Demystifying investment factsheets

A factsheet won’t tell you when to buy or sell.  However, it is a valuable tool for understanding what you’re investing in, its performance, and what risks may be involved. 

But we know that for many, factsheets can feel overwhelming and full of jargon. Luckily, this guide is here to help you interpret them – so you can make more informed choices about your investments.

Let’s go through some of the things you might find on a factsheet.

The investment objective or how we invest

Every factsheet begins with the investment objective. This outlines what the manager is trying to achieve - whether that’s growth, income, or a blend of both. This might also give you an idea of the investment’s dividend policy i.e. whether and how often a company pays out a portion of its profits as a thank you for investing with them.

Ask yourself: Does this align with your own goals? If you want steady dividends, a portfolio that’s focused mainly on capital growth might not be the right fit, and vice versa. Checking this section makes sure you’re comparing the right investments for your needs.

Performance

Factsheets usually talk about performance in two ways:

• Cumulative performance shows the total return over a given period, for example, three or five years.
• Discrete performance breaks down returns year by year, offering a more detailed picture.

These are often compared to a benchmark, like the MSCI All-Country World Index (a broad, globally diversified equity index that tracks large and mid-cap stocks), so you can more easily see how the investment is doing.

Ask yourself: What’s the overall picture? Look at both types of performance. Strong short-term numbers may mask weaker long-term returns, while a difficult year might hide a stronger decade-long track record. 

And remember, past performance is not a guide to future returns.

Key figures to know

This section may seem a bit impenetrable – but each metric reveals something important about the investment.

Share price vs. NAV per share: The share price is what you pay in the market, while the Net Asset Value (NAV) reflects the underlying value of the portfolio. If the share price is below NAV, the investment is said to trade at a discount (i.e. to be worth more than it’s being sold for); if above, at a premium (worth less than it’s being sold for).

Gearing: This is a distinct benefit of investment trusts, where the trust can borrow money with the aim of increasing returns - for example if they need more money to capitalise on a particular opportunity. It can amplify gains in rising markets but also increases risk in downturns.

Yield: The income generated by the investment, usually given as a percentage of the share price.

OCR (Ongoing Charges Ratio): The annual cost of running the investment. Lower charges mean more of the returns stay with you.

Active share %: A measure of how different the portfolio is from its benchmark. A higher active share suggests the manager is taking a more distinctive approach, rather than hugging the index.

Portfolio breakdown

Factsheets typically highlight the top 10–20 holdings, giving a snapshot of where your money is invested. Don’t confuse these with the whole story, though. A portfolio might hold 50, 100, or more positions, and the complete breakdown is usually available online.

Ask yourself: Alongside individual holdings, you can look at sector allocation. Are investments clustered in one area or spread more broadly? What about geography - is the portfolio global, regional, or country-specific? These details show how diversified the investment really is.

Investment commentary

Factsheets usually include a brief market or manager commentary. This explains not just what happened, but why. 

Ask yourself: Did certain sectors outperform? Was volatility driven by macroeconomic events? Understanding this context helps you judge whether the results align with the manager’s stated approach.

A factsheet is a tool, not the whole story

A factsheet is invaluable, but it shouldn’t be your only source. Not every investment will publish one or keep them updated regularly. So be sure to combine the insights you get from factsheets with annual reports, independent research, and – most importantly – your own investment goals. 

Your checklist for reading a factsheet could be:

• Do I understand the strategy?
• How has it performed over time compared with its benchmark?
• Is it trading at a discount or premium to NAV?
• What level of gearing is being used?
• How diversified is the portfolio?
• Are the fees reasonable?
• Does the dividend policy suit my needs?

By seeking advice and working through these questions, you can make a more informed decision about whether the investment deserves a place in your portfolio.

The bottom line

Factsheets are designed to inform, not overwhelm. With the right know-how, you can see what you own, how it’s performed, and what risks you’re taking.

At Alliance Witan, we make investing more accessible by ensuring our data is available in one place, explained in plain terms, and easy to find when you need it.

Issued by Towers Watson Investment Management Limited (TWIM), registered office Watson House, London Road, Reigate, Surrey RH2 9PQ. TWIM is authorised and regulated by the Financial Conduct Authority, firm reference number 446740. TWIM is the Alternative Investment Fund Manager (AIFM) for Alliance Witan PLC. TWIM is part of Willis Towers Watson.
Alliance Witan PLC is listed on the London Stock Exchange and is registered in Scotland No SC1731. Registered office, River Court, 5 West Victoria Dock Road, Dundee DD1 3JT. Alliance Witan PLC gives no financial or investment advice. © Copyright Alliance Witan PLC. Tel: 01382 938320.
 
This information is for informational purposes only and should not be considered investment advice. The views expressed are the opinion of TWIM and are not intended as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell any securities. The views expressed were current as of end July 2025 and are subject to change. Past performance is not indicative of future results. A company’s fundamentals or earnings growth is no guarantee that its share price will increase. You should not assume that any investment is or will be profitable. Information contained herein has been obtained from sources believed to be reliable but not guaranteed.