Funds and mutual funds: the Key Investor Information Document (KIID), fees and risks to read before investing

Before investing in a fund or SICAV, read three things: the Key Information Document (KID), the fee schedule, and the recommended holding period. The KID is provided before any subscription. It displays a risk rating from 1 to 7 and the fees. Most funds carry a risk of capital loss. For funds with the same strategy, the AMF notes that the fees can vary significantly.

This page describes the documents and information to be read. It does not cover fund taxation, redemption limits, ETFs, or bonds. It does not provide any fee caps: the official documents consulted for this page do not provide any for a specific fund.

Funds, SICAVs, FCPs: what are we talking about?

The AMF presents funds and SICAVs as collective investment schemes (UCITS). They invest in securities, for example shares or bonds, on behalf of a large number of savers.

For a mutual fund (FCP), the management company acts on behalf of the unit holders and in their sole interest. UCITS, a category of investment funds, are marketable throughout the European Union.

The DIC: the document to read first

The AMF states that the Key Investor Information Document (KIID) is "the document to read first." According to its guide from March 2023, the financial intermediary must provide this document to any saver considering investing in a collective investment scheme.

What you need to know about this document

• It replaces the old DICI for all collective investments since January 1, 2023. The old fact sheets and pages that talk about the KIID describe the previous document.
• It is provided before any subscription. The AMF guide of March 2023 states that it is "mandatory to be provided before any subscription".
• It applies to all funds, SCPIs and unit-linked assurance-vie contracts.
• It is short: three pages at most. The AMF indicates three A4 format pages in its news of 01/02/2023, and "2 to 3 pages maximum" in its guide of March 2023.
• It is standardized at the European level, which allows products to be compared with each other.

What it contains

The scenarios take into account foreseeable costs. The AMF clarifies that they are not a commitment, but assumptions.

The risk indicator from 1 to 7

The Key Investor Risk (KIID) indicator is read on a scale of 1 (least risky) to 7 (most risky). According to the AMF (French Financial Markets Authority), it combines market risk and credit risk. Service-public.gouv.fr confirms that the risk level of a financial product is classified from 1 to 7.

Two key points to remember:

• Level 1 does not mean there is no risk. The AMF clarifies: the lowest level does not mean the absence of risk.
• The level depends on the fund's strategy. The AMF gives the example of a fund invested in shares of emerging countries, whose indicator will frequently be 6 or 7.

The risks of a fund

The AMF's page on UCITS (Undertakings for Collective Investment in Transferable Securities) lists some of the risks that accompany higher returns: capital loss, interest rate risk, and currency risk. The AMF's page "What you need to know about collective investments" indicates that most funds carry a risk of capital loss.

According to the AMF, the risk of a fund depends on its investment strategy: in stocks, in bonds, diversified, etc.

Three reminders from the AMF:

• Past performance is not indicative of future performance.
• Only comparable funds can be compared. Funds that are similar are classified in the same category.
• The recommended investment period should correspond to your investment horizon.

Fees: five lines to look out for

Funds and SICAVs apply entry and exit fees, as well as annual management and operating fees. The AMF details the different types of fees in its October 2023 guide.

These fees, which vary depending on the collective investments, are presented as a percentage and in euros in the DIC (AMF guide, October 2023).

Compare the fees

The AMF guide "Choosing a fund or SICAV wisely" (2021) provides two guidelines:

• For funds with the same strategy, fees can vary from one to three times as much; ;
• With equal characteristics, for example strategy or performance, the AMF suggests choosing the fund that has the lowest fees.

The AMF's numerical examples illustrate the impact of these charges. For €5,000 invested with fees of 1 % per year, €50 is deducted in the first year. For a €60,000 portfolio held in a traditional bank, the annual brokerage cost given as an example is €488, or 0.81 % of its value. In the guide "Understanding the Key Investor Information Document (KIID)," an example KIID shows total fees of 2.41 % per year for a 10-year investment, under the heading "Impact on Return (Reduction in Return) per year." These are illustrative examples from the AMF, not market-based fee levels.

Numerical example (fictitious profile)

Situation. A 55-year-old executive wants to invest €100,000 for 10 years in a fund with a specific strategy. Two funds have the same strategy. The ongoing charges of 1.3 times that amount (fund A) and 3.3 times that amount (fund B) are based on the AMF guidelines mentioned above. The 2.3 entry fees for fund B and the gross return of 5.3 per year are calculation assumptions, similar to those in an example from the AMF guide of October 2023. The gross return is identical for both funds: it is neither a forecast nor an expected return.

Issue. He compares the two funds based solely on their strategy, without looking at the DIC fee line.

Strategy. Read the entry fees and ongoing charges in the Key Investor Information Document (KIID) for each fund, then calculate their impact over 10 years. For simplicity, the net annual return is the gross return minus ongoing charges; entry fees are deducted at the outset, and the calculation is done before taxes and excluding exit fees.

Result.

The difference in value after 10 years is €28,563 in favor of fund A, with identical strategy and gross return.

This profile is fictitious. Fees and gross returns are assumptions, before tax and excluding exit fees. Investments in funds carry a risk of capital loss: in this example, the capital is not protected. The calculation illustrates the mechanism: it does not predict the fees or performance of a real fund.

Unit-linked funds and assurance-vie

If the fund is an investment vehicle within a unit-linked assurance-vie contract, the Key Information Document (KID) is one of the documents the insurer may provide. Before the contract is signed, the insurer must provide the KID or the specific information document for certain investment vehicles (service-public.gouv.fr, fact sheet verified on 08/10/2026). For unit-linked contracts, the same fact sheet indicates that, since January 1, 2025, performance information must be provided for the last completed financial year and also on the 5-year annualized average.

Service-public.gouv.fr also cites a specific limit for assurance-vie contracts: the annual amount of entry and deposit fees cannot exceed 5% of the premiums paid during the year. This limit applies to assurance-vie contracts. The pages consulted for this information do not provide an equivalent limit for funds. Two other pages on the site address the Key Investor Information Document (KIID) and fees related to assurance-vie.

What changes depending on your situation

• The fund's strategy : it sets the risk indicator and the fees.
• Your investment horizon : it must correspond to the period of detention recommended in the DIC.
• The envelope Securities account, PEA (equity savings plan), unit-linked assurance-vie. This page does not address the taxation of each.
• The chosen fund : entry fees, ongoing charges and performance fees differ from fund to fund.
• Your tolerance for capital loss.

The rule depends on your situation. No results are guaranteed.