XSB, the iShares Core Canadian Short Term Bond Index ETF, enters the final days of April with a dramatic re-set in short positioning — the most notable development on the tape in weeks.
The standout story here is the sheer scale of the short interest unwind. Estimated short interest sat above 1.2 million shares through most of March and early April, a level that implied meaningful tactical hedging or yield-curve positioning against the short end of the Canadian bond market. Then, around April 7, that position collapsed. By April 8, estimated short interest had already fallen to roughly 197,000 shares. It dropped further over subsequent days, reaching a low near 133,000 shares in late April before ticking back up modestly to 158,000 as of April 28. At that level, short interest represents just 0.12% of the free float — a negligible fraction by any measure. Whatever drove the original large position — rate expectations, ETF arbitrage mechanics, or a tactical macro hedge — it has been almost entirely closed out.
The lending market reflects this. With short interest so thin, availability is effectively unlimited, and the borrow cost of 1.61% APR, while up about 10% on the week, remains low in absolute terms. That weekly uptick in cost to borrow coincides with the small fresh build in short shares over the past few days, suggesting a new but modest position may be forming. Availability, however, remains loose — there is no sign of a crowded borrow or any squeeze mechanics at work. The ORTEX short score of 28.2 is consistent with a low-conviction short setup, and well off its 52-week utilization peak of 70.4%.
For an ETF tracking short-duration Canadian government and investment-grade bonds, the broader context matters. The fund closed at CAD 26.72 on April 29, down about 0.67% on the week and essentially flat over the past month — a narrow trading range consistent with its mandate as a low-volatility, income-oriented vehicle. Monthly distributions remain in place, with the most recent cash dividend of CAD 0.069 per unit paid in February 2026. The price action is driven far more by Bank of Canada policy and credit spreads than by any short-side activity.
Institutional ownership is concentrated among a handful of Canadian asset managers and fund-of-fund platforms. 1832 Asset Management holds the largest reported position at just under 1.23 million shares, followed by Purpose Investments at roughly 949,000. BlackRock — the ETF's own parent — holds a comparatively small 181,000 shares in a separate account, steady after a minor trim. These are broadly passive or quasi-passive holders; there is no evidence of activist positioning or material turnover.
The key variable to watch is whether the nascent short rebuild sustains itself over coming sessions, and whether it correlates with any renewed flattening or steepening of the Canadian yield curve at the short end.
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