Mutual Fund SAI - Should I Ask For It?

Jun 24, 2014: We own multiple mutual funds in our investment portfolio. These mutual funds' parent companies send us their prospectuses and annual reports on a regular basis. It is mandatory for them to do so. In this context we discovered "SAI."

What is a Mutual Fund SAI?

A mutual fund's prospectus also has a Part B known as Statement of Additional Information (SAI). We, as shareholders of the mutual funds, are entitled to this SAI. However it is not a requirement for the fund companies to send us the SAI. For most funds, we have to request it either by mail, phone or through the internet.

What does it contain?

Mutual Fund SAI - Should I Ask For It?Let us try to address the following questions with respect to a mutual fund:
  • Who are the officers and directors of the fund?
  • We want to examine the complete financial statement. Where can we find it?
  • What are the fund's investment policies?
  • How do we obtain detailed information on the fund's operation?
  • Who are the majority share holders of the fund?
The answers to all of the above questions and many more can be found in a mutual fund's SAI. For those of us who are of the DIY (Do-It-Yourself) type, and have invested a significant amount of money in mutual funds, it is highly recommend to request SAIs for mutual funds.

If we're interested in using mutual funds as a long term investment vehicle, it may be worthwhile to do a quick reading of the fund's SAI. Knowing the fund in detail would help us determine if it is aligned with our long term investment strategy and philosophy. Consequently we'd know if it's a fit for our portfolio.

Good Luck with Mutual Funds :).

Image Source(s): iStockPhoto

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