Phantom of the Opera: ETF Shorting and Shareholder Voting

• 成果类型: Article; Early Access
• 署名作者: Evans, Richard B.; Karaka, Oguzhan; Moussawi, Rabih; Young, Michael
• 署名单位: University of Virginia; University of Cambridge; Villanova University; University of Pennsylvania; University of Missouri System; University of Missouri Columbia
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2023.01567
• 发表日期: 2025
• 关键词: EXCHANGE-TRADED FUNDS; Proxy voting; broker nonvote; Short interest; operational shorting; authorized participants; ETF market making; voting of hedged positions; empty voting

摘要

The short-selling of exchange-traded funds (ETFs) creates phantom ETF shares, trading at market prices, with cash flow rights but no associated voting rights. Unlike regular ETF shares backed by underlying securities, which are voted as directed by the ETF sponsor, phantom ETF shares are typically hedged by the underlying basket as part of marketmaking activities and result in a significant number of sidelined votes of underlying securities. We find that increases in phantom shares for the corresponding underlying securities are associated with decreases in the number of proxy votes cast and increases in broker nonvotes.