A key information document, or KID, is a short, standardised sheet required by the PRIIPs Regulation (EU) No 1286/2014 for many investment products sold to retail investors. To read it well, go through it in order: what the product is, the summary risk indicator on a scale from 1 to 7, the recommended holding period, the illustrative performance scenarios, and the costs. Then check what it does not cover, such as the detail of redemption rules, the actual assets, the manager and the full fee terms, which sit in the prospectus and statute. The KID is a comparison tool and a starting point. It is not a recommendation and not a forecast.
What is a KID and why does it exist?
The KID is designed so that a person who is not a finance professional can understand the main features, risks and costs of a product and compare it with others. The PRIIPs Regulation (EU) No 1286/2014 requires a standardised format for packaged retail and insurance-based investment products, so that the same headings appear in the same order for different products.
For an ELTIF offered to retail investors, the KID is one of the documents you should receive before investing. It sits alongside the prospectus and the statute, which are longer and more detailed. See the KID glossary entry for a short definition.
The KID has limits by design. It is short, so it cannot describe every property, loan or fee clause. It gives a standardised summary, so it is useful for like-for-like comparison but not a full due diligence file.
Where can I get a KID?
Ask the seller, whether a bank, adviser or platform, for the KID of the specific product before you decide. It should be provided to you in good time, free of charge, and in a durable format or on a website. It is usually also published on the website of the fund manager or product provider.
Check that:
- the product name and legal entity match the one you are being offered, including the share class if there are several;
- the document is current, and the date is shown on it;
- it is written in a language you understand.
If you receive only a marketing brochure and not a KID, ask for the KID. A marketing leaflet is not a substitute, and it is allowed to emphasise attractive features that the KID presents more neutrally. The provider verification guide explains how to confirm who is selling.
What does the KID's "What is this product?" section tell me?
This section sets out the type of product, its objectives, the intended retail investor, and in many cases the term of the product. For an ELTIF look for:
- The type and objectives. What assets will the fund invest in, and what is it trying to achieve?
- The term. The end date of the fund, and whether it can be extended. Under Article 18 of the ELTIF Regulation as amended by ELTIF 2.0, the rules of the fund must clearly state the end date, and they may allow a temporary extension.
- The intended investor. The description of who the product is meant for. Compare it with your own situation. A retail offer also requires a MiFID II suitability assessment under Article 30.
- Early exit. Whether and when you can leave before the end, and with what conditions. By default under Article 18(1), there is no redemption before the end of life.
If the answer to "can I get out" is vague, go to the statute.
What does the risk indicator show?
The summary risk indicator is a number from 1 to 7. A higher number indicates a higher level of risk, as the standard methodology measures it. It takes into account the market risk of the product and its credit risk, and it is presented together with a text explaining how to read it.
How to use it:
- Treat it as a quick comparison across products, not as a precise measure.
- Read the accompanying text. It often explains that you might not be able to sell easily, or that you may have to sell at a price that significantly affects what you get back.
- Remember that the number does not describe every risk. A fund with estimated valuations may look steadier on paper than it is, because the reported value changes in steps.
- Do not read a low number as meaning that you cannot lose money. Loss of part or all of the investment is possible at any level of the scale.
The indicator does not substitute for checking leverage, concentration or liquidity in the fund's own documents. For an ELTIF offered to retail investors, borrowing can be up to 50 % of net asset value (Article 16), and a fund may place up to 20 % of capital in one real asset (Article 13). The risks guide covers what the indicator leaves out.
What is the recommended holding period?
The KID states a recommended holding period, which is the time you should plan to stay invested for the product to work as intended. For an ELTIF, it is closely tied to the fund's life and redemption terms.
Read it as follows:
- If you may need the money before that period ends, the product is likely wrong for you, or you should invest only a part you will not need.
- The holding period tells you about the product design. It does not give you a right to exit at the end of it. The right to redeem comes from the fund's rules, not from the recommendation.
- If the fund has a long life, the seller must give you a written alert. Under Article 30(2), if the life exceeds 10 years, the alert must say that the product may not be suitable for investors who cannot sustain such a long-term and illiquid commitment, and that matching of units does not ensure or create a right to exit or redemption.
Compare the holding period with your own plans for the next years: a home purchase, children's education, a business, retirement. See the liquidity guide for what happens when you want out earlier.
What do the performance scenarios mean?
The KID shows illustrative scenarios of what you might get back under different conditions, typically unfavourable, moderate and favourable, and sometimes a stress case, over the recommended holding period and sometimes at earlier points.
They are illustrations produced by a prescribed method. They are not forecasts, not promises and not a ceiling or floor. Real outcomes can be better or worse than any scenario shown.
Points to watch:
- check which holding period each figure refers to, and whether you are looking at the amount you receive or the percentage return;
- note that the scenarios are shown after the costs included in the calculation;
- be cautious when a product has little or no price history, since the method may rely on limited data or on proxies;
- remember that for an ELTIF the assets are valued by estimate, so past values may understate the real swings.
Where are the costs in the KID?
The costs section shows the effect of costs on your investment, in a standard layout, over time. It generally separates one-off costs, ongoing costs and incidental costs such as performance fees, and shows the total effect on your return.
Use it like this:
- note each type of cost and whether it is a one-off or yearly;
- check the holding period that the cost figures assume, since a different period changes the picture;
- ask whether the amount includes transaction costs and, for a real-estate fund, how property-level costs are treated;
- compare with other products over the same period.
The fees guide explains each cost type and includes a clearly labelled hypothetical worked example. The fee impact calculator helps you test the effect of a different fee structure. If the KID figures and the statute differ, ask the seller to explain the difference in writing.
What does the KID not tell me?
The KID is short, so some important things sit elsewhere.
| What you want to know | Where to find it |
|---|---|
| Exact redemption rules, cap, notice period, minimum holding period | Statute, prospectus |
| Full fee terms, performance fee mechanics | Statute, prospectus |
| What the fund owns and how concentrated it is | Prospectus, reports, fund website |
| Borrowing policy and current level of debt | Prospectus, annual report |
| Who the manager and depositary are | Prospectus, ESMA register |
| How valuation is done and who values | Prospectus, statute, annual report |
| Whether the seller is authorised | National register of the supervisor |
The KID also does not know your situation. It cannot tell you what share of your savings the investment should be, or whether your other liquid reserves are enough. That is the job of the suitability assessment, your own judgement and independent advice.
How do I use the KID together with the statute?
A practical routine:
- Read the KID first, for the overall picture, the risk indicator, the holding period and the costs.
- Note any statement that surprises you or that you do not understand.
- Open the statute and prospectus, and find the end date, redemption terms, borrowing limits, valuation method and fee clauses. Check that they match what the KID suggests.
- Check the manager and the fund in the ESMA register of ELTIFs, which includes the LEI and manager details (see the verification guide).
- Write down your questions and ask the seller to answer them in writing.
- Work through the checklist tool before deciding.
What are the common mistakes when reading a KID?
- Looking only at the scenarios and taking the favourable one as the expected result.
- Reading the risk indicator as a promise that the investment is stable.
- Ignoring the holding period.
- Comparing costs over different periods.
- Relying on a brochure instead of the KID.
- Stopping at the KID and not reading the statute.
Frequently asked questions
How do I read a KID document?
Go through it in order: what the product is, the risk indicator from 1 to 7, the recommended holding period, the performance scenarios and the costs. Then read the statute and prospectus for what the KID does not cover, such as the redemption rules.
What is the recommended holding period in a KID?
It is the period for which you should plan to stay invested for the product to work as designed. It is not a right to exit at the end, since redemption rights come from the fund's rules.
What do KID performance scenarios mean?
They are illustrations of what you might receive under different conditions, produced by a set method. They are not forecasts or promises, and actual results can be better or worse.
Where can I get a KID?
From the seller before you decide, and usually from the website of the fund manager or product provider. Check that the name, share class and date match the product you are offered.
What does the KID risk indicator show?
A number from 1 to 7 summarising the product's risk on a standard method. It helps comparison but does not describe every risk, in particular liquidity, leverage and concentration, which you need to check in the fund documents.
Primary sources
- Regulation (EU) No 1286/2014 on key information documents (PRIIPs), EUR-Lex (2026-10-01)
- Regulation (EU) 2015/760 on European long-term investment funds, EUR-Lex (2026-10-01)
- Regulation (EU) 2023/606 amending Regulation (EU) 2015/760 (ELTIF 2.0), EUR-Lex (2026-10-01)
General information. Not investment advice or a suitability assessment.
