Prospectus.

In plain English

A prospectus is a formal disclosure document that a mutual fund, ETF, or company issuing stock must file with the SEC and make available to investors. It lays out the investment objective, the fees and expenses you will pay, the main risks, past performance, and who manages the money. For funds, there is usually a long full prospectus and a shorter summary prospectus that covers the key points in a few pages. Reading it is the closest thing you get to a label that tells you what you are actually buying.

01Why it matters

It is the one place where the fees and risks are stated plainly and in writing, so skipping it means buying something without reading the fine print on your own money.

02The math, step by step

Before buying an index fund, you open its summary prospectus and find the expense ratio, the stated objective (track a broad US stock index), and a risk section noting the fund can lose value when the market falls. A fund's expense ratio can change over time, so the current figure always lives in that fund's own latest prospectus rather than in any outside summary.

03What this is NOT

04Receipts

Every figure on this page is sourced to a primary document. Tap to open the original.