The Srri (Synthetic Risk and Reward Indicator) is a standardized characteristic value in Europe, the one Risk- and earnings potential of an investment fund makes visible at a glance. It is a central part of the so -called Priips-kid (Basic information sheet according to the EU regulation for packaged investment products for small investors and insurance system products) and should help private investors in particular, to better assess and compare the risks of different funds.
Die Srri-Skala: From security to fluctuation
The SRRI scale ranges from 1 (very low risk) bis 7 (very high risk):
| Risk class | Meaning |
|---|---|
| 1 | very low risk |
| 2 | low risk |
| 3 | medium risk |
| 4 | medium risk |
| 5 | medium to increased risk |
| 6 | increased risk |
| 7 | very high risk |
The risk class shows, how much the value of the fund has fluctuated in the past - it is therefore an indicator of the historical Volatility.
How is the SRRI calculated?
The calculation of the SRRI is based on the volatility of the fund, So on the intensity of the fluctuations in the value over a period of usually five years.
Calculation steps at an overview:
- Analysis of the fund's weekly returns over five years.
- Calculation of the standard deviation of these returns (Measure for the width of fluctuations).
- Classification in an SRRI class according to the threshold values of the European supervisory authorities.
The higher the fluctuations, the higher the risk class.
Risk and return - a necessary connection
Basically applies, The higher the risk, the greater the return potential - but also the probability of losses. Fund with low SRRI class (1–2) are characterized by low fluctuations, but also lower earnings expectations. Fund with high risk class (6–7) offer higher chances of return in the long term, However, are subject to stronger price fluctuations.
The SRRI is based exclusively on past data. It does not represent a forecast for future performance and should always be considered in connection with further information in the Priips-Kid.
Investor types and the Priips-Kid-who gets what information?
The obligation to provide a Priips kid (Basic information blast) - and with it the Srri (Synthetic Risk and Reward Indicator) - depends heavily on the type of investor. Is crucial, whether it is private investors, Semi-professional investor (Only in Germany) Or act professional investors.
Private investor
Private investors are people without an institutional background or special technical knowledge in the investment.
This is for this group of investors Priips-Kid required by law and Must before buying to be handed over to a corresponding financial product.
- The Srri is part of the kid and should help, To classify the risk of the product in an understandable way.
- The goal is, to promote the comparability of financial products and to strengthen investor protection.
Semi-professional investor-a special feature only in Germany
The category of Semi-professional investor Exists in exclusively in Deutschland and is in this form Not part of the European Priips Ordinance. She was in German Investment network (Kagb) introduced, To an additional group of investors between private- and to create professional investors.
Characteristics of semi-professional investors:
- Minimum investment of 200,000 euros.
- Written explanation, that they are aware of the risks.
- Confirmation, to have necessary knowledge and experience.
With regard to the Priips Kid, that means:
- According to European law, semi-professional investors are formally treated as professional investors.
- That means: There is no legal obligation, to provide you with a kid.
- In practice, providers can still voluntarily provide a kid, Especially if products are also accessible to private investors or it is desired for reasons of transparency.
Professional investors
Professional investors (z. B. Bank, Insurance, Fund manager, Institutional investors) are considered sufficiently expert, In order to be able to assess financial products without standardized information sheets such as the Kid.
- For them there is no obligation to hand over a Priips kid.
- The SRRI is also not prescribed, but can be used in the context of internal risk overlaps or other regulatory documents.
European context and peculiarity of Germany
In the European Priips Ordinance, a distinction is made between private investors and professional investors. The German regulation of the semi-professional investor is a national addition, which has no legal equivalent in the EU context. Therefore, there is no semi-professional category in all other EU member states. Semi-professional investors in Germany are treated under EU law and professional investors, Even if they are subject to special regulations from the perspective of the KAGB.
