This article is from the Investing Articles: Mutual Funds series.
All prospective fund investors must receive a prospectus from the fund and declare that they have read it before a purchase application can be accepted by the fund. Before purchase, many investors do not take the time to read the prospectus. These same investors are generally the first to complain when they learn that the fund does not provide certain services or when subsequent purchases or sales of shares are delayed because the shareholder does not understand the procedure for conducting such transactions or the fund levies fees and charges when the shareholder thought the fund was 100% no-load. Read the prospectus!
When mutual fund shares are purchased, the fund will not send stock certificates unless requested to do so by the investor. Instead, ownership is recorded electronically, and the transfer agent keeps a record of the number of shares purchased.
Exchanging and redeeming shares is generally as easy as making purchases. If you have telephone exchange privileges, merely call the fund and request a redemption. Or, write directly to the fund and request that shares be sold and the proceeds sent to you. While you can request that "some" shares be exchanged by telephone, you cannot close an account [sell all shares] unless the fund receives a written and duly signed request to do so.