Retail investors betting on a weaker pound before Britain's vote on European Union membership have pumped money into exchange traded funds (ETFs) that allow them to short the currency, echoing a trend seen before the 2014 Scottish referendum two years ago.
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Total assets held by such ETFs have doubled this year and have climbed to about $113 million, close to their peak of $123 million in 2014.
In contrast, "long" sterling positions are at around $17.5 million, according to ETF Securities, which says it has a 99 percent share in the European foreign exchange ETF market.
The threat of a possible British exit from the EU, or Brexit, has dominated the sterling market since late last year, driving a decline of more than 10 percent in the currency on a trade-weighted basis between mid-November and mid-April.
The latest betting odds on website Betfair show the implied probability of a British vote to stay in the European Union at 74 percent, down from as high as 78 percent on Thursday.
Niche ETFs are popular among retail investors who otherwise find it expensive to short currencies or access complex trades that often require derivatives and leverage.
"If you are a very sophisticated fund manager, you could buy such a short sterling product in other ways, but in the retail space, it's one of the simpler and cheaper ways to access this product," said James Butterfill, head of research and investment strategy at ETF Securities.
ETF Securities' currency exchange traded products are based on Morgan Stanley's foreign exchange indices, and use forward contracts and swaps to replicate the performance of the underlying index.
(Editing and graphic by Vikram Subhedar; Additional editing by Mark Potter)