Take the time to read the Fund Facts. The Fund Facts is a document that highlights key information for investors about a mutual fund or an exchange-traded fund (ETF). You can consult the Fund Facts on the website of the institution offering the fund, or simply ask for a copy.
The Fund Facts provides core information about the fund and briefly explains the fees and expenses you will pay, the dealer’s compensation, and your rights. For more details, consult the fund’s simplified prospectusA prospectus is a detailed information document that a company must prepare to be able to sell securities (such as shares) to the public.
It must provide full, true and plain disclosure of all material facts likely to affect the value or market price of the security in question. .
Exchange-Traded Funds (ETFs) Facts
FAQs
The fund facts document is a clear, plain language document that contains key information about the mutual fund you're thinking about purchasing. In no more than two double-sided pages, it explains the basics of what the fund invests in, the risks involved, how the fund has performed, and the costs of ownership.
What is the main purpose of a fund? ›
What Is the Purpose of a Fund? The purpose of a fund is to set aside a certain amount of money for a specific need. An emergency fund is used by individuals and families to use in times of emergency. Investment funds are used by investors to pool capital and generate a return.
What do funds do? ›
Funds are collective investments, where your and other investors' money is pooled together and spread across a wide range of underlying investments, helping you spread your overall risk. The value of investments can fall as well as rise and you could get back less than you invest.
What items are disclosed in the fund facts documents? ›
This includes the basic information on the background of the fund, including the date the fund started, its total value at the time the Fund Facts was produced, the fund's management expense ratio (MER), the name of the fund manager and portfolio managers, the fund's distributions and the minimum investment needed to ...
What information is on a fund fact sheet? ›
A fund factsheet is an overview of a fund including the fund's investment objective, risk level, costs, past performance and holdings details.
How do funds make money? ›
Investors in the mutual fund may make a profit in three ways: The fund may earn interest and dividend payments from its holdings. The fund may earn capital gains from selling assets held in the fund at a profit. The fund may appreciate, meaning each fund share will grow in value over time.
What are the pros and cons of a fund? ›
Some of the advantages of mutual funds include advanced portfolio management, dividend reinvestment, risk reduction, convenience, and fair pricing, while disadvantages include high expense ratios and sales charges, management abuses, tax inefficiency, and poor trade execution.
What is the goal of a fund? ›
Accordingly, the objectives of investment funds can be generally classified as the following: Invest to maintain capital. Invest to achieve income. Invest to achieve income and growth.
Why is funding so important? ›
Lack of funding is one of the biggest reasons businesses fail. Without enough capital, a company will struggle to maintain operations and cash flow. As a result, many businesses seek out financing to meet their capital needs. In fact, an estimated 56% of small businesses seek business funding at some point in time.
Why do we need funds? ›
When an entrepreneur takes a decision to start business, the need of fund arises in order to meet the expenses of establishment of business, finance is required for purchasing fixed and current assets for day-to-day operations, purchase of raw material, to pay salaries etc.
Safeguard Your Investments: The role of a fund manager is pivotal in safeguarding investors' finances. They bear significant responsibility for ensuring the protection of investors' capital. Regardless of profit potential, a fund manager should prioritize implementing safety measures when managing investor wealth.
Are funds a good idea? ›
Funds offer a useful solution. These spread your investment – and risk – across dozens of different companies and are either managed by a professional fund manager (in the case of 'active' funds) or designed to simply track a particular index (in the case of 'passive' funds or 'trackers').
Why do you need a fund? ›
Having a reserve fund for financial shocks can help you avoid relying on other forms of credit or loans that can turn into debt. If you use a credit card or take out a loan to pay for these expenses, your one-time emergency expense may grow significantly larger than your original bill because of interest and fees.
What kind of information can you expect to find on a fund fact sheet? ›
Almost all include the fund's investment strategy and objective, such as whether it aims for capital appreciation, income, or both. Performance data: Fact sheets present the fund's historical performance over various time frames, from a month to 10 years or more.
Which of these details is given in a fund fact sheet? ›
A mutual fund fact sheet typically contains information such as the fund's objective, asset allocation, top holdings, returns, risk profile, expense ratio, benchmark, and fund manager.
What does funds consists of? ›
These funds consist of a diverse asset pool – with securities comprising of equity, debt instruments, precious metals, etc. This allows asset allocation funds to generate high returns through the best performing instrument, at a reduced risk level guaranteed by the relatively stable securities present in the portfolio.
How to understand a fund fact sheet? ›
Some fund fact sheets include a graph or table of rolling returns, showing the highest, lowest, and annualized average return for the specific period since the fund's inception. These figures are usually a good indication for the investor of the actual performance of the fund relative to the market's performance.
