Booming IPO ETF to shuffle holdings after more than doubling this year

Published Fri, Dec 18 20207:10 AM ESTUpdated Fri, Dec 18 202010:49 AM EST

The high-flying Renaissance IPO exchange-traded fund (IPO) will have its quarterly rebalancing after Friday's closing bell, adding a slew of companies that recently made their public-market debut. Effective Monday, Airbnb , DoorDash , GoodRX and Palantir Technologies , among others, will trade in the ETF. Vir Biotechnology , StoneCo , SolarWinds and Moderna — the ETF's biggest holding — are among the stocks being replaced since they have now been publicly traded for two years. The rebalancing comes as the IPO ETF enjoys its best year ever, with several companies seeing their shares surge after going public amid a broader market comeback in the face of the coronavirus pandemic. "The success of this ETF proves that you can make money on new offerings without getting shares of the IPO," said Kathleen Smith, principal at Renaissance Capital. "The companies in this ETF are very much connected to the real economy." Year to date, the IPO ETF is up more than 114%. In that time, the S & P 500 has gained 15%. The ETF's 2020 gains have been led by outgoing stock Moderna, which is up seven-fold this year and makes up nearly 10% of the entire ETF. Moderna went public on Dec. 7, 2018. This year, the stock has been on fire as the company makes inroads on a Covid-19 vaccine. Zoom Video — which went public last year — is the second-best performing stock in the ETF, gaining more than 400%, as the pandemic led people to communicate more through video conferencing. Neither of these stocks is in the S & P 500. "This ETF gives you exposure to stocks that aren't going to be in the S & P 500 for quite some time," Smith added. It remains to be seen whether the IPO ETF can keep its momentum under the incoming constituents. Airbnb doubled in its public-market debut on Dec. 10. DoorDash — which debuted on Dec. 9 — is up about 57% from its IPO price of $102 per share. Palantir has surged 184% this quarter and is up more than 270% from its IPO price of $7.25 per share on Sept. 30. GoodRx went public on Sept. 23, and is up 36% since then. Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

The Airbnb logo is displayed on the Nasdaq digital billboard in Times Square in New York on December 10, 2020.

Kena Betancur | AFP | Getty Images

The high-flying Renaissance IPO exchange-traded fund (IPO) will have its quarterly rebalancing after Friday's closing bell, adding a slew of companies that recently made their public-market debut.