The IPOX® Week, August 12, 2019

  • Earnings trump Politics: IPOX 100 U.S. (ETF: FPX), IPOX International (ETF: FPXI) rise last week, while Markets fall.
  • Skew at Work: Big return distribution amongst IPOX Holdings.
  • IPO Deal-flow Review & Outlook: IPO pipeline remains light with Kansas-based regional bank CrossFirst (CFB US) and Australian insurance software Fineos (FCL AU) lined up.

Earnings trump Politics: IPOX 100 U.S. (ETF: FPX), IPOX International (ETF: FPXI) rise last week, while Markets fall.  Amid the continuing plunge in U.S. yields, select IPOX Indexes finished a tumultuous week in global equities with sizeable gains, and traded opposite of the direction of the key benchmarks. In the U.S., e.g., the diversified FA(A)NG- and KHC-free IPOX 100 U.S. (ETF: FPX) added +0.80% to +26.92% YTD, extending its relative performance lead vs. the S&P 500 (SPX) by +126 bps. to a massive +1049 bps. YTD. Big relative strength extended to the IPOX International (ETF: FPXI) which  surged  +202 bps. to +1585 bps. vs. the Market YTD.

IPOX 100 U.S. Investing with “FPX” ETF since 2006:

Amid the gyrations in stocks, explosive upside in select more heavily weighted firms active in sectors insulated from macro factors outweighed the impact of big declines in other select IPOX Holdings after earnings with firms including software maker Appian (APPN US: +32.91%), German container shipping line Hapag-Lloyd (HLAG GY: +29.30%), car vending machine operator Carvana (CVNA US: +25.18%) and Tinder-owner social networker Match (MTCH US: +13.88%) recording big weekly upside, while IPOX heavyweight IPO M&A chocolate maker Hershey (HSY US: +2.20%) finished the week at an All-Time High. Weak quarterly reports and corporate actions significantly pressured IPOX exposure including payment processing services provider Greensky (GSKY US: -29.78%), biotech Glaukos (GKOS US: -21.93%) or casino solutions provider Evolution Gaming (EVO SS: -11.41%).

IPOX-linked Fund Performance Updates: The IPOX 100 U.S. (IPXO)-linked, 5-star (10-years) $1.3 billion First Trust U.S. Equity Opportunities ETF (FPX) rose to +27.40% YTD, while the  IPOX International (IPXI)-linked 5-star (3-years) First Trust International Equity Opportunities ETF (FPXI) and the IPOX® 100 Europe (IPOE)-linked First Trust IPOX® Europe Equity Opportunities ETF (FPXE) closed at +24.11% YTD and +23.84% YTD, respectively. IPOX-linked mutual fund Catalyst IPOX® Allocation Fund (OIPAX US) climbed back to +24.54% YTD.

Select IPOX® Indexes Price Returns (%) Last Week 2018 2019 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) 0.69 -11.37 24.50
IPOX® International (IPXI)* (USD) 0.62 -13.47 22.08
IPOX® Indexes: United States
IPOX® Composite U.S. (IPXC)* -0.39 -7.59 17.49
IPOX® 100 U.S. (IPXO)* 0.80 -8.80 26.92
IPOX® Unicorn 10 (IPXT) 2.34 -10.28 25.67
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) -1.63 -13.46 21.92
IPOX® Nordic (IPND) -1.17 -15.45 22.92
IPOX® 100 Europe (IPOE)* (USD) -0.06 -16.60 20.77
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -2.21 -3.21 3.43
IPOX® China (CNI) (USD) -1.28 -22.83 7.22
IPOX® Japan (IPJP)** (JPY) -0.84 -13.70 -1.67

* 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 (IPOU9). ** Live since 07/18. Please contact [email protected] for other IPOX® Indexes.

IPO Deal-flow Review & Outlook: IPO pipeline remains light with Kansas-based regional bank CrossFirst (CFB US) and Australian insurance software Fineos (FCL AU) lined up. Only 6 firms debuted during the first week of August in markets open to global investors, with the average (median) equally-weighted stock adding +6.09% (+9.14%) based on the difference between the final IPO price and Friday’s close. In the U.S., we note the good initial showing of Hong Kong-based independent investment bank AMTD (HKIB US: +18.14%), gaining amid the weakness in the U.S. benchmarks, while Israeli medical devices manufacturer InMode (INMD US: +0.14%) closed slightly above final offer. Abroad, Thai construction materials and home décor retailer Dohome (DOHOME TB: +21.15%), Egyptian e-payment company Fawry (FBTP EY: +31.27%) soared on respective markets, while Korean automation systems supplier Cowintech (282880 KS: -29.28%) and Japanese regenerative medicine biotech StemRIM (4599 JP: -4.90%) slumped. Lined up to debut during this week are Kansas-based regional bank CrossFirst (CFB US) and insurance software developer FINEOS (FCL AU). While the IPO calendar is expected to stay quiet with little deal flow for the remaining month, high-profile unicorns including shared workspaces company WeWork, web performance security company Cloudflare and food delivery platform DoorDash are reportedly preparing September debuts in the U.S.

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