Small Growth

Small growth represents an investment style that focuses on small investment growth. Small-growth stocks are in the bottom 10% of the capitalization of the US equity market and are typically projected to grow faster than other large-cap stocks. Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields). Often these companies are in rapidly expanding industries. Small growth corresponds to the bottom row, right column quadrant of the Morningstar Style Box.

About the Morningstar Style Box: The Morningstar Style Box is a nine-square grid that provides a graphical representation of the investment style of stocks and mutual funds. Two of the three style categories are value and growth, but the third category differs by security type. For funds, the central column represents blend funds, which include value, core, and growth stocks. For stocks, this column represents core stocks, which are stocks for which neither growth nor value characteristics are dominant.