The IPOX® Week, January 06, 2020

  • IPOX Indexes start 2020 with gains. IPOX 100 U.S. (ETF: FPX) unaffected by early-year weakness in U.S. small- and mid-caps.
  • Big gains in China-linked exposure drives continued positive momentum in the IPOX International ETF (ETF: FPXI).
  • No U.S. IPOs lined up, focus on deals across Asia-Pacific.

IPOX Indexes start 2020 with gains. IPOX 100 U.S. (ETF: FPX) unaffected by early-year weakness in U.S. small- and mid-caps. Amid higher risk (VIX: +1.74% YTD) and falling U.S. yields on increased geopolitical tensions into the week-end, the IPOX Indexes started the New Year with gains. Significant upside was recorded by the broad, large-cap centric IPOX International (ETF: FPXI) which gained to +1.46% YTD, and extending the three-year

3-year Investing with the IPOX® International ETF (FPXI)

unadjusted relative performance jump vs. the ultra-cheap benchmarks to a massive ca. +3181 bps. Specifically, the portfolio benefited from continued strength in China-linked exposure (CNI: +1.90%) which rose strongly on optimism about China central bank policy seeking to further stimulate economic growth, the positive prospects for Chinese technology stocks and strength in select Brazil-traded health care related stocks. Individual IPOX International (ETF: FPXI) Portfolio holdings to highlight include Brazil-traded managed health care services providers Hapvida Participacoes (HAPV3 BZ: +8.37%) and Notre Dame Intermedica Participacoes (GNDI3 BZ: +6.96%), as well as the slew of China-linked technology, consumer and health-care linked exposure tracked in the portfolio such as US-traded e-commerce platform operator Pinduoduo (PDD US: +8.12%), educational software maker GSX Techedu (GSX US: +7.18%), “hot pot” restaurant operator Hong Kong-traded Haidilao International (6862 HK: +5.75%) and biotech Wuxi Biologics (2269 HK: +2.99%). We also note a strong start into the New Year by Madrid-traded telecom Tower operator Cellnex Telecom (CLNX SM: +5.03%) which gained after announcing the purchase of infrastructure assets across Portugal from its joint venture including telecom Altice Europe (ATC NA: +3.17%) and investment bank Morgan Stanley (MS US: +0.16%). Profit taking across a number of portfolio holdings including Copenhagen-traded leading windfarm operator Orsted (ORSTED DC: -1.68%) capped upside towards the week-end. In the U.S., the IPOX 100 U.S. (ETF: FPX) rose to +0.32% YTD, outperforming the S&P 500 (SPX: +0.13%), Russell 2000 (RTY: -0.46%) and S&P Mid-Cap (MID: -0.36%), while lagging U.S. technology stocks (NDX: +0.70%). Here, 52/100 portfolio holdings rose on the week, with the average (median) equally-weighted firm adding +0.49% (+0.15%). Software makers ranked amongst the best performing portfolio holdings, including Coupa Software (COUP US: +9.11%) and Avalara (AVLR US: +7.66%), while IPO M&A, S&P 500 (SPX) inclusion candidate electric car maker Tesla (TSLA US: +5.90%) and IL-based French fries maker Spin-off Lamb Weston (LW US: +8.75%) extended recent gains after business updates.

Select IPOX® Indexes Price Returns (%) 2018 2019 2020 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) -11.37 27.93 1.07
IPOX® International (IPXI)* (USD) -13.41 31.37 0.97
IPOX® Indexes: United States
IPOX® 100 U.S. (IPXO)* (USD) -8.80 29.60 0.32
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) -13.46 34.55 0.57
IPOX® Nordic (IPND) -15.45 38.52 0.50
IPOX® 100 Europe (IPOE)* (USD) -16.60 30.97 0.12
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -3.21 4.41 0.27
IPOX® China (CNI) (USD) -22.83 26.31 1.90
IPOX® Japan (IPJP)** (JPY) -13.70 7.91 0.00

* 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 (IPOH0). Source: Bloomberg.

IPOX ETFs 2020 YTD Returns: IPOX 100 U.S. (ETF: FPX): +0.46%, IPOX International (ETF: FPXI): +1.46%, IPOX 100 Europe (ETF: FPXE): -0.11%.

13-year Investing with the IPOX® 100 U.S. ETF (FPX)

No U.S. IPOs lined up, focus on deals across Asia-Pacific. With no IPOs expected to list in the U.S. and Europe, firms set to list across Asia-Pacific include H.K.-traded micro-caps engineering and construction services provider Kwan Yong (9998 HK) and electronic components maker Wise Ally International (9918 HK), as well as Jakarta-listed Financial Bank Amar Indonesia (AMAR IJ).

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