Investment fund management reports provide investors with vital information about their investments. They are consistent and easy to understand. These reports usually present performance data in various ways (MTD QTD, MTD, and YTD) and are usually associated with risk analysis information such as VaR and stress testing. As regulations are imposed, managers are required to provide more detail on their risk management processes than ever before.
Investors are www.productsdataroom.com/top-3-data-security-tools-to-keep-your-information-safe/ more and more interested in knowing what they pay for their fund investments. This is evident in the demand for more detailed information on fees charged by fund. Some funds define the term management fee as narrowly as they only include costs related to the selection of portfolio securities in the above list. Other funds have “unified” fees that cover a wide range of costs, including the administration and record-keeping services, brokerage commissions, and 12b-1 fees.
Many funds utilize breakpoint agreements, whereby the management fee decreases over certain intervals of asset value based on the total assets of a fund. Investors should know the amount of the management fee is for each interval to assess these contracts. The GAO recommends that the Commission require funds to provide fee information per share at the class level and to report any fees that are paid out of the principal and not from the management fee.
The GAO also recommended that Investment Company Act requires that independent directors (directors who are not associated with the fund’s management) are at a minimum a majority of the board members of a mutual fund. This is to ensure that the independent board members are able to effectively represent the fund shareholders’ interests.
