Absolutely. Fairly common for large funds to lend out their stock for revenue purposes. The index funds will depend if the mandate allows it or not. Plenty of investors who don't allow their stock to be lent out. I was a holder in SYR for a while, Aus Super own a fair chunk, large, and I am certain it was their stock that fed the shorts. Generate an income from an otherwise non-yielding asset. Yup. Still feels a bit like s...ting in your own nest, but to each their own.
Fact remains though it is not the Funds that are short-selling. It's the specialists. The Funds may be providing the ammunition, but not pulling the trigger.
For them it doesn't have the same relevance. If MSB makes up 1% of the index, whatever the index, and you have a 1% position, so are neutral, it doesn't make any difference to you if it goes up or down because you are going to get index return regardless. If you are generating a return by lending your stock whilst having a neutral position, you are effectively outperforming the index, whether the stock goes up or down.
MSB Price at posting:
$2.83 Sentiment: Buy Disclosure: Held
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