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

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1.
Sector weightings in a fund tell you how much price risk a fund is taking on.
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False. Sector weightings tell you the industries your manager favors.
2.
The large differences in size among funds in the "small-cap" section of the Morningstar style box mean that _______.
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Some will outperform others at times. Some funds will perform better than others during market conditions that favor the companies they hold.
3.
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.
4.
A fund's turnover rate is usually calculated _______.
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Once a year. As a rule, turnover rates are calculated yearly.
5.
A fund's number of holdings tells you what?
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How much per-issue risk a fund is taking on. Funds with fewer holdings are more vulnerable to troubles in one or two stocks than funds with more holdings are. Sector weightings reveal a fund's sector risk, while P/E and P/B ratios relative to a fund's peers reflect price risk.