By John Waggoner
USA Today

The 2000-2002 bear market not only clobbered millions of investors, it also sent dozens of fund managers packing.

Those changes aren't always for the best. But sometimes, new managers can be a good change for investors - as investors at Marsico 21st Century, T. Rowe Price Capital Appreciation and Alger Capital Appreciation have discovered.

Morningstar, the Chicago-based investment tracker, says there have been more than 4,000 management changes from January 2000 through June. The peak in the past five years was 2002, when 1,303 funds saw management changes. The number is large because many funds have multiple managers: The industry employs more than 20,000 managers.

Nevertheless, it's a big number. Why so many?

In a word: performance. It's the main reason a fund will change managers. Fund managers are judged on their performance against a benchmark. Typically it's a securities index, such as the Standard & Poor's 500-stock index. Others are measured against funds with similar investment objectives.

The bear market simply gobbled up some managers, particularly those who were too aggressive going in. Morgan Stanley Capital Opportunities, for example, plunged 39 percent in 2001 and 46 percent in 2002. The fund got a new management team in October 2002.

Fidelity Aggressive Growth got a bit too aggressive in the heat leading up to the bear market and fell a soul-searing 47 percent in 2001 and another 41 percent in 2002. Manager Robert Bertelson is now co-manager of the more sedate Fidelity Asset Manager Income portfolio.

Funds change management for other reasons, too:

• Problems. The mutual fund scandal has prompted several fund managers to leave. For example, William Garrison, manager of Columbia Small-Company Equity, left the fund because he made frequent trades in his 401(k) plan - which had his fund as an investment option.

• New jobs. Usually, when a fund company says a manager has gone to "pursue other opportunities," it means he had rotten performance and was let go. But sometimes hot managers get lured away by other companies or form their own. For example, manager Thomas Laming left Buffalo Small Cap in September to start his own company.

• More mutual fund coverage available at www.usatoday.com/money/front.htm.