If you are a retail investor who has been tracking and even participating in the recent surge in stock IPOs (initial public offerings), then you are one disappointed investor.

You have probably seen your hopes of getting full allotment being dashed and have also seen your money getting blocked unnecessarily in the process. The good news is that there is a smarter way to invest in IPOs, its called mutual funds.

For the uninitiated, mutual funds also invest in IPOs, and it should surprise no one if they are among the largest subscribers to IPOs. After all, fund managers have a clear mandate to manage funds on behalf of investors to maximize gains. If that includes investing in IPOs, they will do that as well.

However, unlike the retail investor, fund managers have the luxury to apply for a larger allotment given the magnitude of funds at their disposal. Even if they don't get full allotment, they can afford to have their monies locked up for a month. A retail investor would find it difficult to do the same.

Apart from these, there are several other benefits related to mutual fund investing that individuals cannot hope to duplicate on their own. Chief among them is diversification across a wider sample of stocks and sectors. And when you add professional fund management to it, you have in a mutual fund, a vehicle that has few peers in helping the retail investor fulfill his investment needs. Of course, mutual funds also benefit from large-scale economies that help them lower the impact of buying/selling costs.

So if you have had a difficult and a frustrating time applying for IPOs, you still have mutual funds that allow you a window to the IPO universe. At a time when mutual funds are being increasingly employed to meet more and more financial objectives, investing in IPOs is another objective that can be added to that list.

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