The IPOX® Week, January 13, 2020

  • IPOX Indexes extend gains during 1st full week of 2020 trading.
  • China-linked exposure drives continued positive momentum in the IPOX International ETF (ETF: FPXI).
  • IPO Deal-flow Review & Outlook: Busy IPO pipeline as market recoups for 2020.
  • IPOX celebrates Issue #500 of The IPOX Week.

IPOX Indexes extend gains during first full week of 2020 trading. Big overnight gyrations in U.S. equity derivatives on Iran tensions did little to derail the eventually overall positive Momentum in global equities during the first full week of 2020 trading, with all IPOX Indexes adding to YTD gains. Two developments remained most notable, in our opinion: 1) The continued strong Momentum in China-linked exposure with the IPOX International (ETF: FPXI) adding to +1.96%, +162 bps. ahead of the International Market YTD.

IPOX® International ETF with the “FPXI” ETF since 2017.

Here, significant declines across select portfolio holdings including German (iPhone) battery maker Varta (VAR1 GY: -21.97%) on profit taking, e.g., were more than offset by gains in core portfolio stocks including Amsterdam-traded Financial Prosus (PRX NA: +7.68%) and Canadian software firm Shopfiy (SHOP US: +6.15%), as well as the slew of China-linked specialty stocks such as coffee chain operator Luckin Coffee (LK US: +17.97), educational software maker GSX Techedu (GSX US: +14.55%) and Yihai International (1579 HK: +8.93%), producer of seasonings for Hong Kong’s “red hot” “hot pot” restaurants. 2) The big divergence in U.S. equity indexes spreads with continued significant weakness in the Russell 2000 (RTY: -0.65% YTD) and S&P Mid-Cap (MID: -0.56% YTD), while the FANG-free, diversified IPOX 100 U.S. (ETF: FPX) extended its YTD gain to +1.60% YTD, +53 bps. YTD ahead of the S&P 500 (SPX), benchmark for U.S. stocks. Select small & mid-cap specialty growth exposure tracked in the IPOX 100 U.S. (ETF: FPX) recorded the biggest gains last week, led by biotech Apellis Pharmaceuticals (APLS US: +21.92%), application software maker Appian (APPN US: +16.29%), health care services provider Progyny (PGNY US:  +12.93%) and security software maker CrowdStrike (CRWD US: +12.71%), while security services provider ADT (ADT US: -15.44%), cooler maker Yeti (YETI: -7.31%) and car vending machine operator Carvana (CVNA US: -5.54%) ranked amongst the worst performing portfolio holdings of the week.

Select IPOX® Indexes Price Returns (%) Last Week 2019 2020 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) 1.83 27.93 2.92
IPOX® International (IPXI)* (USD) 1.27 31.37 2.26
IPOX® Indexes: United States
IPOX® 100 U.S. (IPXO)* (USD) 1.28 29.60 1.60
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 1.66 34.55 2.24
IPOX® Nordic (IPND) 1.44 38.52 1.96
IPOX® 100 Europe (IPOE)* (USD) 0.34 30.97 0.47
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 0.20 4.41 0.46
IPOX® China (CNI) (USD) 2.24 26.31 4.18
IPOX® Japan (IPJP)** (JPY) 0.89 7.91 0.89

* 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 L.P.

IPOX ETFs 2020 YTD Returns: IPOX 100 U.S. (ETF: FPX): +1.72%; IPOX International (ETF: FPXI): +1.96%; IPOX 100 Europe (ETF: FPXE): +0.18%.

IPO Deal-flow Review & Outlook: Busy IPO pipeline ahead as market recoups for 2020. While no sizable IPOs launched across the global regions since the start of the New Year, a busy IPO market is set for this week in both H.K. and the U.S. With no fewer than ten new offerings, focus this week includes the 600x oversubscribed Chinese restaurant chain Jiumaojiu (9922 HK), which eyes to replicate the H.K. success of “hot pot” king – IPOX International (ETF: FPXI)-portfolio holding Haidilao International (6862 HK: +6.65%). The WeWork of housing, Chinese co-living rental startup Phoenix Tree (known as Danke Apartment) (DNK US) and Xiaomi-(1810 HK: +4.77%)-backed podcast platform Lizhi (LIZI US) are also expected to debut in the U.S. this week. Other IPO news last week include: 1) Online mattress retailer Casper Sleep, REIT Broadstone, CRO company PPD and primary-care startup One Medical (1Life Healthcare) pursue IPO filing, while waste management company GFL revived its U.S. IPO plan; 2) South Korea’s largest internet bank Kakao Bank and e-commerce giant Coupang are in IPO talks; 3) U.S. unicorns including food delivery platform Olo and golf venue Topgolf prepare for an IPO; and 4) restaurant operator “FPX” portfolio stock Yum China (YUMC US: +0.78%) and internet giant Baidu (BIDU: +8.00%) weigh listing on the H.K. stock exchange.

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