Jan. ETF Short Report: EFA Shorts Drop 24%


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Short-sellers took pressure off a number of popular equity ETFs last month in a clear sign that investors were taking on risk amid a stream of positive economic reports and growing views that the economy is normalizing.

As an example, the number of shares of the iShares MSCI EAFE Index Fund (NYSEArca:EFA) being shorted dropped more than 24 percent, compared with a decline of 8 percent in the prior month, December 2012.

The shift was perhaps the most emblematic of basic changes in the economy. The ETF focuses heavily on Europe, whose problems in the past few years have pretty much infected the entire global economy. The dropping short interest of EFA suggests that Europe may be turning a corner, even if that just means the crisis has simply stopped getting worse.

As noted, that bullish trend of dropping short interest could be seen in many different pockets of the equities universe, including the emerging markets, the energy sector, midcaps, small caps and, not least, large-cap stocks.

As an example, short interest in the SPDR S&P 500 ETF (NYSEArca:SPY), the biggest ETF in the world, fell 11.5 percent in January after rising by more than 2.5 percent in December 2012, according to data compiled by IndexUniverse.

Big Bets
Ticker Name % Float Short 1 Month % Change $Short ($, M)
SPY SPDR S&P 500 23.74 -11.57 29,807.87
IWM iShares Russell 2000 71.35 -11.12 12,981.63
QQQ PowerShares QQQ 11.69 2.83 3,835.36
GLD SPDR Gold 4.90 -5.44 3,479.05
IYR iShares Dow Jones U.S. Real Estate 68.28 8.01 3,065.74
EEM iShares MSCI Emerging Markets 4.98 -17.03 2,602.78
XLE Energy Select SPDR 30.29 -11.21 2,289.40
XRT SPDR S&P Retail 259.41 11.49 1,956.73
MDY SPDR S&P MidCap 400 16.77 -10.04 1,936.29
EFA iShares MSCI EAFE 4.19 -24.41 1,754.02

Really Really Short
Ticker Name % Float Short 1 Month % Change $Short ($, M)

XRT SPDR S&P Retail 259.41 11.49 1,956.73
XOP SPDR S&P Oil & Gas Exploration & Production 169.74 -10.24 1,341.24
RTH Market Vectors Retail 165.49 18.06 51.36
FXE CurrencyShares Euro 157.52 -11.79 435.04
FXY CurrencyShares Japanese Yen Trust 150.26 -5.16 193.26
VXZ iPath S&P 500 VIX Mid-Term Futures ETN 122.18 30.63 65.69
KBWB PowerShares KBW Bank 109.57 1,235.51 98.43
DUST Direxion Daily Gold Miners Bear 3X 75.57 24.96 17.40
CVOL C-Tracks Citi Volatility ETN 73.71 -2.35 2.03

Ticker Name Short Interest Ratio 1 Month % Change $Short ($, M)
JGBL PowerShares DB Japanese Govt Bond Futures ETN 48.45 29,226.63 2.53
DRGS RBS Global Big Pharma ETN 12.31 3.55 0.63
PWO PowerShares Dynamic OTC 11.14 0.30 2.55
JGBT PowerShares DB 3X Japanese Govt Bond Futures ETN 3.73 -1.32 0.17
CSMB Credit Suisse Leveraged Merger Arbitrage ETN 2.22 4.89 0.49
MMTM SPDR S&P 1500 Momentum Tilt 1.96 140.61 0.12
NINI iPath Pure Beta Nickel ETN 1.92 12.79 0.03
VLU SPDR S&P 1500 Value Tilt 1.74 6.54 0.11
RGRE RBS Rogers Enhanced Energy ETN 1.42 28.23 0.06
FSU FactorShares 2X:S&P 500 Bull/USD Bear 0.35 0.00 0.01

Data is believed to be accurate; however, transient market data is often subject to subsequent revision and correction by the exchanges.

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This article appears in: Investing , ETFs
More Headlines for: EFA , SPY

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