The IPOX® Week, August 22, 2016

  • IPOX trade mixed, track markets during expiration.
  • First Trust IPOX 100 U.S. ETF (FPX) rises for 8th week.
  • Ahead of a busy September, quiet on the IPO front.

IPOX trade mixed, track markets during expiration. The IPOX Indexes traded mixed during U.S. options expiration week, with the IPOX Global 30 (IPGL30) – benchmark for the performance of the largest and most liquid global IPOs and Spin-offs during the past 4 years – declining by -0.64% to +3.58% YTD, while the IPOX International (IPXI) – underlying for the First Trust IPOX International ETF (FPXI) – fell -0.76% to +0.09% YTD. Performance was mixed on the IPOX Regional Indexes level: While the IPOX U.S. (IPXC, IPXT, IPXO) traded flat, the IPOX Europe (IXTE, IPND) and IPOX Asia-Pacific (IPTA) fell, while the IPOX China (IPXUCHCP, CNI) rose anew.

Performance of the IPOX 100 U.S. ETF (FPX) since 2006

First Trust IPOX 100 U.S. ETF (FPX) rises for 8th week. Last week’s fractional gain brought the gains for the ETF to +10.36% over the past 8 weeks. This ranks amongst the 5th longest weekly winning streak for the ETF since inception in 2006, still dwarfed by the 13-week winning string during Q1/2012, when the ETF rose +20.40%. Last week’s best performing stocks in the IPOX 100 U.S. Index (IPXO) included hard-hit network security solutions provider Palo Alto Networks (PANW US: +7.52%), oil and natural gas explorer RSP Permian (RSPP US: +6.33%) and optical products maker Lumentum Holdings (LITE US: +5.75%). Following a disappointing earnings reports, the portfolio counted firms including outdoor consumer products maker Vista Outdoor (VSTO US: -6.53%), outsourcing services provider ServiceMaster (SERV US: -5.73%) and industrial machinery maker Manitowoc Foodservice (MFS US: -3.92%) as its worst performers. In all 46/100 portfolio holdings rose on the week, with the average (median) equally-weighted stock gaining +0.05% (-0.16%), in line with the applied market-cap weighted index.

IPOX Returns (%) (P) Week 2015 YTD 16
Exposure: Global/International (xUS) (USD)
IPOX Global 50 (IPGL50) -0.58 0.99 -0.52
IPOX Global 30 (IPGL30) -0.64 -0.96 3.58
IPOX Intern. (IPXI)* -0.76 -5.85 0.09
Exposure: United States (USD)
IPOX US Comp. (IPXC) 0.11 -3.90 8.60
IPOX 100 U.S. (IPXO)* -0.01 1.57 5.86
IPOX 30 U.S. (IPXT) -0.17 4.91 6.58
Exposure: Europe (EUR)
IPOX Europe (IXTE) -1.06 14.41 -6.51
IPOX Nordic (IPND) -1.89 23.88 -0.02
Exposure: Asia-Pacific (Developed) (USD)
IPOX Asia-Pacific (IPTA) -1.97 -2.32 3.45
Exposure: China (USD) (x A-Shares)
IPOX China C. (IPXUCHCHP) 0.27 -14.45 1.35
IPOX China (CNI) 1.08 -9.10 -4.43

*Basis for Exchange-Traded Products (ETPs)

Non-U.S. domiciled IPOX Stocks in focus: Amid the gyrations in rates and equities, as well as a disappointing earnings outlook and negative press, some Japanese stocks and the slew of last year’s Japanese privatization IPOs fell back strongly last week, including medical devices maker Cyberdyne (7779 JP: -18.20%), applications software maker Colopl (3668 JP: -9.23%), biotech Peptidream (4587 JP: -8.90%), Suntory Beverages (2598 JP: -6.51%), Japan Post Bank (7182 JP: -3.71%) or Japan Post Holdings (6178 JP: -2.98%). Select IPOX Holdings domiciled in Australia, China and New Zealand, outperformed strongly, however, and extended recent gains, led by Chinese online lender Yirendai (YRD US: +31.13%), Australian packaging products maker Orora (ORA AT: +10.87%) and Hong-Kong-based apparel maker Regina Miracle International (2199 HK: +8.93%). Select Chinese regional banks recovered from last week losses, while mainland China real estate behemoth takeover candidate China Vanke (2202 HK: +1.45%) rose for a 5th week on a row.

IPOs (week of Aug. 15): Ticker Return (%)
No significant accessible deal flow traded.
IPOs (week of Aug. 22): Ticker Sector
No significant accessible deal flow traded.

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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