Wednesday, December 29, 2010

Style Drift

Style drift is basically when a fund manager tries something different. In essence it means the fund manager is investing in a way that is inconsistent with the stated objectives of the fund, as outlined in the prospectus. This situation should be monitored carefully as it represents a change in the nature of the product which the investor purchased, and knee-jerk changes in strategy could be costly. At the end of the day, it is up to the investor to decide to sell and invest in a different fund as far as strategy changes go, i.e. in summary style drift is not really a positive thing.

Synonyms: Style change, Style inconsistency

Comments?
If you have any further questions or would like to add to the entry above, then please submit your thoughts below.

No comments:

Post a Comment