The IPOX® Week, January 4th, 2021

  • In break-out year, investor flock to IPOX® Strategies in 2020.
  • All U.S. listed IPOX ETFs (FPX, FPXI and FPXE) extend 2019 strength to record big gains in 2020: significant outperformance.
  • IPOX® China (CNI) beats new Hang Seng Tech Index in 2020.
  • IPOX® SPAC (SPAC) has solid start to live trading.

Investor flock to IPOX® Strategies exposure in 2020. Amid the unprecedented global economic crises inflicted by COVID-19 driving a jump in equity risk (VIX: +65.09% Y/Y 2020) and further declines in (global) bond yields, the IPOX® Strategies gained as investors flocked to equities mostly untracked in the benchmarks and seemingly insulated or even benefiting from the economic vows. Gains were broad-based and extended across global regions. In the U.S. e.g., the FANG-free, broad-based IPOX 100 U.S. (ETF: FPX) rose +47.32% in 2020, outperforming the S&P 500 (SPX) by a massive +3104 bps., its best relative jump in strategy history. Here, gains across specialty exposure drove the good showing, including software makers 2019 IPO CrowdStrike (CRWD US: +324.74%), 2017 IPO Appian (APPN US: +324.21%) and social networker 2017

IPOX® 100 U.S. Investing with the “FPX” ETF since launch:  

IPO Snap (SNAP US: +206.61%). Solid earnings across portfolio holdings and corporate M&A continued to support, with IPOX in many cases on the winning end of respective M&A takeover targets, including biotech MyoKardia (MYOK US: +208.58%) and social networker direct listing Slack Technologies (WORK US: +72.75%). Laggards in the IPOX 100 U.S. (ETF: FPX), some of which have exited the portfolio during the year, included economically sensitive exposure, including real estate services providers 2017 IPO Newmark Group (NMRK US: -44.91%) and 2018 IPO Cushman & Wakefield (CWK US: -27.45%). Strong gains extended to non-U.S. domiciled exposure tracked in the IPOX International ETF (FPXI), one of the fastest growing and most unique (in terms of factor exposure) ETFs in the marketplace. Here, the portfolio added +72.15% in 2020, a massive +6697 bps. above its benchmark. Gains across a unique group of mostly large-cap centric group of companies drove returns, including Asia-Pacific-linked ecommerce platform operators Singapore-based 2017 IPO Sea (SE US: +394.90%) and China’s 2018 IPO Pinduoduo (PDD US: +369.78%), Chinese biotech 2017 IPO Wuxi Biologics (2269 HK: +212.62%) and fast-growing phone maker 2017 Xiaomi (1810 HK: +2017.98%), just 4.78% of  the  size  of  U.S.  iPhone maker Apple

Select IPOX® Indexes Price Returns (%) 2019 Q4 2020 2020
IPOX® Indexes: Global/International
IPOX® Global Super Liquid (IPGL50) (USD) 27.93 19.36 66.63
IPOX® International (IPXI)* (USD) (ETF : FPXI) 31.37 22.23 72.15
IPOX® Indexes: United States
IPOX® Composite U.S. (IPXC) (USD)> 17.38 40.77
IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) 29.60 22.49 47.32
IPOX® ESG (IPXT) (USD) 14.03 42.29
IPOX® SPAC Index (SPAC) (USD) 30.43
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE)* (EUR) (ETF: FPXE) 34.55 12.63 36.96
IPOX® Nordic Core (IPND) (EUR) 38.52 17.12 59.87
IPOX® 100 Europe (IPOE)* (USD) (ETF: FPXE) 30.97 17.49 35.02
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 4.41 12.33 47.46
IPOX® China Core (CNI) (USD) 26.31 27.85 88.04
IPOX® Japan (IPJP)** (JPY) 7.91 7.90 25.75

* 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 L.P.

Official IPOX® ETFs 2020 Returns: IPOX® 100 U.S. (ETF: FPX): +47.89%, IPOX® International (ETF: FPXI): +71.50%, IPOX® 100 Europe (ETF: FPXE): +34.99%.

AAPL: +82.32%). Amid decreasing valuation discounts and M&A, European payment processors produced solid returns, including “FPXI” heavyweight payment processors Adyen (ADYEN US: +160.60%) and Nexi (NEXI IM: +31.99%). The strategy mitigated bigger losses by exiting its position in Chinese-coffee Chain Luckin Coffee (LK: US: -78.40%) quickly, which also did not derail a big year

IPOX® International Investing with the “FPXI” ETF since launch: 

for the diversified IPOX China (CNI) which rose +88.04% in 2020, even outpacing the newly launched and super-hot Hang Seng Tech Index (HTECH). Amid record IPOX AUM growth during 2020, we note the launch of several new IPOX Strategies in 2020, including the IPOX SPAC®, benchmark for U.S. SPAC performance. The portfolio ended 2020 with a gain of +30.43% from its July 31 launch, outperforming the benchmarks.

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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