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The IPOX® Week, March 27, 2017

  • Most IPOX Indexes extend relative YTD gains into quarter-end. Select IPOX Indexes at multi-year highs.
  • Continued solid initial sentiment for global IPOs, international markets in focus during upcoming week.

Most IPOX Indexes extend relative YTD gains into quarter-end. Select IPOX Indexes at multi-year highs. Ahead of quarter-end, the IPOX Indexes extended the strong relative YTD performance across the IPOX Indexes Universe. For example, the IPOX Global (IPGL50) – benchmark for the “going public” associated with the largest, most liquid and typically well-performing global IPOs and Spin-offs – declined by just -0.29% to +8.48% YTD, significantly outpacing the MSCI World Index (MXWD), key gauge for world stocks. On the back of big gains in the world’s largest pork producer Hong Kong-domiciled WH Group (288 HK: +11.76%), the most significant relative gain was recorded by the IPOX Asia Pacific (IPTA) which surged +1.43% to +9.87% YTD to a multi-year year, significantly ahead of the declining local benchmark. In the U.S., the IPOX 100 U.S. (IPXO) tracked the S&P 500 (SPX) lower but outpaced the deteriorating Russell 2000 (RTY) anew, shedding -1.37% to +5.03% YTD. In the index, 75% of holdings fell on the week, with the average (median) equally-weighted portfolio stock declining by -1.82% (-1.42%) on the week. Recently added U.S. social networker Snap (SNAP US: +16.48%) and health care services provider Healthequity (HQY US: -12.54%) ranked amongst the best and worst performing constituents stocks. Friday’s huge plunge in IPOX China Holding China Huishan Dairy (6863 HK: -85.00%) highlights elevated default risk for Chinese IPOs.

IPOX Returns (%) (P) Week 2017 2016
Exposure: Global/International (xUS) (USD)
IPOX Global 50 (IPGL50) -0.29 8.48 -2.50
IPOX Intern. (IPXI)* 0.29 12.14 -4.63
Exposure: United States
IPOX Composite U.S. (IPXC)* -0.84 8.00 7.24
IPOX 100 U.S. (IPXO)* -1.37 5.03 5.89
IPOX 30 U.S. (IPXT) -0.96 5.21 8.44
Exposure: Europe/Nordic Region
IPOX Europe (IXTE) 0.25 7.12 0.18
IPOX Nordic (IPND) -0.84 3.38 -1.59
Exposure: Asia-Pacific/China Region
IPOX Asia-Pacific (IPTA) 1.43 9.87 -1.96
IPOX China C. (IPXUCHCHP)* 0.39 13.06 -3.73
IPOX China (CNI) -1.93 13.93 -10.21

* Basis for Exchange-Traded Products (e.g. FPX US, FPX LN, FPXU FP, FPXI US, TCIP110 IT) and CME Futures (e-mini IPOX 100 U.S. Index Futures [commodity trading symbol: IPOH7]).

Select IPOX-linked Investment Products Performance: The USD million 690, 5-star, 10-year First Trust U.S. Equity Opportunities ETF (FPX) fell -1.45% to +5.17% YTD last week, while the First Trust International IPO ETF (FPXI) rose +0.81% to +12.11% YTD, a fresh one-year high for the fund.

IPOX® 100 U.S.-linked Investing since 2006:

Continued solid initial sentiment for global IPOs, international markets in focus during upcoming week. At least 7 significant global IPOs (excluding Chinese A-shares) commenced trading last week with the average (median) equally-weighted stock gaining +16.94% (+13.04%) based on the difference between the final offering price and Friday’s close, underlying the evenly distributed strength in global initial IPO returns and sentiment. More deals are lined up for the upcoming week and include outpatient and residential care services operators in Sweden (Ambea AB [AMBEA SS]) and South Africa (Pembury Lifestyle Group [PEM SJ]), while China-linked construction firm Chanhigh Holdings (2017 HK) and the H-share offering of water supply services firm Luxhou Xinglu Water (2281 HK) are lined up to go public in Hong Kong. Real estate property developer Neinor Homes (HOME SM) is set to extend the string of IPOs in Continental Europe.

Traded IPOs (week of 03/20/2017) Country
Alteryx Inc United States
Aumann AG Germany
Medical Group PLC United Kingdom
Minsheng Education Group Co Ltd China
MIPS AB Sweden
Next Games Oy Finland
Sea Harvest Holdings Pty Ltd South Africa
Upcoming IPOs (week of 03/27/2017) Country
Ambea AB Sweden
Chanhigh Holdings Ltd China
Luzhou Xinglu Water Group Co Ltd China
Neinor Homes SLU Spain
Pembury Lifestyle Group South Africa
SHIS Ltd Singapore

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.

This article is provided for educational purposes only and is not considered to be a recommendation or endorsement of any trading strategy. The author is not affiliated with Lightspeed Trading and the content and perspective is solely attributed to the author.

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