Saba Capital has restructured its Saba Capital Investment Trusts UCITS ETF (UKIT) as a semi-transparent ETF, removing daily public portfolio disclosure in an effort to protect the implementation of its activist investment-trust strategy.
The fund will now publish its full holdings quarterly with a one-month delay, rather than disclosing the entire portfolio each day. Authorised participants will continue to receive daily holdings under non-disclosure agreements, allowing them to price and trade the ETF without exposing Saba’s live positions to the wider market.
The change is particularly relevant to UKIT because Saba often builds sizeable positions in relatively illiquid UK investment trusts trading at discounts to net asset value. Establishing a meaningful stake can take one or two months, meaning daily disclosure risked revealing new targets while Saba was still accumulating them. Other investors could then buy ahead of the fund, potentially increasing the price Saba had to pay and reducing the eventual return from the trade.
UKIT launched through HANetf in March and is managed by Saba founder Boaz Weinstein and portfolio manager Paul Kazarian. The strategy seeks to exploit discounts in UK investment trusts and can push portfolio companies towards measures including buybacks, tender offers and restructurings intended to narrow those discounts.