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Mutual Fund Returns and IPOs

There is no direct impact, but the market moods do affect funds

With so many IPOs lined up, does it impact the performance of mutual funds? Will it not impact my mutual fund investments?
-Vrinda Vasudev

IPO investing does not impact mutual funds. The expectation of an IPO investor is very different from that of a mutual fund investor. The state of the mutual fund industry, which is witnessing steady redemption, has nothing to do with IPOs. Presently, the fund industry is at the crossroads where it is facing challenges on back of regulatory changes as well as steady exit of investors because of redemptions. The industry is working out on ways to arrest redemptions and rework on its distribution strategy to cope with changes.



This article was originally published on November 26, 2010.

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