October 28, 2020
1. Overall, would the sample shareholder report be useful in monitoring your fund investments? If not, how would you change it?
Possibly but it needs to ensure that it does not lead to less information for the investor to make the most informed decision possible about the fund in which they are choosing to invest.
2. Rate the sections of the sample shareholder report. Please indicate whether you find each section useful or not useful. Please consider explaining your responses in the comments.
a. What was your cost for the period? : Useful :
b. How did the Fund perform last year? What affected the Funds performance? : Useful :
c. How did the Fund perform over the past 10 years? : Useful :
d. What are some key Fund statistics? : Useful :
e. What did the Fund invest in? : Useful :
f. How has the Fund changed? : Useful :
g. How does the Fund ensure that it has money available to pay me when I exit the Fund? : Useful :
h. Where can I find additional information about the Fund? : Useful :
3. The section titled What was your cost for the period? includes an example of what it costs to hold fund shares this year.
a. Is the table clear? Yes
b. Is it helpful to see costs paid both in dollars and as a percentage of your investment? Yes
c. Is it clear how the total returns of the fund minus the costs paid result in the ending account value? Yes
4. The section titled How did the Fund perform last year? What affected the Funds performance? includes narrative and graphic presentations
a. There is a narrative description of the funds past performance in the Performance Highlights section. Does the narrative description help you understand the key drivers of fund performance? Yes
b. There is a graphic presentation of key drivers of the funds past performance in the Performance Attribution section. Does the graphic presentation help you understand why the fund performed as it did over the past year? No
c. There is a line graph representing the funds performance in dollars over the past 10 years. Does this graph help you understand how the fund performed over that time period? Yes
d. There is an Average Total Returns Table showing the funds performance as a percentage over the past 1, 5, and 10 years. Does this table help you understand how the fund performed over those time periods? Yes
e. Is it helpful to see the funds performance both in dollars and as a percentage? Yes
Is there any information that could be presented more clearly in the How did the Fund perform last year? section?
Information about the rights of each type of share would be helpful, along with why there is a difference in performance between different types of shares. Just showing that there was a difference creates more questions than it answers. I think it would also be helpful to know who or what types of investors makeup the ownership of each type of share.
5. The sample shareholder report includes key statistics about the funds size, number of investments, and annual portfolio turnover. Do these statistics provide meaningful information regarding the fund, for example, to help put the funds performance and investments into context? Yes
6. The section titled What did the Fund invest in? includes charts describing the types of investments made by the fund. Do these charts help you understand how the fund is investing your money? No
7. The section titled How has the Fund changed? describes important changes to the fund within the last fiscal year. What types of changes are most important to you?
Types of changes that would be important to know about include any divestment or new investments over a certain threshold, major governmental or Fed actions that impact rates, sectors or securities that had an overweight influence on the direction of fund returns, key executive changes of any of the organization into which it is invested, any changes in fund management and the track record of new fund managers.
8. Is there any information in the sample shareholder report that is difficult to understand, confusing, too technical, or that could be presented more clearly?
The performance attribution in the second graphic about fund performance could be clearer as to what degree each contributor of detractor affected the fund. Just showing arrows doesn't provide enough context as to what weight those asset classes and sectors have on the fund.
9. Is there additional information that we should require in the shareholder report? This could include the funds full financial statements, the results of any shareholder votes and/or how much the fund paid to directors, officers, and others. Is there any information in the sample shareholder report that should be highlighted more?
I think it would be helpful to know how the fees for the fund are being spent. The full financial statements should at least be provided via a link, if not included in this report. Additionally, forward looking statements about the investment plans for the fund would be imperative. Investors need to know what the fund and its managers plan to do with the investment to ensure it aligns with their investment goals. Those forward looking statements should include realistic benchmarks for returns, and justifiable reasons for those projected returns. It would also be helpful to know which firm is auditing the fund and where to access more information on the fund's audited statements.
10. Under the proposal, in addition to the shareholder report, you also would have access to more information about the fund online (and delivered in paper on request). How likely would you be to seek more information on the following?
The funds full financial statements : Very Important
Key financial information over time : Very Important
Changes in and disagreements with accountants : Very Important
Results of any shareholder votes : Very Important
How much the fund paid to directors, officers and others : Very Important
11. Is the length of the document:
Too short
12. How would you prefer to receive or read a document like the sample shareholder report?
A combination of paper and digital
13. Do you have any additional suggestions for improving the shareholder report?
I put quite a few suggestions into the answer field for question 9. Please look there.