Nicholas Fund ( NICSX), managed by Albert Nicholas for more than 40 years, gets high marks from both Morningstar and S&P Capital IQ. It's built a solid reputation by buying mid- and small-cap stocks of companies that may be relative unknowns, have low valuations and strong earnings growth. S&P says: "Nicholas says he doesn't worry about macroeconomic trends, sectors, or trying to time the market; he says he just uses bottom-up research to identify individual stocks that are unique in some way, target niche markets, and aren't widely followed by Wall Street." Since it was launched in July 1969, the fund has delivered an average annual return of 10.4%, more than three times the peer average over that time, notes S&P. The fund also recently yielded about 2.57% from dividends. The top picks of the $1.6 billion fund now include mutual fund advisory holding firm Affiliated Managers Group ( AMG), credit card processor MasterCard ( MA) and O'Reilly Automotive ( ORLY), the nation's second-largest auto parts retailer.