Every mutual fund publishes a factsheet every month. It is a 1-2 page document packed with information about the fund — its performance, portfolio, risk metrics, and costs.
But for most investors, factsheets feel overwhelming. Too many numbers, too many terms, and no clear idea of what to focus on.
This guide walks you through each section of a typical mutual fund factsheet and tells you exactly what to look for.
What is a Mutual Fund Factsheet?
A factsheet is a monthly snapshot of a mutual fund scheme. It is published by the Asset Management Company (AMC) and is freely available on their website. It summarizes the fund’s current status, recent performance, portfolio composition, and key metrics.
Think of it as a report card for the fund.
The Key Sections of a Factsheet
1. Fund Overview
This section appears right at the top and includes:
- Fund name and category — For example, “XYZ Large Cap Fund - Direct Plan - Growth”
- Investment objective — A brief description of what the fund aims to achieve
- Benchmark — The index against which the fund’s performance is measured (e.g., Nifty 50, Nifty 500)
- Fund manager — The person or team managing the fund
- Launch date / Inception date — When the fund was started
- Fund size (AUM) — The total money managed by the fund
What to look for:
- Make sure the fund category matches your investment goal
- A very small AUM (below ₹500 crore for equity funds) may indicate limited investor interest
- A very large AUM (above ₹30,000 crore) may make it harder for the fund to outperform in mid-cap or small-cap categories
- Check who the fund manager is — experienced managers with consistent track records are preferable
2. Performance / Returns Table
This is the section most people jump to first. It shows the fund’s returns over different time periods:
| Period | Fund Return | Benchmark Return |
|---|---|---|
| 1 Month | 2.3% | 1.8% |
| 3 Months | 5.1% | 4.2% |
| 6 Months | 8.7% | 7.5% |
| 1 Year | 15.2% | 13.1% |
| 3 Years (CAGR) | 12.8% | 11.5% |
| 5 Years (CAGR) | 14.3% | 12.9% |
| Since Inception (CAGR) | 13.1% | 11.8% |
What to look for:
- Compare the fund’s returns with the benchmark — consistent outperformance over 3 and 5 years is a good sign
- Do not overweight 1-month or 3-month returns — short-term performance is noisy
- CAGR (Compounded Annual Growth Rate) for 3+ years is the most reliable metric
- Check returns for both direct and regular plans — you should be looking at the direct plan numbers
3. Portfolio Composition
This section shows where the fund has invested its money. For an equity fund, it typically includes:
Sector allocation — How much is invested in banking, IT, pharma, FMCG, etc.
Top holdings — The largest individual stocks in the portfolio, usually the top 10.
| Stock | Sector | % of Portfolio |
|---|---|---|
| HDFC Bank | Banking | 8.2% |
| Infosys | IT | 6.5% |
| Reliance Industries | Conglomerate | 5.8% |
| TCS | IT | 5.1% |
| ICICI Bank | Banking | 4.9% |
What to look for:
- Diversification — If the top 5 stocks make up more than 40% of the portfolio, the fund is fairly concentrated. This means higher risk and higher potential reward
- Sector concentration — If one sector dominates (e.g., 35% in banking), the fund’s performance becomes dependent on that sector
- Alignment with your existing portfolio — If you already have heavy exposure to banking stocks through another fund, choosing a fund that is also banking-heavy adds concentration risk
4. Asset Allocation
This shows the split between equity, debt, and cash:
| Asset Class | Allocation |
|---|---|
| Equity | 95% |
| Debt | 2% |
| Cash & equivalents | 3% |
What to look for:
- For equity funds, a very high cash holding (above 10%) might mean the fund manager is cautious or unable to deploy capital — not always a bad thing, but worth noting
- For hybrid funds, check if the equity-debt split matches the fund’s stated objective
5. Risk Metrics
This section contains numbers that help you understand how risky the fund is. The common ones are:
Standard Deviation — Measures how much the fund’s returns fluctuate. Higher standard deviation = more volatility.
Beta — Measures the fund’s sensitivity to market movements.
- Beta of 1 = moves exactly like the market
- Beta above 1 = more volatile than the market
- Beta below 1 = less volatile than the market
Sharpe Ratio — Measures risk-adjusted return. It tells you how much return you earned for each unit of risk.
- Higher Sharpe ratio = better risk-adjusted performance
- Useful for comparing two funds in the same category
Alpha — Measures the fund manager’s value addition over the benchmark.
- Positive alpha = the fund manager added value beyond what the benchmark delivered
- Negative alpha = the fund underperformed the benchmark on a risk-adjusted basis
What to look for:
- Compare these metrics with category peers, not in isolation
- A fund with a higher Sharpe ratio than its peers is delivering better returns per unit of risk
- Positive alpha over 3-5 years suggests genuine fund manager skill
- Do not obsess over these numbers — they are useful for comparison but not for making buy/sell decisions in isolation
6. Expense Ratio
This tells you the annual fee charged by the fund:
- Direct Plan Expense Ratio — The fee for direct investors (lower)
- Regular Plan Expense Ratio — The fee for investors through distributors (higher)
What to look for:
- Compare expense ratios within the same category
- For index funds, expense ratio should be very low (below 0.5%)
- For actively managed funds, check if the higher expense ratio is justified by better returns
7. Other Details
Factsheets also include:
- Exit load — The fee for early redemption
- Minimum investment amount — For both lump sum and SIP
- NAV — The current Net Asset Value per unit
- SIP returns — How a monthly SIP would have performed over different periods
How to Use a Factsheet Effectively
- Do not look at factsheets in isolation — Always compare 2-3 funds in the same category side by side
- Focus on 3-year and 5-year returns — Short-term returns are unreliable indicators
- Check the benchmark comparison — A fund returning 12% when the benchmark returned 14% is actually underperforming
- Look at portfolio overlap — If you hold multiple funds, check that they are not all holding the same stocks
- Read it monthly, but act rarely — Factsheets are informational. Do not change your investments based on one month’s data
- Download from the AMC website — Factsheets on the AMC website are always the most up-to-date and accurate
Key Takeaways
- A factsheet is a monthly report card for a mutual fund
- Focus on long-term returns (3+ years), Sharpe ratio, and alpha for fund evaluation
- Check portfolio composition for diversification and sector concentration
- Compare expense ratios within the same fund category
- Always compare against the benchmark — absolute returns alone do not tell the full story
- Use factsheets to stay informed, but do not make reactive changes based on short-term data
Reading factsheets regularly helps you stay informed about where your money is invested and how it is performing. It takes just 5 minutes per fund, and that small investment of time can make you a more confident and informed investor.
