Hedge funds are far more short ETFs (which they don't disclose on 13Fs) than long, as they are a hedge to single stock longs.

Hedge funds are aggressively shorting Exchange Traded Funds (ETFs), a trend that reached record levels in March according to Prime Broker data. This activity is not reflected in their public 13F filings, as ETFs are utilized as hedges against single-stock long positions.

This development is critical for investors and traders as it signals a significant bearish sentiment among sophisticated market participants. The scale of ETF shorting suggests hedge funds are actively seeking to profit from broad market declines or specific sector weaknesses, potentially impacting overall market stability.

Prior to this surge in ETF shorting, markets experienced a period of volatility. While specific market conditions are not detailed, the timing of record shorting in March indicates a response to prevailing economic or market signals that are not publicly disclosed by these funds.

Investors should closely monitor ETF flows and short interest data for further indications of hedge fund positioning. The continued trend of increased ETF shorting will be a key indicator of potential downside risk in the coming weeks.