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Professional investors increasingly sell equity markets short


With equity indices at medium-term or all-time highs, there has been a noticeable increase in professional investors going short, or betting against the market, according to research from exchange-traded products provider Boost ETP.

In May, the research found, investors in exchange-traded products reduced long positions and increased short positions. In total, USD4bn flowed into short positions at the expense of long positions (bets that the market will rise).
Investors are especially bearish on European and US stock markets. During May, for example, most European equity indices suffered outflows from long ETPs and inflows into short ETPs.
Continuing inflows into short positions show how investors are using these products to either hedge their portfolios or position themselves to profit from expected falls in markets. 
Nik Bienkowski, chief executive of Boost ETP, says: “During May, the sophisticated investors who use exchange traded products became increasingly bearish. They are going short either to hedge their portfolios or to position themselves to benefit from market falls. In May, short ETPs experienced inflows at the expense of outflows from long ETPs, which suggests more sophisticated investors are starting to think the market may have topped out. In total, around 58 per cent of global short and leveraged ETPs assets are now short."

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