BofA, Citi Saw Institutional Investors Cash Out as Shares Peaked

(Bloomberg) -- Institutional investors shed shares of Bank of America Corp, Citigroup Inc. and JPMorgan Chase & Co. last quarter just as the S&P 500 Index declined amid questions about the health of the Trump trade and the longevity of the bull market.

Banks have been among the greatest outperformers since Donald Trump’s election in November 2016, buoyed by hopes for tax cuts, easier regulation and economic stimulus. An analysis of 13F filings for the quarter ended March 31 showed institutions have continued to shift away from Bank of America, Citigroup and JPMorgan.

Among Bank of America’s hedge fund holders, Citadel Advisors and Coatue Management topped the list of sales, cutting their positions by 23.7 million and 13.9 million shares respectively. For Coatue, that encompassed the entirety of their stake. On the Citigroup side, Balyasny Asset Management and Manikay Partners sold the most shares at 2.84 million and 1.83 million respectively. Manikay Partners now no longer holds a stake in Citigroup.

The banks were among the top 15 stocks and exchange-traded funds that saw reductions in holdings, with institutions cutting their positions in Bank of America by about 169 million shares, the most of any in the quarter. They cut positions in Citigroup by about 53 million shares, placing it in the ninth position, and in JPMorgan by about 50 million shares, placing it in twelfth place.

This is not a new phenomenon for Bank of America, which also held the top spot in the fourth quarter with reductions of 76 million shares. Citigroup followed, down by 68 million shares, while JPMorgan was down by 30 million shares. Bank of America also led sales in the first quarter of 2017, while JPMorgan came in 10th place and Morgan Stanley 11th.

The institutional investor reductions last quarter came as the KBW Bank Index fell 0.2 percent. During that period, Bank of America rose 1.6 percent, Citigroup sank 9.3 percent and JPMorgan gained 2.8 percent. The bank index rallied 16 percent from the end of 2016 through the end of the first quarter of 2018, with Bank of America rising 36 percent during that time, Citigroup gaining 14 percent and JPMorgan advancing 27 percent.

Tuesday was the deadline for institutional investment managers with more than $100 million in assets to file their first-quarter 13F reports with the Securities and Exchange Commission.

--With assistance from Brad Olesen

To contact the reporter on this story: Felice Maranz in New York at fmaranz@bloomberg.net.

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Courtney Dentch

©2018 Bloomberg L.P.