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Are you seeking to benefit from both growth and
value investment styles?
What is a blend fund?
In equity investing, there are two
main management styles — growth and value. While both offer
a long-term approach to capital appreciation, they differ in how
they pursue that goal. Blend investing combines both approaches.
What type of stocks do blend managers
look for?
Blend managers seek growth stocks,
value stocks or stocks that exhibit characteristics of both. Growth
investing looks for companies with greater growth potential than
the overall market.
Value investing is bargain hunting — looking for strong, inexpensive
companies that offer positive growth potential.
Why include blend investing in my
portfolio?
Because it is difficult to determine
which style the market will favor, a blend fund may be a smart core equity strategy.
A blend fund can emphasize whichever style the manager believes
is performing or will perform better. Of course, there is no guarantee
that a blend-style portfolio will outperform or be less volatile
than a value- or growth-style fund.
| Diversification in a Volatile Market |
| |
Growth |
Value |
| Companies with… |
Consistently stronger earnings
history |
Earnings shortfalls, or a company
that is out of favor with investors |
| Stock prices… |
Valued on high growth earnings
estimates |
Are considered undervalued compared
with intrinsic worth |
| Style tends to perform best
in… |
Faster growing economic environments |
Slower growing economic environments |
| Stock selection focuses on… |
Growth of earnings potential |
Growth potential relative to
current price |
It doesn't have to be one or the
other.
Growth and value stocks have taken
turns outperforming each other over time. A blended approach offers
you the opportunity to take advantage of whichever style is in favor.
Instead of investing in only one
type of fund, you might consider a blend of investment styles in
your portfolio. The growth and value styles of investing have contrasting
characteristics which allows a blend portfolio to maintain diversification
in any market environment. Over the long term, you'll potentially
benefit by not having to guess which investment style will outperform.
How can I add both growth and value
to my portfolio?
Do you have the time, resources or
the inclination to actively manage a portfolio of growth and value
stocks? By investing in a Dreyfus blend fund, you tap into the investment
expertise and resources of a professional management team.
A Dreyfus mutual fund's professional
management team can consist of portfolio managers, economists, analysts
and traders who can perform their own research, conduct in-depth
company analysis, meet with corporate management and use a range
of sophisticated techniques in making investment decisions. Their
experience, knowledge and resources are critical to optimizing performance
potential and managing risk.
| Who invests
in blend funds? |
Someone who:
- Has a long-term perspective
- Seeks capital appreciation
- Wants style diversification
in an equity portfolio
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What are the special benefits and
risks?
Because blend funds may invest in
both growth and value stocks, they'll be affected by economic conditions
depending on their specific holdings and may also be affected by
weighting and performance of that style.
Equity funds are subject generally to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund's prospectus.
Remember:
- Growth stocks may perform
best when the economy is strong.
- Value stocks have historically
tended to perform better when the economy is recovering from a
downturn.
Blend funds may offer the potential benefits
and risks of growth and value stocks.
- Growth stocks may provide
the potential for returns that exceed the overall market's returns,
but they can also be more volatile.
- Value stocks may also
outpace the returns of other equity investments in some economic
conditions and may also be less volatile. But keep in mind that
a value stock's true potential may never be realized.
Questions? Contact
us.
Investors should consider the investment objectives, risks, charges, and expenses of a fund carefully before investing. Download a prospectus that contains this and other information about a fund, and read it carefully before investing.
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