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From Precy Dumlao, Opalesque Asia:
Hedge funds account for the vast majority of short positions, according to Goldman Sachs' latest "Hedge Fund Trend Monitor" report. The steady growth of shorts in the U.S. equity market during the past 9 years has correlated to the rise in hedge fund assets, data showed.
"We estimate that hedge funds account for 85% of all short positions [$405bn as of December 31, 2010]. In the future, mutual funds may become a larger share of the short market, given initiatives such as 130/30 programs. Short interest for the S&P 500 rose during most of 2010 before falling in 4Q. Currently, 1.9% of equity cap is held short while the short interest ratio has declined but is above 10-year low reached in late 2009, the authors of the study David J. Kostin, Stuart Kaiser, CFA, Amanda Sneider, CFA, and Yi Zhang said.
The study also indicated that some of hedge funds' short positions are conducted at the market level via ETFs.
The hedge funds' short positions per sector were as follows: Materials, $21bn (stock position $18bn, ETF $3bn), Consumer Discretionary $67bn (stock position $61bn, ETF $6bn), Information Technology $72bn (stock position $60bn, ETF $13bn), Health Care $45bn (stock position $39bn, ETF $6bn), and Energy $40bn (stock position $32bn, ETF $8bn).
Short positions offer more comprehensive insight to hedge fund sector tilts. Researchers pointed out that short int...................... To view our full article Click here
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