Renaissance Capital, the Greenwich, Connecticut-based research and investment firm that focuses on initial public offerings, has launched its first exchange-traded fund focused on the market.
The new Renaissance IPO ETF (IPO.P) began trading Wednesday under the ticker "IPO" on the NYSE Arca exchange.
It joins other funds looking to benefit from a strong IPO market this year. The First Trust US IPO Index ETF (FPX.P), for example, is up roughly 33 percent year-to-date.
The new Renaissance ETF has an expense ratio of 60 basis points, roughly a fourth of the cost of its mutual fund cousin, the Renaissance Global IPO Plus Aftermarket Fund (IPOSX.O), which has an expense ratio of 2.5 percent.
In an actively managed mutual fund, a manager can select stocks and request IPO shares ahead of time to build positions, instead of passively tracking an index.
The Renaissance IPO Index, which the new ETF tracks, includes common stocks, depository receipts and operating units of newly public U.S. companies. It also includes foreign companies that are listed on a U.S. exchange. The shelf life of the ETF's individual holdings will be capped at two years after their market debut.
(Reporting by Ashley Lau in New York; Editing by Leslie Adler)