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IPO Market Back On Track: ETFs To Tap

After several lackluster quarters, the U.S. IPO market gained momentum in the second quarter of 2017, with 52 companies completing their IPOs raising nearly $11 billion. This marks the most active quarter in two years as per IPO research intelligence Renaissance Capital. The number is well above 25 IPOs in the first quarter and 34 in the year-ago quarter.

In terms of deals, healthcare companies topped the list with 14 deals worth $1 billion, closely followed by technology companies with 12 deals worth $1.6 billion. The financial sector was in third position with eight deals valued at $0.9 billion.

The upsurge were credited to a surging stock market, improving economic fundamentals and increasing consumer sentiment that led to the appeal for new stocks with high growth potential. Most of the companies that went public last quarter have outperformed the broader markets and often generated over 40% returns.

The IPOs in the consumer discretionary sector led the way higher with the fast-growing specialty retailer Floor and Decor Holdings FND returning 87% since its debut on April 26. Technology IPOs also outperformed with a low-code software developer Appian Corp. (APPN - Free Report) surging 51% since its debut on May 24 and a computing memory maker SMART Global Holdings (SGH - Free Report) climbing 47.2% since it went public on May 23. In the healthcare space, Biohaven Pharmaceuticals (BHVN - Free Report) and Athenex are up 47.1% and 45.5%, respectively since their IPOs.

Meanwhile, the largest IPO...