Europe IPO ETF Launches

First Trust launches a companion fund to two existing ETFs.

Today First Trust is launching its third ETF focused on initial public offerings and using an index from IPOX, a firm specializing in IPO-related financial products. The First Trust IPOX Europe Equity Opportunities ETF (FPXE) tracks an index of the 100 largest and most liquid European IPOs.

FPXE lists on the Nasdaq and comes with an expense ratio of 0.70%.

Eligible companies must be domiciled and listed in a developed market in Europe. Those that qualify for inclusion can be added after their sixth trading day and can remain in the index for 1,000 trading days from their initial listing.

The prospectus notes that companies with less than $50 million in market capitalization, less than 15% available free-float market capitalization or severe IPO underpricing issues are all excluded from consideration for the index.

From the remaining pool, the index methodology selects the 100 largest securities based on market capitalization. It also uses market-cap weighting, subject to caps on individual component weights, the prospectus says.

FPXE joins the $1.2 billion First Trust U.S. Equity Opportunities ETF (FPX) and the $27.7 million First Trust International IPO ETF (FPXI).

Contact Heather Bell at [email protected]