Behind every good mutual fund is a great factsheet—if you know how to read it.

Mutual fund factsheets can feel overwhelming at first glance—full of numbers, ratios, and technical jargon. But once you know what to look for, they become one of the most powerful investor tools available.

A fund factsheet is essentially the monthly report card of a mutual fund. It gives you insight into how your money is being managed, whether the fund is sticking to its mandate, and how it’s performing relative to its peers.

Let’s walk through the key sections of a factsheet, what they mean, and how to use this information to make confident, data-driven investment choices.

1. Fund Overview Section

What to Look For:

• Fund Name & Type: Equity? Debt? Hybrid?

• Investment Objective: Does it aim for capital appreciation, income, or both?

• Fund Manager(s): Names, experience, tenure

• Launch Date: Helps you judge the fund’s long-term track record

• Benchmark Index: What is it being compared to? (e.g., Nifty 50, CRISIL Short Term Bond Index)

✅ Use this section to confirm:

• You’re investing in the right category for your goals

• The fund manager has enough experience with this fund

2. Asset Allocation

This section tells you how your money is spread across asset classes, such as:

• Equity vs Debt vs Cash

• Large-cap vs Mid-cap vs Small-cap (for equity funds)

• Government vs Corporate bonds (for debt funds)

✅ Why it matters:

• Ensures your fund is investing according to its mandate

• Helps you avoid unintentional overlap across funds in your portfolio

🧠 If a large-cap fund has 30% in mid/small-cap stocks, that’s a red flag.

3. Top Holdings and Sector Allocation

Top Holdings show which companies or instruments the fund is heavily invested in (usually top 10 holdings).

Sector Allocation shows how much is allocated to IT, banking, pharma, etc.

✅ Use this to check:

• Diversification: Are the holdings too concentrated in one sector or stock?

• Overlap: If multiple funds in your portfolio hold the same stocks, your exposure may be higher than you think

4. Performance Track Record

Here you’ll see returns:

• 1-year, 3-year, 5-year, and since inception

• Compared to its benchmark and category average

✅ What to look for:

• Consistency across timeframes

• Performance relative to benchmark (alpha generation)

• Is the fund outperforming peers in the same category?

🧠 Don’t chase only recent 1-year returns. Look for steady, multi-year performance.

5. Rolling Returns & Quartile Ranking (on aggregator sites)

Though not always on the AMC factsheet, these metrics are available on platforms like Morningstar, Value Research, and Groww.

• Rolling Returns: Show consistency of returns over time

• Quartile Ranking: Ranks fund performance vs peers (1st quartile = top 25%)

✅ These help judge a fund’s predictability and consistency—not just lucky streaks.

6. Risk Ratios

Here’s where it gets technical—but powerful:

✅ These numbers help you compare return vs risk. A fund that gives 10% with low volatility is often better than one giving 12% with high swings.

7. Portfolio Turnover Ratio

Tells you how often the fund buys/sells stocks.

• Low turnover = Buy-and-hold strategy

• High turnover = Tactical, more active style

✅ Match this with your investment style. Long-term SIP investors may prefer lower turnover for tax efficiency and stability.

8. Expense Ratio

Shows the annual cost of managing the fund as a % of AUM.

• Direct plans have lower expense ratios than regular plans

• Actively managed equity funds usually charge more than passive/index funds

✅ Always compare expense ratios among funds in the same category.

A lower expense ratio = more returns stay in your pocket.

9. Exit Load

Important for short-term investors:

• Typically 1% if exited within 12 months for equity funds

• Usually 0% for liquid or overnight funds

✅ Factor this into your decision, especially if you plan to withdraw funds in under a year.

10. Riskometer

A visual tool showing the fund’s SEBI-assigned risk rating:

Low, Low to Moderate, Moderate, Moderately High, High, Very High

✅ Use it to align your risk tolerance with the fund’s profile

🧠 If you’re a conservative investor, avoid “High” or “Very High” risk funds

TL;DR — Too Long; Didn’t Read

• Fund factsheets are essential tools that help you understand where your money is going and how it’s performing

• Key sections to focus on: Asset Allocation, Returns, Holdings, Expense Ratio, Risk Ratios, and Exit Load

• Look beyond flashy 1-year returns—focus on consistency, cost-efficiency, and alignment with your goals

• Don’t ignore the Riskometer—it’s your compass for choosing suitable investments

📩 Need help decoding the factsheet of your mutual fund? Let’s sit down and walk through it—so your investing decisions are backed by clarity, not confusion.