Few funds can boast a 35-year track record. There are even fewer that have actually posted an impressive run of performance over those 35 years. Columbia Acorn measures up on both accounts. So how has the fund managed to stay on top for all these years? Well, let's crack this nut and take a look at what's inside.

Acorn's management
The Acorn Fund is run by Columbia Wanger Asset Management, which is owned by Bank of America (NYSE:BAC). Longtime lead portfolio manager Charles McQuaid has served as skipper of the fund since 1978, and is assisted by co-portfolio manager Robert Mohn, who has been on board since 2003. It's important to look at how long any fund's management team has been in place -- ideally, you want a manager or team of managers who have been with the fund for a meaningful amount of time. In my opinion, you want to make sure a manager has experience in both good and bad market environments. Right now, that would mean at least a seven- or eight-year time period, so you can assess how management performed in the last truly bad market environment, the bear market of 2000-2002. In the case of Acorn Fund, lead manager McQuaid has been around long enough to see many, many different market environments, both good and bad.

However, even setting aside McQuaid's long tenure, I find another aspect of Acorn Fund's management process quite appealing: It is extremely analyst-driven. Senior analysts actually have leeway to make their own buy and sell decisions. While this may strike the average investor as a tactic that undermines the authority of portfolio managers McQuaid and Mohn, Foolish investors recognize the inherent benefit to this approach.  It's always better to have a strong analyst team supporting a lead portfolio manager than a single star manager who runs the entire show. What if that star manager leaves? In that case, you can't be sure that the fund's prior track record will be any kind of indication of how it will perform going forward. Also, since the Acorn Fund has more than 400 holdings, it really needs to be analyst-focused in order to keep tabs on all of those positions!

Finding acorns
The Acorn Fund seeks out small- and medium-sized companies with market capitalizations of less than $5 billion at the time of purchase. Management also has leeway to invest internationally, currently devoting approximately 12% of the portfolio to foreign issues. The fund uses a growth-at-a reasonable-price approach to stock selection, with analysts scouring the small- and mid-cap universe for stocks with solid fundamentals and substantial growth prospects. Right now, Acorn's analysts are favoring positions in financial services stocks such as Eaton Vance (NYSE:EV) and AmeriCredit (NYSE:ACF), as well as consumer goods makers Coach (NYSE:COH) and Abercrombie & Fitch (NYSE:ANF).

The fund's performance track record has truly been impressive, posting a 10-year annualized return of 16% through March 31, compared to a 12% return for the Russell 2500 benchmark. Likewise, the fund has managed to beat the Russell 2500 Index each of the past 10 years except last year. And that's no small accomplishment. Overall, management's consistent performance has been outstanding.    

An acorn of a different size
However, there is one side of this Acorn that leaves a bitter taste in my mouth -- the size. Currently, the fund has amassed almost $20 billion in net assets, making it the second-biggest small-cap stock fund in the Morningstar universe, behind only Fidelity Low-Priced Stock Fund. The problem most successful small-cap funds run into at some point is one of asset bloat. Returns are good, money flows in, and typically management finds it harder and harder to remain nimble when investing in the small-cap space. True, Acorn's asset level has not hurt the fund's performance so far. And the fact that the fund can venture into the lower end of the mid-cap space, and can also seek out international small-cap stocks, has no doubt helped to find an outlet for asset inflows. However, the fund cannot continue to grow in perpetuity and still hope to maintain its focus. I would hope Columbia would keep an eye toward closing the fund the minute management starts to feel that it can't adequately invest all that cash.

One last point: Be warned that the fund comes with a high hurdle for entrance. You currently need a minimum of $75,000 to get in. But that's actually a good thing, as the higher minimum should serve to slow inflows in the future. All in all, Columbia Acorn is a great choice if you are looking for a fund with a small- to mid-cap focus. If you haven't taken a look at the fund yet, do so while it is still open to new investment. You'd be nuts not to.

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Fool contributor Amanda Kish lives in Rochester, N.Y., and does not own shares of any of the companies or funds mentioned herein. Bank of America is an Income Investor recommendation. The Fool has a disclosure policy.