FPX has an international equivalent, the First Trust International IPO ETF (NasdaqGM: FPXI). Like FPX, FPXI includes spin-off and can hold constituent firms for up to 1,000 days after their IPOs. Potential new additions to the ETF’s underlying “generally must have at least six full days of trading in order to enter the index on each rebalance,” according to First Trust.
International IPO ETFs such as FPXI offer investors an advantage via the removal of the stock-picking burden. While that may not sound like the most attractive selling point, consider this: Most international IPOs and spin-offs have produced negative returns over the 12-, 24-, 36- and 48-month periods following their IPOs, the best performers have generated returns that have more than offset the losses from the laggards, according to First Trust.
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“The number of actual IPOs is down significantly in 2016, thus reducing the number of IPO investment opportunities for investors. According to Renaissance Capital, which operates the flagship Renaissance IPO ETF (IPO) , states there were 275 new IPOs in 2014, followed by 170 in 2015, and only 75 so far in 2016, through September 30. In January 2016, the market saw zero new IPOs – the weakest start to a new year for the sector since 2008,” reports TheStreet.com.