The IPOX® Week, August 3rd, 2020

  • IPOX Indexes soar during July, beat benchmarks. IPOX 100 U.S. (ETF: FPX) closes month above key 4000 mark.
  • IPOX 100 U.S. (ETF: FPX) rises +7.06% to +11.74% YTD. IPOX International (ETF: FPXI) jumps +8.76% to +37.15% YTD. IPOX 100 Europe (ETF: FPXE) adds +7.18% to +15.77% YTD.
  • July sees flurry of deals. Rackspace and Rocket Co. lined up.

IPOX Indexes soar during July, beat benchmarks. IPOX 100 U.S. (ETF: FPX) closes month above key 4000 mark. The IPOX Indexes and respective investment products continued to produce significant returns during July. The potent mix of 1) declining U.S. yields and equity risk (VIX: -5.34%) amid unprecedented global government stimulus to counteract the economic contraction caused by COVID-19 and 2) a strong average earnings picture of the New Generation of stocks tracked in the IPOX Portfolios, provided for the powerful backdrop to drive the respective strategies further into uncharted territory during July. Amongst the list of IPOX-linked investment products, the diversified IPOX International (ETF: FPXI) led the list of best performers during July, with the index adding +8.76% to +37.15% YTD, a massive +4765 bps. YTD ahead of the MSCI World Excluding U.S. (MXWOU). Portfolio gains were broad-based with specialty exposure including H.K.-traded real estate services provider Ever Sunshine Lifestyle Services (1995 HK: +24.37%), Brazil’s payment processor StoneCo (STNE US: +23.09%) or Saudi Arabia’s heath care services provider Dr. Sulaiman Al-Habib Medical Services (SULAIMAN AB: +17.58%) amongst the standouts. The U.S.-focused IPOX 100 U.S. (ETF: FPX) delivered

“FPXI” ETF tops July 2020 IPOX-linked ETF Returns

market-beating return during July as well: The broad-based, FANG-free index, underlying for the $1.4 billion “FPX” ETF, added +7.06% to +11.74% YTD, a large +1049 bps. YTD ahead of the S&P 500 (SPX), benchmark for U.S. stocks. Amid big demand for U.S. IPOs and plenty of deal flow lined up, we note the poor showing of some of the recent IPO deal flow added to the IPOX 100 U.S. (ETF: FPX), including e-insurance firm Selectquote (SLQT US: -29.37%), biotech researcher Schrodinger (SDGR US: -20.90%) or marketing solutions provider ZoomInfo (ZI US: -19.91%). Amid the widely praised concerted stimulus across Europe, investors may also focus on the IPOX 100 Europe (ETF: FPXE). The unique European growth index, composed of firms trading across Europe and the U.S., added a massive +7.18% to +15.77% YTD in July, +2560 bps. ahead of the Stoxx 50 (SX5L), benchmark for European stocks.

Select IPOX® Indexes Price Returns (%) Last Week 2019 2020 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) 6.63 27.93 30.27
IPOX® International (IPXI)* (USD) (ETF: FPXI) 8.76 31.37 37.15
IPOX® Indexes: United States
IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) 7.06 29.60 11.74
IPOX® ESG (IPXT) (USD) 4.52
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 4.54 34.55 23.56
IPOX® Nordic (IPND) 7.00 38.52 32.19
IPOX® 100 Europe (IPOE)* (USD) 7.18 30.97 15.77
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 4.97 4.41 18.27
IPOX® China (CNI) (USD) 9.50 26.31 39.51
IPOX® Japan (IPJP)** (JPY) 3.40 37.91 0.40

* 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. For IPOX Alternative Strategies Returns, please contact [email protected]

IPOX-linked ETFs (FPX, FPXI, FPXE) Movers (July 2020 in %):
Livongo Health Inc 69.24 Alector Inc -35.88
Adevinta ASA 51.50 Selectquote Inc -29.37
Farfetch Ltd 48.41 Karuna Therapeutics Inc -26.61
Principia Biopharma Inc 39.82 Adaptive Biotech. Corp -22.86
Goosehead Insurance Inc 37.48 Schrodinger Inc/United States -20.90
Camping World Holdings Inc 34.83 ZoomInfo Technologies Inc -19.91
Mercari Inc 32.73 1Life Healthcare Inc -18.47
BHG Group AB 32.68 Viela Bio Inc -15.49
Tesla Inc 32.50 John Laing Group PLC -15.27
Avantor Inc 29.88 Appfolio Inc -14.44

IPO Deal-flow Review and Outlook: July sees flurry of deals. IPO wave set to continue. At least 62 firms IPO’d in July (ex. China A Shares, Indian IPOs and SPACs), raising ca. $17.6 billion, half of all proceeds raised for Q2. The average (median) equally-weighted deal added +40.84% (+17.33%) based on the difference between final offering price and first close (with >60% of IPOs pricing at the high-end or above range). The U.S. ranked on top with 29 IPOs, raising ca. $10 billion, while H.K. followed with 16 deals (ca. $5 billion). Data analytics veteran Dun & Bradstreet (DNB US), H.K.-traded China Bohai Bank (9668 HK) and Chinese electric-car maker Li Auto (LI US) were the largest deals, while Seoul-traded drugmaker SK Biopharmaceuticals (325030 KS) recorded the initial return, tripling in price. We also note Bill Ackman’s $4 billion Pershing Square Tontine (PSTH/U) deal, the largest SPAC IPO to date. August is set to kick-off with the IPO of Apollo’s 2016 $4B purchase – managed cloud provider Rackspace (RXT US), home mortgage lender, Detroit-based Rocket Companies/Quicken Loans (RKT US), Shopify rival BigCommerce (BIGC) and PE-backed primary care provider Oak Street Health. Chinese clinical research services (CRO) provider Hangzhou Tigermed Consulting (3347 HK) is Asia’s largest listing this week. Other IPO news include: 1) SAP plans to spin off Qualtrics in U.S. IPO; and 2) fintech Affirm prepares for IPO valued at $10B.

Track global deal flow live on: https://bit.ly/2WMvnT9

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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