A SPAC (Special Purpose Acquisition Company) is a company created solely for the purpose of raising capital through an initial public offering (IPO) with the intention of later merging with or acquiring an existing private company. A SPAC does not have its own business operations or products; it serves solely as a vehicle for raising funds and bringing a target company public. SPACs are often referred to as "blank check" companies because their only asset is the capital raised from investors. For target companies, merging with a SPAC can be a faster and simpler way to become publicly traded.
- Financial dictionary
SPAC
SPAC
Related terms
| Term | Definition |
|---|---|
| Synthetic Risk and Reward Indicator | The Synthetic Risk and Reward Indicator (SRRI) is a standardized tool used to assess the risk profile of an investment fund. This indicator evaluates the risk and potential return of an investment on a scale from 1 to 7, where 1 represents the lowest risk with lower potential returns, and 7 represents the highest risk with potentially higher returns. SRRI helps investors more easily compare different funds and better understand the risks associated with an investment. It is a mandatory part of the Key Investor Information Document (KIID) for all UCITS funds. |
| TER | The total expense ratio (TER) is an indicator that expresses the total costs associated with the management and operation of an investment fund, as a percentage of its average annual assets. It includes management fees, administrative costs, distribution fees, and other operating expenses. TER helps investors understand how much they will pay for holding a share in the fund and affects the net return on the investment. A lower TER indicates a more efficient fund, while a higher TER may reduce the overall return for the investor. |
| Thematic investing | Thematic investing is an investment strategy that focuses on specific themes or trends, such as technological innovations, sustainability, demographic changes, healthcare, or renewable energy. This strategy involves investing in companies and sectors that align with the chosen theme or trend and have the potential to benefit from its long-term growth and development. Thematic investments allow investors to express their belief in the future development of a particular market or sector and are suitable for those seeking targeted opportunities outside of traditional diversified portfolios. |
| The risk/reward | The risk/reward ratio evaluates the balance between the expected return and the risk of an investment. It indicates the level of risk that needs to be taken in order to achieve certain returns. Using this ratio, investors compare investment opportunities and select those that best align with their goals and risk tolerance. |
| UCITS | UCITS (Undertakings for Collective Investment in Transferable Securities) is a regulatory framework of the European Union for investment funds, which allows them to be sold across the EU based on a unified set of rules. UCITS funds are designed to provide a high level of investor protection, including requirements for diversification, liquidity, and transparency. Due to this regulation, UCITS funds are popular among investors. They offer relative safety, are strictly regulated, and are easily accessible on international markets. |