For advisors who choose stocks based on sharp management and who also like indexing, there's an option that promises both. After 20 years of research on entrepreneurial managers, Babson College professor Joel Shulman believes he has found his "Global Entrepreneurs"-the 415 best-managed public companies in the world with a market capitalization above $150 million.

He's providing a benchmark, a low-load mutual fund and customized funds for institutions. "We've created an index and fund that reflect what active stock-pickers look for in managers," he says.

What makes a Global Entrepreneur? Shulman's picks all have low costs and manageable debt, concentrated ownership, well-paid executives who stick around and family involvement.

"Entrepreneurs want close control, and we think they'll run the company better," he says. Shulman adds that he looks for an entrepreneur who has a good team. "We don't like bureau- cratic organizations with infighting."

Shulman also looks for companies that grow through strong alliances.While Starbucks was "investing in bricks and mortar," a small Vermont-based rival, Green Mountain Coffee, put its coffeemakers into grocery stories and gas stations, he points out. Entrepreneurial firms keep their costs low, Shulman says, because the members have their own money invested. "It's the venture capital model-find great managers and back them. But I don't have the liquidity problems of venture capital."

The resulting group is much like a small-cap growth fund, with slightly more risk, and about 20% in emerging markets. It is quite diversified, with 20% value stocks and 30% either mid-cap or large. About 60% of the Entrepreneurs are U.S. companies. The group includes 109 industries, with the biggest category, 20%, in information technology.

Shulman's picks included six of the 10 fastest-growing stocks over the last 10 years, including Intuitive Surgical, Coach, Cognizant Technology, Cliffs Natural Resources, Urban Outfitters and Apple. Who did he miss? Carmax, Southwestern Energy, FLIR Systems and Priceline.cm.

In the five and a half years from August 2005 through the end of December, a period that includes both a boom and bust, the strategy returned more than 12% annually, on average. Shulman's portfolio outperformed the MSCI World Index, the Russell 3000 and the S&P 500 by at least 9% per year on average on a risk-adjusted basis.

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