Insights | 08.04.20
A Blank-Check ETF May Be Coming After the Surge in SPACs
Exchange-traded fund investors may soon be able to participate in initial public offerings with a twist. The Defiance NextGen SPAC IPO ETF will primarily track shares of companies that listed on exchanges by merging with special purpose acquisition companies, rather than those that held a traditional IPO, according to a filing Friday with the SEC. It is the first plan submitted for such a fund as SPACs boom in popularity. SPACs are “blank-check” companies that raise money with the intent of acquiring or merging with a private company with a two-year deadline before capital is returned to investors. More than $21 billion has been raised through 51 SPACs so far in 2020, a 145 percent increase from this time in 2019, according to Goldman Sachs Group. However, concerns have been expressed over whether the SPAC market is large and liquid enough to support an ETF portfolio.
Read the full article on Bloomberg.