Many funds use a blended style, which is simply a mix of both growth and value stocks. This helps diversify the fund and enhance the likelihood the investments will earn a smoother, more consistent return over time. Several of the Annuity Board's Select funds use this multi-style approach, although some tend to lean toward one style. For example, the Growth Equity Fund favors the growth style, while the Equity Income Fund focuses on the value style. Growth and value stocks tend to alternate market positions.
Size also makes a difference Like clothing, stocks come in small, medium and large sizes.
Stocks with different market-caps tend to trade differently and offer differing levels of risk and return for your portfolio. Large-cap stocks tend to pay greater dividends and are often less volatile and produce slightly lower total returns than small company stocks over time. Small-cap stocks usually represent young companies with a potential for growth and expansion. Historically, small-cap stocks generally pay smaller, if any, dividends and are more volatile but tend to produce greater total returns over the long term. As their name implies, medium-cap stocks fall between the two.