If it's a bond fund, it may hold corporate bonds or foreign debt. This section may also mention any restrictions on what the fund can invest in. The prospectus should explain the risks associated with the fund. For instance, a fund that invests in emerging markets will be riskier than one investing in the United States or other developed countries. A bond fund should also discuss the credit quality of the bonds it holds and how a change in interest rates may affect those holdings.
Different funds have different sales charges and other fees.
The prospectus will spell out those fees so you can compare them with the fees of other funds. It should also explain the percentage of the fund's return that is deducted each year to pay for management fees and operation costs. Although you shouldn't judge a fund solely by its past performance, this can show how consistently the fund has performed and give some indication of how it may fare in the future. This section of the prospectus will also show you the fund's income distributions and its total return. This section may do nothing more than list the fund manager or managers, or it may give specific information about the management team's experience.