That is not to say FPX and IPO avoid new stocks. In particular, the Renaissance IPO ETF has the flexibility to add a new stock after the company’s fifth trading day if other requirements, including market value, are met. The ETF was one of the first to add Alibaba (NYSE: BABA), but since that IPO, the Renaissance fund has not been rushing to add new stocks that are just a few days old. Lending Club (NYSE: LC) in December was the last stock that got “fast track” treatment from IPO though last month the ETF’s issuer said it would add GoPro (NasdaqGS: GPRO), 58.com (NYSE: WUBA) and EQT GP Holdings (NYSE: EQGP). [GoPro Joins IPO ETF]
Stocks stay in IPO for a maximum of two years. FPX holds companies longer than that. The First Trust ETF still has a combined weight of over 21% to Facebook (NasdaqGS: FB) and AbbVie (NYSE: ABBV), in part explaining its out-performance of IPO this year.
For its part, FPX is not rushing to add the newest IPOs, either. Some of the newer names in FPX include Dave & Buster’s (NasdaqGS: PLAY) and GrubHub (NYSE: HUB), but those stocks are less than a third of the ETF’s weight and both have surged post-IPO.
Renaissance IPO ETF
