Just a year after entering the asset management space with the Renaissance IPO ETF (IPO), the public-stock-offering research and data-tracking firm Renaissance Capital is coming out with an international IPO fund.
The Renaissance International IPO ETF (IPOX) becomes effective on Wednesday, and is scheduled to start trading on Oct. 7.
The new exchange-traded fund is designed to track the Renaissance International IPO Index, which is calculated by FTSE Group Indices. The international version will be managed similarly to the U.S version, which has attracted $30 million since it was launched Oct. 16, 2013.
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Like the domestic version, the new ETF will allocate to newly public companies based on market capitalization.
“We take the top 80% of the universe of IPOs, and we sort them by market cap — adjusted for float — and the largest, most liquid stocks are in the portfolio,” said Kathleen Smith, principal at Renaissance Capital.
There will be no overlap in holdings between the two ETFs.
The Renaissance International IPO Index has declined by 2.6% since the start of the year, and has a 12-month trailing return of 1.2%. That compares to the MSCI ACWI ex-USA Index, which has gained 0.2% this year, and has a 12-month return of 3.9%.
Ms. Smith said the IPO index has been held down recently by a poorly performing 38.8% weighting in emerging-markets IPO stocks.
The original IPO ETF, which counts Alibaba Group Ltd. (BABA) as its largest holding, is up 5.6% this year and has a 12-month trailing return of 16.3%. That compares to the S&P 500 Index, which is up 8.6% this year, and has a 12-month return of 19.3%.
