Mutual funds receive investment capital from investors and use that money to purchase securities. The types and amounts of securities depend on the investment strategy of the mutual fund and change over time as the investment manager makes adjustments to the portfolio.

The turnover, which refers to the investment manager divesting current securities or buying new securities, can occur very often or remain static for a long period of time, depending on the mutual fund.

Disclosures for Mutual Funds

The Securities and Exchange Commission (SEC) requires mutual funds to report the complete lists of their holdings on a quarterly basis since they are regulated investment companies.

Mutual funds use SEC Forms N-Q and N-CSR to disclose their quarterly holdings at the end of each fiscal quarter. These forms are accessible online at the SEC website, primarily through the SEC Edgar online database. Also, many mutual funds disclose their holdings on their official websites.

Under the SEC regulation, the quarterly filings that mutual funds must disclose, need to be certified by a fund's principal executive and financial officers. Although management discussion and analysis are not required, some mutual fund managers choose to comment on their fund's performance in their quarterly reports. Quarterly reports help individual investors assess how funds are complying with their investment objectives.

Other information typically disclosed by a mutual fund include the net asset value, assets under management, performance, industry weightings, and other such information that give an idea of the composition of the fund and how it is performing.

Timing of Mutual Fund Disclosures

Mutual funds have 60 days after their quarter ends to file their holdings with the SEC. Most funds post their holdings 30 days after the quarter ends. Posting earlier than this is very rare, making their reporting not particularly timely. Some funds choose to report their holdings even more frequently, on a monthly basis, but this is less of a norm, as monthly reporting requires a lot of effort and cost on the part of mutual funds.

One of the more common items seen in the list of mutual fund holdings reporting is the top 10 holdings that the fund owns. This is usually updated on a monthly basis and is made available on the company's website quite quickly, within a few weeks.

All that being said, given the delays in reporting, when you look at what has been filed, more often than not, you are not looking at the current portfolio mix. This means that the SEC is not looking at the most recent holdings nor is an investor accurately aware of where their money is being invested. This is especially true with funds that have high turnover ratios.

Mutual funds argue that the delay is necessary, as it prevents other traders from knowing what the fund is investing in, and therefore ensures that the price of the security will not be adversely impacted by other traders buying or selling. The process of traders doing this is known as front-running.

The Bottom Line

Mutual funds have to report their holdings on a quarterly basis and have up to 60 days after the quarter to do so. Although some investment advocacy groups have suggested a monthly reporting requirement for mutual funds and other registered investment companies, the SEC has not yet made any sort of ruling on this proposal yet.