The headline tension on LSGR — the Natixis Loomis Sayles Focused Growth ETF — is a dramatic collapse in short-side activity, with borrow costs falling sharply even as they remain unusually elevated for a fund of this type.
The clearest signal is in the lending market. Cost to borrow has dropped by more than half over the past week, falling to 23.5% from peaks above 60% seen throughout July. That is still a high rate for an ETF — most passive or semi-active vehicles borrow at near-zero — but the direction matters. Short interest itself has fallen more than 70% over the past month, dropping from roughly 42,000 shares in mid-July to around 12,200 today. That puts short interest at a negligible 0.09% of float, a level so low it carries no meaningful information about directional conviction. The borrow-cost story is the only thread worth pulling here. Availability is essentially unlimited at the moment — the lending pool is barely touched — so the earlier cost spike was almost certainly driven by a temporary positioning event, not a structural shortage of shares.
What makes the borrow history genuinely curious is the scale of the mid-July peak. Between July 10 and July 14, cost to borrow was consistently above 54%, with a one-day reading as high as 63% on July 28. For a focused-growth ETF trading at $44, that level of borrow cost implies someone was paying a meaningful premium to hold a short position — not a casual hedge. That activity has now largely unwound. Short shares outstanding fell by nearly two-thirds between late July and early August, and borrow costs followed downward with a lag. The ORTEX short score, at 32.7, reflects a positioning profile that is low-intensity and cooling further.
Price action is broadly consistent with the unwinding narrative. LSGR closed at $44.36 on August 18, down about 1% on the week but up 4% over the past month. The month-to-date gain suggests the ETF benefited as the short pressure lifted — though the week-end dip is a minor counter to that read. With no upcoming earnings event and no analyst coverage structure applicable to an ETF vehicle, there is no scheduled catalyst to frame the next move around.
The question worth watching into next week is whether the cost to borrow continues its descent toward the near-zero levels typical for an ETF, or stabilises at an elevated rate that would suggest residual short demand. A sustained borrow cost above 15% on a product with less than 0.1% of float short would be an unusual combination, and any divergence between cost and availability bears watching.
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