what does the prospectus say that duke intends to do with all this money?

How to Read a Mutual Fund Prospectus (Part 1 of 3: Investment Objective, Strategies, and Risks)

The SEC'due south Office of Investor Education and Advocacy is issuing a series of iii Investor Bulletins to help inform investors near key data in a prospectus. You should note, however, that a prospectus contains additional information that may assist investors in making an investment decision.

Introduction

Mutual funds use a document chosen a prospectus to disclose information almost the fund to investors.  The SEC requires common funds to include important information in the prospectus, including:

• the fund's investment objectives or goals;
• its strategies for reaching those goals;
• the master risks of investing in the fund;
• the fund's fees and expenses; and
• its past performance.

SEC rules require mutual funds to provide a copy of the fund's prospectus before or with the commitment of fund shares to investors, but you can - and should - also request and read a prospectus before making an investment conclusion.  You can obtain prospectuses from the SEC's Electronic Data Gathering, Analysis, and Retrieval ("EDGAR") database or directly from the fund (nigh funds provide their prospectus on their websites and also have toll costless numbers where y'all tin request a copy).  Funds too may provide a "summary prospectus," which is mostly just a few pages long, merely indicates where you can obtain the full prospectus.

Investment Objective

The investment objective of a fund oftentimes will exist:  (1) capital appreciation; (2) income; or (3) a combination of the 2.

1. Funds that seek capital appreciation primarily invest in avails the fund expects to increase in value.
2. Funds that seek income primarily invest in securities that produce income, such equally bonds that pay interest or securities that pay dividends.
3. Funds that seek a combination of growth and income generally invest in equity securities that pay dividends or else invest in a mix of equity securities and bonds.

Mostly, funds that seek uppercase appreciation are considered a more aggressive investment strategy (i.e., have the potential for greater returns, but also the possibility of greater losses), while funds that seek income are considered a more conservative investment strategy.

Principal Strategies

The principal strategies of the fund tell you how the fund intends to achieve its investment objective.  These strategies indicate the arroyo the fund's adviser takes in deciding which securities to purchase or sell.  For example, the fund may choose to concentrate in one or more industries, geographic regions, or types of securities.  In addition, some funds may be actively managed while others seek to replicate the performance of a specified index.  Although a fund's name ofttimes suggests that the fund focuses on a detail blazon of investment, y'all should not rely upon the fund's name without examining the prospectus further.

Some funds may also reserve the right to take a "temporary defensive position."  These funds may invest 100% of avails temporarily in cash or other relatively prophylactic instruments in anticipation of a market downturn that could adversely impact fund functioning, even if that would not normally exist consistent with the fund's primary investment strategy.

Risks

All investments in funds involve risk of fiscal loss.  The reward for taking on risk is the potential for a greater investment return.  An investor with a high-risk tolerance is more often than not willing to adventure losing money in guild to seek larger investment gains than those typically achieved by a lower-gamble investment.  On the other hand, an investor with a low-run a risk tolerance may favor investments in funds that are mostly more stable in value.

When reading a fund prospectus, it is important to determine if the fund satisfies your investment objective and matches your adventure tolerance, besides equally the risks in your overall portfolio.  Your gamble tolerance depends upon several factors, including your financial situation, age, and family obligations.

The types of risks to which a fund is subject vary considerably with the nature of its investments.  Some of the more common risks for funds include:

• Market adventure.   The fund may incur losses due to declines in the markets in which it invests.
• Concern or Issuer risk. The fund may invest in a company that goes out of business, suffers financial problems, or otherwise does not perform as expected, especially if the fund primarily invests in companies without an established record.
• Credit adventure.  The fund may invest in bonds or other debt instruments from an issuer who is unable to pay interest payments as scheduled or repay the principal.
• Involvement rate hazard.  The value of the fund's investments in bonds or other debt instruments may decrease if interest rates rise.
• Inflation risk.  The value of the fund'south investments in bonds or other debt instruments also may not continue track with price increases from inflation.
• Concentration run a risk. The fund may concentrate its investments in a particular industry, sector or geographical area, which can result in a less diversified portfolio that may be subject to greater volatility in performance than a fund that does not concentrate its investments.

Related Information

For additional educational information for investors, run across the SEC'southward Investor.gov website or the Office of Investor Didactics and Advocacy's homepage.  For boosted data related to reading mutual fund prospectuses, likewise see:

• How to Read a Mutual Fund Prospectus (Role ii of 3) – Contains information virtually the fee table and operation.

• How to Read a Mutual Fund Prospectus (Part 3 of 3) – Contains information about direction, shareholder information, and the Statement of Additional Information.

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Source: https://www.sec.gov/oiea/investor-alerts-bulletins/ib_mfprospectus1.html