RPG shorts retreat as pure-growth ETF slides 7% in a month

RPG, the Invesco S&P 500 Pure Growth ETF, heads into the final stretch of October with short sellers quietly unwinding positions even as the fund itself has come under pressure from a difficult growth environment.

The most striking data point this week is the collapse in short positioning. Short interest dropped 88% over the past month to just 0.14% of the float, a level too small to read as a meaningful bearish thesis. Over the past week alone it fell roughly 50%, with the sharpest single-day move on October 27 cutting shares short by 63%. Whatever hedging pressure built up through September and into early October, when short interest was running at more than nine times current levels, has been aggressively unwound. Borrow conditions tell the same story of easing pressure: cost to borrow has dropped 23% on the week to 1.74%, its lowest reading since mid-September, and availability is wide open at 448%, meaning there are more than four shares available to lend for every share already out on loan. That compares with a 52-week low availability of just 11%, reached when the borrow market was genuinely tight. None of those conditions apply now.

Options positioning is equally calm. The put/call ratio at 0.03 is fractionally below its 20-day average of 0.04, essentially in line with recent norms and nowhere near the 0.87 52-week high that marked the most defensive point of the past year. There is no discernible hedging demand from options traders, and the z-score of -0.22 is statistically indistinguishable from neutral. Call volume has dominated consistently across the past month, which for an ETF like this tends to reflect straightforward tactical exposure-buying rather than speculative bets.

The ORTEX short score at 34.7 sits in the lower third of its recent range, having pulled back from the 41 to 42 level seen earlier in the week and mid-month. That prior mild elevation in the score coincided with the period when short interest was at its highest: shares short topped 420,000 in early October before the sustained unwind began. The score's retreat alongside the position reduction reinforces the picture of a market that briefly hedged growth exposure and has since stood down.

The fund is down 7.3% over the past month to $54.53, with only a partial recovery of 1.7% on October 27. Pure-growth factor strategies have been among the more volatile corners of the US equity market as rate expectations shifted through the quarter, and RPG's mandate of concentrating in the highest-scoring growth names within the S&P 500 amplifies that sensitivity. The next test is whether the fund can hold its recent stabilisation as the market approaches month-end rebalancing flows and positioning resets into November.