The following article originally appeared in Kiplinger.Trailing return figures have been updated through May 31, 2007.
When I look for undiscovered funds, I'm usually looking for funds with experienced managers who have great track records but who haven't attracted a lot of assets for one reason or another. However, I also like to look for young managers who appear to be rising stars. Funds with promising young managers have the same potential as emerging-growth stocks in that they could provide great returns for a long time (but you don't want to bet your whole nest egg on them). If you're really cautious, simply put them on your watch list.
Russel Kinnel does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.