Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE).

As Congress moved the tax bill forward, investors pulled the highest amount out of equities funds in more than three years, suggesting some investors may see "tax cuts" as already priced in.

According to Bank of America Merrill Lynch, redemptions from equities funds and ETFs totaled $14.5 billion, the fourth largest on record, and the biggest since August, 2014, just weeks after Brexit.

For the week ending Wednesday, redemptions from bond funds overall totaled $3.2 billion, the largest in a year. High-yield bond funds were down $5.3 billion, the eighth consecutive week of outflows and the longest streak since the financial crisis in 2008.

"I think the reaction was notable this week, after the tax reform passage. The outflows were remarkable," said Jared Woodard, global market strategist at BofAML. Woodard said investors sold value, small-caps and financials, all "Trump trade" sectors that should benefit from the sweeping tax bill.

U.S. value funds had outflows of $7.8 billion and small-caps lost $5.8 billion, both the largest on record.

"It was exactly the kind of places where you saw big inflows after the U.S. election," he said. Woodard doesn't believe the "buy the rumor, sell the news" behavior is negative for stocks near term, and the market should benefit from "risk on" in January. What it may be a sign of is that investors do not see the big returns some expect from the tax stimulus, Woodard said.

Nonetheless, Woodard said momentum is positive for the stock market for now. One area that saw inflows was tech, which is a sector not expected to see much benefit from the sharp decline in the corporate tax rate to 21 percent from 35 percent.

BofAML's bull and bear indicator has moved further away from the sell signal level of 8 and was at 6.1 on weaker high yield flows and less bullish hedge-fund positioning.

Investment grade corporate bonds saw inflows of $1.2 billion, the 52 positive week.

Congress voted on the tax bill Wednesday, and it was signed by President Donald Trump on Friday.

Source: Bank of America Merrill Lynch