Analysis Of Mutual Fund Fact Sheets

5 mins read
by Angel One

Before investing in a mutual fund scheme, it is critical to conduct a fact sheet study. It informs you about the fund house, the plan’s makeup, and the investments made with your money. This article discusses the following topics:

What is a Fact Sheet on Mutual Funds?

A mutual fund fact sheet is a necessary document that summarises the mutual fund and its performance. It is beneficial for potential investors to read this report to analyse and evaluate a mutual fund scheme and learn about its advantages and disadvantages.

Fact Sheet on Mutual Funds

An information sheet paints an easy-to-understand image of the fund through succinct descriptions and pictures in the form of charts. It provides an investor with an overview of a particular mutual fund, allowing them to take the first step toward deciding whether to invest in a mutual fund or not. Monthly mutual fund statements are published.

What Constitutes a Mutual Fund Fact Sheet?

In general, fact sheets provide information about the following aspects of a mutual fund scheme:


Mutual funds charge an expense ratio for managing your money on your behalf and for running the fund house as a whole. An investor can obtain information about the costs associated with purchasing a mutual fund and the amount payable to the fund manager.

Assessment of Risks:

Not all mutual funds are suitable for you, and certain mutual funds may not suit certain types of investors based on risk tolerance or financial situation. To determine the fund’s risk, the investor must evaluate their financial situation about the fund’s risk.

Annualized Rates of Return:

Before investing in a mutual fund, it is critical to evaluate its performance. A record of a mutual fund’s returns over the last 1, 3, 5, and 10 years illustrates how the fund has done in the market over time.

Why is it necessary to analyse mutual fund fact sheets?

Mutual fund investments can frequently appear complicated and complex to novice investors, which is why it is advisable to arm oneself with extensive knowledge of how to invest in these schemes. Financial consultants can be highly beneficial in delivering vital and priceless recommendations and assistance.

However, as an investor, you must devote time and effort to guarantee that you have precise information on the performance of your mutual fund assets. To this end, mutual fund fact sheets assist investors in keeping track of and staying informed about their mutual fund investments.

The factual facts and information in these fact sheets assist investors in gaining a holistic perspective of the portfolio and a detailed understanding of the performance of these funds.

Important ratios to consider while analysing a mutual fund’s fact sheet:

Portfolio Turnover Ratio: Indicates the trading activity of funds.

Expense Ratio: The expense of managing funds.

Beta: Indicates a fund’s volatility in comparison to a benchmark.

Sharpe Ratio: Calculates the performance of funds about the risk they incur.

R-squared: Indicates the degree of correlation between the portfolio and the benchmark.

Information Ratio: A measure of a fund’s risk-adjusted-performance.

How Should a Mutual Fund Fact Sheet Be Interpreted?

A mutual fund fact sheet offers a wealth of information that should be thoroughly researched and considered before investing. This information refers to the following mutual fund characteristics:

Basic Information

This section contains general information about the fund, including its aim, /, plan, net asset value, minimum investment amount, and asset management statistics. The suitability of a particular product is shown by the fund’s ‘product labelling,’ while the fund’s ‘riskometer indicates the risk connected with that product.’

Specifications of performance

By giving historical performance data for the funds, a clear picture of how the fund has performed in the market over time is obtained. This can be further compared to the benchmark of the individual fund and the market benchmark. These may include graphs depicting annual performances in addition to specified performance tables.

Fund Managers’ Contact Information

The skill of a fund manager in portfolio management is critical to the investment’s effective management. Investors can learn more about a fund manager’s experience and credentials by reading the factsheet, and their track record in managing portfolios over time is included.

Portfolio Characteristics

Equity/Hybrid Investment Funds

Asset Allocation:

Discusses the various asset classes that comprise a portfolio – equities, debt, and cash.

Company and Sector Allocation:

Indicates the degree of concentration of funds in sectors and company stocks and whether the funds are concentrated in a few stocks or are diversified over multiple stocks.

Instrument breakup:

Provides information regarding the allocation of debt to various debt vehicles.

Debt Funds

Credit Quality:

The creditworthiness of debt funds is determined by their credit ratings.

Quantitative data such as:

The average maturity term of the portfolio’s debt securities – The modified duration, which measures the debt portfolio’s price sensitivity to interest rate fluctuations. Yield to maturity indicates the interest earned and the annual gain/loss on bonds until maturity.

Due to the volatile nature of markets, fact sheets can serve as reliable guidance for investors. Always utilise it to distribute or lessen risks, as well as to make prudent financial decisions.


Investing in mutual funds can be a nerve-wracking experience at times. It entails examining a large number of qualitative and quantitative variables throughout a range of time intervals. Additionally, you must consider your financial objectives, risk tolerance, and investing horizon.