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NISM-Series-V-A: Mutual Fund Distributors · Scheme Related Information

How to Read a Mutual Fund Fact Sheet and Offer Document

Updated 11 October 2026 · Fact-checked

The offer document (SID, SAI and KIM) tells you what a scheme is before you invest. The fact sheet is a monthly update on portfolio, expense ratio, performance and risk. The riskometer shows the scheme's risk level on a pictorial scale. In the exam, match each item to its document.

Understand Offer Document Contents and Fund Fact Sheet

A mutual fund scheme must tell investors what it does and how it is doing. It does this through two kinds of documents. One is fixed at launch and updated when needed. The other is published regularly.

The offer document is the launch document. For mutual funds it is made up of the Scheme Information Document (SID), the Statement of Additional Information (SAI) and the Key Information Memorandum (KIM). The SID has scheme-specific details. The SAI has details about the mutual fund as a whole, such as the sponsor, trustees and AMC. The KIM is a short summary that goes with the application form.

Key SID sections include the investment objective, the asset allocation pattern, the investment strategy, the risk factors, the fundamental attributes, the benchmark, the fees and expenses, loads, and how to buy and redeem units. Think of the SID as the promise made to the investor. The fund must follow it. Changes to fundamental attributes need defined steps and unit holder protection.

The riskometer is a pictorial risk label shown on the scheme. It places the scheme's risk on a scale from low to very high. SEBI prescribes the risk levels and the method used to assign them. The risk level can change over time, so it is reviewed and disclosed regularly. Always read the riskometer of the scheme and also that of its benchmark.

The fact sheet is a short periodic report, published monthly. It shows the scheme's portfolio holdings, asset mix, expense ratio, performance against the benchmark, riskometer, NAV and other facts. It helps you check whether the scheme is behaving as the SID says. A distributor uses it to compare schemes and to explain them to clients.

Key formulas to remember

Offer document set
Offer document = SID + SAI + KIM
SID is scheme-specific. SAI is about the fund house. KIM is a summary that goes with the application form.
Where each fact lives
Objective, asset allocation, strategy, risk factors, loads → SID | Sponsor, trustee, AMC details → SAI | Summary → KIM | Current portfolio, TER, returns → Fact sheet
Exam questions often ask which document holds an item. Remember that the fixed promise is in the SID and the current position is in the fact sheet.
Fact sheet frequency
Fact sheet = monthly disclosure
It gives the latest picture of the scheme, not the launch terms.
Riskometer
Riskometer = pictorial scale from low risk to very high risk
Assigned by the prescribed SEBI method and reviewed regularly. It can change over time.
Performance comparison
Scheme return vs benchmark return over the same period
Compare like with like: same period and same return basis (e.g. Regular vs Direct).

How to solve Offer Document Contents and Fund Fact Sheet questions

Most questions in this topic ask which document or section holds an item, or what a fact sheet item means. Use this method.

  1. 1Read the question and decide whether it is about the launch promise or the current position.
  2. 2If it is the launch promise (objective, asset allocation, strategy, risk factors, loads), think SID.
  3. 3If it is about the fund house, sponsor, trustees or AMC, think SAI.
  4. 4If it asks for a short summary given with the application form, think KIM.
  5. 5If it is about current holdings, expense ratio, NAV, returns or the latest riskometer, think fact sheet.
  6. 6For riskometer questions, recall that it is a pictorial scale from low to very high risk set by the SEBI method.
  7. 7Eliminate options that mix up the documents, then choose the one that fits exactly.

Quickest way: Promise or progress

When to use it: Use when you have under a minute and the question asks where an item is found.

  1. Ask: is this fixed at launch or updated regularly?
  2. Fixed and scheme-specific: SID. Fixed and about the fund house: SAI.
  3. Short summary with the application form: KIM.
  4. Regularly updated (portfolio, TER, returns, riskometer): fact sheet.
  5. Check the option wording for traps such as swapping SID and SAI.

Common mistakes in Offer Document Contents and Fund Fact Sheet

  • Placing sponsor and trustee details in the SID.

    The SID and SAI sound alike and both are long documents.

    Fix: SID is scheme-specific. SAI covers the mutual fund as a whole, including sponsor, trustees and AMC.

  • Treating the fact sheet as a launch document.

    Students think any document with scheme details is the offer document.

    Fix: The fact sheet is a periodic monthly update. It reports the current position, not the original terms.

  • Assuming the riskometer never changes.

    It looks like a fixed label printed once.

    Fix: The risk level is reviewed and disclosed regularly, so it can move with the portfolio.

  • Reading past returns as a guarantee.

    Fact sheets show attractive performance figures.

    Fix: Past performance does not assure future returns. Always compare with the benchmark over the same period.

  • Ignoring the expense ratio when comparing schemes.

    Students focus only on returns and portfolio.

    Fix: Expenses reduce investor returns. Compare the expense ratio of similar schemes and note Regular versus Direct plans.

  • Confusing the KIM with the SID.

    Both describe the scheme.

    Fix: The KIM is a short summary that goes with the application form. The SID is the detailed scheme document.

Worked examples

Example 1

A distributor wants to check the investment objective and asset allocation pattern of a scheme before recommending it. Which document should the distributor read first?
A. Fact sheet
B. Scheme Information Document
C. Statement of Additional Information
D. Account statement

Show the solution
  1. Objective and asset allocation are the launch promise of a scheme.
  2. These are scheme-specific details.
  3. Scheme-specific details are in the SID.
  4. The fact sheet shows the current position, the SAI covers the fund house, and an account statement shows the investor's holdings.

Answer: B. Scheme Information Document

Example 2

A client asks where to find the latest portfolio holdings, the current expense ratio and the scheme's return versus its benchmark. Which document gives these on a regular basis?
A. Scheme Information Document
B. Statement of Additional Information
C. Monthly fact sheet
D. Key Information Memorandum

Show the solution
  1. Identify the items: current holdings, current expense ratio and performance versus benchmark.
  2. These change over time, so they need a regular update.
  3. The monthly fact sheet is the periodic disclosure for these items.
  4. The SID, SAI and KIM are launch documents and are not the regular source.

Answer: C. Monthly fact sheet

Exam tips

  • Sort every item into one of four buckets: SID, SAI, KIM or fact sheet.
  • Watch for options that swap SID and SAI. Scheme-specific means SID, fund house means SAI.
  • Remember the riskometer is a pictorial scale from low to very high risk and it is reviewed over time.
  • Use the words periodic or current as a clue for the fact sheet.
  • The Regular and Direct plans differ in expenses. Expect questions on comparing them in the fact sheet.

Practice questions from Scheme Related Information

Offer Document Contents and Fund Fact Sheet: frequently asked questions

What does a mutual fund fact sheet contain?

It contains the scheme's portfolio holdings, asset mix, NAV, expense ratio, performance against the benchmark and the riskometer. It is published monthly. Use it to see how the scheme is doing now.

What is a riskometer in a mutual fund scheme?

It is a pictorial scale that shows the risk level of the scheme, from low to very high. SEBI prescribes the method for assigning it. The level is reviewed regularly and can change.

What is the difference between SID, SAI and KIM?

The SID gives detailed scheme-specific information. The SAI gives details about the mutual fund as a whole, such as sponsor, trustees and AMC. The KIM is a short summary that goes with the application form.

Why should a distributor read the fact sheet?

It shows whether the scheme follows its stated objective and how it performs against its benchmark. It also shows the cost through the expense ratio. This helps you compare schemes and explain them honestly to clients.