There's a lot going on in the mutual fund world. If you miss something, it could end up costing you money. To keep you up to date and on top of things, below we scope out some of the recent happenings in the mutual fund industry during the past week, and see how they may affect your portfolio.

A new goodbye at T. Rowe
I never like to see a long-tenured manager leave a successful and well-run fund, but it does happen from time to time. This month, it was time for John Laporte of small-growth fund T. Rowe Price New Horizons (PRNHX) to head for the door after 22 profitable years at the helm. Laporte's departure was announced last summer, and he has been working with his replacement, Henry Ellenbogen, since that time to ensure a smooth transition. Previously, Ellenbogen headed up efforts over at T. Rowe Price Media & Communications Fund (PRMTX), earning some pretty impressive returns during his tenure there.

While Ellenbogen is clearly a talented stock picker, I'd recommend that investors wait a bit before jumping back in here. Ellenbogen has had the benefit of working with Laporte for the past nine months on the new portfolio, but I still want to see how Ellenbogen's prior track record picking larger media and telecom stocks translates into a much broader small-cap mandate at New Horizons. Under Laporte, the fund invested in a wide range of small but fast-growing names, including medical equipment supplier Henry Schein (Nasdaq: HSIC) and auto-parts retailer O'Reilly Automotive (Nasdaq: ORLY). In contrast, Media & Communications has a more narrow focus, favoring big tech names such as Apple (Nasdaq: AAPL) and Amazon.com (Nasdaq: AMZN).

Laporte's departure is a clear loss for the fund, after more than two decades of superior leadership. I think Ellenbogen will do a fine job at his new charge, but I'd like to see evidence of his small-cap prowess before wading back into the waters at New Horizons.

Pay for performance
The mutual fund industry has certainly endured a few black eyes in the past decade, and it's probably no coincidence that exchange-traded funds and other passively managed vehicles are growing in popularity. Some fund shops have been attempting to battle investors' increasing disenchantment by adding performance-based fees to their funds. With performance fees, the amount that investors pay for management rises or falls, depending on whether or not the funds beat certain benchmarks. Janus recently announced that it's getting in on the act, proposing to add performance fees to five more of its funds, including Janus Overseas (JAOSX) and Janus Forty (JDCAX).

The idea behind performance fees is a good one. There's some satisfaction in knowing that managers won't be rewarded for poor performance, and that top-performing managers will get a bonus for a job well done. Ultimately, such a scheme does better align investor and management incentives. However, there is still the problem of short-term incentives versus long-term strategy. A manager could be tempted to make riskier short-term moves that aren't in line with the fund's long-term objectives, in order to juice returns and bump up his next paycheck.

But overall, the idea that managers are paid more or less based on how they perform is a solid idea, and one that more funds may adopt in the future. If you're looking for funds that offer performance-based fees, you might want to check out the Fidelity lineup. I found roughly 20 Fidelity funds, including its hugely popular Fidelity Contrafund (FCNTX), that have some form of performance fees in their expense structure. 

The bull market -- one year later
This past week marked the one-year anniversary of the current bull market. After hitting bottom on March 9, 2009, the market has rallied about 70%. But investors should be cautious of reading too much into the biggest winners of the past year. The current rally has been primarily focused on lower-quality and riskier stocks and sectors. That means funds that invest in these areas, as well as emerging markets and small-cap funds, have led the way. That likely won't be the story looking ahead.

When looking to buy new mutual funds for your portfolio, make sure you look beyond short-term performance. Don't judge a fund by how much money it's made in the past year, because that will likely be an outlier in its longer-term history. Look back over many years, preferably 10 or more, to see how the fund has performed in prior bull and bear markets. Likewise, don't stuff all your money into gold or emerging-market funds because they've done so well lately. Chasing performance is not a winning strategy. Instead, look to funds that invest in blue-chip dividend-producers like Johnson & Johnson (NYSE: JNJ), AT&T (NYSE: T), and Home Depot (NYSE: HD). Financially stable large-cap names are well overdue for their day in the sun, and they're likely to do well in the slow economic recovery period that's almost certainly ahead of us.

Stay tuned for more mutual fund news and updates in the coming weeks!

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Amanda Kish is the Fool's resident fund advisor for the Rule Your Retirement investment newsletter. Amanda owns shares of Fidelity Contrafund. Apple and Amazon.com are Motley Fool Stock Advisor picks. Home Depot is a Motley Fool Inside Value choice. Motley Fool Options has recommended buying calls on Johnson & Johnson, which is a Motley Fool Income Investor selection. The Fool has a disclosure policy.