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ETF Edge: Breaking Down SPACs and 5G

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On this week’s “ETF Edge,” Paul Delaquilla, President and Global Head of ETFs at Defiance ETFs, Andrew McOrmond, Managing Director at WallachBeth Capital, and Tom Lydon, CEO of ETF Trends, talk SPACs and 5G as investors anticipate assets tied to both.

Host Bob Pisani has his eyes on delving into the special interested acquisition company (SPAC) boom, specifically the new fund created for it — the Defiance SPAC ETF (SPAK). The big question is how SPAK breaks down, given the inability to know what SPACs will own until two years from now.

As Delaquilla explains, investors are provided with an 80/20 allocation. 80 is companies public through SPACs, 20% is blank check companies. So, with that in mind, SPAK is still accessing the most liquid and biggest in size of those assets in SPACs.

The 5G Rollout

Additionally, Pisani also gets into next-gen tech by speaking about the Next Generation Connectivity ETF (FIVG). This is a fund closely connected to the advent of 5G and the companies that will eventually be more suited to take on this level generation.

FIVG features companies with global equities related to 5G networks. It’s also tier weighted, making the fund even more elaborate for an ETF. Not to mention the purchasing of cellular networks and satellites, cell phone tower REITs, broadband modems, and fiber cables to establish this fund’s potential further. As Delaquilla explains, FIVG is up YTD around $400 in assets and $500-600 in AUM.

The goal is to every stock possible going into this 5G rollout. Having everything available for any company that could potentially be involved only helps in that pursuit.

Going to Lydon on some thoughts concerning the 5G space, he believes the next iPhone from Apple will play a large role in popularizing this level of connectivity. That said, only around 30 cities in the U.S. have 5G built into them at this point, and it’s not spreading quickly enough. However, having this new phone will ideally build a level of demand in the months to come.

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