Definition
Style drift occurs when a portfolio manager invests outside the fund's stated mandate - for example, a value fund buying growth stocks or a small-cap fund holding large-caps. This can result from chasing performance or lack of discipline. Style drift disrupts investor asset allocation and makes performance harder to evaluate.
Example
A small-cap value fund starts buying mid-cap growth stocks after value underperforms - this is style drift.
FAQ
What is Style Drift?
When a fund's investments deviate from its stated investment style.
Why is Style Drift important?
Style Drift helps investors evaluate portfolio management and make more informed decisions.