Advertising literature produced by virtually any fund manager contains much that is formulaic. For example, we always find statements about how past performance does not necessarily indicate anything about future performance - but there is often a long description of past performance, particularly if it has been good.

The fund manager will also usually tell us about his investment process: the techniques he uses to arrive at his investment decisions or, to use the industry jargon, his investment style.

Style comes in many forms, the two most common being "growth" and "value". It might be tempting to think that there are commonly accepted definitions of growth and value (and all the other styles) but, sadly, different people often mean very different things when they use these terms.

Essentially, the manager groups stocks by reference to certain criteria. A common, if simplistic, method is to look at a company's price/earnings (p/e) ratio and to assert that if it is "high" (or higher than some predetermined threshold) then we are looking at a growth stock. Growth, in this context, is used to denote a business that is rated highly by the market because it grows its profits at a rate higher than the market average.

Growth investors seek out companies that are likely to see good earnings prospects which the market has yet to fully appreciate. Growth investors are sometimes at the flakier end of the market spectrum and, over time, have been amongst the believers in fads such as the nifty-50 and the dotcom boom.

Value investors, by contrast, often buy low p/e stocks when they think the market is undervaluing the underlying business for whatever reason. It might well be that the market isn't pricing in enough growth - or there might be other reasons for the market's error.

Value investors are usually conservative types who style themselves in the mode of Warren Buffett and like to think of themselves, in one sense at least, as being risk averse.

P/e ratios are not the only way to define growth and value: there are lots of criteria, sometimes conflicting, that are used. Indeed, it can get very confusing, particularly when we see the same stocks being bought by both growth and value investors.

Always beware of the fund manager who regards the investment process as something for the advertising literature only. There is a rapidly disappearing type of manager who, despite claims to the contrary, adheres only loosely to the rules that he has apparently set himself.

Growth and value are by no means the only investment styles, although they are by far the most common. Some managers specialise in small to medium-sized companies, others have been known to try forms of "anomaly trading", whereby they seek to exploit timing oddities such as the January effect (the tendency of markets to rise at the beginning of the year) or other, much more complex, phenomena.

Sector-based styles are often popular: investment products that emphasise, for example, technology stocks have, from time to time, been popular. Healthcare and pharmaceuticals are other favourites. But few sector-based investment styles would have consistently bought the best performer of the past 30 years.

The best sector of the European equity market at the time of the first oil shock of the early 1970s was tobacco: money put in that sector would have outgrown all other similar sector bets.

Another rule of thumb with plenty of contemporary resonance: it usually pays, with patience, to be invested in oil stocks. But such simple and - lets be honest - dull investment strategies rarely make it to the marketing literature.

All of the available evidence suggests that much of the effort to develop an investment style is a complete waste of time - or, to be more accurate, eventually becomes a waste of time (with one small possible exception).

The only style that has any statistical backing is value - and even then the evidence is not overwhelming. Other styles, if they work at all, make money for limited periods before the effect that they are trying to exploit either disappears or goes into reverse. The "small cap" effect is a prime example: sometimes, investing in smaller companies produces superior returns (like the current year in the UK and elsewhere). As often as not, small cap investing is a total disaster.

The current disintegration of the traditional asset management business is a bit like watching a glacier melt. But the reasons for the gradual shrinkage become clearer all the time. The industry took several wrong turns, for many reasons, as it grew rapidly during the past three decades. But all of those bad decisions can be traced to a common cause: a systemic willingness to embrace new fashions and fads, no matter how far they took us from sound investment principles.

Each new fashion, every new investment style, including the adoption of inappropriate investment benchmarks, ended up creating even more pricing anomalies. Even indexing, or tracker funds, have contributed to this process: indexing forces people to buy bad companies.

The creation of pricing anomalies is at the heart of the rise of the hedge fund and other boutique investment businesses. These new fund management groups exist to make money out of the opportunities created by the bad decisions of others. Of course, hedge funds run the risk of becoming another fad. Eventually, perhaps already, they will have taken all of the available money left on the table by the traditional asset managers.

But the fragmentation of the investment management business does seem to be an inexorable process.

By committing yourself to an investment style, you run the risk of forcing yourself to buy hopeless companies. The best investment style is simply to buy something that you have good reason to believe is likely to go up in price.

It is this simple logic that is behind the often extremely complex trading strategies of the hedge funds.