The SPAQ ETF is an actively managed exchange-traded fund that primarily invests in the common shares, rights, and warrants of pre-deal special purpose acquisition companies. It applies a redemption option and trust-account structure during the pre-deal phase, and follows an operating principle of not maintaining long-term exposure to the common shares of post-deal companies.

It is suited for investors who understand the redemption conditions and merger-related risks of the special purpose acquisition company structure and who prefer selective active exposure over broad index tracking.

The ETF is actively managed by Horizon Kinetics.

Rather than mechanically tracking a specific index, this product adjusts its holdings based on the manager's review of pre-deal special purpose acquisition companies' redemption terms, merger progress, and trading conditions. After a merger announcement, the handling of redemptions or sales-related rights is reflected in the manager's decisions.

• An active approach that leverages the redemption structure of the pre-deal stage
• An operating principle of not maintaining long-term exposure to common shares following the completion of a merger

Assets under management (AUM) stand at $10.0M, with a total expense ratio of 0.85% annually.

Unlike broad-market equity exchange-traded funds that track an index, the SPAQ ETF adjusts its holdings based on the structure and merger stage of each special purpose acquisition company. Publicly disclosed holdings include names tied to pre-deal special purpose acquisition companies such as OACC, NHIV, VII, EVOX, and CEPV, though actual composition may vary based on manager judgment.

The performance trajectory of the SPAQ ETF is difficult to assess using the direction of the broader equity market alone. Individual special purpose acquisition company merger announcements, redemption selections, trust-account interest-rate conditions, and secondary-market demand all exert influence. As a result, it is more appropriate to review the operating structure and the distribution of merger stages among holdings alongside short-term price movements.

Fund flows can be sensitive to the issuance environment for new special purpose acquisition companies, the recovery of the merger market, short-term interest rate levels, and investor liquidity preferences. Even when market uncertainty rises, the redemption structure does not fully guard against losses, so the gap between net asset value and market price, along with trading conditions, should be monitored.

A selective approach that leverages the redemption structure is a strength, but investors must also shoulder merger outcome risk and the idiosyncratic risks associated with a non-diversified portfolio.

The ITOT ETF and SCHB ETF shown in the table offer a comparison benchmark for broad U.S. equity market exposure at a low expense ratio. The VXF ETF serves as an option that looks beyond large-cap names, while the OEF ETF and IWV ETF can be used to compare large-cap-centric and broad-market exposure, respectively. However, the SPAQ ETF is an actively managed product focused on pre-deal special purpose acquisition companies, so its objective, portfolio construction, and risk sources differ from those index-based products. Information on additional alternatives beyond those listed is limited in publicly disclosed similar-product data.

When evaluating the SPAQ ETF, it should not be judged solely on a cost comparison against general equity exchange-traded funds; instead, the redemption terms and merger stage of special purpose acquisition companies, the gap between market price and net asset value, and the concentration of holdings should all be reviewed together. Liquidity needs should also be distinguished based on whether the goal is long-term holding or short-term trading.

Merger announcements or liquidation possibilities of special purpose acquisition companies can directly affect the value of individual holdings. Even with the existence of redemption options, not all price movements are contained, and the non-diversified structure along with changes in trading volume can amplify realized volatility. Exchange-rate and regulatory factors tied to access to overseas assets should also be considered.

The SPAQ ETF can serve as a structural vehicle for investors seeking to actively select within the pre-deal special purpose acquisition company market. However, rather than making a simple comparison with broad equity market investing, it is advisable to understand how the redemption structure operates and the risks tied to mergers, and then evaluate the allocation weight within the overall asset allocation framework.