Every week, BofA Merrill Lynch equity strategist Savita Subramanian publishes data showing what BofAML clients are doing with their holdings of U.S. stocks.
During the week ended November 29, in keeping with a trend the bank has been observing since it started compiling these data in 2008, big institutions that do business with BofAML unloaded $US2.3 billion from their U.S. equity portfolios.
“Institutional flows suggest waning confidence in U.S. equities,” writes Subramanian in a note to clients this morning.
“Last week, as the S&P 500 climbed another 0.1%, BofAML clients were net sellers for the sixth consecutive week, in the amount of $US2.47 billion. “Net sales were led by institutional clients for the second week in a row, and this group’s net sales were the third-largest in our data history (since 2008). This group remains the biggest net seller year-to-date. Hedge funds were also net sellers for the third consecutive week, while private clients were the sole net buyers.”
Subramanian notes that these private (retail) clients have added to their portfolios in 24 of the last 27 weeks — and unlike institutional and hedge fund clients, they are the only net buyers of stocks so far in 2013.
So, what’s behind the institutional selling?
“While much of institutional clients’ net sales post-crisis were likely due to redemptions, some outflows year-to-date could suggest a rotation out of U.S. stocks and into global equities,” says Subramanian.