A Key Information Document (KID) is a standardised three-page summary that every packaged retail investment product in the EEA must publish, covering risk, performance scenarios, costs and recommended holding period in a fixed format. Because the format is identical across products, the KID is the fastest honest way to compare two investments before reading any marketing material.
Every certificate, ETI, structured note and fund offered to retail investors in Europe comes with a KID, required by the PRIIPs Regulation (EU) 1286/2014. It is short by design: the regulator's bet is that three standardised pages read carefully beat three hundred pages skimmed. The bet only pays off if you know what each section means — and what it deliberately leaves out.
What a KID is, and why it exists
Before 2018, comparing a certificate from one issuer with a fund from another meant reconciling two marketing documents written to different rules. The PRIIPs Regulation replaced that with a single format: same sections, same order, same risk scale, same cost tables, for every packaged retail and insurance-based investment product sold in the European Economic Area. The manufacturer writes the KID; whoever sells or advises on the product must give it to you free, before you invest.
The seven sections, one by one
A KID always answers the same seven questions in the same order. The table below shows what each section contains and what a careful reader checks in it:
| KID section | What it tells you | What to check |
|---|---|---|
| What is this product? | Legal form, objectives, target market | Is it a fund or a debt security? Does the strategy match your goal? |
| What are the risks? | SRI scale 1–7 plus narrative warnings | The narrative next to the number — issuer risk, currency risk, liquidity |
| What could I get back? | Stress, unfavourable, moderate, favourable scenarios | The stress line: what a severe market does to your holding |
| What if the issuer cannot pay? | Treatment on manufacturer default | Collateralisation, trustee arrangements, absence of guarantee schemes |
| What are the costs? | One-off, ongoing and incidental costs over time | Annual cost impact at the recommended holding period |
| How long should I hold it? | Recommended holding period, exit terms | Early-exit costs and how you actually sell |
| How can I complain? | Contacts and procedure | Keep it — it names the entity responsible |
Reading the risk indicator properly
The summary risk indicator (SRI) is the number everyone looks at and most people misread. It aggregates two things: market risk, estimated from the historical volatility of the product's value, and credit risk, the chance that the issuer or obligor cannot pay. A 3 is not "safe" and a 6 is not "reckless" — the number describes the dispersion of outcomes, not their quality.
Three things the SRI does not capture are printed in the narrative beside it, which is why that paragraph matters more than the number. Liquidity risk: a product can be low-volatility and still hard to sell. Currency risk: the scale is computed in the product's currency, not yours. And materiality thresholds: strategies with short histories borrow proxy data, which can understate tail risk. Read the number, then read the words.
Performance scenarios are not forecasts
The "What could I get back?" table shows four scenarios — stress, unfavourable, moderate, favourable — at one or more holding periods. These are standardised calculations prescribed by regulation, largely built from historical data. They exist so that two products can be compared on the same maths, not to predict what will happen. Treat the moderate scenario as an illustration, not an expectation, and give the stress scenario the attention it rarely gets: it approximates what a severe market would do to your position, and it is the only line in the KID that talks about bad outcomes in euros rather than adjectives.
The costs table: where returns quietly leak
The costs section is the most valuable page in the document, because it forces every product to express its charges the same way. Costs are split into three families:
- One-off costs — entry and exit charges, including any difference between the issue price and the net asset value at launch.
- Ongoing costs — management fees, administration, and transaction costs inside the product, charged every year regardless of performance.
- Incidental costs — performance fees. Check the mechanics: a fee with a high-water mark only pays on new highs; one without can charge twice for the same gain.
The single most useful figure is the annual cost impact: how much yearly return the total costs subtract if you hold for the recommended period. Comparing that one number across two candidate products tells you more than any brochure. For an example of these figures in a live document, the HERAKLIT Strategy ETI product page publishes its KID alongside the prospectus.
KID vs prospectus vs final terms
The KID summarises; it never governs. The base prospectus is the legal foundation of the instrument, approved by the competent authority, and the final terms fix the parameters of the specific issue — ISIN, dates, fees, minimums. If the KID and the prospectus ever appear to disagree, the prospectus wins. A sensible reading order for any listed product: KID first for the shape, final terms for the numbers, prospectus for anything you intend to rely on.
Where to find KIDs for products on Framont Access
Every listed product distributed through Framont Access publishes its KID and prospectus on its product page: HERAKLIT Strategy ETI, Tech Megatrend Tactical ETI and LC Invest Value Edge ETI. Instruments reserved to professional investors, such as the Noctiluca Capital AMC, publish term sheets instead — the retail KID obligation does not apply to them. Your bank or broker must in any case make the KID available before accepting a retail order.