General Motors is back in a blockbuster IPO. Eventually, you can get exposure to the automaker’s initial public offering via the IPO exchange traded fund (ETF).
GM is far from the only IPO coming down the pike. There are about 10 IPOs scheduled for this week, giving the investors that follow them a veritable feast. Rick Aristotle Munarriz for The Motley Fool reports that as the volatile market complies, General Motors, government consultant Booz Allen, and casino operator Caesars should all be public companies by the end of the week. [IPO ETF: Signs of Life.]
GM’s IPO, one of the largest ever, is part of a comeback for the auto company that needed a massive government bailout. Washington still owns most of GM, but as the company raises cash, the hope is that the company will repay the loan and turn a profit as a more streamlined operation, reports Paul R. La Monica for CNN Money. [Play The IPO Revival With This ETF.]
First Trust IPOX-100 Index Fund (NYSEArca: FPX) can give exposure to the IPO market. The ETF works like this: it holds the 100 largest IPOs by capitalization, with a minimum of $50 million and companies are only included in the index on their seventh day of trading, in order to miss that initial volatile rush often seen in IPOs.
After the 1,000th day of trading, the company is removed from the index and it’s replaced with fresh blood. By these rules, investors should watch to see if GM’s new stock makes an appearance in the index next Friday.
If you want exposure to the IPO market but don’t want the guesswork, this ETF might be right up your alley.
Tisha Guerrero contributed to this article.
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.