This preview shows page 1. Sign up to view the full content.
Unformatted text preview: Value stocks are those with a low price relative to these measures of value. In contrast, growt h st ock s have high
ratios, suggesting that investors in these firms must believe that the firm will experience rapid growth to justify the
prices at which the stocks sell. The shaded box for Laudus shows that the portfolio tends to hold larger firms
(top row) and growth stocks (right column). A year- by- year history of Laudus's investment style is presented in
the sequence of such boxes at the top of Figure 4.5.
The center of the figure, labeled “Rating and Risk,” is one of the more complicated but interesting facets of
Morningstar's analysis. The column labeled “Load- Adj Return” rates a fund's return compared to other funds
with the same investment policy. Returns for periods ranging from 1 to 10 years are calculated with all loads and
back- end fees applicable to that investment period subtracted from total income. The return is then compared to...
View Full Document
- Summer '11