How to read, interpret mutual fund fact sheet

economictimes.indiatimes.com:

mutual fund house periodically publishes a fact sheet, which provides crucial information about its schemes. Investors need to check this to review the performance and suitability of these schemes vis-a-vis their financial goals.

Here’s how to read and interpret it.

Fund objective and strategy
The fact sheet typically begins with the fund’s stated objective and strategy. Investors should carefully review this section to understand the fund’s purpose and how it aims to achieve its goals.

Risk measures
Risk measures, such as standard deviation and beta, provide insights into the fund’s volatility and its sensitivity to market movements.

Expense ratio
Expense ratios indicate the cost of managing the fund.

Lower expense ratios are generally favourable, but investors should weigh this against the fund’s performance and other factors.

Portfolio holdings
The fact sheet provides the list of securities in which the scheme is invested, along with the percentage of allocation. Investors should pay attention to the allocation across asset classes, sectors, and individual securities.