IPO ETFs in Focus as Renaissance Fund Adds New Listings

What are IPO ETFs?

IPO exchange-traded funds are designed to give investors exposure to companies that have recently gone public, without requiring direct participation in individual listings.

Instead of buying into a single IPO, investors can access a basket of newly listed stocks through one security. These funds typically track indices that screen for size, liquidity, and time since listing.

The approach spreads risk across multiple names while still capturing the early growth phase that often follows a company’s market debut. It also provides liquidity, allowing investors to enter or exit positions during regular trading hours, unlike traditional IPO allocations that may come with lockups or limited access.

Performance in the category has closely followed broader market conditions.

The Renaissance IPO ETF, for instance, has delivered strong gains during periods of heavy issuance, including returns above 100 percent in 2020 and more than 50 percent in 2023.

Those rallies were followed by sharp reversals, including a 57 percent drop in 2022 as higher interest rates weighed on growth stocks.

Recent performance has been more subdued. The fund is up about 3.8 percent year-to-date and nearly 14 percent over the past year, modestly ahead of mid-cap growth peers.

Industry activity drives new additions

Forgent Power (NYSE:FPS), one of the fund’s incoming constituents, showcases the growing weight of data center infrastructure in equity markets.

The company, which went public in a US$1.5 billion IPO, manufactures electrical distribution systems used in data centers and industrial facilities, positioning it to benefit from rising power demand tied to artificial intelligence.

In its latest quarterly, Forgent reported quarterly revenue of US$296 million, up 69 percent year over year, with bookings rising by 268 percent to US$762 million.

Atmus Filtration Technologies (NYSE:ATMU), another addition to the March 23 slate, adds a defensive industrial profile to the mix.

Spun out of Cummins (NYSE:CMI) in 2023 after decades within the engine maker, Atmus produces filtration systems used across commercial trucking, agriculture, construction and power generation equipment. A large majority of its revenue is derived from aftermarket sales, where filters are replaced over time, providing a steady stream of repeat business.

That model has helped the company maintain its consistent performance. The company recently reported revenue of US$446.6 million, up 9.8 percent year on year, exceeding analyst expectations and delivering a solid earnings beat.

LandBridge (NYSE:LB), on the other hand, links IPO flows to US energy production and infrastructure buildout.

The company controls large tracts of surface acreage in the Permian Basin, one of the most active oil and gas regions in the country. Its model centers on monetizing land through multiple revenue streams, including royalties, resource sales and infrastructure development tied to drilling activity.

Since its 2024 listing, LandBridge shares have at times risen more than 300 percent from their IPO price, though trading has been marked by sharp swings.

Operationally, the company has posted rapid growth, including a 56 percent increase in quarterly revenue and a 180 percent jump in earnings. It has also benefited from ties to water infrastructure networks supporting oil and gas production.

Limited competition in a cyclical segment

IPO ETFs remain a small part of the broader ETF market, with few direct competitors to the Renaissance fund in the US.

Due to the cyclical nature of IPO issuance, activity tends to accelerate during periods of strong equity markets and retreat when conditions tighten, limiting consistent inflows into IPO-focused products.

Still, the funds provide a distinct entry point into emerging companies and sectors before they are absorbed into major indices.

The appeal of IPO ETFs lies in access to early-stage growth, particularly in recently-active sectors such as artificial intelligence, electrification, and energy infrastructure.