What is it in style?
In investing, the box style is a graphical representation of the shares investment or a mutual fund or investment in fixed income, such as a bond. There are two stylish boxes - one is used for stocks that are stocks and mutual funds, while the other is used for investment in solid income or bonds. By noticing its location in style, the investor can determine the investment style of a specific investment. Along the bottom of the box are three categories of investment styles: value, mixture and growth. Alongside the boxes are three sizes of companies: large, medium and small or large, medium, medium and small capitalization. The large capital fund should be black square in a box in the upper left corner of the box that represents the penetration of a large row and a column of value. The Middle Capitalization Growth Fund would be marked with a black medium -sized and growth column.
Fixed income box, used for bond and bond funds, is also a matrix of three by threech. The columns represent three durations of investment with fixed income: short, interim and long. Lines represent quality: high, medium and low. The short -term low -quality bond fund would be marked with a black box in the lower left corner of the box, at the short column and low quality series. The binding with temporary maturity, which is of high quality, would be marked with a box for penetration of the interim column and a high quality line.
The international box for the style of its own capital looks just like a box in the style of capital. The difference is in the way the capitalization is assigned. Morningstar, an investment research company that invented a Style Box, divides its stock database into thirds to determine the size of US shares. International shares are considered to be SMVŠECHNY restrictions if their market capitalization is less than $ 1 billion in the US (USD), the middle limit if the market capitalization is between $ 1 billion and $ 5 billion and the large LimIT if market capitalization over $ 5 billion.
Style boxes make it easier to determine whether the portfolio is adequately diversified. Being represented by each of the nine squares in the Style box, the portfolio can be considered diversified. This assumes that no investment style is a disproportionately large percentage of portfolio.