The IPOX® Week, December 31, 2018

  • IPOX 100 U.S. (IPXO) leads rebound amongst U.S. equity indexes after U.S. expiration & re-balancing week. Other IPOX Indexes outpace Markets, too.
  • IPOX Market Neutral declines as equities bounce.
  • IPO Deal-flow Review & Outlook: Lyft and Uber set to lead U.S. deal flow with Palantir, Airbnb, Pinterest, Slack and Robinhood in queue to proceed with 2019 listing.
  • Happy New Year from the IPOX Team

IPOX 100 U.S. (IPXO) leads rebound amongst U.S. equity indexes after expiration & re-balancing week. Other IPOX Indexes outpace Markets, too. The IPOX Indexes finished another highly volatile trading week atop the weekly global equity indexes performance rankings with the IPOX Indexes focused on Developed Markets exposure (e.g. IPXO, IPOE, IPTA) significantly outpacing the benchmarks. In the U.S., e.g., the IPOX 100 U.S. (IPXO) added +3.99% to -9.74% YTD, outpacing all other major diversified U.S. equity indexes, including the S&P 500 (SPX). Here, 89/100 portfolio holdings gained on the week, with the average (median) equally-weighted stock adding +5.49% (+5.21%). Relative gains were driven by recently added exposure to oversold high-beta growth companies including security services provider Alarm.com (ALRM US: +15.94%), biotechs Akcea Therapeutics (AKCA US: 13.84%) and Guardant Health (GH US: +9.78%) or high-speed trading firm Virtu Financial (VIRT US: +8.18%). Amid liquidation-driven selling & profit taking, REIT IPOs followed the weakness in the REIT market in general, with JBG Smith (JBGS US: -2.30%) and Store Capital (STOR US: -1.72%) finishing the week lower. Abroad, a second week of gains for Japan’s mobile network operator Softbank Group (9434 JP: +3.19%) helped to propel the IPOX Asia-Pacific (IPTA), rising +1.70% to -3.84% YTD, now a large +1088 bps. YTD better than the local benchmark YTD.

IPOX® 100 U.S. Investing with the ‘FPX’ ETF since 2006

Select IPOX-linked investment products performance update: Listed on the NYSE, the IPOX 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities ETF (FPX), e.g., added +4.08% to close -9.29% YTD lower. Tracking non-U.S. domiciled stocks, the IPOX International (IPXI)-linked “FPXI” ETF closed the week with a gain of +1.75% to recover to -13.15% YTD.

Select IPOX® Indexes Returns (%) Last Week 2017 2018 YTD
IPOX® Long-Only: Global/International
IPOX® Global (IPGL50) (USD) 2.48 28.59 -12.23
IPOX® International (IPXI)* (USD) 0.43 37.80 -14.07
IPOX® Long-Only: United States
IPOX® Composite U.S. (IPXC)* 3.64 33.64 -8.50
IPOX® 100 U.S. (IPXO)* 3.99 26.04 -9.74
IPOX® 30 U.S. (IPXT) 3.15 26.63 -11.12
IPOX® Long-Only: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 0.14 19.27 -13.96
IPOX® Nordic (IPND) (EUR) 0.68 17.91 -16.10
IPOX® 100 Europe (IPOE)* (USD) 1.02 41.77 -17.03
IPOX® Long-Only: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 1.70 23.30 -3.84
IPOX® China (CNI) (USD) -0.21 37.67 -23.49
IPOX® Japan (IPJP) (JPY) 2.10 N/A N/A
IPOX® Market Neutral (Long-Short)
Beta Neutral Strategy: Yes Week
IPOX® Market Neutral Asia-Pacific** X -0.24 11.98
IPOX® Market Neutral Europe** X -1.46 19.79
IPOX® Market Neutral U.S.** X -2.12 8.17
IPOX® Market Neutral Global** X -1.49 11.30

* Basis for ETPs: FPX US, FPX LN, FPXU FP, FPXI US, TCIP110 IT and CME-traded e-mini IPOX® 100 U.S. Futures [Symbol: IPOZ8]. ** Live since 03/18.

IPO Deal-flow Review & Outlook: Lyft and Uber set to lead U.S. deal flow with Palantir, Airbnb, Pinterest, Slack and Robinhood in queue to proceed with 2019 listing. A total of 9 firms debuted last week across accessible global regions, with the average (median) equally-weighted company adding +40.17% (+29.69%) based on the difference between the final offering price and Friday’s close. No IPOs remain on the calendar for 2018 in the global market, yet two micro-cap Hong Kong offerings are set to debut early in the New Year. We note 29 companies raising more than $1 billion in 2018, with total IPO proceeds exceeding $82 billion. Amid the current uncertainty over the direction of equities and respective valuations, the outlook for larger scale, high profile IPOs for 2019 remains strong, with companies such as Lyft and Uber set for public debut in Q1 2019.

Select IPOs traded (week: 12/24/2018) Domicile
Air Busan Co. Ltd. Korea
BIFIDO Co. Ltd. Korea
China Beststudy Education Group China
Eutilex Co Ltd Korea
Link Inc. Japan
Shanghai Junshi Biosciences Co Ltd China
Sino Gas Holdings Group Ltd. China
Sichuan Energy Investment Development Co China
Veltra Corp. Japan
Select IPOs expected (week: 12/31/2018) Domicile
Weigang Environment Technology Holding Group Ltd. China
Zhejiang Cangnan Instrument Group China

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