What Is a Fund Prospectus?
In the United States, every traded security and every fund which invests in securities is required by the Securities and Exchange Commission (SEC) to provide a document called a prospectus to potential investors. This document describes the fundamentals and technical data about the stocks and their underlying companies, and functions as the primary sales pitch for that security or that fund. A fund prospectus will contain information about the stocks it invests in, what its specific goals are, and the degree to which it has met these goals over its history. Most investors who buy shares in mutual funds have heard it said repeatedly that it is important to read the fund prospectus before investing. This is especially the case for the investor who has little or no experience investing in funds. Trying to make sense of a fund prospectus to extract the most important information is not always easy, and investors must know what to look for ahead of time. Almost every fund prospectus will st
