The IPOX® Week, March 12, 2018

  • IPOX® Indexes surge ahead of expiration.
  • IPOX® 100 U.S. Index-linked ETF (FPX) Assets Under Management (AUM) rise to record.
  • IPO Deal-flow Review & Outlook: Significant deal flow this week. Siemens Healtineers AG (SHL GR) lined up.

IPOX® Indexes surge ahead of expiration. All IPOX Indexes rose sharply last week as a mute increase in U.S. wages and global political tailwind towards the week-end outweighed interest rate fears. For example, the IPOX® Global 50 (IPGL50) – benchmark for the performance of the largest, most liquid and best performing global New Listings – added +2.38% to +6.01% YTD, slightly ahead of the global market. Performance across the IPOX Regional Indexes Group was solid, with the IPOX China (CNI), IPOX 100 U.S. (IPXO) and IPOX Europe (IXTE) recording significant relative gains. Most upside focus in individual equities remained with firms recently recording strong earnings, including 09/17 IPO computer hardware maker Nutanix (NTNX US: +26.31%), Jack-Dorsey led U.S. payment processor Square (SQ US: +14.06%) and social networker Twitter (TWTR US: +7.12%), 04/05 IPO HFT Virtu Financial (VIRT US: +10.30%) or 04/14 IPO Chicago-based online food delivery platform operator GrubHub (GRUB US: +8.88%). Amongst foreign domiciled exposure, notable moves included 06/17 IPO China based Hong Kong traded Wuxi Biologics (2269 HK: +17.96%) or 04/17 IPO Brazilian low-cost airline Azul (AZUL US: +11.14%). The IPOX Indexes counted U.S. retailers 06/14 IPO Michaels (MIK US: -2.43%), 07/15 IPO Ollie’s Bargain Outlet (OLLI US: -2.29%) or 04/14 online food delivery platform operator Just Eat (JE/ LN: -7.14%) as their weakest weekly performers, respectively.

IPOX® 100 U.S. Index-linked ETF (FPX) Assets Under Management (AUM) rise to record. IPOX-linked investment products mirrored the strength in the underlying IPOX Indexes last week. For example, the USD billion 1.12 IPOX 100 U.S. ETF (FPX) added +4.10% to +7.47% YTD, while the IPOX International ETF (FPXI) added +2.69% to +6.70% YTD. Amid asset allocation focused inflows, Fund AUM for FPX closed at a fresh record. “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.

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) 2.83 28.59 6.01
IPOX International (IPXI)* 2.31 37.80 5.90
Exposure: United States (USD)
IPOX Composite U.S. (IPXC)* 4.34 33.64 8.52
IPOX 100 U.S. (IPXO)* 4.01 26.04 7.35
IPOX 30 U.S. (IPXT) 3.87 26.63 6.39
Exposure: Europe/Nordic Region (EUR)
IPOX Europe (IXTE) 3.27 19.27 1.95
IPOX Nordic (IPND) 3.51 17.91 0.60
Exposure: Asia-Pacific/China Region (USD)
IPOX Asia-Pacific (IPTA) 0.48 23.30 3.09
IPOX® China Comp. (IPXUCHCP) 3.70 42.57 7.30
IPOX China (CNI) 4.97 37.67 12.34

* 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].

IPO Deal-flow Review & Outlook: Significant deal flow this week. Siemens Healtineers AG (SHL GR) 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 +5.25% (+0.00%) based on the difference between the final offering price and Friday’s close. Pakistan’s pharmaceutical manufacturing company AGP Pharma (AGP PA: +17.70%) performed the best. At least 10 companies are lined up to go public during expiration week. Top of the list ranks Siemens (SIE GY: +2.05%) medical technology unit spin-off Siemens Healthineers (SHL GR), one of the largest listings in Europe for a decade. With the deal fully covered within the range, the firm is set to start trading in Germany on Friday, March 16th. Notable IPOs lined up in the U.S. include Silicon Valley’s tech-unicorn cloud-based cybersecurity company Zscaler (ZS US) and biotech Arcus Biosciences (RCUS US). We also note some small-cap IPOs in the Asia-Pacific region including, Chinese jewelry retailer CSMall Group (1815 HK) and Japanese human resources service provider Nisso Corp (6569 JP).

Select IPOs traded (week: 03/05/2018)* Country
AGP Limited of Pakistan Pakistan
Acacia Pharma Group PLC Britain
BioXcel Therapeutics Inc U.S.A.
Select IPOs expected (week: 03/12/2018)* Country
Arcus Biosciences Inc U.S.A.
China BoQi Environmental Holdings Co Ltd China
CSMall Group Ltd China
Energean Oil & Gas PLC Greece
JTC PLC Britain
KNC Laboratories Co Ltd Japan
Nisso Corp Japan
Siemens Healthineers AG Germany
Trimantium GrowthOps Ltd Australia
Zscaler 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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