Style & De Stijl, or Morningstar & Mondrian: The Use & Misuse of Style Boxes

Jennings, William W.; Davis, Kevin J.

doi:10.2139/ssrn.563401

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Style & De Stijl, or Morningstar & Mondrian: The Use & Misuse of Style Boxes

Posted: 18 Jul 2004

See all articles by William W. Jennings

William W. Jennings

U.S. Air Force Academy - Department of Management

Kevin J. Davis

U.S. Air Force Academy - Department of Management

Date Written: July 8, 2004

Abstract

Graphics distill and convey information. The clarity and power of the simple style box efficiently conveys two vital dimensions of investment style for equities-valuation and size. In promoting awareness of style variations, style boxes - Morningstar's particularly - have advanced investment literacy. However, as currently constructed, the style box misleads, and can induce unwanted behavior and unintended consequences.

Keywords: Portfolio management, investment style, behavioral finance

JEL Classification: G11, G23

Suggested Citation: Suggested Citation

Jennings, William W. and Davis, Kevin J., Style & De Stijl, or Morningstar & Mondrian: The Use & Misuse of Style Boxes (July 8, 2004). Available at SSRN: https://ssrn.com/abstract=563401 or http://dx.doi.org/10.2139/ssrn.563401