Barron’s reports on mid-cap fund managers Neil Hennessy and Brian Peery, who manage Hennessy Cornerstone Mid-Cap 30. Peery says, “A lot of financial advisors don’t allocate in the mid-cap space, which gives us an advantage.” Mid Caps have outperformed Large and Small Caps over 10, 15, and 20 years, and the Cornerstone Mid-Cap fund has beaten 86% of its peers. Hennessy and Peery take what Barron’s describes as “a fairly strict, rules-based approach to constructing their portfolios.” They annually construct a portfolio in which each stock – selected based on price/sales ratio, annual sales, and rising share price – constitutes 3.3%, “and then they let them ride” for the year. Hennessy learned his quantitative approach to stock-selection from the work of the investing guru James O’Shaughnessy. Last fall, Cornerstone Mid Cap added to its consumer-discretionary holdings, although the managers aim to be well-diversified overall.