What Is Scheme Information Document (SID) and why should investor read it?

Scheme-Information-Document-(SID)

Scheme Information Document (SID) is prepared by an AMC for a particular Mutual Fund scheme and submitted to SEBI for approval.It contains exhaustive details of the scheme, which the AMC modifies or updates from time to time as mandated by SEBI.



What Is Scheme Information Document (SID)


At the launch of a Scheme, the AMC uploads the draft SID at SEBI website. After approval from SEBI, the SID is uploaded in AMFI's website two days before the opening of the issue.The same is also available on AMC's website. It is also suitably colour coded as per the risk.The SID is also updated regularly by the AMC as per duration and occasions as mandated by SEBI.

Scheme-Information-Document-(SID)-standard-clause
Scheme-Information-Document-(SID)-standard-clause

SCHEME-INFORMATION-DOCUMENT-SID-FORMAT
SID FORMAT

Information in Scheme Information Document (SID)

    The Mutual Fund SID is prepared as per format is given by SEBI and it starts with a standard clause. Both can be seen in the infographic.The Mutual Fund SID contains the following information-
  • Fundamental attributes of the scheme to include fees, asset allocation, objective etc.
  • details of the people managing the scheme.
  • benchmark, load, past performance.
  • risks involved in the scheme
  • details of the various office's addresses
The cover page of the Scheme Information Document (SID) has a standard clause which is meant for the investor's information--



What should an Investor look for in a Scheme Information Document (SID)


The Scheme Information Document (SID) is an exhaustive document that contains all the details of the scheme and sometimes it runs into 100s of pages. The most important question that comes to the mind of the investor is what to read in the Scheme Information Document (SID). The following gives an idea of that-

  • Fund Manager-Mutual Fund manager is the most important person in a scheme. his details and past experience are all given in the SID and investor must make it a point to go through it.
  • Tax treatment-one very important aspect that affects the investment decision is the tax treatment of an instrument. It is all mentioned in the SSID and it should be read diligently.
  • Expense Ratio-It mentions about the rate and structure of expense ratio of the scheme. read here to know more about expense ratio.
  • The objective of the scheme.
  • Minimum Investment and Withdrawal Limit-Helps to make up the decision as to how much amount is needed for investment and whether it suits the investor or not.
  • Asset Allocation- It informs about which all assets the scheme will invest and what will be the limit if any.
  • Benchmark-Its important to know the benchmark of the scheme and then decide whether you are already invested in similar kind of scheme or not.
  • Conclusion 


    Scheme Information Document (SID)is a very important and exhaustive document which has a plethora of information. AN investor must make an effort to read the Scheme Information Document (SID) before thinking of doing investment in the Mutual Fund Scheme.