Reading a mutual fund factsheet, line by line
The returns table is the least useful part of the document and the only part most people look at.
Published 30 July 2026 · 5 min read
What a factsheet is
Every mutual fund publishes a monthly factsheet, free, on the fund house website. It is two or three pages and contains almost everything you need to judge whether a fund is doing what it claims.
It is not marketing in the way a brochure is. The disclosures are required, and a fund cannot omit an inconvenient number from it.
What each section tells you
Investment objective and category
Read this first. SEBI requires every scheme to sit in a defined category, which stops a fund quietly changing what it does. If the category is large cap, the fund must largely hold large companies, whatever its name suggests.
Fund manager and tenure
The tenure matters more than the name. A five year performance record built by a manager who left eighteen months ago is not a record of anything you can buy today.
AUM
. Larger funds usually carry a lower percentage fee, because SEBI caps fees on a sliding scale. Very large size can make it harder for a fund to trade smaller companies without moving prices.
Expense ratio
The single most predictable determinant of your long term outcome, because it is certain while returns are not. Check you are reading the direct plan figure. Under the SEBI (Mutual Funds) Regulations, 2026, costs are now shown in parts: base expense ratio, brokerage, and statutory levies charged on actuals.
Portfolio holdings
Usually the top ten, with sector allocation. This is where you discover whether two funds you own are actually the same bet. Put three factsheets side by side and count repeated names.
Benchmark and returns
The return matters only against the . A fund returning 14% when its benchmark returned 17% underperformed, however good 14% sounds in isolation.
Portfolio turnover
How much of the portfolio was traded during the year. High turnover means high trading costs, which come out of your return, and it tells you something about the manager style that the strategy description will not.
The three numbers worth comparing
If you are comparing two funds in the same category, most of the document is context. Three things do the work.
- Expense ratio, direct plan. Known in advance, applies every year to your whole balance.
- Performance against the benchmark, across several periods including a bad one. How a fund behaved in a falling year says more than three good years.
- Portfolio overlap, if you already hold something similar. A second fund holding the same thirty companies adds paperwork, not diversification.
For an specifically, replace the second with . Two funds tracking the same index should deliver nearly the same thing, so how tightly they track is the actual differentiator.
What not to use it for
- Ranking funds by last year return. The top fund of one year frequently drifts to the middle within three, because the conditions that suited its style change.
- Confirming a decision you already made. Once you own something you read its factsheet differently. Look at the numbers before forming a view.
- Judging a fund on one month. The document is monthly. The judgement is not.
Full method in mutual funds.