Legendary fund manager Peter Lynch would take some heat today. The former head of Fidelity Magellan FMAGX was an opportunist. Sometimes he liked growth stocks. Other times, value investments held more allure. Large companies struck his fancy but so did smaller firms. Today, financial advisors, investors, and the media criticize this kind of flexibility. They'd rather have managers who stick to one part of the Morningstar style box. In other words, they want style- specific managers.

Morningstar seems to be among the purists. After all, we categorize funds by narrow investment styles, such as large growth or small value. But we don't necessarily favor funds that stay in the same part of our style box year in and year out. In fact, while we know that style-specific funds have their charms, we acknowledge that flexible funds also have advantages. Neither one is better than the other. It's up to you to decide how to use each in your portfolio.

Next: Flexibility's Power, Purity's Charms >>