When an investor seeks to explore mutual fund investments, they are presented with the mutual fund’s prospectus. This includes a plethora of documents that talk about the fund’s aims, strategies, and previous performance. The Statement of Additional Information (SAI) is one such document. It is a supplementary note that provides investors with insights into the operations and legal aspects of the mutual fund. Let us delve into the various aspects of SAI and understand how one can use it to their benefit.
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An SAI helps investors to get acquainted with the following:
The SAI helps provide investors with a comprehensive understanding of the structure and operations of the fund. Investors can leverage the data that it provides to reap certain benefits. First and foremost, SAIs facilitate informed decision-making. They supply the investors with a deep understanding of the fund’s approach to investment and its associated risks. This, in turn, empowers investors to make decisions based on their own financial objectives and degree of risk aversion. Although this additional information is not legally required, it helps increase transparency and thus improves relations with investors.
The SAI is a useful tool when it comes to investing in mutual funds. It extends the details mentioned in the prospectus while highlighting certain other details that the fund is not legally liable to disclose. By prudently utilizing this document, investors can make well-informed decisions while making sure that their goals and risk tolerance align with the fund they wish to invest in. All investors should carefully go through the SAI before making investment decisions. Practising this due diligence will most certainly aid in garnering the desired profits.