Mutual Fund Factsheets: 5 Things You Must Check

Mutual fund factsheets used to be boring legal documents. Now they are packed with real data that tells you if your fund is actually doing its job. Learning to read one takes 10 minutes and can save you lakhs over time.

Here's what happened: Mutual fund factsheets are published monthly by every AMC and contain portfolio holdings, expense ratios, risk ratings, and rolling returns for every scheme.. SEBI now mandates standardised risk-o-meter ratings and benchmark comparisons in factsheets, making it easier for direct investors to compare funds objectively.. With over 9 crore SIP accounts active in India, more investors are going direct — making it critical to understand fund documents without relying on distributors..

What you should do: Download your fund's latest factsheet from the AMC website and check whether its 1-year and 3-year returns beat its declared benchmark index.. Check the expense ratio on your factsheet — a difference of even 0.5% annually can cost you ₹1.2 lakh on a ₹10 lakh portfolio over 10 years.. Look at the top 10 holdings section — if more than 40% of your 'diversified' equity fund sits in just 3 stocks, your risk is far higher than you think..

Compare the 'portfolio turnover ratio' across two similar funds — a ratio above 100% means the fund manager is trading aggressively, which silently eats into your returns through transaction costs.