Old Mutual Fund Stars Can Still Shine

Consider buying once-great funds if they can pass two important tests.

Deciding whether to buy or keep a fund that was once a top performer can be tricky. Besides all the normal factors to consider, you may have to sort through some emotional baggage. If the fund made you money in the past, you may be biased toward it even though it may be under new management and look much different than it once did.

In the best cases, star funds remain stars -- if not forever, at least for decades. Among funds in that small category are American Funds Growth Fund of America, Fidelity Contrafund, T. Rowe Price Equity Income and Vanguard Wellington. But many other onetime luminaries have sagged, lagged or gagged because their management or strategies changed.

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Russel Kinnel
Contributing Editor, Kiplinger's Personal Finance