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Formal written document to sell securities that describes the plan for a proposed business enterprise, or the facts concerning an existing one, that an investor needs to make an informed decision. Prospectuses are used by mutual funds to describe fund objectives, risks, and other essential information.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


A legal document detailing the structure and goals of an investment company such as a mutual fund. The SEC requires investment companies to file a prospectus before issuing shares and to provide one to a potential investor on demand. Each prospectus must contain relevant information, such as the terms of purchase, the amount of the load (if any), the fund's investment strategy, and historical financial statements. A prospectus is also called a circular.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


A formal written document relating to a new securities offering that delineates the proposed business plan or the data relevant to an existing business plan—information needed by investors to make educated decisions whether to purchase the security. The prospectus includes financial data, a précis of the firm's business history, a list of its officers, a description of its operations, and mention of any pending litigation. A prospectus is an abridged version of the firm's registration statement filed with the SEC. See also offering circular, red herring.
What is the most important information to be found in a mutual fund prospectus?

The mutual fund prospectus is a legal document that contains valuable information for the investor. Now, it's easy to make fun of a prospectus. It's boring, and, yes, reading one is a cure for insomnia. But the prospectus is worth a close look, and a lot of investment mistakes could be avoided with a careful reading of the whole text. But several sections should be highlighted. First is the expense table. All mutual funds have to lay out in a standardized format all the fees associated with owning a fund. If there is a fee to buy and sell a fund, it's there, plus all the ongoing charges imposed by the fund. Thoroughly scrutinize the financial highlights. It's a lot of numbers, but these figures give a reading on how the fund has done over time and in different markets. The investment objective section is critical. Is this the kind of fund you are looking for? Is it run, say, to generate dividend income, or is the money manager striving for long-term capital appreciation in high-tech stocks? The management page tells you whether the fund is run by an individual or by a committee.

Christopher Farrell, Economics Editor, Minnesota Public Radio, heard nationally on Sound Money®
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


A prospectus is a formal written offer to sell stock to the public. It is created by an investment bank that agrees to underwrite the stock offering.

The prospectus sets forth the business strategies, financial background, products, services, and management of the issuing company, and information about how the proceeds from the sale of the securities will be used.

The prospectus must be filed with the Securities and Exchange Commission (SEC) and is designed to help investors make informed investment decisions.

Each mutual fund provides a prospectus to potential investors, explaining its objectives, management team and policies, investment strategy, and performance. The prospectus also summarizes the fees the fund charges and analyzes the risks you take in investing in the fund.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.


a document prepared by a JOINT-STOCK COMPANY as an invitation to the public to subscribe for shares in the company The prospectus gives details of the company's past trading record, current capital structure and borrowings. Prospectuses are published as the first stage of an offer for sale of shares. See SHARE ISSUE.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson


A legal document describing something that is being offered for sale, with all disclosures required by applicable state and federal laws.
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Mudassar Islam, a printing press owner, told Dawn that the actual price of a prospectus carrying 100 pages was not more than Rs250.
There is no domestic bond market in the United Arab Emirates or any of its members, but Abu Dhabi's government is considering setting one up, mainly in order to help develop the banking sector, the prospectus added.
Paredes also noted that there are "no disputes" among the SEC Commissioners about approving such a prospectus, which would be similar to a mutual fund prospectus.
The launch of the prospectus kick-starts Teesside's 2015 recruitment campaign, starting with an open day on June 18.
prospectus, an information brochure and pre-printed acceptance forms will be sent out to directly registered shareholders in Isconova's share register as of July 4, 2013.
The specific terms of any offering of common shares will be contained in a shelf prospectus supplement filed in connection with each offering.
In a simplified summary prospectus for mutual funds, consumers can easily ascertain key information about fund investment objectives and strategies, risks and fees.
To view the interactive prospectus visit
TyneMet College is the only college in the region to be shortlisted for the best prospectus award at the 2012 Heist Awards.
Anatolia Energy Inc, an international oil and gas company engaged in the exploration and development of oil and gas in Turkey, has filed a preliminary prospectus with the securities regulatory authorities in Ontario, Manitoba, Saskatchewan, Alberta and British Columbia.
Golar LNG on Thursday announced that the Financial Supervisory Authority of Norway has approved its prospectus dated 15 June 2011 in connection to the listing of 5,551,180 new shares on Oslo Bors.
There have been a few great opportunities in my sports career, and writing for Baseball Prospectus was one of them.