Investment fund management reports help provide clients with critical information about their investments in a consistent, accessible way. They present performance data in different ways (MTD), QTD and YTD) and are usually combined with information on risk analysis like VaR or stress testing. As regulations are imposed, managers are required to provide more detailed information regarding their risk management procedures than ever before.
Investors are keen in knowing the amount they are paying for their fund investment and this is evident in the rising demand for more more detailed fund fee data. Some funds define the term management fee as narrowly as they only include the costs associated with choosing portfolio securities within the above list. Other funds have „unified” fees that cover a range of expenses, such as the administration and record-keeping services, brokerage commissions, and 12b-1 charges.
Many funds use breakpoint agreements, in which the management fee reduces at certain intervals in the asset portfolio based on the total assets of the fund. Investors need to know what the management fee is for each interval in order to evaluate these contracts. The GAO suggests that the Commission demand that funds provide fee information on a per-share basis 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) comprise at least a majority of the members of a fund board. This is to ensure that board members who are independent are able to adequately represent the fund shareholders as well as the interests of fund shareholders.
