New Issues are offerings of securities from companies who are looking to make money.
Initial Public Offerings, or IPOs, are the most commonly known New Issues. An IPO is a company’s first sale of stock to the public. Securities offered in an IPO are often those of young companies who want to raise money to support the growth of their business.
Secondary Offerings are another type of New Issue which involve the additional sale of securities of companies that have preciously “gone public,” and frequently involves larger, more mature companies selling securities at a discount to their recent trading price. No commission is paid by those who invest in IPOs and Secondary Offerings.
New Issues of closed end funds usually contain underwriting fees which represent a load (cost) to buyers. Many closed end funds have initial expenses that add up to 6%, which means just 94% of the buyer’s money is invested.