Shares of special purpose acquisition companies have lost their luster for those who recently saw them as a ticket to fast riches. That is good news for a different group of investors, who treat them as an alternative to bonds.

Known on Wall Street as Spac arbitrage, the trade has become turbocharged of late — thanks in equal parts to the day-trader-fueled craze for  Spacs that materialized late last year and the more-recent slump in Spac demand.