Short sellers aim to profit from share price declines. Short selling is a very different proposition to going long. Not only is your upside capped, and downside unlimited – but you also have to pay a fee to borrow the stock. The easy answer can be to exclude shorting from your portfolio completely. However, we believe there are significant benefits to be gained from shorting, and that investors should consider allocating a part of their portfolio to shorting.
How can you access shorts in Australia?
When looking at managed funds, there are broadly two categories of funds that offer shorting. In our view, the most important decision that investors in these funds must make is the overall level of equity market exposure desired. The two categories are: