Retail traders were huge buyers of last week’s market sell-off, but hedge funds sold
Investors took advantage of the market dip last week and piled into stocks, according to Bank of America Securities. Yet there was one cohort sitting out: hedge funds. The bank saw $4.1 billion in inflows to single stocks from clients, the fifth largest since 2008, it said in a note Tuesday. The move came after four weeks of selling. However, as has been the case recently, retail investors are among those leading the way, buying on dips and pushing stocks to multiple highs this year. Last week, both retail and institutional investors were doing the buying, Bank of America said. Hedge funds were net sellers of U.S. equities for the fifth straight week, the bank said. In fact, hedge funds have been conservative as the market continues to rally. They dumped stocks at the start of the year and in August, they turned cautious as the S & P 500 sat near record highs, according to data from Goldman Sachs. Earlier this month, JPMorgan noted the cautious tone from macro hedge funds as the index hit all-time highs . At the same time, retail investors poured about $7 billion on balance into stocks the first week of October, according to JPMorgan. The S & P 500 set an all-time intraday high of 6,764.58 on Oct. 9. The market rose on Wednesday, after several tumultuous trading days that saw a sell-off on Friday, a rally on Monday and choppiness on Tuesday.
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