In a previous blog post we talked about fund facts. Fund facts provide investors with relevant and timely information they need to make an informed decision when deciding to purchase a mutual fund. One of our readers was researching a mutual fund recently and found that the fund facts document they were reading was almost eight months old. They wanted to know how often a fund facts document must be updated to ensure investors are getting the most recent information.
Under securities laws fund facts must be updated by a mutual fund company at least on an annual basis. If you find a fund facts that is more than a year old there should be a more recent version. If there is a material change to the fund, then the fund facts must be updated within 10 days after the material change occurs. For example, if there is a change in the portfolio manager or a change in the investment objective of the fund, , a fund facts document must be amended and published.
The following paragraphs from the companion policy of NI 81-106 describe what constitutes a material change that would require an amendment to a fund facts document:
Paragraph 2.1(1)(e) of the Instrument requires a mutual fund to file an amendment to a fund facts document when a material change to the mutual fund occurs that requires a change to the disclosure in the fund facts document. This mirrors the requirement in paragraph 11.2(1)(d) of National Instrument 81-106 Investment Fund Continuous Disclosure. We would not generally consider changes to the top 10 investments, investment mix or year-by-year returns of the mutual fund to be material changes. We would generally consider changes to the mutual fund’s investment objective to be material changes under securities legislation.