The IPOX® Week, April 06, 2020

  • IPOX Indexes mixed as declines in IPOX U.S. outweighs strength in IPOX Europe, IPOX Nordic & IPOX China.
  • IPOX International (ETF: FPXI) heavyweight Riyadh-traded Saudi Aramco (ARAMCO AB) extends post-inclusion gains.
  • IPO Deal-flow Review & Outlook: April starts with two U.S. IPOs as Zentalis (ZNTL US) soars on debut. Slow month ahead amid coronavirus disruption.

IPOX Indexes mixed as weak IPOX U.S. outweighs strength in IPOX Europe and IPOX China. Amid Covid-19 driving continued strength in the U.S. Dollar & U.S. Bonds, while U.S. equity risk sank (VIX: -28.59%), the IPOX Strategies finished the week mixed. While U.S. equities succumbed to the big weakness in U.S. small-caps (RTY: -7.06%) anew post mid-week, markets abroad fared significantly better, led by the IPOX Nordic, IPOX Europe and IPOX China, driving the relative performance differential of the IPOX International (ETF:FPXI) vs. the International Market to a massive +1531 bps. YTD in IPOX’s favor. Amid no earnings visibility resulting in reducing multiples for growth stocks, e.g., the impact of liquidation-selling in secondary and tertiary equity positions was highlighted by the week’s return distribution in the IPOX 100 U.S. (ETF: FPX). Here, 70/100 holdings fell on the week, with the average (median) equally weighted position declining by -5.86% (-6.28%) a massive -299 (-341) bps. lower than when compared to the applied market-weighted IPOX 100 U.S. (ETF: FPXI), with the ESG-compliant IPOX ESG version (IPXT) faring even better. On a global

IPOX® International Investing (ETF: FPXI) since Fund launch:

level, this helped to push the market neutral IPOX Global Alts/Corporate Action strategy to a fresh all-time high, gaining +2.38% to +26.47% YTD last week. In individual exposure, we note the big performance jump in IPOX International (ETF: FPXI) heavyweight Riyadh-traded global energy behemoth Saudi Aramco (ARAMCO AB: +5.85%). With the “FPXI” ETF being the only ETF available to U.S. investors carrying significant weight, the company extended its two week-gain since portfolio inclusion to +9.52%. This helped to compensate for the significant losses in select small- and mid-caps held in the portfolio, including Chinese coffee chain Luckin Coffee (LK US: -79.01%), Brazilian payment processor StoneCo (STNE US: -27.09%) and Chinese application software maker GSX Techedu (GSX US: -21.91%). We also note the big relative strength in the Nordic-traded portion of the “FPXI” portfolio, with online casino software application maker Evolution Gaming (EVO SS: +12.51%), (EVO SS: +12.51%), cloud communications software Sinch (SINCH SS: +11.66%) and telecom IPO M&A Tele2 (TEL2B SS: +9.13%) leading the way.

Select IPOX® Indexes Price Returns (%) Last Week 2019 2020 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) -2.57 27.93 -15.28
IPOX® Global Alternative (USD) 2.38 -1.96 26.47
IPOX® International (IPXI)* (USD) (ETF: FPXI) -2.75 31.37 -11.96
IPOX® Indexes: United States
IPOX® Composite U.S. (USD) -3.22 24.64 -21.57
IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) -2.87 29.60 -25.19
IPOX® ESG (IPXT) (USD) -1.37
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 0.61 34.55 -9.21
IPOX® Nordic (IPND) 2.62 38.52 -14.41
IPOX® 100 Europe (IPOE)* (USD) -2.30 30.97 -18.65
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -4.27 4.41 -17.56
IPOX® China (CNI) (USD) -0.30 26.31 -4.62
IPOX® Japan (IPJP)** (JPY) -4.61 37.91 -26.65

* Basis for ETFs: FPX US, FPX LN, FPXE US, FPXU FP, FPXI US, TCIP110 IT and CME-traded e-mini IPOX® 100 U.S. Futures (IPOM0). Source: Bloomberg L.P. & Refinitiv/Thomson Reuters.

IT’S THE NEW GENERATION: CME Group announces launch of 0.25 tick IPOX 100 U.S. Index Futures (Front month: IPOM0). Whether you are a risk manager or speculator, CME Group (CME US: +1.43%) – the world’s largest exchange operator – now offers investors efficient and cost effective access to the IPOX 100 U.S. (ETF: FPX) via emini IPOX 100 U.S. Index Futures (Front month: IPOM0). Contact [email protected] for further info and free resources.

IPO Deal-flow Review & Outlook: April starts with two U.S. IPOs as Zentalis (ZNTL US) soars on debut. Slow month ahead amid coronavirus disruption. Only 2 firms commenced trading across the global regions last week with the average equally-weighted deal adding +12.17% based on the difference between the final IPO offering price and Friday’s close. Chinese AR-advertising platform WiMi Hologram (WIMI US: -4.55%) fell on below-target offering whereas the New York-based cancer biotech Zentalis Pharmaceuticals (ZNTL US: +28.89%) surprised the market with its high-end and upsized IPO. As the COVID-19 pandemic deepens, April is set for a slow start with only one biotech (Keros Therapeutics [(KROS US)]) scheduled. Other IPO News include: 1) Thailands’s largest energy company PTT Oil & Retail Business (PTTOR) filed for another $1B+ IPO offer; and 2) COVID-19 vaccine maker Immunomic Therapeutics mulls IPO.

Lightspeed Financial Services Group LLC is not affiliated with these third-party market commentators/educators or service providers. Data, information, and material (“content”) are provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities or contracts. Any investment decisions made by the user through the use of such content is solely based on the users independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lightspeed Financial Services Group LLC does not endorse, offer nor recommend any of the services or commentary provided by any of the market commentators/educators or service providers and any information used to execute any trading strategies are solely based on the independent analysis of the user.

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