Scheme Related Information

Scheme Related Information (Part 1)

Definition: Scheme related documents are legal documents that provide the information that the investor requires to make an informed investment decision.
Details: These documents include the Scheme Information Document (SID), Statement of Additional Information (SAI), and Key Information Memorandum (KIM).

Mandatory Documents: These are the primary source of information for investors and include:
- Scheme Information Document (SID): Provides details about the scheme, such as investment objective, asset allocation, and risk profile.
- Statement of Additional Information (SAI): Contains statutory information about the mutual fund or Asset Management Company (AMC) offering the scheme.
- Key Information Memorandum (KIM): A summary of the SID and SAI, providing essential information for investors to make a decision.
Non-Mandatory Documents: These may include additional information or updates to the mandatory documents.
Importance of Scheme Related Documents: Investors are expected to read and understand these documents before investing, as they form the basis of the contractual relationship between the investor and the mutual fund.
Regulatory Provisions: The Securities and Exchange Board of India (SEBI) regulates the preparation and updating of scheme related documents, ensuring that they are accurate, complete, and easily accessible to investors.

Content: The SID provides information about the scheme, including investment objective, asset allocation, and risk profile.
Update Frequency: The SID is updated periodically, with changes reflected in an addendum or a revised document.

Content: The SAI contains statutory information about the mutual fund or AMC, including details about the constituents, investment valuation norms, and tax information.
Update Frequency: The SAI is updated regularly, with material changes reflected in an addendum or a revised document.

Content: The KIM is a summary of the SID and SAI, providing essential information for investors to make a decision.
Update Frequency: The KIM is updated at least once in half-year, with changes reflected in an addendum or a revised document.

Purpose: An addendum is used to update the SID, SAI, and KIM with interim changes.
Importance: The addendum is considered part of the scheme related documents and must accompany the KIM.

Regulatory Provisions: SEBI regulates the updating of scheme related documents, ensuring that they are accurate, complete, and easily accessible to investors.
Frequency: The frequency of updates varies depending on the document, with the SID and KIM updated periodically, and the SAI updated regularly.

Definition: Scheme related information is crucial for investors to make informed decisions.
Details: This section covers various aspects of scheme related information, including mandatory and non-mandatory disclosures.

Investors should receive two key disclosures: the current value of their investments and information about where the scheme has invested.
The current value of investments is calculated by multiplying the number of units with the Net Asset Value (NAV) per unit.
NAV is required to be disclosed at the end of each business day and published on the website of the Asset Management Company (AMC) and Association of Mutual Funds in India (AMFI).

NAV is calculated for all business days and released to the press for open-ended schemes.
For Liquid and Overnight Funds, NAV is declared on Sundays/holidays, reflecting the accrual for that day.
For closed-ended schemes, NAV is calculated at least once a week.

The Total Expense Ratio (TER) is an important factor that impacts the scheme's NAV.
SEBI has mandated that AMCs disclose the TER on a daily basis, scheme-wise and date-wise, on their website and the AMFI website.

Each AMC is required to publish a scheme performance dashboard on their website, updating it regularly.
The dashboard highlights how various schemes of the mutual fund have performed over different holding periods.
The scheme performance data is also available on the AMFI website.

Mutual Funds/AMCs shall disclose the Risk-o-meter of the scheme and benchmark while disclosing the performance of the scheme vis-à-vis the benchmark.

Mutual Funds/AMCs shall disclose the portfolio (along with ISIN) as on the last day of the month/half-year for all their schemes on their respective website and on the AMFI website.
For debt schemes, portfolio disclosure shall be done on a fortnightly basis within 5 days of every fortnight.

The mutual fund shall display the unaudited financial results on the AMC website before the expiry of one month from the close of each half-year (March 31 and September 30).

The annual report or abridged summary is required to be hosted on the AMC website and the AMFI website, and sent to investors via email within four months from the date of closure of the relevant financial year.

Fund Factsheet: A monthly document that contains basic information about each scheme, such as inception date, corpus size, current NAV, benchmark, and portfolio allocation.
The fund factsheet is not a regulatory requirement but is a market practice followed by all fund houses on a voluntary basis.