EU legislation sets new standards for investor information
As of 1 July, 2012 new EU legislation will affect the European mutual fund industry. One of the consequences - and innovations - is that all fund management companies in the EU are required to publish a "key investor information document" (KIID) for all their UCITS funds under management.
Enhanced transparency and common rules in all EU-countries
The background for introducing the KIID is to make it easier for investors to understand and compare funds with funds in other countries or alternative fund managers. The document must always be two pages – no more, no less – and contain the most important information about each fund.
See an example of a key investor information document which have now been implemented for all our funds in all markets and in all languages
The document replaces the simplified prospectus and is fully standardized in terms of content, performance, risk and reward profile, annual updating procedures etc. Furthermore, the fund managers are required to avoid financial terms and to write in plain and concise language which aims to help potential investors understand the key features of the fund.
A simple risk and reward profile
An important part of the key investor information is a new risk indicator which rates the funds on a scale from 1 to 7. The most stable funds are rated with 1 whereas 7 indicates that the funds fluctuates substantially from year to year but on the other hand implies a potentially higher return than funds in the lower end of the scale.
According to the EU legislation fund management companies are required to monitor the funds’ risk figures regularly. If the data suggests that a fund has changed risk category the fund managers are required to publish an updated document.
See a list of all key investor information documents
