Traders work on the floor of the New York Stock Exchange (NYSE) on November 10, 2025 in New York City, USA.
Brendan McDiarmid | Reuters
While professional investors have used the market’s record rally as an opportunity to book profits, retail investors have been doing much of the heavy lifting in the latest run of the three-year bull market.
Hedge funds and other institutional investors have been the biggest net sellers of individual stocks and exchange-traded funds this year, selling more than $67 billion worth of stocks in 2025, according to the latest customer flow data from Bank of America.
Wall Street investment banks say retail investors are the backbone of the market and have been the most consistent bull-buyers since 2020, a behavior forged in the pandemic’s backlash. The strategy has worked beautifully, with the S&P 500 reaching multiple all-time highs this year. Retail investors have been steadily bringing in new money even during market pullbacks, giving them an advantage over many institutional investors who have remained cautious amid uncertainty over interest rate cuts and geopolitical disputes from trade wars to Gaza to Ukraine and Iran.
That tension will be in focus this week as a number of prominent institutional investors gather for CNBC’s Delivering Alpha Investor Summit in New York City on Thursday, giving the world a chance to hear how the industry’s most influential voices are navigating this volatile market.
In the first week of November, hedge funds and other large investors saw their largest net shorting of tech stocks in two years, amid concerns about skyrocketing valuations.
Even as professional money managers balked during the selloff earlier this year, small investors repeatedly stepped in and helped keep large-cap tech stocks and the more speculative parts of the market rising.
However, this pattern seems to be evolving. BofA noted that retailer enthusiasm is showing early signs of fatigue following the market’s relentless rise.
