The fund's relatively strong performance enabled it to go against the grain in another sense: It gained $250 million in net investments, compared with an overall fund market that suffered net outflows.

Mairs describes the fund's philosophy as buying growth companies on a valuation basis, with a long-term investment approach that has resulted in some companies remaining in its portfolio for decades. The fund was started in 1950. The fund, although categorized as a large cap, has also liberally dipped into the realm of lower capitalized companies if it sees a bargain.

"I think perhaps the biggest advantage we have, as a multi-cap fund, is we can move in any direction we choose in terms of size," Mairs says.

Another key ingredient to the fund's philosophy is that, with the exception of large blue chips, it gravitates towards companies based in its home state of Minnesota. Two-thirds of the fund's holdings, in fact, are based in the Twin Cities.

"We're almost within eyesight of most of their corporate headquarters," Mairs says. "That gives us the ability to stay in close contact with these companies."

Some of the funds best performers were corporate neighbors that have been longtime holdings. Toro Company, a diversified manufacturer of turf and agricultural equipment, has been a fund holding for 30 years, Mairs says. Bought when it was a small cap, the company had $1.4 billion in sales in 2002. It turned out to be the fund's best holding in 2002, going from $45.00 to $63.90 per share.

Another hometown core holding, Ecolab Inc., whose main product is detergents for the hospitality industry, is a 25-year holding that also boosted the fund. It started the year at $40.25 and ended at $49.50. "I think one of the keys is that they are the leading companies in their particular industry," says Mairs, who has managed the fund since 1980. "If a company is the leader in an industry, chances are they have a certain amount of pricing power."

The fund's familiarity with management is also a significant factor for Mairs, who feels that corporate malfeasance and the war on terror exerted the most negative influence on investor confidence in 2002. "It creates a level of confidence that would not be possible had we not been able to meet with these people," he says.

In the large-cap arena, where management information is easier to come by, Mairs isn't bashful about going shopping outside Minnesota state borders. He recently decided to buy two badly beaten up blue chips, General Electric and Verizon. Devoting 21% of the fund's holdings to health care, he also has bought Pfizer, Johnson & Johnson and Merck.

Although earnings were weak in 2002, the characteristics of companies with good growth potential didn't change, says William F. D'Alonzo, manager of the Brandywine Blue large growth fund. "Last year was similar to 2001 in that companies with the best earnings prospects were those with the kind of pricing power that withstood economic uncertainty," he says. "We found rapidly growing companies in health care and, to a lesser extent, companies that sell staple consumer goods. The durability of the consumer also drove decent earnings among certain retailers and restaurants."