(MONEY Magazine) – John Montgomery, founder of Houston-based Bridgeway Capital, never meets with the management of the companies whose stock he buys. He doesn't even watch the market. "I've got three computers on my desk, and not one of them has a ticker," the 45-year-old former Houston Transit System manager boasts. At Wednesday night church dinners, he finds that other parishioners are better versed in stocks than he is.

His company also has some unusual traits: The top-paid employee (that would be Montgomery) earns no more than seven times the salary of the lowest-paid one. Bridgeway gives half its pretax profits to charity and won't buy tobacco stocks. Perhaps most unusual, it cuts its management fees when funds lag their benchmarks.

It would be easy to write off John Montgomery as just another eccentric if his results weren't so good. Bridgeway Aggressive Growth, the company's largest fund, with $250 million in assets, is No. 1 in its category for the last three years and five years, with annualized gains of 36% and 32%, respectively. Micro-Cap Limited tops its category for three years as well. And Ultra-Small Company is in the top 10% for the last three and five years. Alas, Micro-Cap and Ultra, both up 23.5% this year (through July 12), closed to new investors when they reached $27.5 million in assets (and even existing investors will be barred from adding money when assets hit $55 million). Aggressive Growth, down just 1.5%, is still taking investments, though it will probably close soon. "Bridgeway's one of the fund world's best-kept secrets," says Morningstar analyst Brad Sweeney.

The Bridgeway family also includes two index funds--one large-cap and one small-cap--a newly opened balanced fund and a socially responsible fund that's been merged into Calvert Large Cap Growth (managed by Montgomery). And even when it comes to indexing, Bridgeway does it differently. Unlike most index funds, which tie themselves to large, established benchmarks such as the S&P 500, Bridgeway's Ultra-Large 35 Index fund tracks a basket of just 35 stocks chosen by Montgomery. The Ultra-Small Company Tax Advantage fund mirrors an obscure index published by the University of Chicago.

What's the key to Bridgeway's success? With a master's degree in engineering from M.I.T. and a Harvard M.B.A., Montgomery is a "quant." He gets his investment ideas from four separate computer models; two look for stocks with certain growth characteristics, one analyzes price momentum screens and one looks at valuation. While macroeconomic trends don't figure into Montgomery's formulas, the models' output does reflect the mood of the market. During the go-go '90s, the growth and momentum screens ended up producing most of the candidates for the portfolio. Lately, not nearly as many stocks have been able to meet the criteria built into those models. In the current market, the valuation model has been spitting out the bulk of the ideas. "The models seem to find the market's sweet spot," says Sweeney.

Montgomery's reliance on computer-generated ideas means the funds can take you on some wild rides. "The models not infrequently pick stocks that make me hold my breath," Montgomery says.

A look at Aggressive Growth shows what he means. The fund buys anything from megacap stocks to microcaps, from blue chips to companies no one's ever heard of, and can put up to a quarter of its assets into a single stock, making it very risky indeed. (Morningstar now classifies it as a midcap blend fund, but it has spent time in the small growth and small value categories too.)

In early 1999, Montgomery bought the wireless player Qualcomm for Aggressive Growth and held it through most of its dazzling 2,600%-plus gain that year--even as its price/earnings ratio reached an astounding peak of 294. At one point it accounted for more than 20% of Aggressive Growth's assets. But the funds aren't completely on autopilot: Even though the computer model that had selected Qualcomm was still rating it a buy, Montgomery began selling in early 2000 because he was uncomfortable holding such a large position. That was good timing--he got out before the stock collapsed later that year. He had similar luck with JDS Uniphase, the fiber-optics maker, loading up on the stock and then escaping before it cratered. The results were impressive. Many funds that scored triple-digit gains in 1999 suffered shattering losses in 2000. But after posting a 120% advance in 1999, Aggressive Growth ended 2000 up 13.6%. The fund is now heavy in retailers like Christopher & Banks, energy stocks and homebuilders. Clearly, this fund is not for everybody. But if you want to spice up your portfolio with a fund that doesn't adhere to a single style, Bridgeway is a good place to look.

--ILANA POLYAK