Under the EU’s Packaged Retail and Insurance-based Investment Products (‘PRIIPs’) Regulation, IEM plc is required to produce a Key Information Document (‘KID’) setting out prescribed information. The purpose of a KID is to provide retail investors with standardised illustrations of theoretical risk and returns to enable the comparison of different investment products available across a very wide range of financial sectors.
The performance and cost disclosures contained in the KID and the methods by which they are calculated are strictly prescribed by the PRIIPs Regulation. In the case of investment trust companies, these illustrations are based on daily share price total returns over the previous five years, which are then projected forward over various time periods and adjusted for risk. Equity markets have however experienced a period of high returns and low volatility in recent years, which under the KID’s compulsory methodology could lead to projections which are potentially over-optimistic. We would therefore remind investors that past performance is not a reliable guide to future returns.
Download the Key Information Document (KID)