For years, the Morningstar style box classification system has been the standard for evaluating mutual funds’ investing strategies. This nine-box grid classifies funds according to capitalization (small, mid, or large) and investment style (value, blend, or growth). Investment professionals worldwide use such style boxes to build and maintain portfolios. Now, one company hopes to break style boxes’ current industry monopoly with a new way to gauge mutual funds.

A new alternative

Instead of measuring how assets are currently invested, a new system currently being tested by Denver-based AthenaInvest studies how well a manager follows one of 10 overarching strategies.

The style box definitely has its drawbacks. Not every fund can fit neatly into the classification grid — for example, some long-short funds are not classified, because Morningstar’s system does not recognize short equity positions. In addition, some managers’ investment strategies don’t fit entirely within one square in the style box, leaving them moving from square to square with each passing quarter.

More importantly, some managers may base portfolio decisions on their style box classification. Managers pursuing one set strategy — large-cap growth, for example — might avoid otherwise attractive value opportunities for fear of straying beyond their square of the style box, and thus displeasing their clients.

I’d argue that any manager who can actually fit the style box system isn’t a very good one. Rigidly sticking to a given style box can limit managers’ investment options and drag down fund performance.

Out with the old?

In general, I think it’s probably more important for investors to judge a fund not by its specific holdings, but by how well it follows its investing strategy. In that sense, this new system may have a leg up on Morningstar.

However, AthenaInvest faces an uphill battle in winning converts to its system. Style boxes are deeply entrenched in the investment industry. They’re also easy to understand and communicate, which often counts for more than practicality today.

Here’s hoping that the industry accepts this new system once it goes live this coming July. I doubt AthenaInvest’s new system will ever supplant style boxes in popularity, but maybe it can provide another helpful perspective in evaluating funds. Giving investors more useful information usually leads to better investing decisions.

Further out-of-the-box Foolishness:

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Fool contributor Amanda Kish lives in Rochester, N.Y. and does not own shares of any of the companies or funds mentioned herein. The Fool has a disclosure policy .