How often must mutual funds provide updated performance information to investors?

Mutual funds are required to provide updated performance information to investors on a regular basis to ensure transparency and allow investors to make informed decisions. The correct answer indicates that mutual funds must provide performance updates at least annually. This annual reporting includes detailed information about the fund's performance over the previous year, as well as insights into the investment strategy and any changes that may affect the fund.

This annual requirement is designed to protect investors by keeping them informed about how their investments are performing and giving them the opportunity to reassess their choices based on the fund’s performance. While more frequent updates, such as quarterly or monthly reports, may be provided, the regulation mandates that at the very least, investors can expect a comprehensive summary of performance once a year. This structure helps maintain a balance between adequate communication and the administrative burden on fund managers.