Shorting a stock indicates how sellers view a particular company, but with the ability to short Exchange Traded Funds, one can now bet on entire sectors. Morgan Stanley reported top performing sectors held the highest level of short interest last month. Could this be a predictor of future sector trends?
Most-shorted ETFs in September, relative to total assets
| Fund | Short interest | 13-week return | 1-year return | 3-year return (not annualized) |
| Retail HOLDRS | 308% | -8.9% | 0.95% | 21.7% |
| Regional bank HOLDRS | 162% | -4.51% | -0.80% | 27.0% |
| iShares Lehman 20+ year Treasury | 132% | n/a | 6.21% | 22.3% |
| Oil service HOLDRS | 126% | 4.78% | 39.2% | 103% |
| iShares DJ U.S. real estate | 120% | -7.48% | 13.7% | 90.3% |
Source: Morgan Stanley Equity Research
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.