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.
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