‘Style’ can be described as a fund manager’s investment philosophy in relation to the companies it chooses to invest in, and the process by which those investment decisions are made.
Successful managers are generally committed to a particular style. Not only does it provide a set of disciplines which dictate the selection of companies, but it also allows them to develop and refine a specific process which can be easily shared with new portfolio managers they recruit. This improves the chances of repeating their success over the long term, rather than achieving short term success based on a couple of star individuals.
Opinions differ as to how many different styles there are, but we believe there are two main styles – ‘Value’ and ‘Growth’. However it is important to mention another category that aims to eliminate or style bias – these managers are called Core or ‘Style Neutral’.