When Mani Govil, took over as the manager of the $899 million ( GPAFX) RS Core Equity Fund (GPAFX) two years ago, he hit the ground running.For the previous 10 years, the fund's long-suffering shareholders had watched their investment decline by a cumulative 8%. Meanwhile, the overall stock market, as represented by the S&P 500, had rocketed 120%. But since Govil's arrival on Aug. 1, 2005, RS Core Equity has joined the elite ranks of active managed funds outperforming the stock market. It has surged a cumulative 38%, compared with 24.7% for the S&P 500. So far this year, the fund is up 16.3%, or nearly double the 8.5% gain in the S&P. The secret to Govil's success? He describes RS Core Equity's portfolio as a pyramid. The bottom level, the fund's foundation, is made up of companies he calls "toll keepers," which have the biggest weightings. These are companies with a sustained competitive advantage in their markets. Whether the economy is hot or cold or the market is value driven or growth driven, so long as these toll keepers retain this position, their earnings perform consistently well, Govil cites Mastercard ( MA) as an example. "Any time a person uses the card, whether they pay it off or not, just by virtue of their using the card, they pay a toll to the company," he says. "It's a difficult business to penetrate and collectively they own the customer."