International IPO ETF Coming Soon

Renaissance Capital, the Connecticut-based fund manager and research firm that specializes in analyzing initial public offerings, is preparing to unveil an international equivalent to the increasingly popular Renaissance IPO ETF (NYSEArca: IPO).

The Renaissance International IPO ETF (NYSEArca: IPOX) becomes effective on Wednesday, and is scheduled to start trading on Oct. 7, reports Jeff Benjamin for InvestmentNews.

In an interview last month with ETF Trends from the Morningstar Conference in Chicago, Renaissance Capital Principal Kathleen Smith mentioned her firm had filed plans for the Renaissance Capital International IPO ETF. IPOX will provide investors with an avenue to tap into IPO listed outside the U.S., nearly three-quarters of which will hail from developed markets. [Alibaba Highlights This ETF]

IPOX track the Renaissance International IPO Index, meaning that like IPO, the new ETF will be a cap-weighted fund. There will be no overlap in holdings between the two ETFs, according to InvestmentNews.

That means IPOX will not hold shares of Alibaba (NYSE: BABA), the newly public Chinese e-commerce giant, because IPO owns shares of that company. IPO was the second ETF to add Alibaba after the company’s Sept. 19 initial public offering, doing so five days after the company came public. Alibaba is now IPO’s second-largest holding at 9.86%, just behind the 9.94% the ETF allocates to Twitter (NYSE: TWTR). That is by far the largest allocation to Alibaba among ETF’s that currently hold the stock. [A True Alibaba ETF]

First Trust, which sponsor’s IPO’s main competitor, the First Trust US IPO Index Fund (NYSEArca: FPX), is expected to launch the First Trust International IPO ETF on the NASDAQ Stock Market under the ticker “FPXI” on Oct. 8.