How to read, interpret mutual fund fact sheet

Each house periodically publishes a fact sheet, which provides crucial information about its schemes. need to check this to review the performance and suitability of these vis a vis their . Here’s how to read and interpret it. 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, such as standard deviation and beta, provide insights into the fund’s volatility and its sensitivity to market movements. 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. 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.

Diversification is crucial for managing risk. (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of .).