All mutual fund ads contain a message: “Read all scheme related documents carefully.” What are these documents?
There are 3 important documents: Key Information Memorandum (KIM), Scheme Information Document (SID) and Statement of Additional Information (SAI).
These are prepared by the Asset Management Company (AMC) about a particular scheme, and submitted to the Securities and Exchange Board of India (SEBI) for approval.
The SID has information like:
- All Fundamental Attributes like Investment Objective and Policies, Asset Allocation Pattern, Fees and Liquidity Provisions.
- Fund Management Team details
- All Risk Factors in the scheme as well as risk mitigation mechanisms.
- Scheme details like load, plans and options, past performance, benchmark.
- General Unitholder information.
- Other details like list of AMC branches, Investor Service Centres, Official Points of Acceptance.
The SAI has information like:
- The constitution of the
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