AMFI Exam Tips series -7

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This chapter examines the mutual fund world from the shareholder perspective.

In the final series i will be sharing objective type question papers which will give all aspirants fair idea about the question pattern.

Mutual Fund Shareholders

The Prospectus
Financial Reports
Types of Accounts

Shareholder voting
Certain shareholder issues are decided based on votes by all of the outstanding shares. Some of the issues shareholders vote on are:

· filling vacancies on the board of directors
· proposed changes in the investment advisory contract
· other material changes to fund provisions, objectives etc.

The prospectus is a key document for investing in mutual funds. It contains detailed information about the fund and its

· management
· major service providers
· investment objectives and policies
· rules pertaining to purchasing and redeeming shares
· dividend policy
· NAV calculated time and method other operating policies.

Each prospectus must comply with SEC regulations for information disclosure. The following is an example of standard prospectus language stating the purpose of the document:

The Prospectus
The statement of additional information (SAI), also known as Part B of the prospectus includes additional supporting detail for items included in the prospectus. It is available to all shareholders upon request, and required to accompany the prospectus in some states.

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