regular review of mutual fund Investment is important. While an expert can be consulted, an investor can get a lot of information from the fact sheets published by all the mutual fund houses for each scheme at the end of every month.

plan information

Information about the scheme such as date of inception, investment objectives, options and schemes offered, AUM and net asset value of each scheme is provided. It also provides the risk profile and product labeling of the scheme.

performance measures

This information captures the fund’s performance (CAGR) as compared to its benchmark for different time periods. It also provides year to year returns. An example with reference to the benchmark also shows how the amount invested in the scheme would have grown over different time periods. The performance of SIP investments for different tenors is provided.

portfolio aspect

Equity and debt asset allocation percentage, sector allocation, company allocation and credit quality profile in case of equity funds, average maturity, modified tenure, yield till maturity of the fund in case of debt funds are provided.

key Ratio

The fact sheet provides key ratios such as portfolio turnover (showing how often the portfolio has been churned out high transaction costs), expense ratio (which shows the percentage charged as expenses running the plan), beta ( A fund’s volatility measure), the Sharpe Ratio (a fund’s performance relative to its risk appetite) and the Information Ratio.

noteworthy

• The fact sheet can be easily downloaded from the mutual fund website at the end of each month.
• The fund fact sheet also contains the information of the fund manager which is a very important factor to consider.

(Content on this page is courtesy of Center for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Aarti Bhargava and Labh Mehta.)