Style investors, then, make portfolio allocation decisions by placing their money in broad categorizations of assets, such as small-cap, value, low-volatility, or emerging markets.
[5] When classifying securities into styles, investors group together assets that appear to be similar, in the sense that they have a common characteristic.
[1] Other characteristics used as the basis for a style are based on size, risk, valuation, price return, or profitability.
[1] Financial firms Lipper and Morningstar developed and refined categorization systems and Style Box tools to aid with classification in the 1970s[6] and 1990s.
[7] Also major index providers such as MSCI and FTSE offer a wide range of style-based indices.