The IPOX® Week, November 1st, 2021

  • Most IPOX® Indexes record strong monthly gains. Lower U.S. rates and risk big driver.
  • IPOX® EV leads with +20.24% gain. IPOX U.S. (FPX) and IPOX Europe (FPXE) surge, too.
  • A strong month for SPACs: Select deals soar, while 57 new SPACs launch.
  • 88 sizable global IPOs commence trading. More high-profile deals lined up during November.

OCTOBER 2021 Summary:  Most IPOX® Indexes recorded strong gains during October as good average earnings amid mostly lower U.S. rates and a decline in risk (VIX: -29.73%) continued to drive strong investor interest for Developed Markets equities. In the U.S., e.g., the IPOX® 100 U.S. (ETF: FPX) – benchmark for the performance of U.S. IPOs and underlying for the $2.2 billion “FPX” ETF – added +5.96% to +10.62% YTD, in-between the performance of U.S. large- and small-caps, as measured by the S&P 500 (SPX) and Russell 2000 (RTY). Strong gains extended to Markets abroad with the IPOX® Europe (ETF: FPXE) and IPOX® International (ETF: FPXI) adding +5.08% to +10.90% YTD and +2.06% to -4.68% YTD, respectively. Across the somewhat narrower-focused IPOX® Sector Strategies, we note the +7.64% jump in the IPOX® IPO M&A Portfolio (GNDX) and the +20.24% surge in the IPOX® EV Portfolio (IPEV), composed of companies on the cutting edge of energy and technology innovation. In the aftermath of the big declines across China-linked exposure during July and August, IPOX®-linked exposure linked to Asia-Pacific and China traded flat to lower.

IPOX® Portfolio Holdings in focus: Amid earnings season, big swings across commodity and crypto currency markets and continued significant price consolidation across a broad basket of seasoned global payment processing companies, IPOX® Portfolio Holdings returns diverged sharply during last month: In the IPOX® 100 U.S. (ETF: FPX), e.g., top of the monthly performance list ranked security software maker Cloudflare (NET US: +72.85%), followed by crypto currency exchange operator  Direct Listing Coinbase (COIN US: +40.42%) and P/E-backed global mobile application technology firm AppLovin (APP US: +35.76%). Takeover target Israel-based medical devices and technology provider InMode (INMD US: +18.83%) and Australian digital wealth manager Netwealth (NWL AU: +18.82%) stood out in the IPOX® International (ETF: FPXI), while Nordic-domiciled exposure once again contributed significantly to the strong showing of the IPOX® Europe (ETF: FPXE), including Sweden-domiciled biotech Olink (OLK US: +32.62%), application software maker Cint Group (CINT SS: +31.17%) and private equity firm EQT (EQT SS: +23.66%). Inflation and growth concerns resulting in big currency weakness, as well as regulatory overhang significantly hit select Brazil-linked  exposure, including payment processor PagSeguro Digital (PAGS US: +30.01%), pet food retailer Pet Center Comerica (PETZ3 BS: -19.99%) and wealth management platform operator XP (XP US:  -18.32%).

IPOX® SPAC INDEX (SPAC):  The index added +2.14% to -7.68% YTD and +37.13% since its 7/30/2020 launch. SPAC IPO activity was brisk with 57 new SPACs launching in the U.S., raising ca. $11 billion, almost doubling from September. SPACs remained efficiently priced, with the average (median) equally weighted deal adding just +0.22% (+0.50%) on the first day with LAIG Investments-backed Enphys Acquisitions (NYFS US) ranking as the largest deal of the month. Only 11 SPACs announced a merger target In October with most focus on Digital World Acquisition (DWAC US: +581.45%). Another deal involved 26 Capital Acquisition (ADER US: +1.65%) with leading Philippines-based casino operator Okada Manila. 17 SPACs approved business combinations include BowX Acquisition with shared office space provider We Work (WE US: +2.10%), Horizon Acquisition with online ticket marketplace Chicago-based Vivid Seats (SEAT US: +36.86%) and Chicago-based VPC Impact Acquisition Holdings with ICE (ICE US: +20.56%)-backed BAKKT (BKKT US: +320.047%). 1 SPAC terminated merger agreement during the month include Spring Valley Acquisition (SV US: +14.61%) with indoor vertical farming firm AeroFarm.

Select IPOX® Indexes Price Returns 2020 Last mONTH YTD
IPOX® Indexes: Global/International
IPOX® Global Super Liquid (IPGL50) (USD) 66.63 3.68 -0.50
IPOX® International (IPXI) (USD) (ETF: FPXI) 72.15 2.06 -4.68
IPOX® Indexes: United States
IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) 47.32 5.96 10.62
IPOX® M&A (GNDX) (USD) n/a 7.64 n/a
IPOX® ESG (IPXT) (USD) 42.29 4.16 13.18
IPOX® SPAC (SPAC) (USD) 48.52 2.14 -7.68
IPOX® EV (IPEV) (USD) n/a 20.24 25.97
IPOX® Indexes: Europe/Nordic
IPOX® Europe (IPOE) * (USD) (ETF: FPXE) 35.14 5.08 10.90
IPOX® Nordic Core (IPND) (EUR) 59.89 7.26 24.39
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 47.50 -1.47 -2.82
IPOX® China Core (CNI) (USD) 88.02 0.14 -31.50
IPOX® Japan (IPJP) (JPY) 25.75 -2.43 10.84

* Basis for CME-traded e-mini IPOX® 100 U.S. Futures (IPOZ1). *also available In UCITS format in Europe in EUR (EFPX IM,), USD (IPXE LN), and GBP (FPX LN).

GLOBAL Deal-flow Review and Outlook: At least 88 sizeable non-SPAC IPOs launched in October (ex. China A-shares and local India), raising ca. $30 billion and recording an average (median) equally weighted initial return of +10.07% (+4.33%). The U.S. continued to dominate the global IPO deal calendar with 40 IPOs (45.45%) and ca. $13 billion in proceeds raised (43.91%), led by Abu Dhabi-controlled chip maker GlobalFoundries (GFS US: +3.70%), Chinese-owned Swedish car maker Volvo Cars (VOLCARB SS: +23.02%) and SoftBank-backed Norwegian warehouse robotics firm AutoStore (AUTO NO: +7.40%). Other notable deals Include Saudi Arabian alternative energy giant ACWA Power (ACWA AB: +27.50%), ANDOC drilling unit spin-off ADNOC Drilling (ADNOCDRI UH: +29.57%), U.S. coding platform GitLab (GTLB US: +45.71%) and medical device maker PHC (6523 JP: -14.06%), the largest IPO In Japan in 3 years, while high-profile French property group Icade (ICAD FP: -0.00%) health care unit spin-off Icade Sante and Peloton (PTON US: +4.97%) competitor iFit postponed. High profile deals lined up for November include Korean payment services provider Kakao Pay, sustainable shoe maker Allbirds, upscale furniture retailer Arhaus, Amazon-backed EV producer Rivian and fast-growing salad chain unicorn Sweetgreen. Fintech Ebanx and Buffet-backed Financial Nubank are set to go public on the beleaguered Brazil IPO market.

Lightspeed Financial Services Group LLC is not affiliated with these third-party market commentators/educators or service providers. Data, information, and material (“content”) are provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities or contracts. Any investment decisions made by the user through the use of such content is solely based on the users independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lightspeed Financial Services Group LLC does not endorse, offer nor recommend any of the services or commentary provided by any of the market commentators/educators or service providers and any information used to execute any trading strategies are solely based on the independent analysis of the user.

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