Module 1 : Investor Rights and Obligations
SID, SAI, KIM before investing
Every mutual fund scheme has three important documents which provide important information about the scheme. These documents are prepared by the Asset Management Company (AMC) and approved by the SEBI. Investors and financial advisors should read these documents carefully to understand the risk characteristics and other scheme features before making investment decisions. These three documents are the SID, SAI and KIM.
SID, SAI, KIM before investing
Every mutual fund scheme has three important documents which provide important information about the scheme. These documents are prepared by the Asset Management Company (AMC) and approved by the SEBI. Investors and financial advisors should read these documents carefully to understand the risk characteristics and other scheme features before making investment decisions. These three documents are the SID, SAI and KIM.
What is SID?
Full form of SID in mutual fund is Scheme Information Document. It contains basic information about the scheme which investors should know before investing. The scheme information document usually runs into several pages and may seem too technical for novice investors. However, it has very useful scheme related information, which can help investors make informed investment decisions. For the benefit of investors we will summarize some key information which investors should look for and read in the scheme information document.
Fundamental attributes of the scheme: Investment objective (e.g. capital appreciation, income generation etc), type of securities which the scheme will invest in (e.g. large cap, midcap, small cap, Macaulay duration, credit ratings etc), asset allocation of the scheme (e.g. percentage equity, fixed income along with ranges). Fundamental attributes of the scheme will help investors understand risk / return characteristics of the scheme.
Fund management team details: Fund managers of the scheme, experience of the fund managers and the list of other schemes managed by the fund managers. Fund managers play a very important role in the scheme’s performance relative to its benchmark index. Investors should check the track record of the fund manager before investing.
Risks factors: Different risks involved in the scheme’s performance. You should understand the risks clearly before investing.
Unit-holder information: Limits on investments and redemptions (if any), tax implications etc.
Scheme details: Entry or exit loads, different plans and options, benchmark, past performance etc.
Other information: AMC branch offices, Investor Service Centres, Official points of Acceptances etc.
What is SAI?
SAI full form in mutual fund is Statement of Additional Information. This document is essentially an addendum to the SID. Information provided in the SAI includes the following:-
Constitution of the mutual fund: Asset Management Company of the scheme, scheme sponsors and trustees. The sponsor is the promoter of the Asset Management Company. The sponsor provides capital, creates a board of trustees and sets up the Asset Management Company (AMC). The role of the trustees is to protect the interest of investors, monitoring the AMC and ensuring compliance with regulations.
Key information about the AMC: Key personnel of the AMC, key associates of the AMC like Bankers, Custodians, Registrars, Auditors and Legal Counsel.
Financial and legal issues.
What is KIM?
KIM full form in mutual fund is Key Information Memorandum. As the name suggests, it has key scheme related information. The KIM is essentially a concise version of the SID. The KIM is available with all mutual fund scheme application forms. It is recommended to read the KIM carefully before investing, especially if you have not gone through the SID.
Where can you find these documents?
The Scheme Information Document (SID), Statement of Additional Information (SAI) and Key Information Memorandum (KIM) are available online on the AMC websites. These are also available on SEBI’s website. If you want a printed copy of these documents, you can get it from the respective AMC branch office in your city or you can ask your mutual fund distributor or financial advisor to print copies of these documents for you.
What is SID?
Full form of SID in mutual fund is Scheme Information Document. It contains basic information about the scheme which investors should know before investing. The scheme information document usually runs into several pages and may seem too technical for novice investors. However, it has very useful scheme related information, which can help investors make informed investment decisions. For the benefit of investors we will summarize some key information which investors should look for and read in the scheme information document.
Fundamental attributes of the scheme: Investment objective (e.g. capital appreciation, income generation etc), type of securities which the scheme will invest in (e.g. large cap, midcap, small cap, Macaulay duration, credit ratings etc), asset allocation of the scheme (e.g. percentage equity, fixed income along with ranges). Fundamental attributes of the scheme will help investors understand risk / return characteristics of the scheme.
Fund management team details: Fund managers of the scheme, experience of the fund managers and the list of other schemes managed by the fund managers. Fund managers play a very important role in the scheme’s performance relative to its benchmark index. Investors should check the track record of the fund manager before investing.
Risks factors: Different risks involved in the scheme’s performance. You should understand the risks clearly before investing.
Unit-holder information: Limits on investments and redemptions (if any), tax implications etc.
Scheme details: Entry or exit loads, different plans and options, benchmark, past performance etc.
Other information: AMC branch offices, Investor Service Centres, Official points of Acceptances etc.
What is SAI?
SAI full form in mutual fund is Statement of Additional Information. This document is essentially an addendum to the SID. Information provided in the SAI includes the following:-
Constitution of the mutual fund: Asset Management Company of the scheme, scheme sponsors and trustees. The sponsor is the promoter of the Asset Management Company. The sponsor provides capital, creates a board of trustees and sets up the Asset Management Company (AMC). The role of the trustees is to protect the interest of investors, monitoring the AMC and ensuring compliance with regulations.
Key information about the AMC: Key personnel of the AMC, key associates of the AMC like Bankers, Custodians, Registrars, Auditors and Legal Counsel.
Financial and legal issues.
What is KIM?
KIM full form in mutual fund is Key Information Memorandum. As the name suggests, it has key scheme related information. The KIM is essentially a concise version of the SID. The KIM is available with all mutual fund scheme application forms. It is recommended to read the KIM carefully before investing, especially if you have not gone through the SID.
Where can you find these documents?
The Scheme Information Document (SID), Statement of Additional Information (SAI) and Key Information Memorandum (KIM) are available online on the AMC websites. These are also available on SEBI’s website. If you want a printed copy of these documents, you can get it from the respective AMC branch office in your city or you can ask your mutual fund distributor or financial advisor to print copies of these documents for you.