SchusterWatch #760 (11/11/2024)
IPOX® Indexes record historic week on earnings, a bit on Trump, too.
IPOX® 100 U.S. soars +11.64%, 3rd best Week in 20-year live trading.
Other IPOX® Indexes outperform by large margin.
IPO market is heating up, e.g. Kioxia, Coreweave announce plans.
IPOX® INDEXES: The IPOX® Indexes soared ahead of U.S. option expiration week as 1) explosive earnings amongst IPOX® Heavyweights, 2) the resolution of the U.S. election uncertainty driving repositioning across global equity allocators and 3) a smoother U.S. yields environment following good auctions and the FED meeting propelled risk appetite (VIX: -31.72%) with the universe of unseasoned stocks tracked by IPOX® benefiting most.
IPOX® 100 U.S. (ETF: FPX) HAS 3RD BEST WEEK IN 20 YEARS OF LIVE TRADING: Top of the list ranked the IPOX® 100 U.S., underlying for multiple ETFs such as the world’s largest New Listings IPO Fund ETF (Ticker: FPX) and CME-listed IPOX® 100 U.S. emini Futures (IPOZ4). The Index added +11.64% to +30.03% YTD, beating the S&P 500 (SPX) and Nasdaq 100 (NDX) by a historic +698 bps. and +623 bps. last week, respectively. With ca. 75% of index holdings above expected earnings and revenues, the distribution of returns across individual portfolio holdings was highly uneven with the average (median) equally-weighted stock adding +9.50% (+8.93%), a large -214 bps. (-2.71 bps.) lower than the applied market-cap weighted IPOX® 100 U.S. Index. Top of the list ranked heavyweight P/E-backed CA-based AI-play 04/21 IPO AppLovin (APP US: +77.34%), followed by Chicago-based biotech 06/24 IPO Tempus AI (TEM US: +60.16%) and Crypto exchange operator 04/21 Direct Listing Coinbase (COIN US: +48.04%). The market sharply punished firms reporting more lackluster corporate results and/or perceived regulatory issues, including UT-based health care services provider 04/24 IPO PACS Group (PACS US: -50.33%) and NY-based health insurance technology platform operator 03/21 IPO Oscar Health (OSCR US: -23.29%).
IPOX® INDEXES FOCUSING ON NON-US. STOCKS OUTPERFORMED SHAPRLY LAST WEEK, TOO: Positive sentiment extended to our universe of non-U.S. domiciled stocks pooled in IPOX®, including the IPOX® International Index (ETF: FPXI) which added +2.94% to +18.26% YTD, extending its relative benchmark-adjusted lead by +262 bps. to +1287 bps. YTD.
Companies including HK’s JS-global Spin-off 11/23 IPO household appliance maker SharkNinja (SN US: +17.02%), Swiss-based sportswear maker 09/21 IPO On Holding (ON US: +10.73%) and Israel-based software solutions provider 06/21 IPO Monday.com (MNDY US: +8.27%) led the portfolio to recover more of its post-Covid losses to significantly outperform YTD and Y/Y. Amid the welcome change in Germany’s Finanzminsterium, our investment strategy tailored for European-domiciled ECM remained particularly attractive last week as the IPOX® 100 Europe (ETF: FPXE) rose +2.20% to +19.26% YTD, while the European benchmarks declined. Highlights included Dutch biotech 02/21 IPO NewAmsterdam (NAMS US: +35.35%), Swiss sports technology provider 09/21 IPO Sportradar (SRAD US: +27.08%) and Luxembourg-based P/E firm 04/24 IPO CVC Capital Partners (CVC NA: +12.82%). Germany’s 02/23 IPO web hosting services provider IONOS (IOS GY: -6.69%) was counted as a significantly negative outlier last week.
ECM REVIEW AND OUTLOOK: In a relatively quiet week for ex-China/India IPO markets, 19 firms raised $1.5 billion globally, gaining a median +6.82%. The largest IPO in accessible markets was South Korean restaurant franchise The Born Korea (475560 KS: +35.88%) raising $76.47m. Notable IPOs this week include the Abu Dhabi listing of supermarket chain Lulu Retail ($1.7b) and U.S. oil and gas firm Peak Resources (PRB, $66m). Read The IPOX® Update for a summary of last week’s most notable IPO News including Coreweave and Kioxia. Check in on www.ipox.com or visit our social media (Linkedin) for the latest information.
