Category Archives: Mutual Funds

Mutual fund trends to watch in 2017

Mutual funds are usually a safe investment, and despite a troubled year this was definitely true at the end of 2016. The S&P 500 finished the year up 12%. Diversified stock funds in the United States went up an average of 10.81% after gaining 4.06% in the fourth quarter. With last year and its post-election rally over, it remains to be seen whether 2017 continues strong for mutual funds. To best prepare for the days to come, let’s look at some predictions for the rest of the year and see what new regulations might be enacted.

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In general, experts have reason to be cautiously optimistic about trends throughout the stock market. After a steady and even rapid rise throughout the Obama years, trends are expected to level out now they’ve mostly reached or exceeded the levels before the worldwide financial crisis in 2008. 2017 is Donald J. Trump’s first year in office, and investors may become more conservative as they wait and see what sort of effect his policies will have on consumer confidence and business in general. And basic math means since stock prices have raised making stocks more expensive to buy, leading naturally to a lower buy-rate as supply exceeds demand.

The most common reaction from Wall Street despite a turbulent 2016 has been to make like a British wartime propaganda poster and “Keep Calm and Carry On.” Despite ferocious anti-globalist and America-first trade promises, key firms such as Goldman Sachs believe Donald Trump remains a pro-business Republican and will tone down the rhetoric and pass only moderate regulations and tariff hikes while in office. With no other major changes in the global situation thus far in evidence, investors seem willing to stay the course and assume no major financial crisis is imminent rather than risk missing out on more strong quarters like Q4 of 2016.

But 2017 predictions definitely include some risks and pitfalls to watch out for, and even a chance for major mishap in the mutual fund space. Liquidations and mergers may continue to increase in 2017, while possible bad news in commodities might mean a drop in exchange-traded notes. Liquid-alternative funds have risen in popularity over the last few years, but their downsides have been mostly ignored, including a tendency to be not quite as liquid as advertised, with a risk of locking investors into bad deals. Keep in mind that although 2016 saw a big rally, the majority of the year was rough for mutual funds, and 2017 might well be no different, and might lack the rally at the end.

Note also that new regulations by the Securities and Exchange Commission (SEC) may influence growth. New SEC rules for money market mutual funds went into effect in October of 2017, for example.  These changes include new definitions for government and retail funds wherein institutional prime (general purpose) and institutional municipal money market mutual funds must price and transact as “floating” NAVs, able to change liquidity fees in times of unusual stress upon the market.

When planning for whatever the next year brings, companies should be sure contract a financial printing or specialized printing firm for any mutual fund publishing and content management that needs doing. Financial printing companies employ XBRL experts who can help with SEC filings whether one’s business is an IPO or deals in Mergers and Acquisitions in what promises to be, at the very least, an exciting year for all of us.

The investment industry is experiencing upheaval due to the rise of passive funds and robo-advisors. At the same time, the regulatory environment is in major flux. How will the changing conditions affect dealmaking in the sector?

How mutual fund SEC filings compare to corporate issuer filings

Our ETF and mutual fund teams are experts with the intricacies (and deadlines) of mutual fund reporting e.g. keeping track of the very subtle changes, prospectus-by-prospectus, across a trust.

Although the SEC filings for ’40 Act documents are no more “accurate” than ’33 and ’34 Acts, the process and volume of work, per client, can be much greater. Our WorkStream process diagram illustrates that. Request our 2017 MF & ETF Calendar for even more clarity. 

WorkStream-Integrates-Traditional-and-Automated-Publishing-for-Mutual-Funds_V3

CLICK IMAGE TO ENLARGE

 Corporate SEC filings compared with mutual fund SEC filings:

Corporate Issuer Filings

Securities Act Of 1933

Mutual Fund Filings

Securities Act Of 1933 and 1940

S-1: Initial IPO registration N-1A: Initial fund registration
S-1/A: Pre-effective amendments

 

N-1A/A: Pre-effective amendments
POS AM: Post-effective amendments 485APOS: Post-effective amendments
NA 485BPOS: Post-effective amendments with XBRL risk/return reporting
8-K: Current report 497: Supplement report
10-Q: Quarterly report with XBRL N-Q: Filed Q1 and Q3 reporting
NA N-CSRS: First six-month report including non-financial information
NA NSAR-A: First six-month financial-based report
10-K: Annual report with XBRL N-CSR: Year-end report including non-financial information
NA NSAR-B: Year-end financial-based report
DEF 14A: Definitive proxy statement DEF 14A: Definitive proxy statement
NA N-PX: Annual proxy voting record
S-4: Merger N-14: Merger
NA 40-17G: Fidelity bond filing

Another differentiation is that, unlike a corporate S-1 issuer with its single “stock,” N-1A funds have a three-tiered structure

  • Trust – corporation: this is the entity that gets a CIK on the EDGAR system.
  • Series – fund: this is the specific fund
  • Class: most funds also have different share classes based on audience for that fund

Lastly, a cost difference between the S-1 and N-1A filing processes is that N-1A don’t have a SEC filing fee nor do they typically work through the “aesthetic” typesetting and financial “ink on paper” printing process. This generally happens when the fund is ready to be marketed – at the 485APOS and 485BPOS (post-effective) stage.

Request our 2017 MF & ETF Calendar now. Each month is sorted by FYE.

Mitigate filing deadlines risk with easy-to-read 2017 FYE calendar for Mutual Funds

To help keep track of the varying filing deadlines across funds with different fiscal-year-ends, we’re pleased to offer our 2017 Mutual Fund & ETF Filing Calendar.

v-mf_blog

CLICK HERE TO ORDER & DOWNLOAD YOUR CALENDAR

Both mailed to you to hang up on your bulletin board and as download, you’ll find this colorful and segmented month-by-moth per fiscal-year-end calendar perfect to remind you of those key filing and mailing dates.

  • Easy to read – separated by fiscal-year-end per page and month
  • Includes individual filing and mailing dates for all 12 FYE dates
  • Includes federal holidays

mutual-funds-filing-calendar-vintage-12

(FREE)

The SEC is being questioned by the Chamber regarding Mutual Fund e-delivery reversal

This month, the leader of the U.S Chamber of Commerce, via their Center for Capital Markets Competitiveness, told SEC Chair Mary Jo White that they are “extremely dismayed” regarding the August announcement that the SEC has “abandoned proposed Rule 30e- 3, which would permit mutual funds to deliver reports to shareholders by making them available on the internet.” This reversal is reported to be a result of lobbyists for the paper industry.

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From Tom Quaadman, executive vice president of the Chamber’s Center for Capital Markets:

“We believe that the SEC should move away from a 1930’s paper based model and embrace the information delivery systems used by the general public, including investors and the businesses they invest in. Backing away from the Proposed Rule, which would further support the ability of investors to choose between paper-based or electronic delivery of shareholder reports, is a major step backwards. In fact, we believe that this decision runs counter to the Commission’s tripartite mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation and ignores the significant demand for electronic access to such documents.”

Juxtapose this with what the WSJ reported last month when they first wrote on the SEC backtrack:

“It’s easy to think the world has gone digital,” said John Runyan, a former lobbyist for International Paper Co. who now runs Consumers for Paper Options. “The trend lines are in that direction, but why do we want to disadvantage the people who are least likely to manage that transition?”

Mutual funds depicted themselves as progressives countering Luddites, and as ardent environmentalists. Paper mailings are a vestige of “a bygone era” when people used to go to stores to rent VHS tapes, David Blass, general counsel for the Investment Company Institute, an industry group, said in a March speech. “Count all the harmful compounds emitted during paper manufacturing—along with the massive amounts of waste that discarded paper produces,” he said, “and we’re absolutely crushing the environment here.”

And this:

Consumer groups warned the SEC proposal would reduce readership of important documents. “We simply have not yet reached the point in this country where a sufficient percentage of investors prefer to receive disclosures electronically to justify a default to electronic delivery,” Barbara Roper, the head of investor protection at the Consumer Federation of America, told the SEC.

Confused? What they are talking about is bringing Notice and Access into the Mutual Funds’ communications environment.

There is a VERY APPROPRIATE historical precedent here. Don’t ANY of these people own equities?

As most all know in the equities markets, Notice and Access was adopted in 2008 by corporate issuers for their annual report and proxy materials. It’s the formal regulatory defined process under which issuers and other soliciting entities can meet their proxy delivery requirements by posting proxy materials on a website, notifying shareholders of the availability of such materials and sending paper or email copies of such materials upon request. Digital documents and internet distribution is the default. Paper documents and hardcopy-mail distribution is the opt-in.

Currently, Mutual Fund fulfillment is still the opposite. Prospectuses and reports are printed and mailed by default and e-delivery is the opt-in. FYI: Our Mutual Funds teams support both media – for equities and funds. The front-end (detailed) work is exactly the same.

Order your free copy of this 30 page report. (click image)

Order your free copy of this 30 page report. (click image)

Now, if I were not such an optimistic person, regardless of the pundits above, I’d possibly imply that the battle over Rule 30e- 3 is not about shareholder transparency nor saving trees. The equities markets shaved millions off their IR budget… and (ignoring the detail that we are a top-thee EDGAR filer and financial printer) certainly and quite literally tons of 10-Ks and proxy books went directly into trash cans. That is undeniable.

One last point. Per the pundit above, I don’t know what is defined as a “sufficient percentage of investors,” but as you can read in our How are Investors Consuming your Investor Relations Content study, only 39% of Wall Street investors and 32% of Main Street investor prefer printed annual reports.

REQUEST REPORT HERE.

SEC says “Access THEN Notice,” not Notice and Access, for Mutual Fund print distribution

With a surprisingly analog mentality, the SEC backtracked on its 2015 Proposed Rule 30e-3 which would allow Mutual Funds to move to a “Notice and Access” online model for the fulfillment and distribution of their semi-annual shareholder reports and quarterly portfolio holdings. This would save the Mutual Fund industry millions of dollars.

Currently, Mutual Fund document delivery is “Access THEN Notice.”

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Here’s the difference:

Notice and Access, which was adopted in 2008 by corporate issuers for their annual report and proxy materials, is a process under which issuers and other soliciting entities can meet their proxy delivery requirements by posting proxy materials on a website, notifying shareholders of the availability of such materials and sending paper or email copies of such materials upon request.

  • Digital documents and internet distribution is the default. Paper documents and hardcopy-mail distribution is the opt-in.

Access THEN Notice is the status quo for Mutual Funds as well as the exact opposite of the equities’ process.

  • Paper documents and hardcopy-mail distribution is the default. Digital documents and internet distribution is the opt-in.

According to the Wall Street Journal, Mutual Funds annually print and mail 440 million shareholder reports at a cost of $308 million. The SEC emphasized data from a 2011 survey in which 59.5% of [Mutual Fund investors] respondents said they would read their Mutual Fund’s annual report online. 24.5% reported they prefer a mailed hardcopy report.

Apples learning from oranges

Much has been written of the initial trial and tribulations of Notice and Access for corporate issuers. Broadridge reports are the most detailed.

What most antagonists of Notice and Access commented about in 2008 and 2009 was the obvious drop in proxy voting by individual investors. Certainly, concerns about voting does not apply for Mutual Funds, but what DOES apply is the “speedbump” of poor communications to investors of this dramatic process change. Corporate investor relations and their corporate secretary have since corrected this – a tangible manifestation being the evolution to highly designed online proxy materials a.k.a. our interactive proxy materials documents.

In regard to Mutual Funds and Rule 30e3, Consumers for Paper Options, a lobbyist group funded by the paper industry’s largest tradegroup and several of North America’s biggest paper manufacturers, have taken the stance that “Notice and Access would impede access for many investors, especially the elderly, those with disabilities and minority Americans — all demographics that are less likely to have regular Internet access.’’

Per the WSJ: “In the end, big paper scissored big Mutual Funds.”

Beholden to our promise of intelligent value, Vintage is agnostic regarding analog or digital.

Our strengths lie in our omnichannel, flexible approach to document production and the subsequent transparent shareholder communications. Specifically for Mutual Funds, is our June 2016 launch of Vintage WorkStream – the concierge service for Investment Advisors / Fund Administrators to produce, SEC file and distribute Mutual Fund prospectus, shareholder reports and marketing materials.

.WorkStream-Integrates-Traditional-and-Automated-Publishing-for-Mutual-Funds_V3

Click image to view.

Capable of both traditional and automated publishing, Vintage Workstream is an agile document management platform that allows clients to access the best method of execution based upon the production requirements for each and every job.

The end documents easily and equally flow both online and onto a printing press.

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Workstream traditional publishing:

  • Simple workflow, lighter client responsibility and à la carte fees
  • Each document managed and created individually by Vintage
  • Favored stream for small complexes with limited series and Shareholder reports 

Workstream automated publishing with DocuBuilder: 

  • Component content management workflow for large complexes with multiple funds
  • All documents generated automatically from dynamic pool of approved content and data feeds
  • Reduces redundancies and assures content integrity and design continuity across all funds’ documents
  • Enterprise SaaS platform: shared resource across compliance and marketing teams
  • Generate prospectuses and marketing materials from the same content pool
  • Favored stream for large complexes with multiple series and classes of funds as well as aggressively growing complexes

Learn more here.

PS: I totally made up the phrase “Access THEN Notice.” 

Vintage WorkStream Combines Traditional and Automated Publishing for Mutual Funds’ Compliance

New agile document management process matches the publishing and workflow requirements of all Mutual Fund organizations 

NEW YORK, JUNE 08, 2016 / PR Newswire / — Vintage, the capital markets, corporate services and institutional & fund services division of PR Newswire, today announced the launch of Vintage WorkStream and the collaboration with Appatura and their innovative smart component content management and publishing solution, DocuBuilder.

Vintage Workstream is a concierge service for Investment Advisors and their Fund Administrators to produce, SEC file and distribute Mutual Fund prospectus, shareholder reports and marketing materials.

WorkStream-Integrates-Traditional-and-Automated-Publishing-for-Mutual-Funds_V3

Click image to enlarge.

Capable of both traditional and automated publishing, Vintage Workstream is an agile document management platform that allows clients to access the best method of execution based upon the production requirements for each and every job.

Unique in the industry, Vintage Workstream is customizable to best match the publishing volume within a trust and across a series of multiple funds as well as 100% freedom to move between the two publishing workflows, depending on a specific document’s’ unique attributes.

Traditional publishing

  • Simple workflow, lighter client responsibility and à la carte fees
  • Each document managed and created individually by Vintage
  • Favored stream for small complexes with limited series and Shareholder reports 

Automated publishing with DocuBuilder 

  • Component content management workflow for large complexes with multiple funds
  • All documents generated automatically from dynamic pool of approved content and data feeds
  • Reduces redundancies and assures content integrity and design continuity across all funds’ documents
  • Enterprise SaaS platform: shared resource across compliance and marketing teams
  • Generate prospectuses and marketing materials from the same content pool
  • Favored stream for large complexes with multiple series and classes of funds as well as aggressively growing complexes

 “The combination of Vintage and DocuBuilder has created a very client-centric publishing solution for mutual funds,” said Richard Plotka, CEO of Appatura. “It’s a complete 360 degree relationship that allows our clients,  to seamlessly navigate between Appatura’s automated platform and Vintage’s traditional typesetting, print and filing services. We’re very pleased to be working with Vintage. They have clearly positioned themselves to be a leader in execution and customer service which are important to us and our valued clients,” Plotka concluded.  

Vintage WorkStream supports different internal departments and international borders:

  • Compliance: prospectus, shareholder reports, summary pro, SAI, supplements, XBRL/EDGAR
  • Marketing: Factsheets, profiles, commentaries, pitch books, XML/HTML and other data feeds
  • UCITs: Kiid’s and factsheets 

“Our relationship with Appatura assures complexes a smooth publishing execution, regardless if it’s across a large series of prospectuses or a single, ad hoc shareholder report,” said Liam Power, President of Vintage. 

“One measure of success for a Mutual Fund is the continual expansion of the number of funds it manages However, that success can add an overwhelming publishing and filing burden,” explained Power. “Vintage WorkStream was expressly created to help our clients evolve from a traditional, one-document-at-a-time workflow into an automated publishing environment without losing the flexibility and value of working with their Vintage account team,” stated Power. “It’s an intelligent balance that assess speed, volume and of course, price.”

Please visit Vintage today for more information: http://www.thevintagegroup.com

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About Vintage

Vintage, a PR Newswire division, is a top-three provider of full-service regulatory compliance and shareholder communications services, delivered across our three practice areas: Capital Markets, Corporate Services and Institutional & Fund Services.

Founded in 2002 and acquired by PR Newswire in 2007, Vintage has evolved to become the industry’s intelligent value choice. We deliver a flexible balance of people, facilities and technology to ensure that regulatory compliance and shareholder communications processes are efficient, transparent and painless. Services include IPO registrations, transactions, virtual data rooms, EDGAR & XBRL filing, typesetting, financial printing and investor relations websites.

www.thevintagegroup.com

About Appatura.

Appatura, a subsidiary of Havas Worldwide (HAV:FP), is an Smart Content Solutions and  Automated Publishing and Distribution provider based in Ridgefield Park, NJ. They have been focused on delivering technology driven service solutions to the Mutual Fund and other industries for over 30 years.  By offering granular component content management and dynamic distribution in PDF, HTML, XML, XBRL, MSOffice, and other formats simultaneously and in real-time, they have helped change the way clients manage their content and create and deliver their marketing and compliance content and finished materials in the United States, Europe and Asia.

www,appatura.com

About PR Newswire

PR Newswire (www.prnewswire.com) is the premier global provider of multimedia platforms that enable marketers, corporate communicators, sustainability officers, public affairs and investor relations officers to leverage content to engage with all their key audiences. Having pioneered the commercial news distribution industry 60 years ago, PR Newswire today provides end-to-end solutions to produce, optimize and target content — from rich media to online video to multimedia — and then distribute content and measure results across traditional, digital, mobile and social channels. Combining the world’s largest multi-channel, multi-cultural content distribution and optimization network with comprehensive workflow tools and platforms, PR Newswire enables the world’s enterprises to engage opportunity everywhere it exists. PR Newswire serves tens of thousands of clients from offices in the Americas, Europe, Middle East, Africa and the Asia-Pacific region, and is a UBM plc company. http://www.prnewswire.com

Media Contact:

Bradley H. Smith

Director of Marketing, IR and Compliance Services

PR Newswire & Vintage

+1 201.942.7157

Who makes a video about a Mutual Fund timeline calendar?

I do… because exactly like how Vintage WorkStream can keep your prospectus workflow on track, our new and improved Mutual Fund & ETF calendar can keep your workdays on track. Plus, it will look snazzy on your bulletin board.

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Use the really enthusiastic button below to be mailed this free resource and to download a PDF version. Click the HD and full screen icons, lower right on the video, to see the calendar better.

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Mutual fund SEC filings v. corporate issuer SEC filings

Fast turns and spot-on execution is not limited to our corporate issuer clientele. Our investment management specialists (IMS) are equally honed for accuracy to meet the needs of mutual fund SEC filings.

In fact, I’d wager that our IMS team feel they are even more spotter-onner, due to the intricacies of mutual fund reporting e.g. keeping track of the very subtle changes, prospectus-by-prospectus, across a trust.

00003594Corporate SEC filings juxtaposed with mutual fund SEC filings:

Corporate Issuer Filings

Securities Act Of 1933

Mutual Fund Filings

Securities Act Of 1933 and 1940

S-1: Initial IPO registration N-1A: Initial fund registration
S-1/A: Pre-effective amendments

 

N-1A/A: Pre-effective amendments
POS AM: Post-effective amendments 485APOS: Post-effective amendments
NA 485BPOS: Post-effective amendments with XBRL risk/return reporting
8-K: Current report 497: Supplement report
10-Q: Quarterly report with XBRL N-Q: Filed Q1 and Q3 reporting
NA N-CSRS: First six-month report including non-financial information
NA NSAR-A: First six-month financial-based report
10-K: Annual report with XBRL N-CSR: Year-end report including non-financial information
NA NSAR-B: Year-end financial-based report
DEF 14A: Definitive proxy statement DEF 14A: Definitive proxy statement
NA N-PX: Annual proxy voting record
S-4: Merger N-14: Merger
NA 40-17G: Fidelity bond filing

Another differentiation is that, unlike a corporate S-1 issuer with its single “stock,” N-1A funds have a three-tiered structure

  • Trust – corporation: this is the entity that gets a CIK on the EDGAR system.
  • Series – fund: this is the specific fund
  • Class: most funds also have different share classes based on audience for that fund

Lastly, a cost difference between the S-1 and N-1A filing processes is that N-1A don’t have a SEC filing fee nor do they typically work through the “aesthetic” typesetting and financial “ink on paper” printing process. This generally happens when the fund is ready to be marketed – at the 485APOS and 485BPOS (post-effective) stage.

CLICK HERE for a filing calendar for mutual funds.

Easy-to-read FYE calendar for Mutual Funds

Both mailed to you to hang up on your bulletin board and as a download, you’ll find this colorful and segmented by your fiscal-year-end calendar perfect to remind you of those key filing and mailing dates.

MF_CALENDAR_700

  • FREE!
  • Easy to read – separated by fiscal-year-end per page
  • Includes filing and mailing dates for all 12 FYE dates
  • Includes federal holidays

request