Wednesday, January 11, 2012

"Fund Facts" is Coming

The Canadian Securities Administrators (CSA) has authorized a new disclosure document for mutual fund investors. It’s called Fund Facts (FF) and you’ll receive it when you’re sold a mutual fund. It is a dumbed-down version of the detailed simplified prospectus. It highlights key information for investors, including the fund performance, risk and the costs of buying and owning a fund. Regulators believe short, summarized disclosures of key information, such as the Fund Facts document, are more likely to be read by retail investors and at least somewhat understood than are longer fund prospectuses. You will no longer receive the simplified prospectus unless you ask for it. Despite FF being only 2-4 pages in length it attempts to provide the key facts of the mutual fund. In any event, make sure you understand the objectives of the fund (not well articulated in FF – seeing what the fund invests in is not the same as understanding its objectives).

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