Simply put, the most important factor in an equity-based exchange traded fund’s performance is the gains and/or losses accrued by the fund’s underlying holdings.

That is an important reminder when considering the year-to-date performances of the First Trust US IPO Index Fund (NYSEArca: FPX) and the Renaissance IPO ETF (NYSEArca: IPO). FPX and IPO are up 11.7% and 7.8%, respectively, compared to a 3.1% for the S&P 500. The key for the IPO ETFs is arguably as much attributable to the stocks the funds currently own as it is to the IPOs the ETFs’ issuers have resisted adding.

Over 700 companies have come to market globally in 2015, led by Chinese stocks after an IPO banduring 2013 was lifted early in 2014. However recent price collapses have seen authorities once again close the taps of new issuances, in efforts to stabilise the country’s equity markets,” according to Markit. “Short sellers have concentrated their IPO efforts in US and Japan listed firms with IPOs with more than 1% of shares outstanding on loan featured predominantly in these two areas at 60% and 30% respectively.”

Shake Shak (NYSE: SHAK) is the epitome of a recent IPO that would be trouble for FPX and IPO (the ETF), if the funds had added the stock. The stock’s nearly 10% return since coming to market in late January is deceiving because the shares have plunged almost 47% since May 22. Nearly 3.6% of Shake Shak’s shares outstanding are on loan to short sellers, according to Markit data. [IPO ETF Holding up Nicely]

IPO and FPX have also dodged laggards such as Box (NYSE: BOX), which is down 19.3% since its late January IPO and Etsy (NasdaqGS: ETSY). Even with today’s 27% surge, shares of Etsy have tumbled 38.1% since the company’s April IPO. Almost 8% of Etsy’s are on loan to short sellers, according to Markit data.