Equity Investment Style Classification

Determine, based on the results of the returns-based style analysis, whether the US equity portfolio of the Benson family has experienced a style drift.

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Did you conclude that the portfolio has exhibited a style drift?

Correct! The portfolio experienced a slight drift toward even higher exposure to large-cap growth stocks.

Incorrect. While it would be fair to say that the portfolio retained its growth focus, it also moved toward large-caps at the expense of mid-caps and small-caps.

An analysis of the portfolio's composition reveals the following key changes: - The exposure to growth stocks decreased slightly from 75% two years ago to 74% at present, which implies level toward growth stocks. - The exposure to large-cap stocks increased from 42% to 56%, while the exposures to mid-caps decreased from 43% to 33% and to small-caps from 15% to 11%. Overall, the portfolio has retained and reinforced its growth orientation, but in doing so, it has moved toward larger-cap stocks. So there has been a slight style drift.

Yes

No

Out of time step

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