BofA: The Great Rotation We Almost Saw In The First Quarter Really Ended With A Whimper

Back in January, amid record, multi-billion dollar inflows into equity mutual funds and talk of the beginning of a “Great Rotation” out of bonds and into stocks, BofA Merrill Lynch analysts noted that, according to their own data on client positioning, they were already seeing a rotation underway.

January is now squarely in the rear-view mirror – as is all of the first quarter.

Savita Subramanian, BAML’s head of U.S. equity strategy, is out with an update on that client positioning today and what ended up transpiring over the rest of Q1 following January’s stunning flows.

Her post-mortem on the first quarter: ” Started with a bang, ended with a whimper.”

“Private clients have been the primary driver of BofAML client flows into US stocks this year, with strong inflows in January that tapered off in February and turned to net sales in March,” says Subramanian. “Hedge funds and institutional clients have both been cumulative net sellers, with outflows during all three months of the quarter.”

BAML client flows Q1

“With the S&P 500 surpassing its all-time high last week, we will be watching private client flows in the coming weeks for evidence of confidence in the rally,” concludes Subramanian.

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