The IPOX® Week, September 5, 2016

  • IPOX Indexes record strong gains across regions.
  • IPOX-linked funds beat market: FPX, FPXI, OIPAX.
  • IPOX stock focus: Recent U.S. deals keep on surging.
  • No significant accessible deal flow set to price this week.

IPOX Indexes record strong gains across regions. The IPOX Indexes rose last week, with the IPOX Global 30 (IPGL30) – benchmark for the performance of the largest and most liquid global IPOs and Spin-offs during the past 4 years – gaining +1.53% to +3.55% % YTD, substantially more than when compared to the global market. With the exception of the IPOX Nordic (IPND), the strong performance picture extended to the IPOX Regional Indexes level: For example, the IPOX U.S. Indexes (IPXC, IPXT, IPXO) substantially beat the S&P 500 (SPX) – the key measure for U.S. stocks – while the IPOX Indexes providing focused and diversified exposure to the IPOs and Spin-offs asset in other global regions such as Europe (IXTE), Developed Asia-Pacifc (IPTA) and China (IPXUCHCP, CNI) also gained strongly.

IPOX-linked funds in focus: FPX, FPXI, OIPAX. Linked to the IPOX 100 U.S. Index (IPXO) and the IPOX International Index (IPXI), the First Trust IPOX 100 U.S. ETF (FPX) and the First Trust IPOX International IPO ETF (FPXI) exceeded the gains in the market benchmarks last week, benefiting from the outsized impact of strong earnings on individual components and a general economic environment which continues to favor stocks: The 5-star, 10-year old, USD million 582 FPX gained +1.00% to +6.32% YTD, while FPXI added +1.23%% to +1.22% YTD. Notable is the continued surge in the IPOX-linked Catalyst IPOX Allocation Fund (OIPAX), an actively managed mutual fund which adds a dynamic deal flow component to a core position in IPOX U.S. and available to investors in the U.S. since November 2015: Last week, the fund rose to +14.00% YTD.

Performance of the IPOX 100 U.S ETF (FPX) since inception:

IPOX Returns (%) (P) Week 2015 YTD 16
Exposure: Global/International (xUS) (USD)
IPOX Global 50 (IPGL50) 0.77 0.99 -0.76
IPOX Global 30 (IPGL30) 1.53 -0.96 3.55
IPOX Intern. (IPXI)* 0.65 -5.85 -0.13
Exposure: United States (USD)
IPOX US Comp. (IPXC) 1.47 -3.90 9.28
IPOX 100 U.S. (IPXO)* 1.06 1.57 5.83
IPOX 30 U.S. (IPXT) 1.15 4.91 6.71
Exposure: Europe (EUR)
IPOX Europe (IXTE) 1.96 14.41 -4.23
IPOX Nordic (IPND) -0.54 23.88 0.63
Exposure: Asia-Pacific (Developed) (USD)
IPOX Asia-Pacific (IPTA) 0.76 -2.32 2.13
Exposure: China (USD) (x A-Shares)
IPOX China C. (IPXUCHCHP) 2.07 -14.45 2.29
IPOX China (CNI) 0.52 -9.10 -5.01

IPOX stock focus: Recent U.S. deals keep on surging. Strong earnings, short-covering and continued broad-based allocation into U.S. small- and mid-caps recently gone public propelled IPOX U.S. Holdings 07/16 IPO semiconductor devices maker Impinj (PI US: +63.35%), payment solution provider 10/15 IPO First Data (FDC US: +8.85%), 04/16 exchange operator Bats Global Markets (BATS US: +6.36%) or 11/15 IPO social networker Match Group (MTCH US: +6.23%), while more seasoned exposure including application software maker 10/13 IPO Veeva Systems (VEEV US: +4.97%), specialty store operator 10/13 IPO Burlington Stores (BURL US: +3.11%) or consumer staple Burger King/Tim Hortons tie-up Restaurant Brands (QSR US: +2.97%) all closed at a post-IPO weekly high. Amid relative weakness in U.S. biotechs, ever-volatile 12/14 IPO Juno Therapeutics (JUNO US: -11.84%) fell strongly after negative analyst comments, while fitness club operator 08/15 IPO Planet Fitness (PLNT US: -4.55%) declined after announcing a secondary share offering. In markets abroad, notable moves involved Dutch cable & satellite services operator Altice (ATC NA: +10.28%), Singapore-domiciled aircraft leasing firm BOC Aviation (2588 HK: +6.82%) or Mainland China property developer 01/16 IPO Ronshine China (3301 HK: +21.34%).

IPOs (week of Aug. 29): Ticker Return (%)
No significant accessible deal flow traded.
IPOs (week of Sep. 5): Ticker Sector
No significant accessible deal flow set to price.

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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