Understanding a Fund Fact Sheet

Understanding a Fund Fact Sheet

1.)    The name of the fund and the Financial Institution

2.)    Fund Performance

This is the comparative result of the fund against its benchmark. In this case, it is the high-conviction fund pitted against the Philippine Stock Exchange Index. The performance is broken down into different periods (YTD, 1 month, 3 months, 1 year, etc.) for quicker reference.

3.)    Graph

For easier comparison, graphs of the fund and the benchmark are always provided in a fund fact sheet. This is for the investors to have an idea of the track record and the trends of the fund and the index. Investors can recognize when the fund performed better or worse than benchmark.

4.)    Manager’s Report

The Manager’s Report usually contains three parts:

Market Review – a brief summary of the market’s performance for the past month and rational behind the performance. It also provides key issues that led the rise or fall of the market and other data that contributed to such performance.

Fund Performance -a comparative summary of how well (or bad) the fund performed against the benchmark and  the issues in its portfolio that allowed it to outperform (or underperform) the benchmark.

Fund Strategy – A brief explanation on how the fund managers will proceed with the investment allocations to take advantage of the current market condition. This section explains which sectors they will be overweight and underweight, how much cash position should they have and what are the key support level they are likely to buy and key resistance level they are likely to sell.

5.)    Investment Objective

The section that tells you what is the objective of funds. In other words, this is the compelling reason why you are investing in this fund. A word of caution though, never invest if your objective does not match the fund’s objective. If it says long term, invest for long term.

6.)    Top 10 Holdings

This section presents the top issues of the portfolio and their corresponding percentage to the total fund. You can easily know which sectors they are favoring by just looking the companies the fund is investing in. This is also a guide on which companies to trade.

7.)    Sector Holding

The percentage allocation of each sector to the total portfolio arranged from heavyweight to underweight. In bear markets, fund usually take a defensive stand by investing heavily in recession-proof industries such as Telecoms and Utilities.

8.)    Key Figures and Statistics

Other data that are not classified into the first seven sections are all lumped into the last. This contains the total number of selection of the fund, the fund performance and its beta coefficient. It also contains the general information about the fund such as: Launch date, custodian bank, fund valuation and trust fee just to name a few.

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