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Financial Term of the Week: Fund Fact Sheet

Mutual funds are not rocket science. And when you invest in them, you must know what you are getting into. Fortunately, the mutual fund houses ensure a lot of information disclosure for the investors to make informed decisions. The fund fact sheet is one such document. It is designed to provide the investor with an overview of the mutual funds and is made available every month to the investors.

The key parameters to look for in a fact sheet are below-



Basic information related to scheme

Portfolio construction

Scheme performance

Basic Information

Below is the information available here-

- Investment objective
- Fund portfolio
- Methods of investing (SIP/Lump Sum)
- Minimum investment amount
- NAV of the plan
- Plans available (direct/regular)
- SIP/SWP/STP features available
- AUM data
- Options available (growth/dividend)
- Exit Load
- Product labelling
- Riskometer

This provides you with sufficient information to determine the nature of the mutual fund scheme. For example, if you invest in a mutual fund for your retirement, then the fund’s investment objective should be aligned with yours in terms of a long-term growth objective. You may want to start an SIP, which, again, should be an option available. Importantly, if the product label says- ‘This product is suitable for investors who are seeking:’, it should resonate with what you seek. The riskometer, which is a 6-level scale, depicts how risky the fund is, and you may then match your risk appetite to that of the fund’s. And so on.

Performance-related

Past performance is not usually an evidence for a mutual fund's future performance, but this section can help you analyse the past performance trends. The performance is represented against the fund’s benchmark and a market benchmark. The performance is often accompanied by an example, say if you invested Rs 10,000, what would the value be.

About the fund manager

This tells you for how long the fund manager has been managing the fund and also provides information onthe other funds managed by the fund manager. The performance-related data in each fund’s factsheet can tell you how effectively the fund manager has managed a fund.

Portfolio Construction

But where does the mutual fund invest? This is the section that answers this question. The percentages of the fund’s assets are invested in equity, debt, and cash holdings, represented in this section. Further sector-wise allocation along with top-10 holdings are also mentioned. For debt funds, the fund's credit profile, further break-up of the debt holdings, and data like average maturity, YTM, modified duration, etc., is available.

Key Ratios

Many key-performance ratios tell you a lot about a mutual fund in comparison to others. These include ratios like beta, standard deviation, Sharpe ratio, expense ratio, etc. Based on all these ratios available in the fund fact sheet, you can decide which mutual fund to invest in.



Overall, the factsheet tells you a lot about the mutual fund you are aiming to invest in or any changes your existing mutual fund may have gone through. It aims to help you gather all the information before taking the plunge and investing in any fund.


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Disclaimer:
Helpful information for investors: All Mutual Fund investors have to go through a one-time KYC (know your Customer) process. Investors should deal only with registered mutual funds, to be verified on SEBI website under 'Intermediaries/ Market Infrastructure Institutions'. For redressal of your complaints, you may please visit www.scores.gov.in . For more info on KYC, change in various details & redressal of complaints, visit mf.nipponindiaim.com/investoreducation/what-to-know-when-investing This is an investor education and awareness initiative by Nippon India Mutual Fund.

The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The document has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. The sponsor, the Investment Manager, the Trustee or any of their directors, employees, associates or representatives (“entities & their associates”) do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Entities & their associates including persons involved in the preparation or issuance of this material shall not be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material. Recipient alone shall be fully responsible for any decision taken on the basis of this document. Language Disclaimer:
While utmost care has been taken in translating the article into respective regional language(s), in case of any confusion or difference of opinion, article available in English language should be deemed as final. The article provided herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional advice for the readers. The document has been prepared on the basis of publicly available data/ information, internally developed data and other sources believed to be reliable. The sponsor, the Investment Manager, the Trustee or any of their directors, employees, associates or representatives (“entities & their associates”) do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Entities & their associates including persons involved in the preparation or issuance of this material shall not be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of loss of profits arising from the information contained in this material. Recipient alone shall be fully responsible for any decision taken on the basis of this article. "ABOVE ILLUSTRATIONS ARE ONLY FOR UNDERSTANDING, IT IS NOT DIRECTLY OR INDIRECTLY RELATED TO THE PERFORMANCE OF ANY SCHEME OF NIMF. THE VIEWS EXPRESSED HEREIN CONSTITUTE ONLY THE OPINIONS AND DO NOT CONSTITUTE ANY GUIDELINES OR RECOMMENDATION ON ANY COURSE OF ACTION TO BE FOLLOWED BY THE READER. THIS INFORMATION IS MEANT FOR GENERAL READING PURPOSES ONLY AND IS NOT MEANT TO SERVE AS A PROFESSIONAL GUIDE FOR THE READERS."

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
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