What are the ratios, matrix, figures an investor should look out for in a fund fact sheet or prospectus?

For Equity funds

· Estimated 3-5 Yr EPS Growth: An estimated measure of the growth of earnings per share over a forward-looking period. This helps investors get an idea of the rate of expected growth for their portfolio

· Price to Earnings (typically 12-mo Forward): A measure of the price to earnings ratio for a stock using the forecasted earnings for the next 12 months. This is also commonly referred to as a measure of a fund’s valuation

· Standard Deviation: A measure of the degree to which a fund’s return varies from the average of its previous returns. The larger the standard deviation, the greater the likelihood (and risk) that a fund’s performance will fluctuate from the average return

For Fixed Income funds

· Average Credit Quality (ACQ): The average credit quality reflects the holdings of the underlying issues, based on the size of each holding and ratings assigned to each based on rating agency assessments of its creditworthiness. The higher the ACQ, the higher the average creditworthiness of the fund

· Average Duration: A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. Expressed as a number of years, the higher the fund’s duration, the higher its price sensitivity to interest rates movements

· Standard Deviation: A measure of the degree to which a fund’s return varies from the average of its previous returns. The larger the standard deviation, the greater the likelihood (and risk) that a fund’s performance will fluctuate from the average return.

Some things to look out for

1) Country, sector and asset allocation. This give you a rough idea of how and what the fund is invested in.

2) Fund manager goals and strategy. They will explain what the fund is about. Find those fund which you agree with and are align with your goals.

3) Management fee. Unit trust management fee is significantly higher than robo advisor/ ETF. This will eat into your profit in the long run.

4) Fund size Avoid low AUM, the fund might close down soon.

5) Past performance. Look at how the unit trust perform in comparison to the benchmark in the past 5-10++ years. Statistic shows most don’t outperform consistently. Even those who did in the past, don’t maintain the performance.
(Past performance is not super important because past performance is not the same as future performance)

Instead of unit trust, have you thought of ETF/ robo advisors? The fees of ETF/ Robo are a lot lower. I mean since fund always fail to outperform the market, what’s the point of paying the super high fees right.