Hardly a day goes by when a fund company doesn't announce that one of its funds is changing managers. Often, you won't know it until you get a notice in your mailbox or an announcement in your email.

So what should you do? Sell the fund or stay the course? What questions should you ask?

"The two biggest questions you should ask are: First, what's the new manager's background and track record? And, second, are they changing the strategy, and if so, what does that mean for my portfolio?" says Russel Kinnel, director of fund research at Chicago-based fund tracker Morningstar.

Whether a portfolio manager change is a good or bad thing for a particular fund is not always readily apparent to investors. If you're unsure whether to pull the plug, Kinnel recommends you check back at least a couple of times after the change.

"You want to see what's going on a year after the change because these changes can be subtle, and sometimes fund companies aren't that good at communicating what's going on," says Kinnel. "You want to assess, 'Is this a good manager? Is this a strategy I still like?' And if you're not happy, you can look and see if there is something better."

A Good Fund Manager Change

In the case of a manager change at Fidelity Dividend Growth Fund, you would have been wise to stick with the fund, even though the new manager, Larry Rakers, dramatically changed the fund's strategy when he took over in 2008 from previous manager Charles Mangum, according to Kinnel.

"It was definitely an upgrade," says Kinnel. "Dividend Growth had been sort of a megagrowth high-quality fund, and under the new manager, it became more widely dispersed across the style box," Kinnel says, referring to the Morningstar grid that identifies style on a spectrum from value to growth, and small- to large-capitalization stocks. "Rakers has done a good job since, so you'd have to say it was a positive."

Investors should be especially on their guard when star-driven funds change managers, and assess the change carefully, warns Michael Iachini, managing director of ETF research at Charles Schwab Investment Advisory, an independent affiliate of Charles Schwab & Co.

"Star-driven funds are often built around the genius of an individual, and if that fund loses that portfolio manager, that's going to be a problem for the fund," says Iachini.

Iachini cites as an example Fidelity Magellan Fund, which was a great performer under legendary manager Peter Lynch. Lynch stepped down in 1990 after a 13-year reign in which the fund had averaged a 29% annual return, according to Fidelity Investments. The fund's reputation over time helped its assets grow to $100 billion, but it has since struggled, shrunk in assets, gone through several managers and lost much of its luster.

Sizzling Funds Can Go Cold

Bill Miller, star manager of Legg Mason Capital Management Value Trust fund, posted an industry-record streak of beating his benchmark, the Standard & Poor's 500 index, for 15 straight years between 1991 and 2005.