The performance of initial public offerings (IPOs) this year had been lackluster before August, trailing US stocks overall, based on an ETF tracking these securities vs. the S&P 500 Index. The relatively weak results for IPO didn’t surprise analysts, who’ve been arguing that private equity has been stealing the thunder of public offerings and keeping the best new companies from going public. But in recent weeks, the performance of IPOs generally has turned up, and is now leading the equities market by a wide margin in 2025, based on a pair of ETFs.

Over the past month, Renaissance IPO ETF (IPO) has rallied sharply, and is now up 22.0% year to date through Tuesday’s close (Sep. 16). The latest surge in performance has lifted the fund’s 2025 advance far ahead of the broad market via SPDR S&P 500 ETF (SPY), which is ahead by 13.3% this year.
 

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The relative strength in IPOs is a bit surprising, given the recent negative news about the decline in companies going public. Earlier this week, a business law professor at the University of Calgary wrote in The New York Times: “A growing number of American companies are refusing to participate in public markets at all,” and instead are “are choosing to remain private instead.”

Most everyday investors can no longer buy into some of the country’s fastest-growing businesses. The stock market’s impressive performance, on which so many retirements depend, is growing increasingly tenuous, as its returns rely on an increasingly narrow slice of the economy. Innovation is declining. Economic concentration is increasing.

Morgan Stanely recently noted: “Over the last decade private markets have outperformed versus public markets.” Meanwhile, assets under management for portfolios of private debt and equity have jumped 20% a year since 2018, reports McKinsey Global.

The growing popularity of private equity may pose a challenge for IPOs, but it’s not obvious at the moment. As Business Insider reports, “Public investors are clamoring for new IPOs, and startups are steadily coming back to the market.” The news site advises: “Last week marked the busiest period for IPOs since 2021, with over $4 billion raised across 6 deals.”

CNBC also notes that “The IPO market has bounced back in recent months after an extended dry spell due to high inflation and rising interest rates.”

How long can the party last? No one knows, but the bullish technical profile of Renaissance IPO ETF (IPO) suggests the rebound has room to run.
 

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The latest numbers on new public offerings suggest as much. Yahoo Finance reports: “Six companies went public over five days that each raised more than $100 million — something that hasn’t happened since November 2021, according to Renaissance Capital. Collectively, IPOs from these companies raised $4.4 billion.”

“The pickup [in IPOs] is here,” Renaissance Capital director of investment strategies Avery Marquez said. “Things could change very quickly. Right now, it looks like we’re in for a very active fall.”

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