Getting Information about Mutual Funds

Getting Information about Mutual Funds

The prospectus

The annual and semi-annual reports

Statement of additional information

Third-party sources of information

The prospectus

Mutual fund company must send you a prospectus before allowing you to invest

The prospectus is a legal document that outlines fund objectives, risks and expenses

You should read this document, especially the front portions

The annual and semi-annual reports

Fund companies normally don't send these out when you request investment information

But your should always ask the fund to send you the latest annual and semi-anual reports

Study the fund's holdings

Do you feel comfortable with these assets?

Statement of additional information

Very detailed information about the fund

Provided by the fund at your request

You generally don't need to read this document unless

The fund is new or invests in exotic securities

You're nosy and want to find out things like salary levels of the fund managers

Third-party sources of information

Morningstar

• Largest provider of fund information
• Presents lots of information in a compact form
• Look in your library or America Online for Morningstar reports
• Don't get carried away with "star" ratings
• Also provides information about annuities and closed-end funds

Value Line

• Veteran provider of information about individual stocks
• Just started to provide information about mutual funds
• Much of the information is similar Morningstar's information

Lipper Analytical Services

• Provides "grades" in newspapers like the Wall Street Journal
• Biased toward load funds because it omits the effect of loads when handing out "grades"