Our philosophy is to classify New Listings such as IPOs (Initial Public Offerings), Spin-offs and respective M&As as a distinct equity sector for a substantial period of time in aftermarket trading. As a consequence of the limited information available to gauge the risk of a New Listing ahead of its “going public” event, New Listings may possess distinctive return dynamics once trading, such as underpricing, short-run over-performance, a highly skewed long-run return distribution and significant return differences when measuring returns of sub-groups of companies.
At the same time, our objective is to construct portfolios that track the performance of New Listings – often a pure proxy for economic growth and innovation – within a consistent, objective, scalable, and stable portfolio construction technology that adheres to IPOX’s philosophy and minimizes turnover and structural risk in order to provide exposure to a unique group of equities with limited overlap to incumbent equities.
The IPOX Indexes provide an alternative way to make size, style and sector decisions in global equities and gauge the strength of equities in the regional markets. The IPOX Indexes are used as the basis for Financial Products including Exchange Traded Funds (ETFs), Futures, Mutual Funds, Separately Managed Accounts (SMAs) and Structured Products.