The Smart Money Is Starting to Pour Into Energy Stocks

Institutional investors are starting to take a shine to energy.

Bank of America Merrill Lynch’s clients poured $212 million into energy equities, primarily mid-caps, for the week ending July 24.

Bank of America Merrill Lynch

The increase was wholly attributable to institutional investors, as hedge funds and private clients were net sellers of the space.

This group, which is comprised of mutual funds, pension funds, insurance companies, banks, broker dealers and others, has put money to work in energy stocks for five consecutive weeks. The last time Bank of America’s institutional clients bought energy for this long, they were trying to catch a falling knife -- and it didn’t work out too well.

“This is the longest Energy buying streak by institutional clients since August 2014 (when this group bought the dip as Energy first pulled back over 5 percent from its highs),” equity and quant strategist Jill Carey Hall wrote.

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