February 14, 2022
- Strong Earnings outweigh negative macro factors as IPOX® 100 U.S. (ETF: FPX) gains for 2nd week.
- Strength extends to markets abroad as IPOX® heavyweight Adyen (ADYEN NA) jumps.
- IPOX® SPAC (SPAC) has good week, outperforms U.S. small caps. 9 SPACs launched.
- U.S. IPO front quiet as higher rates, tech slump pressure pre-IPO valuations. Norway’s Var Energy lined up.
Last week’s Summary – ipox® U.S. 100 Index (ETF: FPX) outpaces U.S. benchmark for 2nd week. Ahead of February U.S. options expiration week, the IPOX® Indexes extended the recent gains into a 2nd week in very volatile trading, as the impact of strong average earnings outweighed the macro factors hitting the benchmarks, including higher rates after dismal Thursday’s inflation numbers resulting in a spike in equity risk (VIX: +17.83%). Top of the list ranked the IPOX® 100 U.S. (ETF: FPX) which gained +0.54% to -12.77% YTD, +236 bps. ahead of the S&P 500 Index (ETF: SPY) and a massive +354 bps. ahead of the Nasdaq 100 (ETF: QQQ), benchmark for U.S. technology stocks. Amid earnings, the distribution of returns across the portfolio was highly skewed with 64% of the portfolio holdings closing the week in positive territory. In the U.S., benchmark adjusted gains extended anew to companies which have recently pursued respective corporate actions: The diversified and highly liquid IPOX® Growth Infusion Index (GNDX) fell just -0.09% last week, extending the YTD lead vs. the S&P 500 (ETF: SPY) to +156 bps. Gains were also recorded across select IPOX® Indexes focusing on non-U.S. domiciled stocks tracked in the IPOX® International (ETF: FPXI), for example. The index gained +1.42% to -9.42% YTD, well ahead of the declining international benchmarks.
IPOX® Portfolio Holdings in focus: Amid some recovery in the hard-hit technology, health care and consumer sectors, notable upside was recorded by application software makers 09/20 Direct Listing Asana (ASAN US: +27.96%) and 06/21 IPO Israel-based Monday.com (MNDY US: +17.37%), specialty online retailer 06/19 IPO Revolve Group (RVLV US: +15.39%) and clinical stage biopharma company 06/20 IPO Cerevel Therapeutics (CERE US: +14.68%). We also note the big week for IPOX® heavyweight 06/18 IPO Dutch payment processor Adyen (ADYEN NA: +11.86%) which soared after reporting strong earnings. U.S. sanctions on more China-domiciled companies pressured the Chinese health care services firm Wuxi AppTech (2359 HK: -21.18%), while the bear market for mid- and small-cap Nordic-linked firms continued viciously, with household appliance maker Harvia (HARVIA FH: -15.63%), sports helmet maker MIPS (MIPS SS: -14.69%), Financial Samhallsbyggnadsbolaget i Norden (SBBB SS: -10.38%) and streaming music services provider Spotify (SPOT US: -6.17%) recording significant declines, for example.
IPOX® 100 U.S. Performance and End-of-Year Returns (since 1989)
|End of 2ND week of Feb.||Year-end|
|All Years (10)||-5.85||-3.33||7.20||11.58|
|Internet bubble (1)||-6.20||-3.47||10.59||17.27|
|FInancial CrisIs (2)||-5.04||-3.19||12.92||17.27|
|(1) + (2)||-5.33||-3.33||17.45||20.30|
Does the IPOX® 100 INDEX (etf: fpx) start-of-year drop indicate negative end-of-year returns? During 10 years since 1989 (and excluding YTD 2022), the IPOX® 100 U.S. (ETF: FPX) closed the 2nd week of February negative YTD, respectively, recording an average (median) loss of -5.85% (-3.33%). During these years, the IPOX® 100 U.S. (ETF: FPX) closed positive in 60% of cases, gaining an average (median) return of +7.20% (+11.58%) from year-end, and implying a range between 5886.86 – 6127.38, respectively.
|Select IPOX® Indexes PRICE Returns||2020||2021||YTD|
|IPOX® Indexes: Global/International|
|IPOX® Global Super Liquid (IPGL50) (USD)||66.63||-4.01||-14.31|
|IPOX® International (IPXI) (USD) (ETF: FPXI)||72.15||-15.57||-9.42|
|IPOX® Indexes: United States|
|IPOX® Composite U.S. (IPXC) (USD)||40.77||-1.01||-11.54|
|IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX)||47.32||3.70||-12.77|
|IPOX® GROWTH INFUSION (GNDX)* (USD)||n/a||9.42||-5.73|
|IPOX® SPAC (SPAC) (USD)||48.53||-16.34||-11.00|
|IPOX® Canada (ICDX) (CAD)||n/a||n/a||-6.07|
|IPOX® Indexes: Europe/Nordic|
|IPOX® Europe (IPOE) * (USD) (ETF: FPXE)||35.14||9.09||-15.60|
|IPOX® Nordic Core (IPND) (EUR)||59.87||20.34||-21.82|
|IPOX® Indexes: Asia-Pacific/China|
|IPOX® China Core (CNI) (USD)||88.02||-42.62||-7.07|
|IPOX® Japan (IPJP) (JPY)||25.75||3.42||-14.42|
* Basis for CME-traded e-mini IPOX® 100 U.S. Futures (IPOH2). *Also available in UCITS format in Europe in EUR (EFPX IM), USD (IPXE LN), and GBP (FPX LN). GNDX, SPAC and IPEV returns measured since live launch on 08/13/2021, 07/30/2020 and 11/17/2020.
IPOX® SPAC INDEX (SPAC) REVIEW: The Index rose +1.63% to -11.00% YTD and +10.59% since its 7/30/2020 launch. SPAC news include: 1) Only 1 SPAC Announced Merger Agreement include DPCM Capital (XPOA US: +1.12%) with Canadian quantum computing company D-Wave. 2) 2 SPACs Approved Business Combinations include a) Growth Capital Acquisition with lidar maker Cepton Tech. (CPTN US: -15.73%) and b) Novus Capital II (NXU US: +15.23%) with Swiss-based energy storage provider Energy Vault (NRGV US). 3) 3 SPACs Terminated mergers include Longview Acquisition II (LGV US: -0.10%) with cardiac test company HeartFlow and b) M3-Brigade Acquisition II (MBAC US: +1.35%) with telecom company Syniverse. 4) Burgundy Technology Acquisition (BTAQ US: +0.00%) to liquidate at $10.05/share. 5) 9 new SPACs launched last week in the U.S.
IPO Deal-flow Review & Outlook: 4 IPOs launched last week, with the average equally weighted deal falling by -6.52% based on the difference between the final offering price and Friday’s close. UAE port operator Abu Dhabi Ports (ADPORTS UH: +6.56%) was the only IPO last week trading above offer price. No IPOs are scheduled for this week in the U.S. Abroad, Norwegian E&P company Vår Energy (VAR NO) readies for its Oslo debut in one of the largest European energy listings ever. Italian microelectronics maker Technoprobe (TPRO IM) is also set to launch in Milan. Other IPO new include a) amid merger collapse with Nvidia, SoftBank-owned British chip designer Arm opts for IPO; b) Canadian alternative investment management giant Brookfield reportedly mulls to spin off its asset management unit; c) Apollo-backed German lender Oldenburgische Landesbank (OLB) seeks IPO; d) Bausch Health filed IPO for its 2014 acquisition unit aesthetic medical device maker Solta Medical and e) world’s largest e-sports organizer VSPN (Versus Programming Network) filed for Hong Kong IPO.
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