Institutions, hedge funds and retail investors continued to sell their stock holdings in July as the equities rally showed signs of fatigue.
These three groups sold off a combined net $36.04 billion of stocks in July as the S&P 500 gained just over 1.1% from the end of June, compared to the more than 15.1% rally in the index during the first six months of 2024, the latest S&P Global Market Intelligence data shows.
Retail investors sold a net $20.72 billion throughout July, the most of any group that month, and have sold nearly $116.80 billion in net over the past year, the data shows. Retail investors have sold off a net $9.73 billion of stocks on average over the past 12 months.
"Over the past six months, retail investors have been fairly aggressive net-sellers of equities," said Julian Janse van Rensburg, a research analyst for Investor Relations Solutions with S&P Global Market Intelligence. "
Investor group breakdown
Institutions sold off a net $6.92 billion of stocks in July, down from the nearly $10.90 billion sold in June and well below the group's monthly average of nearly $18.20 billion over the past 12 months.
Hedge funds also sold a net of nearly $8.40 billion, down from the $9.30 billion sold in June but a reversal of the buying the group has done for much of the past year. Over the past 12 months, hedge funds bought an average of about $1.72 billion of stocks per month in net.
While both institutional investors and hedge funds ended up selling in net, both groups did move to buying as the end of July neared. Institutions sold overall on the month, but bought nearly $2 billion in stocks in net during the last week of July, as did hedge funds, which bought nearly $2.80 billion in stock in net during that last week.
"Institutions and hedge funds effectively used the mid-month pullback as a buying opportunity, while a portion of this capital seemed to be redeployed into ETFs," said Janse van Rensburg. "We have seen an ongoing shift of active money into index funds over the past year as stock picking has fallen out of favor."
Institutions, hedge funds and retail investors were all relatively sellers of stocks in the materials sector throughout July, likely due to ongoing fears of a recession, said Janse van Rensburg.
"The materials moves are likely being driven by the back-and-forth in perception of whether the Fed can pull off a soft landing," Janse van Rensburg said.
