Which U.S. federal document explains a mutual fund's objectives, strategies, risks, and fees before purchase?

A mutual fund prospectus explains a fund’s objectives, strategies, risks, and fees before purchase.

The prospectus is a regulated disclosure document designed to give prospective investors important information about the offering. A mutual fund prospectus commonly describes the fund’s investment objective, principal investment strategies, principal risks, historical performance, management, expenses, and purchase and redemption arrangements.

Investors often confuse a prospectus with marketing material or a trade confirmation. A trade confirmation records a transaction after it occurs, while an annual report describes a fund’s financial results for a reporting period. The prospectus does not predict returns or eliminate investment risk. Instead, it provides a standardized basis for evaluating what the fund intends to do and what costs or risks may affect results. Funds may also provide a shorter summary prospectus highlighting key information.