Daily Brief 12/11 – Green ETFs and IPOs continue hot

JPM Carbon Fund: Per Bloomberg, “J.P. Morgan Asset Management is throwing its hat into the rapidly expanding universe of green funds. The JPMorgan Carbon Transition U.S. Equity exchange-traded fund (JCTR) will begin trading on the New York Stock Exchange Thursday. The firm’s first U.S. ETF focused on environmental, social and governance (ESG) standards will be passively managed and track a gauge that screens the Russell 1000 Index for companies seeking to reduce their carbon footprint.”

So the ETF doesn’t consist of ESG heroes just yet, rather companies that are seeking to become better at following ESG protocols. U.S. ESG funds have had a record $27.9 billion worth of inflows in 2020, according to
Bloomberg Intelligence data. Those ETFs currently have about $61
billion in assets.

Here are the top 10 holdings of the ETF:

Here are the top holdings of the Russell 1000 which the ETF screens for reference.

The top 5 holdings are the same, but 6-10 we start to see some changes.

IPOs continue hot: According to Bloomberg, among 200 firms that went public this year, 80 have yet to earn money, but their stocks have surged an average of 27% on the first trading day.

“It feels like the markets are partying like 1999 all over again,” said Gene Goldman, chief investment officer at Cetera Financial Group. “Companies are using this opportunity because the market is so thirsty.”

Investing in the Renaissance IPO exchange-traded fund at the start of the year would have yielded 108%, more than seven times the returns of the S&P 500 Index during the same time.

Airbnb went public yesterday and subsequently popped 122.8%. You can see our valuation of the company here:

https://millennialmkts.com/2020/12/10/airbnb-valuation-growth-is-expensive-in-this-market/

What we’re reading and charts and tweets we like:

China’s Xi Ramps Up Control of Private Sector. ‘We Have No Choice but to Follow the Party.’ – WSJ

This could be big

TOYOTA MOTORS HAS DEVELOPED A EV BATTERY THAT CAN FULLY CHARGE IN 10 MINS AND GO 300 MILES ON A SINGLE CHARGE – NIKKEI

— FXHedge (@Fxhedgers) December 10, 2020

Don’t bet against house mouse

Updated IPO craze

2020 IPOs: 1st Day vs. Offering Price…
CureVac $CVAC: +249%
BigCommerce $BIGC: +201%
Berkley $BLI: +198%
Seer $SEER: +197%
Agora $API: +152%
Lemonade $LMND: +139%
Ncino $NCNO: +133%
Vroom $VRM: +118%
Airbnb $ABNB: +112%
Snowflake $SNOW: +112%
KE $BEKE: +87%
DoorDash $DASH: +86%

— Charlie Bilello (@charliebilello) December 10, 2020

The race to Herd immunity

Top Nasdaq winners

Crazy IPO market driving crazy valuations

To briefly put on my value investor/goldbug/crank hat, at $90 billion in market cap AirBnB is worth more than Mariott, Hilton, Hyatt, and Accor combined, but generated (-$0.3bn) in EBITDA vs. $6.3bn

— Quantian (@quantian1) December 10, 2020

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