As a shareholder, you are entitled to certain information from the companies or mutual funds that you own. These communications are meant to give you transparency into both the performance of the company or fund as well as insight into key decisions, strategic objectives and other factors that could have a material impact on your investment and how you decide to vote.
Whether you are evaluating a potential new investment, want to understand how your investments are performing or just want to keep tabs on the shares you own, carefully reviewing these shareholder communications can help you make more informed decisions.
Publicly traded companies are required by the Securities and Exchange Commission to make regular, public reports of certain information to shareholders and prospective investors. Some of the most common shareholder communications that you should be aware of include:
|Annual Reports (10-K)
|A comprehensive overview of a company’s finances and business, consisting of five required sections: business overview; risk factors impacting the company; select historical financial data; management’s discussion and analysis; and audited financial statements and supplementary data.
|Quarterly Financial Reports (10-Q)
|A required, quarterly release of key financial information that provides shareholders a comprehensive, unaudited review of the company’s financial health.
|Shareholder Announcements (8-K)
|A required announcement of material events that shareholders need to be aware of. These can include mergers, acquisitions, or executive elections, as well as any changes in a company’s status or control.
You can learn more and get copies of these communications by visiting the website of the companies you own and looking at the investor relations section of the site.
Mutual funds are also required to release a range of communications to help inform prospective investors and current shareholders. Some of the most common communications that you should be aware of include:
|A once-yearly review of mutual fund performance over the previous fiscal year that includes detailed comparisons with the fund’s historic trends as well as information about holdings, sector exposure, risks, fund fees and expenses, and changes to the fund. They also contain commentary from the fund managers to help keep investors informed about current fund performance and positioning.
|A briefer, mid-year update on fund performance and holdings data generally without management commentary.
|A detailed, summary of a mutual fund’s investment objectives, strategies, risks, fees and past performance that is required to be shared with investors as part of the initial investment decision process. Prospectuses are updated each year and are generally sent annually to ensure that shareholders have the most current fund details for future investment purchases.
|Statement of Additional Information (SAI)
|A supplement to a mutual fund’s registration statement that contains additional information about fund history, investment and debt management policies, fund managers and advisors, as well as handling of taxes and brokerage commissions. SAIs are made available to investors, but are not automatically sent, unless requested.
In addition, mutual fund managers may also make available other information in the form of Fund Profiles, Fact Sheets, Tax and Distribution Info and Fee Disclosures. Each of these publications is meant to help keep shareholders informed about the nature of their investment.
Fund managers are required to distribute many of these documents proactively to shareholders. In many cases you can opt for e-delivery through your custodian or recordkeeper. You can also learn more by visiting the website of the mutual funds you own and reviewing the fund detail pages. These pages are updated frequently and can provide more current information about the funds you own.
In addition to fund-specific materials provided, you will also receive periodic account statements that show your personal performance and fund account transactions. These will be sent by your brokerage firm, mutual fund, 401(k) provider, or other company where you hold your investments.