Investment fund management reports provide investors with crucial information regarding their investments. They are consistent and simple to comprehend. They typically present performance information in a variety of ways (MTD QTD, MTD, and YTD) and are often supported by risk analysis data such as VaR and stress testing. Regulatory demands are forcing managers to publish their risk processes in even more detail than they have ever before.
Investors are interested in knowing what they are paying for their investment, and this is reflected in the rising demand for more and greater detail on fund fee information. Some funds define management fees more narrowly and only include costs associated with selecting the appropriate securities for the portfolio in this amount. Other funds have “unified fees” that cover a variety of expenses including administrative and record-keeping services as well as brokerage commissions and a 12b-1 fee.
Many funds use breakpoint agreements, whereby the management fee decreases over certain asset intervals based upon the total assets of a fund. Investors need to know how much the management fee is at every interval to evaluate these contracts. The GAO recommends http://productsdataroom.com/data-room-providers-uk-have-your-data-protection-strategies-in-place that the Commission demand that funds provide fee information per share at the class level, and also to disclose any fees that are paid out of principal and not from the management fee.
The GAO has also suggested that the Investment Company Act require that independent directors (directors not connected with the fund’s management) constitute at least a majority of a fund’s board. This is to ensure that independent directors are able to effectively represent the interests of fund shareholders.