Hedge funds drive return to US equity buying: BofA
Hedge funds led Bank of America clients back into net buying of US equities in the week ended July 3, with net purchases of $4 billion, driven largely by individual stocks.
Bank of America clients returned to net buying of US equities in the week ended July 3, recording net purchases of $4 billion, the bank’s flow data showed. Individual stocks accounted for $3.1 billion, the strongest weekly demand for single names since March, while equity ETFs drew about $1 billion.
Hedge funds were the most active buyers, extending a four-week net buying streak. The group’s four-week average net inflows reached the highest level in Bank of America’s records going back to 2008. Institutional and retail investors also posted net purchases for the week.
Buying was broad across market capitalisations, with large-, mid- and small-cap stocks all attracting inflows. Small- and micro-cap companies saw particularly strong demand, and the bank described the week as a record period for those segments.
Corporate share buybacks declined for a sixth consecutive week, falling to the lowest weekly level since February. Bank of America noted the annualised pace of buybacks this year is slightly below 2025 levels but remains above the averages recorded from 2016 through 2023.
At the sector level, Consumer Discretionary drew the largest inflows, reversing four weeks of selling and registering the biggest single-stock inflow for the sector since the bank began tracking the data. Technology and Health Care returned to positive territory after recent outflows. Financials sustained seven weeks of net selling, while Energy and Utilities recorded their fifth and fourth straight weeks of outflows, respectively.
ETF flows followed a different pattern: large-cap and blend-style funds attracted inflows, while growth, value, mid-cap, small-cap and broad-market ETFs saw net outflows. Financials ETFs were among the stronger performers despite continued selling of individual financial stocks. Health Care ETFs posted their largest weekly outflow since January 2025.
Measured over the past 12 months, hedge funds, institutional investors and retail clients remain net sellers, according to Bank of America data.
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