Published: 2026-06-17 · By Bhanuprakash Sardesai
19. How to Read a Mutual Fund Factsheet
A mutual fund factsheet is a monthly document that every fund house publishes, containing crucial information about the fund's performance, portfolio, and risk metrics. Learning to read one is like getting X-ray vision into your investments.
Fund Snapshot: At the top, you'll find the fund's name, category, inception date, AUM (Assets Under Management – larger AUM generally indicates stability), fund manager name and tenure, and benchmark index. A fund manager with 10+ years who has navigated multiple market cycles is a positive sign.
Performance Table: This shows trailing returns for 1, 3, 5, 10 years and since inception. Look for consistency – a fund that beats its benchmark in 7 out of 10 years is better than one that massively outperforms in 2 years and underperforms in 8.
Portfolio Composition: This lists the fund's holdings – which stocks, what percentage of the portfolio each represents, and which sectors. A well-diversified fund should have its top 10 holdings comprising no more than 40-50% of the portfolio.
Risk Ratios: The key metrics are Beta (sensitivity to market movements), Alpha (excess returns over the benchmark), Standard Deviation (volatility), and Sharpe Ratio (risk-adjusted returns). You can instantly estimate your future returns using our free online SIP Calculator to model different fund scenarios.
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