NEW YORK — The Clipper Fund built itself into an industry legend on the strength of its management team. At the end of 2005, they departed abruptly. What happens to a 23-stock fund once the stock pickers who built it leave?

Clipper, founded in 1984 by James H. Gipson, has an enviable record. A $10,000 investment in Clipper when it was founded would have grown to $199,346 by the end of 2005, outgrowing the same investment in the Standard & Poor's 500 (with dividend reinvestment) during the same period by a cool $60,484.

Clipper's hallmarks under Gipson and his team were a small number of carefully selected stocks, a load of cash if there was nothing they wanted to buy, and low turnover in the portfolio. That often meant Clipper made big bets on big companies. At the end of 2005, for instance, the Fund had 10.4 percent of its holdings in Freddie Mac and 6.3 percent in American Express Co.

The strategy resulted in some years of remarkable gains and some years in the doldrums. The Freddie Mac investment, for instance, helped drag down Clipper's returns. In 2005, the final year the fund was managed by Gipson and his colleagues, Clipper lost 0.24 percent. In contrast, the S&P 500 had a 4.91 percent return for the year.

That October, Gipson, then 63, and the rest of his team announced they would retire from managing Clipper. Investors had already started bailing out. Don Phillips, managing director of mutual fund tracker Morningstar Inc., told Fortune magazine that he and his wife were selling. "Time to Clip Clipper," advised Kiplinger.com.

Finding a replacement was tricky. After all, buy-and-hold value investors are a rare breed. The philosophy is simple: Pick a few great companies at great prices and hang onto them. The problem is that few fund managers can resist the urge to juggle a portfolio or change course during the times the market beats up a couple of those hand-selected stocks or bids up everything but.

Clipper's board picked Christopher C. Davis and Kenneth C. Feinberg of Davis Selected Advisors LP to manage the fund, effective January. The firm manages $60 billion and the two men were selected as Morningstar's Domestic-Stock Fund Managers of the Year in 2005.

Davis, 40, is a third-generation investor. As the Davis Funds' Web site describes it, "through careful and sensible investment practices," Shelby Collum Davis, Christopher Davis' grandfather, invested $100,000 in the early 1940s and turned it into $800 million by the early 1990s.

Since taking over Clipper, Davis and Feinberg have sold off many of the fund's holdings, bought their own picks and laid out a plan. While the two say much will stay the same, they promise a couple of interesting changes.

The fund turned over roughly 53 percent of its portfolio in the months after Davis and Feinberg took over, but Davis said the rate of turnover would slow and the fund's holding period would be between three to 10 years for most investments. He said Clipper would be managed as a concentrated fund, holding positions in 15 to 25 companies on average.

Like their predecessors, the two have focused on a small number of holdings. As of March 31, the fund held 22 stocks, almost all of them large caps. Unlike their predecessors, Davis and Feinberg are not sitting on cash: roughly 95 percent of the fund's $3.5 billion was invested in equities as of the end of March.

One of the tenets of value investing is "eating your own cooking," which means throwing your own money into the fund along with your clients' money. In a letter to shareholders in April, Davis said that families and co-workers of the new managers invested $50 million in Clipper in January.

The biggest change may be the new managers' fee structure.

Clipper paid 1 percent advisory fees to Gipson's team, Pacific Financial Research Inc. One percent may not sound like much, but it added up: The Fund paid Pacific $62.4 million in 2005, $69.4 million in 2004 and $56.9 million in 2003.

Davis has reduced the fee substantially, setting up a sliding scale that starts at 0.65 percent for the first $500 million of net assets in the fund and gets lower. He has promised to waive all fees in excess of 0.50 for 2006.

There's obviously no way to say if the future at Clipper can match the past. But there's a lot to be said for carefully picking a small portfolio, then sitting on it. Ditto for cutting fees. In a marketplace where many mutual funds seem bent on wringing the most they can from clients, Davis and Feinberg may be the exception. In 20 years or so, we may know for sure.