Ann: Investor presentation - IOOF FY 2018 results, page-69

Apologies, I may not have explained myself clearly. I only meant the market leverage on some financials is used as a method of shorting the entire market as well as the individual stock. Some long short funds write about this approach when they wish to short a market, if a financial with their inherent leverage is used it will effectively increase short exposure for the same short borrowing fees

OK, now I see what you mean Andy, thanks for clarifying.

Sure, that’s possible. I see it as a bit unusual, though, that someone would choose to take a bearish view on FUMAS (which is a heterogeneous pool of assets, with correlations that don’t always work in the same direction), rather than on a single asset class (e.g. an equity or credit index type of thing).

I do see your point about operating leverage, but then I guess the banks would an even better short, from that perspective (i.e. higher leverage, and also less diversified asset class exposure, plus more constraints on future credit growth).

Admittedly, I myself bought some put options on bank stocks, at a couple of points in the past, as a sort of “portfolio hedge” for my Australian equity holdings.

Out of curiosity, which particular long/short funds have shared commentary about this sort of approach?