5-minute guide: How to read a fund factsheet

If you’ve ever looked up a fund on FundCalibre or another investment platform, you’ve probably come across something called a fund factsheet. At first glance, it might look like a wall of numbers and jargon but once you know what to look for, it becomes a powerful tool to help you decide whether a fund is right for you.

In this guide, we’ll break down what a fund factsheet is, what the key sections mean, and how you can use them to make more informed investing decisions.

What is a fund factsheet?

A fund factsheet is a short document (typically no more than three pages) that gives you a snapshot of an investment fund at a particular moment in time. Think of it as a summary report: it outlines what the fund is trying to achieve, who runs it, how it’s performed, what it costs, and what it invests in.

Factsheets are updated regularly (usually monthly or quarterly), but it’s important to note that they’re not live documents. The information they contain reflects a specific date — so the first thing you should always do is check the date.

If the factsheet is several months old, the fund’s holdings or performance figures may have changed since then. At FundCalibre, we try to keep our factsheets as up to date as possible, but always take note of when they were last refreshed.

Let’s consider our seven-point approach to reading a fund factsheet. 

1. The key fund facts

At the top, you’ll usually find a section with essential details, which will help you understand the basics of how the fund operates. Think of them as the “who, what, and when” of the fund. 

Here’s a few things to look out for:

• Base currency: This is the currency the fund uses to buy and sell investments (for example, pounds, euros, or US dollars). If you’re investing using a different currency, keep in mind that exchange rates can affect your returns.
• Benchmark: This shows what the fund is compared against. For instance, a UK equity fund might use the FTSE 100 as its benchmark. This helps you see whether the fund is performing well relative to a broader market or a group of peers.
• Other details: You might also see the fund’s size (how much money it manages), its launch date, and the type of assets it invests in (for example, shares, bonds, or a mix of both).

2. Understanding the objectives (or overview)

Every fund has an investment objective, which outlines what it’s trying to achieve. This could be something like “to deliver long-term capital growth” or “to generate a steady income.” This section might also explain the fund’s investment approach, for example, whether it focuses on growth companies, undervalued opportunities, or sustainable investments.

Reading this part carefully can help you decide if the fund aligns with your goals and risk tolerance. For instance, a fund aiming for “long-term growth” might be more volatile than one focused on “capital preservation.”

For all our Elite Rated funds, we provide a jargon-free overview of all our funds on their individual research page; this might give you more information than simply reading the factsheet. 

3. Costs and charges

All funds come with costs, and the factsheet should outline them clearly. The most common measure is the Ongoing Charges Figure (OCF). Remember, even small differences can add up over time, so if one fund charges 0.5% and another charges 1.5%, that extra 1% could significantly affect your long-term returns. It’s important to note that fund charges can vary by share class as well, so it’s important to double check this information with your investment platform of choice. 

4. Who’s managing your money?

The fund manager is the person (or team) responsible for deciding what to buy, sell, and hold. Some factsheets include a short biography or photo of the fund manager, along with details about their experience or tenure. It’s worth noting how long the current manager has been in charge; a change in manager could mean a change in strategy or investment style.

5. Understanding risk

Every investment carries risk, and the factsheet will usually include a risk rating or risk scale. This gives you an idea of how much the fund’s value might fluctuate. Generally, funds investing in shares are riskier (but with higher potential returns) than those investing in bonds or cash-like instruments. Make sure the fund’s risk level fits your own comfort zone and financial goals.

Comparing risk across asset managers can be tricky, but at FundCalibre we use the same risk scale across all our Elite Rated funds to help make the comparison easier. 

6. What does the fund actually invest in?

This section breaks down where the fund’s money is going, often with charts and graphs. You’ll want to look at these different sections: 

• Top 10 holdings: These are the largest individual investments in the fund and give you an example of where the majority of your money is going. You can also determine how concentrated a fund is by looking at the allocation in this section. 
• Sector and geographic exposure: You can see how diversified the fund is across industries (like technology or healthcare) and regions (like the UK, US, or Asia).
• Asset allocation: For multi-asset funds, this shows the balance between shares, bonds, and cash.
• For bond funds, you might also see details about duration, credit quality, or currency exposure.

7. Fund performance and commentary

Factsheets typically show the fund’s past performance, often over one, three, and five years. Remember, past performance is not a guide to future returns, but it can give you a sense of how the fund has behaved in different market conditions.

Some factsheets also include a fund manager commentary, which is a short written section explaining how the fund has performed recently, why certain investments were made, and what the manager expects from the market going forward. This qualitative insight can be just as useful as the numbers as it helps you see how the manager thinks and reacts to changing conditions.

The takeaway

A fund factsheet is only one piece of the investment puzzle, but it’s still an incredibly useful resource, if you know how to read it. By focusing on the key details like objectives, costs, holdings, and performance, you can start to make more confident and informed choices about where to invest.