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The IPOX® Week, April 17, 2017

  • IPOX Indexes focused on Markets outside the U.S. continue big run, IPOX U.S. retreats for second week.
  • IPOX 100 U.S. Index (IPXO)-linked ETF (ticker: FPX) celebrates 11-year listings anniversary, AUM rise.
  • Plenty of deals done during shortened trading week.

IPOX Indexes focused on Markets outside the U.S. continue big run, IPOX U.S. retreats for second week. Amid big upside moves in specialty exposure less susceptible to the negative geopolitical news flow currently affecting the widely held stocks, all of the IPOX Indexes focused on markets outside the U.S. rose last week, while the IPOX U.S. Index (IPXC, IPXO, IPXT) fell less than the S&P 500 Index (SPX). Specifically, the IPOX Europe (IXTE) and IPOX Nordic (IPND) closed the week at or near multi-year or all-time highs. Individual exposure driving the big strength included China-based social networker Momo (MOMO US: +9.30%), Finland-domiciled industrial machinery maker 2016 IPO Valmet (VALMT FH: +8.80%), recent Spin-off YUM China (YUMC US: +5.91%) or Danish energy behemoth offshore wind farm operator 2016 IPO Dong Energy (DENERG DC: +2.37%). Amid underperforming U.S. stocks in general, the IPOX U.S. Indexes fell, but retreated less than when compared to the S&P 500 (SPX). Here, significant price drops were recorded by firms including optical and photonic products maker Lumentum Holdings (LITE US: -8.51%) and recent Spin-offs metal producer Alcoa (AA US: -8.12%) and specialty chemicals maker The Chemours Company (CC US: -6.94%).

IPOX Price Returns (%) Last Week Q1 2017 2017 YTD
Exposure: Global/International (xUS) (USD)
IPOX Global (IPGL50) -0.32 8.33 7.91
IPOX International (IPXI)* 0.34 11.49 12.45
Exposure: United States
IPOX Composite U.S. (IPXC)* -0.37 9.26 8.36
IPOX 100 U.S. (IPXO)* -0.91 6.12 4.30
IPOX 30 U.S. (IPXT) -0.87 5.90 4.10
Exposure: Europe/Nordic Region
IPOX Europe (IXTE) 0.29 9.03 10.21
IPOX Nordic (IPND) 1.81 3.84 6.85
Exposure: Asia-Pacific/China Region
IPOX Asia-Pacific (IPTA) 0.23 8.32 8.73
IPOX China C. (IPXUCHCHP)* 0.11 11.44 12.65
IPOX China (CNI) -0.08 11.52 12.30

* Basis for ETPs: FPX US, FPX LN, FPXU FP, FPXI US, TCIP110 IT) and CME Futures (e-mini IPOX 100 U.S. Index Futures [commodity trading symbol: IPOM7]).

IPOX 100 U.S. Index (IPXO)-linked ETF (ticker: FPX) celebrates 11-year listings anniversary, AUM rise. Select IPOX-linked ETFs traded mixed last week. For the second week in a row, however, AUM rose. Amid its 11- year NYSE listings anniversary, e.g., the IPOX 100 U.S. Index-linked, 5-star, 706 million First Trust U.S. Equity Opportunities ETF (FPX) fell -0.79% to +4.63% YTD. Amid the big strength in the IPOX Indexes focusing on foreign markets, the First Trust International IPO ETF (FPXI) extended its YTD gain by +0.03% to +13.12% YTD. FPXI counts Chinese e-commerce behemoth Alibaba (BABA US: +1.12%) as its top holding.

Plenty of deals done during shortened trading week. Another 15 global IPOs (non China-A shares) commenced trading last week with the average (median) equally-weighted IPO gaining +6.86% (+1.07%) based on the difference between the final offering price and the week’s close. Amid the re-opening of the market for Brazilian IPOs (AZUL US, NETS US), deals domiciled in the U.S. continued to be better received when compared to their foreign counterparts. Companies set to go public during the upcoming week include Macquarie-led NZ-based health services provider Oceania Healthcare (OCA NZ), China New Higher Education Group (2001 HK) and Seoul-based video game maker Netmarble (251270 KS).

Traded IPOs (week of 04/10/2017) Country
 Azul SA  Brazil
 Cadence BanCorp  United States
 FM Mattsson Mora Group AB  Sweden
 Guotai Junan Securities Co Ltd  China
 Lai Group Holding Co Ltd  Hong Kong
 LIXIL VIVA Corp  Japan
 Moelis Australia Ltd  Australia
 Netshoes Cayman Ltd  Brazil
 Source Energy Services Ltd  Canada
 Tocagen Inc.  United States
 Warrior Met Coal Inc.  United States
 Wavelock Holdings Co Ltd  Japan
 WHA Utilities and Power PCL  Thailand
 Yext Inc.  United States
Upcoming IPOs (week of 04/17/2017) Country
 China New Higher Education Group Ltd.  China
 Netmarble Games Corp  South Korea
 Oceania Healthcare Ltd  New Zealand

Josef Schuster is the founder of IPOX Schuster LLC (www.ipoxschuster.com), a Chicago-based Financial Services company specialized in Financial Products Design related to Initial Public Offerings and corporate Spin-offs. He is the chief architect of the IPOX Indexes, a global index group initiated in 2004 that encompasses an index technology allowing for asset-allocation focused exposure to the “going public” effect associated with global IPOs and Spin-offs. Mr. Schuster earned his Bachelor of Arts degree in Business Administration in 1994 from the European Business School, London. Mr. Schuster was also awarded a MSc in Accounting and Finance in August 1996 and a MPhil / PhD in Accounting and Finance in June 2003 from the London School of Economics.

ABOUT THE IPOX INDEXES: Through the range of the IPOX Indexes, market participants have an innovative opportunity to navigate the global IPO and Spin-off market and to track the performance of this economically significant sector more accurately and comprehensively than with any other index group. The IPOX Indexes accomplish the systematic indexation of the aftermarket performance of the IPO and Spin-off sector, while – at the same time – preserving the benefits of diversification. Linked to the IPOX 100 U.S. Index, for example, IPOX-linked investment products available to investors include the pioneering USD million 600, 5-star First Trust U.S. IPO ETF (ticker: FPX). On February 18, 2016, CME Group, the world’s largest exchange operator, launched e-mini IPOX 100 U.S. Index Futures, offering market participants for the first time a tool to manage the aggregate risk associated with U.S. IPOs and Spin-offs.

Disclosure: the author has no position in the stocks mentioned.

This article is provided for educational purposes only and is not considered to be a recommendation or endorsement of any trading strategy. The author is not affiliated with Lightspeed Trading and the content and perspective is solely attributed to the author.

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