Almost every month the financial press will publish an article lauding the top performing fund manager over the previous 12 month period; generally accompanied by a picture of the manager looking quite pleased with themselves in an expensive suit, together with an after match report detailing which stocks they had in their portfolio that allowed them to outperform their peers. The assumption underlying these articles is that all equity funds are managed using the same investment philosophy and that a manager’s outperformance is solely due to their skill.
In the piece Investing Styles Part 1 we looked at the four basic investment styles (index, growth, value and quality). In this week’s note on investment styles we are going to look at the market conditions under which each style tends to outperform, as no single investment style outperforms in every market condition.
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