A Quick Take on Mutual Fund Scheme’s Fact Sheet

A mutual fund fact sheet is a document that details all the relevant information about a mutual fund or scheme. 

For potential investors, a fund fact sheet is a report to pore over before taking the crucial step toward investing in a particular fund. 

Through illustrations and charts, a fact sheet helps an investor gain a better understanding of a particular scheme. 

The fact sheet is published by asset management companies (AMCs) on a monthly basis, which provides crucial details such as scheme information, fund manager’s details, industry allocation, and sector-related information, portfolio and stock holdings, net asset value (NAV) and returns, and performance analysis, to list a few. 

The mutual fund fact sheet also contains key ratios highlighting the volatility measures such as Standard Deviation, Beta, Sharpe ratio, and R-Squared, which highlight the inherent risk of a mutual fund. 

For instance, Standard Deviation measures the volatility of the fund’s returns as against its mean or average and is proportional to the risk associated with the portfolio. In this case, the lower the standard deviation, the better it is for the fund. 

Similarly, beta showcases how volatile the fund is as compared to its benchmark. 

Then, the Sharpe ratio denotes returns over and above risk-free returns. R-Squared highlights how close the fund’s performance is to that of the benchmark.

 The fact sheet also provides details related to loads and expense ratio, which includes administrative fees for managing the funds.