February 7, 2022
- Big Earnings drive key Innovation plays to explosive gains: IPOX® 100 U.S. (ETF: FPX) soars +4.62% last week.
- Gains extend to Markets Abroad as IPOX® International (ETF: FPXI), IPOX® 100 Europe (ETF: FPXE) surge.
- IPOX® SPAC (SPAC) rises to -12.43% YTD. 4 SPACs launched last week.
- Amid valuation cut, quiet on the U.S. IPO front. Abu Dhabi Ports (ADPORTS UH) set for Tuesday debut.
Last week’s Summary – IPOX® Indexes play catch-up with benchmarks as earnings trickle in: The IPOX® Indexes surged last week as strong earnings across select IPOX® Portfolio Holdings more than offset the impact of higher interest rates and a weaker U.S. dollar (EURUSD: +2.67%) affecting the broad-based global equity benchmarks. In the United States, for example, the IPOX® 100 U.S. (ETF: FPX), added +4.62% to -13.25% YTD, +307 bps. ahead of the S&P 500 (SPX), while narrowing the YTD gap versus the broad-based Russell 2000 (RTY) to just -243 bps. Strong gains extended to the global and international level with the IPOX® International (ETF: FPXI) and IPOX® 100 Europe (ETF: FPXE) all catching a sizeable bid, rising +2.98% and +3.24%, respectively. We also note another week of relative strength for the IPOX® Growth Infusion (GNDX). The highly liquid and broadly diversified benchmark for IPO M&A added +1.72% to -5.65% YTD, outpacing the S&P 500 (SPX) by +17 bps. last week.
IPOX® Portfolio Holdings in focus: Explosive gains across some of the recently hard-hit group of application software makers and social media plays after strong earnings drove some of the big outperformance, including software makers Bill.com (BILL US: +37.85%) and Cloudflare (NET US: +22.58%), social networker Snap (SNAP US: +27.91%), semiconductor maker On (ON US: +13.85%) and high-end apparel maker and distributor IPO M&A Capri Holdings (CPRI US: +14.16%). We also note (relative) strength across the hard-hit group of unseasoned biotechnology plays, such as Cerevel Therapeutics (CERE US: +12.37%), Intellia Therapeutics (NTLA US: +11.56%), Oxford Nanopore Technologies (ONT LN: +11.06%) and Legend Biotech (LEGN US: +10.70%), which was featured in last week’s IPOX® Watch: https://bit.ly/3GAqHDW . More losses for Denmark-based IT services provider Netcompany (NETC DC: -8.60%), building services provider Stockholm-based Instalco (INSTAL SS: -6.10%) and Helsinki-based pet food supplier Musti Group (MUSTI FH: -3.06%) pressured the IPOX® Nordic (IPND) anew.
IPOX® 100 U.S. Performance and End-of-Year Returns (since 1989)
| End of 1st week of Feb. | Year-end | |||
| Returns (%) | Average | median | Average | Median |
| All Years (8) | -6.02 | -5.63 | 3.27 | 8.46 |
| excluding: | ||||
| Internet bubble (1) | -6.20 | -5.92 | 6.93 | 11.02 |
| FInancial CrisIs (2) | -5.56 | -5.35 | 10.06 | 11.02 |
| (1) + (2) | -5.69 | -5.63 | 15.46 | 14.14 |
Does the IPOX® 100 INDEX (etf: fpx) start-of-year drop indicate negative end-of-year returns? During 8 years since 1989 (and excluding YTD 2022), the IPOX® 100 U.S. (ETF: FPX) closed the first week of February negative, displaying an average (median) return of -6.02% (-5.63%), respectively. During those years, the index recorded a positive average (median) return by year-end in 5 years, rising by an average (median) of +3.24% (+8.46%), respectively. When eliminating the year of the Financial Crisis as systemic risk event, respective end-of-year returns rose to +10.06% (average) and +11.02% (median), implying an upside of +23.31% (average) and +24.27% (median) from Friday’s close (5874.59–5920.32 index target range).
| Select IPOX® Indexes PRICE Returns | 2020 | 2021 | YTD |
| IPOX® Indexes: Global/International | |||
| IPOX® Global Super Liquid (IPGL50) (USD) | 66.63 | -4.01 | -14.72 |
| IPOX® International (IPXI) (USD) (ETF: FPXI) | 72.15 | -15.57 | -10.69 |
| IPOX® Indexes: United States | |||
| IPOX® Composite U.S. (IPXC) (USD) | 40.77 | -1.01 | -11.77 |
| IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) | 47.32 | 3.70 | -13.25 |
| IPOX® GROWTH INFUSION (GNDX)* (USD) | n/a | 9.42 | -5.65 |
| IPOX® ESG (IPXT) (USD) | 42.29 | -0.62 | -15.37 |
| IPOX® SPAC (SPAC) (USD) | 48.53 | -16.34 | -12.43 |
| IPOX® EV (IPEV) (USD) | 11.02 | 27.06 | -16.75 |
| IPOX® Canada (ICDX) (CAD) | n/a | n/a | -5.05 |
| IPOX® Indexes: Europe/Nordic | |||
| IPOX® Europe (IPOE) * (USD) (ETF: FPXE) | 35.14 | 9.09 | -15.27 |
| IPOX® Nordic Core (IPND) (EUR) | 59.87 | 20.34 | -19.92 |
| IPOX® Indexes: Asia-Pacific/China | |||
| IPOX® China Core (CNI) (USD) | 88.02 | -42.62 | -6.42 |
| IPOX® Japan (IPJP) (JPY) | 25.75 | 3.42 | -15.59 |
* 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 +2.30% to -12.43% YTD and +8.82% since ist 7/30/2020 launch. SPAC news include: 1) 5 SPACs Announced Merger Agreement include a) CHW Acquisition (CHWA US: +0.51%) with dog care service platform Wag and b) Angel Pond Holdings (POND US: +1.87%) with open-source database provider MariaDB. 2) 6 SPAC Approved Business Combinations include a) SilverBox Engaged Merger I (SBEA US: -0.60% with veteran-founded coffee company Black Rifle Coffee (BRCC US); b) Ivanhoe Capital Acquisition Corp. with EV batteries maker SES AI (SES US: -18.34%); 3) 4 new SPACs launched last week in the U.S.
IPO Deal-flow Review & Outlook: 3 sizeable IPOs launched globally last week, with the average equally-weighted deal adding +20.62% based on the difference between the respective final offering price and Friday’s close. Clinical-stage biotech Arcellx (ACLX US: +12.00%), Norwegian tonnage provider Gram Car Carrier (GCC NO: +33.96%) and Korean EV parts and communications power supplies manufacturer Egtronics (377330 KS: +15.91%) all rose on debut. Following the fall-out from the Jan. declines, IPO activity is set to remain subdued this week with no U.S. IPOs scheduled. Abroad, Abu Dhabi Ports (ADPORTS UH) is set to list on Tuesday as demand for Middle Eastern deals remains unabated. Other IPO news include a) Saudi Aramco (ARAMCO AB: +0.00%) seeks another $50 billion stake-sale for London listing; b) Advent-backed Brazilian fintech Ebanx postponed and c) TA Associates and Warburg Pincus-backed UK private schools operator Inspired Education Group considers London listing.
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