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IPOX Global Indexes Weekly Review for 06/27/08

English Version

Chinese Version

Some notable events during last week:
 
1)     IPOX Global Indexes fall, spreads remain steady: The IPOX Global Indexes fell last week, generally tracking respective benchmarks in weakening markets. Relative strength built over the past months remained in the key indexes, driven by IPOX exposure into areas other than financial companies and selected industrials particularly affected by the downturn in blue chip indexes. Positive focus remained on the IPOX-30 Global (All Markets) Index (IPGL30), which outperformed the S&P 500 by another 121 basis points on the week, driven by exposure into Alternative and Energy Related global large- and mega-caps such as Spectra Energy (SE) or OAO Rosneft (ROSN LI). Since the lows on March 20th, the IPGL30 and IPGL100 have outperformed the S&P 500 (SPX) and MSCI World Index (MXWO) by between 1500 and 1800 basis points, sharp moves considering the comparable underlying size breakdown and liquidity in the respective indexes. Notable was, however, the broad weakness amongst stocks in the 2306 member strong IPOX Global Composite Index (IPGLC) with more than 70% of the constituents recording negative returns with the average equally-weighted constituent losing 3.53% (median: -2.95%) on the week. The broad weakness weighted on spreads between the IPOX Sub-Indexes. 
 
2)     Malaise in Latin American Stock/Futures Exchange Operators continues: The IPOX Latin America 20 Index (IPXULATT) remained under pressure, driven by yet another round of weakness in exchange operators Bolsa de Mercadorias (-8.68%, YTD: -44.20%) and Bovespa Holdings (-8.57%, YTD: -37.81%). Sentiment was not helped as global exchanges Deutsche Boerse AG (YTD: -47.19%), CME Group (YTD: -43.57%) and NYSE Group (YTD: -42.27%) retreated again after the recent run-ups on assumed declines in fixed income trading and upcoming pricing pressure from upstart exchanges.
 
3)     New Benchmark Choice for the IPOX U.S. Indexes: Following the reclassification of the IPOX-100 U.S. Index Fund (FPX) to large-cap growth by IPOX Constituent Morningstar (MORN), we have adjusted the benchmarks selection in the weekly update accordingly: Instead of the Russell 2000 Index (RUT), we are now using the Russell 1000 Growth Index (RLG) as a comparative benchmarks for the IPOX U.S. Indexes (IPOX-100 U.S. Index and IPOX-30 U.S. Index). While the IPOX-100 U.S. Index is recording a price return of an annualized 7.35% over the past ten years, RLG remains virtually flat. Since start of the first investment product in 2005, actual returns on the IPOX-U.S. Indexes have beaten RLG by around 800 basis points annually, at around 15% higher volatility. THINK GROWTH – THINK IPOX.

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ETF Upgrade: IPOX-100 U.S. (FPX)

Link to Article

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IPOX Global Indices Weekly Review for 06/20/2008

06232008.pdf      (English Version)

062320081.pdf    (Chinese Version)

Some notable events during last week:
 
1)  IPOX Global Indexes fall slightly, outperform major benchmarks:  The IPOX Global Indexes recorded slight losses during F&O expiration week, outperforming the S&P 500 (SPX) and the MSCI World Index (MXWO) between 130 and 250 basis points with the IPOX-100 Global recording an outperformance of 1550 basis points versus the S&P 500 between March and June F&O expiration, one of the biggest moves on record. Focus in the global universe continued to be on Alternative Energy and Basis Materials-related issues with Blackrock and State Street involved Eurasian Natural Resources (ENRC LN) rising 11.55% on the week. Embattled Huntsman (HUN) was the biggest heavyweight loser amongst the constituents (-39.15%), after private equity controversially withdraws a takeover over. Driven by emerging markets, global IPO and spin-off activity remained brisk as 10 companies representing USD 8.6bn of market cap entered the IPOX universe.
 
2)  SJM files, IPOs of Casino Operators: Casino and entertainment stocks continued to trade to the downside, with current IPOX constituent Melco PBL (-11.59%) and former IPOX Constituent Wynn Resorts (WYNN) (-21.48% YTD) weak, while USD 20bn casino heavyweight and 2004 IPO Las Vegas Sands (LVS, not an IPOX constituent) has seen its stock fall by almost 50% this year. At the same time, SJM, the gaming flagship of HK tycoon Stanley Ho, seeks to relaunch its IPO this week in a listing expected to raise up to USD 800m on the Hong Stock Stock Exchange.
 
3)  Initial Returns in Chinese A share IPOs decline:  With the IPOX China 30 A Share Index losing 36.96% on the year, slightly better than local benchmarks, declining initial returns of recent IPOs of A shares point to bottoms in the stock market: While the median and average IPO in the Chinese A Share market between 2007 and May 2008 returned 194.16% and 176.60% based on the difference between the final offering price and first close, respectively, initial returns of recently issued A share IPOs have declined to an average of 37.92% (average) and 31.18% (median).

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IPOX-100 US (FPX) Announcement

Final Constituents (xls)

See below for full list

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Morningstar Reclassifies the IPOX-100 Index Fund (FPX) to large-cap growth

FPX: 06-09-08

Equity Style Box change
The equity Style Box position for the First Trust IPOX-100 Index Fund (FPX) has changed from medium-cap growth to large-cap growth. For details, go to
 
http://quicktake.morningstar.com/AlertNewsWire/ticker.asp?ticker=FPX&alert=A0803 

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IPOX Global Indexes Weekly Review for 06/13/08

English Version

Chinese Version

Some notable events during last week:

1) IPOX Global Indexes fall: The IPOX Global Indexes continued to fall sharply last week, driven by weakness in Chinese Financials (with the IPOX China 20 losing 917 basis points on the week) as well as events in individual securities. French government intervention re: a rise in French utility costs as well as concerns re: its bid for British Energy pressured mega-cap Electricite de France (EDF FP) (-10.37%). Ahead of F&O expiration this coming Friday, the IPOX-30 Global (All Markets) Index lost 425 basis points on the week, its biggest relative and absolute decline since March 08 F&O expiration week.

2) Despite downside volatility, IPOX U.S. rises, Morningstar reclassifies IPOX-100 U.S. (FPX) as Large-cap Growth: The IPOX U.S. universe recorded a surprise rise this week, bucking the lower trend in other US indexes with the S&P 500, Russell 2000 and Nasdaq-100 each recording a negative week. Both the IPOX-30 U.S. (IPXT) and the broader IPOX-100 U.S. (IPXO) rose on the week, now outperforming the S&P 500 by around 700 basis points on the year. Drivers or returns were last weeks losers, with index heavyweight First Solar (FSLR) gaining 9.02%. In additional development, Morningstar (MORN) has reclassified the associated ETF linked to the IPOX-100 Index (FPX) from mid-cap growth to Large-cap growth. Morningstar has been an FPX index constituent since its IPO.

3) Global IPO and spin-offs activity soars: A record of USD 69 billion in market cap (representing 17 companies) was added to the IPOX Global Composite Universe last week. Focus remained in the emerging markets, with South America leading the way with Brazilian OGX, Mexican spin-off Telmex International and the IPO Mexican Bolsa entering the IPOX universe. At the same time, the IPOX Latin America 20 Index managed to regain some lost ground, finishing the week marginally lower and outperforming the respective benchmarks. Brazilian Bank Banco Nossa Caixa (+8.26%) continued to be the center of takeover speculation.

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Q2 2008 Rebalancing Schedule

Rebalancing Schedule

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IPOX Global Indexes Weekly Review for 06/06/2008

English Version

Chinese Version

Some notable events during last week:

1) IPOX Global Indexes fall: The IPOX Global Indexes fell on the week, with IPOX Europe and IPOX U.S. outperforming local benchmarks, while IPOX China underperformed. Divergence in cross-sectional performance in the underlying 2303 company-strong IPOX Global Composite Index continued to be wide, with select solar energy and materials companies rising substantially (Ersol Solar Energy: +65.17%). Exposure into large/mega cap European utilities (Electricite de France, Gaz de France) supported index spreads across the applicable IPOX Global Indexes, with the IPOX-30 Europe Index (IXTE) having now outperformed the benchmark Dow Jones STOXX 50 Index (SX5P) by 1216 basis points over the past 12 months. At the same time, SX5P records an annualized 10 year price performance of -1.02% (IXTE: + 4.92% p.a.), underlying the strongly negative performance of European blue chips over the past 10 years relative and absolute.

2) IPOX Sector breakdown, IPO activity and the growth of economies: With a sector weighting of 31.81% (using GICS), Utilities make up the biggest sector allocation in the IPOX Europe 30 (IXTE) and broader IPOX Europe Indexes (JP Morgan IPOX Europe 50 Index – IPXUJPEU). At the same time, Information Technology has no weighting in the IPOX Europe Sub-Indexes. Contrary, Information Technology is the biggest sector in the IPOX-30 U.S. and IPOX-100 U.S. Index (weights of 32.32% and 28.63%, respectively), while the allocation to the U.S. utilities sector in IPOX U.S. is negligible.

3) IPOX Latin America reverses course, plunges – OGX Petroleo e Gaz SA nears listing as Merrill withdraws from IPO consortium: The IPOX Latin America Indexes plunged last week, strongly underperforming benchmarks, driven by weakness in global exchanges stocks – notably CME - which spread into the Brazilian exchanges sector with Brazilian exchange operators Bovespa and BMF each dropping more than 13%. At the same time, recently positive momentum in JBS (-14.96%), now the world’s largest meat producer, reversed after reports of sharp drops in profits at Smithfield (its pending US based hog producer). Amid the strong sentiment for Brazilian energy stocks, USD 33bn OGX - the oil and gas explorer - plans to sell up to 15% of the company in an IPO this week. At the same time, Merrill Lynch withdrew from the consortium of underwriters after disagreeing on price of the company, which has yet to declare revenues and profits.

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IPOX-30 Asia Pacific Announcement

Drop from Index effective at the open of business 03-Jun-2008 Dyno Nobel Limited (DXL.AX) due to company acq by Incitec Pivot Ltd.. Add to Index effective at the open of business 03-Jun-2008 Kingboard Laminates Holdings (1888.HK) due to company replacing DXL.AX. 1888.HK will be added to the Index at the same weight as the dropped stock.

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