What Are Mutual Funds and How Do They Work? (2026 Guide)

Mutual funds are investment vehicles that pool money from many investors and use it to buy a diversified portfolio of stocks, bonds, or other securities, managed by a professional fund manager. Instead of researching and buying individual securities yourself, you buy shares of the fund, and your money is combined with other investors’ money to purchase a broad basket of holdings. This article explains how mutual funds actually work behind the scenes, what you own when you buy one, how NAV and fees affect your returns, and how to evaluate whether a mutual fund fits your goals.

What Is a Mutual Fund?

A mutual fund is a company that pools money from many investors and invests that pooled capital according to a stated objective, such as long-term growth, income, or capital preservation. When you put money into a mutual fund, you’re not lending the fund company money or opening a savings account. You’re buying shares in the fund itself, and each share represents a small proportional stake in everything the fund owns.

A few core pieces make up every mutual fund:

• Pooled investor money: thousands of investors contribute capital, which is combined into one large pool.
• The portfolio: the collection of stocks, bonds, or other assets the fund actually holds.
• The fund manager or investment adviser: the person or team responsible for deciding what the fund buys and sells, based on the fund’s stated strategy.
• Fund shares: the units investors own, priced daily based on the value of the underlying portfolio.
• Diversification: because the fund holds many securities at once, no single stock or bond failing can sink the entire investment.

A simple example: imagine a fund that holds 500 different company stocks. If you tried to buy one share of each of those 500 companies yourself, you’d need a large amount of capital and a lot of time to manage it. By buying shares of a mutual fund that already holds all 500 stocks, you get exposure to the entire group with a single purchase.

How Do Mutual Funds Work?

The mechanics of a mutual fund follow a fairly consistent process:

1. Investors contribute money. You and other shareholders each send money into the fund, usually through a brokerage account, retirement account, or directly with the fund company.
2. The fund pools the money. All investor contributions are combined into one large pool of capital managed together.
3. The fund purchases securities. The fund manager buys stocks, bonds, or other assets that match the fund’s stated objective and strategy, as described in its prospectus.
4. The portfolio changes in value. As the prices of the underlying securities rise and fall each trading day, the total value of the fund’s holdings changes.
5. The fund calculates NAV. At the end of each business day, the fund calculates its net asset value (NAV) per share, which becomes the price used for that day’s purchases and sales.
6. Investors receive returns. Money can come back to you through dividend payments, capital gains distributions, or simply a higher NAV when you sell.
7. Investors can redeem shares. On any business day, you can typically sell your shares back to the fund at the next calculated NAV, subject to any fees the fund charges.

That cycle repeats every trading day for as long as the fund exists.

A Simple Mutual Fund Example

Here’s a hypothetical, simplified illustration of pooling in action.

Suppose three investors put money into a new fund on the same day:

• Investor A contributes $2,000
• Investor B contributes $5,000
• Investor C contributes $13,000

Total pooled capital: $20,000

If the fund’s starting NAV is $10 per share, the fund issues 2,000 total shares, split proportionally:

• Investor A receives 200 shares (10% of the fund)
• Investor B receives 500 shares (25% of the fund)
• Investor C receives 1,300 shares (65% of the fund)

The fund manager uses the $20,000 to buy a basket of stocks. If those holdings rise 8% in value over the following year, the fund’s total assets grow to roughly $21,600, and the NAV per share rises to about $10.80. Each investor’s stake grows in that same proportion, without any of them needing to pick the individual stocks themselves. If the holdings had fallen 8% instead, each investor’s stake would have declined by the same percentage, which is a reminder that pooling reduces single-stock risk but does not eliminate market risk.

What Do You Actually Own When You Buy a Mutual Fund?

This is one of the most common points of confusion for beginners. When you buy a mutual fund, you do not directly own the individual stocks or bonds in its portfolio. You own shares of the fund itself, and the fund, as a separate legal entity, owns the underlying securities.

In practical terms:

• You cannot vote your preferred amount on a single company’s board using your mutual fund shares the way a direct shareholder might on individual holdings.
• Your ownership is a proportional interest in the whole portfolio, not a claim on any specific security within it.
• If one company in the fund’s portfolio goes bankrupt, you don’t lose your entire investment, only the small slice tied to that one holding.

This structure is what makes diversification possible without requiring you to buy and track dozens or hundreds of securities individually.

How Do Mutual Funds Make Money?

Mutual fund returns generally come from three sources:

1. Increase in NAV. If the market value of the fund’s holdings rises after expenses are deducted, the NAV per share increases, and your shares are worth more.
2. Dividend or income distributions. When the fund’s holdings pay dividends (from stocks) or interest (from bonds), the fund typically passes most of that income to shareholders.
3. Capital gains distributions. When the fund manager sells a security inside the portfolio for more than it paid, that gain is generally distributed to shareholders, often near the end of the calendar year.

You can usually choose to receive these distributions in cash or automatically reinvest them into additional fund shares.

None of these three sources are guaranteed. A fund’s NAV can decline, dividends can be cut, and a fund can even distribute taxable capital gains in a year when its overall NAV fell, because the distribution reflects gains realized from selling specific securities, not the fund’s total return for the year.

What Is NAV in a Mutual Fund?

Net asset value (NAV) is the per-share price of a mutual fund. It represents the total value of everything the fund owns, minus what it owes, divided by the number of shares outstanding.

Unlike a stock, which trades continuously throughout the day at a fluctuating market price, a mutual fund’s NAV is generally calculated once per trading day, usually after the major U.S. exchanges close. That means when you place an order to buy or sell mutual fund shares during the day, your transaction is executed at the next calculated NAV, not the price you saw when you placed the order.

An important beginner misconception: a lower NAV does not mean a fund is “cheaper” or a better value than a fund with a higher NAV. Two funds tracking the same index could have very different NAVs simply because they issued a different number of shares for the same total pool of money. What matters for evaluating a fund is its strategy, fees, and holdings, not the sticker price of one share.

How to Calculate NAV of Mutual Fund (With Example)

Calculating a fund’s NAV comes down to three steps, and the fund itself carries out this calculation at the end of every business day.

The formula:

NAV per share = (Total Fund Assets − Total Fund Liabilities) ÷ Number of Outstanding Shares

Step 1: Add up total fund assets. This includes the current market value of every security the fund holds (stocks, bonds, and so on), plus cash, accrued interest, and dividends receivable.

Step 2: Subtract total fund liabilities. This includes short-term borrowings, accrued management and operating expenses, and any other amounts the fund owes.

Step 3: Divide by the number of outstanding shares. The result is the fund’s NAV, quoted as a per-share price.

Worked example:

Suppose a mutual fund’s holdings and finances look like this at the end of a trading day:

NAV per share = $48,000,000 ÷ 4,800,000 shares = $10.00 per share

Now suppose that, the next trading day, the market value of the fund’s stock and bond holdings rises to $47,500,000 (with cash, liabilities, and shares outstanding unchanged). Total assets become $52,000,000, net assets become $50,000,000, and:

New NAV per share = $50,000,000 ÷ 4,800,000 shares ≈ $10.42 per share

That $0.42 increase reflects the rise in the underlying portfolio’s value, spread evenly across every share. If you owned 100 shares, your stake would have grown from $1,000.00 to roughly $1,041.67, without you having to buy or sell anything yourself. The same math works in reverse when the underlying holdings lose value, which is why NAV can fall as easily as it rises.

In practice, individual investors never need to calculate NAV by hand. Fund companies publish it daily, and it’s what determines the price of your next purchase or redemption. Understanding the calculation simply makes it clear why NAV moves the way it does, and why comparing two funds’ NAV per share tells you nothing about which one is the better investment.

Types of Mutual Funds

Mutual funds are generally grouped by what they invest in and what they’re trying to accomplish.

Fund Type	Main Investments	Typical Risk	Main Purpose
Equity/Stock Funds	Stocks	Higher	Long-term growth
Bond/Fixed-Income Funds	Bonds	Low to moderate/high depending on holdings	Income and diversification
Money Market Funds	Short-term, high-quality debt instruments	Generally lower, but not risk-free	Cash management and liquidity
Balanced/Hybrid Funds	Stocks and bonds combined	Moderate	Diversification within one fund
Index Funds	Securities that mirror a market index	Depends on the index tracked	Low-cost, broad market exposure
Target-Date Funds	A changing mix of stock and bond funds	Shifts (usually lower) as the target date nears	Retirement or goal-based investing
Sector Funds	A single industry or theme	Higher and concentrated	Targeted exposure to one area of the market

Fund names, categories, and regulatory classifications can differ from country to country, so always check a specific fund’s prospectus or offering documents rather than assuming based on its name alone.

Active vs. Passive Mutual Funds

Every mutual fund is either actively managed or passively managed (an index fund), and the difference has a real effect on both cost and expected performance.

Feature	Actively Managed	Passively Managed (Index)
Objective	Try to outperform a benchmark	Track a benchmark index as closely as possible
Management	A portfolio manager makes ongoing buy/sell decisions	Rules-based; holdings mirror the index
Trading	Generally more frequent	Generally lower turnover
Fees	Typically higher	Typically lower
Performance	Depends on the manager’s skill and decisions	Usually aims to match the benchmark, before fees
Main risk	Manager underperformance relative to the benchmark	Tracking error and ordinary market risk

The cost gap between these two approaches is significant and well documented. Industry data shows actively managed equity mutual funds carried an asset-weighted average expense ratio of around 0.40% in recent years, while comparable index funds averaged closer to 0.05% to 0.14%. That gap compounds over time, which is covered in more detail in the fees section below.

Performance data also tends to favor index strategies over long periods, particularly for U.S. large-cap funds, where a majority of actively managed funds have underperformed their benchmark index in most recent years. This does not mean active management never adds value (it has, in specific categories and time periods), but it does mean beginners should not assume that paying more for active management automatically produces better returns. Fee levels and manager consistency both matter more than a fund’s marketing.

Mutual Fund Fees and Expenses

Every mutual fund costs something to run, and those costs are passed on to shareholders in a few common forms:

• Expense ratio: the percentage of your investment deducted annually to cover the fund’s operating costs, including management fees, administrative expenses, and other charges. This is the single most important cost figure to check.
• Management/advisory fees: what you pay the professionals making investment decisions for the fund.
• 12b-1 fees: a type of distribution or marketing fee, common in mutual funds but generally not present in ETFs.
• Sales loads: a commission charged when you buy (front-end load) or sell (back-end/deferred load) certain share classes of a fund.
• Purchase and redemption fees: transaction-specific charges some funds apply to discourage short-term trading.
• Account fees: administrative charges some brokerages or fund companies apply to smaller accounts.

Terminology and typical fee levels vary by country and by fund share class, so always check the fee table in a fund’s prospectus before investing.

Why small percentages matter over time: expense ratios look tiny on paper, but they compound against you every year. Consider $10,000 invested for 30 years, assuming a hypothetical 7% gross annual return before fees:

• At a 0.05% expense ratio (roughly typical for a low-cost index fund), the net return is about 6.95% annually, growing the investment to approximately $75,080.
• At a 1.00% expense ratio (on the higher end for an actively managed fund), the net return is about 6.00% annually, growing the investment to approximately $57,435.

That’s a difference of nearly $17,600, more than the original $10,000 invested, purely from a 0.95 percentage-point difference in annual fees. This is a hypothetical illustration, not a projection of any real fund’s performance, but it demonstrates why fees deserve as much attention as a fund’s stated strategy.

Advantages of Mutual Funds

• Diversification: exposure to many securities through a single purchase, reducing single-stock risk.
• Professional management: a manager (or, for index funds, a rules-based process) handles the day-to-day investment decisions.
• Accessibility: many funds have low or no minimum investments, especially through modern brokerage platforms.
• Convenience: no need to research and monitor dozens of individual securities yourself.
• Liquidity: shares can generally be redeemed on any business day at the next calculated NAV.
• Variety of strategies: options exist for growth, income, capital preservation, and everything in between.
• Automatic investing options: many platforms support recurring contributions, which can support long-term, consistent investing habits.

These benefits improve convenience and reduce certain risks, but they do not eliminate investment risk. A diversified fund can still lose value.

Disadvantages of Mutual Funds

• Market risk: the value of the underlying holdings can decline, sometimes sharply.
• Management risk: an active manager’s decisions can underperform the broader market.
• Fees and expenses: ongoing costs reduce your net return every year, regardless of performance.
• Possible underperformance: even skilled managers can lag their benchmark in a given period.
• Less individual control: you don’t choose which specific securities the fund buys or sells.
• Tax implications: in taxable accounts, capital gains distributions can create a tax bill even in a year when the fund’s overall value declined.
• Possible sales charges: certain share classes carry loads or other transaction fees.
• Redemption rules: some funds apply short-term redemption fees or other restrictions.
• Concentration risk: sector or thematic funds can be far less diversified than their category name might suggest.

Are Mutual Funds Safe?

Mutual funds are investments, not guaranteed savings products, and the honest answer is that “safety” depends entirely on what the fund invests in.

• Equity mutual funds can experience significant, sometimes prolonged, declines in value.
• Bond funds can also lose value, particularly when interest rates rise or credit quality deteriorates.
• Money market funds are designed to be low-risk and aim to maintain a stable share price, but they are still not risk-free. They are not insured by the FDIC the way a bank savings account is, and in rare stress events a money market fund’s share price can fall below its target, an event sometimes referred to as “breaking the buck.”
• Mutual funds in general are not equivalent to bank deposits. Deposit insurance protections (like FDIC coverage in the United States) do not apply to mutual fund investments, though brokerage accounts may carry separate protections like SIPC coverage against the failure of the brokerage itself, which is different from protection against investment losses.

The clearest way to think about it: diversification reduces the risk of any single security wiping out your investment, but it does not guarantee you won’t lose money. Investor protection rules and account insurance also vary meaningfully by country, so check the specific protections that apply in your market.

Mutual Funds vs. ETFs

Mutual funds and exchange-traded funds (ETFs) are structurally similar (both pool investor money into a diversified portfolio) but differ in some important ways.

Feature	Mutual Funds	ETFs
Trading	Bought/sold once per day through the fund company or a broker	Trade throughout the day on an exchange, like a stock
Pricing	Transacted at NAV, calculated once daily	Market price can differ slightly from NAV during the trading day
Intraday trading	Not available	Available
Minimum investment	Can range from $0 to several thousand dollars, depending on the fund	Often the price of one share, or less with fractional shares
Fees	Expense ratios vary; some share classes carry sales loads or 12b-1 fees	Typically lower average expense ratios; loads are uncommon
Management style	Can be active or passive	Can be active or passive
Tax considerations	Redemptions can trigger fund-level capital gains distributed to all shareholders	In-kind creation and redemption often makes ETFs more tax-efficient in taxable accounts
Liquidity	Redeemable daily at NAV	Tradable anytime the exchange is open
Convenience	Well suited to automatic recurring investments and retirement plans	Well suited to investors who want intraday pricing control

The tax-efficiency gap is worth highlighting: because of how ETF shares are created and redeemed, ETFs have historically distributed far fewer taxable capital gains than mutual funds. In recent years, only a small single-digit percentage of ETFs distributed capital gains in a given year, compared with roughly half of mutual funds. That difference matters most in taxable brokerage accounts; it has little effect inside tax-advantaged retirement accounts.

Both mutual funds and ETFs can be actively or passively managed, so “mutual fund vs. ETF” is a separate question from “active vs. passive.”

Mutual Funds vs. Stocks

Buying a single stock and buying a mutual fund are very different decisions.

Factor	One Individual Stock	A Diversified Mutual Fund
Diversification	None; success depends on one company	Spread across many holdings
Risk	Concentrated in a single company’s performance	Reduced single-stock risk, but market risk remains
Control	You choose the exact company	The fund manager (or index rules) decides holdings
Research required	Deep company-specific research	Less individual research, but fund-level due diligence still matters
Fees	Typically just brokerage commissions, if any	Ongoing expense ratio in addition to any transaction costs
Potential returns	Can significantly outperform or underperform the market	Generally tracks a broader market segment, for better or worse
Time commitment	Higher, if actively monitoring the company	Lower, since the manager or index handles rebalancing

Neither option is inherently “better.” An individual stock offers concentrated upside (and downside) potential, while a mutual fund trades some of that upside for broader diversification and reduced single-company risk.

How to Choose a Mutual Fund

Rather than chasing a “best” fund, it helps to evaluate funds against your own situation using a consistent framework:

1. Investment goal: what are you investing for, and by when?
2. Time horizon: how many years until you need the money?
3. Risk tolerance: how much short-term volatility can you handle without panic-selling?
4. Asset allocation: does the fund’s stock/bond mix match your goals?
5. Fund objective: growth, income, capital preservation, or a blend?
6. Underlying holdings: what does the fund actually own?
7. Benchmark: what index or standard is the fund measured against?
8. Historical performance: how has it performed relative to its benchmark and peers, understanding this is not predictive?
9. Expense ratio: how much does it cost annually?
10. Other fees: are there loads, redemption fees, or account fees?
11. Fund manager and approach: for active funds, who is managing it and how long have they run it?
12. Portfolio concentration: how spread out are the holdings?
13. Turnover: how frequently does the fund buy and sell, and what tax impact might that create?
14. Minimum investment: does it fit your starting capital?
15. Liquidity and redemption rules: are there restrictions on when you can sell?
16. Tax considerations: is this for a taxable account or a tax-advantaged account?
17. Fund documents: have you read the prospectus, not just a summary or a rating?

Past performance never guarantees future results, and a fund that led its category last year can easily lag next year.

How to Invest in Mutual Funds

The general process looks similar across most markets, though specific steps vary by country and provider:

1. Define your investment goal.
2. Determine your time horizon and risk tolerance.
3. Research appropriate fund categories for that goal.
4. Compare specific funds within those categories.
5. Review each fund’s fees and official documents.
6. Open an investment account where required (a brokerage account or a retirement account, for example).
7. Make your initial investment.
8. Monitor the investment periodically, without obsessively checking daily price moves.
9. Rebalance or adjust your holdings when your goals, timeline, or risk tolerance change.

This is a general outline, not a country-specific regulatory process. Account types, tax treatment, and available fund lineups differ significantly between markets like the United States, the United Kingdom, India, and Pakistan, among others.

How Much Money Do You Need to Start Investing in Mutual Funds?

Minimum investment requirements vary widely by fund, share class, and platform, so there is no single universal number.

• Some funds and brokerages allow you to start with $0 to a small dollar amount, particularly for certain index fund share classes.
• Other funds set traditional minimums that can range from a few hundred to a few thousand dollars for an initial investment.
• Subsequent investments after the initial purchase are often allowed in much smaller increments.
• Many platforms support recurring automatic contributions, sometimes called systematic investment plans in some markets, which let investors build a position gradually rather than all at once.
• Fractional investing, where available, can lower the effective entry point even further.

Because these figures change fund by fund and platform by platform, always confirm current minimums directly with the fund company or brokerage before assuming a specific dollar amount applies.

How Long Should You Hold a Mutual Fund?

There’s no fixed rule for how long to hold a mutual fund; it depends on:

• Fund type: money market and short-term bond funds are generally built for near-term needs, while equity funds are generally built for longer horizons.
• Investment objective: growth-oriented funds typically need more time to recover from downturns than income-oriented funds.
• Risk tolerance: how comfortable you are holding through volatility affects how long you can realistically stay invested.
• Financial goal: money needed in one to two years generally shouldn’t be exposed to the same volatility as money earmarked for a goal 20 years away.
• Market conditions: broad downturns can extend the time needed to recover previous highs.

As a general pattern (not a rule that applies to every investor or every fund), equity-oriented mutual funds tend to be more appropriate for longer time horizons, since they need time to ride out short-term volatility, while money you’ll need within the next couple of years is often better suited to lower-volatility options.

Taxes on Mutual Funds

In a taxable account, mutual fund investors may encounter a few different tax events:

• Dividend or income distributions: generally taxable in the year received, even if reinvested.
• Capital gains distributions: when the fund sells appreciated securities internally, the resulting gains are typically distributed to shareholders and are generally taxable, even if you didn’t personally sell any shares.
• Capital gains when you sell: if you sell your fund shares for more than you paid, that gain is generally taxable as well.
• Taxable vs. tax-advantaged accounts: holding mutual funds inside a tax-advantaged retirement account can defer or, in some account types, eliminate certain taxes that would otherwise apply in a standard taxable brokerage account.

Because tax rules, rates, and account types differ significantly by country, this section describes general concepts only. It is not country-specific tax guidance, and you should confirm the rules that apply in your own market, ideally with a qualified tax professional.

Common Mutual Fund Mistakes Beginners Make

• Choosing a fund based only on past returns, without checking whether that performance is likely to repeat.
• Ignoring fees, which quietly compound against returns every single year.
• Not looking at the fund’s actual underlying holdings, and assuming a fund’s name fully describes its strategy.
• Confusing a low NAV with a “cheap” investment, when NAV per share says nothing about value.
• Picking a fund without considering personal risk tolerance, then panic-selling during a downturn.
• Over-diversifying into multiple funds that hold largely the same securities, which adds complexity without adding real diversification.
• Chasing last year’s top-performing fund, rather than evaluating a consistent strategy.
• Ignoring the tax impact of capital gains distributions, particularly in taxable accounts.
• Investing money that’s actually needed for near-term expenses, exposing short-term goals to market volatility.
• Assuming professional management guarantees better returns than a low-cost index fund, when the data doesn’t consistently support that assumption.

Pros and Cons of Mutual Funds

Pros	Cons
Diversification	Market risk
Professional management	Ongoing management fees
Accessible to most investors	Possible underperformance vs. benchmark
Convenient, low-maintenance	Less control over specific holdings
Wide range of available strategies	Potential tax inefficiency in taxable accounts
Suitable for many financial goals	Some funds carry complex or layered fee structures

Frequently Asked Questions About Mutual Funds

What is a mutual fund in simple words?

A mutual fund is a pool of money from many investors that a professional manager (or a rules-based index process) invests in a diversified group of stocks, bonds, or other securities on their behalf. You own shares of the fund, which represent a proportional stake in everything it holds.

How do mutual funds make money?

Returns generally come from three sources: an increase in the fund’s NAV, dividend or interest income distributed to shareholders, and capital gains distributions when the fund sells appreciated securities. None of these are guaranteed.

Can you lose money in a mutual fund?

Yes. Mutual funds are investments, not insured deposits, and their value can decline along with the underlying securities they hold. Even generally lower-risk categories like money market funds are not entirely risk-free.

Are mutual funds better than stocks?

Neither is universally “better.” Individual stocks offer concentrated risk and reward tied to one company, while mutual funds trade some upside potential for broader diversification. The right choice depends on your goals, risk tolerance, and how much research you’re willing to do.

Are mutual funds better than ETFs?

They’re structurally similar, but ETFs generally trade intraday and tend to be more tax-efficient in taxable accounts, while mutual funds are well suited to automatic recurring investments and certain retirement plans. Both can be actively or passively managed.

What is NAV in mutual funds?

NAV, or net asset value, is a fund’s per-share price, calculated as total assets minus liabilities, divided by shares outstanding. It’s typically calculated once per trading day, after markets close.

How much money do I need to start investing in mutual funds?

It varies widely. Some funds and platforms allow you to start with very little or even $0, while others set traditional minimums ranging from a few hundred to a few thousand dollars. Always check the specific fund’s current requirements.

Can I withdraw money from a mutual fund anytime?

In most cases, yes, mutual fund shares can be redeemed on any business day at the next calculated NAV, though certain funds may apply short-term redemption fees or other restrictions described in the prospectus.

Are mutual funds good for beginners?

Broad, low-cost, diversified mutual funds (including many index funds) are often considered approachable for beginners because they offer instant diversification and professional or rules-based management without requiring individual security research. That said, “good for beginners” still depends on matching the fund’s risk level and objective to your own goals and time horizon.

What is an expense ratio?

The expense ratio is the annual percentage of your investment deducted to cover a fund’s operating costs, including management and administrative fees. It’s charged whether the fund gains or loses value, and even small differences compound significantly over long periods.

What is the difference between active and passive mutual funds?

Actively managed funds have a manager trying to outperform a benchmark through ongoing buy and sell decisions, usually at a higher cost. Passively managed (index) funds simply track a benchmark’s holdings, generally at a lower cost.

Do mutual funds pay dividends?

Many do, if their underlying holdings generate dividend or interest income. That income is typically passed through to shareholders and can usually be taken as cash or reinvested into more fund shares.

How long should I keep money in a mutual fund?

It depends on the fund type and your goal. Money needed within the next year or two is generally better suited to lower-volatility options, while equity-oriented funds are typically better matched to longer time horizons that allow room to recover from downturns.

Are mutual funds safe for long-term investing?

Mutual funds can be a reasonable vehicle for long-term investing, but “safe” is relative. Equity funds can decline significantly over shorter periods even if they’ve historically trended upward over longer horizons, and diversification reduces, but does not eliminate, that risk.

What should I check before buying a mutual fund?

At minimum: the fund’s objective and underlying holdings, its expense ratio and any other fees, its benchmark and historical performance relative to that benchmark, its risk level relative to your own tolerance, and the fund’s prospectus for any redemption rules or restrictions.