Hot IPO trade: Hedge funds love FitBit, hate Etsy

A Fitbit Zip wireless activity tracker at the Wearable Expo in Tokyo, last January.
Kiyoshi Ota | Bloomberg | Getty Images

Investors are wondering what has happened to once red-hot IPOs like Shake Shack and El Pollo Loco, which have gotten killed over the last three months even as the rest of the market holds up.

The Renaissance Capital IPO ETF, tracking shares that came to market the last two years, is off nearly 6 percent in three months and is up just 1 percent on the year now. Alibaba is leading the way, off 28 percent in 2015.

But hedge funds still have their favorite IPO shares, which they are scooping up amid the slaughter. Here's what the smart money is buying and selling...