Other misconceptions surrounding what moves IPO ETFs include interest rates and the spate of impressive IPOs out of China.
Regarding interest rates, Treasury yields soared last year, but FPX still managed to gain almost 48%. After debuting in October 2013, IPO gained 7.6% during a time when many market observers were forecasting 3% 10-year Treasury yields.
And yes, some of the recent Chinese Internet IPOs have been successful. Look at JD.com (NasdaqGS: JD), shares of which are up 27.2% in three weeks of trading. However, FPX does not hold that stock and IPO allocates less than 1.7% of its weight to JD.com, hardly enough to move the ETF’s needle one way or the other. [IPO ETF to Add JD.Com]
Sure, IPO is up 3.6% since JD.com came to market, but that is more the result of Zoetis (NYSE: ZTS), Facebook (NasdaqGS: FB) and Workday (NYSE: WDAY) posting an average gain of 4.1% since the day of JD.com’s IPO. Those are IPO’s three largest holdings, combining for almost 23% of the ETF’s weight.
Renaissance IPO ETF
