This traditionalist fund is changing its leadership, but sticking by one of its big holdings: Target. By Nellie S. Huang, Senior Associate Editor From Kiplinger's Personal Finance, October 2014 Some places are resistant to change. Since 1980, Mairs & Power Growth (MPGFX) has invested mostly in companies based in or near its St. Paul, Minn., headquarters. And once a stock enters the portfolio, it tends to stay for a long time, sometimes for decades. But one change is coming: After 15 years with the fund, co-manager Bill Frels is bowing out at the end of 2014 because of the firm’s policy requiring mandatory retirement once an employee reaches age 75. The transition has already begun: A year ago, Mark Henneman, a co-manager since 2006, took over as head honcho. “Mark’s calling most of the shots now,” says Frels. Sponsored Content See Also: The Kiplinger 25 -- Our Favorite Funds Henneman says shareholders needn’t worry. “Like Bill, I’m a long-term, buy-and-hold investor,” he says. The fund focuses on growing companies with solid financial underpinnings and a durable competitive advantage. Examples include health care giant Johnson & Johnson and paint maker Valspar. The fund can invest in firms of any size, but more than half of its 48 holdings are considered large companies. Advertisement Over the past 12 months, Growth has lagged Standard & Poor’s 500-stock index by nearly four percentage points. The culprit: About one-third of the fund’s assets are in industrial stocks, such as 3M and Pentair, a water-treatment firm. The fund’s 16% stake in small-company stocks, some of them industrials, also hurt. But the fund’s big stake in industrial stocks helped it produce an impressive 36% gain in 2013. Henneman sold some of the fund’s big winners late last year and plowed the proceeds into what he thought were “more compelling” stocks. One such company was Schlumberger, the Houston-based global energy giant and one of the fund’s few holdings that doesn’t have a direct connection to the upper Midwest. Another drag has been Target, a longtime holding. The Minneapolis-based discount retailer has been under fire since a security breach last Christmas. And a lackluster launch into Canada in 2013 didn’t help. (Canadian store prices were slightly higher than those in the U.S., annoying Canadian shoppers.) The stock, once one of the fund’s 10 biggest holdings, has surrendered 14% over the past 12 months. Even so, says Frels, he and Henneman have added “a little” to the portfolio. “We’re convinced that Target can weather this storm,” he says.