The Styles and Performance of Large Seasoned U.S. Mutual Funds, 1985-1994

William F. Sharpe
March, 1995

The following material provides the results of a number of analyses of the performance of an important subset of U.S. mutual funds, termed the LS100 funds. Each year, 100 large, seasoned U.S. funds are chosen from among those categorized as bond funds, stock funds, balanced funds, global and international funds. To be included in a given year, a fund must have been in existence for at least five prior years. From among all such funds, the 100 largest are selected each year.

The LS100 funds invest a large proportion of the money available to funds in their categories. Moreover, they tend to have lower expenses and better prior performance than the remainder of such funds. Hence their styles and performance are of considerable interest.

The following sections provide details concerning the ways in which the analyses were performed as well as their results. They are meant to be read in the order shown.

• The LS100: Large, Seasoned U.S. Mutual Funds
  Details concerning the selection criteria and characteristics of the resulting sets.
• Computing the Styles of the LS100 Funds
  Details on the use of Style Analysis to estimate the style of each fund.
• Styles of the 1994 LS100 Funds
  Graphs of the style of each of the funds in the 1994 LS100.
• The Performance of the LS100 Index from 1985 through 1994
  Overall performance of the LS100 funds compared with that of passive investments with the same styles.
• The Performance of Subsets of the LS100 Funds from 1985 through 1994
  The performance of portfolios utilizing subsets of the LS100 funds. Presumptive evidence on the important question: do winners repeat?

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