ETF Short Shifts
Short Interest Drops Sharply for Alibaba ETFs While Rising for Bond Funds
Anonymous
Key Points
1
BAMV is an actively managed total-market equity ETF that selects mid- and large-cap U.S. companies judged to have strong value characteristics through internal and external research; it launched on Sept. 27, 2023.
2
BABX provides leveraged daily exposure to Alibaba shares, and the article describes the fund as offering 1.75-times exposure before fees and expenses. Several institutional traders—including Jane Street, Tower Research Capital, Flow Traders, Scientech Research and Simplex Trading—reported positions or acquisitions.
3
BAMU paid a quarterly dividend of $0.1739 per share on Sept. 4, equivalent to an annualized $0.70 dividend and a 2.8% yield. The fund focuses on U.S. Treasurys and investment-grade corporate bonds with maturities of zero to two years.
4
BAMG’s short-interest increase occurred alongside a reported share price of $44.22, a price-to-earnings ratio of 31.62 and a beta of 1.15; the fund focuses on mid- and large-cap companies with strong earnings-growth potential.
5
BABO uses a synthetic covered-call strategy collateralized by cash and U.S. Treasurys to seek current income and capped gains on Alibaba stock, using both standardized exchange-traded options and FLEX options. The actively managed fund launched on Aug. 7, 2024.
Five exchange-traded funds saw dramatic swings in short interest during August, with three Alibaba-focused and value-oriented funds posting sharp declines while bond and growth-focused funds attracted new short positions. Watchlist News reported that short interest fell 68.1% in Brookstone Value Stock ETF (BAMV), 60.2% in GraniteShares' leveraged Alibaba ETF (BABX), and 60.7% in YieldMax's Alibaba option-income fund (BABO), with short positions shrinking to between 0.1% and 6.5% of shares outstanding by August 31.
In contrast, short interest surged 205.9% in Brookstone Ultra-Short Bond ETF (BAMU) and 150.5% in Brookstone Growth Stock ETF (BAMG), though absolute short levels remained modest at 0.4% and 0.1% respectively. The diverging moves reflect shifting institutional bets on China stocks, U.S. interest rates, and growth valuations heading into fall.
Alibaba Funds See Sharp Short-Interest Pullback
Short sellers rapidly unwound positions in three Alibaba-linked products by month's end. BABX, which offers 1.75-times leveraged daily exposure to Alibaba before fees, fell from higher mid-August short levels to 6.5% of outstanding shares. BABO, YieldMax's covered-call income strategy launched on August 7, 2024, dropped to 0.9% short. Both funds posted days-to-cover ratios between 0.2 and 0.3 days, signaling tight liquidity and minimal squeeze risk for remaining shorts.
The pullback reflects profit-taking as Alibaba shares remained well below their 52-week highs despite market volatility. Institutional traders including Jane Street, Tower Research Capital, and Flow Traders hold or acquired positions in BABX, suggesting algorithmic and arbitrage-focused hedge activity rather than concentrated bearish bets.
Value ETF Sheds Short Interest at Rapid Pace
BAMV, Brookstone's actively managed value-stock ETF launched September 27, 2023, saw short interest collapse 68.1% from mid-August levels. By August 31, shorts represented just 0.1% of shares outstanding, with a days-to-cover ratio of 0.2 days. The fund selects mid- and large-cap U.S. companies using internal and external research to identify strong value characteristics.
The steep decline suggests institutional investors abandoned or reduced bearish hedges against the fund's holdings. BAMV's rapid short-interest reversal indicates reduced skepticism about U.S. value stocks as investors repositioned for the fall.
Bond Fund Attracts New Short Positions Amid Rate Uncertainty
While equity-focused funds saw shorts flee, BAMU attracted fresh short interest with a 205.9% surge in August. The Brookstone Ultra-Short Bond ETF focuses on U.S. Treasurys and investment-grade corporate bonds with zero- to two-year maturities. BAMU paid a quarterly dividend of $0.1739 per share on September 4, annualized to $0.70 and representing a 2.8% yield.
The jump in short interest reflects hedging bets against short-term bond price movements as investors anticipate interest-rate volatility. Despite the 205.9% increase, shorts still represented only 0.4% of total shares, indicating tactical positioning rather than a major bearish thesis on ultra-short bonds.
Growth ETF Shorts Rise Amid Elevated Valuations
BAMG, Brookstone's growth-stock fund, attracted a 150.5% increase in short interest during August, climbing to 0.1% of outstanding shares. The fund focuses on mid- and large-cap companies with strong earnings-growth potential. As of the reporting period, BAMG traded at $44.22 per share with a price-to-earnings ratio of 31.62 and a beta of 1.15, indicating higher volatility than the broad market.
The rise in shorts suggests some investors are hedging against overvaluation in high-growth stocks. However, like BAMU, the absolute short level remains negligible, pointing to market-makers making tactical adjustments rather than concentrated speculative bets against growth equities.
Sentiment
Mostly PositiveNEGATIVENEUTRALPOSITIVE
Publishers
85
Articles
66
Reach
151
A
AnonymousAuthor
