Function

• The list of all securities of the fund contained in the annual report will allow an investor to compare and contrast the composition of funds with similar investment objectives.
  
  

Features

• The annual report will list the securities in the fund as well as the percent of each security of the whole composition. Also, the annual report will report the turnover metric, which will give an indication of how much the manager trades in the fund.
  
  

Benefits

• The reported holdings not only provide an update to the investors, they also ensure an accountability that the manager has maintained the guidelines spelled out in the prospectus.
  
  

Warning

• Investors need to understand that some managers will do some "window dressing" near the end of the fund's fiscal year. The reported holding from the annual report only gives a snapshot of one day in the portfolio and this composition changes constantly.
  
  

Considerations

• Many mutual fund companies have started to disclose the top ten holdings at the end of every month. This allows investors to have better visibility into the fund and track the performance of the holdings somewhat better.