The IPOX® Week, September 9, 2019

  • IPOX Indexes start new month with gains. Sell-off in hig8h-beta stocks weighs on IPOX 100 U.S. (ETF: FPX).
  • IPOX International (ETF: FPXI) closes week at multi-year High.
  • IPO Deal-flow Review & Outlook: After a slow August, IPO season begins with three unicorns – cybersecurity firm Cloudflare (NET US), biotech 10x Genomics (TXG US) and teledentistry firm SmileDirectClub (SDC US) lined up.

IPOX Indexes start new month with gains. Sell-off in high-beta stocks weighs on IPOX 100 U.S. (ETF: FPX).  IPOX International (ETF: FPXI) closes week at multi-year High. The IPOX Indexes gained last week, driven by a reversal in sentiment over global trade fueling a big short-covering rally in the derivatives-heavy benchmarks as yields rose and risk plunged (VIX: -20.97%). Big declines in U.S.-domiciled high-beta growth stocks after profit taking and lackluster U.S. economic numbers, however, dampened sentiment in the IPOX 100 U.S. (ETF: FPX), while the IPOX International (ETF: FPXI) closed the  week  near its historical High.

IPOX® International Investing with the “FPXI” ETF since 09/16:

Focus amongst the best performing individual IPOX holdings was again on exposure traded in the IPOX International (ETF: FPXI) abroad, including German battery maker Varta (VAR1 GY: +16.36%), consumer staple state monopoly China Tobacco International (6055 HK: +15.42%), Swedish online casino solutions provider Evolution Gaming (EVO SS: +10.48%) or China infrastructure play China Tower (788 HK: +6.70%). Stocks recording the biggest declines in the IPOX 100 U.S. (ETF: FPX) included a slew of application software makers such as Smartsheet (SMAR US: -17.06%), Everbridge (EVBG US: -13.98%) and Appian (APPN US: -11.55%), while red-hot wireless devices maker Roku (ROKU US: +12.22%) added to recent gains, closing the trading week at the highest level since its 09/2017 IPO.

IPOX-linked Funds Performance Updates: The IPOX 100 U.S. (IPXO)-linked, $1.3 billion First Trust U.S. Equity Opportunities ETF (FPX) climbed to +28.27% YTD during the shortened U.S. trading week, while the IPOX International (IPXI)-linked First Trust International Equity Opportunities ETF (FPXI) and the IPOX 100 Europe (IPOE)-linked First Trust IPOX® Europe Equity Opportunities ETF (FPXE) closed at +28.39% and +24.32% YTD, respectively. The actively managed Catalyst IPOX® Allocation Fund (OIPAX US) finished at +24.89% YTD.

Select IPOX® Indexes Price Returns (%) Last Week 2018 2019 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) 0.62 -11.37 24.41
IPOX® International (IPXI)* (USD) 1.52 -13.47 25.32
IPOX® Indexes: United States
IPOX® Composite U.S. (IPXC)* 0.65 -7.59 18.70
IPOX® 100 U.S. (IPXO)* 0.35 -8.80 27.61
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 1.53 -13.46 24.68
IPOX® Nordic (IPND) 1.92 -15.45 26.06
IPOX® 100 Europe (IPOE)* (USD) 1.16 -16.60 21.35
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 1.31 -3.21 3.48
IPOX® China (CNI) (USD) 2.14 -22.83 17.46
IPOX® Japan (IPJP)** (JPY) 0.94 -13.70 -2.10

* 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 a slow August, IPO season begins with three unicorns – cybersecurity firm Cloudflare (NET US), biotech 10x Genomics (TXG US) and teledentistry firm SmileDirectClub (SDC US) lined up. While no sizable IPOs debuted in markets open to global investors, Lars Windhorst’s Italian luxury lingerie brand La Perla (ALPER FP: +10.00%) opted to directly list in Paris last week and finished its first week of trading with gains. In the U.S., deal flow is set to pick-up with a number of unicorns set to debut: Top of the list rank venture capital backed DNA sequencing biotech 10x Genomics (TXG US), private equity backed clear aligners startup SmileDirectClub (SDC US) and cybersecurity company Cloudflare (NET US). Smaller deals including biotechs SpringWorks (SWTX US) and Satsuma (STSA US) are scheduled to launch as well. We are also expecting to see a turnaround in European New Listings activity with South Africa’s internet and media giant Naspers (NPN SJ) set to spin off its internet unit Prosus (PRX NA). Other IPO news include a) the IPO plan of Swedish private equity firm EQT on Stockholm, the year’s largest in the Nordic region, b) the revival of REITs in Asia including three upcoming deals (Singha Estate’s S Hotels & Resorts in Thailand, China Merchants commercial REIT in Hong Kong, and Lendlease Global Commercial REIT in Singapore), c) Continental AG’s mulled spin off of its €5 billion powertrain unit, d) the delay of GFG Alliance’s Australian Liberty Steel unit offer amid market volatility, e) the IPO  delay of U.S. data analytics unicorn Palantir as the company opts for more private funding and, e) the 50% cut in the value of WeWork ahead of its roadshow.

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