The IPOX® Week, December 31, 2018
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 |
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.
