How to Read an ETF Factsheet: The Numbers That Matter
Two ETFs on the exact same index can quietly diverge by thousands over a working life. The factsheet tells you which one is silently eroding your returns. Few investors open it.
ETF factsheet numbers - what counts as good
| Metric | Good for passive | Watch out |
|---|---|---|
| OCF | Under 0.25% | Above 0.50% rarely justified |
| Tracking error | Under 0.10% annually | Above 0.5% = drift |
| Beta | Close to 1.0 | Outside 0.95-1.05 |
| Sharpe ratio | Above 1.0 | Beware short windows |
| Dividend yield | 1% to 4% normal | 7%+ usually a warning |
For a plain global equity tracker. Sector or tilted ETFs read differently.
Key takeaways
Check the Ongoing Charge Figure (OCF) to understand the annual fees for the fund, with lower percentages being more favourable.
Look at the Tracking Difference to see how closely the fund follows its benchmark, with a neutral difference being ideal.
Review the Tracking Error to gauge the consistency of the fund's performance relative to its benchmark, with lower values indicating better consistency.
Analyse the Beta to determine the fund's volatility in relation to the market, with a value close to 1.0 indicating standard market behaviour.