028. How to read a fund fact sheet

In Malaysia, fund houses will publish their monthly fund fact sheet to show their fund's latest details. Each fund house will have their own format. This fund fact sheet will give investors a brief idea of the fund and its performance etc. Of course, investors must read Master Prospectus and Product Highlight Sheet before making any investment decisions.

This post is just to show how to read a fund fact sheet. Below is sample of fund fact sheet. I have blank out some portion.

Let's go through part by part.

• On the top left, we see the logo, name, address, website and email of the fund house.
• The round logo near the top right is the Lipper 3 years volatility index. The number "11.94" we see is the reading of the volatility. Below the number we see the category of the index. This example showed "Very High". It will be explained at end of page (we shall see later) what does they all mean.
• At the extreme right is actually the fund's name and also the month being reviewed.

Then we have the "FUND DETAILS" section.

• "Investment Manager" - the name of the company in charge of managing the fund.
• "Trustee" - trustee company who is holding the investment money in trust.
• "Fund Objectives" - the objective of the fund. It can be purely for growth or income, or a blend of both. This example mentioned it is for capital growth over long term.
• "Distribution Policy" - whether the fund will give regular dividend income or not. You will see "Annual" if it is a dividend fund that give annual income; growth fund will normally reinvest profits and tends to dividends as secondary priority, ie "Incidental".
• "Asset Allocation" - how the allocation the money into equities, bonds, money market and cash investment.
• "Launch Date" - the launched date of the fund.
• "Approved Fund Size" - the fund size approved by the authority.
• "Fund Size" - the current fund size. Fund size should be stable or steady increasing.
• "Sales Charge" - the upfront charge being deducted from investor's investment amount. The lower the better.
• "Redemption Charge" - the charge incurred when investor do redemption. The lower the better.
• "Management Fee" - the annual fee charge by fund manager for managing the fund. The lower the better.
• "Minimum Initial Investment" - the minimum amount to start investment.
• "Minimum Additional Investment" - the minimum amount to subscribe to regular saving scheme.
• "Investor's Profile"  - to know is this fund for high, moderate or low risk investor; or the purpose of investment.

Manager's Comments - how manager's comments on the market situation, how is he managing the fund and their upcoming strategy.

Sector allocation - how is the money in the pool of fund being invested.

Top 5 Holdings - the top 5 biggest investment.

Performance chart - the performance of the fund versus a benchmark.

Performance table - the comparison of performance between the fund and benchmark in table format.

Disclaimer - manager's disclamer. Here we also see the explanation of the Volatility Factor shown in the top part.

As said, every fund house will have their different format. Some will have extra info. Use fact sheet as guide to know the latest performance and manager's comments. For final decision, refer to master prospectus and product highlight sheet. Of course, you must do a suitability assessment to know your risk profile.