As new Initial Public Offering (IPO) players emerge in the market, you can bet you will see lots of activity in the exchange traded fund (ETF) "fan" that tracks some of them. The First Trust IPOX (FPX) tracks the 100 largest U.S. IPOs. As shown in the chart below, FPX is currently up 12% year-to-date. Although it is on the decline, FPX is still well above the 200-day moving average.
Be careful when investing in IPOs, as many of them look promising in the beginning but fall after their initial honeymoon period is over and produce blah earnings reports, advises S.J. Chaplan for The Motley Fool. If you’re interested in mutual funds, the IPO Plus Aftermarket (IPOSX) also invests in certain IPOs.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.