The New Year kicks off with gains for IPOX: The IPOX® Indexes rose across the board last week, with most strategies continuing the drive into uncharted territory. While government lip-service propelled select China-linked exposure, talks on a further round of stimulus pushed the FANG-free IPOX 100 U.S. (ETF: FPX) to a gain of +4.31% last week, +263 bps. and +247 bps. better than when compared to the Nasdaq 100 (NDX) and S&P 500 (SPX). Equity risk declined (VIX: -5.23%), while 10-year U.S. yields closed at the highest level since the start of the pandemic. Abroad, we note big (relative) strength in the IPOX® China Core (CNI) as investors continued to flock to specialty exposure seemingly unaffected by economic vows with a low risk of adverse government intervention, often represented by New Listings deal flow invested by IPOX. Here, the broad-based strategy soared +7.15%, outpacing the super-hot HS Tech Index (HSTECH) by a massive +472 bps. Strength in China-linked exposure was also able to mitigate relative weakness amongst some of the European domiciled portfolio holdings, helping the IPOX International (ETF: FPXI) to another record, rising +2.24%. Amongst individual IPOX Portfolio Holdings, Hong Kong-traded real estate services providers had big week, including 12/18 IPO Ever Sunshine Lifestyle (1995 HK: +36.90%) and 06/18 Spin-off Country Garden Services (6098 HK: +22.02%), benefiting from the release of favorable notes by China’s Ministry of Housing and Urban-Rural Development related to elderly care, day care and housekeeping services. We also note a fresh post-IPO high in German energy Spin-off 09/20 IPO Siemens Energy (ENR GY: +11.43%). 07/20 IPO digital insurance provider Lemonade (LMND US: +31.22%) and IPOX heavyweight car vending machine operator 04/17 IPO Carvana (CNVA US: +16.24%) stood out in the outperforming IPOX 100 U.S. (ETF: FPX).
|Select IPOX® Indexes Price Returns (%)||2019||2020||YTD|
|IPOX® Indexes: Global/International|
|IPOX® Global Super Liquid (IPGL50) (USD)||27.93||66.63||3.59|
|IPOX® International (IPXI)* (USD) (ETF : FPXI)||31.37||72.15||2.24|
|IPOX® Indexes: United States|
|IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX)||29.60||47.32||4.31|
|IPOX® ESG (IPXT) (USD)||–||42.29||4.00|
|IPOX® SPAC (SPAC) (USD)**||–||48.53||3.37|
|IPOX® EV (IPEV) (USD)***||–||11.02||13.86|
|IPOX® Indexes: Europe/Nordic|
|IPOX® 100 Europe (IPOE)* (USD) (ETF: FPXE)||30.97||35.14||1.91|
|IPOX® Nordic Core (IPND) (EUR)||38.52||59.89||2.34|
|IPOX® Indexes: Asia-Pacific/China|
|IPOX® Asia-Pacific (IPTA) (USD)||4.41||47.50||3.07|
|IPOX® China Core (CNI) (USD)||26.31||88.02||7.15|
|IPOX® Japan (IPJP)(JPY)||7.91||25.75||0.97|
* 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 (IPOH1). Source: Bloomberg. Prices exclude dividends. **since July 30, 2020, ***since Nov. 17, 2020.
IPOX® SPAC Index (SPAC): The Index added +3.37% last week and closing at an All-Time-High, with an accumulated return of +53.54% since its 7/30/20 launch. SPAC news include 1) 4 SPACs Announced Merger Agreement/LOI include: a) ACE Convergence Acquisition with fabless semiconductor provider Achronix Semiconductor; b) Social Capital Hedosophia V with fintech startup SoFi; and c) SC Health with unidentified healthcare app developer; d) GX Acquisition with biotech firm Celularity. 2) 2 SPACs Completed Business Combination include: Social Capital Hedosophia III with senior Medicare Advantage plans provider Clover Health (CLOV), and b) Megalith Financial Acquisition with Customers Bank fintech unit BankMobile Technologies (BMTX). 3) Deals reportedly in talk include: media platform Bustle Digital Group 4) 28 new SPACs flooded the market on the week.
IPO Deal-flow Review and Outlook: Only 4 IPOs kicked off across the global markets last week with the average (median) equally weighted deal adding +28.35% (+36.87%) based on the final offer price and respective close. Two upsized cancer drug/therapy developers, Cullinan Management (CGEM US: +42.43%) and Gracell Biotechnologies (GRCL US: +31.89%) soared. Installment payment provider fintech Affirm (AFRM US), online thrift store Poshmark (POSH US), private equity held pet retail chain Petco (WOOF US) and automotive services franchise Driven Brands (DRVN US) are lined up to debut on Nasdaq with a busy IPO pipeline in Hong Kong market as well. Other IPO news include: 1) $30 billion gaming platform Roblox opts for direct listing after IPO delay; 2) U.S.-listed Chinese search engine giant Baidu and video sharing site Bilibili plan H.K. secondary IPOs; 3) Brazilian private equity firm Patria and asset manager Vinci Partners, Oprah-backed oat milk brand Oatly, MMB’s Germany pipeline construction business Friedrich Vorwek and Philippine’s electricity network operator National Grid plan to join 2021 IPO pipeline.
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