Morningstar Style Box

The Morningstar Style Box is a nine-square grid that provides a graphical representation of the investment style of stocks (equity style box) and bonds (fixed-income style box).

The equity style box categorizes stocks and stock funds. On the vertical axis, there are three categories that represent market capitalization: small, mid, and large caps. On the horizontal axis, there are value, blend, and growth categories. This three-by-three grid creates nine distinct categories that represent a stock’s or portfolio’s investment style.

The fixed-income style box also uses the same three-by-three structure as the equity style box. Its vertical axis measures credit quality (low, medium, or high), and its horizontal axis measures interest-rate sensitivity (limited, moderate, or extensive). Fixed-income securities and fixed-income funds can be evaluated by this style box.

By providing a visual representation of stock and bond characteristics that is easy to understand, the Morningstar Style Box allows for informed comparisons and portfolio construction based on actual holdings as opposed to assumptions based on a fund's name or how it is marketed. The Morningstar Style Box also forms the basis for Morningstar's style-based fund categories and market indexes.