Last week, as the dollar rose, clients of Merrill Lynch were selling, selling, selling.
1min read Despite the S&P 500 index rising 0.9% last week, U.S. Bank's clients net sold U.S. stocks, with clients withdrawing $3.3bn from the market, the highest level since early April. Meanwhile, demand for exchange-traded funds (ETFs) increased.
Within this trend, institutional clients played a key role, leading the selling activity after two consecutive weeks of net buying. In contrast, hedge funds acted as net buyers, with the overall inflows reaching the largest weekly record since October 2023.
From an industry perspective, financials experienced the largest outflows of the week, the highest since 2008. In addition, industrial and healthcare experienced outflows, with the weekly outflows of the industrial sector being the largest since December 2022 and the healthcare sector being the largest since May 2023.
In ETFs, U.S. Bank's clients bought ETFs for the sixth consecutive week, with net new money flowing into 5 of the 11 S&P sectors. The XLV.US, the healthcare sector index ETF, attracted the largest inflows, while the XLK.US, the technology sector index ETF, recorded the largest weekly outflows. In addition, clients bought ETFs across asset classes, including hybrid, growth ETFs (VUG.US), value ETFs (VTV.US) and most size segments, such as large, small and mid-cap funds.
Despite the overall positive market performance, U.S. Bank's clients' fund flows indicate changing preferences among investors across asset classes and industries. This dynamic reflects different views and strategy adjustments among market participants on the current economic environment and future market trends.