Short interest in U.S.-listed exchange-traded funds rose sharply last week, climbing 8.3% and marking the largest weekly increase since Liberation Day as well as the second-largest jump seen in the past five years, according to figures from the Goldman Sachs Prime Trading Desk.
The surge suggests a notable rise in hedging activity, the team led by Vincent Lin and Marco Laicini said. ETFs tied to corporate bonds, energy, small-cap equities and large-cap equities were among the most actively shorted during the week ending March 5.
U.S. equities overall experienced net selling for the third straight week, largely driven by both long and short sales in macro-oriented products. These outflows were partly balanced by fresh long positions and short covering in individual stocks.
Although single stocks as a group still saw net buying, seven of the 11 market sectors recorded net outflows. The trend was fueled by continued selling in cyclical sectors and widespread deleveraging across technology, media and telecom (TMT) shares, with software stocks leading the move through short covering.