Fidelity Capital Appreciation Fund is one of the country's top mutual funds for the past five years, as manager Harry Lange outclassed 97 percent of his big-company growth-stock rivals.

Except that Lange doesn't run Capital Appreciation (FDCAX) anymore. In October he left the $7.9 billion fund he'd piloted for almost a decade to try to revive Fidelity Magellan Fund (FMAGX) . Capital Appreciation's new manager, Fidelity veteran Fergus Shiel, is off to a good start. But the portfolio's longer-term legacy is Lange's.

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A fund's record doesn't always speak for itself. Funds are ranked, rated and rewarded on the strength of returns over several years. But those numbers may not reflect what the current leadership has done. So what's more important — the fund or the manager?

Fund companies tend to spotlight the overall quality of an offering rather than superstar managers as they did in the 1990s.

"Fund companies would like you to believe that the fund is an institution and carries on regardless, but I don't think that's consistent with the real world," said Roy Weitz, publisher of the watchdog Web site FundAlarm.com. "Funds are people. It ultimately comes down to the quality of the talent."

But others will tell you that while long tenure is welcome in a manager, it isn't as crucial when a fund is managed by a team or when a successor carries a solid track record from another portfolio. Fund managers stay on the job about four years, on average.

"Manager turnover is not necessarily bad," said Jim Peterson, a vice president at the Schwab Center for Investment Research in San Francisco. "Maybe a manager is leaving and there's a perfectly adequate team in place, or the new manager has been groomed."

Making the team

One reason for a diminished emphasis on individual managers is the fact that management teams now are the norm. About two-thirds of broadly invested U.S. stock funds have multiple managers, according to investment researcher Morningstar Inc.

The poster child for the team approach is the American Funds family, where portfolio assets are spread among in-house professionals who run money independently. Vanguard Group echoes this effort for many funds by dividing management duties among outside firms. More commonly, a team of managers make collective buy and sell decisions, although sometimes the "team" is actually one leading player with a supporting cast.

In contrast are the vanishing breed of solo fund operators. (Remember Peter Lynch, the legendary former Fidelity Magellan manager, in the late 1970s and 1980s?)

"The 'cowboy' stock picker is difficult to replicate," Schwab's Peterson said. "The trend is to get away from sole managers and that cowboy mentality, and to manage money around processes and teams. You don't have to worry so much about manager stability if process is the primary driver of a fund's success."

And there are plenty of success factors for a fund that transcend the manager, said Russel Kinnel, Morningstar's director of fund analysis. Strong stock research, solid investment philosophy and reasonable expenses can boost returns, he said.

"The manager didn't create that performance in a vacuum," he said. "Some funds are very analyst-driven; the manager selects from a buy list and rarely goes against the analysts. In others, the manager is dominant. Bill Miller is an obvious one; you'd hate to see him go" at Legg Mason Value Trust (LMVTX) .

Success for Dreyfus Premier New Leaders Fund (DNLDX) in recent years, for example, depended largely on longtime managers Hilary Woods and Paul Kandel, who built an opportunistic midcap-growth fund with an eclectic array of holdings. But they were replaced in June 2005 by a team of managers from Franklin Portfolio Advisors, a Boston-based firm that uses computer-driven investment strategies focusing on a benchmark index. While the fund's five-year record is still near the top of its category peers, its one-year return has slipped into the bottom half of the group, according to Morningstar.

More than a few of the five-year category leaders have managers who have yet to prove themselves at those funds. Among them are Fidelity Small Cap Independence Fund (FDSCX) , Sentinel Small Company Fund (SAGWX) , and Allianz OCC Value Fund (PDLAX) , where Colin Glinsman — who also has a lengthy and respectable record at Oppenheimer Quest Balanced Fund (QVGIX) — has delivered only market-average returns since taking over from John Schneider in February 2005.

Experience counts

So ask a fund company for the new manager's background, or better yet, scout that information on the Web — it's in the fund's prospectus. See how a manager performed in up and down markets, making note of any outsized gains or losses against a benchmark that may offer clues into risk-taking.

"Generally you go with a manager who has a meaningful track record somewhere," Morningstar's Kinnel said. "It doesn't guarantee this is a smart or good manager, but at least it said I've got a few years and I can learn a lot from that."

If you like a portfolio's style and strategy, another option is to buy the old manager instead of his or her old fund. Ross Levin, a financial adviser with Accredited Investors in Edina, Minn., said he's been pleased with the latest investment vehicles steered by veterans such as Schneider, formerly of Allianz and now at Touchstone Large Cap Value Fund (TLCAX) , David Winters, who left the Mutual Series funds to build his Wintergreen Fund (WGRNX) , and Tom Marsico, a star at Janus more than a decade ago who oversees several large-growth offerings including Marsico Focus Fund (MFOCX) and Marsico Growth Fund (MGRIX) .

"Our favorite funds are those that a manager with a great track record left and started a new fund on their own," Levin said. "The manager is what matters."

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