SPAC Rush Leads Active ETF to Go All In on Blank-Check Firms
Bloomberg 1/21/2021 Michael Bellusci
(Bloomberg) The world’s first actively managed exchange-traded fund that invests in blank-check companies is doubling down on the red-hot SPAC market at the expense of its other strategy, merger arbitrage.
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The Accelerate Arbitrage Fund was launched in April by Julian Klymochko, the founder and chief executive of Calgary-based Accelerate Financial Technologies. The firm invests in special purpose acquisition companies, or SPACs, before they’ve announced deals, and also incorporates merger arbitrage, which aims to capitalize on the spread between a target’s stock price and the offer price before a deal closes.
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They ve been around for decades, but it wasn t until this year that special purpose acquisition companies (SPACs) really took the financial world by storm.
What Happened: Where there s a hot theme, an exchange-traded fund usually isn t far behind that s the case with the 2020 spate of blank-check exuberance. The
Defiance Next Gen SPAC Derived ETF (NYSE:SPAK) debuted at the end of September.
SPAK, which tracks the Indxx SPAC & NextGen IPO Index, is off to a solid start with $37.17 million in assets under management.
More importantly, the lone dedicated SPAC ETF is up 6.12% since inception and an impressive 14.34% over the past month. More gains could be on the way next year.