Renaissance IPO ETF: Getting allotment of IPO is very difficult. This becomes more difficult when there is a huge crowd of investors to buy it during the process of initial public offering. Investors who miss out on buying an IPO can buy it after it is listed on stock exchanges or through mutual funds. Many a times, most IPOs get bids many times the issue size, so many people do not get the allotment. Interestingly, there are some mutual fund schemes that offer their customers the option to invest in the recently listed IPO stocks. This scheme is – Edelweiss Recently Listed IPO Fund.
Edelweiss Recently Listed IPO Fund in the Indian market invests investors’ money in those stocks whose listing has been done in the recent past. On the other hand, Renaissance IPO ETF gives investors exposure to some of the recently listed IPO stocks in the US stock market.
fund facts
- Renaissance IPO ETF was launched on October 14, 2013 and since then the fund has generated around 17% CAGR.
- Total Expense Ratio (Gross): 0.60%
- Listed on NYSE, Renaissance IPO is the ETF ticker IPO.
Renaissance IPO ETF is an ETF that tracks the Renaissance IPO Index. It is designed to house the largest, newly listed US IPO portfolio. Every quarter when ETFs are rebalanced, new IPOs are included and old ones are removed.
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Top Holdings
Some of the top holdings in the Renaissance IPO ETF include Uber Technologies, Snowflake, Zoom Video Communications, Cloudflare, Palantir Technologies, CrowdStrike Holdings, Coinbase Global, DoorDash ( DoorDash) and Airbnb.
Industry Exposure
Renaissance IPO ETF has major exposure to Technology Sector (50.5%), while other allocations include Health Care (21.5%), Financials (9.1%), Consumer Discretionary (8.3%), Communication Services (6.9%), Consumer Staples (1.6%) %) includes industrials (1.3%) and real estate (0.4%). In terms of market cap, the allocation in large cap stocks is 88.5 per cent and in mid cap stocks is 11.5 per cent.
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what is etf
Exchange Traded Fund (ETF) is a variant of mutual fund and it tracks the same index in equal proportion to the shares of the index. You can buy and sell ETF units anytime during trading and hence it is different from mutual funds, especially index funds.
how much is the risk
Investors should be aware of the risks involved before investing in Renaissance IPO ETF. Renaissance IPO ETF lacks trading history, which can result in volatility. Due to the high number of IPOs in certain segments, information technology and financial sector, small and mid capitalization companies, ETFs can be more risky.
(Article: Sunil Dhawan)
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