Bank of America's Clients Were Net Buyers of All but One Sector Last Week

Optimism (almost) across the board.

Navigating the Rocky Start to Markets in 2016

Stocks are off to a rough start in 2016, but Bank of America Merrill Lynch clients appear to be buying the dip in everything from energy to health care.

One sector, however, hasn't been so lucky. According to the equity-flow note sent out by Jill Carey Hall and Savita Subramanian, $2.9 billion flowed into U.S. equities last week, the largest amount since late August, when the market saw a similar downturn. Industrial stocks, however, missed out on the new money.

"Industrials was the only sector which saw net sales by our clients last week; this sector has continued to ail amid disappointing PMIs and other industrial/manufacturing data. Industrials has seen the longest and most consistent sales by our clients, with net sales in 15 of the last 18 weeks."

Screen Shot 2016-01-14 at 6.52.40 AM

Troubles in industrial stocks won't come as a surprise to many, with industrial production in the U.S. falling the most since early 2012 in November. Everything from El Niño to high inventory levels at factories is said to have contributed to the sector's recent struggle. Industrials have seen net selling since November of 2015, according to BofAML, with the outflows appearing to pick up steam when looking at the four-week moving average. 

Screen Shot 2016-01-14 at 6.53.14 AM

There was a small bright spot for industrials in BofAML's data: Hedge funds were net buyers of the sector. These purchases weren't enough, however, to compensate for selling by larger institutional and private clients.

Eschewing industrials may be working out for some investors, relatively speaking.

The S&P 500's Industrial Index is down 7.8 percent since the start of the year, compared with a 7.5 percent drop in the broader S&P 500.  

Before it's here, it's on the Bloomberg Terminal.