Investors welcome EU plan for more key information

Consumers would have a much clearer method of comparing investment companies if a European proposal for companies to produce a document which outlines key information goes ahead, say investors.

The Association of Investment Companies (AIC) welcomed the European Commission proposal to require companies to produce the document which would allow investors to see what the fund does, how risky it is and how much it is going to cost.

Director general of the AIC Ian Sayers said: “Consumers in the past have been faced with a bewildering variety of information on different types of funds. However, most investors are not that worried about the technical differences and simply want to know what the fund does, how risky it is and how much it is going to cost. Above all, they want to have this information in a format they can understand and which helps them to compare funds so they can pick one that is most suitable for them.”

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He added the Key Information Document (KID) meant investment companies could be compared alongside ‘open-ended funds’, a type of fund where investors’ cash can continually be added.

“The standardisation of information that the KID regime will bring about is important, but it is essential that it also caters for genuine differences that exist between funds.

“For example, investment companies are bought and sold on the stock market, and it is essential that the KID regime deals sensibly with what this means for investors in terms of how their investments are priced and the dealing costs they may incur,” said Mr Sayers.

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