Reading Mutual Fund Disclosures

Why Reading Disclosures Matters

Mutual fund factsheets and scheme documents contain important details that help investors understand what they are investing in. Knowing where to look helps you read these documents with more confidence.

Scheme Category and Objective

Most factsheets begin with the scheme's category (for example, an equity, debt or hybrid category) and its stated investment objective, which describes the broad approach the scheme follows.

Total Expense Ratio (TER)

The Total Expense Ratio shows the annual cost of managing the scheme as a percentage of assets, including distributor commission. This is already reflected in the scheme's published NAV.

Portfolio Composition and Holdings

Factsheets typically list the scheme's top holdings, sector allocation, and asset allocation across equity, debt and cash, giving a snapshot of how the fund is currently invested.

Risk-o-Meter and Riskometer

Most factsheets display a riskometer indicating the scheme's risk level, ranging from low to very high, based on the scheme's underlying portfolio and category.

Fund Manager and AUM

Factsheets typically mention the assigned fund manager(s) and the scheme's Assets Under Management (AUM), which indicates the scale of the fund.

Exit Load and Minimum Investment

Look for the exit load structure, which describes any charge for redeeming within a specified period, along with minimum investment and SIP amounts.

Where to Find the Full Details

The Scheme Information Document (SID) and Key Information Memorandum (KIM) provide the complete, legally binding details behind the summary shown in a factsheet, and should always be read before investing.

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