ETFs to Provide Exposure to New Snapchat IPO

Additionally, the index follows a rules based value-weighted methodology, with components selected based on quantitative initial screens. The portfolio is typically reconstituted and adjusted quarterly.

The competing Renaissance IPO ETF (NYSEArca: IPO) is set to include SNAP in its portfolio on March 20 during its quarterly rebalance of underlying holdings. David Sieber of Renaissance, an IPO ETF manager, told IBD that SNAP could rank up among the top 10 holdings in IPO ETF’s portfolio given its size.

The Renaissance IPO usually incorporates new issues within 90 days of listing and kicks out older ones after two years of public trading. The fund can also quickly include new sizable companies, like SNAP, at their discretion.

IPO-related ETFs usually don’t capitalize on the first-day pop, or decline, in new IPOs and only include new issues after a few days of trading.

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