Tag Archives: Renaissance Capital

Now We Have an International IPO ETF…

CT – October 7, 2014 – Renaissance Capital LLC, a global IPO investment advisor providing institutional research, investment management and indexing services, announced today the launch of the Renaissance International IPO ETF, an exchange traded product that tracks an index of newly public international companies prior to their inclusion in core global equity portfolios. The Renaissance International IPO ETF began trading today on NYSE Arca under the ticker symbol “IPOS.”

Kathleen Smith, photo courtesy of Bloomberg LP
Kathleen Smith, photo courtesy of Bloomberg LP

“The launch of the Renaissance International IPO ETF, responds to investor demand for systematic exposure to newly listed IPOs in a low-cost tax- efficient exchange-traded structure,” said Kathleen Smith, Chairman of Renaissance Capital. “When added to core equity holdings, this portfolio of new equities provides investors with unique returns and more complete coverage of the full set of public equities. The Renaissance International IPO ETF when coupled with the Renaissance IPO ETF (NYSE symbol: IPO) provides investors with access to the entire global IPO market.” Continue reading

ETF $IPO-Knight Flames Irrational Exuberance With Irrational Pricing

indexuniverseBelow excerpt courtesy of Oct 24 IndexUniverse column re: The Renaissance IPO ETF, the newest entrance to the ETF market place, and tracks a market-cap-weighted index of recent US-listed IPOs. The fund acquires issues within 90 days or sooner after IPO and sells after 2 years.

“..The reason it (IPO) traded to a premium, most likely, is that the sole AP for the fund, Knight Capital [aka KCG] was caught off guard. The underlying stocks are plenty liquid, so there’s no reason to think Knight couldn’t make more shares, and obviously, with $31 million now in the fund, Knight indeed made more shares in a hurry. So the premium present in that first day’s trading was entirely irrational, and predictably collapsed.  To anyone who bought at that irrational price, all I can offer is my condolences. And perhaps a reminder that, in the end, fair value always wins. ..” Dave Nadig, IndexUniverse

Since the 2009 inception of the index IPO tracks—the Renaissance IPO Index—it’s returned an average annual return of 19.09 percent, just a touch over the Russell 3000’s return of 18.97 percent. Add in the effect of a 60 basis point management fee and it’s easy to be skeptical about whether the long-term returns will really play out for investors.

But that cautionary note seemed to be lost on the markets when IPO launched. In the first day of trading, IPO traded more than 800,000 shares. That’s a big day for a new niche ETF.

Unfortunately, the folks who were trading during that initial feeding frenzy caused an irrational “IPO pop” of their own.

For the entire article from IndexUniverse, please click here.

 

New ETF of IPOs Is Better Than It Sounds: $IPO

barrons  Courtesy of Brendan Conway

A new exchange-traded fund that invests in newly public companies isn’t as speculative at it seems at first glance.

Almost every day, I get word of a shiny new exchange-traded fund for some ephemeral trend or market sliver. So when news of an ETF of initial public offerings crossed my desk—just in time for Twitter’s hotly anticipated IPO next month—I expected more of the same. But the fund turns out to be different from, and an improvement on, the clubby and nontransparent IPO market. Don’t hop on the bandwagon, but for the right sort of risk-taking investor, there could be an untapped opportunity.

It turns out the surest way of investing effectively in newly public companies—as opposed to speculating on a first-day pop in a stock—is making sure the company will still be selling goods and services a few years from now. University of Florida economist Jay Ritter found three decades of outperformance (1980-2011) in IPO stocks with the biggest sales revenues before they go public. If a company sells a lot of products, it’s certainly less likely to be a Pets.com-type disaster. While this may sound obvious, it’s tough to put into practice. Small, newly public companies are tough to research and inherently risky investing propositions. They’re also not represented in the major stock indexes. Continue reading

#IPO Expert Renaissance Capital Launches ETF For…IPOs..

  Courtesy of Tom Lydon

etf-logo-final

Renaissance Capital, the Connecticut-based investment behind the Global IPO Plus Aftermarket Fund (IPOSX) mutual fund, will introduce the Renaissance IPO ETF (NYSEArca: IPO) on Wednesday.

The new ETF will be benchmarked to an in-house index, the Renaissance IPO Index, which is designed in conjunction with index provider FTSE.  “The FTSE Renaissance Global IPO Index Series provides total global IPO market coverage and is composed of regional (e.g. Asia Pacific), country-level (e.g. US) and strategic subsets (e.g. ex-US, Emerging Markets, capped and investable versions),” according to the Renaissance web site. 

IPO will compete directly with the First Trust US IPO Index Fund (NYSEArca: FPX), which is seven and a half years old and has $184.7 million in assets under management.  FPX has had another banner year, gaining 31.4%, but there are key differences between it and FPX.

Investors should note how FPX does business because in the case of this ETF, IPO does not necessarily mean brand new stocks. Said another way, a hot IPO set to debut on October 20 could trade for months before being included in FPX’s index. Additionally, FPX is home to plenty of spin-offs and companies that were taken private in private equity buyouts only to go public again a few years later. [Another Market Beating Niche ETF]

For the full story from ETF Trends, please click here

Renaissance Capital To Launch IPO ETF

etfexpressIPO research and investment specialist Renaissance Capital is to launch its first exchange-traded fund, according to a regulatory filing made with the US Securities and Exchange Commission (SEC).

The proposed fund, the Renaissance IPO ETF, will track the firm’s own index of newly-listed securities on US exchanges and will normally invest up to 80 per cent of its total assets in securities that make up the benchmark index.

According to the regulatory filing, the index is comprised of common stocks, depositary receipts and operating units of newly public US exchange-listed companies. These companies may include foreign companies that are listed on a US exchange. Companies are considered to be newly public if they have completed an IPO in the last 500 trading days.

What’s Next? ETFs for IPOs. Renaissance Capital Joins the Fray.

Reported by IndexUniverse’s Devon Layne and Olly Ludwig

Kudos to IU for scooping the news media–

Renaissance Capital, a research and investment management firm known for its IPO Plus Aftermarket Fund, filed regulatory paperwork requesting permission to offer a broad swath of ETFs targeting U.S. and non-U.S. stocks and bonds, with the first to be a fund that tracks its own Renaissance IPO Index.

The initial exchange-traded fund it is planning, called the Renaissance IPO ETF, will follow the performance of the U.S. IPO market through the use of an index that will be composed of a revolving list of qualified IPOs that change on a two-year rotation. The firm plans to market ETFs that are based on its own indexes.

[MarketMuse Editor’s note: we can only hope that FB incident and subsequent clog in IPO pipeline doesn’t put too much of a crimp in this initiative.]

Indeed, Greenwich, Conn.-based Renaissance’s “exemptive relief” filing with the Securities and Exchange Commission also requests permission to roll out funds with “affiliated indexes”—ETF lawyer-speak for in-house indexes. The petition with the SEC cited as precedents a number of firms that market self-indexed funds, including Russell and Van Eck Global.

The paperwork thus seeks to establish Renaissance’s presence in the dynamic ETF market, where total assets are now more than $1.150 trillion in over 1,450 securities. Moreover, the firm, by requesting to use its own indexes, is tapping into one of the newer trends in the ETF market that industry sources say reflects a desire among ETF sponsors to stop paying costly index-licensing fees. Continue reading