Robinson Capital Management,, an independent investment advisor specialising in alternative fixed income strategies, has launched the Robinson Alternative Yield Pre-Merger SPAC ETF (SPAX).
Robinson Capital Management, an independent investment advisor specialising in alternative fixed income strategies, has launched the Robinson Alternative Yield Pre-Merger SPAC ETF (SPAX).
The ETF is actively managed and is the first 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,” says 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.”
The Robinson Alternative Yield Pre-Merger SPAC ETF is actively managed and will invest at least 80 per cent of its net assets (plus any borrowings for investment purposes) in equity securities, specifically, units and shares of common stock and warrants, of US-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 USD10/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 in order 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.