PayPal Holdings (NasdaqGS: PYPLV) is in its second go as a standalone public company after recently being spun-off from eBay (NasdaqGS: EBAY). In nine trading days, shares of PayPal are up about 4.7% and more than half of that gain arrived today.
Although PayPal is a new stock, exchange traded funds investors already have at least one option for accessing the shares and, on a more speculative note, some other ETFs could soon add PayPal to their respective lineups.
The PureFunds ISE Mobile Payments ETF (NYSEArca: IPAY), the first ETF dedicated to providers of mobile payments solutions, debuted today featuring a decent allocation to PayPal. PayPal is the third-largest holding in the ISE Mobile Payments Index (IPY), IPAY’s underlying index, at a weight of almost 5.7%. Only Dow components Visa (NYSE: V) and American Express (NYSE: AXP) command larger weights than PayPal in that index. [HACK Issuer Adds two More ETFs]
In terms of ETFs that could add shares of PayPal, emphasis on “could,” and do so sooner than later, the Renaissance IPO ETF (NYSEArca: IPO) is a credible candidate. Due to its indexing flexibility that allows for the inclusion of some IPOs after their fifth day of trading, the Renaissance IPO ETF could add PayPal. Plus, the ETF has the flexibility to add spin-offs as highlighted by a stake in Synchrony Financial (NYSE: SYF), among others.
Speaking of spin-offs, the newly minted Market Vectors Global Spin-Off ETF (NYSEArca: SPUN) is another likely destination for PayPal.
SPUN tracks the performance of the Horizon Kinetics Global Spin-Off Index, which equally weights components. Specifically, SPUN will build a position in the early stages after a spin-off occurs, capitalizing on short-term selling pressure to buy low. Additionally, index components will be held for five-years to capture any potential long-term opportunities. [Inside the Global Spin-Off ETF]
SPUN has the ability to add new spin-offs every quarter, so it is likely the ETF includes PayPal before the rival Guggenheim Spin-Off ETF (NYSEArca: CSD) does. CSD can include spinoffs that have been spun-off over the past 30 months, but no more recently than six months before the time that ETF rebalances.
Renaissance IPO ETF
