The IPOX® Week, July 22, 2019

  • Most IPOX Indexes outperform during tough week for U.S. stocks as earnings line up. ETFs in focus: FPX, FPXI and FPXE.
  • China Tobacco Intern. (6055 HK) adds another +17.78%.
  • IPO Deal-flow Review & Outlook: Euphoric U.S. IPO market continues. Goldman Sachs affiliated specialty insurer Prosight (PROS US), IRONMAN owner Wanda Sports (WSG US) inline.

Most IPOX Indexes outperform during tough week for U.S. stocks as earnings line up. ETFs in focus: FPX, FPXI and FPXE.  Amid lower U.S. yields, uncertainty over U.S. rates and a rise in risk (VIX: +16.62%), the IPOX Indexes traded mixed during option expiration week, generally outperforming the respective markets. In the U.S., e.g., the IPOX 100 U.S. (ETF: FPX) fell -0.99% to +28.06% YTD, less then when compared to the U.S. benchmarks. Other IPOX Indexes rose last week to trade near multi-year highs, including the IPOX International (ETF: FPXI)  and   IPOX Europe  (ETF: FPXE).

Here, strength was driven by big upside moves in specialty firms across industries after upgrades and earnings, including FPXI-held Chinese state tobacco monopoly China Tobacco International (6055 HK: +17.78%), Sweden-traded online casino solutions provider Evolution Gaming (EVO SS: +15.94%) or H.K.-traded biotech Wuxi Biologics (2269 HK: +14.52%). With IPOX Europe (ETF: FPXE) heavyweight drug-maker IPO M&A Novartis (NVS US: +6.09%) rising strongly, we also note the takeover talks surrounding IPOX Europe (ETF: FPXE) holding specialty eyewear retailer/distributor Grandvision (GVNV NA: +22.66%). In the IPOX U.S. (ETF: FPX) and ahead of some key earnings, results-driven gains in recently added security software maker Crowdstrike (CRWD US: +13.63%) were more than offset by significant declines in car vending machine operator Carvana (CVNA US: -13.90%), social networker Snap (SNAP US: -10.19%) and application software maker Pluralsight (PS US: -7.68%).

IPOX-linked ETFs Update: The IPOX 100 U.S. (IPXO)-linked, 5-star (10-years) $1.3 billion First Trust U.S. Equity Opportunities ETF (FPX) fell to +28.71% YTD, while the IPOX International (IPXI)-linked 5-star (3-years) First Trust International Equity Opportunities ETF (FPXI) and the IPOX® 100 Europe (IPOE)-linked First Trust IPOX® Europe Equity Opportunities ETF (FPXE) closed at +24.43% YTD and +25.50% YTD, respectively.

Select IPOX® Indexes Price Returns (%) Last Week 2018 2019 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) -0.61 -11.37 25.62
IPOX® International (IPXI)* (USD) 0.43 -13.47 22.18
IPOX® Indexes: United States
IPOX® Composite U.S. (IPXC)* -0.43 -7.59 19.90
IPOX® 100 U.S. (IPXO)* -0.99 -8.80 28.06
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 0.34 -13.46 24.83
IPOX® Nordic (IPND) -0.22 -15.45 24.18
IPOX® 100 Europe (IPOE)* (USD) 0.75 -16.60 22.33
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -0.34 -3.21 6.05
IPOX® China (CNI) (USD) -0.55 -22.83 13.86
IPOX® Japan (IPJP)** (JPY) -0.77 -13.70 -0.49

* 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 (IPOU9). ** Live since 07/18. Please contact [email protected] for other IPOX® Indexes.

IPO Deal-flow Review & Outlook: Euphoric U.S. IPO market continues. Goldman Sachs affiliated specialty insurer Prosight (PROS US), IRONMAN owner Wanda Sports (WSG US) inline. At least 16 firms debuted last week in markets open to global investors, with the average (median) equal-weighted stock adding +9.94% (+1.47%) based on the difference between the final IPO price and Friday’s close. Apart from micro-cap biotechs Mirum Pharma (MIRM US: -10.00%) and Fulcrum Therapeutics (FULC US: -21.56%), U.S.-based (& domiciled) IPOs continued to attract strong initial interesting, with venture capital firm Sequoia-backed customer experience management platform Medallia (MDLA US: +76.43%), New York-based patient intake software developer Phreesia (PHR US: +33.33%), Brazilian medical education provider Afya (AFYA US: +26.79%) and Chinese security veteran Huatai Securities (6886 HK: +0.75%)-owned TAMP AssetMark Financial Holdings (AMK US: +25.86%) all rallying above their respective offering prices, and underlying the unabated strong momentum for respective deals in the U.S. market. Most China-linked IPOs, however, lagged anew, including Chinese internet giant Tencent-backed live streaming platform DouYu (DOYU US: -8.70%), last week’s largest deal. The U.S. IPO market is set to continue its strong momentum with Goldman Sachs-affiliated specialty insurer ProSight (PROS US) and Chinese conglomerate, debt-heavy Wanda Group’s sports events media and marketing unit spin-off Wanda Sports (WSG US) lined up to go public during this week

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