The word “style” conjures up a number of images from fashion to cars to architecture. Investment style refers to an investment manager’s broad investment approach. Looking at equity managers, while you’ll hear terms such as Core, Growth at a Reasonable Price (GARP), Quantitative or Momentum, most managers describe their investment style as Value or Growth.

Do such distinctions matter? Yes. While many more questions need to be asked to fully understand a manager’s investment philosophy, approach and process, their style description is the first indicator of the characteristics emphasized in selecting stocks and the characteristics to be expected from the aggregate portfolio. With such information, inferences can be made as to how the portfolio is likely to perform in various market conditions and how best to measure performance in absolute terms, as well as versus its peers and a benchmark.

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