(MONEY Magazine) – The following trivia quiz is sure to stump even mutual fund experts. What U.S. fundholders profited the most over the past five years? Answer: owners of the capital, as opposed to the income, shares of $700 million Quest for Value Dual Purpose. This weird but rewarding closed-end fund rarely advertises its sizzling performance, eschews fashionable small stocks in favor of solid dividend-paying heavyweights and has two classes of shares (see the details at left).

QFV capital shares' five-year return of 350% not only trounced Standard & Poor's 500-stock index, up 109%, but also beat all open-ended stock funds (average return: 91%). In 1992, QFV capital holders were up 45%, with all gains reinvested, more than five times the 8% earned by the S&P 500. So far in 1993, they are ahead 4%, vs. gains of 1.5% for the market and 1% for stock funds overall. And QFV capital shares recently sold on the New York Stock Exchange for about $24, a fetching 10% discount to the per-share value of their assets.

Unlike the fund, QFV's founder and manager is readily recognized on Wall Street. He's George Long, 52, the top stock picker at $26 billion Oppenheimer Capital, parent of the Quest for Value clan of 22 mostly open-ended funds (800-232-3863). Long's winning formula? He and his 17 analysts swear by old-fashioned value investing, a patient, low-risk strategy that downplays the importance of timing turns in the market and economy. ''We buy stocks mistakenly priced at 50% to 70% of what an acquirer would pay for the business,'' says Long. ''We're willing to sell them for 80% to 90% of that value.'' His chief yardstick of value for stocks (65% of the fund) is discretionary cash flow -- reported cash flow less the amount of capital spending he believes the company needs to run efficiently. Bonds, convertibles and other fixed-income securities (35% of the fund) reduce risk and enhance the income shares' total return, which was 7.4% in '92. Long doesn't try to be broadly diversified. He stashes more than half of his 26-stock holdings in 10 companies -- a grab bag of underappreciated insurers, manufacturers and onetime leveraged buy-outs that have gone public, such as Fruit of the Loom (up sevenfold since its purchase in late 1987 and 5% of the fund). Among such big bets, he particularly likes four stocks that he thinks have the potential to gain an average of 49% by year-end 1994, based on his target prices cited in the table on page 181. Listed below are his four picks: Transamerica. While many big insurers are still hobbled by bad investments in real estate and junk bonds, conservatively managed Transamerica (assets: $32 billion) has $1 billion of undeclared profit in its bond portfolio. Another plus in Long's view is that Frank Herringer, the San Francisco holding company's CEO since 1991, is committed to selling off low-return assets -- notably, Transamerica's property and casualty insurer. In response, Long predicts the firm's current return on equity of 10.5%, which is roughly par for its industry, will surge to 15% or more in three years. And he's aiming for a target stock price of $75 in 1994 -- a potential 56% profit. Becton Dickinson. Long says this $2.4 billion leader in hypodermic needles, syringes and a host of other hospital supplies has already weathered the price squeeze now facing drugmakers, whose stocks have swooned 25% over the past year. ''Federal controls in the 1980s forced cut-throat pricing on Becton's medical supplies unit,'' he explains. ''But Becton kept cutting costs to maintain that division's fat 20% profit margins.'' The Franklin Lakes, N.J. firm also invested heavily in its diagnostic business, which makes automated equipment such as high-volume blood analyzers and accounts for 44% of total sales. The payoff, according to Long: The diagnostic segment's margins should soar from 13% to 20% in three years and lift the stock 52% to $100 in 1994. Hercules. Long began buying this $2.9 billion chemicals conglomerate in 1991 after CEO Thomas Gossage took charge and began to cut costs, cast off low- return units and reverse a 23% earnings decline over the past five years. In 1992 the Wilmington firm divested $100 million in assets to help pay down % debt and buy back 9% of its outstanding shares. This year its board wants to retire another 11% of the stock. And Long? ''We've doubled our money and, like the company's board, still think the stock's a steal,'' he says. His rationale: A leaner Hercules and a stronger economy figure to boost profits 25% to 30% annually -- and the stock 44% to around $100 -- over the next two years. Aflac (nee American Family Life Assurance Co.). This low-profile $12 billion life and health insurer, says Long, has both a sterling income statement and balance sheet. Profits at Aflac in Columbus, Ga. grew a brisk 23% on average every year for the past decade. So why's the stock priced just above the earnings multiples of Aetna, Cigna and other ailing giants in Hartford? ''Most U.S. insurance experts question the need for Aflac's specialty -- supplemental cancer medical policies,'' says Long. But 75% of its business is in Japan, where there's no such stigma and where there is a vibrant $420 million market monopolized by the firm since 1974. Long forecasts a 16% rise in profits this year and a '94 target price of $50, a 43% gain.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: FOUR WITH HIDDEN VALUE GALORE George Long has big bets on these four stocks, which he believes are enticingly undervalued. All trade on the New York Stock Exchange and are ranked here according to his projected appreciation by year-end 1994.