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Institutional investors slowed their rate of selling in November as outflows totaled $25 billion compared to $48 billion the month prior. The move brings total year-to-date outflows for the group to $375 billion. The smaller magnitude of selling correlated to a notable recovery in equity markets over the month. Meanwhile, retail investors and hedge funds reacted to the market rally by locking in short-term profits. Retail investors sold $10 billion worth of equities over the month while hedge funds divested $11 billion. Both groups had been significantly smaller sellers in the prior month.

The broader market rebound in November led to notable recoveries among many sectors, including utilities and consumer staples, which nearly erased their year-to-date losses. Fears of inflation and rising interest rates continued to impact some sectors such as consumer discretionary and real estate, both of which saw little positive price action on the month.

Institutional investors increased exposure to 3 sectors

Institutional investors made real estate a top buy against a backdrop of improved consumer price index data and dovish Fed talk. The buying follows the notable declines in the space as real estate is currently the third worst performing sector of the year. The group appeared to favor value opportunities as the two other sector inflows for the month were also in spaces that have significantly underperformed.

Hedge funds bet on a consumer recovery

Hedge funds aggressively bought into the consumer discretionary and consumer staples sectors after making them top sells in the month prior. The sector rotations suggest that some hedge fund strategies are shifting their focus away from near-term inflation concerns.

Retail investors sold aggressively mid-month

After marginal selling in the month prior, retail investors were notable sellers in the second week of November. The group appeared to react to the significant market rally by locking in short-term gains in many sectors. The group continues to be the only one with net inflows year-to-date, but prior months have shown a considerably bearish shift in activity.

Data and insights for this article were compiled by Matthew Albert, Mark Buckles, and Christopher Blake from S&P Global Issuer Solutions.