What Is a Mutual Fund Prospectus?

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A mutual fund prospectus is the outline of a mutual fund that gives information on past performance and the direction of the fund. Find out whether a mutual fund is looking for high-dividend paying stocks or debt instruments by reading a mutual fund prospectus with help from an investment manager in this free video on investing.

Part of the Video Series: Stocks & Mutual Fund Investments
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Video Transcript

What is a mutual fund's prospectus? The prospectus gives the outline of the mutual fund that you may be looking at purchasing. And the prospectus will give you past performance and they're very specific to tell you that it's no indication of what they may do in the future but it will give you the past performance of the mutual fund. The other thing it will give you a good guideline for what the fund's investing in. Both it's mission or it's direction, the way that they're investing and will also give you some of the companies that they're investing in. So you'll see the large pieces of the mutual fund so you'll be able to see what's being invested in, what the direction of the mutual fund or what they're, are they looking for income and high dividend paying stock, are they looking for debt instruments, are they look for high growth stock and will give you all that information. And also you can look at some part performance and compare that with other mutual funds and equities and market results and see where that mutual fund sits in that mix.

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