The IPOX® Week, April 23, 2018

  • U.S. Options expiration week leaves IPOX 100 U.S. (IPXO) on top of weekly performance ranking. Small-cap specialty exposure propels IPOX Nordic (IPND).
  • IPOX-linked ETFs (FPX, FPXI) record strong gains.
  • IPO Deal-flow Review & Outlook: Plenty of deals in the pipeline / U.S. Tech IPOs to lead the way.

U.S. Options expiration week leaves IPOX 100 U.S. (IPXO on top of weekly performance ranking. Small-cap specialty exposure propels IPOX Nordic (IPND). Amid renewed anxiety over U.S. interest rates, weakness in select technology stocks and earnings, the diversified IPOX 100 U.S. (IPXO) ranked on Top of the weekly performance ranking last week, adding +1.68% to +2.92 YTD, a massive +116 bps. ahead of the S&P 500 (SPX), yardstick for U.S. stocks. Strength extended across the IPOX Universe with the large-cap centric IPOX Global (IPGL50) adding +1.12% to +4.23% YTD (excluding dividends), while small-cap specialty exposure propelled the IPOX Nordic (IPND). Amid earnings and continued corporate M&A, notable upside amongst individual portfolio holdings was recorded by U.S. payment processor Transunion (TRU US: +13.52%), in play pharma stock IPOX heavyweight Shire (SHPG US: +8.00%), while aluminum producer Spin-off Alcoa (AA US: +9.19%) extended the previous week’s run-up. In Markets outside the U.S., we note the big weekly gain in IPOX China (CNI) Portfolio Holding Hua Hong Semiconductor (1347 HK: +21.96%), as well as Nordic-based gaming stocks Stockholm-traded Evolution Gaming (EVO SS: +23.06%) and LeoVegas (LEO SS: +18.56%). Amid weakness in global biotech and fresh trial results, biotech Blueprint Bio (BPMC US: -17.20%) ranked as the worst performing IPOX Holding last week.

IPOX-linked ETFs (FPX, FPXI) record strong gains. Amid its 12th NYSE (AMEX) listings anniversary, the IPOX 100 U.S. (IPXO)-linked, USD billion 1.09, 5-star (10-year) First Trust U.S. Equity Opportunities ETF (FPX) added +1.58% to +2.98% YTD, while the 4-star (3-year) First Trust International IPO ETF (FPXI) rose to +4.85% YTD. “FPX” and “FPXI” offer investors a turnkey solution to the “going public” effect associated with the largest U.S. (FPX) and International (FPXI) New Listings, often a pure proxy for economic growth and innovation.

IPOX® 100 U.S. – Investing with the “FPX” ETF since 2006:

IPOX Price Returns (%) Last Week 2017 2018 YTD
Exposure: Global/International (xUS) (USD) (Price)
IPOX Global (IPGL50) 1.12 28.59 4.23
IPOX International (IPXI)* 0.72 37.80 4.17
Exposure: United States (USD) (Price)
IPOX Composite U.S. (IPXC)* 1.25 33.64 3.50
IPOX 100 U.S. (IPXO)* 1.68 26.04 2.92
IPOX 30 U.S. (IPXT) 1.41 26.63 1.23
Exposure: Europe/Nordic Region (EUR) (Price)
IPOX Europe (IXTE) 0.41 19.27 2.34
IPOX Nordic (IPND) 3.15 17.91 -0.82
Exposure: Asia-Pacific/China Region (USD) (Price)
IPOX Asia-Pacific (IPTA) -0.17 23.30 2.18
IPOX China (CNI) -0.51 37.67 9.71

* Basis for ETPs: FPX US, FPX LN, FPXU FP, FPXI US, TCIP110 IT and CME listed e-mini IPOX® 100 U.S. Index Futures [Symbol: IPOM8].

IPO Deal-flow Review & Outlook: Plenty of deals in the pipeline / U.S. Tech IPOs to lead the way. At least 9 notable (non-China A shares and non-local India) firms debuted last week, with the average (median) equally-weighted firm adding +8.56% (+3.75%) based on the difference between the final offering price and Friday’s close. Citing adverse market conditions, AT&T canceled the already downsized IPO of DirecTV’s Latin America Unit Vrio Corp at the last minute, as did FirstCaribbean International Bank, while the largest U.S.-traded biotech IPO of the year – German-domiciled MorphoSys (MOR US: +3.12%) – traded rather flat based on its final offering price. Banking services provider Columbia Financial (CLBK US: +54.20%) ranked the best performer of the week. Focus this week is on a wave of U.S. tech IPOs including e-signature platform developer DocuSign (DOCU US), cloud-based work management app provider Smartsheet (SMAR US), and human capital management software provider Ceridian HCM (CDAY US).

Select IPOs traded (week: 04/16/2018) Country
Columbia Financial Inc United States
GrafTech International Ltd United States
Jupiter Mines Ltd Australia
Level One Bancorp Inc United States
MorphoSys AG Germany
Pivotal Software Inc United States
Serviceware SE Germany
SLB Development Ltd Singapore
Surface Oncology Inc United States
Select IPOs expected (week: 04/23/2018) Country
Bank Tabungan Pensiunan Nasional Syariah Tbk PT Indonesia
Ceridian HCM Holding Inc United States
DocuSign Inc United States
Goosehead Insurance Inc United States
Hapvida Participacoes e Investimentos SA Brazil
nLight Inc United States
Notre Dame Intermedica Participacoes SA Brazil
Smartsheet Inc United States

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.

Lime Brokerage LLC is not affiliated with these service providers. Data, information, and material (“content”) is provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities. Any investment decisions made by the user through the use of such content is solely based on the users independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lime Brokerage LLC does not endorse, offer or recommend any of the services provided by any of the above service providers and any service used to execute any trading strategies are solely based on the independent analysis of the user.

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