Mutual Funds Facts An example
The Mutual Funds Facts provides core information about the fund and briefly explains the fees and expenses you will pay, the dealer’s remuneration, and your rights. For more details, consult the fund’s simplified prospectusA simplified prospectus is an abbreviated prospectus that meets all the legal requirements and provides the information to which investors are entitled..
Here is a sample Fund Facts that will be given to you. This document is also available on the website of the institution offering the fund. We have broken the Fund Facts down into its different sections. You will be able to learn more about a particular section by clicking on the numbered tablet to enlarge it.
Fund Facts
XYZ Canadian Equity Fund – Series B
June 30, 20XXThis document contains key information you should know about XYZ Canadian Equity Fund. You can find more details in the fund’s simplified prospectus. Ask your representative for a copy, contact XYZ Mutual Funds at 1-800-555-5556 or [email protected], or visit www.xyzfunds.com.
Before you invest in any fund, consider how the fund would work with your other investments and your tolerance for risk.
Quick facts
- Fund code:
- XYZ123
- Fund manager:
- XYZ Mutual Funds
- Date series started:
- March 31, 2000
- Portfolio manager:
- Capital Asset Management Ltd.
- Total value of fund on June 1, 20XX:
- $1 billion
- Distributions:
- Annually, on December 15
- Management expense ratio (MER):
- 2.25%
- Minimum investment:
- $500 initial, $50 additional
What does the fund invest in?
The fund invests in a broad range of stocks of Canadian companies. They can be of any size and from any industry. The charts below give you a snapshot of the fund’s investments on June 1, 20XX. The fund’s investments will change.
Top 10 investments (June 1, 20XX)
| Order | Company name | Fund part (Percentage) |
|---|---|---|
| 1. | Royal Bank of Canada | 7.5% |
| 2. | Toronto-Dominion Bank | 7.1% |
| 3. | Canadian Natural Resources | 5.8% |
| 4. | The Bank of Nova Scotia | 4.1% |
| 5. | Cenovus Energy Inc. | 3.7% |
| 6. | Suncor Energy Inc. | 3.2% |
| 7. | Enbridge Inc. | 3.1% |
| 8. | Canadian Imperial Bank of Commerce | 2.9% |
| 9. | Manulife Financial Corporation | 2.7% |
| 10. | Canadian National Railway Company | 1.9% |
| Total percentage of top 10 investments : | 42% | |
| Total number of investments : | 93 | |
Investment mix (June 1, 20XX)
Industry
- Financial services
- 30.4%
- Energy
- 26.6%
- Industrial goods
- 16.5%
- Business services
- 6.4%
- Telecommunication
- 5.9%
- Hardware
- 3.7%
- Healthcare services
- 2.3%
- Consumer services
- 2.1%
- Media
- 1.9%
- Consumer goods
- 0.6%
How risky is it?
The value of the fund can go down as well as up. You could lose money.
One way to gauge risk is to look at how much a fund’s returns change over time. This is called “volatility”.
In general, funds with higher volatility will have returns that change more over time. They typically have a greater chance of losing money and may have a greater chance of higher returns. Funds with lower volatility tend to have returns that change less over time. They typically have lower returns and may have a lower chance of losing money.
Risk rating
XYZ Mutual Funds has rated the volatility of this fund as medium.
This rating is based on how much the fund’s returns have changed from year to year. It doesn’t tell you how volatile the fund will be in the future. The rating can change over time. A fund with a low risk rating can still lose money.
Low Low to medium Selected elements Medium Medium to high High
For more information about the risk rating and specific risks that can affect the fund’s returns, see the Risk section of the fund’s simplified prospectus.
No guarantees
Like most mutual funds, this fund doesn’t have any guarantees. You may not get back the amount of money you invest.
How has the fund performed?
This section tells you how Series B units of the fund have performed over the past 10 years. Returns are after expenses have been deducted. These expenses reduce the fund’s returns.
Year-by-year returns
This chart shows how Series B units of the fund performed in each of the past 10 years. The fund dropped in value in 3 of the 10 years. The range of returns and change from year to year can help you assess how risky the fund has been in the past. It does not tell you how the fund will perform in the future.
Best and worst 3-month returns
This table shows the best and worst returns for Series B units of the fund in a 3-month period over the past 10 years. The best and worst 3-month returns could be higher or lower in the future. Consider how much of a loss you could afford to take in a short period of time.
| Return | 3 months ending | If you invested $1,000 at the beginning of the period | |
|---|---|---|---|
| Best return | 32.6% | April 30, 2003 | Your investment would rise to $1,326. |
| Worst return | -24.7% | November 30, 2008 | Your investment would drop to $753. |
Average return
The annual compounded return of Series B units of the fund was 6.8% over the past 10 years. If you had invested $1,000 in the fund 10 years ago, your investment would now be worth $1,930.
Who is this fund for?
Investors who:
- are looking for a long-term investment
- want to invest in a broad range of stocks of Canadian companies
- can handle the ups and downs of the stock market.
Don’t buy this fund if you need a steady source of income from your investment.
A word about tax
In general, you’ll have to pay income tax on any money you make on a fund. How much you pay depends on the tax laws where you live and whether or not you hold the fund in a registered plan, such as a Registered Retirement Savings Plan or a Tax-Free Savings Account.
Keep in mind that if you hold your fund in a non-registered account, fund distributions are included in your taxable income, whether you get them in cash or have them reinvested.
How much does it cost?
The following tables show the fees and expenses you could pay to buy, own and sell Series B units of the fund. The fees and expenses — including any commissions — can vary among series of a fund and among funds. Higher commissions can influence representatives to recommend one investment over another. Ask about other funds and investments that may be suitable for you at a lower cost.
1. Sales charges
You have to choose a sales charge option when you buy the fund. Ask about the pros and cons of each option.
| Sales charge option | What you pay | How it works | |
|---|---|---|---|
| in per cent (%) | in dollars ($) | ||
| Initial sales charge | 0% to 4% of the amount you buy | $0 to $40 on every $1,000 you buy |
|
| Deferred sales charge |
If you sell within :
|
$0 to $60 on every $1,000 you sell |
|
2. Fund expenses
You don’t pay these expenses directly. They affect you because they reduce the fund’s returns. As of March 31, 20XX, the fund’s expenses were 2.30% of its value. This equals $23 for every $1,000 invested.
| Annual rate (as a % of the fund’s value) | |
|---|---|
|
Management expense ratio (MER)
This is the total of the fund’s management fee (which includes the trailing commission) and operating expenses. XYZ Mutual Funds waived some of the fund’s expenses. If it had not done so, the MER would have been higher. |
2.25% |
|
Trading expense ratio (TER)
These are the fund’s trading costs. |
0.05% |
| Fund expenses | 2.30% |
More about the trailing commission
The trailing commission is an ongoing commission. It is paid for as long as you own the fund. It is for the services and advice that your representative and their firm provide to you.
XYZ Mutual Funds pays the trailing commission to your representative’s firm. It is paid from the fund’s management fee and is based on the value of your investment. The rate depends on the sales charge option you choose.
| Sales charge option | Amount of trailing commission | |
|---|---|---|
| in per cent (%) | in dollars ($) | |
| Initial sales charge | 0% to 1% of the value of your investment each year | $0 to $10 each year on every $1,000 invested |
| Deferred sales charge | 0% to 0.50% of the value of your investment each year | $0 to $5 each year on every $1,000 invested |
How much does it cost? cont’d
3. Other fees
You may have to pay other fees when you buy, hold, sell or switch units of the fund.
| Fee | What you pay |
|---|---|
| Short-term trading fee | 1% of the value of units you sell or switch within 90 days of buying them. This fee goes to the fund. |
| Switch fee | Your representative’s firm may charge you up to 2% of the value of units you switch to another XYZ Mutual Fund. |
| Change fee | Your representative’s firm may charge you up to 2% of the value of units you switch to another series of the fund. |
What if I change my mind?
Under securities law in some provinces and territories, you have the right to:
- withdraw from an agreement to buy mutual fund units within two business days after you receive a simplified prospectus or Fund Facts document, or
- cancel your purchase within 48 hours after you receive confirmation of the purchase.
In some provinces and territories, you also have the right to cancel a purchase, or in some jurisdictions, claim damages, if the simplified prospectus, annual information form, Fund Facts document or financial statements contain a misrepresentation. You must act within the time limit set by the securities law in your province or territory.
For more information, see the securities law of your province or territory or ask a lawyer.
For more information
Contact XYZ Mutual Funds or your representative for a copy of the fund’s simplified prospectus and other disclosure documents. These documents and the Fund Facts make up the fund’s legal documents.
XYZ Mutual Funds
456, rue Répartition d’actif
Montréal (Québec)
H1A 2B3
Phone: (514) 555-5555
Toll-free: 1-800-555-5556
Email: [email protected]
www.xyzfunds.com
To learn more about investing in mutual funds, visit the AMF’s website.
