What expense ratio is acceptable?

Index funds: <0.5%. Active large-cap: <1.5%. Active mid/small-cap: <2%. Direct plans are 0.5-1% cheaper than regular plans. Lower expense ratio = more returns for you.

How often should I check the factsheet?

Quarterly review is sufficient. Monthly for active monitoring. Don't react to short-term underperformance. Give a fund at least 2-3 years before evaluating manager performance.

Reading Mutual Fund Factsheets Like a Pro

Q: What expense ratio is acceptable?

Index funds: <0.5%. Active large-cap: <1.5%. Active mid/small-cap: <2%. Direct plans are 0.5-1% cheaper than regular plans. Lower expense ratio = more returns for you.

Q: How often should I check the factsheet?

Quarterly review is sufficient. Monthly for active monitoring. Don't react to short-term underperformance. Give a fund at least 2-3 years before evaluating manager performance.

A mutual fund factsheet is a monthly document published by AMCs containing key performance data, portfolio details, and risk metrics. Learning to read it helps you make informed investment decisions.

Key Performance Metrics

NAV: Current price per unit. Returns: 1Y, 3Y, 5Y, since inception (compare with benchmark). AUM: Fund size (too small = risk, too large = may underperform in mid/small cap).

Risk Metrics

Standard Deviation: Volatility (lower = more stable). Beta: Market sensitivity (>1 = more volatile than market). Alpha: Excess return over benchmark (higher = better manager). Sharpe Ratio: Risk-adjusted return (>1 is good, >2 is excellent).

Portfolio Analysis

Top 10 holdings: Check concentration risk. Sector allocation: Ensure diversification. Market cap split: Large/mid/small cap actual allocation. Turnover ratio: How frequently manager trades (high = more tax/cost).