Volatility surged again in the first quarter of 2026 as markets dealt with a tech sell-off, more tariff turmoil, private credit woes, and war in the Middle East. The flow of initial public offerings (IPOs) in the US started strong but dropped off mid-quarter with the broader market turbulence, while global activity was sustained by a listing frenzy in Hong Kong. Optimism about stability returning in Q2, as well as excitement around major deals like SpaceX, brought some life back to the US public pipeline in late March. Global benchmarks seesawed through the quarter, and new stocks in particular were weighed down by lower appetite for risk. Select spaces outperformed, namely power infrastructure names in the US benefiting from demand for AI data centers and semiconductor plays in Asia. Overall, the Renaissance IPO ETF posted a loss, while the Renaissance International IPO ETF ended with a decent gain.
Performance Snapshot
Below we highlight first 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 3/31/26. Figures for the quarter ended 3/31/26. Returns based on market price. Standard deviation reflects the standard deviation of daily returns during the quarter. 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 standardized quarter end and month end performance for each fund, please click here (IPO) (IPOS) (SPY) (ACWX).
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.
Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Total Returns are calculated using the daily 4:00pm net asset value (NAV). Market price returns reflect the midpoint of the bid/ask spread as of the close of trading on the exchange where Fund shares are listed. Market price returns do not represent the returns you would receive if you traded shares at other times.
IPO ETFs vs. Market Benchmarks: US IPO ETF Underperforms, While International IPO ETF Pulls Ahead
The Renaissance IPO ETF returned -8.2% in Q1, below the SPDR S&P 500 ETF Trust, which returned -4.4%. While broader markets were weighed down by the surging volatility, the IPO ETF was particularly impacted by the shift away from risk, as well as valuation compression in software stocks related to concerns about AI disruption. This resulted in a -3.8 percentage point excess return in the IPO ETF.
The Renaissance International IPO ETF returned 7.9% in Q1, outperforming the iShares MSCI ACWI ex US ETF, which returned 2.0%. The International IPO ETF was boosted by tailwinds in Asia’s semiconductor sector, particularly memory stocks, which offset continued headwinds in Europe. This resulted in a 5.9 percentage point excess return in the International IPO ETF.
The IPO ETFs’ performance came with higher volatility, evidenced by higher standard deviation of daily returns during the quarter compared to the broader market benchmarks (2.1% for IPO vs. 0.9% for SPY; 2.7% for IPOS vs. 1.3% for ACWX). However, their 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 Q1, the IPO ETF returned -8.2%, compared to a -8.1% return for the IPO Index. The modest tracking difference of -0.11% is consistent with expectations for a passive strategy and reflects the impact of management fees, corporate actions and rebalance timing, and cash drag.
The Renaissance International IPO ETF seeks to replicate the performance of the Renaissance International IPO Index, which captures newly public internationally-listed companies. In Q1, the International IPO ETF returned 7.9%, compared to a 4.7% return for the International IPO Index. The sizable tracking difference of 3.27% reflects the expectations for a passive strategy listed above, particularly cash drag, which had a positive rather than negative effect as it provided a buffer against poor trading near quarter end, as well as normal challenges associated with trading in international markets, particularly lot sizes that can result in over- or under-weighting.
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 included AI infrastructure-focused names CoreWeave and Arm, both of which benefited from growing demand for AI data center buildout. Arm also traded up near quarter end after revealing a new in-house chip that is expected to generate $15 billion in revenue by 2031, according to statements from the company’s CEO. The biggest detractors were companies vulnerable to disruption by AI, including Reddit and Rubrik. In its first quarterly rebalance of the year, ten names were added to the IPO ETF, including electrical equipment maker Forgent Power Solutions, solar project firm SOLV Energy, and heavy equipment retailer EquipmentShare.com.
Top contributors in the Renaissance International IPO ETF were companies with ties to Asia’s booming semiconductor sector, including Toshiba’s memory chip unit Kioxia and Japanese metals company JX Advanced Metals. The biggest detractors came from beaten-down European markets, including Stockholm-listed security firm Verisure and Swiss skincare pharma Galderma. In its first quarterly rebalance of the year, eleven names were added to the International IPO ETF, including Chinese memory chip designer GigaDevice Semiconductor, Chinese AI model developer MiniMax Group, and Amsterdam-listed ammo maker CSG.
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. The ETFs invest in companies that have recently completed initial public offerings. These stocks are unseasoned equities lacking trading history, a track record of reporting to investors and widely available research coverage which may result in extreme price volatility. Due to a greater number of IPOs in certain segments, the ETFs may also be subject to information technology and financial sector risk, small and mid-capitalization company risk, and, for the Renaissance International IPO ETF, emerging market risk. The ETFs may hold securities in the form of Depository Receipts, REITs, and Partnership Units, which have greater risks than common shares. The strategies have high portfolio turnover and securities lending risks. The returns of the ETFs may not match the return of the respective indices. The ETFs are classified as non-diversified investment companies subject to concentration risk.
For a prospectus and/or summary prospectus with this and other information, please visit the document center at etfs.renaissancecapital.com. Investors should read the prospectus and consider the investment objectives, risks, charges and expenses 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 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. Net Asset Value (NAV) of the fund is calculated by dividing the total value of all the securities in its portfolio, less any liabilities, by the number of fund shares outstanding. Market Price is the current value at which an asset or service can be bought or sold. Standard Deviation of returns measures the average a return series deviates from its mean. It is often used as a measure of risk. When a fund has a high standard deviation, the predicted range of performance implies greater volatility.