How were the style methodology factors chosen?
We chose the fundamental balance sheet and market factors that would best measure and describe the separate “value” and “growth” characteristics of common equities. To reflect the fact that fund managers look at both historical and projected measures of company characteristics, Morningstar assigned a 50% weighting to the forward-looking estimates. The 10-factor model’s results were evaluated using different factor weightings to satisfy the index design criteria: a high negative correlation between the composite value and growth scores, accurate classifications, and good classification stability. The weightings selected produced superior results.
Related Questions
- In order to be sure that NOx allocations determined using a states chosen methodology (rather than EPA-determined allocations) are recorded in source accounts for the 2009 compliance period, what is the deadline for States to submit their SIP revisions and initial set of NOx allocations to EPA?
- What factors have the most influence on which applications are chosen for a grant award?
- How were the style methodology factors chosen?
