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How To Read A Prospectus - Reading A Prospectus

You've probably heard it said more than once that you should always consult a mutual fund's prospectus before handing over your money. The same advice applies to unit investment trusts (UITs), exchange-traded funds (ETFs) and REITS.

While mutual funds and UITs are legally required to provide a prospectus to prospective investors, it's no secret that the size of this document and the type of information inside can be hard to tackle, but don't be too overwhelmed. Here is a guide to what a prospectus is, why it is important and what items should be central to your considerations.

What Is a Prospectus?
A prospectus is a formal legal document, which is required by and filed with the
Securities and Exchange Commission. It provides details about an investment offering for sale to the public, including fees, investment objectives and strategies, as well as the finer points of the past performance, risks, performance, distribution policy, fees and expenses, and fund management.

You can obtain these documents directly from fund companies through mail, email or phone. You can also get them from a financial planner or advisor. Many fund companies also provide PDF versions of their prospectuses on their websites.

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RELATED TERMS
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    A formal legal document, which is required by and filed with ...
  2. Final Prospectus

    1. The final version of a prospectus for a public offering of ...
  3. Short Form Prospectus Distribution ...

    A system that allows firms making an issue to produce a short ...
  4. SEC Form 424A

    The prospectus form that a company must file if it has made significant ...
  5. Single-Country Fund

    A mutual fund that restricts its investment to the assets of ...
  6. Offering Circular

    An abbreviated prospectus for a new security listing. Delivered ...
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    Learn about the differences between the summary prospectus and statutory, or full, prospectus, and discover what mutual fund ... Read Answer >>
  3. What is the most important section in an investment company's prospectus?

    Learn about the various elements included in an investment company's prospectus and which ones are most important for investors ... Read Answer >>
  4. What information should I focus on in my mutual fund's prospectus?

    Understand what information investors can find in a mutual fund prospectus and what they should focus on when reviewing the ... Read Answer >>
  5. How can I get a free mutual fund prospectus?

    Obtain a free copy of a mutual fund prospectus from the dealer or use one of these online resources to download an electronic ... Read Answer >>
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    Understand the lengthy list of required information that investment companies such as mutual funds must include in a prospectus ... Read Answer >>

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