Statement of additional information

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The Statement of additional information (SAI) is a supplementary document to a mutual fund prospectus, which provides detailed ancillary information regarding the operation of the fund. It is often called "Part B" of the fund prospectus. [1]

Statement of Additional Information (SAI)

"Mutual funds and closed-end funds (but not UITs) also are required to have statements of additional information (SAIs). Funds must give you the SAI without charge if you request it.

The SAI conveys information about the fund that some investors find useful. The SAI affords the fund an opportunity to expand discussions of the matters described in the prospectus. The SAI generally includes the fund’s financial statements and information (or additional information) about: the history of the fund; some fund policies (such as on borrowing and concentration policies); officers, directors and persons who control the fund; investment advisory and other services; brokerage commissions; tax matters; and performance measures, such as, average annual total return."

-- SEC



SAI sections

Among the sections included in the SAI, one will usually find the following major sections: [2]

Example:

Vanguard SAI Table of Contents

  1. Description of the Trust
  2. Fundamental Policies
  3. Investment Strategies and Nonfundamental Policies
  4. Share Price
  5. Purchase and Redemption of Shares
  6. Management of the Funds
  7. Investment Advisory Services
  8. Portfolio Transactions
  9. Proxy Voting Guidelines
  10. Information About the ETF Share Class
  11. Financial Statements
-- Vanguard European Stock Index (VEURX) SAI


Fundamental policies

This section of the SAI details the fund's policy regarding such issues as borrowing, use of commodities, and limits regarding portfolio concentration in individual securities or industry sectors.

Investment policies

This section goes into great detail regarding the risks associated with the investments allowed by the fund's prospectus. These can include (but are by no means limited to) convertible securities, derivatives, swaps, options, currency forwards, repurchase and reverse repurchase agreements, and exchange traded funds.

Management of the fund

This section provides a close examination of a fund's distribution costs and marketing strategies. This section also provides disclosure of trustee compensation as well as trustee ownership in the fund.

Investment advisory services

This section provides details regarding the advisory contract, and provides a listing of other accounts managed by the fund manager. The fund manager's investment in the fund is also revealed.

Portfolio transactions

This section reveals the amount of brokerage commissions the fund has incurred buying and selling fund securities.

Proxy voting guidelines

This section details guidelines on how the fund, as a shareholder in the companies it owns, will vote on proxy issues.

See also

References

  1. Investopedia definition.
  2. To view: Select Statement of Additional Information from the document list.Vanguard SAI