The IPOX® Week, Q2 2019 Summary

  • Diversified IPOX trumps Markets anew: Most IPOX Strategies extend big YTD gains in Q2 2019.
  • IPOX-linked ETFs in focus: FPX, FPXI, FPXE
  • IPO Deal-flow Review & Outlook: After slow Q1, slew of high-caliber deals debut in Q2. Robust pipeline seen.

Diversified IPOX trumps Markets anew: Most IPOX Strategies extend big YTD gains in Q2 2019. The IPOX Indexes remained one of the biggest beneficiaries of the plunge in yields and subdued stock market volatility across the U.S. and Europe during Q2 2019, with most IPOX Strategies adding to the big Q1 performance jump, ending Q2 significantly ahead of their peers. On a global level, e.g., the diversified, super-liquid, mega-cap centric IPOX Global (IPGL50) added +4.82% to +23.31% YTD, extending the relative lead vs. the global market by +189 bps. during Q2 to +842 bps YTD. Big relative strength extended to other global regions, including the IPOX International (ETF: FPXI) and IPOX Europe (ETF: FPXE). In the U.S., the FANG-free IPOX 100 U.S. (ETF: FPX) added +4.09% to +25.44% YTD, ending the month +809 bps. YTD ahead of the S&P 500 (SPX), benchmark for U.S. stocks. Gains were broad-based and extended from the slew of U.S. traded application software makers, including Okta (OKTA US: +49.29%), Shopify (SHOP US: +45.27%), Coupa Software (COUP US: +39.16%), Alterix (AYX US: +30.11%) and Avalara (AVLR US: +29.41%) to IPO M&A consumer staples Hershey (HSY US: +17.37%) and Tyson Foods (TSN US: +16.85%) to other “old economy” stocks including German battery maker Varta (VAR1 GY: +43.53%) and container shipper Hapag-Lloyd (HLAG GY: +37.17%). Declines in some Asia-traded exposure including Hong Kong-traded biotech’s Wuxi Biologics (2269 HK: -8.12%) and Innovent Biologics (1801 HK: -8.03) weighted on the respective IPOX Indexes.

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

IPOX-linked Funds rise strongly: Amid strong fund flows, the IPOX 100 U.S. (IPXO)-linked, 5-star (10-years) $1.2 billion First Trust U.S. Equity Opportunities ETF (FPX) advanced to +25.83% YTD, while the IPOX International (IPXI)-linked 5-star (3-years) First Trust International Equity Opportunities ETF (FPXI) and the IPOX® 100 Europe (IPOE)-linked First Trust IPOX® Europe Equity Opportunities ETF (FPXE) rose to +20.17% and +24.58% YTD, respectively. Amongst actively managed IPOX-linked funds, the 2019 Thomson Lipper Award Winner Catalyst IPOX® Allocation Fund (OIPAX) finished Q2 at +24.37% YTD.

Select IPOX® Indexes Price Returns (%) Last Week Q2 2019 2019 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) -0.47 4.82 23.31
IPOX® International (IPXI)* (USD) -0.31 4.25 18.65
IPOX® Indexes: United States
IPOX® Composite U.S. (IPXC)* -0.69 0.85 18.81
IPOX® 100 U.S. (IPXO)* -0.94 4.09 25.44
IPOX® 30 U.S. (IPXT) 0.62 5.10 23.33
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 0.25 7.64 23.76
IPOX® Nordic (IPND) -0.07 7.75 23.18
IPOX® 100 Europe (IPOE)* (USD) 0.62 6.74 21.34
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -0.95 0.26 4.06
IPOX® China (CNI) (USD) 2.21 -0.09 12.81
IPOX® Japan (IPJP)** (JPY) -1.12 -6.21 -0.80

* 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 (IPOU9). ** Live since 07/18. Please contact [email protected] for other IPOX® Indexes.

IPO Deal-flow Review & Outlook: After slow Q1, slew of high caliber deals debut in Q2. Robust pipeline seen. At least 128 firms debuted in Q2 and raised ca. $49.6 billion with an average (median) initial return of +18.14% (+9.75%) in markets accessible to investors across the global regions*. The U.S. again led the way with 60 New Listings, raising over $26.2 billion. Hong Kong followed with 24 offerings with companies raising ca. $6.0 billion in aggregate. The largest IPO of the quarter belonged to ride sharing platform operator Uber (UBER US: +2.40% based on offer price), while chemical manufacturer Avantor (AVTR US: +36.36%) secured the runner-up. The European IPO market also recovered in Q2 with Italian payment firm Nexi (NEXI IM: +0.68%) coming in third place in proceeds raised, globally. Other high-profiled deals included the direct listing of workspace messaging software Slack (WORK US: +44.23%), the first Shanghai-London Stock Connect listing -Chinese brokerage Huatai Securities (HTSC LI: +18.05%), social networker Pinterest (PINS US: +43.26%), Middle East payments firm Networking International (NETW US: +36.32%), train tickets app Trainline (TRN LN: +17.76%) and Volkswagen’s truck unit spinoff Traton (8TRA GR: -2.22%). The U.S. welcomed the two largest biotech IPOs of the year: gene sequencing unicorn Adaptive Biotech (ADPT US: +141.5%) and KKR-backed biopharma BridgeBio (BBIO US: +58.65%). Vegan meat producer Beyond Meat (BYND US: +542.72%) took the crown for best performing IPO of Q2 2019, followed by Hong Kong traded China Tobacco International (6055 HK: + 167.21%). Cloud-based video conference platform Zoom (ZM US: +146.64%), cybersecurity unicorn Crowdstrike (CRWD US: +100.85%) and pet products online retailer Chewy (CHWY US: +59.09%) are also amongst the best-performing IPOs during Q2. Chinese influencer incubator Ruhnn (RUHN US: -72.48%) ranked as the worst performing global IPO of Q2.
*restriction applies

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