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IPO ETF: A Contrarian Idea In Beaten Down Tech

Dec. 02, 2021 12:57 PM ETRenaissance IPO ETF (IPO)5 Comments


  • The IPO ETF invests in companies that launched an initial public offering within the last few years.
  • While 2020 was a big year for IPOs, the segment has underperformed more recently with significant volatility amid macro-dynamics.
  • Despite shortcomings to the fund structure, IPO's unique exposure makes it a good option to capture tactical trends in high-growth tech stocks.
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Initial Public Offering. IPO. Financial trade. Investment

Andranik Hakobyan/iStock via Getty Images

The Renaissance IPO ETF (NYSEARCA:IPO) invests in companies that recently began trading following an initial public offering. The attraction in IPOs is the typical early-stage growth profile of the companies with an innovative product

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This article was written by

Dan Victor, CFA profile picture

15 years of professional experience in capital markets and investment management at major financial institutions. 

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of ZM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (5)

Dan Victor, CFA profile picture
Thanks for reading. If you enjoyed the article consider following to hear about our next Seeking Alpha idea. - BOOX
Might there be an investment company with the opposite thesis? Spunoff businesses whose former parents divested "unrelated lines". There might be alpha from selloffs as some holders unload the new firms, which may do well later.
Dan Victor, CFA profile picture
@wdjax0n you mean an ETF with such strategy? I don't believe it exists but an interesting idea. What you are describing is done in hedge funds as part of a risk parity strategy. Buy the parent and short the spinoff, but will really depend on a case-by-case basis.
Seeking AIpha profile picture
Beaten down? 😂
You ain't seen nothin' yet 😆😆
The bear market is just starting 🔻🔻🔻
Dan Victor, CFA profile picture
@Seeking Aipha i agree there is downside in tech but the IPO ETF will be a good way to play the bounce at some point..
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