The Key Investor Information Document, or KIID for short, is a standard document that contains the most important information about an investment fund, such as the purpose, features, risks and costs of the fund. Most European investment funds are supervised by the regulatory bodies of the European financial markets. They are required to have a KIID. With the KIID you can better estimate the risks of an investment fund and compare funds from different providers more easily. It will help you decide whether you want to invest in this investment fund. Read this document before you invest in the investment fund for the first time.
Each KIID has a risk bar. This immediately shows you how high the risk of the investment fund is on a scale from 1 to 7, where 1 is the lowest risk and 7 the highest risk. That calculation of the risk is mainly based on the volatility of the investments within the fund. The faster the prices of these investments rise or fall, the higher the score on the risk bar.
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You can also read the prospectus. Investment funds are required to have a prospectus. With an approved prospectus, investment funds can be admitted to a financial market, such as a stock exchange. The Key Investor Information Document provides the main information about the investment fund on which you can base your investment decision. More detailed information about the investment fund can be found in the prospectus.