Determining the Optimal Mutual Fund Style Classification Methodology
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There are currently two primary methodologies used to classify the investment style of mutual funds: holdings-based style analysis (HBSA) and returns-based style analysis (RBSA). HBSA classifies any investment based on the underlying holdings in the portfolio (what it is), while RBSA classifies an investment bond upon its historical returns (what it did).
Authors: David M. Blanchett, CFA & Craig L. Israelsen, Ph.D.