A fund factsheet is a snapshot: usually a short document showing the investment approach, selected holdings and recent results. It is a useful starting point, but its headline number cannot explain the whole fund.

Start with the purpose and date

Read the objective in ordinary language. What types of assets does the fund hold, and what is it trying to achieve? Then find the reporting date. A portfolio shown at month-end may have changed since that snapshot was prepared.

The asset mix and largest holdings help describe exposure. They do not replace the fuller risk explanation in the fund’s disclosure documents. Moneysmart’s managed-fund guide covers the investment mix, risks and access to money.

Read the small print beneath performance

Check the period, the currency, whether income is reinvested and which fees are included. A multi-year figure labelled “per annum” is an annualised rate, rather than the total gain across all those years.

A benchmark provides a reference for comparison. In a hypothetical one-year table, a fund returning 6% and its benchmark returning 4% have a difference of two percentage points, provided both figures use comparable calculations. That difference alone does not explain the risks taken.

The US SEC’s guide to fund performance and fees explains the role of benchmark comparisons and why historical performance cannot guarantee future results.

Find the fuller picture

Check all applicable costs, including performance fees or transaction charges. For an unlisted fund, check withdrawal timing and restrictions. For an ETF, most investors sell units through a broker or platform at the market price; Moneysmart explains ETF trading. The Product Disclosure Statement or other offer document supplies details relevant to the product.

A useful reading note has four lines: what it holds, the dates covered, what the return includes, and what needs further explanation. That turns a busy page into an understandable description.

Educational information only. It does not take account of your objectives, financial situation or needs.