What is a primary characteristic of style indexes?

A primary characteristic of style indexes is that they are widely available and easy to understand. Style indexes are designed to categorize and track the performance of specific investment styles, such as growth or value investing, or by capitalization size like small-cap or large-cap. This straightforward classification allows investors, portfolio managers, and analysts to quickly assess how different styles are performing over time. The transparency and accessibility of style indexes make them valuable tools for both individual and institutional investors in constructing and evaluating portfolios.

The clarity with which they convey information about asset classes and investment strategies facilitates informed decision-making in portfolio management. Their popularity stems from this ease of interpretation, allowing for a straightforward comparison of different investment styles.