In fact, IPO has not added a new holding this year. In the fourth quarter of 2014, IPO added Zayo Group (NasdaqGS: ZAYO) and Lending Club (NYSE: LC), which are off 5.4% and 20.8%, respectively, year-to-date. The good news is those stocks do not even combine for 0.9% of the ETF’s weight. [IPO ETF Adds Lending Club]
Of the seven members of the Bloomberg IPO Index that had 2015 loss of 20% to 25% as of Monday, only Lending Club is a member of the IPO ETF.
Among others, Zoetis (NYSE: ZTS) and Twitter (NYSE: TWTR) have propped IPO up this year with gains of 8.25 and 33%, respectively. JD.com (NasdaqGS: JD) has ignored the weakness in rival Alibaba to soar 19%. Those stocks combine for nearly 24% of IPO’s weight.
IPO’s challenges lie further out, that is assuming Twitter and Zoetis remain the primary drivers of the ETF’s bullishness. IPO’s underlying index only holds companies for two years after the IPO date, meaning Zoetis will soon be leaving while Twitter will depart in the fourth quarter or early in the first quarter of 2016.
Renaissance IPO ETF