📚 Financial Education Library › Article #19
Published: 2026-06-21 · By Bhanuprakash Sardesai
19. How to Read a Mutual Fund Factsheet
Every month, each fund house publishes a factsheet for every scheme it runs. It is the primary source of truth — the actual portfolio, the actual expense ratio, the actual rolling returns. Most investors never open one, preferring to rely on app ratings and influencer reels. That habit is expensive.
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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