Short sellers have increasingly backed away from financial stocks this year, which have maintained their market-beating gains despite the recent decline in bond yields.
Short-sellers held just 1.57% of financial sector stocks at the end of May, the lowest percentage of any of the S&P 500’s 11 groups, according to an analysis by S&P Global Market Intelligence. That compares to an average of 2.21% of shares in the broad index held by short-sellers.
Financial shares remain up more than 20% this year, despite the recent decline in bond yields, which narrows the gap between what banks pay on deposits and charge on loans.
Healthcare and consumer discretionary stocks were among the most-shorted sectors, with an average of 5.13% and 4.57% of shares held by shorts, respectively, the report noted.
