New ETF For International IPOs

Renaissance Capital has launched a follow-up to its popular Renaissance IPO ETF IPO that will concentrate on the international markets.

The new ETF will trade under the ticker symbol IPOS and will track a basket of recent international IPOs. Renaissance Capital has made it clear that there will be no overlap between its two IPO ETFs, therefore the popular Chinese IPO Alibaba Group Holding Ltd BABA will remain a holding in IPO and not be transferred to IPOS.

Kathleen Smith, chairman of Renaissance Capital said, "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 provides investors with access to the entire global IPO market."

Related Link: New Actively Managed Global ETF From Arrow Funds

The Renaissance International IPO ETF IPOS began trading on October 7 with a total of 101 holdings across 10 industries. Financials led all sectors at 40 percent and industrials came in at 20 percent. As far as country allocation, the U.K. has the largest weighting at 21 percent, followed by Japan at 12 percent and China at 11 percent.

The top individual holdings include Brazilian insurance company BB Seguridade Participacoes S.A with a 5.1 percent holding, Japanese beverage distributor Suntory at 3.0 percent, and European cable company Altice S.A coming at 2.9 percent.

IPOS opened for trading at $20.12, finished the first trading day down at $20.05 with a scant 8,000 shares traded. The expense ratio is 0.80 percent.

There are a few specific rules that the ETF will follow when constructing the portfolio. The goal is to hold the largest and most liquid newly listed IPOs. New IPOs that it considers “sizable” will be added on a fast-entry basis on the fifth day of trading. New IPOs that do not meet the size requirement will be added during the regularly scheduled quarterly revisions. The IPOs will remain in the ETF up to two years, when the company considers the stocks to be seasoned equities.