In short: An ETF factsheet is a monthly publication from the fund issuer summarizing key fund characteristics. It highlights the tracked benchmark index, total fund size, currency, replication method, dividend policy (accumulating or distributing), geographic and sector weighting, top holdings, and ongoing charges, allowing investors to verify portfolio composition and costs.
Why are there two documents with different jobs?
When you look for information about an ETF, you will usually find two documents: the factsheet and the KID (Key Information Document). The KID follows a format required by law under Regulation (EU) No 1286/2014, also known as PRIIPs. Since 1 January 2023, UCITS funds also use this PRIIPs KID. It has a fixed layout and is at most three sides of A4 when printed.
The factsheet is the issuer’s own monthly overview of the fund. It is very useful for recent data, but it is not standardised.
| Feature | KID | Factsheet |
|---|---|---|
| Who makes it | the issuer, under EU rules | the issuer, own layout |
| Required | yes | no |
| Length | max. 3 sides of A4 | varies |
| Risk | indicator 1 to 7 | often volatility or none |
| Costs | full cost tables | usually ongoing costs only |
| Future | four scenarios (no forecast) | past performance only |
How do you read the Key Information Document (KID) step by step?
Every KID follows a mandatory, standardised sequence across Europe. Below is the section-by-section walkthrough using the KID’s own headings, explaining what to look for and what each section does not tell you.
- “Purpose”
What to look for: A standard statutory statement confirming that this is a pre-contractual document required by law to help you understand the fund and compare it with other investments, and not marketing material.
What it does not tell you: It gives no details about the fund itself, its tracked index, or its strategy.
- “Product”
What to look for: The exact fund and share class name, ISIN code, fund manufacturer, competent financial supervisor, and document date.
What it does not tell you: It does not tell you the live trading price on the stock exchange, the bid-ask spread, or your broker’s order execution commission.
- “What is this product?”
What to look for: The legal fund type (UCITS), the underlying benchmark index tracked, how the fund tracks it (replication method), whether dividends are accumulating or distributing, and the intended retail investor profile.
What it does not tell you: It does not list the individual stock holdings, sector weightings, or country breakdown. Those portfolio details appear in the monthly fund factsheet.
- “What are the risks and what could I get in return?”
This section contains two essential subheadings:
- “Risk Indicator”: A Summary Risk Indicator (SRI) on a scale from 1 (lower risk) to 7 (higher risk). It is calculated using regulatory formulas based on historical return volatility, combining market risk and credit risk. A lower score indicates smaller price swings in the past, but 1 is never risk-free. Crucially, the indicator assumes you hold the fund for the recommended holding period. If you sell early, the actual risk can vary significantly. It also does not factor in currency fluctuations if you invest in a different currency.
- “Performance Scenarios”: Four statutory model calculations: stress, unfavourable, moderate, and favourable. They illustrate what your investment could return after costs under different market environments at one year and at the recommended holding period.
What to look for: The risk score, whether the fund matches your horizon, and how severe losses could be under the stress scenario.
What it does not tell you: Performance scenarios are purely hypothetical illustrations calculated from historical return patterns. They are not forecasts, predictions, or promises of return. Future market developments cannot be accurately predicted, and actual returns can be lower.
- “What happens if [the manufacturer] is unable to pay out?” (the KID names the fund manufacturer here)
What to look for: Information on whether your investment is protected if the fund manager faces insolvency (in the regulation: “What happens if the manufacturer is unable to pay out?”). In European UCITS ETFs, fund assets are held in custody by a separate depositary in segregated accounts, ring-fenced from the manager’s creditors.
What it does not tell you: It does not cover market losses from declining share prices, as investor compensation schemes do not protect against market risk.
- “What are the costs?”
This section breaks down costs through two tables:
- “Costs over Time”: Shows total costs in money terms and annual cost percentage impact across different holding periods for an example investment.
- “Composition of Costs”: Details one-off entry and exit costs, ongoing management fees (TER), portfolio transaction costs incurred when buying and selling underlying shares, and incidental performance fees.
What to look for: The total annual ongoing charge and transaction costs, which together represent the internal fund drag.
What it does not tell you: It does not include broker transaction fees, platform custody fees, or personal taxes. Read our detailed guide on what an ETF costs to see the full cost picture.
- “How long should I hold it and can I take money out early?”
What to look for: The recommended holding period (such as five years) chosen to match the fund’s risk profile, alongside confirmation that exchange-traded shares can be sold on any trading day through a broker.
What it does not tell you: It does not tell you whether current market conditions are favourable for selling, nor does it promise you will not sell at a loss.
- “How can I complain?”
What to look for: Contact details and official procedures for submitting a complaint to the fund manager or relevant financial ombudsman.
What it does not tell you: It does not handle complaints about your broker’s app, order execution, or platform fees (those must be directed to your broker).
- “Other relevant information”
What to look for: Where to find the legal prospectus, annual reports, past performance history, and previously published monthly performance scenario documents.
What it does not tell you: Real-time daily net asset value updates or current market news.
| KID section | Question you can answer | What to look for |
|---|---|---|
| “Product” | Is this the exact ETF share class and fund structure? | Verify the ISIN, currency, and fund manager. |
| “What is this product?” | What index does it track and how are dividends paid? | Index tracked, replication method, and accumulating or distributing policy. |
| “Risk Indicator” | How volatile is this fund compared to other investments? | The 1 to 7 risk score, assumed holding period, and currency notes. |
| “Performance Scenarios” | How might value develop under varying market models? | Four hypothetical model outcomes; no forecast or return promise. |
| “What are the costs?” | What internal charges reduce my compounding? | Ongoing charges (TER), transaction costs, and cost reduction over time. |
| “How long should I hold it…?” | What investment horizon is suited to this ETF? | The recommended holding period (such as five years) and exchange exit rights. |
How do you read the fund factsheet step by step?
The factsheet holds a lot of practical data. In our ETF overview, we use the following fields from the factsheet:
- Index and ISIN: Which index the fund tracks and its unique identification code.
- Ongoing costs (TER): The annual fund costs.
- Domicile: The country where the fund is based.
- Dividend policy: Whether the fund is accumulating or distributing.
- Replication method: How the fund tracks the index.
- Other data: The fund currency, launch date, fund size, number of holdings, top-10 weight, and the exchanges where the fund is listed (listings).
Some details on the factsheet, such as the fund size and the weights of the holdings, change daily. Other details, like the ISIN, the domicile, and the dividend policy, rarely change.
Which common mistakes should you avoid when reading fund documents?
It is easy to misinterpret these documents. These are the most common misunderstandings:
- “The favourable scenario is what I can expect.” This is incorrect. The favourable scenario is simply one of four model outcomes, not a forecast.
- “SRI 1 means no risk.” A 1 on the risk indicator only means a lower risk on the scale, not that the fund has no risk at all.
- “The factsheet is checked by the regulator.” The factsheet is the issuer’s own document. Only the KID follows fixed EU rules.
- “Ongoing costs are all the costs.” This is not true. The KID also shows other expenses, such as transaction costs. You can read more about this in our article on what an ETF costs.
Where can you find and check these documents yourself?
Every issuer publishes the KID and the factsheet on the fund’s page. You can easily find them by searching online for the ISIN.
Here are two examples to look up yourself on the issuers’ websites:
- iShares Core MSCI World UCITS ETF (IWDA), ISIN IE00B4L5Y983: iShares product page.
- Vanguard FTSE All-World (VWCE), ISIN IE00BK5BQT80: Vanguard’s KID.
Once you know a fund’s ongoing costs, you can enter them into our ETF calculator. For more information, read the FAQ on entering your own costs.
Facts checked on 3 October 2026.
Sources
- The issuer links above go to the issuers’ own documents and were checked on 19 October 2026. Issuers replace KIDs at least once a year, so a link can move.