Factsheets provide an overview of funds and summarize the key characteristics, such as volume, past performance, costs, risk, investment strategy, largest positions and financial key figures. Taking a close look at factsheets is well worth it for investors to assess whether a product is suitable for their personal investment strategy. Factsheets are available from customer advisors and on the websites of fund providers.
To obtain a quick overview, look at the following elements which are part of every factsheet:
- Performance: this provides information on the fund’s past performance. Most funds compare the performance of their portfolio with a general market index – in other words, how the fund has performed over a certain period in comparison to the market. Please note that past performance is not a reliable indicator of how well a fund will do in future. The past has shown that the situation on the financial markets can change rapidly. It is also worth bearing in mind that no charges are incurred on an index.
- The 10 largest positions: this overview of the fund’s main securities (for example, shares or bonds) helps to identify risk concentration. If, for example, you hold lots of shares in a particular company, you should not invest in a fund which places particular emphasis on the sector in which this company operates and which holds a high proportion of these shares itself.
- Total expense ratio (TER): the TER provides details of the proportion of the average fund assets accounted for by a fund’s charges. It contains all charges incurred at the expense of the fund assets, with the exception of transaction costs.
- Risk: ratings systems of the fund provider, the legislator and independent rating agencies provide information on an investment’s anticipated risk.