ETF tracking SPACs set to fall to a three-month low

FILE PHOTO: The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City, New York, U.S., March 9, 2020. REUTERS/Carlo Allegri/File Photo

(Reuters) – An exchange-traded fund (ETF) that tracks special purpose acquisition companies (SPACs), or blank check firms, was set to fall to its lowest level in three months on Friday, hit by weakness in its biggest holdings.

The Defiance Next Gen SPAC Derived ETF was trading 1.5% lower at $26.90 before the bell, hurt partly by a 2.8% fall in units of Michael Klein-backed Churchill Capital IV Corp, a top-5 holding of the ETF.

SPACs have gained immense popularity among amateur retail traders, who are hoping to ride on the coat-tails of prominent sponsors, such as hedge fund manager Bill Ackman and serial blank-check dealmaker Chamath Palihapitiya.

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