Renaissance Capital Corp. is expected to launch as early as next week one of the first mutual funds that will focus almost exclusively on initial public offerings.
The IPO Plus Aftermarket Fund will offer buyers a way to invest in companies as they go public, an area from which small investors traditionally have been excluded.
Greenwich, Conn.-based Renaissance, which provides IPO research to institutional investors, received approval to market the fund from the Securities and Exchange Commission on Dec. 18. Renaissance officials declined to comment.
"A fund that is purely IPOs is going to be extremely volatile and could easily lose or gain 50% in six months," said Russel Kinnel, equity fund editor for Morningstar Inc., a Chicago-based research firm.