Today BABA is reacting to its first quarterly earnings call with muted weakness turned into a new rally now in the early going (above $103).
The stock has done nicely since its September IPO and has topped $100 a share on two sessions now in the past week, closing yesterday at $101.80. We see the stock opening today right around the $100 level, so thus far, a rather muted move.
Two “IPO” focused funds may see out of the ordinary levels of interest here following BABA’s earnings and thus higher expected trading volume in the stock, are IPO (Renaissance IPO ETF, Expense Ratio 0.60%) and FPX (First Trust IPOX-100 Index, Expense Ratio 0.60%) which have weightings of >13.7% and >2.8% respectively in the stock.
IPO clearly has more of a “BABA” bet on in terms of its weighting to the stock, as it is the largest weighted name in the fund above ZTS (>8.9%), TWTR (>8.6%), WDAY (>3./8%), and HLT (>3.8%). If nothing else, a quick look at the underlying indexes in these IPO based funds can give an investor or portfolio manager a quick look of which companies, some with not readily recognizable ticker symbols and even names in some cases, have gone public recently and are finding their ways into IPO based ETF offerings.
IPO currently owns seventy four individual names, with almost 80% of the portfolio lying in U.S. domiciled companies, (>15% is devoted to China, presumably largely due to its exposure to BABA). From a sector standpoint, the fund has its highest exposures to Consumer Discretionary (>25.4%), and Technology (>23.3%), followed by Energy (>13.2%) and Health Care (>12.1%).
FPX follows a different IPO based index, that of the IPOX-100 U.S. Index, which reflects the top 100 companies ranked by market capitalization on a quarterly monitored basis. The IPOX Global Composite Index is the parent index, and then 100 companies are listed and ranked to create the IPOX-100 U.S. Index, as a sub-index basically.
Top holdings in FPX look very different than IPO, likely due to this market cap focused methodology and tendency to buy the rising large caps, with FB (>10.5%), ABBV (>9.1%), GM (>5.0%), PSX (>4.5%), and KMI (>3.9%)
among the top holdings. IPO debuted in October of 2013 and FPX has a much longer history, having launched back in April of 2006. From an AUM perspective, FPX holds a commanding edge in terms of size at the moment, with more than $518 million compared to about $29 million.
Renaissance IPO ETF
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