The IPOX® Week, Q1 2019 Summary

  • FANG-free, large-cap centric IPOX 100 U.S. (ETF: FPX) gains +20.51% during Q1/19. Other IPOX Strategies jump, too.
  • Big corporate actions, strong earnings drive outperformance.
  • IPO Deal-flow Review & Outlook: Lyft & Levis go public, electronic marketplace Tradeweb Markets (TW US) lined up as markets await flood of deals in Q2.
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FANG-free IPOX 100 U.S. (ETF: FPX) records best quarterly gain since Q4/1999. Other IPOX Strategies jump, too. The IPOX Strategies ranked amongst the top equity investments during Q1 2019, characterized by a plunge in yields as well as equity risk (VIX: -46.07% during Q1) amid global economic & political jitters, but generally strong U.S. earnings and an extraordinary market for (U.S.) corporate actions/M&A in the IPOX Universe. In the U.S., e.g., the diversified, large-cap centric IPOX 100 U.S. (ETF: FPX) zoomed to its best quarter this century, adding +20.51%, a massive +744 bps. ahead of the S&P 500 (SPX), benchmark for U.S. stocks. Big (relative) gains also extended to other IPOX Strategies, such as the IPOX International (ETF: FPXI) or IPOX Europe (ETF: FPXE). With the underlying IPOX Universe a target market for corporate M&A, some of the outperformance in the IPOX 100 U.S. (ETF: FPX) was driven by corporate actions, including the (pending) buy-out of IPOX Holdings specialty chemicals maker Versum (VSM US: +81.89%) and payment processors IPOX heavyweights First Data (FDC US: +55.35%) and Worldpay (WP US: +48.50%). Amid earnings, overall positive sentiment extended to many specialty IPOs held, including social networker Snap (SNAP US: +100.00%) or advertising technology provider The Trade Desk (TTD US: +70.56%). However, the big slump in Ketchup maker Buffet-held Spin-off Kraft Heinz (KHC US: -23.10%) which exited IPOX during Q1, dented the overall positive sentiment somewhat.

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

IPOX-linked Funds Performance: The IPOX 100 U.S. (IPXO)-linked, 5-star USD billion 1.1 First Trust U.S. Equity Opportunities ETF (FPX) rose +20.76% in Q1, while the IPOX International (IPXI)-linked 5-star First Trust International Equity Opportunities ETF (FPXI) and IPOX 100 Europe (IPOE)-linked First Trust IPOX® Europe Equity Opportunities ETF (FPXE) rose +14.69% and +15.44%, respectively. The actively managed Catalyst IPOX Allocation Fund (OIPAX) – a 2019 Thomson Lipper Award Winner – finished Q1 with a gain of +18.47%.

Select IPOX® Indexes Price Returns (%) Last Weerk 2018 Q1 2019
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) 0.24 -11.37 17.64
IPOX® International (IPXI)* (USD) 0.80 -13.41 13.80
IPOX® Indexes: United States
IPOX® Comp. U.S. (IPXC)* 1.60 -7.59 17.81
IPOX® 100 U.S. (IPXO)* 1.25 -8.80 20.51
IPOX® 30 U.S. (IPXT) 1.15 -10.28 17.34
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 1.17 -13.46 14.98
IPOX® Nordic (IPND) 0.54 -15.45 14.32
IPOX® 100 Europe (IPOE)* (USD) 0.75 -16.60 13.57
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -1.27 -3.21 3.71
IPOX® China (CNI) (USD) 0.90 -22.83 12.91
IPOX® Japan (IPJP)** (JPY) -0.19 -13.70 5.77

* 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 (IPOM9). ** Live since 07/18. Please contact [email protected] for other IPOX® Indexes.

IPO Deal-flow Review & Outlook: Lyft & Levis go public, electronic marketplace Tradeweb Markets (TW US) lined up as markets await flood of deals in Q2. At least 54 firms debuted in Q1 across accessible global regions, with the average (median) equally-weighted firm adding +13.46% (+4.91%) based on the difference between the final offer price and Friday’s close. The largest IPOs of the quarter belonged to ride-hailing firm Lyft (LYFT US: +8.74% based on final offer), jeans maker Levi Strauss (LEVI US: +38.53%) and H.K.-traded biotech CStone Pharma (2616 HK: +32.33%). Blackstone and Refinitiv (formerly the financial and risk unit of Thomson Reuters) co-owned electronic trading platform Tradeweb Markets (TW US) is set to kick-off what is expected to be a very busy quarter for IPOs with its Nasdaq listing. Other deals this week include the IPO of drug maker Merck (MRK US: +1.01%) bankrolled late-stage pharmaceutical company NGM (NGM US), CA-based medical equipment maker Silk Road Medical (SILD US), the H-share offering of HK-traded auto finance firm Shanghai Dongzheng (2718 HK), as well as SIX Swiss Exchange-traded medical devices maker Medacta (MOVE SW), which kicks off the European IPO season.

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