In his early years as an investor, Chuck Bath, 57, focused on finding undervalued companies, regardless of the industry. But over time the manager of the $1.5 billion Diamond Hill Large Cap Strategy fund ( began looking for promising sectors as well as cheap stocks. The strategy has served him well. He has a 10-year annualized return of 10.1%, compared with 8% for the S&P 500. Now he likes insurers, especially the )Hartford Financial Services Group (Fortune 500). ,
Henry Ellenbogen scouts for small-cap companies and even the occasional not-yet-public startup.