Short Selling Respite Continued in March as Dow and S&P 500 Reached All-time Highs, Says Report

The short selling respite continued in March as the Dow Jones Industrial Average and S&P 500 reached all-time highs, according to the J.P. Morgan Prime Brokerage Global Hedge Fund Trends report.

J.P. Morgan’s U.S. Prime Brokerage book again ended the month net covered, with activity split evenly between single names, ETFs and bonds. In Europe, there were several notable capital raising events, which helped spur flows, said the monthly trend report. Gross short selling volume in the US decreased 11% month-over-month as clients appeared to focus more on the long positions in their portfolios. From a sector perspective, the strongest shorting occurred in the technology, basic materials and industrials sectors, said the report.

For a second consecutive month, the U.S. Prime Brokerage fixed income book was net covered.

Hedge fund strategies showed positive performance in March, despite mixed fortunes for markets, according to the report. It noted that the HFRI Global Hedge Fund Index climbed +1.15% month-over-month. Relative value strategies (+1.52%) fueled much of those gains, though all of the main hedge fund strategies recorded positive performance.

Despite record stockpiles of cash on corporate balance sheets, year-over-year M&A volume fell in the first quarter, said the report.