European Short Observer November 2014

In November, short positions reported by hedge funds rallied, costing managers mark-to-market losses, albeit not to the extent of the general market.

Our model portfolio that tracks the aggregate short positions disclosed by hedge fund managers, returned -2.8% compared to a loss of 3.3% for a short on S&P 350 Europe index, accounting for dividends. Year to date, the model portfolio has compounded at 21% above the benchmark, making 2014 a great year for generating alpha shorting individual stocks in Europe.