Benjamin Felix

These are types of stocks that they're more volatile and they tend to lag behind the broader market.

If you can choose to avoid them, you might want to.

A really interesting thing is that Dimensional's paper ends in 2018, but their finding is pretty easy to update and replicate because there are actually two ETFs that invest in IPOs.

So they invest in IPOs when they list and they hold them for three years and then sell them.

There's the Renaissance IPO ETF, which exclusively invests in large US IPOs.

And as I said, they hold them for three years and then sell them.

It has underperformed VTI, which just tracks the total US market by more than six percentage points annualized since inception in October, 2013.

As expected, if you run a quick regression, which I did in Portfolio Visualizer, it behaves like a portfolio of small stocks with high prices, low profitability, and aggressive asset growth.

And then there's another one that has international stocks.

This one has been listed since 2014.

Its ticker is IPOS, which I think is quite a comical or unfortunate ticker choice.

It's also underperformed by a wide margin relative to just an index.

You can also see similar underperformance if you look at Jay Ritter's data.

His data from 1980 to 2023 shows similar underperformance.

So that's just a broad picture of IPO data.

There are different ways you can slice it.

And I'll talk about that from a couple of different perspectives in a minute.

But first I want to talk about low float IPOs.

Before I do that, do you guys have any comments?

Not bad.