Net Selectivity Revised
The lack-of-diversification premium in Fama's net selectivity model is recast to measure risk from a downside perspective. The switch left evaluations of 143 of 155 growth-only mutual funds unchanged but elevated the remaining 12 from below-average to above-average status. The same 155 funds were also ranked by the revised Fama model for the 1980-89 period. Fidelity Magellan finished number 1, but some underfollowed funds populated the "Top 10."