Introduction to Important Mutual Fund Documents: The Shareholder Report

A mutual fund's shareholder report is part biography, part blueprint, and part ledger book.

A good shareholder report is like a biography in that it sets out what happened to the fund over the past quarter, six months, or year, and why. It's like a blueprint because it sets before you all the investments in stocks, bonds, and other securities that the fund has made. And it's like a ledger book because it discloses a fund's costs, profits, and many other financial facts. Mutual funds are required by the Securities and Exchange Commission to release a shareholder report at least twice a year, though some fund families publish them quarterly.

Not all of the following items are required by law to appear in a mutual fund's shareholder report. The SEC allows some of the information to be included in other documents, such as a fund's prospectus or Statement of Additional Information. However, a good report will contain all of the elements discussed here.