Style

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.

BREAKING DOWN '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. Portfolio

    A grouping of financial assets such as stocks, bonds and cash ...
  2. Focused Fund

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

    A nationally recognized, well-established and financially sound ...
  4. Broker

    1. An individual or firm that charges a fee or commission for ...
  5. Growth Stock

    Shares in a company whose earnings are expected to grow at an ...
  6. Portfolio Manager

    The person or persons responsible for investing a mutual, exchange-traded ...
Related Articles
  1. Investing News

    BNP Paribas Investment Partners: Investment Manager Highlight

    Read about the investment operations of BNP Paribas Investment Partners, the asset management arm of the French banking giant BNP Paribas.
  2. Investing News

    Melon Capital Management: Investment Manager Highlight (BK)

    Learn more about the investment management operations of Mellon Capital Management, a BNY Mellon subsidiary with over $329 billion in assets under management.
  3. Mutual Funds & ETFs

    Build A Model Portfolio With Style Investing

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

    3 Alternative Ways To Assess Your Investment Manager

    Find out whether your funds are being managed according to your goals.
  5. 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?
  6. Mutual Funds & ETFs

    Should You Follow Your Fund Manager?

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

    Understanding The Mutual Fund Style Box

    Evaluate your investments with this simple tool.
  8. 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.
  9. Mutual Funds & ETFs

    3 Expensive Mid-Cap Mutual Funds Worth Your While (ETAGX, VMACX)

    Discover three mutual funds with above-average expense ratios and consistent outperformance of the S&P 500 Index and the Russell Mid-Cap Index.
  10. Mutual Funds & ETFs

    JANBX: Overview of Janus Balanced Fund

    Discover a balanced mutual fund with a solid performance history, weathering down markets and routinely outperforming equity indexes in up markets.
RELATED FAQS
  1. Is a money market account the same as a money market fund?

    Discover the differences between money market accounts and money market funds, including minimum balance requirements, withdrawal ... Read Answer >>
  2. What typically comprises a money market fund?

    Learn about the basic types of money market funds and discover how they are characterized by the types of investments that ... Read Answer >>
  3. Do financial advisors get paid by mutual funds?

    Learn how mutual funds reimburse financial advisors for recommending that their clients invest in funds and stay invested ... Read Answer >>
  4. What advantages do exchange-traded funds have over mutual funds?

    Exchange-Traded Funds (ETFs) are growing ever more popular, as they were created to combine the best characteristics of both ... Read Answer >>
  5. When do you invest in a commingled fund vs. separate account?

    Explore situations when a commingled fund is a more suitable investment vehicle than a separate account. Read Answer >>
  6. What are the advantages and disadvantages of mutual funds?

    Mutual funds are currently the most popular investment vehicle and provide several advantages to investors, including the ... Read Answer >>
Hot Definitions
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  2. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  3. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  4. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  5. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  6. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because ...
Trading Center