NEW YORK ( TheStreet) -- Being an activist investor is a hard way to make a living. The typical practitioner first spots a company that is performing badly because of management mistakes. Then the activist buys a big stake in the stock and begins pushing for changes. Activists may advocate raising the dividend or replacing the CEO. When an activist succeeds, the profits can be huge. Among those who have made fortunes by shaking up corporate boards are Carl Icahn, Nelson Peltz and Bill Ackman. Should you invest in stocks that are targeted by activists? Not necessarily, says Ken Squire, portfolio manager of 13D Activist ( DDDAX), a mutual fund. While some of the top activist investors have strong long-term track records, many other players deliver subpar results. To separate the stars from the also-rans, Squire tracks all of the approximately 1,500 13D documents that are filed at the Securities and Exchange Commission each year. Investors must make a filing when they have acquired more than 5% of a company's shares. Squire monitors each deal, assessing the obstacles that activists face. He analyzes investment track records, determining whether an activist excels in particular industries or types of deal. Squire sells the data to activists and institutional investors. In December 2011, he opened the activist mutual fund, which invests in 20 or so stocks that have been involved in 13D filings. The fund aims to outperform the S&P 500. Just as important, Squire seeks to provide diversification because activists can push up stock prices during weak markets. So far the approach has been succeeding. In 2012, the fund returned 21%, outpacing the S&P 500 by 5 percentage points. During the fourth quarter of the last year, the portfolio returned 5.2%, while the S&P 500 sank slightly into the red. One of Squire's favorite holdings is Agrium ( AGU), which operates two businesses: a retail operation that sells fertilizers and a wholesale business that distributes potash and other crop nutrients. JANA Partners, an activist hedge fund, holds 6% of the shares and has argued that the company should be split in two so that each major line could be operated separately. The activists are seeking board seats, calling for cutting costs and strengthening the company's working capital.