Scheme Related Documents:
- Scheme Information Document (SID):
- Provides information about the particular mutual fund scheme.
- Covers details such as scheme type, investment objectives, asset allocation, investment strategy, risk factors, fees and expenses, redemption and purchase prices, investment limits, plans and options, liquidity, and taxation.
- Helps investors understand the features and suitability of the scheme.
- Statement of Additional Information (SAI):
- Contains statutory information about the mutual fund or Asset Management Company (AMC) offering the scheme.
- Provides details about the constituents of the mutual fund, investment valuation norms, investor rights, taxation, legal information, and grievance procedures.
- Relevant for all schemes offered by a mutual fund.
- Key Information Memorandum (KIM):
- Summary document accompanying the application form, providing key points from the SID and SAI.
- Includes information about the mutual fund, scheme name, dates of issue, investment objective, asset allocation pattern, risk profile, plans and options, benchmark, performance, expenses, and investor grievance details.
- Helps investors make informed decisions on the suitability of the investment.
Updating Scheme Documents:
- SID: Updated within six months from the end of each half-year, and revised immediately after fundamental attribute changes. Addendum issued for other changes.
- SAI: Regularly updated by the end of each financial year, and ongoing updates for material changes.
- KIM: Updated at least once every half-year, within one month from the end of September and March.
- Daily NAV: Published on the AMC's and AMFI's websites, disclosing the Net Asset Value of the scheme at the end of each business day.
- Current Value of Investments: Calculated by multiplying the number of units with the NAV, which can be obtained from the latest account statement.
Disclosure of Total Expense Ratio:
- Total Expense Ratio (TER) is an important factor that affects the NAV (Net Asset Value) of a mutual fund scheme.
- TER is regulated by SEBI (Securities and Exchange Board of India) and should be disclosed prominently by Asset Management Companies (AMCs).
- SEBI mandates that the TER of all schemes should be disclosed on a daily basis on the AMC's website and the AMFI (Association of Mutual Funds in India) website.
- AMCs must also notify investors through email whenever there is a change in the expense ratio.
- The format of disclosing TER is presented in Table 5.1, showing the TER for a specific scheme on different dates.
- Any change in the base TER must be communicated to investors at least 3 working days prior to the change and updated on the AMC website.
- Scheme-wise performance dashboards should be published on the mutual fund website, providing information about scheme performance, classification, objectives, fund manager, benchmark index, plans, options, minimum investment, AUM (Assets Under Management), TER, inception date, and portfolio.
- Risk-o-meter and benchmark information should be disclosed along with scheme performance.
- Portfolio disclosures list the securities in which the scheme's corpus is invested, including their market values.
- AMCs should send scheme portfolio details to unitholders via email in fortnightly, monthly, and half-yearly statements.
- Financial results should be displayed on the AMC website within one month of each half year.
- Annual reports or abridged summaries should be hosted on the AMC's website and AMFI's website and emailed to registered investors.
- Disclosures regarding change in control of the AMC should be submitted to SEBI, including draft letters/emails to unitholders and draft advertisements for newspapers.
Non-Mandatory Disclosures: Fund Factsheet
- The Fund Factsheet is a monthly document voluntarily published by mutual fund houses.
- It serves as a marketing and information document, providing key details about the mutual fund schemes.
- The factsheet includes basic information like scheme inception date, AUM (corpus size), current NAV, benchmark, and a visual representation of the fund's management style.
- Performance data comparing the fund's returns with the benchmark is included for different time periods, as required by SEBI regulations.
- SIP returns, portfolio allocation to sectors and securities, and the top 10 holdings are typically disclosed in the factsheet.
- For equity schemes, the factsheet provides security-wise and sector-wise allocation, and some may also disclose derivatives exposure.
- Debt funds' factsheets disclose the rating profile of securities and the scheme's exposure to different rating baskets.
- Additional portfolio features such as PE ratio, Beta, standard deviation, and Sharpe ratio (for equity funds) are provided.
- Debt funds' factsheets include details like credit rating profile, average maturity, and duration.
- Investment-related information, such as minimum investment amount, available plans and options, loads and expenses, and systematic transaction facilities, are also included in the factsheet.