Style investing guide with iShares UCITS ETFs

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An iShares ETF guide to style investing

What is style investing?

Style is defined as an investment approach with different risk-reward features. Investors for a generation have tended to answer in the language of the “style box,” the nine-square classification grid that measures securities by size, and places them somewhere between “growth” and “value” based on business metrics.¹

An advantage of the style investing is simplicity

Its methodology makes it easy to assess a stock’s potential risk and return. The same is true at the portfolio level, since the style box is widely used to gauge how different funds might interact.

This makes the style investing a potent tool for investors, since academic research has shown that high-level allocation decisions — for instance how much and which type of equities to own — are most critical to long-term performance.²

What you should know

01

Equity allocations can be tailored to match investor objectives

02

Actual allocations can more precisely match allocation models

03

Portfolio diversification can be readily calibrated

Growth vs. value: the basics

As the name implies, growth stocks are shares in a company that is anticipated to grow at an above-average rate. Value stocks tend to trade at a lower price relative to fundamentals, such as earning and sales. Growth and value stocks are categorized as such based on a distinct set of characteristics. (Figure 1)

Chart with growth and value stocks comparison and their characteristics.

Style investing implementation with iShares ETFs

Popular benchmarks such as the S&P 500 and Russell 1000 help create the core of many investor portfolios. Style box funds are available which split these popular benchmarks into value and growth styles. These style ETFs extend the core to enable more precision exposures that could better align with an investor’s market outlook.

Download an iShares ETF guide to style investing and implementation

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