April 2, 2022
- IPOX® Indexes have strong start to new quarter. IPOX® 100 U.S. (ETF: FPX) extends 3-week run to +12.59%.
- Europe-, China-, MENA-domiciled stocks propel IPOX® International (ETF: FPXI).
- Q1 2022 IPOX® SPAC Index (SPAC) Review: During less active quarter, 59 U.S. SPACs raise $10 billion.
- Q1 2022 Global Deal-flow Review: At least 72 firms go public, Saudi Arabia sees historic high, U.S. lags.
Last week’s Summary: All IPOX® Indexes extended their post-expiration strength into the new quarter, able to shake off weakness in the U.S. equity benchmarks which have been pressured by inflation and U.S. interest rates (yield curve) fears amid the geopolitical overhang. In the U.S., e.g., the IPOX® 100 U.S. (ETF: FPX), a diversified basket of high-quality, innovative stocks as defined by IPO, Spin-off, and IPO M&A deal flow of U.S. domiciled firms, added +1.31% to -10.43% YTD, extending its 3-week winning streak to a massive +12.59%. The portfolio also outperformed the derivatives-heavy U.S. equity benchmarks by between +59 bps. (Nasdaq 100 [ETF: QQQ]) and +143 bps. (Dow Jones [ETF: DIA]). Strong momentum extended to Markets abroad with the IPOX® Nordic (IPND), IPOX® Europe (ETF: FPXE) and IPOX® China also propelling the IPOX® International (ETF: FPXI).
Last week’s big movers: Recently added equities (as part of the Q1 2022 IPOX® rebalancing) drove some of the great showing in the IPOX® 100 U.S. (ETF: FPX). This included application software maker Zeta Global (ZETA US: +13.10%), database software developer MongoDB (MDB US: +11.92%), Twinkie maker consumer staple de-SPAC Hostess Brands (TWNK US: +5.47%) and energy play Constellation Energy (CEG US: +7.84%). The portfolio of declining firms was led by hardware maker Dell Technologies (DELL US: -10.93%) which sank anew after investment bank Morgan Stanley (MS US: -5.88%) and Goldman Sachs (GS US: -2.18%) downgraded the firm on Thursday and Friday, respectively. The weekly ranking of firms traded abroad was undoubtedly led by Swedish car maker Volvo Cars (VOLCARB SS: +21.47%), followed by Fintech Nordnet (SAVE SS: +11.22%) and German biotech BioNTech (BNTX US: +10.97%), which soared after reporting big earnings. We also note the fresh all-time high in select Riyadh-traded names such as utility ACWA Power (ACWA AB: +12.06%) and exchange operator Saudi Tadawul (TADAWULG AB: +10.66%).
IPOX® Growth Infusion (GNDX) update: The portfolio added +0.05% to -1.56% YTD. Amid its EUR 21 bn bid for Blackstone’s European Mileway warehouse portfolio, REIT Prologis (PLD US: +5.38%) ranked amongst the best performing portfolio member last week, while the utility sector recorded the best sector gains (+4.08%). Fears about a slowdown in the U.S. economy and higher interest rates pressured trucking firm Knight Swift Transportation (KNX US: -10.55%) and specialized home products stores operator Builders FirstSource (BLDR US: -5.53%).
| Select IPOX® Indexes PRICE Returns | last week | YTD | 2021 |
| IPOX® Indexes: Global/International | |||
| IPOX® Global Super Liquid (IPGL50) (USD) | +1.74 | -15.21 | -4.01 |
| IPOX® International (IPXI) (USD) (ETF: FPXI) | +2.63 | -14.63 | -15.57 |
| IPOX® Indexes: United States | |||
| IPOX® Composite U.S. (IPXC) (USD) | +1.40 | -10.45 | -1.01 |
| IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) † | +1.31 | -10.43 | +3.70 |
| IPOX® Growth Infusion (GNDX)* (USD) | +0.05 | -1.56 | +9.42 |
| IPOX® SPAC (SPAC) (USD) | +0.65 | -9.27 | -16.34 |
| IPOX® Canada (ICDX) (CAD) | +1.39 | -5.66 | n/a |
| IPOX® Indexes: Europe/Nordic | |||
| IPOX® Europe (IPOE) (USD) (ETF: FPXE) † | +3.38 | -20.00 | +9.09 |
| IPOX® Nordic Core (IPND) (EUR) | +5.07 | -17.63 | +20.34 |
| IPOX® Indexes: Asia-Pacific/China | |||
| IPOX® China Core (CNI) (USD) | +3.50 | -21.14 | -42.62 |
| IPOX® Japan (IPJP) (JPY) | -0.41 | -16.68 | +3.42 |
*Basis for CME-traded e-mini IPOX® 100 U.S. Futures (IPOM2). †Also available in UCITS format in Europe in EUR (EFPX IM), USD (IPXE LN), and GBP (FPX LN/FPXE LN). GNDX and SPAC returns measured since live launch on 08/13/2021, 07/30/2020 and 11/17/2020.
Q1 2022 IPOX® SPAC INDEX (SPAC) REVIEW: The index fell -9.52% in Q1 and rose +12.43% since its 07/30/2020 live launch. In the U.S., 54 SPACs raised ca. $10 billion, recording an average first day returns of just +0.07%, significantly less when compared to issuance number and proceeds raised during the previous quarter. Amid market volatility and regulatory overhang, a record breaking 40 SPACs withdrew IPO plans during the quarter. 33 SPACs announced merger targets including Cohn Robbins (CRHC US: +1.12% QTD) with multinational lottery operator Allwyn Entertainment and Sports Venture Acquisition (AKIC US: +1.44%) with Best Visual Effects Academy Award winner motion picture visual effects and animation studio DNEG. 29 SPACs completed business combinations with Motive Capital merger pre-IPO marketplace Forge Global (FRGE US: +244.31%) and SilverBox Engaged Merger Corp merger veteran-owned coffee company Black Rifle Coffee (BRCC US: +105.62%) skyrocketing. 15 SPACs terminated merger agreements and 1 SPAC liquidated during the quarter. Abroad, Singapore and Hong Kong saw their first SPAC trading debuts, respectively.
Q1 2022 Global IPO Deal-flow Review: At least 72 sizable traditional IPOs (ex. China A Shares and local India) launched globally in Q1 2022, with the average equally-equally weighted deal adding +20.87% based on the difference between the final offering price and its first close, respectively. Amid volatility, inflation, interest rate jitters, escalated geopolitical risk and IPO seasonality, the U.S. saw a slow Q1 with only 14 deals raising ca. $2.5 billion, while Saudi Arabia saw a the most IPOs in history, both in terms of Number of deals (8) and IPO proceeds (ca. $3.76 billion). South Korean EV battery manufacturer LG Energy Solutions (373220 KS: +47.33%), Saudi’s largest pharmacy retail chain Nahdi Medical (NAHDI AB: +18.32%) and U.S. private equity veteran TPG (TPG US: +2.54%) ranked as the top three largest global IPOs. Indonesian coal miner Adaro Minerals (ADMR IJ: +2190.00%) recorded an unprecedented post-IPO return.
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