Last week, during the U.S. stock market sell-off, tech stocks became the only safe haven.

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Last week (ending March 20), the S&P 500 Index fell 5.8% in a single week, but the actual trading behavior of Bank of America Securities clients tells an even clearer story than the index's movement itself. There was a net outflow of $8.3 billion from individual stocks, the fourth largest weekly scale since 2008; stock ETFs saw net outflows of $1.1 billion, marking a six-month high. Taken together, these two figures constitute a rather rare, broad-based reduction in positions.

According to Chase Wind Trading Desk, Bank of America Securities equity and quantitative strategist Jill Carey Hall recorded this "broad-spectrum sell-off" in the latest weekly fund flow report—9 out of 11 sectors experienced net outflows, with financials, energy, discretionary, staples, utilities, and materials seeing record or near-record outflows. Communication services saw net outflows for the first time since the end of December last year. The only exception was tech stocks: with net inflows of $4.6 billion—setting a historical record for weekly inflows since Bank of America started tracking in 2008.

From the client structure perspective, three types of clients showed rare directional divergence. Institutional clients were the largest net sellers last week, after three consecutive weeks of net buying; private clients net sold for the second week in a row; hedge funds, after four weeks of net selling, turned to net buying for the first time. However, zooming out to the past 12 months, the divergence presents another facet—hedge funds and institutional clients have cumulatively continued net selling, while private clients have been the main force of net buying. Last week’s short-term actions were almost completely opposite from this medium-term trend.

Regarding corporate buybacks, the scale accelerated week-on-week last week, but measured as a proportion of market cap, buyback levels over the past 10 weeks have continued to be below seasonally normal values. The rolling 52-week buyback proportion of S&P 500 market cap fell from the 0.42% peak at the end of February to 0.22% now. More noteworthy, Bank of America corporate client buybacks are down 17% year-over-year, while S&P 500 overall buybacks are still up 6% year-over-year in Q3 2025—these two data sets have historically been highly correlated, and if this gap persists, it may signal contracting buyback pressure at the index level in the coming quarters.

Institutional Clients Reverse Course, Hedge Funds Step In

In last week’s net outflows from Bank of America clients, institutional clients were the main contributors—with combined single-stock and ETF net outflows exceeding $11 billion, including about $9.9 billion in individual stocks. After three weeks of sustained buying, last week's sharp reversal was rather sudden.

Hedge funds were the only net buyers last week, net buying $2.7 billion in individual stocks, net selling about $900 million in ETFs, resulting in a comprehensive net buy of around $1.8 billion, ending four consecutive weeks of net selling. Private clients net sold individual stocks for the second week in a row (about $1.08 billion), but continued net buying in ETFs, so their overall net outflow was relatively limited.

The situation for small-cap and micro-cap stocks is more prolonged. Currently, small-cap and micro-cap stocks have recorded net outflows for eight consecutive weeks, the longest duration among all market cap categories.

Tech Stocks Reach Record Inflows, Historical Samples Point to Outperformance

Tech stocks saw single-week net inflows of $4.6 billion last week—the highest figure in Bank of America data since 2008, ranking eighth in terms of proportion to tech sector market cap. This number came after clients had net sold tech stocks for five consecutive weeks.

The report traces four similar historical cases—after five consecutive weeks of selling, there was immediately a reversal with large-scale buying; following this, tech stocks outperformed the S&P 500 by an average of 1.7 percentage points in one month, and 6.0 percentage points in three months, while the overall average excess returns for tech stocks are only +0.5 ppt and +1.6 ppt respectively over one and three months. Although the sample size is small, the direction is consistent.

By comparison, the financial sector has seen net outflows every week since the beginning of the year, with cumulative net outflows of about $17.5 billion in 2026 so far—the largest outflow among all sectors this year. Healthcare was the only sector besides technology last week to see net buying among the 11 sectors.

Energy ETFs and Individual Stocks Diverge, Large Cap ETFs Abandoned

The divergence between ETF and individual stock flows is most evident in the energy sector: Energy ETFs have seen almost weekly net inflows since the beginning of the year, last week saw another $43 million inflow; but individual energy stocks had about $1.8 billion in net outflows last week, among the largest declines across sectors. This "buy the sector basket, sell the individual stocks" approach suggests that investors are maintaining directional exposure to the energy sector, but are unwilling to bear specific company-level stock-picking risk.

From a style perspective, clients were buying growth and value ETFs, but for the second week in a row, they heavily net sold blend ETFs. By market cap, large-cap ETFs saw the most significant outflows, while small-cap ETFs and broad market ETFs saw net buying. Six sectors recorded ETF net inflows, with financials, tech, and energy ranking in the top three; materials ETFs saw the largest net outflow.

Buyback Data Concerns

Buybacks are currently an important endogenous support for US stocks, but the relevant data is now raising signals. Across the industry distribution, the two largest buyback sectors over the past 12 weeks were tech ($9.9 billion) and financials ($6.6 billion), followed by discretionary and healthcare.

However, in total, Bank of America corporate client buybacks are down 17% year-over-year, whereas overall S&P 500 buybacks in Q3 2025 are up 6%—a clear gap, given the historical correlation between the two. If Bank of America corporate client data is a leading indicator, then the overall S&P 500 buyback trend may soon weaken—this is not a variable that can be ignored in a market highly dependent on companies’ own buying.

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The above content is from Chase Wind Trading Desk.

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