The IPOX® Week, June 15, 2020

  • IPOX Indexes decline but outperform markets as pendulum swings violently the other way big ahead of expiration.
  • IPOX 100 U.S. (ETF: FPX) drops to -1.39% YTD. IPOX International (ETF: FPXI) falls to +17.31% YTD. IPOX China (CNI) and IPOX Japan (IPJP) steady.
  • Amid exuberant IPO sentiment, more deals lined up.

IPOX Indexes decline but outperform markets as pendulum swings violently the other way big ahead of expiration. Most IPOX Indexes declined last week as a rapid shift in equity sentiment drove profit taking after the big run-up ahead of quarterly U.S. Futures & Options expiration, motivated by 1) Lackluster equites abroad pressured by (disappointing) European economic data, 2) The FED delivering a downbeat long-run interest rate forecast amid 3) Renewed fears over Covid-19 subduing U.S. sentiment. Relative returns, however, continued to move impressively in IPOX’ favor across the board:

IPOX International ETF (FPXI) reaches $100 million AUM mark:

IPOX 100 U.S. (ETF: FPX) drops to -1.39% YTD. IPOX International (ETF: FPXI) falls to +17.31% YTD. IPOX China (CNI) and IPOX Japan (IPJP) steady. On the global level, e.g., the super-liquid, mega-cap centric, diversified IPOX Global (IPGL50) fell just -1.20% to +14.35% YTD, +2258 bps. ahead of the MSCI World (MXWD) YTD, while in the U.S., the broad-based, FANG-free diversified IPOX 100 U.S. (IPXO) – underlying for the $1.2 billion “FPX” ETF – shed -3.53% to -1.39% YTD, outperforming the S&P 500 (SPX) by +125 bps last week. Relative strength also extended to the IPOX International (IPXI), tracked by the $104 million “FPXI” ETF: The Strategy extended its YTD relative return lead vs. benchmark MSCI World excluding U.S. (MXWOU) by +349 bps. to a massive +3070 bps. YTD, the highest level in history and underlying the potential asset allocation benefits of adding IPOX-linked portfolios to conventional benchmark exposure for large-scale semi-passive asset allocation purposes. We also note significant losses in a number of high-profile IPOX holdings into the week-end: Most notable are the sharp drops of IPOX heavyweights 1) European food delivery platform operator $13.7 billion Just Eat Takeaway (TKWY NA: -18.60%) AND 2) Leading U.S. ride share serves provider Uber (UBER US: -13.36%) after Just Eat Takeaway inked the deal to acquire leading U.S. food delivery platform operator Chicago-based Grubhub (GRUB US:-0.23%).

Long-only IPOX® Indexes Price Returns (%) Last Week 2019 2020 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) -1.20 27.93 14.35
IPOX® International (IPXI)* (USD) (ETF: FPXI) -0.82 31.37 17.31
IPOX® Indexes: United States
IPOX® Composite U.S. (IPXC) (USD) -3.30 24.65 2.43
IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) -3.53 29.60 -1.39
IPOX® ESG (IPXT) (USD) -3.58
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) -3.28 34.55 11.63
IPOX® Nordic (IPND) -5.19 38.52 11.94
IPOX® 100 Europe (IPOE)* (USD) -3.91 30.97 1.60
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -0.22 4.41 11.70
IPOX® China (CNI) (USD) -0.47 26.31 20.74
IPOX® Japan (IPJP)** (JPY) 0.01 37.91 -3.28

* 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 (IPOM0). Source: Bloomberg L.P. & Refinitiv/Thomson Reuters. For IPOX Alternative Strategies Returns, please contact [email protected]

IPOX-linked ETFs (FPX, FPXI, FPXE) Movers (Last Week in %):
CLOUDERA (FPX) 17.65 HAPAG-LLOYD (FPXE) -18.60
XP (FPX) 12.63 JUST EAT TKWY. (FPXE) -16.97
STILLFRONT GROUP (FPXE) 11.78 EQT (FPXE) -16.96
BILL.COM HOLDINGS (FPX) 11.67 AIB GROUP (FPXE) -15.73
GDS HOLDINGS (FPXI) 11.38 LEVI STRAUSS (FPX) -14.19
ZEALAND PHARMA (FPXE) 9.88 MEDICOVER (FPXE) -13.96
DOCUSIGN (FPX) 7.85 UBER TECH. (FPXE) -13.36
FARFETCH (FPXE) 7.41 NETWORK INTER’L (FPXE) -13.13
AVALARA (FPX) 6.91 TOPBUILD (FPX) -12.10
GSX TECHEDU (FPXI) 6.22 ARCOSA (FPX) -12.08
ZOOM VIDEO COMM. (FPX) 5.74 ARVINAS (FPX) -11.86
TESLA (FPX) 5.60 ADEVINTA (FPXI) -11.68

IPO Deal-flow Review and Outlook: Used car seller Vroom doubles in debut. Biotech companies continue to flood in U.S. IPO market. At least 8 IPOs commenced trading across the global regions last week with the average (median) equally-weighted deal adding +38.10% (+39.61%) based on the difference between the final offering price and their respective Friday’s close. Online used-car seller Vroom (VRM US: +95.59%) soared on debut along with vaccine maker Vaxcyte (PCVX US: +63.44%) and other smaller biotech IPOs. Chicago-based decking and outdoor furniture maker Azek (AZEK US: +18.04%) also debuted strongly. Deals this week include the largest IPO YTD – biopharmaceutical royalties investor 1) Royalty Pharma (RPRX US), Germany OTC drug maker 2) PharmaSGP (PSG GR) and Italian mask and filter maker 3) GVS. Chinese online retailer JD.com (9618 HK) will also follow gaming giant NetEase to return with a discounted Hong Kong secondary offering. Other IPO news include: 1) The largest U.S. mortgage lender Quicken Loans and Salesforce-backed cloud data-warehousing unicorn Snowflake filed for IPO confidentially 2) Long-awaited data analytic firm Palantir Technologies expects September debut 3) More noteworthy filings include commercial data analytics firm Dun & Bradstreet and Softbank-backed insurtech Lemonade.

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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