Renaissance Capital Debuts New International IPO ETF

This week marked the launch of Renaissance Capital’s second foray in the world of ETFs. The Renaissance International IPO ETF IPOS tracks an index newly issued foreign companies.

This ETF joined the NYSE Arca exchange on October 6 and charges a total gross expense ratio of 0.80 percent annually.

Typically new public companies have to wait several months or even years to be considered seasoned enough to join traditional broad-based indexes. However, IPOS allows new companies that meet liquidity and size requirements to be added to its underlying holdings on the fifth day of trading.

In addition, IPOS removes companies when they have more than two years of trading history. This keeps the basket of securities focused on upstart public companies with strong growth potential. 

Related Link: Bond ETF Investors Choose Quality Over Yield

At launch, IPOS included 100 publicly traded companies with significant exposure to emerging market nations such as China and Brazil. In addition, the portfolio included stocks of developed nations such as the United Kingdom and Japan. 

According to the press release, “The launch of the Renaissance International IPO ETF, responds to investor demand for systematic exposure to newly listed IPOs in a low‐cost tax‐efficient exchange‐traded structure,” said Kathleen Smith, Chairman of Renaissance Capital. “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.”

This new international offering joins the successful Renaissance IPO ETF IPO, which uses a similar screening methodology for new U.S.-listed companies. IPO has garnered over $32 million in total assets and will be celebrating its one-year anniversary this month.

IPO gained distinction for being one of the first exchange-traded funds to offer Alibaba Holding Group Ltd BABA, the largest public offering in the history of the NYSE, as part of its portfolio. BABA made up nearly 10 percent of the asset allocation in IPO as of October 9. 

These two ETFs allow investors a comprehensive way to access a global lineup of new companies in a reasonably diversified ways, helping to mitigate individual business risks.