Get documents about "FTSE Renaissance IPO Composite Index
Document Sample
FTSE Renaissance IPO Composite Index
Generates Superior Risk‐Adjusted Returns
The FTSE Renaissance IPO Composite Index has shown
significant outperformance relative to major equity indices over
110%
time. Since inception, the IPO Index has outperformed the
broader indices. By investing in IPOs on a float weighted
Return
60%
basis, emphasis is placed on those companies with the highest
unfolding liquidity and strongest performance, which enables
this asset class to produce unique and superior risk-adjusted 10%
returns. 2003 2004 2005 2006 2007 2008 2009
‐40%
FTSE Renaissance IPO Composite Index S&P 500
RUS 2000 RUS 3000
Adds Diversification by Picking up Performance Ahead of other Indices
The FTSE Renaissance IPO Composite Index adds IPOs at the close of the first day of trading. This early inclusion is well in advance of
the other major indices, where newly public companies must wait up to a quarter or longer for inclusion. Thus, major indices miss the
early returns on newly public companies and underweight the new industries that typically manifest themselves first in the IPO market.
For example, Visa, which went public on March 19, 2008, gained 85% before it was included in the Russell 3000 on June 30, 2008.
As of December 31, 2009 3M 6M 12M 3YR 5YR Alpha Sharpe
FTSE Renaissance IPO Composite Index 12.7% 27.0% 54.9% ‐11.1% 28.5% ‐‐‐ ‐0.09
S&P 500 5.5% 21.3% 23.5% ‐21.4% ‐8.0% 6.4% ‐0.41
Russell 2000 3.5% 23.0% 25.2% ‐20.6% ‐4.0% 3.0% ‐0.26
Russell 3000 5.4% 21.9% 25.5% ‐20.6% ‐5.8% 5.8% ‐0.37
A Liquid Alternative to Alternatives Good Timing
Newly public companies are specialized equities with exploitable Academic studies show that in weak stock markets
information asymmetries similar to alternative investments. Like characterized by low issuance of IPOs, only the strongest and
private equity investments, IPOs are under-researched, lack most attractively priced companies are able to go public. These
trading charts, have untested governance and lack an established companies have historically produced superior long-term
shareholder base. Yet, IPOs possess far greater liquidity and returns.
transparency than alternative equities.
Captures an Economically Significant Category of Equities
IPOs represent one-third of total equity capital
Constituent Sizes % Mkt Cap Top 5 Constituents Market Cap $m
raised. The market capitalization of the FTSE
Visa (V) $64,950
Renaissance IPO Composite Index has Large Cap (Over $5B) 2% Verisk Analytics (VRSK) $5,452
averaged $306 billion over the past six years, Mid Cap ($1B to $5B) 24% American Water Works (AWK) $3,913
permitting significant indexing capacity. This Small Cap ($250M to $1B) 56% Mead Johnson Nutrition (MJN) $8,937
is because the IPO market is not just limited to Micro Cap (Less than $250M) 17% Intrepid Potash (IPI) $2,189
small cap companies, but includes companies Data as of 12/31/09
from all sectors and sizes.
Designed by IPO Experts to Harness the Power of IPOs
The FTSE Renaissance IPO Composite Index is a comprehensive benchmark index designed to capture the essence of IPO activity and
performance. It is the first index to incorporate the truly investable IPO universe by using float-adjusted shares and the first to account
for the unseasoned nature of the asset class by including a rolling two-year population of IPOs starting from the first day of trading. The
Index includes all institutionally-investable U.S.-listed IPOs, capturing over 95% of the total market value of the IPO universe. The Index
was designed by Renaissance Capital, the global leader in IPO Research, and is managed by leading index provider FTSE, to provide
investors with a comprehensive and structured vehicle to invest in the IPO market.
Renaissance Capital LLC Two Greenwich Plaza Greenwich, CT 06830 www.renaissancecapital.com 203.622.2978
Related docs
