2025 was a slow year for initial public offerings (IPOs), with just 61 companies going public in the U.S. But in 2026, Goldman Sachs is forecasting "a record year for IPOs in absolute dollar value," as the artificial intelligence (AI) titans OpenAI and Anthropic race to tap into public markets first.
Likewise, The Wall Street Journal predicts a "blockbuster year" for IPOs, with Elon Musk's SpaceX also rumored to be preparing to go public. SpaceX's IPO could hit over $1 trillion, according to people familiar with the matter, while OpenAI is also laying the groundwork for a $1 trillion valuation.
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Given how OpenAI's ChatGPT not only kicked off the four-year AI frenzy with its launch in 2022, but also shattered records as the fastest app to gain 100 million users (reaching the milestone in two months, compared to 2.5 years for Meta Platforms' Instagram and nine months for ByteDance's TikTok), it's easy to envision this enthusiasm driving a white-hot IPO. The average IPO had a first-day return of 15% this year, according to Goldman Sachs, which the bank noted is in line with historical norms.
But as with any investment vehicle that can bring lightning-fast profits, IPOs can be dangerous. Shares of Beyond Meat are down 98% from their 2019 IPO, despite an initial surge. Shares of Airbnb are down 17% since its 2019 IPO, despite its hundreds of millions of users. Even the ultimately successful stocks can fall substantially at first. Shares of Meta Platforms, then called Facebook, fell 20% in the days after its 2012 IPO.
How to gain exposure to IPOs while managing risk
For investors seeking to profit from this wave of IPO activity without selecting a single company, a fund to consider is the Renaissance IPO ETF (IPO 2.19%).
NYSEMKT: IPO
Key Data Points
The exchange-traded fund is designed to provide exposure to recently public, U.S.-listed companies. It holds stocks for three years after their IPO, rebalancing each quarter as newly public stocks replace companies that have passed the three-year mark.
This strategy allows investors to tap into post-IPO momentum from newly listed U.S. stocks, but also exposes them to drawdowns that can be very common in the days, weeks, or even years following IPOs. The advantage is that this fund provides exposure with a single security -- investors don't need to research and try to time multiple individual IPOs to play the trend.
Since its 2013 inception, the fund has underperformed the S&P 500, with a 127% gain compared to a return of over 350% for the index. However, in times of white-hot IPO activity such as 2020, the fund has significantly outperformed the S&P 500. It's very possible that, with 2026 shaping up to be a huge year for IPOs, this fund is poised to shine once more.
For investors with above-average risk tolerance, this fund's 0.6% expense ratio is a reasonable price to pay for a diversified way to tap into a likely record year for IPO activity. Over time, however, the fund seems likely to continue underperforming the S&P 500, which will naturally include the biggest newly listed companies among the 500 it tracks. Long-term investors might be disappointed with this ETF.
