On Wednesday, Robinson Capital Management, LLC, an independent investment advisor specializing in alternative fixed income strategies, announced the launch of the Robinson Alternative Yield Pre-Merger SPAC ETF (SPAX). The ETF is actively managed and is the first exchange traded fund to invest primarily in pre-merger SPACs.
The SPAX portfolio management team, which has extensive fixed income experience and a long-term history of identifying successful managers and companies, seeks to provide total returns in excess of cash equivalents and short-to-intermediate duration fixed income while ultimately seeking to protect investors’ capital.
“As a 40-year veteran of fixed income trading and management, I have never seen a more attractive vehicle than the pre-merger SPAC structure. It has the credit and interest rate risk of a T-Bill portfolio, a base case return profile of the high yield bond market, and the upside potential of a strong equity market,” said James Robinson, CEO and CIO, Robinson Capital Management. “We are excited to bring this timely alternative solution to yield-starved fixed-income investors, and wrapping the strategy in an ETF provides greater tax sensitivity and intraday liquidity.”
SPAX is actively managed and will invest at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities, specifically, units and shares of common stock and warrants, of U.S.-listed Special Purpose Acquisition Companies (“SPACs”).
Robinson Capital invests primarily in pre-merger SPACs because of the tendency for downside mitigation (ability to redeem shares at $10/share), upside opportunity when a merger is announced, and almost zero correlation with traditional fixed income markets. Robinson attempts to purchase SPAC shares below trust value to generate a positive yield and higher overall returns. Given the attractive risk versus return characteristics, the manager believes SPAX is a compelling alternative for many traditional fixed income portfolios.
Robinson Capital partnered with the team at Tidal ETF Services to bring SPAX to market.
For more information, visit robinsonetfs.com.