IPOX 100 U.S. (IPXO) rises for second week, outperforms U.S. equities as select specialty deals surge after earnings. A good showing in China-linked exposure after the recent sell-off and big gains in select specialty holdings untracked in the main benchmarks after earnings well-supported the IPOX Indexes last week. In the U.S., for example, the IPOX 100 U.S. (IPXO) – benchmark for the performance of U.S. New Listings by applying the IPOX® Indexes Technology – added +0.86% to +6.86% YTD, leading the S&P 500 (SPX) – benchmark for U.S. stocks – by +101 bps. on the week, ahead of U.S. options expiration. Relative strength extended across to other IPOX Regional Indexes, such as the IPOX Europe (IXTE), IPOX Nordic (IPND), IPOX Japan (IPJP) or IPOX China (CNI). Amid earnings, the divergence of returns in the individual IPOX Portfolios remained extraordinarily wide: In the IPOX 100 U.S. (IPXO), e.g., companies with big upside focus included social networker Tinder-owner Match Group (MTCH US: +34.16%), application software maker Alteryx (AYX US: +28.36%), car vending machine operator Carvana (CVNA US: +19.92%), online furniture seller Wayfair (W US: +10.52%) or payment processor Worldpay (WP US: +9.93%), while leading U.S. real estate website operators Zillow Group (Z US: -14.92%) and Redfin (RDFN US: -23.70%) plunged. In non-U.S. domiciled IPOX exposure, we note big strength in Denmark-based windfarm operator Orsted (ORSTED DC: +7.10%) and Italian tire maker Pirelli (PIRC IM: +6.65%), while Germany’s online fashion retailer Zalando (ZAL GY: -7.62%) plunged after missing earnings and lowering guidance for the year.
IPOX-linked Investment Products Performance Update: Last week, the USD billion 1.2 IPOX 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities ETF (FPX) rose +0.94% to +7.14% YTD, while the surge in the USD pressured its international version (FPXI) to drop to -2.28% YTD. Amongst IPOX-linked actively managed funds, the Catalyst IPOX® Allocation Fund (OIPAX) rose to +9.91% YTD.
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)||0.82||28.59||1.36|
|IPOX International (IPXI)*||-0.12||37.80||-2.98|
|Exposure: United States (USD) (Price)|
|IPOX Composite U.S. (IPXC)*||0.38||33.64||7.76|
|IPOX 100 U.S. (IPXO)*||0.86||26.04||6.86|
|IPOX 30 U.S. (IPXT)||-0.20||26.63||2.94|
|Exposure: Europe/Nordic Region (EUR) (Price)|
|IPOX Europe (IXTE)||-0.36||19.27||3.27|
|IPOX Nordic (IPND)||0.16||17.91||3.02|
|Exposure: Asia-Pacific/China Region (USD) (Price)|
|IPOX Asia-Pacific (IPTA)||-0.53||23.30||-0.10|
|IPOX China (CNI)||-2.49||37.67||0.33|
|IPOX Japan (IPJP)||-1.00||N/A||N/A|
* 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: IPOU8].
IPO Deal-flow Review & Outlook: World’s largest telecoms tower operator China Tower (788 HK) gains during its first week of trading / Global IPO pipeline light. At least 7 (non-China A shares and non-local India) firms debuted last week across accessible global regions, with the average (median) equally-weighted firm declining by -1.53% (-2.08%) based on the difference between the final offering price and Friday’s close. Most focus was on IPOs outside the U.S.: The largest deal of the week belonged to the IPO of USD billion 29 China Tower Corp. (788 HK: +3.17%) – the world’s largest telecoms tower operator and the world’s largest IPO in two years. Despite the general YTD initial and aftermarket weakness in China-linked exposure, the stock gained based on its final offering price in Hong Kong in heavy trading on the week. Other IPOs in the Hong Kong market involved biotech BeiGene (6160 HK: -3.70%), whose shares debuted lackluster, pressured by weakness in select incumbents amid China’s ongoing vaccine scandal and public health confidence crisis. Only two companies commenced trading in the U.S. last week: Priced at the low end of the bookbuilding range, Nasdaq-listed small-caps Rochester, NY-based biotech Vaccinex (VCNX US: -4.17%) and downsized regional airline operator Phoenix-AZ based Mesa Air Group (MESA US: -2.08%) both closed their first week of trading below final offer, respectively. Amid holidays, the pipeline for deals across the global regions during this week is light, with only Taiwanese home and office furniture manufacturer small-cap Shane Global Holdings (8482 TT) lined up for its listings debut on the Taiwan Stock Exchange. This is the largest IPO in the Taiwanese market YTD.
|Select IPOs traded (week: 08/06/2018)||Domicile|
|China Tower Corp Ltd||China|
|Digital Imaging Technology Co||South Korea|
|Jadestone Energy Inc||Singapore|
|Mesa Air Group Inc.||United States|
|Shinhan Alpha REIT Co Ltd||South Korea|
|Vaccinex Inc.||United States|
|Select IPOs expected (week: 08/13/2018)||Domicile|
|Shane Global Holding Inc||Taiwan|
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