Just when it looked like investors would have to wait at least five days trading days after Alibaba’s debut as a pubic company this Friday on the New York Stock Exchange under the ticker “BABA” to find the Chinese e-commerce firm in an exchange traded fund, one index provider has announced the stock will appear in the underlying index for a well-known ETF after Friday’s close.
IPOX Schuster, the company behind the IPOX-100 U.S. Index, the benchmark for the $513.7 million First Trust US IPO Index Fund (NYSEArca: FPX), has confirmed to ETF Trends that it will add Alibaba to that index after the close of U.S. markets Friday.
Earlier this week, it appeared as though Alibaba would not find its way into FPX because of the company’s decision to incorporate in the Cayman Islands, a sticking point for other index providers as well. [Alibaba May Not be in This ETF]
IPOX Schuster confirmed that after external and internal reviews, it decided to add Alibaba to FPX’s underlying index and in making that decision, FPX will likely be the first ETF to add Alibaba, beating the rival Renaissance IPO ETF (NYSEArca: IPO) to the punch in the process. IPO will add Alibaba after the stock’s fifth trading day. [IPO ETF Rallies Ahead of Alibaba IPO]
Alibaba’s addition to FPX’s index also means the stock can stick around in the ETF for up 1,000 days. In fact, none of the ETF’s major holdings, including Facebook (NasdaqGS: FB), AbbVie (NYSE: AABV) and General Motors (NYSE: GM), are new IPOs.