Chasing an IPO after it has launched is risky. Prices are often volatile, and if you can only invest in 1 or 2 IPOs, you’re facing that price volatility head-on –– along with the reality that not all IPOs are growth opportunities.
With that in mind, here are some specialized, professionally managed ETFs that track IPOs.
There are ETFs that invest in stocks of companies when they go public. Others engage in post-IPO trading. Meanwhile, some ETFs invest in the common stocks of small, rapidly growing companies, which may include recent IPOs. And then there are ETFs that track IPOs in a specific sector, such as technology or healthcare.
ETFs that invest in IPOs mitigate their risk of one failing by holding many companies. However, the funds are actively managed and can sell their post-IPO shares at the manager’s discretion.
Here are some funds that track IPOs:
|First Trust US Equity Opportunities ETF (NYSEArca: FPX)||US—Total Market||0.57%|
|First Trust International Equity Opportunities ETF (NasdaqGM: FPXI)||Global Ex-US—Total Market||0.70%|
|Renaissance IPO ETF (NYSEArca: IPO)||US—Total Market||0.60%|
|Renaissance International IPO ETF (NYSEArca: IPOS)||Global Ex-US—Total Market||0.80%|
|Invesco S&P Spin-Off ETF (NYSEArca: CSD)||US—Total Market||0.62%|
|Defiance Next Gen SPAC Derived ETF (NYSEArca: SPAK)||US—Total Market||0.45%|
When you invest in an individual IPO, you run the risk that the company may not meet your growth expectations. Keep in mind, IPOs are typically surrounded by intense media and investor hype and many don’t end up living up to it. But when you invest in an ETF that invests in newly public companies, you invest in a handful of IPOs handpicked by professional asset managers. This offers some advantages:
Like anything in the world of investing, IPO-tracking ETFs are no guaranteed win. Here are some risks to watch out for:
It was a record year for IPOs in 2020, with more companies going public than ever before. The coming year should see that trend continue.
But it’s difficult for individual investors to separate good from bad IPOs. So the best choice is to diversify the risk and buy a specialized, professionally managed ETF and a basket of IPOs based on specific criteria.
Consider IPO-tracking ETFS one-stop shopping, where you can get everything you need in one place.
Stock trading doesn’t have to be expensive. Using Finder’s proprietary algorithm, we’ve identified the best cheap Canadian and US stocks to buy now.Read more…
Steps to owning and managing Cue Health stocks, with 24-hour and historical pricing before you buy.Read more…
Steps to owning and managing ARBK stock, with 24-hour and historical pricing before you buy.Read more…
We look at 6 popular stock discussion groups from Canada and overseas.Read more…
We’ve rounded up the top dividend stocks in Canada. Check out current stock prices, historical stock performance, company info and more.Read more…
Trade commission-free with this large Canadian bank. Plus, it’s good for beginners and pros alike.
Stock trading doesn’t have to be expensive. Using Finder’s proprietary algorithm, we’ve identified the best cheap Canadian and US stocks to buy now.
If you’re looking for ways to gain exposure to Bitcoin and other digital currencies, cryptocurrency ETFs could be worth exploring. Find out what crypto ETFs are and how they work in this introductory guide.
We look at 6 popular stock discussion groups from Canada and overseas.
Find out how to short the NASDAQ, the world’s second largest stock exchange, with inverse exchange-traded funds (ETFs) or derivatives.
Protect your international stock portfolio from currency fluctuations by hedging your investments.
Investing in renewable energy isn’t just good for the planet—it can be good for your portfolio too.
We take a closer look at 6 popular EV stocks and what these stocks can offer Canadian investors.
Benefits and risks to consider before you invest in pipeline stocks.
Benefits and drawbacks to consider before you invest in pharma stocks.
You must be logged in to post a comment.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.