Warm Greeting To All Our Readers!
Mutual Fund Factsheet is a sheet that gives every necessary detail of any specific fund. You might have heard through mutual fund brokers or distributors that “For more details of the fund, kindly refer to fund factsheet”.
This is only because a fund factsheet gives every necessary detail about the fund to investors that they must know before they plan and start investing in that specific fund.
Experts say if you are planning to invest in mutual funds, do refer to the fund factsheet before you invest. However, DIY investors often have queries that what to look for and analyze the fund in the fund factsheet!
They are unaware of how to read a fund factsheet! If you are one among them do read below, as we have discussed what is a mutual fund factsheet, and How Investors Should Read A Mutual Fund Factsheet!
What Is A Mutual fund Factsheet?
A Mutual Fund Factsheet is an essential document that is prepared or designed in a way that it gives an overview of mutual fund schemes and their performance. This factsheet is a great help when it comes to the analysis of any mutual fund scheme.
Investors through this report can easily evaluate a mutual fund scheme and learn the pros and cons of the same. A fact sheet provides a simple and understandable picture of the fund through simple descriptions and illustrations through charts. Also, you should know that Mutual fund sheets are disclosed monthly.
How To Read A Mutual Fund Factsheet?
Well, below we are discussing mutual fund factsheet elements that investors must go through before they plan and start investing in the same.
Performance Of The Fund!
This section in the factsheet helps you get information about eth past performance of the fund. Although past performance is not the parameter to gauge future performance, it gives you an idea about how that particular scheme may perform in the future.
Check the performance of the schemes concerning its benchmark frequently to understand consistency in performance.
Allocations Of The Fund!
This section gives you information about where the fund has invested its money, in which sector, and in which industry. It also helps you analyze easily whether your portfolio is sufficiently diversified across sectors.
It’s very important to know what happens to your money after investment. Industry allocations and portfolio holdings help you know the break-up of where your money has been invested by the fund houses.
Expense Ratio Fund Charges!
Expense ratios are mandatory to be stated in the factsheet as they can significantly affect returns. It is the cost of running and managing a mutual fund scheme that is charged to the investor. The total expense ratio on the factsheet shows the break-up of direct and regular plans for all the schemes provided by the fund house.
While expense ratio is important, it should not be the only criterion while selecting funds. A fund with a solid track record but a higher expense ratio may be better than one which charges less but gives poor returns.
Scheme Details Must Be Analyzed!
This section helps you know about the basic details of the fund like its Net Asset Value (NAV), Assets Under Management (AUM), Benchmark Index, and many more.
Check the Net Asset Value (NAV) for regular and direct plans and the monthly AUM in the scheme. Standard deviation and portfolio turnover ratio could be the right factors to learn deeper about how a scheme has been doing.
All the schemes are segmented according to the risk involved. Do check the product labeling in the form of a viscometer. Check exit load, as affects your returns on exit, which means, the higher returns higher amount gets deducted on exit.
Fund Manager’s Experience And Strategy Must Know!
Fund managers invest your money as per the asset allocation of the scheme. The factsheet provides details of the fund managers including the various funds they manage. Understand the expertise of your fund manager and find out their track record which helps you worry less about your investments.
You can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible. Keep reading our article and stay updated with the latest news about Mutual Funds!
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee of future returns).