Understanding Investment Styles

It’s important to know the difference between ‘value’, and ‘growth’ – and in the case of funds, ‘blends’.

Marco Caprotti 30 September, 2021 | 1:15AM
Facebook Twitter LinkedIn

Paths in Forest

Readers of the articles and analyses published by Morningstar very often find references to “value” or “growth”. It is a way that investment professionals identify the styles towards which the investment instruments are oriented. What do these terms mean, and how are the styles different from each other?

Understanding Value Vs Growth

‘Value’ stocks are those that are seen to trade at a lower stock price relative to the company fundamentals. These stocks have low market valuations in relation to some multiples, such as: Price / Earnings, Price / Book value, or Price / Cash Flows. These companies also tend to, on average, pay higher dividends. Some examples include companies like Enel, Total, Telefonica or JPMorgan which, although belonging to different sectors, ‘value’ as a common denominator.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

Do You Want To Take Control Of Your Finances?

Find The Best Tools Here

Facebook Twitter LinkedIn

About Author

Marco Caprotti

Marco Caprotti  è Giornalista di Morningstar in Italia.

© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy