The IPOX® Week, March 05, 2018

  • IPOX 100 U.S. and IPOX Asia-Pacific record relative gains amid downbeat global equities.
  • Select IPOX Specialty exposure closes out volatile week at all-time highs.
  • IPOX 100 U.S. Index-linked ETF (FPX) Highlights.
  • IPO Deal-flow Review & Outlook: Light, little deal flow lined up.

IPOX 100 U.S. and IPOX Asia-Pacific record relative gains amid downbeat global equities. All IPOX Indexes fell last week on renewed rate concerns and technical weakness with the IPOX Global 50 (IPGL50) – benchmark for the performance of the largest, most liquid and best performing global New Listings declining by -2.38% to +3.09% YTD, broadly in line with the global market. While the IPOX Europe Indexes (IXTE, IPND) and IPOX China (IPXUCHCP, CNI) tracked the markets lower in unison, strong gains in specialty exposure drove select IPOX Indexes to relative gains. For example, the IPOX 100 U.S. (IPXO) declined by -1.26% to +3.21% YTD, +78 bps. ahead of the S&P 500 (SPX) – gauge for U.S. stocks – on the week, while the IPOX Asia-Pacific (IPTA) shed -1.01% to +2.60% YTD, +76 bps. ahead of the Developed Asia-Pacific market on the week.

Select IPOX Specialty exposure closes out volatile week at all-time highs. Big gains in uncorrelated small- and mid-cap specialty exposure trading in the IPOX 100 U.S. (IPXO and IPOX Asia-Pacific (IPTA) contributed to mitigate the losses in the respective portfolios last week, with select IPOX portfolio holdings closing out the week at fresh all-time highs. Firms with upside focus included 06/15 IPO online healthcare services provider USD billion 2.6 Teladoc (TDOC US: +10.54%), 09/16 IPO computer hardware maker USD billion 6.2 Nutanix (NTNX US: +9.19%), 04/14 IPO Chicago-based online food delivery platform operator USD billion 8.7 IPO Grubhub (GRUB US: +3.08%) or 10/16 IPO application software maker USD billion 2.5 Coupa Software (COUP US: +3.08%). In Asia-Pacific, we note the surge in 07/15 Sydney-traded IPO agricultural products maker old economy USD billion 2.3 Costa Group (CGC AU: +18.48%) after reporting stellar quarterly results. 01/15 IPO content sharing platform operator USD billion 2.6 Box (BOX US: -19.30%) ranked as the worst performing IPOX portfolio holding on the week.

IPOX® 100 U.S. Investing with the 5-star “FPX” ETF:

IPOX Price Returns (%) Last Week 2017 2018 YTD
Exposure: Global/International (xUS) (USD)
IPOX Global (IPGL50) -2.38 28.59 3.09
IPOX International (IPXI)* -3.44 37.80 3.50
Exposure: United States (USD)
IPOX Composite U.S. (IPXC)* -2.25 33.64 4.01
IPOX 100 U.S. (IPXO)* -1.26 26.04 3.21
IPOX 30 U.S. (IPXT) -1.54 26.63 2.43
Exposure: Europe/Nordic Region (EUR)
IPOX Europe (IXTE) -3.70 19.27 -1.27
IPOX Nordic (IPND) -3.96 17.91 -2.81
Exposure: Asia-Pacific/China Region (USD)
IPOX Asia-Pacific (IPTA) -1.01 23.30 2.60
IPOX® China Comp. (IPXUCHCP) -3.90 42.57 3.47
IPOX China (CNI) -3.78 37.67 7.02

* Basis for ETPs: FPX US, FPX LN, FPXU FP, FPXI US, TCIP110 IT and CME listed e-mini IPOX 100 U.S. Index Futures [Symbol: IPOH8].

IPOX 100 U.S.-linked Index ETF (FPX) Highlights. Linked to the IPOX 100 Index (IPXO), the 5-star (10-year) USD billion 1.06 First Trust U.S. Equity Opportunities ETF (FPX) – fell -1.10% to +3.24% YTD last week, while also recording notable creations. The 4-star (3 year) First Trust International IPO ETF (FPXI) – which tracks the IPOX® International (IPXI) – declined to +3.96% YTD. “FPX” and “FPXI” provide a turnkey portfolio solution to access the “going public” effect associated with global IPOs and Spin-offs, often a pure proxy for economic growth and innovation.

IPO Deal-flow Review & Outlook: Light, little deal flow lined up. Only 3 notable (non-China A shares and non-local India) firms debuted last week, with the average (median) equally-weighted firm adding +16.24% (+8.53%) based on the difference between the final offering price and Friday’s close. Most upside was recorded by London-based investment wrap platform provider GBP million 878 IntegraFin (IHP LN: +35.20%). Ahead of expiration week, three micro/small-cap pharmaceutical companies are set to debut this week including AGP Ltd (AGP PA) – one of the largest drug makers in Pakistan – Cambridge, England-based Acacia Pharma (ACPH BB), and U.S. Connecticut-based biopharmaceutical company BioXcel Therapeutics (BTAI US).

Select IPOs traded (week: 02/26/2018)* Country
Bualuang Office Leasehold REIT Thailand
IntegraFin Holdings PLC Britain
Stemmer Imaging AG Germany
Select IPOs expected (week: 03/05/2018)* Country
AGP Limited of Pakistan Pakistan
Acacia Pharma Group PLC Britain
BioXcel Therapeutics Inc U.S.A.

* Company operates in Closed-end funds, Country funds-closed-end, Special Purpose Entity, or Specified Purpose Acquisition are excluded.

Josef Schuster is the founder of IPOX Schuster LLC (www.ipoxschuster.com), a Chicago-based Financial Services company specialized in Financial Products Design related to Initial Public Offerings and corporate Spin-offs. He is the chief architect of the IPOX Indexes, a global index group initiated in 2004 that encompasses an index technology allowing for asset-allocation focused exposure to the “going public” effect associated with global IPOs and Spin-offs. Mr. Schuster earned his Bachelor of Arts degree in Business Administration in 1994 from the European Business School, London. Mr. Schuster was also awarded a MSc in Accounting and Finance in August 1996 and a MPhil / PhD in Accounting and Finance in June 2003 from the London School of Economics.

ABOUT THE IPOX INDEXES: Through the range of the IPOX Indexes, market participants have an innovative opportunity to navigate the global IPO and Spin-off market and to track the performance of this economically significant sector more accurately and comprehensively than with any other index group. The IPOX Indexes accomplish the systematic indexation of the aftermarket performance of the IPO and Spin-off sector, while – at the same time – preserving the benefits of diversification. Linked to the IPOX 100 U.S. Index, for example, IPOX-linked investment products available to investors include the pioneering USD million 600, 5-star First Trust U.S. IPO ETF (ticker: FPX). On February 18, 2016, CME Group, the world’s largest exchange operator, launched e-mini IPOX 100 U.S. Index Futures, offering market participants for the first time a tool to manage the aggregate risk associated with U.S. IPOs and Spin-offs.

Disclosure: the author has no position in the stocks mentioned.

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