Asset allocation buying lifts major equity benchmarks ahead of U.S. options expiration and earnings. IPOX Indexes reverse some of last week’s relative gains. Big asset allocation-driven buying triggered by relief over global trade after the U.S. / China trade pact and Brexit propelled the Derivatives-heavy benchmarks past the IPOX Indexes last week, with IPOX reversing some of the previous week’s strong relative gains. In the U.S., e.g., the IPOX 100 U.S. (ETF: FPX) added +0.34% to +21.86% YTD, lagging the S&P 500 (SPX) by -28 bps., while the IPOX International (ETF: FPXI) added +0.55% to +20.53% YTD, -159 bps. less than when compared to the International Market. Ahead of key U.S. earnings and the general risk-adjustment in the pre-IPO market, individual portfolio holdings with most upside focus included U.S. biopharma Reata Pharma (RETA US: +19.40%), consumer electronic products maker Roku (ROKU US: +13.89%) or car vending machine operator Carvana (CVNA US: +6.56%). Abroad, we note the big week in beleaguered
IPOX® 100 U.S. Investing with the “FPX” ETF since 2006:
IPOX Europe (ETF: FPXE) holding Irish Financial AIB Group (AIBG ID: +22.40%) and fresh weekly post-IPO Highs in IPOX International (ETF: FPXI) heavyweights Italian courier services provider Poste Italiane (PST IM: +6.01%) and China’s web shopping platform operator Meituan Dianping (3690 HK: +4.43%). Weakness in some of the most unseasoned exposure continued to weigh on the IPOX, however, including security software market 06/19 IPO CrowdStrike (CRWD US: -5.59%), Softbank-held biotech 10/18 IPO Guardant Health (GH US: -4.81%) and specialty chemicals maker 05/19 IPO Avantor (AVTR US: -4.41%).
IPOX-linked ETFs add to YTD gains last week: The IPOX 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities Fund (ETF: FPX) closed at +22.46% YTD, while the IPOX International (IPXI)-linked First Trust International Equity Opportunities Fund (ETF: FPXI) and the IPOX 100 Europe (IPOE)-linked First Trust IPOX® Europe Equity Opportunities Fund (ETF: FPXE) closed at +23.84% and +19.97% YTD, respectively.
|Select IPOX® Indexes Price Returns (%)||Last Week||Q3 2019||2019 YTD|
|IPOX® Indexes: Global/International|
|IPOX® Global (IPGL50) (USD)||0.44||-3.83||19.22|
|IPOX® International (IPXI)* (USD)||0.55||0.16||20.53|
|IPOX® Indexes: United States|
|IPOX® Composite U.S. (IPXC)*||0.08||-3.20||14.43|
|IPOX® 100 U.S. (IPXO)*||0.34||-2.63||21.86|
|IPOX® Indexes: Europe/Nordic|
|IPOX® 30 Europe (IXTE) (EUR)||1.87||-1.75||21.56|
|IPOX® Nordic (IPND)||0.88||-0.58||21.14|
|IPOX® 100 Europe (IPOE)* (USD)||1.83||-3.21||18.34|
|IPOX® Indexes: Asia-Pacific/China|
|IPOX® Asia-Pacific (IPTA) (USD)||-0.81||-3.72||-0.35|
|IPOX® China (CNI) (USD)||1.28||0.71||16.45|
|IPOX® Japan (IPJP)** (JPY)||-0.88||0.46||-0.67|
* 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 (IPOZ9). ** Live since 07/18.
IPO Deal-flow Review & Outlook: A buyers’ market for U.S. IPOs as biotech IPOs close week below final offer. Spin-off BellRing Brands (BRBR US) lined up. At least 13 firms debuted in the accessible markets last week**, with the average (median) equally-weighted stock adding (losing) +0.90% (-0.83%) based on the difference between the final offering price and Friday’s close, respectively. Focus was on IPOs abroad, including Thai real estate development group Asset World Corp (AWC TB: +3.33%), Chinese sports-wear retailer Topsports (6110 HK: +14.12%), Japanese home care startup Amvis (7071 JP: +48.21%) and Chinese property management services provider spin-off Xinyuan Property Management (1895 HK: +41.83%). In the U.S., IPO sentiment remained fragile with biotechs BioNTech (BNTX US: -7.87%) and Vir (VIR US: -29.90%) closing the week significantly below final offer. Deals lined up for this week include protein bar and powder spin-off BellRing Brands (BRBR US) and P/E-backed Australian non-bank lender Latitude Financial (LFS AU). Other IPO news include: a) strong progress reported on Saudi Aramco’s world’s largest IPO, b) the delay in the IPO of food delivery unicorn Postmates’ and c) the IPO plans of U.K. gas station chain EG Group, Africa Export-Import Bank, Telecom Italia’s data center spin-off, GE’s health-care unit, China’s Everbright Group and Indonesia’s Lion Air.
Track Priced & Upcoming IPOs on https://ipox.com
Lime Brokerage LLC is not affiliated with these service providers. Data, information, and material (“content”) is 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. 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. Lime Brokerage LLC does not endorse, offer or recommend any of the services provided by any of the above service providers and any service used to execute any trading strategies are solely based on the independent analysis of the user.