The IPOX® Week, October 21, 2019

  • Non-U.S. domiciled exposure leads weekly IPOX Portfolio Returns ETFs in focus: FPXI, FPXE.
  • More Buy-Out activity propels select IPOX Holdings.
  • IPO Deal-flow Review & Outlook: Despite mixed IPO sentiment, number of deals line up:  Fertility benefits manager Progyny (PGNY US) and KKR-backed Swiss tech consulting giant SoftwareONE (SWON SW) top list

Non-U.S. domiciled exposure leads weekly IPOX Portfolio Returns anew. ETFs in focus: FPXI, FPXE. Amid hopes over Brexit, buy-out activity and another week of big strength for China-linked stocks with the broad IPOX China (CNI) adding +2.27% to +19.09% YTD, the IPOX Strategies focusing on non-U.S. domiciled firms outperformed their U.S. counterpart anew last week. While the IPOX 100 U.S. (ETF: FPX) declined by -0.35% to +21.43% YTD, the IPOX International (ETF: FPXI), e.g., added +0.83% to +21.54 YTD, while the IPOX 100 Europe (ETF: FPXE) added +1.39% to +19.99% YTD. Buy-out activity for select IPOX Holdings contributed to the strong showing of non-U.S. exposure, including the Thomas Bravo-led deal for IPOX 100 Europe (ETF: FPXE) portfolio holding software maker Sophos Group (SOPH LN: +32.97%). We also note

IPOX® International Investing with the “FPXI” ETF:

the post-IPO Highs in select China-linked exposure, including H.K. traded online marketplace operator Meituan Dianping (3690 HK: +4.86%) and hot-pot ingredients maker Yihai International (1579 HK: +14.04%), while Spanish infrastructure play Cellnex Telecom (CLNX SQ: +8.44%) also recorded a weekly post-IPO High. In the IPOX 100 U.S. (ETF: FPX), big gains in U.S. biotech Reata Pharmaceuticals (RETA US: +93.00%) on the back of a successful trial and hardware maker Hewlett Packard Enterprises (HPE US: +6.97%), e.g., were unable to fully offset the negative impact of the renewed weakness in the slew of U.S.-traded high-beta and unseasoned momentum exposure including software technology makers including CrowdStrike (CRWD US: -21.95%), Coupa Software (COUP US: -18.70%), Okta (OKTA US: -15.21%)  and Mongodb (MDB US: -14.27%) ahead of earnings.

IPOX-linked ETFs Performance Updates: The IPOX 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities Fund (ETF: FPX) closed at +22.13% 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 +24.33% and +23.59% YTD, respectively.

Select IPOX® Indexes Price Returns (%) Last Week Q3 2019 2019 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) 0.02 -3.83 19.25
IPOX® International (IPXI)* (USD) 0.83 0.16 21.54
IPOX® Indexes: United States
IPOX® 100 U.S. (IPXO)* -0.35 -2.63 21.43
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 1.28 -1.75 23.12
IPOX® Nordic (IPND) -0.04 -0.58 21.09
IPOX® 100 Europe (IPOE)* (USD) 1.39 -3.21 19.99
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -0.10 -3.72 -0.45
IPOX® China (CNI) (USD) 2.27 0.71 19.09
IPOX® Japan (IPJP)** (JPY) 0.00 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: Strong deal flow ahead despite recent IPO withdrawals. At least 12 firms debuted in the accessible markets last week**, with the average (median) equally weighted stock adding +11.97% (+9.3%) based on the difference between the final offer price and Friday’s close. Highlights of the week include Post’s spin-off of protein powder and energy bar maker BellRing (BRBR US: +16.79%), the IPO of African telecom tower operator Helios Towers (HTWS LN: +6.96%) and the strong initial showing of German eye clinic operator EuroEyes (1084 HK: +27.73%) in the Hong Kong market, while hedge fund owned publication paper producer Norske Skog (NSKOG NO: 0.00%) closed flat in its Oslo debut. Amid weak market sentiment, Italian luxury yacht maker Ferretti, sound system provider RCF and Australian financial services company Latitude Financial pulled their IPOs. More firms are set to commence trading this week including the $1.3 billion U.S. IPO of fertility benefits manager Progyny (PGNY US) and Chinese internet giant NetEase’s online learning platform Youdao (DAO US). Swiss tech veteran SoftwareONE (SWON SW) and PE-backed Singapore online realtor PropertyGuru (PGU AU) are also lined up. Other IPO news include: a) Saudi Aramco delays world’s largest IPO, b) French state-owned lottery operator FDJ to launch IPO in November c) German defense supplier Hensoldt prep for IPO, d) PE-backed Nigeria payment unicorn Interswitch halts IPO.

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