If you're like me, you probably have some money invested in a few mutual funds. And odds are, you probably have little idea exactly what your fund managers are doing with your money. Every now and then, I try to remedy this situation a little by checking to see which stocks my funds are holding.

Recently, I did just that with Fidelity's Magellan Fund (FUND:FMAGX), which is a fund with an impressive past, although it has struggled in recent years. I first bought into it long ago, as part of an employer-sponsored retirement plan, and although I've shed most of my shares, I still have a few.

[Note: Super-Investor Peter Lynch ran the Magellan fund for many years. He's no longer at the helm, but he's written many books which are acclaimed for their readability and valuable content. Check out One Up on Wall Street, for example, or Learn to Earn.]

Behind Magellan's curtain
So where has Magellan manager Robert Stansky parked the fund's dollars? As I perused a list of the top holdings, I was interested to find six companies in which I'm invested among the top 20 holdings. Here they are, along with the percentage of the fund's total value they represent:

Microsoft (NASDAQ:MSFT) 3.0%
Home Depot (NYSE:HD) 2.2%
Pfizer (NYSE:PFE) 2.0%
Johnson & Johnson (NYSE:JNJ) 1.9%
Wal-Mart (NYSE:WMT) 1.7%
Time Warner (NYSE:TWX) 1.3%
Total 12.1%

This tells me that about 12% of the fund's return is a return I'd be earning anyway through my main portfolio of individual stocks. Also interesting is that a few other firms on the list are ones I've been considering buying into -- such as Citigroup (NYSE:C) and Bank of America (NYSE:BAC). If I owned them now, the fund would be duplicating nearly 17% of my portfolio, which is not an insignificant amount.

[Note: You can often look up a fund's holdings at the fund company's website. The information will usually be as of the end of the last fiscal quarter. Funds don't normally let the public -- or shareholders -- know what they're holding at any given time, so quarterly reports are the best we can do.]

Beware of window dressing
One thing to keep in mind when you look at a list of a mutual fund's holdings is the dangerous practice of window dressing, which some less scrupulous fund managers have been known to engage in. Window dressing involves buying the "right" stocks in time to be able to list them in your roster in order to impress investors. If the stock market in general is very bullish on Microsoft, for example, and shares have been bid up considerably, a fund manager might buy shares after much of the run-up. Someone glancing at a list of the fund's holdings won't usually know just when those shares were purchased or at what price. They may mistakenly assume that the manager was smart enough to buy shares long ago and is enjoying the run-up.

You can spot window dressing a mile away if you're willing to spend a little time looking at several quarterly reports where holdings are listed. That's how you can see which stocks are new to the list and which aren't, as well as the size of the various positions.

Questions to ask yourself
As you survey the list of stocks your fund owns, you might pause to ask yourself some questions. When I look at the Magellan list, for example, I ask myself how well this investment is really serving my overall portfolio.

It's invested in Citigroup, for example, which is a stock I wouldn't mind owning. Magellan's essentially saved me the trouble of buying it, you might even argue.

But that's not quite right. Citigroup is the fourth-largest holding in the fund (as of the end of the last quarter) -- no small portion. Then again, it is a small portion after all, since it makes up just 2.7% of the fund's value. If I have $3,000 invested in the fund, I've got only $81 in Citigroup, roughly equivalent to two shares. Suddenly, I don't really feel like I own part of Citigroup. If I'm interested in being part of what may be a spectacular future, I'm going to have to buy a bigger chunk of the company.

Next, I'd do well to look at the big picture. What kinds of companies make up Magellan's Top 20? Large ones. Really big ones. (This makes sense, since Magellan is such a huge fund. It's so huge that it's closed to new investors, lest it grow even faster. It's often a good thing when funds close.)

And what kinds of companies make up my own personal portfolio of stocks? Mostly really big ones. See what's going on here? I'm being redundant. Large-cap companies are already well represented in my portfolio. I'd arguably do better to round out my holdings with some different kinds of investments, such as small caps.

Finding alternative investments
So how should I proceed with the fun, if I'm now looking for small-cap companies? Well, here's where I give strong consideration to recommendations from others, since I'm not that familiar with much of the small-company world and I don't really have the time to become an expert. One good source of small-company recommendations is our Motley Fool Hidden Gems newsletter, for example, which reviews several each month in detail and tracks the progress of its recommendations regularly.

Another excellent option is our Champion Funds newsletter, which highlights at least one outstanding mutual fund in each issue, as well as reviewing past recommendations. Newsletter editor Shannon Zimmerman even offers up model portfolios for three kinds of investors -- aggressive, moderate, and conservative.

I encourage you to check out one or both of these newsletters. You can get a free 30-day trial, and just by trying, you'll have access to the full lists of past recommendations. All our newsletters have pretty darn impressive track records.

Keep learning
You can learn more about mutual funds in general in our very readable and informative Mutual Fund Center and in these articles:

Discuss mutual funds on our Mutual Funds discussion board , or just pop in to see which funds others are talking about.

Selena Maranjian 's favorite discussion boards include Book Club, The Eclectic Library and Card & Board Games. Sheowns shares of Microsoft, Home Depot, Pfizer, Johnson & Johnson, Wal-Mart, and Time Warner.For more about Selena, viewher bio and her profile. You might also be interested in these books she has written or co-written:The Motley Fool Money GuideandThe Motley Fool Investment Guide for Teens. The Motley Fool is Fools writing for Fools.