Disclosure

Man studying and concentrating.Before you invest, learn all that you can.  Here are some tips on how to do your research.

What some investors don’t know is that all publicly traded companies and mutual funds have to disclose information about themselves.

 

The Facts – Disclosing Relevant Information

A key part of choosing an investment that’s right for you is to do your homework by reading all of the materials that a company issues about what is influencing its business, its results and returns for investors. This process is called disclosure and requires that all relevant details are made available to all investors equally.

Investing should never be about “overnight success.” Success over time should be your goal, and the tried and true method to meet this goal is to do your homework and have a plan.

DIY Investing or Working with an Adviser

Doing your research and developing an investment plan takes time and some discipline. And lots of investors enjoy the process of digging into the details of financial disclosures to get the facts they need.

So, if you’re not up to doing your research and learning what’s really driving the results of a company you are thinking of investing in, you may want to consider working with an adviser who essentially does this work for you. They can then recommend options that are a fit for you – in the balance of all of the facts.

Now let’s take a look at some of the specifics of where to find various types of disclosed information.

Mutual Funds and Fund Facts

If you’re considering a mutual fund, the seller is required to provide Fund Facts, an information sheet on the fund that discloses critical information such as the total number of investments in the fund, the fund’s performance history, and costs.

You can often find these on the mutual fund company’s website, on SEDAR, through your financial adviser or your online trading service.

One added value of the Fund Factsheet, is that it summarizes the risk profile of the fund, which is a helpful way for all investors to quickly understand a fit with their investment goals.

Types of Disclosure Documents

Mutual funds and publically traded companies are required to disclose all pertinent facts about their business to the public.

Disclosure documents can include quarterly and annual financial statements, prospectuses, management information circulars and management’s discussion and analysis (MD&A).

Where to Find Company Information

Company’s Website

  1. The majority of public companies provide annual reports and additional financial information on their websites.

System for Electronic Document Analysis and Retrieval (SEDAR)

  1. SEDAR is the official electronic home for all disclosure documents from investment funds and publicly-traded companies across Canada. As an investor, you can access disclosure documents on SEDAR for free.

System for Electronic Disclosure by Insiders (SEDI)

  1. Whenever an “insider” (e.g., chief officers and directors) buys or sells securities from their firm, they’re required to provide a report to SEDI. Similar to SEDAR, investors can access this information for free.

 

These disclosures are governed by your provincial securities commission who specify the requirements for transparency to investors.