For most of us, the only way into initial public offerings is through mutual funds.
That may not be a bad thing.
A mutual fund can offset the sharp gyrations in IPO share prices by holding a diversity of companies, says Cebra Graves of Morningstar Inc., a Chicago fund-rating company.
But that is only true to an extent, he adds.
Most IPO-linked funds have fallen sharply this year, reflecting a slump for smaller stocks.
There is no overall fund category called "IPO funds," Mr. Graves says.
But many funds do buy shares of IPOs at or near the day they come to market. Buying, and holding these funds, requires a firm strategy and a tolerance for short term loss.
Perhaps the best known fund, the Warburg, Pincus Post Venture Capital Fund (800-888-6878), is down 12.9 percent through April 17. It is far from alone this year:
* Govett Smaller Companies Fund (800-421-5666), down 24.9 percent.
* Strong Small Cap Fund ( 800-368-1030), down 21.5 percent.
* Robertson Stephens MicroCap Growth Fund (800-766-FUND), down 8.18 percent.
* BT Investment Small Cap Fund (800-422-6577), down 16.13 percent through March 31.
These funds dabble in new stock offerings, using IPOs for a percentage of the portfolios.
Some of the funds may now start to look attractive, Graves says, precisely because small company stocks have been so battered this year.