SchusterWatch #795 - H1 2025 Review
IPOX® Indexes record stellar H1/2025, top Benchmarks.
IPOX® 100 U.S.: +20.90%, IPOX® 100 E.U.: +21.27%, IPOX® Intern’l: +19.02%.
IPOX® China soars +40%. IPOX® SPAC gains as SPACs revive.
562 Global IPOs raised $61 billion in H1, with $17 billion raised on U.S. markets.
IPOX® H1 2025 REVIEW: More certainty about the future path of inflation with long-term U.S. yields stabilizing, good average earnings as well as AI enthusiasm drove risk appetite for equites during H1/2025, while occasional spikes in risk linked to geopolitics and trade remained short-lived. The IPOX® Indexes benefited from this backdrop and surged, closing out the month at respective Highs. Corporate action activity, including IPOs, Spin-offs and IPO M&A rose sharply.
UNITED STATES: THE NEW GENERATION MODELLED IN IPOX® SURGED … AND FOR GOOD REASON: In the U.S., the IPOX® 100 U.S. (ETF: FPX) – gold standard for the performance of the most significant U.S. IPOs sourced by IPOX® - surged +20.90%, outpacing the U.S. stock market benchmarks, including the S&P 500 (SPX), tech-gauge Nasdaq 100 (NDX) and mid/small-cap gauges S&P Mid-Cap (MID) and Russell 2000 (RTY) by between +1297 bps. (vs. NDX) and +2337 bps. (vs. RTY). With more than 70% of firms exceeding estimates during both reporting cycles, Fundamentals drove the big strength. Amid the AI revolution, a diversified mix of portfolio holdings across sectors surged, with nextgen online brokerage Robinhood (HOOD US: +151.29%), defense/national security play Palantir (PLTR US: +80.25%), electrical power behemoth Spin-off GE Vernova (GEV US: +60.87%) and food delivery platform Doordash (DASH US: +46.95%) leading the way, while holdings biotech SpringWorks Therapeutics (SWTS US: +30.06%) and financial Mr. Cooper (COOP US: +55.41%) were acquired at significant premia. Key 2022/2023 spin-off deals of consumer staple Kenvue (KVUE US: -1.97%) and imaging firm GE Healthcare (GEHC US: -5.26%) lagged.
IPOX® MARKETS OUTSIDE THE U.S. BUYOED: CHINA, EUROPE: Strong average earnings also drove strength across our non-U.S. domiciled portfolio holdings pooled in the IPOX® Global China (CNI) and IPOX® 100 Europe (ETF: FPXE), e.g. This drove the IPOX® International (ETF: FPXI) to a YTD gain of +19.58%, +256 bps. YTD ahead of its benchmark. A diversified mix of firms rose strongly, including key China consumer stock and best-ever-Hong Kong IPO PopMart (9992 HK: +197.38%), biotechs SKB (6990 HK: +100.37%) and Verona Pharma (VRNA US: +103.66%), as well a slew of high-potential growth IPOs such as radar maker Hensoldt (HAG GY: +182.32%), wind turbine focused Spin-off Siemens Energy (ENR GY: +94.64%), leading Italian gaming operator Lottomatica (LTMC IM: +83.49%), Germany’s IT solutions provider Ionos (IOS GY: +82.61%) and Japan’s Rakuten Bank (5838 JP: +49.66%). Laggards included stocks originating from some of the leading European consumer brands, such as Swiss sneaker firm On Holdings (ON US: -4.97%), sandals maker Birkenstock (BIRK US: -13.20%), as well as luxury car producer Porsche (P911 GY: -28.21%).
IPOX® SPAC: The Index closed the first half of 2025 up +10.82%. At least 29 SPACs announced merger targets in H1 2025, with Cantor Equity Partners (CEP US: +167.47%) and its deal with bitcoin treasury firm Twenty One Capital standing out, marking the first meaningful announcement pop since the peak SPAC cycle in 2021. At least 21 SPACs completed business combinations, including the largest deal: SK Growth Opportunities’ merger with trading platform WeBull (BULL US: -9.74%). A total of 63 new SPAC IPOs launched in the U.S. during the first half raising over $11 billion, already surpassing the full-year totals for both 2022 and 2023, respectively. At least 11 deSPACs have been acquired or are pending acquisition in 2025, including the most recent proposal by CoreWeave to acquire 2022 deSPAC Core Scientific (CORZ US: +21.49%). Notably, Goldman Sachs re-entered the SPAC underwriting market after a three-year self-imposed ban.
ECM DEALS: In a strong first half for new listings, 562 IPOs raised $61 billion in global markets and so far gained an average of +46.05% from their offer price (Median: +8.59%). The five largest IPOs of H1 2025 were the H-Shares listing of Chinese battery maker CATL (3750 HK: +25.17%, $5.26b), Japanese precious metals firm JX Advanced Metals (5016 JP: -1.59%, $2.88b), U.S. LNG firm Venture Global (VG US: -37.68%, $1.75b), AI infrastructure provider CoreWeave (CRWV US: +307.65%, $1.57b), and Chinese biopharma Jiangsu Hengrui (1276 HK: +22.13%, $1.46b).
114 companies listed on U.S. markets, raising $17 billion. Performance showed a notable skew, with the average U.S. IPO gaining +26.68% while the median deal declined -5.45%. Further large U.S. listings included cybersecurity firm SailPoint (SAIL US: -0.61%, $1.38b), stablecoin provider Circle (CRCL US: +484.81%, $1.21b), neobank Chime (CHYM US: +27.81%, $994m), Smartstop Self Storage REIT (SMA US: +20.77%, $932m), brokerage eToro (ETOR US: +28.06%, $713m), and space defense firm Karman (KRMN US: +128.95%, $582m). Looking ahead, we expect activity to pick up after the typically quiet summer months.
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