The IPOX® Week, August 29, 2016

  • Most IPOX Indexes decline, trail markets.
  • IPOX-linked funds in focus: FPX, FPXI, OIPAX.
  • IPOX sector focus: Global container/packaging IPOs.
  • No significant accessible deal flow lined up.

Most IPOX Indexes decline, trail markets. Most IPOX Indexes fell last 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 -1.37% to +2.16% YTD, its second consecutive week of losses. Performance was mixed on the IPOX Regional Indexes level: While the IPOX U.S. (IPXC, IPXT, IPXO) fell after eight consecutive weeks of gains, the IPOX Europe (IXTE, IPND) rose, while the IPOX Asia-Pacific (IPTA) and IPOX China (IPXUCHCP, CNI) declined. Indexes were pressured more than the conventional benchmarks on big selling in U.S. pharma stocks, disappointing earnings in select US-traded mid-caps, as well as continued weakness in the slew of heavily-weighted recent Japanese privatization offerings. Number of non-techs global small- and mid-cap IPOX holdings reach all-time weekly closing highs.

IPOX-linked funds in focus: FPX, FPXI, OIPAX. Linked to the IPOX 100 U.S. Index (IPXO) and the IPOX International Index (IPXI), both the First Trust IPOX 100 U.S. ETF (FPX) and the First Trust IPOX International IPO ETF (FPXI) recorded losses last week. The 5-star USD million 576 FPX declined -0.95% to +5.32% YTD, while FPXI shed -0.81% to -0.01% YTD. The IPOX-linked Catalyst IPOX Allocation Fund (OIPAX US), an actively managed mutual fund focusing on U.S. deal flow opportunities at syndicate level and the immediate aftermarket and available to investors in the U.S., dropped by -0.61% to +12.04% YTD.

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

IPOX Returns (%) (P) Week 2015 YTD 16
Exposure: Global/International (xUS) (USD)
IPOX Global 50 (IPGL50) -1.00 0.99 -1.52
IPOX Global 30 (IPGL30) -1.37 -0.96 2.16
IPOX Intern. (IPXI)* -0.87 -5.85 -0.77
Exposure: United States (USD)
IPOX US Comp. (IPXC) -0.84 -3.90 7.69
IPOX 100 U.S. (IPXO)* -1.07 1.57 4.72
IPOX 30 U.S. (IPXT) -1.01 4.91 5.49
Exposure: Europe (EUR)
IPOX Europe (IXTE) 0.46 14.41 -6.08
IPOX Nordic (IPND) 1.20 23.88 1.18
Exposure: Asia-Pacific (Developed) (USD)
IPOX Asia-Pacific (IPTA) -1.00 -2.32 2.41
Exposure: China (USD) (x A-Shares)
IPOX China C. (IPXUCHCHP) -0.71 -14.45 0.63
IPOX China (CNI) -0.67 -9.10 -5.08

Individual IPOX Stocks in focus: Amid jitters over FED-action, rising volatility (VIX: +20.37%), declines in U.S. biotechs (IBB US: -1.78%) and desolate Japan, we note the relative weakness in heavyweights drug makers Abbvie (ABBV US: -3.71%) and Shire (SHPG US: -4.57%), while software maker Splunk (SPLK US: -9.68%) and health care services provider Premier (PINC US: -6.06%) sank after earnings, and Norwegian Cruise Lines (NCLH US) extended its YTD loss by -6.31% to -38.91%. The slew of Japanese privatizations, including Japan Post Holdings (6178 JP: -1.94%), Japan Post Bank (7182 JP: -3.86%) and Japan Post Insurance (7181 JP: -5.33%) fell anew. Yindrai (YRD US: -29.50%), one of the best performing U.S.-traded Chinese IPOs since online retailer VIP Shopping (VIPS US) plunged after regulators announced a crackdown on the industry. Stocks setting fresh all-time highs included IT services provider spin-off SAIC (SAIC US: +3.04%), apparel store operator Burlington Stores (BURL US: +2.70%) and educational services provider Bright Horizons (BFAM US: +1.21%). IPOX tracked “old economy” global container/packaging IPOs remained the best performing IPOX sub-category, including Dunkin supplier Berry Plastics (BERY US: +3.00%) and Sydney-traded Pact Group (PCT AU: +8.39%) and Orora (ORA AT: +1.63%).

IPOs (week of Aug. 22): Ticker Return (%)
No significant accessible deal flow traded.
IPOs (week of Aug. 29): 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.

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