UBS sees 30 percent uptick in short positions from its hedge fund clients YTD
Swiss bank UBS AG has revealed this week that the global economy is continuing to create contrarian viewpoints, noting that its Asia hedge fund clients have increased short positions on stocks three times faster than corresponding long bets. Often a very complex strategy that involves borrowing, selling and buying back (“covering the short”) shares on the expectation they’ll fall over a specified timeframe, this 30 per cent hike would suggest that UBS’s clients remain far from bullish on economic recovery. According to Lynden Howie, UBS Head of Equity Finance, Asia Pacific, long holdings have, by comparison, risen by 10 per cent, commenting to Bloomberg: “While our gross balance has increased, the percentage split of long and short balances has varied widely through the year. That’s just consistent with the lack of conviction that the client base has experienced through 2010 due to the volatile markets.” Despite this upswing, Howie confirmed that clients’ were still overweight long positions versus shorts. A trend that he believes will continue in the current investment climate.
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