Fund Expands Embrace Beyond Big Fry

The managers aim to hold their smaller picks as they grow large. "What we're trying to do is capture the next Wal-Mart and Microsoft," Swanson said.

To do that, Focus Growth fits a preference for bottom-up stock picking with some top-down forecasting as well.

"Our analysts do industry-by-industry reviews to see where companies are positioned and to get an idea of trends in the market," said Swanson. "This gives us a better idea of whether we're investing in true growth opportunities with strong long-term characteristics."

Focus Growth's two main metrics for choosing stocks are three- to five-year earnings forecasts and return on equity.

"What we don't want are one-hit wonders," said Holtz. "We're looking for companies that can deliver for many years."

Among favorites is Genentech Inc (DNA). Holtz refers to it as one of his fund's racehorses.

"We use it as a fast-growth resource to help improve the returns for the overall portfolio," he said. "It's built on research and development. So it plays in more of the developmental phases, or early product growth phase, of the market."