Hedge funds short 'cable' ahead of Scottish vote

As the gap between the "yes" and "no" vote for Scottish independence narrows, hedge funds are trimming their long positions on cable – the exchange rate between sterling and the dollar -- new data shows.

On average, investors have cut their positions from 5 percent of their net assets at the end of May to -1.3 percent in early September, according to French asset management group Lyxor.

"Although economic fundamentals signal the pound is now oversold, few investors, if any, are willing to take the "independence risk" on their portfolios," head of research at Lyxor's Managed Account Platform, Phillipe Ferreira said.

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Last week, the pound fell to its lowest level in 10 months amid uncertainty about Scotland's future within the U.K.

The pound weakened further on Monday, falling 0.2 percent to $1.62, but remained above last week's low of $1.60, as polls are still too close to call.

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In terms of performance, the broad Lyxor Hedge Fund Index was flat last week as investors were in "wait and see mode" ahead of key events this week including a Federal Reserve meeting on Wednesday and the Scots vote on Thursday.

Multi-asset fund manager at Miton, David Jane said a "yes" vote for independence is more likely than the opinion polls imply, but in any event, sterling will weaken.

"Clearly a yes vote would create another huge wave of uncertainty which will weigh on the currency and potentially the bond markets for an extended period of time until all the details of separation are settled," he said.

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"However, even in the event of a no vote, we feel sterling's luster as a safe haven currency has been tarnished by these events. This, combined with the forthcoming general election, could lead to further weakness," he said.

"Our portfolios are generally 40 percent to 60 percent exposed to overseas currency so on balance we feel we are set to benefit from a yes vote, but in practice we think the outcome of the vote remains in balance," he added.

By CNBC's Jenny Cosgrave: Follow her on Twitter @jenny_cosgrave