How to Read a Mutual Fund Prospectus
What to look for in a prospectus:
- How long the fund has been around–at least 5 years will provide a decent track record.
- How well it’s performed in the past–illustrated in a line graph comparing it to an index.
- How long the money manager has run the fund and/or has experience in the industry.
- Your cost–look for a table illustrating how much you pay a year for every $1,000 invested.