Pity the poor large-cap growth fund. Over the last five years, few fund flavors have fared worse. Indeed, of all the stock-fund categories that research house Morningstar tracks, only sector-specific funds that focus on technology and communications stocks have been harder hit.

It doesn't take an MBA in finance to figure out at least one of the main reasons why that's the case. During the late 1990s, investors famously got drunk on the stuff, snapping up shares of go-go growth stocks with valuations high enough to make all but the most irrationally exuberant investors' heads spin.

Eventually, of course, heads did spin -- and dizzy investors promptly let all the air out of the market's balloon. The end result is that the typical large-growth fund now shows an annualized loss of more than 8% over the last five years.

In other words, ouch.

Against that grim backdrop, though, I want to continue with last year's theme and roll out another tip for fortifying your portfolio during troubled times, namely: Favor out-of-favor areas of the market.

Au contraire
On the surface, that may seem like counterintuitive advice. Why shop for stocks or funds in the market's returns department? Well, the short answer is that you can get 'em at a discount. Generally speaking, that dynamic leads me to favor value funds, which by definition traffic in the kinds of stocks that aren't in vogue -- except maybe with the likes of my Fool comrade Philip Durell, whose Motley FoolInside Value newsletter service I heartily recommend.

Still, it's sometimes possible to buy growth at value-like prices, and right now appears to be one of those times. That's not a market call, mind you. Just an acknowledgment that the growth/value pendulum really does swing -- and that it's been swinging toward value for so long now that even dyed-in-the-wool cheapskates such as yours truly would be well advised to sit up and take notice. Moreover, all but the most conservative investors will likely want some exposure to growth stocks. And if Mr. Market has put 'em on sale, well, so much the better.

The bigger they are...
For my money, large-cap growth funds look like the most compelling buy opportunities right now. With growth-stock stalwarts such as Oracle (NASDAQ:ORCL), Intel (NASDAQ:INTC), First Data (NYSE:FDC), and Texas Instruments (NYSE:TXN) -- not to mention Best Buy (NYSE:BBY), Kohl's (NYSE:KSS), and Time Warner (NYSE:TWX) -- now trading close to or below industry multiples, quite a few mighty fine large-cap growth funds are having a hard time of it, too.

Thus, while I remain thoroughly enthusiastic about each of the recommendations I've made in Champion Funds, it's the newsletter's large-growth picks that I think currently strike the most intriguing profile. These funds boast talented and experienced managers, superior long-term track records, and reasonable expense ratios -- three things that appear at the top of my list whenever I go shopping for mutual funds.

As a result, despite the soft patch they're enduring, I continue to like these funds' long-term chances. Indeed, I think they would make fine portfolio additions for investors with a growth bent or even for those who are just looking to add a dollop of the stuff to their otherwise value-heavy portfolios. The logic of intelligent asset allocation, after all, is that a portfolio that's well diversified in terms of both market cap and style can help keep volatility under control. When one area of the market falls from favor -- taking a part of your portfolio with it -- your exposure to other areas can help you play catch-up.

To be sure, I think there are plenty of compelling opportunities further down the cap range. And I remain a big believer in the efficacy of value investing for the long haul. Still, given how long the rally in small-cap value stocks has endured -- and especially given how thoroughly those little fish have trounced their bigger brethren -- I think the market is handing smart fund investors a world-class opportunity to go shopping down the equity market's large-cap growth aisle.

This article was originally published on August 17, 2004. It has been updated.

Shannon Zimmerman is chief analyst for Motley Fool Champion Funds , which you can try free for 30 days without risk. Shannon doesn't own any of the companies mentioned above, but he recently snagged a perfectly restored antique high chair for his new little one. The Motley Fool is investors writing for investors.