SchusterWatch #849 - Q2 2026 Review
The New Generation Leads Advance: ETFs tracking IPOX® soar during Q2.
Year-to-Date Price Returns:
U.S. (FPX): +25.85%; ex. U.S. (FPXI): +39.71%.
Big Movers: 285A, SNDK, STX, APGE, 2513 HK, 9903 HK, 3986 HK, TPRO IM.
The Golden Age of IPOs is here: IPO deal flow soars during Q2; U.S. in focus.
HIGHLIGHT OF THE QUARTER: On Thursday, May 28, IPOX® CEO J. Schuster rang the NYSE Opening Bell to mark the 20-year anniversary of the pioneering First Trust U.S. Equity Opportunities ETF (FPX), which is tied to our flagship IPOX® 100 U.S. Index (BBG: IPXO). We want to thank First Trust Portfolios, the New York Stock Exchange, and all our investors and partners for making this such a successful event.
QUARTERLY REVIEW: Strong earnings, the perceived positive impact of generational trends around electrification, biotech innovation, and AI, as well as a more muted inflation outlook, increasingly dominated global equities trading over geopolitical turmoil and inflation concerns during Q2 2026. The New Generation of equities pooled in IPOX® were the main beneficiaries of increasing risk appetite, with select strategies recording one of their best quarters in 20 years.
UNITED STATES: The IPOX® 100 U.S. Index (IPXO), key U.S. innovation gauge tracked by the diversified First Trust U.S. Equity Opportunities ETF (ticker: FPX), continued its stellar performance record during Q2, adding +29.63% for the quarter and bringing YTD performance to +25.85%. This extended its relative YTD lead versus the benchmark S&P 500 (SPX) to a massive +1,530 bps. Outsized average corporate results, IPO-related M&A activity, and our strategic tilt toward the top themes set to drive future U.S. innovation contributed to the strong showing, with substantial upside recorded by storage-device maker Sandisk (SNDK: +243.87%) and IPO M&A name Seagate Technologies (STX US: +173.19%). After the buyout of biotech company Nuvalent (NUVL), biotech company Apogee Therapeutics (APGE US: +46.86%) became our second IPOX® 100 U.S. (ETF: FPX) portfolio stock to be acquired at a significant premium by large pharma in Q2, underscoring the continued attractiveness of the IPOX® 100 U.S. (ETF: FPX) as a target market for corporate M&A.
INTERNATIONAL: The IPOX® International Index (IPXI) advanced by +37.76% to +39.71% YTD during Q2, extending its relative lead versus the international market to a massive +2,750 bps YTD, with the associated First Trust International Equity Opportunities ETF (ticker: FPXI) tracking these gains and soaring to fresh all-time highs. Exposure to the New Generation of firms driving innovation in AI and technology led to the strong showing, including Japan’s Kioxia (285A: +270.02%), while best-in-class APAC and European AI and semiconductor exposures, such as Knowledge Atlas (2513 HK: +103.39%), Shanghai Iluvator (9913 HK: +161.74%), GigaDevice Semiconductor (3986 HK: +147.02%), and Technoprobe (TPRO IM: +144.40%), contributed to the strong showing of the strategy during the quarter.
THE IPOX® SPAC INDEX: The Index gained +21.16% to +20.22% YTD during Q2. LiDAR traffic management firm Ouster (OUST US: +240.34%) ranked on top, more than tripling on growing adoption of LiDAR technology, and its Buy America-compliant portfolio. Biopharma Oculis (OCS US: -47.84%) fell most after its late-stage trial failed to meet its endpoint. At least 28 SPACs announced merger targets, including deals such as Axiom Intelligence Acquisition (AXIN US) with German-Swiss quantum computing-as-a-service company Terra Quantum. At least 11 SPACs completed business combinations, including Willow Lane Acquisition's merger with GPU cloud firm Boost Run (BRUN US). 55 new SPAC IPOs launched in the U.S. during Q2.
Q2 ECM REVIEW: 291 firms went public, raising a combined $143 billion. Firms gained an average of +89.65% from offer price to quarter-end close (median: +21.62%). The U.S. market dominated, representing >80% of global proceeds, underscoring the continued rotation of large, best-in-class private companies towards U.S. public markets.
The defining IPO was satellite communications firm SpaceX (SPCX US: +21.62%), the largest public debut ever, raising $86.25 billion. Other large U.S. deals included chipmaker Cerebras (CBRS US: +16.84%, $6.38B), gas engine maker Innio (INIO US: +41.93%, $2.79B), air quality specialist Madison Air Solutions (MAIR US: +37.63%, $2.57B), geothermal energy firm Fervo Energy (FRVO US: +17.67%, $2.17B), quantum computing firm Quantinuum (QNT US: +21.40%, $1.71B), and nuclear reactor firm X-Energy (XE US: -18.22%, $1.02B). Outside the U.S., large deals included circuit board maker Victory Giant Technology (2476 HK: +55.33%, $2.95B), Canadian generics firm Apotex Health (APTX CN: +34.67%, $1.08B), and electronics maker Lingyi iTech (1688 HK: -7.86%, $1.05B).
Best performers were clustered around defense and biotech, such as Arxis (ARXS US: +64.29%, $1.3 billion) and British defense firm Doncasters (DPC US: +56.85%, $919 million). IPO M&A also propelled biotech IPOs, including Hemab Therapeutics (COAG US: +104.06%, $347 million), Alamar Biosciences (ALMR US: +63.35%, $220 million), Kardigan (KARD US: +61.88%, $460 million), Parabilis Medicines (PBLS US: +45.95%, $771 million), Kailera (KLRA US: +35.44%, $719 million), and Seaport Therapeutics (SPTX US: +25.11%, $268 million).
Looking ahead, we expect large-cap IPOs during H2 2026, including AI model developer Anthropic, sandwich chain Jersey Mike’s, restaurant franchisor Inspire Brands, data analytics platform Databricks, wearable ring maker Oura, fitness tracking platform Strava, social networking platform Discord, crypto exchange Kraken and micromobility operator Lime and others.
