift to Selling

While institutional investors had been net buyers the previous week, they turned into the biggest sellers last week. Meanwhile, hedge funds continued their selling trend for the third consecutive week, reducing exposure to U.S. equities.

Corporate Buybacks Surge Beyond Seasonal Trends

Despite institutional and hedge fund selling, corporate stock buybacks accelerated at an above-average pace. Year-to-date buyback execution, measured as a percentage of market capitalization, is tracking at its highest level since 2014.

Health Care Sector Sees Record Inflows

• Health care stocks attracted record-breaking inflows, the highest in BofA’s data since 2008.
• Institutional investors drove the bulk of these inflows, with hedge funds also increasing exposure.
• According to BofA’s report, health care inflows as a percentage of market cap were the largest since January, and before that, the biggest since 2009.
• Health care has outperformed the S&P 500 by approximately 9% year-to-date, making it the best-performing sector so far in 2025.

Sectors Facing Outflows: Communication Services & Utilities

• Communication services and utilities saw the largest outflows, with utilities experiencing its fourth consecutive week of selling.
• ETF flows remained negative for the second week in a row, with clients reducing exposure to growth, blend, mid-cap, and broad market ETFs.
• Value, large-cap, and small-cap ETFs, however, saw increased inflows, indicating a potential rotation in investor sentiment.

Mixed Sector ETF Flows: Tech Gains, Financials Face Selling Pressure

ETF sector trends were divided, with five out of 11 sectors experiencing outflows:

• Financials ETFs recorded the largest outflows, despite strong demand for individual financial stocks.
• Tech and communication services ETFs saw the highest inflows, indicating investor optimism in these industries.

What’s Next for Investors?

With BofA’s private clients extending their record-breaking buying streak and corporate buybacks surging, the market remains in a dynamic phase. However, institutional and hedge fund selling could signal caution ahead.

(Sources: investing.com, reuters.com)