Hedge Funds Take Aim at Small Cap Stocks After Torrid Rally
The short position on the Russell 2000 Index hit $16 billion in July, one of the highest levels since 2021, according to the Goldman Sachs Group Inc. trading desk. More broadly, net exposure to Russell 2000 futures sits near its lowest in a year, even as investors' futures bets on the Nasdaq 100 Index are near historic highs. The gap between the two metrics is the largest ever, according to Goldman.
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Long-Term Unemployment Rises In Worrying Sign For U.S. Labor Market
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The exchange-traded fund ecosystem keeps growing: There are now 268 ETF issuers in the United States—roughly double the number of issuers there were three years ago, according to data from Bloomberg. The ETF industry saw 45 issuers debut last year and is on pace for 50 new ones in 2025, according to Bloomberg Senior ETF Analyst Eric Balchunas, who shared the data in a post on X. 'It's where the fish are biting,' Balchunas said. FactSet data analyzed by show 289 unique issuers as of August 2025, up from 252 in 2024, which puts the projected number of new issuers closer to 60 by year's end. A Large Appetite for Niche Strategies The explosion of new ETF issuers represents the fact that there is investor appetite for ETFs, and firms are eager to meet that demand, Zach Evens, analyst of passive strategies at Morningstar, told He added that a lot of the ETF launches from new issuers have been in non-traditional or niche strategies. Invest in Gold American Hartford Gold: #1 Precious Metals Dealer in the Nation Priority Gold: Up to $15k in Free Silver + Zero Account Fees on Qualifying Purchase Thor Metals Group: Best Overall Gold IRA 'These types of strategies attempt to capture a specific market, or trade, and deliver select clients the specific exposures they desire,' Evens said, adding that many of the issuers use options to achieve those exposures. Examples include covered-call and derivative-income ETFs, including single-stock funds: Derivative-income strategies saw more than $29 billion in net flows in the first six months of the year, and it was the top category for all active ETF flows, according to data from Morningstar. Other examples are leveraged or inverse ETFs—also sometimes with single-stock funds—crypto-related ETFs and defined outcome or buffer ETFs. Many of these ETFs are relatively expensive compared to index ETFs, which lowers the bar for profitability, Evens added. Relative Ease for New ETF Issuers Another trend behind the surge of new ETF issuers is that it's now relatively easy for firms to launch new ETFs with the rise in white label providers like Tidal Financial and ETF Architect, which handle much of the administration and operations associated with launching and running an ETF, Evens said. That means that, while there's more demand, there's also more ability for firms to meet that demand. Editor's note: This article has been updated to add issuer data from | © Copyright 2025 All rights reserved
