Our Approach to Style

Our Philosophy

Our approach to Style and Style Analysis recognizes that in equity markets there are generally only a few key factor criteria that are systematically related to securities, portfolio, and investment manager performance.

These factor criteria (basic financial and accounting ratios and market trading characteristics) offer clear evidence of the relevance of basic equity Styles within major equity markets and across broad market regions.

And no Style works in every market all the time!

Our Objective

Style Research identifies and highlights these regular features within the structure of equity market returns, and in the holdings and risk exposures of equity portfolios, and endeavours to anticipate important factor return trends, and trend shifts, and their influences on portfolio performance.

Standard Style definitions (Value, Growth, Size - using very simple criteria such as Book to Price and Market Capitalization) might offer practical descriptions of the US equity market, but there is no a priori reason to believe these criteria work well in other markets.

Other descriptions, based on local market fundamentals and regional analysis criteria, are more faithful to individual market structure and local traditions of analysis and offer a more secure foundation.

The intuition may be very similar, but basic Styles frequently differ considerably from market to market, both in the detail of their factor components as well as in the co-ordination and timing of their cycles.

While Style is an extremely useful concept and a practical analytical tool in global markets, there are notable differences across markets and analysis must remain "culturally sensitive" to local market characteristics.