Investment managers explain investment risk and styles through the illustration of style boxes, which makes it very easy for the retail investor to understand. So much so that style boxes have become the rule rather than a guide for even the most sophisticated strategy analyst. Today, it is an industry standard to define investment allocations and choose managers based on these boxes.
Although we would not steer investors away from using it as a guide, we do ask that you think outside the box as there are several issues with evaluating a manager solely based on where they fall in the nine-box paradigm.
First and foremost, the value/Core/Growth categories are defined as buying companies that trade at a low/high price to some fundamental variable, which is a measure of cheapness rather than a sophisticated valuation analysis (for more on Cheapness vs Value).
By buying growth or value buckets managers are pigeon-holing themselves and missing out on some of the most undervalued companies in the market simply because a company falls in the wrong box. For this reason, we encourage due-diligence analysts that evaluate our strategies to first focus on our unique approach to stock selection process and portfolio construction.
However, If you are going to put our strategies in a box, we fill the Valuation Box, buying the most undervalued companies in any given strategy benchmark.