Investment fund management reports provide clients with essential information about their investments. They are reliable and simple to comprehend. These reports provide performance data in a variety of ways (MTD) QTD, YTD, and YTD) and are often coupled with information on risk analysis like VaR or stress testing. Regulatory demands are forcing managers to present their risk management processes in more detail than they have ever before.
Investors are more and more interested in knowing the exact amount they pay for their fund investments. This is evident in the demand for more detailed information on fund fees. Some funds define management fee in a narrow manner and include only costs related to selecting securities for the portfolio in this number. Other funds have “unified fees” that cover a range of costs including administrative and record-keeping services, brokerage commissions and 12b-1 fees.
Many funds make use of breakpoint agreements in which the management fee decreases over certain asset intervals, based on the total assets of a fund. Investors should know how much the management fee is at each interval to assess these contracts. The GAO suggests that the Commission that funds provide fee information per share at the level of class as also revealing any fees that are paid from the principal, but not the management fee.
The GAO has also recommended that the Investment Company Act require that independent directors (directors http://productsdataroom.com/what-is-managed-file-transfer-and-what-is-its-place-in-protecting-businesses who are not part of the fund’s management) constitute at least a majority of a fund board. This will ensure that the board members are independent and are able to represent the shareholders’ interests.