Style

AAA

DEFINITION of 'Style'

The investment approach or objective that a fund manager uses to make choices in the selection of securities for the fund's portfolio. While there are a variety of styles, there are nine basic investing styles for both equity and fixed-income funds. For stock funds, company size and value/growth characteristics determine the style. For bonds, style is defined by maturities and credit quality.

INVESTOPEDIA EXPLAINS 'Style'

The specific size parameters for stocks are large, medium and small-sized companies, which are determined by market capitalization. Value, growth and a value/growth blends are the three basic categories for stocks.

Bond maturities are categorized as short term, intermediate term and long term. Credit quality is determined by a bond's status as a government or agency issue (high) and credit ratings for corporates and municipals of 'AAA' to 'AA' (high), 'A' to 'BBB' (medium) and 'BB' to 'C' (low).

Variations and combinations of these basic categories, as well as consideration of special industries, industry sectors and geographic location, create investment styles for both stock and bond funds beyond the basic nine categories for each.

RELATED TERMS
  1. Focused Fund

    A mutual fund which rather than holding a diversified mix of ...
  2. Blue Chip

    A nationally recognized, well-established and financially sound ...
  3. Portfolio Manager

    The person or persons responsible for investing a mutual, exchange-traded ...
  4. Style Box

    Created by Morningstar, a style box is designed to visually represent ...
  5. Growth Stock

    Shares in a company whose earnings are expected to grow at an ...
  6. Style Analysis

    The process of determining what type of investment behavior an ...
Related Articles
  1. Mutual Funds & ETFs

    Build A Model Portfolio With Style Investing

    This sophisticated approach will add flair to your returns.
  2. Personal Finance

    3 Alternative Ways To Assess Your Investment Manager

    Find out whether your funds are being managed according to your goals.
  3. Mutual Funds & ETFs

    Watch Out For The Mutual Fund Metamorphosis

    A new name may make a fund look fresh and exciting, but has anything really changed?
  4. Mutual Funds & ETFs

    Should You Follow Your Fund Manager?

    Learn how to tell if a fund in flux is still a suitable investment.
  5. Mutual Funds & ETFs

    Understanding The Mutual Fund Style Box

    Evaluate your investments with this simple tool.
  6. Mutual Funds & ETFs

    Do Focused Funds Provide a Better Outlook?

    Should you diversify or focus? Read on to decide which will work best for you.
  7. Professionals

    Should Investors Nix Actively Managed Funds?

    Index fund returns are on a tear but does this mean investors should nix actively managed funds?
  8. Investing

    Why Is The Nasdaq 5,000 Different This Time?

    The Nasdaq this week has slipped below the 5,000 high-water mark it reached last week. The last time it hit above 5,000 was in March 2000.
  9. Mutual Funds & ETFs

    Are These 2015's Most Promising Mutual Funds?

    For 2015, the mutual funds covered below are likely to offer more upside potential than the vast majority of mutual funds in existence.
  10. Mutual Funds & ETFs

    Why These Could Be 2015's 10 Best Mutual Funds

    These 10 mutual funds offer strong potential for 2015. Here's why.

You May Also Like

Hot Definitions
  1. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  2. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  3. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  4. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  5. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  6. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
Trading Center