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Every mutual fund publishes a booklet that tells everything you need to know about it. This is
called a prospectus, and is supposed to be read before your money is accepted by the fund
company. The Investment Act of 1940 says that the prospectus must fully disclose all expenses,
which include sales costs, management fees, and 12b-1 “marketing” fees.
Also included is an explanation of management's objectives and style of investing. All policies and
practices are disclosed, including how to buy and sell your shares, and any redemption fees that
may be charged. The prospectus's chart of the performance of the fund over various time periods
such as 1, 3, 5, and 10 years shows you how well the fund has done in the past.
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