"Smart money" is making a major move into U.S. stocks! Bank of America clients recorded the sixth highest net purchases in history in a single week, with technology stocks gaining favor once again.

According to the latest client fund flow data from Bank of America, its clients net purchased U.S. stocks for the second consecutive week last week, with inflows reaching the highest level since mid-July, marking the sixth largest weekly net inflow since the bank began tracking weekly data in 2008. Notably, this round of buying was mainly driven by institutional investors and hedge funds, while retail clients have been net sellers of U.S. stocks for the sixth consecutive week. Meanwhile, funds are being redirected towards growth sectors such as technology, indicating a resurgence in risk appetite among large professional investors. Data shows that last week, Bank of America clients net purchased approximately $3.9 billion in individual stocks and about $3.1 billion in stock ETFs, resulting in total inflows of about $7 billion. During the same period, the S&P 500 index only rose by 0.1%, suggesting that the large-scale capital influx did not occur against a backdrop of a significant market rise. In terms of investor type, institutional clients and hedge funds have become the main driving forces behind this round of inflows. In contrast, retail clients continue to exit the market, marking the sixth consecutive week as net sellers of U.S. stocks. There has also been a noticeable divergence in fund flows among stocks of different market capitalizations. Bank of America clients mainly bought large-cap and mid-cap stocks while continuing to sell small-cap stocks, indicating that although investors are increasing their exposure to U.S. equities, they still prefer larger, more liquid companies with relatively stable fundamentals. At the sector level, the trend of funds flowing back into growth assets is particularly evident. Last week, Bank of America clients net bought stocks in 8 out of 11 major U.S. stock sectors, with the technology sector receiving inflows for the second consecutive week. The rolling average fund flow for tech stocks over the past four weeks has remained positive since mid-July, indicating a continuing improvement in capital allocation to the technology sector. Meanwhile, the communication services sector also saw its first net inflow of funds in five weeks. In stark contrast, the industrial sector has seen Bank of America clients net sell industrial stocks for the fifth consecutive week, with last weeks outflow being the largest among all sectors. Bank of America pointed out that industrial stocks had previously become overvalued and congested in trading. The week prior, the rolling average fund outflow for this sector reached a historical record, indicating that investors are retreating from previously high positions in industrial stocks. Consumer-related sectors also emerged as another area of significant fund outflows, reversing the previous weeks net buying trend. The ETF market is also signaling a shift back towards a growth style. Last week, clients purchased value, growth, and blend style ETFs simultaneously, with growth ETFs seeing their first net buying in five weeks. In terms of market cap styles, large-cap, mid-cap, and overall market ETFs all received inflows, while small-cap ETFs continued to be sold off. However, there is a notable divergence within the technology sector between individual stocks and ETFs. While clients have significantly net purchased tech stocks, technology ETFs have instead experienced the largest outflow among industry ETFs. Meanwhile, among the 11 industry ETFs, seven saw net buying from clients, with the healthcare ETF attracting the most inflows. Overall, the latest client fund data from Bank of America indicates a clear reallocation of funds within U.S. equities. On one hand, institutional investors and hedge funds are flowing back into the market, driving overall inflows in U.S. equities to historically high levels; on the other hand, funds are not pursuing risk universally, but are concentrating on large-cap and mid-cap stocks as well as growth sectors like technology, while continuing to avoid small-cap stocks and withdrawing from the previously crowded industrial sector. It is particularly noteworthy that retail clients have sold off for the sixth consecutive week, while institutions and hedge funds are actively buying, showing a further divergence in attitudes towards the current U.S. stock market among different types of investors.