(MONEY Magazine) – ONE OF THE MOST BEGUILING things about watching baseball is doping out your team's best possible lineup. Who hits best off a lefty with a wicked slider? Who pitches best to a righthanded pull hitter? Such is the stuff that keeps fans coming back to the old ball park.

But in the mutual fund game, investors like stable lineups. Many folks take comfort in knowing that the ace of the staff, whose record may have originally attracted them to the fund, is going to be playing for them every day. So when Fidelity, the $394 billion Boston fund colossus, changed portfolio managers at 26 of its 239 funds on March 11, a lot of investors felt like spectators watching a game they didn't quite understand. Managers at some of Fidelity's best-known funds, including Balanced, Puritan and the three Asset Manager portfolios, got shuffled. All told, funds with more than $70 billion in assets and over 6 million shareholder accounts were affected.

Why such sweeping changes now? Well, for one thing, the company has a history of repositioning managers, believing that fresh faces in new places can energize both people and performance. Before the March switches, there had been 16 manager changes over the past four years at Fidelity's two dozen biggest U.S. stock funds. For another thing--Fidelity's top management, presumably including ultimate chief Edward C. "Ned" Johnson III, concluded that several of the funds that got new stock pickers needed fresh blood fast. Last year, for instance, only five of Fidelity's 31 diversified U.S. stock and balanced funds beat the firm's plain-vanilla Market Index Fund, which mimics the S&P 500 and ended 1995 up 37%. Worse, only two of the company's 23 funds with $1 billion or more of assets whipped Market Index. Bottom line: Fidelity decided to move before its fundholders did.

So what should you make of the changes--the most dramatic in Fidelity's 50-year history? To get some insight, I met in late March with Fidelity's head of equity funds, William Hayes. The box score:

--Fidelity simply won't tolerate subpar performance. Take the case of three high-profile managers who got new assignments in March. Each had been in what Fidelity clearly considers a slump. For example, Thomas Sweeney, the manager of $1.7 billion Capital Appreciation for nearly 10 years, finished 1995 up 18.8%, placing his fund no better than 79th among 85 aggressive growth funds ranked by Morningstar. Result: Sweeney gets farmed out to run Fidelity Canada, with just $136 million in assets. At $4.9 billion Fidelity Balanced, Robert Haber, in the pilot's seat since 1988, ended 1995 as Morningstar's 259th-ranked balanced fund (out of 262), rising 14.9% for the year. Result: He goes to Fidelity's front office as director of equity research. And in perhaps the biggest switch of all, Robert Beckwitt, the whiz kid who had run the $15 billion Asset Manager funds since 1988, got sent to the showers; his funds' 1995 returns ranked no better than the middle of the pack in Morningstar's multi-asset and asset-allocation categories. Result: He'll brainstorm ideas for new funds and run Fidelity's personalized fund-picking division, Portfolio Advisory Services.

--Fund styles will match fund names. Although Capital Appreciation sounds like a gutsy growth fund, the cautious, value-oriented Sweeney loaded it up with sluggish utilities, raw-materials and natural-resources shares. Conversely, Michael Gordon ran the stodgy-sounding Blue Chip Growth like a racy aggressive growth fund, spicing it with a 39% stake in technology shares in 1995. By switching Sweeney to the Canada fund and Gordon to Retirement Growth (where 94% of the assets come from 401(k)s and IRAs), Fidelity figures they're now positioned in funds that better suit their investing styles.

--Risk will be reduced. A team of four managers, led by 28-year Fidelity veteran Richard Habermann, will steer the ostensibly risk-deflecting Asset Manager funds. (Habermann ran the then $20 million Magellan fund from 1972 to 1977.) "We want to make sure the funds are managed in the way the shareholders expect," says Hayes. Translation: No more esoterica like the Third World bonds favored by ex-manager Beckwitt.

Why have so many Fidelity stock funds seemingly slumped all at once? My view is that many of them, like Magellan, got too big too fast. Rapid asset growth has all sorts of effects on how a portfolio is run--few of them positive and not the least of them being that it becomes harder for a handful of smart stock picks to propel a portfolio to the top of its class. (For more, see "Today's Hottest Funds Are Too Big for Their Britches" in MONEY's April issue.)

Fidelity's Hayes doesn't agree that asset growth is a problem. "We think we turn size to our advantage by using it to build our research department," he says. But one former Fidelity executive tells me: "It's finally hitting home; they realize that their size is hurting performance."

Going forward, Fidelity will continue to grapple with its own growth. Among the possible scenarios I foresee:

--There's a good chance Magellan's manager Jeffrey Vinik will be benched if his returns, which lagged the S&P 500 by 3.1 percentage points in 1994 and 0.7 points in 1995, do not improve by the end of 1996. And because its $56 billion size makes beating the S&P 500 a herculean task, Magellan may be repositioned as a lower-risk growth and income fund rather than a turbocharged capital-appreciation fund. (For the record, Fidelity denies any plans to remove Vinik--perhaps because he has come roaring back from slumps in the past.)

--In a long overdue change, Fidelity will finally begin closing its hottest funds to new investment, preventing them from growing unwieldy.

--I expect more Fidelity funds to be run by teams instead of solo managers. Fidelity used to have four "groups" of stock funds; now it has eight, each with an objective like growth, income or international. The reason, says Hayes: "We wanted to put managers into smaller groups where they'll benefit from exchanging ideas with folks with overlapping investment interests." Hayes denies, though, that there are plans for the funds themselves to take on the team approach.

So what should you do if you're a Fidelity fundholder or think you might be someday? My advice:

--Don't buy a Fidelity fund simply because you like the manager. Buy it because you like the fund's objective, its investing style and its performance. After all, the manager may get the hook right after you buy in. That's true at any fund company--but all the more so at Fidelity.

--Consider buying smaller, newer Fidelity funds when you can. Once funds grow into the $5 billion to $10 billion range, they tend to lose their performance edge. If your Fidelity money is in a 401(k), IRA or other tax-sheltered account, you may want to switch out of a multibillion-dollar mammoth into a comparable smaller Fidelity fund whose manager can be more nimble. If you're a new Fidelity investor, try one of its less humongous funds instead. Candidates with promising credentials include, for aggressive investors, $745 million Dividend Growth (up 23.5% annually since its inception in 1993, vs. 15.4% for the average growth fund), and for conservative investors, $3.7 billion Fidelity Fund (up 14.7% over the past five years, vs. 13.3% for the average growth and income fund).

--Don't second-guess the lineup. Fidelity has shown it can wring good returns out of its funds no matter how many people it platoons around. Fidelity Value, for instance, has had four manager changes in less than four years; Growth & Income has had two. Yet both funds have beaten their category averages by 3.9 percentage points or more over that period.

--Don't own too many funds. With so many to choose from, it's easy to get carried away. Don't. Pick four or five, tops, and stick with them as the managers come and go. Pull the rip cord only if the fund trails its category average by two percentage points a year or more for three consecutive years. After all, just because Fidelity likes to switch its lineup doesn't mean you need to.