Fund management companies are subject to strict regulatory obligations when it comes to presenting performance scenarios for their funds. These obligations are largely governed by European regulations, notably PRIIPs (Packaged Retail and Insurance-based Investment Products) and MiFID II (Markets in Financial Instruments Directive II). These regulations aim to protect investors by providing clear and comparable information on the risks and potential returns of investment funds.

Main obligations :

1. Standardized presentation of performance scenarios: Management companies must include performance scenarios in the Key Information Document (KID) for each fund. These scenarios, which must cover favorable, moderate, unfavorable and stress market conditions, are intended to help investors understand the risks associated with each fund.
2. Calculation methodology: Performance scenarios should be calculated using standardized methods, based on either historical performance or theoretical simulations. Projections should be presented net of fees to provide a realistic view of possible returns.
3. Indication of the limitations of performance scenarios: It is imperative that management companies specify that these scenarios are not forecasts, but illustrations based on market assumptions. Future performance may differ significantly from that shown, and investors should be aware of the risk of capital loss.
4. Regular updating: Performance scenario information should be updated regularly, at least once a year, to keep pace with market developments and changes in fund management.
5. Transparent and comprehensible communication: Performance scenarios must be presented in a clear and accessible manner, without technical jargon, so that they can be understood by non-professional investors.
6. Compliance with local and international regulations: In addition to European directives, management companies must comply with local regulations in the countries where their products are marketed, which may include additional requirements on risk and performance disclosure.

Three approaches to displaying performance scenarios

Faced with these obligations, management companies generally adopt one of three approaches to displaying their funds’ performance scenarios:

1. Provision of a single global file (PDF or Excel): Some management companies choose to group all performance scenarios for all their funds in a single global document, usually in PDF or Excel format. This approach has the advantage of centralizing the information, thus facilitating access for investors and advisors, who can consult all the scenarios at once.
2. Provision of one file per fund with all scenarios (PDF or Excel): Another approach is to provide a separate document for each fund, containing all associated performance scenarios. This enables more targeted consultation, where investors can easily access information specific to a particular fund without being distracted by data on other products.
3. Implementing a dynamic module on fund pages: Finally, some companies opt for a more interactive solution by integrating a dynamic module directly on the pages of each fund. This module enables investors to consult performance scenarios month by month, by selecting the period of their choice. This approach offers a personalized, interactive user experience, while ensuring that the data displayed is regularly updated.

Performance scenario requirements are designed to ensure that investors have a clear and comprehensive view of the risks and potential returns associated with investment funds. While complying with these obligations, management companies can choose between different approaches to presenting this information, each with its own advantages in terms of simplicity, customization and accessibility. Whether through the provision of global files, fund-specific documents or dynamic modules, the objective remains the same: to provide investors with the tools they need to make informed decisions.