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Select the one that best describes you is recommending a new short position for the month ahead. This short recommendation is based around taking advantage of a relative weakness in a foreign equity market in the event that selling pressures return to Wall Street. Below, we outline our investment thesis and outlook for the new recommendation.

This position is motivated by stagnating momentum in an overseas equity market despite January being a very fruitful month for “risk on” investors of all stripes. Because this ETF failed to stage an impressive rally alongside its peers last month, we are opting to short it if and when profit-taking pressures return to the broad market in anticipation of it breaking down and leading to the downside.

The new short recommendation is based around:

  • The Asia Pacific Equities ETF, which is flat for the month and down around 4% for the trailing year.
  • This ETF has seen heavy outflows over the past year to go along with its lackluster performance, totaling just over $450M.
  • The fund is fairly concentrated, as the top ten holdings, from a portfolio of 80 securities, account for roughly half of the total assets under management.
  • In terms of exposure, this ETF is dominated by large-cap securities from the financials and technology sectors.

Check out our previous buy recommendation here.

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