5 Tips to Maximize the Effectiveness of a Mutual Fund Fact Sheet


Christine Venuti

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  • Distribution

One of the main tools that investors reference when analyzing mutual funds is the fact sheet. Fact sheets provide an overview of a fund, including the fund’s investment objective, risks, performance, and holdings details, as well as management information, and are used for mutual funds, ETFs, separately managed accounts, and other types of investments.

Although some of the information on the fact sheet is required by regulators, there are other components of the fact sheet that can make it an essential marketing piece to attract and engage additional shareholders. Effective fact sheets need to attract the eye of a potential investor or intermediary and may contribute to an increase in the net assets and growth of a fund.

Here are 5 fundamental tips that should be followed to boost the effectiveness of a fact sheet.

  1. Know your audience – As with any effective marketing piece, the fact sheet should keep in mind the needs and desires of the targeted audience. Who is the audience? Whether the primary audience is the average retail investor or a pension fund director, these needs must be addressed. Remember, it’s all about them — existing and potential investors. Look at what’s included on the fact sheet from the investor’s point of view.
    • What are the goals of the investor?
      • What do they care about?
      • What is the fund’s investment philosophy or strategy and how does that strategy benefit the investor?
      • What barriers might there be for the investor?
      • What information does the investor need to make the fund more attractive, or what would motivate them to act and invest?
  2. Show relevant data – Of course, the fact sheet must include the usual minimum required performance data, expense ratios, and disclosures if returns are listed. But it should also include the additional data that would help any existing or potential investor to assess the risk of investing and determine if it aligns with their risk tolerance level or their investment plan. Don’t require the investor, or ‘captive audience’, to go elsewhere to find the information that they would need to make a decision of whether or not to invest. If you currently have a 2-page fact sheet, consider going to a 3 or 4 page document if you need additional space. But be careful to not add too much unnecessary information. You don’t want a potential investor to be overwhelmed with an overload of information.
  3. Add a commentary – One of the best ways to convey and clarify the fund management style or approach is to include a commentary. Be sure to include information about what really matters to your retail public or institutional audience. The commentary should focus on how the fund strategy fulfills the objectives of existing and potential investors. And, if needed, be sure to explain concepts to bridge the gap and help the average retail investor understand why this information is important to them. Remember, to look at it from the investor’s point of view.
  4. Be concise and organized – When laying out the content and data for your fact sheet, the data and information needs to be well thought out and prepared in a concise and organized fashion. Some content is best shown by being displayed as part of a graphic image. And sometimes, the data might be best represented as a pie or bar chart or even in a table. Ensure you put the time and effort into the message development and the appropriate layout and construction of the fact sheet.
  5. Create a compelling design – A polished and professionally designed fact sheet says a lot more than just the content of what’s on the sheet; it’s a reflection of the reputation of the management firm. When it comes down to it, a fact sheet is a marketing piece and must adhere to not only the firm’s corporate branding guidelines, but also industry-standard marketing concepts of design, placement, white space, balance, color, etc.  This document needs to be dynamic and have visual appeal.  But remember, an exceptional design can never be a substitute for meaningful and informative content.

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Working with a professional can help to create a successful and compelling fund fact sheet. To learn more about effective ways to merge informative content with creative designs, industry standards, and regulatory compliance, please contact us here.

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