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Importance of SID/KIM/SAI of Schemes of Mutual Funds

Every mutual fund advertisement provides a disclaimer that investors are required to read the scheme related offer documents carefully before investing. The objective is to keep the investors well informed about their mutual fund investments. Every investment decision needs to be an informed one, and scheme related documents provide much-needed information and transparency.

  • What is a SID?

    A Scheme Information Document (SID) is one of the fund offer documents. It contains almost all the information about a particular mutual fund scheme. It includes details like ,minimum subscription amount, SIP details, fund managers and their experience, exit loads (if any), the scheme's objective, How will the Scheme Allocate Its Assets?, Where Will The Scheme Invest? Investment strategy, risk level, Minimum amount for purchase/redemption/switches ,Cut off timing for subscriptions/redemptions/ switches, Investor Grievances contact, expenses that will be charged to the Scheme, etc.

  • The Scheme Information Document or SID is easily available on the AMC/AMFI website

  • Riskometer and AMC Information: The first page of the SID contains the riskometer and some basic information about the AMC. It is supposed to provide information to the investors on the risk level the fund carries. Generally, Equity funds have a higher risk than other fund categories.

  • The information about the AMC includes the name of the Mutual Fund, the name of the Asset Management Company, the name of the Trustee Company, Company addresses, and their websites. Such information is provided in more detail in the SAI.

  • Read on to understand the primary sections included in a SID:

  • Introduction

    The scheme information document begins with the different applicable risks associated with certain aspects of the scheme. It may include risks related to equity investing, fixed-income securities, liquidity risk, credit risk, etc.

  • It includes risks associated with diverse investment strategies, different underlying assets of the fund, and any other risk involved that an investor may be exposed to by investing in a particular scheme.

  • Scheme Information

    This section includes the fund strategy and objectives. All the details of asset allocation, distributions, fund strategy, fund category and subcategory, fund performance and top 10 holdings of the fund are mentioned. However, the fund performance and holding information may not be available for the New Fund Offer (NFO)

  • Units and Offer

    This section contains details about the accessibility of the scheme. Given below are a few examples of details that you may see in this section:

    • 1. Available plan options: Direct or Regular
    • 2. Available Investment options: Growth, Income Distribution cum Capital Withdrawal Option (IDCW)
    • 3. Investor Eligibility
    • 4. The minimum amount required to invest or redeem
    • 5. Details associated with the availability of SIP/SWP/STP
    • 6. Switching options
    • 7. Exit loads
    • 8. NAV disclosures
    • 9. Details on Consolidated Account Statement
    • 10. Applicable taxes

    Fees and Expenses

    This section provides you with a detailed break up of all the applicable fees and charges.

  • Generally, a couple of charges are subsumed into the expense ratio. It may include trustee fees, investment management and advisory, audit fees, etc. This section will also talk about the applicable exit load, if any.

    • Other Scheme related Documents

  • Key Information Document (KIM)

    Key Information Document or KIM is an abridged form of SID. It has all the necessary information about a fund in a shorter format as compared to the SID.

  • Statement of Additional Information (SAI)

    Another mutual fund offer document is the 'Statement of Additional Information'. This document offers information on a larger note than that of the scheme. As the name suggests, it contains ‘additional information’. It includes information like the names of key persons in the AMC (asset management company), bankers, registrars, auditors and custodian legal counsel. It covers detailed information on the asset management company itself, including the sponsors and trustees. How To Apply? Financial and legal matters are also mentioned.

    Conclusion

    While investing in a mutual fund scheme, it is crucial for you to know about the scheme and the fund house. SID gives you all the information about the scheme, and SAI gives you all the information about the fund house. If the volume of information in the SID and SAI is overwhelming, you can refer to the KIM.. It is a concise version of the SID and has all the instrumental information for making an informed decision.

“Visit here https://licmf.info/KYCredressal to learn more about KYC requirements, SEBI Registered Mutual Funds and Grievance redressal.”

Disclaimer: The views expressed herein are based on internal data, publicly available information and other sources believed to be reliable. Any calculations made are approximations, meant as guidelines only, which you must confirm before relying on them. The information contained in this document is for general purposes only. The document is given in summary form and does not purport to be complete. The document does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. The information / data herein alone are not sufficient and should not be used for the development or implementation of an investment strategy. The statements contained herein are based on our current views and involve known and unknown risk and uncertainties that could cause actual results, performance, or event to differ materially from those expressed or implied in such statements. Past performance may or may not be sustained in the future. LIC Mutual Fund Asset Management Ltd. / LIC Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investment made in the scheme(s). Neither LIC Mutual Fund Asset Management Ltd. and LIC Mutual Fund (the fund) nor any person connected with them, accepts any liability arising from the use of this document. The recipients before acting on any information herein should make his/her/their own investigation and seek appropriate professional advice and shall alone be fully responsible / liable for any decision taken on the basis of information contained herein.

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.

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