Since launch of the IPOX-30 Van Kampen sponsored product on July 20th, the IPOX-30 has outperformed the S&P 500 by 650 basis points or the Russell 2000 by 900 basis points. Over a 15-year horizon, the IPOX-30 has beaten the Nasdaq-100, only at 60 percent of its standard deviation.

The “IPO underperformance story” is outdated, all of the academic IPO research uses an equally-weighted sample set-up in event time. Any top US business school academic will verify this.

The IPOX Indexes are the first product addressing one of the most pervasive empirical anomalies in Finance: the dispersion in long-run IPO returns. i.e. while many companies go public (annually around $140bn of market cap is being created through IPO and spin-off activity annually), exposure to only few can add substiantial diversification benefits and alpha to a portfolio.

The IPOX-30 Index is an index of the top 30 companies in the IPOX Composite Index ranked quarterly by market capitalization. The IPOX Composite captures a (screened) universe of US IPOs and spin-offs. After entering the IPOX-Composite Index on the 7th trading day, companies remain in the IPOX Composite until their 1000th trading day anniversary on the stock markets. Current companies include GOOG, CME, DEX, WYNN, PA, CE, PRU, PFG, WC, WLP etc.

This allows for a buy-and-hold exposure to the largest and best performing IPOs during the past four years, a totally systematic and disciplined approach to add alpha to a portfolio.

Update your thoughts on IPOs: think IPOX

For more info, see www.ipoxschuster.com and discuss with josef@ipoxschuster.com