The Prospectus—Section 5

 

The prospectus is a legally required document that contains important information about a mutual fund including charges and expenses, investment risk and a general explanation of how fund assets will be invested.

Many people don’t read mutual fund prospectuses because they believe that they are intimidating and boring. Boring perhaps, but so is the warranty on your car and you have probably read that. Prospectuses, however, are not intimidating; they are written in clear English and are mostly free of technical jargon. They can usually be read in about 20 minutes.

You may eventually have many thousands of dollars invested in a fund, so it makes sense to know a little about what the fund is trying to achieve and what it’s costing you.

 

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