The

IPO calendar might be

full, but that doesn't guarantee profits for the mutual funds lining up to buy them.

In the first two weeks of this month, about 60 companies will have their initial public offering, a hair's-breadth away from the 61 IPOs for all of March, the busiest month of debuts this year.

This marks a resounding resurgence in the IPO market, which had slowed to a near trickle after the

Nasdaq Composite peaked in March and more investors started looking at young and speculative companies as, well, young and speculative. But many IPO and fund watchers warn that the new pickings may not exactly constitute a bumper crop.

"Some of the companies we're seeing are high quality, but there is considerable risk in the current IPO market, too. You need to be discerning," says Seth Kirkham, co-manager of the no-load

(GFWWX)

Investec Guinness Flight Wireless World fund.

Here's how the IPO revival affects you: Institutional investors -- including mutual funds -- get the majority of these often hard-to-get shares. In last year's white-hot market, stock funds' IPO stakes frequently led to fat gains right out of the gate. But this year the pros say it's a different ballgame.

There might be a deluge of IPOs coming out after a second-quarter slowdown, but not all of these saplings will grow to the sky. Whether a new issue is warmly received or given the Bronx cheer, it's a good bet that many stock funds, maybe even yours, will own a decent amount of its shares.

"When the IPO market is hot, funds will load up on IPO shares," says Scott Cooley, a senior fund analyst at

Morningstar

.

Last year, the IPO market was a gravy train for funds. In February

TheStreet.com

singled out the 10 funds with the highest percentage of their assets in companies within 12 months of their IPO. Those 10 averaged a stunning 164% return in 1999, but the bonny days appear to be over.

"This

the IPO market is not an instant-money area," says Kathleen Smith, co-manager of the no-load

(IPOSX)

IPO Plus Aftermarket fund and founder of IPO research house

Renaissance Capital. According to her math, some 40% of this year's IPOs are currently trading below their offering price.

Smith adds that when it comes to IPOs, quantity should never be confused with quality. "August might be going into the record books for the most deals, but when there's this many issuers you've got to be careful because quality can go down," she says.

Smith believes most of the higher quality stocks are in the tech/telecom infrastructure industry. Her fund recently participated in two July 28 IPOs from that area:

Avici Systems

(AVCI)

and

Corvis

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. The two stocks initially were priced at $31 and $36, respectively, and traded at more than 125 and 95 at Tuesday's close.

Kirkham, whose fund focuses on the wireless-communications industry, will participate in

Repeater Technologies'

IPO. The company, which helps wireless cellular networks cheaply expand their reach, begins trading on Wednesday.

Smith also sees some solid alternative-energy companies like

Active Power

(ACPW)

, which was priced at $17 and started trading on Monday. It closed on Tuesday at over 52.

But there's plenty of dreck. Managers say the glut of new issues has eroded demand for less promising rookies' shares. This potentially proves the old saw that if you're a modest individual investor and get IPO shares, they're often shares in weak companies that the pros passed on.

"We haven't participated in IPOs recently. We may in the near future, but I'm not seeing anything too great right now," says Jeff Provence, co-manager of the

Wireless

fund.

Adding to the risk of new issues is that they're a lot newer than usual. Prior to last year's tech-obsessed fervor, companies were typically profitable or very close to it when they had their IPO, pros say. Now, however, companies are cashing in earlier in their life cycle, often when they're still years from making a dime. In the past these fledgling shops would still be asking venture capitalists for money, rather than Wall Street.

"We're still seeing very young companies. We're providing venture capital to companies that are still four to five years from being

cash flow positive," says Kirkham.

You don't have to buy shares of an online Pet Rock store currently based in your Uncle Mel's garage to lose money on an IPO.

AT&T Wireless

(AWE)

, one of this year's biggest IPOs in a sizzling industry, closed Monday at 26 1/4, down from its $29.50 offering price April 27. Likewise,

America Online Latin America

(AOLA)

, the joint venture between

America Online

(AOL)

and privately held

Cisneros Group

, made its debut Tuesday. After the initial offer price was cut sharply last week, the much-ballyhooed stock finished the day up a modest 5.5%.