The second quarter of 2025 was marked by heightened volatility, shifting US tariff policy, and early signs of an initial public offering (IPO) market recovery. Global benchmarks were cratered by the sell-off in April, sinking to year-to-date lows as the VIX Volatility Index reached a post-pandemic high, but tariff pauses and positive inflation data sparked a rally that carried through the back half of the quarter. The Renaissance IPO ETFs delivered strong trading against this backdrop, outperforming broader market benchmarks.
Performance Snapshot
Below we highlight second quarter performance of the Renaissance IPO ETF (NYSE: IPO) and the Renaissance International IPO ETF (NYSE: IPOS). We frame this against the performance of the SPDR S&P 500 ETF Trust (SPY) and the iShares MSCI ACWI ex US ETF (ACWX), respectively, as well as the IPO ETFs' underlying indices, the Renaissance IPO Index (IPOUSA) and the Renaissance International IPO Index (IPOXUS).
Source: Renaissance Capital, based on data from Yahoo Finance as of 6/30/25. Figures for the quarter ended 6/30/25. Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. For the most recent quarter end performance for the fund, please click here (IPO) (IPOS).
All funds are managed differently and do not react the same to economic or market events. This article does not aim to make direct fund-to-fund comparisons. The investment objectives, strategies, policies, or restrictions of other funds may differ and more information can be found in their respective prospectuses. Therefore, we generally do not believe it is possible to make direct fund to fund comparisons in an effort to highlight the benefits of a fund versus another similarly managed fund.
IPO ETFs vs. Market Benchmarks: Both IPO ETFs Outperform Broader Markets
The Renaissance IPO ETF returned +19.8% in Q2, significantly outperforming the SPDR S&P 500 ETF Trust, which returned +10.8%. While both the IPO ETF and the S&P 500 ETF benefited from the broader market recovery and tailwinds in the tech sector, particularly related to AI, the IPO ETF's concentration of new stocks in fast-growing spaces boosted performance as investors jumped back into growth names. This resulted in a 9.1 percentage point excess return in the IPO ETF.
The Renaissance International IPO ETF returned +15.9% in Q2, a solid lead over the iShares MSCI ACWI ex US ETF, which returned +11.5%. Both the International IPO ETF and the ACWI ex US ETF benefited from rallies in Hong Kong, Japan, and Europe. The International IPO ETF was further boosted by strong trading from new stocks in these markets, as well as Indonesia, that aren't currently included in the ACWI ex US ETF. This resulted in a 4.4 percentage point excess return in the International IPO ETF.
While this outperformance often comes with higher volatility, the IPO ETFs' differentiated exposure can complement broad-market strategies by capturing a distinct segment of public equities in US and international markets.
IPO ETFs vs. IPO Indices: Outcomes of Replicating Index Performance
The Renaissance IPO ETF seeks to replicate the performance of the Renaissance IPO Index, which captures newly public US-listed companies. In Q2, the IPO Index returned +19.7%, compared to a +19.8% return for the IPO ETF. The modest tracking difference of +0.10% is consistent with expectations for a passive strategy and reflects the impact of management fees, rebalance timing, and cash drag, the latter of which had a positive rather than negative effect as it provided a buffer against some poor trading near quarter end.
The Renaissance International IPO ETF seeks to replicate the performance of the Renaissance International IPO Index, which captures newly public internationally-listed companies. In Q2, the International IPO Index returned +16.1%, compared to a +15.9% return for the International IPO ETF. The tracking difference of -0.22% reflects the expectations for a passive strategy listed above, as well as normal challenges associated with trading in international markets.
Importantly, both funds continued to provide accurate exposure to the indices' core holdings, offering investors efficient access to the new stock asset class in both US and international markets.
Attribution Highlights
Top contributors in the Renaissance IPO ETF were all companies with strong ties to AI, including precision medicine platform Tempus AI and chipmakers Astera Labs and Arm. The biggest detractors included consumer health company Kenvue, Kazakhstan-based "super app" Kaspi.kz, and restaurant chain CAVA. In its second quarterly rebalance of the year, one name was added to the IPO ETF, AI infrastructure provider CoreWeave.
Top contributors in the Renaissance International IPO ETF included Swiss skincare company Galderma, Indonesian gold miner Amman Mineral, and Italian lottery operator Lottomatica. The biggest detractors were Indonesian “super app” GoTo Group, Amsterdam-listed private equity firm CVC Capital Partners, and Japanese railway operator Tokyo Metro. In its second quarterly rebalance of the year, five names were added to the International IPO ETF, including Chinese battery maker CATL and Japanese metals company JX Advanced Metals.
The IPO ETFs aim to offer a systematic investment approach, novel diversification, and dynamic access to the transformative period post-IPO. We believe that the defined three-year holding period makes these the go-to ETFs for investors interested in new stocks, as they include names not found in most core portfolios.
Investors interested in the ETF can access fact sheets, performance data, and holdings on our website, or contact our team for further information.
Investments in the Renaissance IPO ETF, symbol "IPO", and the Renaissance International IPO ETF, symbol "IPOS" (the "ETFs") are subject to investment risk, including possible loss of the principal amounts invested. Investors should consider the investment objectives, risks, charges and expenses carefully before investing.
For a prospectus and/or summary prospectus with this and other information, please visit the document center at etfs.renaissancecapital.com. Read the prospectus carefully before investing.
Companies mentioned in this article may be held by the funds. For a list of the Renaissance IPO ETF’s top 10 holdings, please click here. For a list of the Renaissance International IPO ETF's top 10 holdings, please click here. Fund holdings are subject to change.
Foreside Fund Services, LLC, is the distributor for the ETFs. For additional information, contact Foreside at 1-866-486-6645.
Definitions
The Cboe Volatility Index, also known as the VIX Index (VIX), is a calculation designed by Cboe Global Markets to produce a measure of constant, 30-day expected volatility of the US stock market. The Renaissance IPO Index (IPOUSA) is a portfolio of companies that have recently completed an initial public offering and are listed on a US exchange. The Renaissance International IPO Index (IPOXUS) is a portfolio of companies that have recently completed an initial public offering and are listed on a non-US exchange.
Excess Return is the difference between the return of a portfolio and the return of a specified benchmark over a given period. A positive excess return indicates outperformance over a specified benchmark. Tracking Difference is the difference between the return of a portfolio and the return of its underlying index over a given period.