Style Box


DEFINITION of 'Style Box'

Created by Morningstar, a style box is designed to visually represent the investment characteristics of fixed-income (bond), domestic equity (stock) and international equity (stock) securities and their respective mutual funds. A style box is a valuable tool for investors to use to determine the asset allocation and risk-return structures of their portfolios and/or how a security fits into their investing criteria. There are slightly different style boxes used for equity and fixed-income funds.

Style Box


For stock funds (domestic and international), the horizontal axis of the style box is divided into three investment style categories: value, blend (a value/growth mix) and growth. The vertical axis is divided into three company-size (based on market-capitalization) indicators: large, medium and small.

For bonds and bond funds, the horizontal axis is divided into three maturity categories: short-term, intermediate-term, and long-term. The vertical axis is divided into three credit-quality categories: high, medium and low (BB-C).

Investors can use a style box to put together mutual fund portfolio and visually see the results as a total picture. For example, an investor looking for a relatively safe stock fund would seek out one categorized as a large-cap value fund. If that same investor is willing to accept more risk for the opportunity of a greater return, he/she might select a fund in the small-cap growth category. Putting dollar values on the fund selections in the same and/or differing category squares will readily reflect the risk-return parameters of the whole portfolio.

  1. Small Cap

    Refers to stocks with a relatively small market capitalization. ...
  2. Growth Fund

    A diversified portfolio of stocks that has capital appreciation ...
  3. International Equity Style Box

    A visual representation of the principal investment characteristics ...
  4. Mid Cap

    A company with a market capitalization between $2 and $10 billion.
  5. Bond Fund

    A fund invested primarily in bonds and other debt instruments. ...
  6. Value Fund

    A stock mutual fund that primarily holds stocks that are deemed ...
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