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Funds 208: Examining a Stock Fund's Portfolio: Style Box Statistics

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1.
Why should you study the funds in the average market capitalization section of Morningstar's style box in more detail?
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The funds differ in size. Further study can tell you which funds might perform better in different market conditions; for example, very-small-cap funds might do well in an environment that favors very small companies.
2.
In the language of sector investing, the stock 'super-sectors' are divided into _______.
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Cyclical, sensitive, and defensive. Each of these super-sectors breaks down into smaller ones.
3.
A fund's number of holdings tells you how much sector risk a fund is taking on.
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False. The number of holdings tells you how much per-issue risk a fund is taking on.
4.
Price/earnings multiples tell you what?
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How much price risk a fund is taking on. The greater a fund's price/earnings multiple, the greater its price risk.
5.
A fund's turnover rate is usually calculated _______.
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Once a year. As a rule, turnover rates are calculated yearly.