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November 24, 2006
NEW YORK — Investors observing the seemingly uninterrupted parade of corporate buyout announcements might wonder how much the deals and the attendant rise in stock prices might boost returns in their mutual funds. The answer lies in the type of funds they own.
Acquisition announcements often inject confidence into investor sentiment because the deals generally reflect a sense that the stock market is offering bargains on some desirable businesses. That notion can send stocks up in general, which of course benefits many mutual funds. And while a bevy of merger announcements has prompted questions about whether the market is overvaluing some properties, mutual funds returns for the year are likely to get a boost from all the dealmaking.
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