The year 2025 is shaping up to be positive for IPOs, with market experts and investors predicting a revival of capital market activity.

A flurry of factors, including policy changes under the Trump administration, monetary easing and a favorable business environment, is expected to stimulate this resurgence. For investors, this creates a good opportunity to consider ETFs that focus on IPOs and newly public companies.

Here's a look at some key ETFs.

First Trust U.S. Equity Opportunities ETF FPX

This ETF tracks the IPOX-100 U.S. Index, which includes a basket of 100 securities, has an asset base of $795.4 million and an annual expense ratio of 0.59%. Its one-year return stands at an impressive 25%.

This ETF is a solid choice for investors seeking broad exposure to U.S. IPOs.

Renaissance IPO ETF IPO

Focusing on the Renaissance IPO Index, this ETF includes 26 securities and offers targeted exposure to U.S. IPOs. The fund has an asset base of $153.7 million and an expense ratio of 0.60%. The ETF has returned 15.8% over the past year.

Renaissance International IPO ETF IPOS

Another international option, this ETF tracks the Renaissance International IPO Index, comprising 35 securities. With a smaller asset base of $4.4 million and an annual fee of 0.80%, this ETF is ideal for niche investors.

It has faced recent headwinds, losing 6.65% over the past three months and 10.46% over the past year, but those could be a reflection of the challenges in international IPO markets in the past year.

Strong Investor Appetite For IPOs

Per a Reuters report, recent IPOs have demonstrated strong performances, indicating ample investor interest. An example is ARM Holdings ARM, which raised $4.87 billion in September 2023. Its shares surged nearly 200% since. Another instance is Viking Holdings VIK which raised $1.54 billion in April 2023, climbing 86% since. These results, and the results of many such companies, show us that there is a thriving appetite for high-profile IPOs.

Reuters reported that a promising lineup of anticipated IPOs is in the pipeline this year, powered by a more business-friendly regulatory situation as interest rates decline and Donald Trump returns to the White House. High-profile IPOs from companies such as Klarna, Chime, Cerebras and Medline are expected to headline the rebound.

David Solomon, CEO of Goldman Sachs, echoed this optimism on CNBC, noting that the multi-year IPO drought is finally nearing its end.

Proceeds from U.S. IPOs are expected to rise significantly, according to EY, thanks to monetary easing and historical trends that show IPO activity often builds in the years following a presidential election, irrespective of the winning party.

The incoming Trump administration's policies, including plans for corporate tax cuts and regulatory rollbacks, should further fuel market sentiment. Pro-crypto leader Paul Atkins' expected leadership at the SEC, coupled with unified Republican control of the House and Senate, could relax the restrictive regulatory environment, supporting IPO growth.

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