The IPOX® Week, February 22nd, 2021

  • IPOX® Strategies consolidate as U.S. tech falters during expiration week; Higher U.S. rates and equity risk weigh.
  • IPOX® ETFs (FPX, FPXI, FPXE) record weekly losses.
  • Amid earnings, significantly wide cross-sectional distribution of weekly returns amongst IPOX® Holdings.
  • IPOX® SPAC (SPAC) surges +5.61% as stellar run continues.
  • IPO Deal flow frenzy slows on shortened U.S. trading week, Chinas lunar New Year.

IPOX® Strategies consolidate: The IPOX® Strategies consolidated during U.S. options expiration week as the continued rise in U.S. yields amid declining COVID-19 anxiety weighed on sentiment for equities after generally solid earnings. In the U.S., e.g., the IPOX® 100 U.S. (ETF: FPX) declined -1.12% to +13.70% YTD, lagging the S&P 500 (SPX), while  outperforming  the  Nasdaq 100

(NDX). Declines extended to the international level, with both the IPOX® International (ETF: FPXI) and IPOX® 100 Europe (ETF: FPXE) consolidating after the big run  up YTD. Amid  earnings,  the

distribution of returns amongst individual IPOX® Portfolio Holdings diverged sharply. Upside weekly outliers included Softbank-held Swedish cloud communication platform developer Sinch (SINCH SS: +21.66%), Malaysia’s home products store operator Mr. DIY Group (MRDIY MK: +12.10%), leading Chinese smart phone maker Xiaomi (1810 HK: +9.27%) and Country Garden Services (6098 HK: +6.21%), China’s leading residential services provider. Select Japan-domiciled high growth firms ranked towards the bottom, including AI-software provider AI Inside (4488 JP: -19.58%), medical data and life insurance statistics provider JMDC (4483 JP: -13.32%) and e-commerce marketplace operator Mercari (4385 JP: -10.23%). We also note the renewed weakness in U.S. infrastructure software provider Fastly (FSLY US: -20.95%).

Select IPOX® Indexes Price Returns (%) 2020 Week YTD
IPOX® Indexes: Global/International
IPOX® Global Super Liquid (IPGL50) (USD) 66.63 -0.36 15.91
IPOX® International (IPXI) (USD) (ETF : FPXI) 72.15 -0.83 12.12
IPOX® Indexes: United States
IPOX® Composite U.S. (IPXC) (USD) 40.77 -1.65 11.75
IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) 47.32 -1.12 13.70
IPOX® ESG (IPXT) (USD) 42.29 -1.31 11.01
IPOX® SPAC (SPAC) (USD)** 48.52 5.61 24.47
IPOX® EV (IPEV) (USD)*** 11.02 -4.58 13.54
IPOX® Indexes: Europe/Nordic
IPOX® 100 Europe (IPOE) (USD) (ETF: FPXE) 35.14 -0.45 7.01
IPOX® Nordic Core (IPND) (EUR) 59.89 1.15 10.36
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 47.50 -0.54 10.59
IPOX® China Core (CNI) (USD) 88.02 -0.16 26.36
IPOX® Japan (IPJP)(JPY) 25.75 -1.37 0.85

* Basis for CME-traded e-mini IPOX® 100 U.S. Futures (IPOH1). Source: Bloomberg. Prices exclude dividends. **since July 30, 2020, ***since Nov. 17, 2020.

IPOX® SPAC (SPAC). The index added +5.61% on the week, rising +88.48% since its 7/30/2020 launch with big gains in Churchill Capital (CCVI US: +32.42%), CarLotz (LOTZ US: +11.31%) and Juniper Industrial Holdings (JIH US: +7.74%) leading the way up. SPAC news include 1) 8 SPACs Announced Definitive Merger Agreement/LOI include (partially): a) Artius Acquisition with sustainable materials company Origin Materials; b) Peridot Acquisition with lithium-ion battery recycler Li-Cycle; and c) Osprey Technology Acquisition with satellite imagery and geospatial monitoring firm BlackSky. 2) 1 SPAC Completed Business Combination include: a) Longview Acquisition with ultrasound machine maker Butterfly Network (BFLY). 3) Deals reportedly in talk include Blackrock-backed British online car dealer Cazoo. 4) 16 new SPACs IPO’d on the week.

IPO Deal-flow Review and Outlook:  Another 13 IPOs launched across the globe last week with companies continuing to trade at significant premia when compared to their final offer prices, respectively. While deal activity slowed from previous weeks due to the shortened U.S. trading week and Lunar New Year holiday, noteworthy debuts included China’s first and only molecular cancer screening tests provider, New Horizon Health (6606 HK: +206.08%) and Warsaw’s biggest mobile gaming IPO, free-to-play casino games developer HUUUGE (HUGE PW: -1.00%). IPO activity is set to slow towards month-end with British art and antiques auction platform Auction Technology Group (ATG LN) and Chinese CRO Joinn Laboratories (6127 HK) lined up. Other IPO news include: 1) sneaker-maker Allbirds, Swiss running shoes maker On, Vivendi unit Universal Music Group mull IPO. 2) ByteDance in preliminary talks to list its Chinese TikTok unit Douyin in U.S. 3) U.K. food delivery startup Deliveroo close to reveal IPO filings; 4) Talks on Volkswagen to spin off luxury car unit Porsche in IPO continue.

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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