EPP — the iShares MSCI Pacific ex Japan ETF — arrives at the end of May with a curious divergence: the cost to borrow has been falling steadily, yet short positions have jumped sharply in the latest reading.
The most striking data point this week is the sudden rise in estimated short interest. Shares reported short climbed to roughly 220,000 on May 28, up from around 60,000 the prior day — a near-fourfold jump in a single session and the highest reading over the past 30 days. At 0.64% of free float, the absolute level remains low. But the velocity of the move is worth watching, particularly as the fund has drifted quietly higher, closing at $55.44 on May 29, up about 0.8% on the week and 1.3% over the past month.
The borrow picture tells a conflicting story. Cost to borrow has been declining — it's now 3.14%, down from a peak of nearly 6.5% in late April. That compression suggests the lending market is easing, not tightening. Availability has also swung dramatically: it collapsed from above 2,300% on May 27 to just 267% on May 28, a drop of 44% week-on-week. That single-day compression tracks closely with the short-interest spike, implying a meaningful burst of borrow demand entered the market in one concentrated move. The 52-week low in availability was just 2.4% — the current reading is still well above that level, so there is no squeeze pressure, but the direction of travel is abrupt.
Options positioning is leaning bullish rather than cautious. The put/call ratio has been running near its annual low, at 0.066 — well below its 20-day average of 0.12 and not far from the 52-week floor of 0.058. That PCR is roughly one standard deviation below normal, reflecting unusually light demand for downside protection. Options traders, in other words, are not hedging against the same risk that the short-interest spike hints at. The two signals are pointing in opposite directions.
On the institutional side, the largest reported holder is JPMorgan Chase with just over 20% of shares, though the firm trimmed its position modestly in Q1. RBC Rochdale stands out as the most active buyer in the latest quarter, adding more than 2.2 million shares to reach nearly 9.6% of the fund. Goldman Sachs Wealth Services reduced its stake by over 1 million shares. The holder base is broad — 144 institutional owners in total — with the distribution suggesting EPP functions primarily as a tactical allocation tool rather than a long-term conviction holding.
The ORTEX short score edged up to 41.2 on May 28, its highest reading in more than a week and a clear step-change from the 29–30 range seen mid-week. That score had been drifting lower since a local peak of 45 on May 15, making Thursday's jump back toward the 40s the more notable development. The combination — cost to borrow easing even as estimated shorts jump and availability tightens sharply — is the dynamic to track in the days ahead.
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