The standout tension in LSGR this week is a mismatch that rarely persists: the Natixis Loomis Sayles Focused Growth ETF carries a borrow cost running above 12% annualised, yet the lending pool is essentially unlimited — a pairing that warrants closer attention than the fund's quiet price action suggests.
The borrow market tells an unusual story for an ETF of this size. Cost to borrow has climbed steadily all week, reaching 12.66% on Tuesday — up roughly 12.5% from where it stood seven days earlier. That level is expensive for an exchange-traded fund; most liquid ETFs sit well below 1%. Yet availability is not the constraint. The lending pool shows more than 939,000 shares freely available, and the availability reading has been pegged at its effective ceiling for weeks. In other words, shares are easy to locate, but whoever is borrowing this fund is paying a premium to do so. Short interest is a negligible 0.08% of the float — just over 11,000 shares — so the elevated borrow cost is not the product of a crowded short trade. It is more likely a structural quirk of the creation/redemption mechanism or a thin group of specialised borrowers willing to absorb the cost.
Context from earlier in the year sharpens the picture. Cost to borrow on LSGR was running above 50% through much of July and into early August — peaking near 64% in late July. The sharp collapse to the low-to-mid teens through late August and September represents a substantial easing, even if the current 12.66% still looks elevated against comparable growth ETFs. Short interest followed a related path: it fell sharply through August from around 15,500 shares to a trough near 3,700 in late August, before rebuilding toward current levels through September. The monthly change in SI remains negative at roughly -9%, so the recent rebuilding is still unwinding a larger prior position.
On price, the fund has been quietly constructive. LSGR gained roughly 2.4% over the past week and is up around 2.1% over the past month, closing at $45.82 on Tuesday. The ORTEX short score registers at 32.3, a reading that places it comfortably in low-risk territory, and the score has been edging higher through September without any abrupt move. No analyst data, earnings calendar, or valuation multiples are relevant here — LSGR is a fund, not a single-name equity, so those lenses do not apply.
The dynamic worth watching is whether borrow costs continue to normalise from their summer extremes or find a floor near current levels. The gap between an effectively infinite lending pool and a 12%-plus borrow rate is the anomaly — how that resolves, and whether the small but recently-growing short position expands further or reverses, is the signal worth monitoring in the weeks ahead.
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