Besides boosting investor confidence and stock prices, the rash of mergers and acquisitions is boosting the returns of mutual funds, the Associated Press reports.
So far this year, $3.46 trillion in M&A deals have taken place around the world, according to Dealogic. The previous record was $3.33 trillion in 2000.
Shares of the buying company typically fall slightly on fears of the risk it will be assuming, while shares of the company being bought typically go up.
One mutual fund that has benefited tremendously from M&As this year is the James Small Cap Fund, up 13.5% this year. It held five companies that have been bought over the summer.
“Companies are awash in cash, and they’re just scratching their heads as to what to do,” said Barry James, manager of the fund and president of James Advantage Funds.