The IPOX® Week, January 21, 2019

  • FANG-free diversified IPOX 100 U.S. (IPXO) extends January gain to +10.07%. IPO/Spin-off M&A, surge in high-beta stocks big driver of returns.
  • IPO Deal-flow Review & Outlook: Despite overall positive market sentiment, Hong Kong IPOs deliver disappointing results / U.S. energy company New Fortress Energy (NFE US) aims to list on Nasdaq during SEC close.

FANG-free diversified IPOX 100 U.S. (IPXO) extends January gain to +10.07%. IPO/Spin-off M&A, surge in high-beta stocks big driver of returns. Most IPOX Indexes continued to soar during U.S. options expiration week with the FANG-free, large-cap centric diversified IPOX 100 U.S. (IPXO) extending the previous week’s massive gains, adding +3.37% to +10.07% YTD, now +353 bps. YTD ahead of the S&P 500 (SPX: +2.87%), benchmark for U.S. stocks. Just 15% of holdings fell, with outperformance driven by more IPO/Spin-off M&A, including the well-received takeover of IPOX heavyweight payment processor, private equity-backed USD billion 21.4 First Data (FDC US: +32.70%) by Financial Technology provider Fiserv (FISV US: +5.08%). Select IPOX-held high-beta growth stocks contributed to the strong showing, including software makers Coupa (COUP US: +17.98%) & Okta (OKTA US: +13.87%), as well as hardware maker CDW (CDW US: +1.37%) partner Nutanix (NTNX US: +14.78%). With 30% of IPOX 100 U.S. (IPXO) weight reporting earnings during the week of Jan. 28th, just one IPOX 100 U.S. (IPXO) portfolio holding – industrial IPO M&A United Rentals (URI US: +5.05% / after market close on Jan. 23) – is set to report results during the shortened trading week. Big (relative) gains extended to other IPOX Indexes, such as the IPOX Europe (IXTE, IPOE, IPND), e.g., while a massive decline in Hong Kong domiciled real estate developer Jiayuan (2768 HK: -70.82%) weighed on the IPOX Asia-Pacific (IPTA).

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 First Trust U.S. Equity Opportunities ETF (FPX) added +3.39% to +10.07% YTD, while the IPOX International (IPXI)-linked “FPXI” and IPOX Europe (IPOE)-linked “FPXE” ETFs also rose to +6.73% YTD and +5.73% YTD, respectively. Amongst long-only actively managed IPOX-linked products, the Catalyst IPOX® Allocation Fund (OIPAX) added +2.54% last week to finish the week +8.67% YTD higher.

IPOX® Indexes Price Returns (%) (RT) Last Weerk 2018 2019 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) 2.17 -11.37 7.20
IPOX® International (IPXI)* (USD) 0.92 -13.41 5.15
IPOX® Indexes: United States
IPOX® Comp. U.S. (IPXC)* 2.15 -7.59 8.75
IPOX® 100 U.S. (IPXO)* 3.37 -8.80 10.07
IPOX® 30 U.S. (IPXT) 3.15 -10.28 9.55
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 2.55 -13.46 6.67
IPOX® 100 Europe (IPOE)* (USD) 1.21 -16.60 5.73
IPOX® Nordic (IPND) (EUR) 1.34 -15.45 6.68
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -2.39 -3.21 2.99
IPOX® China (CNI) (USD) 0.97 -22.83 2.68
IPOX® Japan (IPJP)** (JPY) 1.90 -13.70 6.25

* 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 (IPOZ8). ** Live since 07/18. Please contact [email protected] for other IPOX® Indexes.

IPO Deal-flow Review & Outlook: Despite overall positive market sentiment, Hong Kong IPOs deliver disappointing results / U.S. energy company New Fortress Energy (NFE US) aims to list on Nasdaq during SEC close. Only 3 firms debuted last week across accessible global regions, with the average equally-weighted firm adding +5.37% based on the difference between the final offering price and Friday’s close. While Hong Kong added its 17th New Listings YTD, the U.S. IPO market remained quiet: The reorganization IPO of N.Y. small regional bank Rhinebeck (RBKB US: +16.12%) delivered the best performance of the week, while Tencent (700 HK: +1.75%)-backed marketing services start-up Weimob (2013 HK: 0.00%) failed to woo Hong Kong retail interest and closed the week flat. Amid the longest government shutdown in U.S. history, the U.S. IPO market is expected to remain subdued with just one deal, the IPO of integrated energy infrastructure company Nasdaq-listed New Fortress Energy (NFE US), set to commence trading, seeking to raise USD million 422. Notable IPO news last week include the Hong Kong IPO plan of Chinese state-owed tobacco monopoly spinoff China Tobacco International, the world’s largest cigarette maker, the revival of the $3 billion IPO of Mongolia state-owned coal mine producer Erdenes Tavan Tolgoi, the IPO of China-backed UK-based global data center operator Global Switch and reports about the upcoming IPO of New York-based enterprise software maker Infor, after landing a USD billion 1.5 investment led by Koch Industries’ investment arm, Koch Equity Development, and Golden Gate Capital.

Select IPOs traded (week: 01/14/2019) Domicile
Weimob Inc China
Rhinebeck Bancorp United States
Select IPOs expected (week: 01/21/2019) Domicile
New Fortress Energy LLC United States
China Kepei Education Group Ltd China

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