The IPOX® Week, February 25, 2019

  • Surge in China-linked stocks propels IPOX Global, IPOX International (ETF: FPXI), IPOX China to strong week.
  • Amid stable yields & trade optimism, big gains in Wayfair and Tradedesk mitigate impact of plunge in Kraft Heinz in IPOX 100 U.S. (ETF: FPX). More earnings lined up.
  • IPO Deal-flow Review & Outlook: U.S. IPO market set to remain quiet. Social media company Pinterest files for IPO.

Surge in China-linked stock propels IPOX Global, IPOX International, IPOX China to strong week. The IPOX Indexes continued to trade well supported last week, with the IPOX Global 50 (IPGL50) – benchmark for the performance of some of the largest and most liquid global New Listings by applying the IPOX Indexes Technology – extending the YTD gain by +2.13% to +15.47% YTD, now +483 bps. YTD ahead of the world market. With stable U.S. yields and optimism over global trade pushing up risk appetite (VIX: -9.39%), big strength extended to the IPOX International (ETF: FPXI) and IPOX China Core (CNI) which benefited from continued positive momentum in some of the most recent China-linked IPOs listed in the U.S. and Hong Kong, including Hong Kong-traded biotech Wuxi Biologics (2269 HK: +12.64%), infrastructure stock China Tower (788 HK: +9.04%), phone maker Xiaomi (1810 HK: +7.00%) or U.S.-traded entertainment platform operator Bilibili (BILI US: +8.84%) and electric car maker Nio (NIO US: +10.26%). In the U.S., the IPOX U.S. Indexes (IPXC, IPXO, IPXT) diverged sharply: While the broad 814 member-strong IPOX U.S. Composite (IPXC) extended its consecutive weekly winning streak to 9, the IPOX 100 U.S. (ETF: FPX) declined by -0.10% to +16.34% YTD, lagging the S&P 500 (SPX) by -72 bps. Here, upside focus was on massive gains in advertising technology firm The Trade Desk (TTD US: +25.05%) and e-tailor Wayfair (W US: +22.08%) which mitigated the impact of the plunge in Ketchup maker Kraft Heinz (KHC US: -26.61%). Another 27 firms or 16.60% of the IPOX 100 U.S. (ETF: FPX) weight is set to report this week.

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

Last week, the IPOX® 100 U.S. (IPXO)-linked, 5-star $1.1 billion First Trust U.S. Equity Opportunities ETF (FPX) fell -0.07% to +16.44% YTD, while the IPOX® International (IPXI)-linked 5-star First Trust International Equity Opportunities ETF (FPXI) added +2.21% to +13.85% YTD and the IPOX® 100 Europe (IPOE)-linked First Trust IPOX® Europe Equity Opportunities ETF (FPXE) added +0.76% to close the week +12.24% YTD higher. Amongst actively managed funds, the 4-star Catalyst IPOX Allocation Fund (OIPAX) rose +0.23% to +15.00% YTD.

IPOX® Indexes Price Returns (%) (RT) Last Weerk 2018 2019 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) 2.13 -11.37 15.47
IPOX® International (IPXI)* (USD) 2.71 -13.41 12.91
IPOX® Indexes: United States
IPOX® Comp. U.S. (IPXC)* 1.08 -7.59 15.95
IPOX® 100 U.S. (IPXO)* -0.10 -8.80 16.34
IPOX® 30 U.S. (IPXT) -0.87 -10.28 13.11
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 0.80 -13.46 11.39
IPOX® Nordic (IPND) -0.09 -15.45 11.62
IPOX® 100 Europe (IPOE)* (USD) 1.18 -16.60 10.65
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 0.81 -3.21 3.39
IPOX® China (CNI) (USD) 6.06 -22.83 19.01
IPOX® Japan (IPJP)** (JPY) 2.62 -13.70 5.33

* 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: U.S. IPO market set to remain quiet. Social media company Pinterest files for IPO. Only three small-caps debuted last week across accessible global regions, with the average equally-weighted firm adding +24.57% based on the difference between the final offering price and Friday’s close. With no deal debuting in the U.S., upside focus was on Korean government-backed early-stage cancer vaccines company Cellid (299660 KS: +46.06%). VC fund Flagship Pioneering-incubated Kaleido Biosciences (KLDO US) will add to the recent biotech IPO wave this week, while two listings are scheduled in Hong Kong after three consecutive quiet weeks since the Chinese New Year. Amongst the new listings this week, immuno-oncology company CStone Pharmaceuticals (2616 HK) will step up to be the largest IPO in Hong Kong YTD. The GIC-backed biopharma startup is valued at $1.50 billion at the final offering price. CStone has close ties to IPOX International (ETF: FPXI) portfolio winning stock H.K. traded 06/2017 IPO WuXi Biologics (2269 HK: +12.64%). Joining other private tech giants including share ride Uber, Lyft, workplace communication platform Slack and food delivery firm Postmates, social media company Pinterest filed confidentially for its IPO last week. We also note that Lyft is now highly likely to beat its rival Uber to its long-awaited IPO and launch the roadshow on the week of March 18. Succeeding the government shutdown delay and IPO seasonality influence, we expect the U.S. IPO market to fully regain its momentum in the coming months with deals including iconic blue jean maker Levi’s (LEVI US), Blackstone-backed, IL-based HCM company IL-based Alight (ALIT US), Chinese brokerage platform operator Futu (FHL US), and ride-hailing firm Lyft entering the immediate IPO pipeline.

Select IPOs scheduled (week: 02/25/2019) Domicile
CStone Pharmaceuticals China
Dexin China Holdings Co Ltd China
Kaleido Biosciences Inc United States

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