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Toward the end of 2020, Morningstar released the latest iteration of its Global Investor Experience study, with the chapter focused on Disclosure. I contributed to the study as the primary researcher and author for the section on the U.S. market. This study plays a valuable role in pushing the global fund industry toward best practices.
In this column, I’m using my work on the “2020 Global Investor Experience Study: Disclosure” as a jumping-off point to consider a more basic question: What does disclosure mean in the context of mutual funds, and why should it matter to investors? The truth is that disclosure practices aren’t just an abstract concept of concern to regulators and asset managers they’re highly relevant and of tangible value to investors.
Synopsis
According to Morningstar s biannual Global Investor Experience report on disclosures, India and the US received top grades due to their robust disclosure practices.
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The mutual fund industry of India and the US received top grade for robust disclosure practices in areas such as fees and transparency of fund holdings, according to a global study by Morningstar. However, India could work to improve the level of details provided by fund firms in discussions of performance and risk within fund literature, it added. According to Morningstar s biannual Global Investor Experience report on disclosures, India and the US received top grades due to their robust disclosure practices.
The mutual fund industry of India and the US received top grade for robust disclosure practices in areas such as fees and transparency of fund holdings, according to a global study by Morningstar. However, India could work to improve the level of details provided by fund firms in discussions of performance and risk within fund literature, it added. According to Morningstar s biannual Global Investor Experience report on disclosures, India and the US received top grades due to their robust disclosure practices. The two markets feature global best practices for disclosure of portfolio manager names, fund ownership and compensation. India earns a top grade for disclosure given the strength of its requirements for monthly portfolio holdings disclosure, portfolio management disclosure, and specifications for the simplified prospectus, the report noted.
Investors increasingly back ESG-friendly companies, more transparency still needed
December 19, 2020
Sustainability funds need to be more transparent in the stocks they hold to ensure investors are completely aware of where their money is going.
30SHARES
As Australia stares down the barrel of another bushfire season, and coronavirus continues its global rampage, retail investors are increasingly voting with their feet and putting their cash behind funds and stocks with favourable environmental, social and corporate governance policies.
ESG compliance has gained momentum over the past decade pushing companies to improve on their environmental and social policies while increasing transparency – however, more is needed.