A stock picker's market is forming for the first time since 2008 as investors ditch ETFs and pile into single shares, Bank of America says

• Bank of America said it seeing the first sign of a stock picker's market since 2008.
• So far this year, $25 billion has flowed into single stocks while ETF outflows have reached $9 billion.

Investors are snapping up single stocks and moving away from index funds as they target buying opportunities in the US equity market.

Inflows into single stocks cumulatively have climbed to $25 billion on a year-to-date basis while, outflows from exchange-traded funds have reached $9 billion – the widest gap since the global financial crisis, Bank of America Securities said in a Tuesday note about flow trends.

The figures point to the "first sign of a stock picker's market since 2008," Jill Carey Hall, who leads BofA's small and mid-cap strategy, said in a weekly update capturing activity among its clients.

Tech stocks are drawing in the most investment money so far this year. Shares of mega-tech companies have climbed recently following better-than-expected earnings reports, with the batch including Apple and Microsoft and Meta.

The S&P 500 Communication Services sector is up 22% this year and the Information Technology sector has gained 21%, stronger than the overall S&P 500 index's 7% rise.

While more money is flowing to stock pickers, their actual performance versus the rest of the market is another matter.

Actively managed mutual funds that focused on large caps were "caught off guard" in missing the market's rally during the first quarter, BofA said last month.

Bearish stances in that group left just one in three funds outperforming benchmarks during the first three months of the year, the worst quarterly performance since the fourth quarter of 2020.