RT Journal Article SR Electronic T1 Explaining the Performance of Domestic Equity Mutual Funds JF The Journal of Investing FD Institutional Investor Journals SP 81 OP 91 DO 10.3905/joi.2001.319477 VO 10 IS 3 A1 James D. Peterson A1 Paul A. Petranico A1 Mark W. Riepe A1 Fran Xu YR 2001 UL https://pm-research.com/content/10/3/81.abstract AB Using data over 1992Q1–2000Q1, the authors evaluate the ability of various publicly available mutual fund attributes to explain subsequent domestic equity fund returns. Risk and investment style explain a great deal of the variability in mutual fund returns during this period, but the relationship between these attributes and future fund returns changes dramatically from quarter to quarter. Past performance and expenses explain less of the variability in subsequent fund returns, through relationships that are much more consistent over the period. The recommendation is to choose an asset allocation based on the investor's risk tolerance and implement it using funds with good past performance and low expenses. Investors who are not market or style timers should diversify across fund styles, as good past performance and low expenses alone are not powerful enough to offset the damage from investing heavily in a style that goes out of favor.