3

Style Boxes map financial products on a two axes diagram, but instead of using continuous values for the axes, they use discrete values (small/medium/large, value/blend/growth, etc.).

enter image description here(source)

How is this useful? Why should $1 be able to shift a product between squares? What's wrong with using for example the actual (normalized?) market cap on one axis and the actual (normalized?) P/E ratio on the other axis, in the familiar Cartesian representation?

Sparkler
  • 528
  • 3
  • 12

1 Answers1

2

It appears that in 2016 Morningstar presented a new framework for style box based analysis, which is continuous:

enter image description here (source)

Another document from 2004 shows a similar continuous nature:

enter image description here (source)

Sparkler
  • 528
  • 3
  • 12