The Renaissance IPO Index rose 2.8% on Monday, and surpassed its all-time high in mid-day trading.
The IPO Index is now up 12.9% for the year, outperforming the S&P 500 by 20 points, and the Nasdaq Composite by 10 points. The Renaissance IPO ETF (NYSE: IPO) tracks the index, which is composed of the largest and most liquid IPOs over the past two years. IPO outperformance is a global phenomenon, with the International IPO Index (tracked by NYSE: IPOS) also 20 points above its benchmark, the MSCI ACWI ex USA.
The US IPO Index's #4 holding, messenger RNA biotech Moderna (MRNA) gained another 20% on Monday after reporting positive interim data in its ongoing Phase 1 trial for a COVID-19 vaccine. The stock has returned 309% year-to-date, the best performing constituent in the IPO Index. According to ETF.com, the IPO ETF has the fourth-largest weighting in Moderna (5.8%), and the largest weighting for a non-biotech ETF.
Investors are betting that new technologies and services are best suited for the post-pandemic world.
Other recent IPOs driving the 2020 IPO market's gains: Zoom Video (ZM; #14 holding) up 142% year-to-date, Pinduoduo (PDD; #8) up 76%, Beyond Meat (BYND; #9) up 72%, and DocuSign (DOCU; #2) up 66%.
With the IPO Index again flying high, the US IPO market has begun to reopen. After months with just a few Chinese deals, biotechs, and SPACs, large US companies are stepping up to the plate, with insurance platform SelectQuote (SLQT) targeting a $450 million offering this week. It's joined by fast-growing and profitable medical device maker Inari Medical (NARI). On Monday, used car buying site Vroom (VRM) filed for an IPO that could value the company at over $2 billion. Sales platform ZoomInfo (ZI) is reportedly gearing up for an IPO next month that could value it at over $5 billion, while grocery giant Albertsons (ACI) is prepping a potential multi-billion dollar offering.
| IPO Index Top Holdings | ||||
|---|---|---|---|---|
| Rank | Company |
Business | Index Weight | 2020 Return |
| 1. | Uber Technologies (UBER) |
Ridesharing and delivery | 10.51% | 13.0% |
| 2. | DocuSign (DOCU) | E-signature software | 9.55% | 65.9% |
| 3. | Spotify Technology (SPOT) | Audio streaming app | 8.93% | 7.9% |
| 4. | Moderna (MRNA) | mRNA biotech | 5.82% | 309.0% |
| 5. | Slack Technologies (WORK) | Workplace messaging app | 3.88% | 29.0% |
| 6. | Elanco Animal Health (ELAN) | Animal pharmaceuticals | 3.64% | -33.1% |
| 7. | Equitable Holdings (EQH) | Insurance and annuities | 3.28% | -26.1% |
| 8. | Pinduoduo (PDD) | Chinese e-commerce | 3.24% | 75.7% |
| 9. | Beyond Meat (BYND) | Plant-based proteins | 3.06% | 72.0% |
| 10. | Ceridian HCM (CDAY) | HR software | 2.82% | -4.4% |
| IPO Index | 12.9% | |||
| S&P 500 | -7.9% | |||
| Nasdaq Composite | 3.3% | |||
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