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“Forecasting a Positive IPO Landscape in 2025: Top ETFs to Watch”

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Anticipating a Surge in IPO Activity for 2025

IPO activity is set to pick up in 2025, driven by expected policy shifts under Trump and improved business conditions. Investment bankers are gearing up for a resurgence in global equity capital markets, bolstered by a strong slate of anticipated IPOs, according to Reuters.

With rising economic confidence, a rebound in capital market activity seems likely. Firms planning to go public stand to gain significantly. David Solomon, CEO of Goldman Sachs, shared on CNBC that the prolonged slump in IPOs is almost over, as capital markets begin to show signs of renewed activity ahead of the President-elect’s inauguration.

Factors Behind Market Optimism

Investors are optimistic about a vibrant IPO market in 2025, largely due to the incoming Trump administration’s proposals for reduced corporate taxes and more relaxed regulations. This enthusiasm hints at increased deal-making activity, with Solomon predicting growth in both IPO and merger-and-acquisition (M&A) sectors.

Moreover, Trump’s appointment of Paul Atkins as SEC chair, known for advocating financial deregulation, combined with a unified Republican Congress, could create a less stringent regulatory framework. Such changes could further propel IPO activity during what is expected to be a busy year ahead.

Currently, the Cboe Volatility Index, a measure of investor anxiety, stands at around 16, a relatively low figure suggesting an upcoming rebound in capital markets and a readiness among investors to take risks.

However, some challenges persist; increased federal spending and possible inflation spikes due to proposed tariffs might raise Treasury yields, introducing potential volatility that could temper enthusiasm for the IPO market’s recovery.

ETFs Worth Considering

Given the promising outlook for the IPO market in 2025, increasing exposure to certain Exchange-Traded Funds (ETFs) is a prudent strategy. Here are some options to consider:

First Trust U.S. Equity Opportunities ETF (FPX)

This ETF aims to track the IPOX-100 U.S. Index, comprising 100 securities. It has an asset base of $795.4 million and charges an annual fee of 0.59%.

Over the past three months, FPX has gained 8.52%, with a 25.02% increase noted over the past year.

Renaissance IPO ETF (IPO)

Renaissance IPO ETF seeks to follow the Renaissance IPO Index with 26 securities. The fund has assets totaling $153.7 million and an annual fee of 0.60%.

In the last three months, this ETF has grown by 1.82% and has seen a 15.80% rise over the past year.

First Trust International Equity Opportunities ETF (FPXI)

This fund aims to track the IPOX International Index with 50 securities. It has amassed $133.9 million in assets and charges an annual fee of 0.70%.

FPXI has recorded a loss of 2.31% over the past three months, but it has achieved a gain of 12.74% year-over-year.

Renaissance International IPO ETF (IPOS)

The Renaissance International IPO ETF aims to follow the Renaissance International IPO Index with 35 securities. This fund has $4.4 million in assets and charges an annual fee of 0.80%.

Over the last three months, it has lost 6.65% and 10.46% over the past year.

Stay Informed on Key ETF Data

Want insights on top-performing ETFs and critical market analysis? Zacks offers a free Fund Newsletter that delivers relevant news directly to your inbox.

Additionally, to receive expert stock recommendations, you can download Zacks’ report on the “7 Best Stocks for the Next 30 Days” for free.

Explore ETFs:

First Trust International Equity Opportunities ETF (FPXI): ETF Research Reports

Renaissance IPO ETF (IPO): ETF Research Reports

Renaissance International IPO ETF (IPOS): ETF Research Reports

First Trust US Equity Opportunities ETF (FPX): ETF Research Reports

For the full article, visit Zacks.com.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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