The prospectus of an investment company, such as a mutual fund, includes information about the company's investment objectives and strategies, performance and risks, pricing, fees and expenses, according to the U.S. Securities and Exchange Commission. Additional information in the prospectus of a unit investment trust includes a listing of its securities. A mutual fund may issue a summary prospectus that contains pertinent fund data. The fund publishes its full prospectus on a website and provides free paper copies when asked.
Before deciding whether or not to invest in a fund, individuals should ask for and read the fund's prospectus, states the SEC. In addition to issuing a prospectus, a closed-end fund and mutual fund must provide a statement of additional information. The document offers a detailed discussion of the information in a fund's prospectus. Federal law requires a fund to provide a free copy of its SAI upon request.
A SAI typically contains the history of a fund, its policies on issues such as borrowing, and its financial statements, notes the SEC. Information about fund performance indicators and fund directors, officers and people who have control of the fund are all part of a SAI. Additional data such as the fund's annual total return, tax information, fund services and brokerage commissions are usually part of an SAI.