The IPOX® Week, October 22, 2018

    • IPOX 100 U.S Index (IPXO) rises against the trend as payment processors, consumer staples rise strongly.
    • Spike in volatility takes toll on deal flow.
    • IPO Deal-flow Review & Outlook: Select IPOs still record strong initial gains. Buffett-backed StoneCo (STNE) and high-end outdoor gear maker YETI (YETI) lined up.

IPOX 100 U.S Index (IPXO) rises against the trend as payment processors, consumer staples rise strongly. Big gains in global payment processors after strong earnings and a re-shuffling into underperforming consumer staples propelled the IPOX 100 U.S. (IPXO) to the top of the weekly diversified U.S. Equity Indexes Performance Rankings, gaining +0.71% to +1.78% YTD, +76 bps. more on the week than when compared to the S&P 500 (SPX), benchmark for U.S. stocks. While IPOX heavyweight payment processor PayPal (PYPL US: +7.28%) reversed big weakness after reporting strong earnings towards the week-end, broad strength in the lagging consumer staples including food services provider US Foods (USFD US: +7.91%), ketchup maker IPOX heavyweight Kraft Heinz (KHC US: +6.12%), French fries maker Conagra Spin-off Lamb Weston (LW US: +4.95%) or candy maker Hershey (HSY US: +3.07%) helped the portfolio to more than offset the impact of losses in the high-beta/momentum plays including car vending machine operator Carvana (CVNA US: -14.35%) or social networkers Match Group (MTCH US: -6.56%) and Snap (SNAP US: -5.15%). 48/100 IPOX 100 U.S. portfolio holdings fell, with the average (median) equally-weighted stock declining by -0.36% (+0.08%), significantly lagging the applied market-cap weighted IPOX 100 U.S. Amid steady rates, political uncertainty over trade and a downside surprise in select economic numbers, sentiment in markets outside the U.S. remained mixed at best, with China-linked exposure (CNI: -4.56%) lagging other markets anew.

IPOX 100® U.S. investing with the ‘FPX’ ETF since 2006:

Select IPOX-linked Investment Products Performance Update: The USD billion 1.1 IPOX 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities ETF (FPX) rose to +2.22% YTD last week, while its international counterpart (FPXI) fell to -9.36% YTD and the First Trust IPOX® Europe Equity Opportunities ETF (FPXE) fell to -5.10% YTD. Amongst the range of actively managed IPOX-linked long-only products, the Catalyst IPOX® Allocation Fund (OIPAX) rose to +6.12% YTD.

IPOX Price Returns (%) Last Week 2017 2018 YTD
Exposure: Global/International (xUS) (Price)
IPOX® Global (IPGL50) (USD) -0.22 28.59 -3.93
IPOX® International (IPXI)* (USD) -0.74 37.80 -10.57
Exposure: United States (Price)
IPOX® U.S. Composite (IPXC)* (USD) -0.28 33.64 0.62
IPOX® 100 U.S. (IPXO)* (USD) 0.71 26.04 1.78
IPOX® 30 U.S. (IPXT) (USD) 1.28 26.63 0.21
Exposure: Europe/Nordic Region (Price)
IPOX® Europe 30 (IXTE) (EUR) 0.14 19.27 -6.06
IPOX® Nordic (IPND) (EUR) -0.26 17.91 -5.97
IPOX® 100 Europe (IPOE)* (USD) -0.18 41.77 -8.82
Exposure: Asia-Pacific/China Region (Price)
IPOX® Asia-Pacific (IPTA) (USD) -1.51 23.30 -2.40
IPOX® China (CNI) (USD) -4.56 37.67 -18.92
IPOX® Japan (IPJP) (JPY) -0.28 N/A N/A

* Basis for ETPs: FPX US, FPX LN, FPXU FP, FPXI US, TCIP110 IT and CME-traded e-mini IPOX® 100 U.S. Index Futures [Symbol: IPOZ8].

IPO Deal-flow Review & Outlook: Spike in volatility takes toll on deal flow, but select IPOs still record strong initial gains. Buffett-backed StoneCo (STNE US) and high-end outdoor gear maker YETI (YETI US) lined up. 13 firms debuted last week across accessible global regions, with the average (median) equally-weighted firm adding +16.64% (+10.00%) based on the difference between the final offering price and Friday’s close. Amid jittery global markets, at least three larger scale deals – all set to debut outside the U.S. – postponed their listing plans last week, including Spanish oil company CEPSA, British IT services provider Valtech, and Mexican Financial Mifel. Among the firms that moved forward with their IPO respectively, many were downsized or lowered their price range, but generally debuted well: In the U.S., e.g., CA-based medical device company SI-BONE (SIBN US: +35.67%) and Melco Resorts’ spin-off Macau’s Studio City International (MSC US: +32.72%) ranked as the best performing IPOs, while French renewable energy company Neoen (NEOEN FP: +9.09%) and European self-storage provider Shurgard (SHUR BB: +10.00%) also recorded sizeable initial gains. Three notable IPOs to watch this week include the first Chinese D-shares offering in Germany – household appliance manufacturer Qingdao Haier (HAI GR) – the third largest Brazilian IPO in the U.S. – Berkshire Hathaway-backed payment company StoneCo (STNE US) – and PE-backed high-end outdoor gear maker YETI (YETI US).

Select IPOs traded (week: 10/15/2018) Domicile
Neoen S.A. France
Shurgard Self Storage Belgium
SolarWinds United States
Studio City International Hong Kong
Piovan SpA Italy
Select IPOs expected (week: 10/22/2018) Domicile
Coronado Global Resources Australia
Qingdao Haier China
StoneCo Ltd Brazil
YETI Holdings United States

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