Core Insights - The "October Effect" is a psychological belief that stocks tend to decline in October, although historical data does not support this notion [1][8] - October 2025 has seen increased market volatility due to a government shutdown and economic uncertainty, yet the market is reaching new historic highs [2] - Investors are showing a strong preference for large-cap equity ETFs, particularly those tied to the S&P 500, despite concerns about economic growth [3][4] ETF Flows and Performance - Equity ETFs accounted for 50% of all ETF asset flows in October, with a notable focus on large-cap exposure [3] - The top three ETFs have captured approximately 37% of all equity ETF flows, with significant inflows into the Invesco QQQ Trust, Vanguard Total Stock Market ETF, and others [4][6] - Conversely, small-cap ETFs like the iShares Russell 2000 and Invesco S&P 500 Equal Weight ETF have experienced significant outflows, indicating a lack of diversification interest [4] Gold Investment Trends - Gold has emerged as a favored asset class, attracting substantial investment as a hedge against inflation and market volatility [7] - In October, gold ETFs have seen significant inflows, with the SPDR Gold Shares, SPDR Gold Minishares Trust, and iShares Gold Trust leading the way [9] - Gold's performance has been strong, with a 7% gain in October, reinforcing its status as a safe-haven asset [8]

Investment Rating - The report indicates a positive investment sentiment with a focus on buying the dip in US equities, particularly in single stocks, which saw significant inflows [9][18]. Core Insights - Institutional and retail clients were net buyers of US equities, with a notable $4.1 billion inflow into single stocks, marking the fifth highest weekly inflow since 2008 [9][18]. - The report highlights a shift back to large-cap stocks, with inflows observed across all market cap sizes, particularly in Communication Services and Health Care sectors [9][18]. - Hedge funds continued to sell US equities for the fifth consecutive week, contrasting with the buying behavior of institutional and retail clients [9][18]. Summary by Sections Client Flows - Institutional clients led the buying activity, marking the largest weekly inflow since November 2022, while retail clients also participated after a period of selling [9][18]. - Hedge funds were the largest net sellers, with cumulative flows showing a significant outflow trend [5][22]. Sector Performance - Inflows were recorded across all 11 sectors, with Communication Services and Health Care leading the way, alongside notable inflows in the Energy sector [9][18]. - The report notes that clients sold equity ETFs for a second week, with outflows primarily from Tech and Materials sectors, while defensive sectors like Health Care and Real Estate saw inflows [9][18]. Size Segmentation - All market cap segments (large, mid, small) experienced inflows, with small caps showing resilience with inflows in five of the last seven weeks [9][18]. - The report indicates a preference for small-cap and value ETFs, contrasting with the outflows from large and mid-cap ETFs [9][18]. Corporate Buybacks - Corporate buybacks have slowed but are expected to pick up during the earnings season, with a focus on Tech and Financials dominating the buyback activity over the last three months [9][18].

Core Insights - BlackRock reported strong quarterly results, beating expectations on both revenue and earnings, with assets under management reaching a record $13.5 trillion [1][5]. Company Performance - The positive performance is attributed to strong fund flows and a strategic focus on expanding into alternative investments, private assets, and infrastructure [2][5]. - Digital assets, commodities, and fixed income also contributed significantly to the quarter's results, alongside core equity ETFs [5][6]. - BlackRock's shares have outperformed the asset management peer group, with a year-to-date increase of approximately 13% [10]. Market Environment - The current investment climate is characterized as "risk-on," benefiting firms like BlackRock, with expectations for continued strong performance in the fourth quarter [5][6]. - Macro factors, particularly US-China trade relations, may impact market performance, but BlackRock is positioned to navigate these challenges [3][4]. Competitive Position - BlackRock holds a competitive edge due to its efficient fee structure and a strong portfolio of ETFs, which are less susceptible to market volatility [12][14]. - The company is focusing on innovation and diversification to maintain its competitive position and enhance its business model [12][14]. Future Outlook - The outlook for 2026 suggests that macroeconomic risks will be more significant than inherent risks to BlackRock, as the company prepares to strengthen its product offerings [13][14].

Investment Rating - The report indicates a bullish sentiment with the BofA Bull & Bear Indicator rising to 6.5, reflecting strong inflows into stocks and a positive outlook for global equity markets [7][11]. Core Insights - There have been record inflows into global equity ETFs, totaling $152 billion over the past three weeks, marking the largest inflow on record [2][16]. - The report highlights a shift in investment themes from war to peace, and from US exceptionalism to global rebalancing, suggesting a favorable environment for gold and international equities in the second half of the 2020s [2][3]. - The report notes a significant outflow from Treasuries, amounting to $7.5 billion, which is the sixth-largest outflow ever recorded [10]. Summary by Sections Market Flows - Global equities saw inflows of $114 billion in the past three weeks, the third highest ever, with $26 billion inflows to stocks and $19.9 billion to bonds [16][41]. - Private clients have allocated 64.7% of their assets to stocks, the highest since March 2022, while bond allocations have decreased to 18.0%, the lowest since May 2022 [11][41]. Investment Themes - The report identifies entrenched trends favoring corporations over governments and passive over active management, with a notable shift towards national security and border control [2][3]. - The "Magnificent 7" companies are reallocating cash flow towards capital expenditures in the AI sector, indicating a significant trend in technology investment [17][38]. Sector Performance - The technology sector experienced the largest inflow of $9.3 billion, while healthcare saw a minor inflow of $33 million, contrasting with a record outflow of $17 billion for the sector [16][42]. - Financials and materials sectors also saw substantial inflows, with $3.3 billion and $5.9 billion respectively, indicating strong investor interest [16][42]. Economic Indicators - The report notes that 80% of global stock indices are trading above their 50-day and 200-day moving averages, suggesting a robust market breadth [11]. - The report emphasizes that no central bank has raised rates in the past two months, which may contribute to the current bullish sentiment in the markets [18].

BofA Securities Equity Client Flow Trends Small>Large, Value>Growth, equity income inflows 1st large cap outflows in two months Equity income inflows Accessible version ETFs: Value>Growth Exhibit 3: Biggest flows out of large caps in over 2 years (July '23) Net buying (selling) of large cap (single stocks + ETFs) by BofA Securities clients, 1/2008-present -6000 -4000 -2000 0 2000 4000 6000 8000 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Large Cap Source: BofA Securities. Note: see Exhibit 6 and E ...

Investment Rating - The report indicates a mixed sentiment with institutional clients being net sellers while private clients have shown net buying behavior [5][7][20]. Core Insights - The report highlights that small cap inflows have continued, with clients showing a preference for small cap stocks over mid caps, while large caps also saw some buying activity [9][25]. - Private clients have turned net sellers for the first time this year, with a rolling four-week average of equity flows turning negative [9][20]. - Institutional clients have been net buyers for six consecutive weeks, marking the longest streak since late 2022, while hedge funds have also shown buying activity [9][20]. - The report notes that corporate client buybacks have accelerated, surpassing typical seasonal levels for the first time in ten weeks [9]. Summary by Client Type - **Institutional Clients**: The largest net sellers post-crisis, with cumulative flows showing significant outflows [5][7]. - **Private Clients**: Have been the only cumulative net buyers year-to-date, but recent trends indicate a shift to net selling [9][20]. - **Hedge Funds**: Showed a buying trend for the second consecutive week, contrasting with the selling behavior of private clients [9][20]. Summary by Sector - **Technology, Consumer Services, and Staples**: These sectors saw the most buying activity from clients [9]. - **Industrials, Financials, and Utilities**: Experienced the largest outflows, with utilities facing near-record outflows in recent weeks [9][20]. - **Equity ETFs**: Clients favored growth ETFs over value ETFs for the first time in six weeks, indicating a shift in investment strategy [9]. Summary by Size Segment - **Small and Micro Caps**: Continued to attract inflows, while mid caps saw outflows [9][25]. - **Large Caps**: Also experienced buying activity, indicating a diversified interest across market capitalizations [9][25]. Summary by Investment Style - **Growth vs. Value**: Growth ETFs have seen greater net flows compared to value ETFs, suggesting a preference for growth-oriented investments [9].

Investment Rating - The report indicates a broad-based buying trend across various client groups and sectors, with a particular emphasis on institutional-led buying [1][11][19]. Core Insights - Financials experienced significant inflows, marking the fourth-largest since 2008 and the largest since February, with a notable increase in institutional client purchases [3][11][14]. - Clients showed a preference for growth over value, particularly in the technology sector, which outperformed most other sectors [3][11]. - The report highlights a shift in client behavior, with private clients becoming net buyers for the fifth consecutive week, contrasting with institutional clients who have been net sellers post-crisis [9][19]. Summary by Relevant Sections Client Flows - Institutional clients were the biggest net sellers post-crisis, while private clients have recently turned net buyers [7][9]. - Hedge funds showed small net buying activity after a previous selling trend, while corporate buybacks have slightly accelerated but remain below typical seasonal levels [11][19]. Sector Performance - Financials saw the largest inflows, followed by Health Care, Industrials, and Energy, while Communication Services experienced the largest outflows [11][16]. - Cyclicals recorded their biggest weekly inflows since January 2019, indicating a strong interest in these sectors [11][14]. Market Capitalization - All market cap segments (large, mid, and small caps) saw inflows, with large caps leading the way [22][26]. - The report notes that clients sold equity ETFs for the first time in nine weeks, with outflows across various sectors, particularly in Staples and Real Estate [11][19]. ETF Trends - Technology ETFs had the strongest inflows, while Consumer Staples ETFs faced significant outflows [29][30]. - The report provides a detailed breakdown of ETF flows, indicating a preference for mid-cap and broad market ETFs over large and small-cap ETFs [32][34].

Investment Rating - The report indicates a bearish sentiment with institutional clients being the largest net sellers of US equities, while private clients are net buyers [10][11][25]. Core Insights - There has been significant divergence in trading flows, with institutional selling and retail buying reaching the largest cumulative gap since 2008, indicating a potential shift in market dynamics [10][11]. - The report highlights that institutional clients sold stocks across 8 of 11 sectors, with the largest outflows observed in Technology, Staples, and Health Care, while inflows were seen in Industrials and Financials [10][11]. - Corporate buybacks have accelerated but remain below typical seasonal levels, suggesting cautious sentiment among corporate clients [10][11]. Summary by Relevant Sections Client Flows - Institutional clients have been net sellers for three consecutive weeks, with outflows totaling $3.8 billion last week, marking the largest rolling four-week average outflows since just before the 2024 election [10][11]. - Private clients have been net buyers in 29 of the last 31 weeks, indicating strong retail interest in the market [10][11]. - Hedge funds returned to buying for the first time in four weeks, suggesting a potential change in strategy among these investors [10][11]. Sector Performance - The Technology sector experienced the largest outflows, while Industrials saw the most significant inflows, reflecting a rotation towards cyclical sectors [10][11][16]. - The report notes that clients bought equity ETFs for the sixth consecutive week, with inflows across major styles including Blend, Value, and Growth [10][11][30]. Market Capitalization Trends - Large-cap and mid-cap segments saw outflows, while small-cap stocks experienced modest inflows, indicating a preference for smaller companies amidst broader market volatility [10][11][24][72]. - The cumulative net buying trends show that institutional clients sold across all market cap sizes, while private clients bought across large, mid, and small caps [10][11][72].

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific stocks within it Core Insights - The report discusses the moderation of inflows into US offshore-listed equity ETFs, with net outflows of approximately USD 4.7 billion over the past 20 weeks, indicating a shift in investor sentiment towards Europe and emerging markets (EMs) [1][3][5] - Europe-focused offshore ETFs have seen positive net inflows in 21 out of the past 24 weeks, totaling around USD 15 billion, suggesting a growing interest in European equities [3][7] - Emerging market ETFs have recorded positive flows in 19 out of the past 23 weeks, amounting to USD 13.6 billion, coinciding with the decline in US equity ETF inflows [3][9] - Interest in EM-ex China funds has declined recently, with net outflows of USD 2.9 billion over the past 18 weeks, contrasting with the significant inflows of USD 16.8 billion from October 2022 to October 2024 [3][11] - Japan offshore-listed ETFs have seen modest net buying, but foreign investors may be favoring direct stock investments in Japan, as evidenced by 13 consecutive weeks of net inflows into the Japanese cash equity market [3][14] - India offshore-listed ETFs have experienced a resurgence in net inflows of approximately USD 1.8 billion since late March 2025, following a period of net selling [3][18] - Taiwan onshore ETFs have seen significant net inflows of around USD 43 billion since the start of 2024, providing strong support for Taiwanese equities [3][22] - Korea offshore ETFs have attracted USD 1.4 billion in net inflows over the past 6 weeks, driven by renewed interest in AI and expectations of corporate governance reforms [3][25] Summary by Sections US Offshore-Listed ETFs - 11 out of the past 20 weeks have seen net-negative fund flows, totaling outflows of approximately USD 4.7 billion [3][5] - Significant net inflows of around USD 160 billion were recorded between June 2023 and February 2025 [3][5] Europe Offshore-Listed ETFs - Positive net inflows in 21 out of the past 24 weeks, totaling approximately USD 15 billion [3][7] Emerging Markets (EM) ETFs - Positive flows in 19 out of the past 23 weeks, totaling USD 13.6 billion [3][9] - Recent decline in interest for EM-ex China funds, with net outflows of USD 2.9 billion [3][11] Japan Offshore-Listed ETFs - Modest net buying observed, with a preference for direct stock investments indicated by foreign net inflows into the Japanese market [3][14] India Offshore-Listed ETFs - Net inflows of approximately USD 1.8 billion since late March 2025, following previous net selling [3][18] Taiwan ETFs - Significant net inflows of around USD 43 billion since the start of 2024 for onshore ETFs [3][22] Korea Offshore-Listed ETFs - Attracted USD 1.4 billion in net inflows over the past 6 weeks, driven by specific factors [3][25]

Jay Jacobs, BlackRock U.S. Head of Equity ETFs, and Roger Hallam, Vanguard global head of rates, share their outlooks for the rest of year, key trends to watch in the ETF space and the strategy behind their firms’ latest funds with CNBC’s Dominic Chu. ...