Investment Style

Investment style refers to the way a fund's manager selects investments for the fund's portfolio. Understanding a fund's style and the inherent risk that style carries can help you determine whether that fund should play a role in your asset allocation strategy.


Blend investing combines growth and value styles. In general, blend funds are less volatile than pure growth funds and more volatile than pure value funds. An investor with a long-term time horizon who wants to diversify between growth and value styles may find blend funds to be an appropriate choice.


A growth fund manager looks for companies with the potential to outpace a sector or the market as a whole in terms of revenues or earnings. These companies may be volatile. Stock in these companies may be vulnerable to occasional corrections when earnings growth does not meet expectations. Growth funds may be suitable for investors with a high tolerance for risk and a long-term time horizon.


Value fund managers who pursue a value strategy seek stocks of companies that are temporarily out of favor with investors and whose market prices are therefore lower than their perceived intrinsic values. This investment style focuses on low price/earnings and price/book ratios compared to a company's normal range or its industry's normal range. Value funds may be appropriate for investors who are concerned about volatility in their portfolios.

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