The Investment Company Act of 1940 requires mutual funds to send what to shareholders?

The Investment Company Act of 1940 mandates that mutual funds provide shareholders with semiannual and annual reports. This requirement is in place to ensure transparency and to keep investors informed about the mutual fund's financial health, performance, and investment strategies. These reports typically include details such as the fund’s performance relative to its benchmarks, portfolio holdings, expenses, and any changes in management or fund policies. By providing this information, the Act aims to protect investors by ensuring they have access to critical information for making informed investment decisions.

Other options do not align with the regulatory requirements. While quarterly dividend payments and monthly newsletters may be offered by some funds or companies, they are not mandated by the Investment Company Act of 1940. Annual bonuses are not a feature of mutual funds, as these funds distribute profits in the form of dividends rather than bonuses to investors. Thus, the correct choice reflects the legal obligations set forth by the Act to promote transparency and accountability within mutual funds.