Returns-based style analysis is a statistical technique used in finance to deconstruct the returns of investment strategies using a variety of explanatory variables. The model results in a strategy's exposures to asset classes or other factors, interpreted as a measure of a fund or portfolio manager's investment style. While the model is most frequently used to show an equity mutual fund’s style with reference to common style axes (such as large/small and value/growth), recent applications have extended the model’s utility to model more complex strategies, such as those employed by hedge funds.
