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Great Mutual Funds Go Head to Head

It's Marsico vs. Janus and Fidelity vs. Vanguard!

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Should you stay or should you follow the manager? When a manager leaves to start another fund, it's always tough to figure out if you should follow him. After all, a fund isn't just a manager; there are the analysts, traders, and expenses that have a big impact on a fund's success, and they'll usually still be there after the manager leaves.

With that in mind, I looked at a few situations in which managers left to start their own funds. I also looked at indexing's biggest battles, though they don't involve manager departures. Interestingly, you'd have been better off leaving to stay with the manager in the majority of these cases, but my small sampling is hardly scientific. The return figures below are not annualized.

Yacktman vs. Selected American
Winner: Selected American

This is an interesting case because these funds use very different value strategies. Donald Yacktman, who left  Selected American (SLASX) to set up his own fund ( Yacktman Fund (YACKX)) in 1992, runs a concentrated deep-value strategy that has made for more-extreme performance. When value's out of favor, the fund tanks, but in good value years, the fund is outstanding. Selected American under Chris Davis and Ken Feinberg is more willing to pay up a bit for outstanding management, so they have larger growthier stocks than Yacktman.

Russel Kinnel does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.