IPOs have performed extraordinarily well this year, particularly when you think about what the share market has done. That is, gone nowhere.
In October 2016, IPOs delivered an average return of 36.8% on the first day of listing and 29.2% over the month, the OnMarket October IPO Report 2016 reveals.
Year-to-date average returns have also been strong at 29.6% for IPOs, against a drop of 3.2% for the broader Australian share market, the report reveals.
Most of the IPO offerings in 2016 have been in the technology, industrial and LIC space, but there appears to be a resurgence of resources listings coming to market, and likely to be more opportunities in the pipeline.
Because IPOs can be so lucrative, they have traditionally been offered to a select few wealthy individuals and institutions. But a new product offering called OnMarket, which is free to investors, is changing that with its innovative technology, the OnMarket app and portal, which enables all investors to directly invest in Australian IPOs with as little as $2000.
The platform, launched by Prime Minister Malcolm Turnbull in October 2015, is the world’s first direct access portal and app for IPOs and equity placements, having attracted a strong Generation X and Y following. Using OnMarket, investors can easily research, bid and invest in IPOs all for free.
And investors too have benefited with handsome gains. In its first year OnMarket has given the Australian public access to 29 IPOs. That’s approximately 1 in 3 of all IPOs in Australia in the corresponding period.
On average, OnMarket IPOs have risen 22% in the three months after listing. That is a lot more than the broader share market has delivered in any quarter this year, or even other asset classes such as property.
That momentum has been maintained from 2015, when the average return of the 93 companies that listed on the ASX that year was 23%. That compared to the S&P/ASX 200, which lost 3% in the same period. A total of $8.6 billion in capital was raised.
Another key point for investors is that any shares that you purchase are automatically uploaded to your existing broking account, whomever your broker may be. Also there are no favourites or preferred investors – mum and dad, institutional, SMSF, first-time – all OnMarket investors are treated equally in IPO allocations. If a stock is oversubscribed, everybody is scaled back by the same proportion, giving all OnMarket users an equal opportunity to participate in IPOs.
By joining OnMarket investors can earn Velocity Points when they bid on IPOs. OnMarket has recently unveiled a worldfirst partnership with Virgin Australia’s Velocity Frequent Flyer program, which will allow investors to earn Velocity Points on investments they make in IPOs via OnMarket.
Velocity members will earn one point for every $4 spent via OnMarket, with no limit on the number of Velocity Points that can be earned. This is a fantastic way for new OnMarket members to build their wealth and get on a plane quicker. You can join OnMarket for free, right here.
And when you think about it, taking action as a retail investor can be a great way to participate in the equity market, even as a novice.
For smaller investors who can’t get a one-on-one meeting with a chief executive or other managers, OnMarket fills the gap, giving you exclusively curated and relevant information on IPOs. You can then make an informed move with as little as $2000.