(FORTUNE Magazine) – Mutual funds are wonderful things, offering broad diversification and professional management to folks who haven't the time to pick their own stocks and bonds. But the great proliferation of funds--there are now thousands to choose from--also exposes you to some with excessive fees, neophyte managers, and people who are just plain not cut out for managing big chunks of your money.

Mutual funds work best when they are carefully chosen and focused on specific objectives, such as investing for college or delivering a juicy income check every quarter. To that end, we have recruited Michael Stolper, one of the top fund pickers in the country, to help assemble mutual fund portfolios designed to fit four popular financial goals. Got your sights set on Ivy League schools for the little ones? Or perhaps you stay awake nights fretting over the fees that are eating away at your mutual fund stash. We've got the custom fit for you.

Stolper, who heads his own investment management firm in San Diego, has invested some $3 billion for clients over the past 20 years, a service for which he receives a handsome fee. He is also known among industry cognoscenti for publishing Mutual Fund Monthly, a newsletter that profiles top money managers. The funds that Stolper has handpicked for our portfolios are his favorites from Fortune's best-performing funds list in this issue (see preceding story). So if you don't feel up to choosing from among the 270 top performers on that comprehensive ranking, sit back and let Stolper do the work for you.

HARVARD 2010 PORTFOLIO. The jazzy quintet of funds in Harvard 2010 is designed to help finance the outlay for tuition at the nation's elite schools, though it's also appropriate for meeting any ambitious goal ten to 15 years in the future. The portfolio includes a pair of high-profile small-company stock funds for pyrotechnic growth--Baron Asset and Kaufmann. Both feature preeminent stock pickers: Ronald Baron, of Baron Asset, possesses "encyclopedic" knowledge of every company in which he invests, says Stolper. Lawrence Auriana and Hans Utsch, managers of Kaufmann, earn kudos for adroitly earning high returns, even as their fund grows in size--it now has some $1.9 billion in assets.

Adding more sizzle are GAM International and Montgomery Emerging Markets, which invest overseas. Stolper cites GAM manager John Horseman's ability to dodge entirely the meltdown in Latin America's markets last December, while making a dead-on investment in European debt that has earned equity-like returns this year. Stolper further diversifies Harvard 2010 with Schafer Value, which typically owns mid-to large-cap stocks. He lauds manager David Schafer's skill at spotting value in wrung-out shares nobody else likes. As you can see from the 12.9% annual rate of return over the past three years, after taxes and sales charges, Schafer's picks don't stay unpopular for long.

Pull the strands together, and Harvard 2010 is geared to return a summa cum laude 12% or better per year. But investors with queasy stomachs be forewarned--volatility is part of the curriculum.

SCROOGE PORTFOLIO. Though less racy than Harvard 2010, this ensemble, too, has been picked for growth and is best used to finance long-term goals. The moniker Scrooge, though, arises from Stolper's strict attention to cost. Each fund is notable for lean operating expenses, and not one charges a sales load. "Scrooge is for people theological in their belief that they should not buy a fund with steep costs under any circumstance," says Stolper.

Though their management may be spartan, these funds sport lavish returns. Veteran manager Spiros Segales of Harbor Capital Appreciation made a killing this year in large-cap growth stocks, while Meridian adds a dash of small-cap stocks. Stolper particularly approves of Meridian manager Richard Aster Jr.'s willingness to raise cash and stay out of small caps if good values are scarce. A quarter of the portfolio is invested in Neuberger & Berman Guardian, which intermingles big-growth companies with more value-oriented issues that pay higher dividends. Topping off the brew is Dodge & Cox Balanced, which invests in both stocks and bonds: The fund is steered by a committee with a disciplined strategy of seeking strong franchises that sell at bargain prices. Stolper figures that Scrooge should generate 12% annual returns over the long haul. SANCTUARY PORTFOLIO. The idea behind this grouping is simple: "Protect against 3% inflation while keeping investors from walking around with white knuckles," says Stolper. Sanctuary, in short, suits conservative investors who are intolerant of volatility, but who value the capital appreciation stocks provide.

Much of Sanctuary's growth is driven by James Gipson's Clipper fund. Clipper is up 27% this year alone thanks to its manager's keen contrarian bets on brokerage shares, big consumer growth stocks, and even Treasury bonds. The portfolio also includes a duo of balanced funds: Westwood Balanced and CGM Mutual. To round out the mix, Stolper tosses in Vanguard Long-Term U.S. Treasury. Despite the big bond rally so far this year, he believes yields are still generous, given the benign inflation outlook. Look for this portfolio to average 8% to 9% returns a year.

HIGH-INCOME PORTFOLIO. Dominated by fixed-income funds, this blend typically appeals to investors, like retirees, who require fat income checks each and every quarter. "It's for people who are perfectly content to collect interest and go to sleep," says Stolper. High-Income also suits investors who are happily reallocating out of aggressive investments as they near financial goals. Top-quality bond funds in the portfolio include Harbor Bond, led by legendary bond manager William Gross, and Strong Government Securities. To bounce the yield a bit, Stolper includes Vanguard High-Yield, a junk-bond fund. The lone equity fund, Gabelli Equity-Income, specializes in stocks that pay rich dividends.

Keep in mind that High-Income presents risk of another sort. With fewer equities, which historically earn higher rates of return than other assets, inflation takes a bigger bite out of the portfolio's long-term total return. Still, over the past three years the group has averaged 7.4% returns, after accounting for loads and taxes. It currently yields 5.8%. So once you decide on one of these portfolios, how much tending do you need to do? Not much. Stolper takes care to choose seasoned managers who stick to proven investment styles. That ensures this crowd includes no short-haul speedsters likely to disappoint when a market cycle changes. Stolper also diversifies risk by choosing funds with different investing styles--growth vs. value, for instance--and asset classes, such as small-cap or large-cap stocks.

To properly maintain a portfolio, David Feldman, a vice president in retirement services at Dreyfus, recommends that investors check performance quarterly to see how the funds are doing. Once a year, rebalance allocations--sell part of the faster-appreciating funds and redistribute the proceeds into the others to get back to the original weightings. Make bigger strategic decisions every five years or so, or as needed, to adjust to major life events. A strategic move, for instance, would involve reallocating from an aggressive portfolio, like Harvard 2010, to a more conservative mix, like Sanctuary or High-Income, a few years before the money is needed. That protects against the possibility of sudden market declines.

An elegant way to purchase these portfolios is through discount brokers that provide consolidated statements. Jack White (800-323-3263) and AccuFund (800-445-7777), a branch of AccuTrade, carry the full selection of each of Stolper's portfolios at competitive prices, though both charge $27 transaction fees for many of the funds. Charles Schwab (800-266-5623) offers all the funds in the High-Income and Scrooge portfolios, and Fidelity (800-544-9697) carries all except for Sanctuary, though these firms require higher minimum investments.