The IPOX® Week, February 04, 2019

  • FANG-free diversified IPOX 100 U.S. (IPXO) extends consecutive weekly winning streak to six. Select small- and mid-caps close at all-time high. More earnings lined up.
  • Other IPOX Indexes trade mixed.
  • IPO Deal-flow Review & Outlook: Global IPO market stays quiet, ECM activity set to regain momentum.
  • Happy Chinese New Year from IPOX.

FANG-free diversified IPOX 100 U.S. (IPXO) extends consecutive weekly winning streak to Six. Select Mid-caps close at all-time high. More earnings lined up. Amid supportive U.S. economic numbers and FED action, stable U.S. yields and more corporate actions, the FANG-free diversified IPOX 100 U.S. added to last week’s gains, rising +1.15% to +12.36% YTD, now +439 bps. YTD ahead of the S&P 500 (SPX), benchmark for U.S. stocks. Amid weakness in select IPOX heavyweights, including payment processor PayPal (PYPL US: -4.53%), just 24/100 holdings fell on the week, with the average (median) equally-weighted company adding a strong +2.31% (+2.26%) last week, far outpacing the applied market-cap weighted IPOX 100 U.S. While select (technology-related) high-beta small- and mid-caps zoomed to fresh all-time highs ahead of earnings, gains also continued to be driven by further corporate actions. Firms in focus here included applications software maker Coupa Software (COUP US: +14.37%), health care services provider Medpace Holdings (MEDP US: +7.38%), measurement instruments maker Spin-off Keysight Technologies (KEYS US: +5.78%), while internet infrastructure software solutions provider Twilio (TWLO US: +8.35%) consummated the takeover of IPOX 100 U.S. holding application software maker SendGrid (SEND US: +7.10%) and specialty chemicals maker Versum (VSM US: +16.84%) surged after its takeover announcement by semiconductor maker Entegris (ENTG US: +6.77%). Big declines in little weighted holdings, including Japanese biotech Sanbio (4592 JP: -50.00%) weighed on select other IPOX Indexes.

IPOX® 100 U.S. Investing with the “FPX” ETF since 2006

IPOX-linked Products Performance Updates: The IPOX 100 U.S. (IPXO)-linked, 5-star (10 years) USD billion 1.01 First Trust IPOX® U.S. Equity Opportunities ETF (FPX) added another +1.17% to +12.44% YTD, while the IPOX International (IPXI)-linked “FPXI” and IPOX Europe (IPOE)-linked “FPXE” ETFs also rose to +9.93% YTD and +10.23% YTD, respectively. Amongst long-only actively managed IPOX-linked products, the Catalyst IPOX® Allocation Fund (OIPAX) finished the week +10.23% YTD higher.

IPOX® Indexes Price Returns (%) (RT) Last Weerk 2018 2019 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) 0.86 -11.37 10.44
IPOX® International (IPXI)* (USD) 0.68 -13.41 8.85
IPOX® Indexes: United States
IPOX® Comp. U.S. (IPXC)* 1.91 -7.59 10.83
IPOX® 100 U.S. (IPXO)* 1.15 -8.80 12.36
IPOX® 30 U.S. (IPXT) 0.47 -10.28 10.84
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) -0.04 -13.46 8.39
IPOX® Nordic (IPND) 0.50 -15.45 6.63
IPOX® 100 Europe (IPOE)* (USD) 0.67 -16.60 7.88
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -0.16 -3.21 2.61
IPOX® China (CNI) (USD) 2.60 -22.83 9.28
IPOX® Japan (IPJP)** (JPY) -1.49 -13.70 3.90

* Basis for ETFs: FPX US, FPX LN, FPXE US, FPXU FP, FPXI US, TCIP110 IT and CME-traded e-mini IPOX® 100 U.S. Futures (IPOH9). ** Live since 07/18. Please contact [email protected] for other IPOX® Indexes.

IPO Deal-flow Review & Outlook: Global IPO market stays quiet, ECM activity set to regain momentum. Only two firms debuted last week across accessible global regions, with the average equally-weighted company adding +31.15% based on the difference between the final offering price and Friday’s close. Downsized NY-based integrated gas-to-power energy company USD billion 2.3 New Fortress Energy (NFE US: -0.36%) launched the first IPO after the SEC reopened, finishing the week mixed. Red-hot Canopy Growth (CGC US: +0.81%)-backed Canadian cannabis goods distributor, SLANG Worldwide (SLNG CN: +62.67%), on the other hand, skyrocketed on debut. Though the SEC resumed operations, we expect U.S. ECM activity to remain subdued due to the heavy backlog of deals. Amid the Lunar New Year, the Hong Kong market is still expected to welcome a significant IPO before its three-day close, including Chinese conglomerate Tencent (700 HK: +1.14%) and food delivery giant Meituan Dianping (3690 HK: +12.68%)-backed movie ticketing and entertainment platform operator Maoyan Entertainment (1896 HK). In review, only a handful of sizable IPOs launched during last month. While the U.S. government shutdown impeded the marketing of deals in the U.S., in Asia, on the other hand, a number of deals commenced trading in Hong Kong or Indonesia, for example. Here, respective deals recorded a mixed performance: While Indonesian property and hospitality management firm small-cap Citra Putra Realty (CLAY IJ: +844.44% since IPO) recorded significant gains post-IPO, China-linked heavy truck interior decorative parts maker China Tianrui Automotive Interiors (6162 HK: -43.20% since IPO) fell sharply after debuting in Hong Kong.

Select IPOs traded (week: 01/28/2019) Domicile
New Fortress Energy United States
SLANG Worldwide Canada
Select IPOs expected (week: 02/04/2019) Domicile
Maoyan Entertainment China

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