The IPOX® Week, October 28, 2019

  • IPOX Indexes rise across the board towards month-end, trade mixed vs. benchmarks.
  • Broad IPOX Nordic (IPND) and IPOX China (CNI) record big relative performance jump as select specialty exposure surges.
  • IPO Deal-flow Review & Outlook: U.S. IPO activity set for slow down towards month-end, Hong Kong IPO market in focus.

IPOX Indexes rise across the board towards month-end, trade mixed vs. benchmarks. Broad IPOX Nordic (IPND) and IPOX China (CNI) record big relative performance jump as select specialty exposure surges. Ahead of the Fed and month-end, big momentum, solid earnings and stable rates provided the catalyst for another good week for global equities. While the IPOX Indexes rose anew, performance vs. the benchmarks was mixed. In the U.S., e.g. the IPOX 100 U.S. (ETF: FPX) added +1.05% to +22.72% YTD, while the IPOX International (ETF: FPXI) rose +0.54% to +22.19% YTD,

IPOX® International Investing with the “FPXI” ETF since 2016:

both lagging the benchmarks. Abroad, however, big absolute and relative upside was recorded by the broad IPOX Nordic (IPND) and IPOX China Core (CNI) which closed the week at +24.30%and +19.71% YTD, extending the relative YTD lead vs. their benchmarks to a massive +1280 bps. (IPND) and +1634 bps. (CNI), respectively. Here, gains in select specialty exposure (after earnings) drove the good showing, including China-based e-commerce platform operator Pinduoduo (PDD US: +22.35%), Sweden’s online casino solutions provider Evolution Gaming (EVO SS: +13.22%) and Malmo, Sweden, based bike rake maker Thule Group (THULE SS: +12.98%). In the IPOX 100 U.S. (ETF: FPX), weakness in defensive positions IPO M&As consumer staples Hershey (HSY US: -6.28%), Tyson Foods (TSN US: -4.78%), General Mills (GIS US: -3.88%), as well as social networker Twitter (TWTR US:  -22.29%) weighted on relative returns.

IPOX ETFs Performance Updates / IPOX International (ETF: FPXI) in focus as 5-year listings anniversary nears: The IPOX 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities Fund (ETF: FPX) closed the week at +23.41% 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 +25.00% and +23.05% YTD, respectively.

Select IPOX® Indexes Price Returns (%) Last Week Q3 2019 2019 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) 1.33 -3.83 20.83
IPOX® International (IPXI)* (USD) 0.54 0.16 22.19
IPOX® Indexes: United States
IPOX® 100 U.S. (IPXO)* 1.05 -2.63 22.71
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 0.55 -1.75 23.79
IPOX® Nordic (IPND) 2.65 -0.58 24.30
IPOX® 100 Europe (IPOE)* (USD) 0.05 -3.21 20.05
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -0.90 -3.72 -1.34
IPOX® China (CNI) (USD) 0.52 0.71 19.71
IPOX® Japan (IPJP)** (JPY) 2.11 0.46 1.42

* 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: U.S. IPO activity set for slow down towards month-end, slew of Hong Kong IPO market in focus. At least 13 firms debuted in the accessible markets last week**, with the average (median) equally weighted stock adding +3.94% (+2.54%) based on the difference between the final offering price and Friday’s close. 6 deals were jammed into a two-day window in the U.S., including Insurance broker BRP Group (BRP US: +15.36%), New York-based fertility benefit startup Progyny (PGNY US: +22.62%) and Chinese internet giant NetEase e-learning unit Youdao (DAO US: -26.47%). Companies abroad included Swiss software management company CHF 2.9 billion SoftwareONE (SWON SW: +2.78%). Amid market uncertainty, KKR-backed Singapore-based online property services firm PropertyGuru became the second large P/E-backed IPO to be shelfed in Australia. Just two deals are set to commence trading in the U.S. this week, including the world’s first space-travel company reverse IPO Virgin Galactic (SPCE US). Center focus is on deals in Hong Kong with at least 6 IPOs lined up, including $1.45 billion Warburg Pincus-backed logistic real estate developer ESR Cayman (1821 HK), while Brazil’s IPO market is set to build further momentum with Dutch fashion retailer’s Brazilian unit C&A Modas (CEAB3 BZ) lined up. Other IPO news include: a) the upcoming $2 billion IPO of waste management company GFL Environmental (GFL US), the largest Canadian offer in 15 years, b) aluminum foil wrap maker Reynolds preps for IPO, c) Blackstone considers relisting payment provider Paysafe, d) MegaChips unit SiTime and shoemaker Cole Haan filed for IPO and e) visual special effect firm DNEG seeks London listing.
**term applies

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