- There are countless ways to manage money
- Blending styles should protect you in very uncertain times
Time and again dispiriting reports are published claiming that, on average, stockpickers fail to beat the market. Fortunately for fans of active investing, there is a significant number of funds that have consistently outperformed, and in some cases spectacularly so.
There are many ways fund managers try to beat their benchmarks, but approaches can broadly be broken down into four styles: growth, quality, value and momentum. The interpretation of these styles is subjective and will vary among managers, but generally growth investors look for companies with high earnings growth rates, quality investors seek growth with strong balance sheets, value investors are attracted to low valuation ratios and momentum investors follow stock price trends.