The Tortoise and the Hare: Fund Manager Edition

Ken Heebner and William Danoff are fund managers with radically different investing styles. As manager of Fidelity Contrafund, Danoff meets with executives from as many as 1,000 companies a year, jots down tickers in a tattered old notebook to identify what he calls “best of breed” companies, and spreads his investments across a range of industries from tech to restaurants. Heebner considers himself a trend spotter as well as a stock picker, concentrating his holdings in industries he thinks are poised to boom.

In recent years, Danoff’s slow and steady approach has been winning the race. Contrafund has returned an annual average of 8 percent over the past 10 years through June 26, the best showing among the nation’s 10 largest mutual funds. And it did so with less volatility than all but one fund in the group. Heebner’s CGM Focus Fund, which topped all diversified U.S. stock mutual funds in the decade through 2007, lost an annual average of 6.3 percent in the five years through June 26, trailing 96 percent of the same group, according to data compiled by Bloomberg.