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Prospectus

For a mutual fund or ETF, a prospectus is a formal disclosure document describing the fund's objectives, risks, performance, and expenses.

By Betta Signals Research Desk · Reviewed October 24, 2026

Plain-English definition: For a mutual fund or ETF, a prospectus is a formal disclosure document describing the fund's objectives, risks, performance, and expenses.[1]

How the term is used

A fund prospectus explains its investment objective, strategy, principal risks, management, fees, and past-performance presentation. Those details help distinguish funds with similar names.[2]

What to check before relying on it

Use the correct share class and effective date, then check for later supplements. Marketing pages summarize; the prospectus and governing filings control the disclosed terms.

Example

A fund's website may call a strategy 'income focused,' while the prospectus explains the derivatives, concentration limits, and risks behind that label.

SEC filingExpense ratioExchange-traded fund (ETF)

Research last reviewed: October 24, 2026. This definition is educational and does not evaluate a particular security.

Sources

  1. Investor.gov: Prospectus — the formal disclosure document supplied in connection with a securities offering. Accessed October 24, 2026.
  2. FINRA: Mutual Funds — fund structure, NAV, expenses, distributions, and share classes. Accessed October 24, 2026.