The IPOX® Week, March 16, 2020

  • IPOX Indexes fall with markets. IPOX 100 U.S. (ETF: FPX) suffers 3rd largest weekly decline since 1990; closes well above December 2018 lows.
  • Amid turmoil, IPOX Global Alternative strategy shines.
  • IPO Deal-flow Review & Outlook: New IPOs tumble over COVID-19 market turmoil. Investec’s asset management unit Ninety One proceeds with London offer.

IPOX Indexes fall with markets. IPOX 100 U.S. (ETF: FPX) suffers 3rd largest weekly decline since 1990. Ahead of Futures & Option expiration week, the IPOX Indexes followed the big drop in global equities as fears over the impact of COVID-19 drove indiscriminate selling and the U.S. large- vs. small/mid-cap divergence trade continued to favor U.S. large-caps by a wide margin. In a tumultuous upside move towards the end of the week, however, equity sentiment somewhat improved as U.S. yields surged, and the U.S. dollar strengthened. Relative performance was mixed: While the IPOX Global (IPGL50) and IPOX 100 U.S. (ETF: FPX) lagged, the IPOX International (ETF: FPXI), IPOX Europe (ETF: FPXE) and IPOX China (CNI) significantly outpaced the respective benchmarks with all IPOX Indexes closing well above the lows from December 2018. Indiscriminate selling extended across sector and market-cap.

IPOX® 100 U.S. (ticker: FPX) Investing since 04//2006:

ranges with negative weekly breadth at a historical record, including personal shopping platform operator Stichfix (SFIX US: -41.79%), ride sharing platform UBER (UBER US: -28.66%) and Lyft (LYFT US: -32.90%), Brazil Financial XP (XP US: -27.75%) and Azul (AZUL US: -37.06%), Australian Payments Processor Tyro Payments (TYR AU: -35.34%), British payment processor Finablr (FIN LN: -71.28%) and Italian Courier services operator Post Italiana (PST IM -30.63%). U.S. logistics firm Schneider (SNDR US: +0.67%), sporting goods distributor Acushnet (GOLF US: +0.67%), IPOX heavyweights payment processor PayPal (PYPL US: -0.67%), Chinese Financial Postal Savings Bank of China (1658 HK: -0.81%) and Chinese supply chain management solutions provider Best (BEST US: -0.19%) were stand-outs during the dismal week for global equites. Amid the historical moves in equity indexes spreads across countries, size groups and sectors, we note the fresh weekly all-time high in the IPOX Global Alternative Strategy with the market neutral portfolio adding +1.53% to +20.92% YTD last week.

Select IPOX® Indexes Price Returns (%) Last Week 2019 2020 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) -13.69 27.93 -13.57
IPOX® Global Alternative (USD) +1.53 -1.96 +20.92
IPOX® International (IPXI)* (USD) (ETF: FPXI) -13.20 31.37 -11.92
IPOX® Indexes: United States
IPOX® Composite U.S. (USD) -12.05 24.64 -16.98
IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) -13.42 29.60 -18.30
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) -16.28 34.55 -16.62
IPOX® Nordic (IPND) -19.10 38.52 -17.31
IPOX® 100 Europe (IPOE)* (USD) -17.66 30.97 -21.54
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -13.64 4.41 -14.87
IPOX® China (CNI) (USD) -8.15 26.31 -2.19
IPOX® Japan (IPJP)** (JPY) -17.57 37.91 -27.94

* 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): -18.25%; IPOX International (ETF: FPXI): -11.35%; IPOX 100 Europe (ETF: FPXE): -17.57%.

IPO Deal-flow Review and Outlook: New IPOs tumbled over COVID-19 market turmoil. Investec’s asset management unit Ninety One proceeds with London offer. 6 small-caps commenced trading across the global regions last week with the average (median) equally-weighted deal losing -13.28% (-7.81%) based on the difference between the final offering price and Friday’s close. Amid the market volatility, biopharma Imara (IMRA US: 0.00) managed to close flat on the week, while Japanese engineers staffing company Forum Engineering (7088 JP: -45.19%) halved, for example. While no U.S. IPO is scheduled for the week, Investec’s asset management unit Ninety One (N91 LN) is set to spinoff and list in London. Other IPO News include: 1) Johnson & Johnson’s partner, Legend Biotech plans to spinoff from HK-based parent Genscript Biotech and pursue a U.S. IPO; 2) Prudential plans to sell its U.S. insurance unit Jackson National Life Insurance; 3) Malaysian conglomerate Sime Darby Plantation mulls IPO to sell its Indonesia unit; 4) A slew of IPOs postponed amid coronavirus and the oil price war, including Continental’s powertrain division Vitesco, oil and gas companies Wintershall and Neptune Energy, Spanish bank Ibercaja, Brookfield’s Australian coal port Dalrymple, JAB’s coffee unit, Carlyle’s Japanese software company WingArc1st, and Caixa’s insurance unit; 5) Elon Musk dampens Starlink’s near-IPO plan.

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