Bringing you live news and features since 2006 

Active Alts launches Contrarian ETF


Exchange traded fund industry veteran Brad Lamensdorf has launched the Active Alts Contrarian ETF, an actively managed ETF that seeks capital appreciation by investing in companies with solid fundamentals that have very large short positions and are subject to a short squeeze.

As a secondary investment strategy, Lamensdorf intends to lend out the hard-to-borrow securities in an effort to earn a stream of monthly income which has the potential to enhance the total return.
“SQZZ is the first ’40 Act fund to employ this novel strategy of seeking to capitalise on “short squeeze” opportunities and generate potential income by getting paid for lending securities,” says Lamensdorf.
The SQZZ ETF portfolio manager screens securities that are highly shorted to isolate indications of unexpected values.
“Because of changing market conditions or smart management moves, highly shorted securities may have promising fundamentals, creating the potential for a profitable short squeeze,” says Lamensdorf.
The ETF invests in securities with market capitalisation of USD250 million or greater with at least USD1 million a day in trading volume. The strategy does not have to be fully invested at all times, and it can raise 100 per cent cash if warranted by market conditions, which may allow the fund to outperform in bear markets.
Until a short squeeze materialises, SQZZ investors earn current income by receiving the majority of the interest from banks who are paid by borrowers of the security. Typically, when securities are loaned from an investor’s margin account, the investor earns nothing – the payment is kept by the bank or broker. SQZZ is not typical; when it loans securities, the bank will pay the ETF the majority of the interest it may earn, that income goes to SQZZ investors in the form of a dividend.
“While securities lending is commonplace, SQZZ will be partnering with major banks to optimise which securities to lend and to get the most income for the fund, which may bolster returns,” says Lamensdorf.

Latest News

HSBC Asset Management’s (HSBC AM) ETF and Indexing business has passed USD100 billion in assets under management (AUM), reflecting its..
Amundi’s ETF Market Flows Analysis for April reveals that investors added EUR54.1 billion to global ETFs in April with equities..
VanEck has reached USD10 billion in assets under management in Europe for the first time in April 2024...
Global index revenues increased 9.3 per cent in 2023, totalling a record USD5.8 billion, according to a benchmark study published..

Related Articles

Dan Miller, IQ-EQ
With just over a week to go till T+1 settlement begins in North America, Canada and Mexico, time is of...
Emily Spurling, Nasdaq
Last October’s ETF Express US Awards 2023 found Nasdaq winning Best Index Provider – ESG ETFs and Best Index Provider...
Vinit Srivistava, MerQube
Index provider, MerQube, launched in 2019, with the aim of providing a “technology-driven answer to the most complex, rules-based investment...
Sean O' Hara
Pacer ETFs has announced the launch of three Cash Cows UCITS ETFs. The firm writes that this will give European...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by