Tear Sheets

What Is a Tear Sheet?

The term tear sheet can have various implications relying upon the industry. In finance, a tear sheet is a solitary paged document that is utilized to sum up key data about individual companies or funds. The term "tear sheet" traces all the way back to prior days when brokers would in a real sense tear a page out of a bigger document set to show their clients. These were common before the approach of the internet, where it is currently simpler and more savvy to find company data online.

In the world of advertising, a tear sheet is a page that is torn from a publication to demonstrate to a client that a commercial has without a doubt been distributed. The military purposes the term for certain reminders or emails that are utilized to convey messages from subordinates to bosses.

Understanding Tear Sheets

A tear sheet some of the time alludes to a fund company's reality sheet or another page piece of marketing collateral. The term is derived from days before the internet when Standard and Poor's created one-page summary sheets for public companies. Each page is a summary and could be torn from the bigger book. In the mutual fund industry today, tear sheets are in some cases called "fund truth sheets" and incorporate data about historical performance, the key holdings in the portfolio, and asset allocations.

Financial advisors and brokers frequently give tear sheets to prospective investors to give knowledge into conceivable investment opportunities. The sheet normally incorporates data about the company, for example, market capitalization, earnings, market sector, and a graph or chart of historical price movement in shares. The tear sheets can be introduced individually, or put together in an envelope and left with the client.

While tear sheets date back to the days of yore when stockbrokers would tear individual pages out of the S&P summary book and send them to current or expected clients, most data is extricated online today. In this way, any succinct representation of a company's business fundamentals could be viewed as a tear sheet.

Tear Sheet versus Prospectus

While assessing a mutual fund, a tear sheet varies from a prospectus in that the tear sheet is normally only a couple of pages and will typically contain a summary of the investment, the investment supervisor's benchmark, a graph showing historical performance, a couple of statistics, (for example, three-year or five-year alpha and standard deviation), and some data about the fund company dealing with the investment.

A mutual fund prospectus is a significantly longer document. It subtleties the strategy and investment objectives of the fund. The prospectus additionally incorporates data about the portfolio managers, the fund company, historical performance, and other financial data. It is accessible straightforwardly from a fund company by reaching them by email, mail, or via telephone.

The prospectus must be given to an investor at or before the hour of investment in a fund. Albeit many brokers or fund companies use tear sheets for marketing their products, it isn't required that one be given to a prospective investor. The prospectus, then again, is required by law.

Features

• The tear sheet is not the same as the mutual fund prospectus, which mutual fund companies are required to provide for their investors and is ordinarily significantly longer than a tear sheet.
• Today, most documents are delivered online, and many types of rundowns are viewed as tear sheets.
• The tear sheet ordinarily incorporates key fundamental data and a graph showing historical performance.
• In finance, a tear sheet is a one-page summary of a mutual fund or individual company.