The IPOX® Week, March 1st, 2021

  • Most IPOX® Strategies gain during February. Surge in global yields towards month-end dampens positive sentiment.
  • IPOX® 100 U.S. (FPX) (Feb): +3.64% (+7.38% YTD)
  • IPOX® International (FPXI) (Feb): -0.30% (+0.94% YTD)
  • IPOX® 100 Europe (FPXE) (Feb): +0.91% (-0.08% YTD).
  • IPOX® SPAC (SPAC) adds +4.14% to +10.55% YTD.
  • Busy global New Listings calendar set to continue during March.

Most IPOX® Strategies gain during February, IPOX® 100 U.S. (ETF: FPX) leads the way: While being significantly pressured by the wave of selling and profit-taking towards month-end on a spike in global rates and equity risk (VIX: +26.76%) – amid further declining Covid-19 anxiety – most IPOX® Strategies gained or traded to slightly lower during February. Top of the list ranked the IPOX 100 U.S. (FPX), which added +3.64% to +7.38% YTD during the month, finishing +591 bps. and +722 bps. ahead of the S&P 500 (SPX) and Nasdaq 100 (NDX) YTD, respectively, and setting a monthly all-time

IPOX® 100 U.S. Investing with the “FPX” ETF since 2006

high. In markets abroad, respective IPOX® Strategies traded more muted with big declines associated with emerging markets-linked Growth/Momentum plays leading to significant losses in the IPOX® International (ETF: FPXI) and IPOX® 100 Europe (ETF: FPXE) towards month-end, with both strategies finishing February trading broadly in line with their respective benchmarks YTD. Amid earnings season and the outperformance of old economy/value stocks, we note a big move in a number of IPOX® Portfolio Holdings including 08/18 IPO CA-based audio products manufacturer Sonos (SONO US: +48.91%), web-based insurance products seller 05/20 IPO Selectquote (SLQT US: +44.41%), applications software maker 12/19 IPO Bill.com (BILL US: +35.39%) and Malaysia’s retailer 10/20 IPO Mr. DIY Group (MRDIY MK: +33.23%). Select European IPOs with notable upside focus during February included Swedish sporting goods maker MIPS (MIPS SS: +33.23%), application software maker Softbank-backed Sinch (SINCH SS: +28.25%) and IPO M&A re-opening trade global duty-free shops operator Dufry (DUFN SE: +29.28%) which entered IPOX® through its 2020 acquisition of Hudson Group. Companies recording big declines during February after reporting earnings included a number of software-related businesses such as JP-traded 12/19 IPO AI Inside (4488 JP: -36.75%), 05/19 IPO Fastly (FSLY US: -32.71%), 09/20 Direct Listing Palantir Technologies (PLTR US: -32.06%) and 09/18 IPO SVMK (SVMK US: -26.15%).

Select IPOX® Indexes Price Returns (%) 2020 February YTD
IPOX® Indexes: Global/International
IPOX® Global Super Liquid (IPGL50) (USD) 66.63 2.07 6.50
IPOX® International (IPXI) (USD) (ETF : FPXI) 72.15 -0.30 0.94
IPOX® Indexes: United States
IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) 47.32 3.64 7.38
IPOX® ESG (IPXT) (USD) 42.29 4.48 6.06
IPOX® SPAC (SPAC) (USD)** 48.52 4.14 10.55
IPOX® Indexes: Europe/Nordic
IPOX® 100 Europe (IPOE) (USD) (ETF: FPXE) 35.14 0.91 -0.08
IPOX® Nordic Core (IPND) (EUR) 59.89 4.17 3.14
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 47.50 -4.96 -1.69
IPOX® China Core (CNI) (USD) 88.02 -2.65 8.32
IPOX® Japan (IPJP)(JPY) 25.75 -0.60 -3.55

* Basis for CME-traded e-mini IPOX® 100 U.S. Futures (IPOH1). Source: Bloomberg. Prices exclude dividends. **since July 30, 2020.

IPOX® SPAC (SPAC). The portfolio added +4.14% during February, rising +64.21% since its 7/30/2020 launch with the SPAC boom showing few signs of a slowdown as 98 SPAC IPOs raised over $34.5 billion. 43 SPACs announced merger targets (LOIs), 9 SPACs completed a merger and at least another 150 SPACs filed for an IPO with Soaring Eagle Acquisition (SRNGU US) ranking as the largest deal of the month. Life sciences-focused SPAC CM Life Sciences II (CMIIU US) recorded the largest initial jump (+24.90%). Some of last week’s SPAC news include: 1) 12 SPACs Announced Merger Agreements/LOIs include (partial): a) Churchill Capital IV with EV maker Lucid Motors; b) Reinvent Technology Partners with electric air taxi developer Joby Aviation. 2) Deals reportedly in talks include: a) Singapore-based mixed martial arts organizer ONE Championship. 3) 28 new SPACs flooded the market on the week.

IPO Deal-flow Review and Outlook: At least 83 accessible IPOs launched across global regions during February, raising over $31.1 billion and recording an average (median) initial return of +37.78% (+30.04%). IPOs in the U.S. accounted for 1/3 of global deal flow with 29 IPOs (35%) and over $9 billion in proceeds raised (31.5%). Chinese short-video sharing platform/TikTok rival Kuaishou (1024 HK), dating app Bumble (BMBL US), and German online used-car dealer Auto1 (AG1 GR) ranked amongst the top 3 largest IPOs. HK-traded early cancer detection company New Horizon Health (6606 HK) more than tripled on debut, marking the best first-day IPO performance. Indonesian micro-cap digital bank provider Bank Net Indonesia Syariah (BANK IJ) scored the best performance YTD, gaining 20-fold from its final offering price. Other high-profile deals included Thai PTT Oil & Retail Business spin-off (OR TB) and the largest Polish mobile game developer IPO HUUUGE (HUGE PW). Firms lined up during March include cryptocurrency trading platform Coinbase (direct listing), gaming platform Roblox (direct listing), Vodafone’s tower unit Vantage Tower, Italian aerospace, defense and security company Leonardo’s DRS unit, rubber glove maker Top Glove (secondary listing in HK) and oat milk maker Oatly.

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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