Everybody wants to invest in cheap mid-cap stocks these days, but there's a right way and a wrong way. Today, we'll show you an example of each.

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This week's inductions into our Ima Winner and Ima Loser Fund clubs come from the mid-cap value fund ranks. Our winner is the burgeoning no-load

(OAKMX) - Get Report

Oakmark fund, where value maven Bill Nygren calls the shots. Our loser is the sputtering and broker-sold

(CHCLX) - Get Report

Alliance fund, which is on its third management team since the start of last year.

Value funds' price-conscious ways and tech-light portfolios have helped them shine over the past year, while their growth-fund competitors are nursing shiners. The average mid-cap value fund is up 6% over the past year, compared with a 40% free fall for its average growth peer, according to Chicago fund-tracker Morningstar. A river of cash is flowing into mid-cap value funds these days, but there are stars and duds. Let's start with one of the former, then look at one of the latter.

The Winner

I confess. My first choice was Nygren's

(OAKLX) - Get Report

Oakmark Select fund, but it's closed. So we're highlighting the Oakmark fund he took over just as the

Nasdaq

peaked in March last year.

Past Winners

Large-Cap Value: Dodge & Cox Stock

Large-Cap Growth: Growth Fund of America

Small-Cap Growth: Managers Special Equity

Mid-Cap Growth: Bridgeway Aggressive Growth

Tech: Dresdner RCM Global Technology

Health Care: Vanguard Health Care

Like his colleagues at Chicago-based Harris Associates, Nygren and co-manager Kevin Grant pick through Wall Street's dustbin, looking for stocks of companies they think are trading for far less than they're worth. (For more detail on Nygren's strategy, check out this

recent interview, "10 Questions With Growth Maven Jeff Van Harte and Value Guru Bill Nygren.")

The approach might sound like a vanilla approach to value investing, but his results have been anything but. The Oakmark Select fund, which focuses on just 20 stocks, has beaten at least 75% of its peers in each of the past four years. It's leading the

S&P 500

and 99% of its competitors this year as well.

The $3.2 billion Oakmark fund, which has a broader portfolio of about 55 stocks, is up 30% over the past 12 months, beating the S&P 500 by some 55 percentage points and 99% of its competitors.

Ima Winner

Returns through Sept. 4. Source: Morningstar

A final positive: The

no-load fund's 1.21% annual expense ratio is lower than the category's 1.44% average.

Boy, What a Loser

The Alliance fund was launched back in 1938, but it seems as shiftless as an Austin-based

slacker.

Past Losers

Large-Cap Value: Seligman Common Stock

Large-Cap Growth: Putnam New Opportunities

Mid-Cap Growth: Putnam OTC & Emerging Growth

Small-Cap Growth: Alliance Quasar

Tech: T. Rowe Price Science & Technology

Health: Invesco Health Sciences

Since 1993 the fund's portfolio has morphed from large-cap blend to large-cap value to mid-cap blend. It settled in the mid-cap value style from 1998 through last year and is now moving toward a mid-cap growth label. Contributing to the fund's schizophrenic ways is manager turnover: As noted earlier, it's on its third manager since the start of last year.

One point of consistency has been the fund's underperformance. Over the past eight years, it has trailed its average peer -- wherever it was classified at any given time -- five times. It currently trails the S&P 500 and more than 80% of its peers over the past one, three, five and 10 years, according to Morningstar.

It would be nice if few people had followed the fund on this tortured odyssey. But that's not so. It has more than $720 million in assets, compared with $500 million for the average mid-cap value fund.

Some optimists plied with Prozac might say there's hope for better days ahead. After all, current co-managers Alan Levi and John Blundin took over only at the start of this month, so blame for the fund's years of bumbling doesn't lie with them. Each has a background in running growth funds, so maybe they can reinvent the fund as a growth portfolio.

Hey, Ima Loser

Returns through Sept. 4. Source: Morningstar

But given the fund's sketchy past and the presence of far superior options like the Oakmark fund, hanging on or buying shares of this fund now hardly seems like a good idea.

Ian McDonald writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

imcdonald@thestreet.com, but he cannot give specific financial advice.