Founded in 1995, Ameristock (AMSTX) has established an impressive track record by following a value approach to investing in blue-chip stocks. Focusing on companies with market capitalizations of at least $15 billion, the fund narrows down this universe by targeting stocks that have lower price-to-earnings and sales-to-book ratios and pay larger dividends than their peers. These investments account for 80 percent of the fund’s holdings, while the remainder is allocated to traditional growth companies that meet the fund’s capitalization requirements.

That commitment to value and quality has enabled the fund to outperform the S&P 500 by 1.7 percent and the large-value category by 0.6 percent over the past 10 years. Since its inception, the fund has generated a return of better than 6.5 percent. As of May 21, the fund is up 1.2 percent in 2009; the S&P 500, on the other hand, is down 1.8 percent.

Despite this performance, the fund has just $178 million in total assets.

Part of that could stem from the makeup of the fund’s portfolio; there’s nothing particularly sexy about its staid investment strategy. Holding stocks such as Verizon Communications (NYSE: VZ), Cisco Systems (NSDQ: CSCO) and Colgate-Palmolive (NYSE: CL), lead manager Nicholas Gerber doesn’t go out on too many limbs. He just looks for great names that trade at reasonable valuations and pay sustainable dividends. And if the market environment isn’t to his liking, Gerber has the flexibility to increase the fund’s cash position as conditions warrant.

With that kind of approach, CNBC and the other financial networks aren’t tying up his phone, and Gerber isn’t the sort to court that kind of attention.

And operating such a small shop doesn’t leave much time for self-promotion. Gerber and Andrew Ngim, who was brought on in 2000 to manage the fund’s day-to-day operations, work with a small staff consisting of just two analysts. That’s par for the course with Gerber, who initially ran the fund from his home. And with a fairly limited universe of stocks to choose from, he doesn’t require a large retinue of analysts and managers.

That, in turn, has lead to a relatively low expense ratio of just 0.83 percent and limited turnover in the portfolio to 14 percent. Not only is the fund cheap, but it’s also a true no-load offering and doesn’t charge 12b-1 fees. And the lack of portfolio churn helps to minimize volatility and makes it extremely tax efficient by minimizing capital gains exposure.

That doesn’t mean that the fund is without risks. For starters, Gerber and Ngim run a heavily concentrated portfolio of around 30 holdings, making it difficult to avoid overexposure to favored sectors and making the fund susceptible to bad news from individual names. And the duo routinely makes heavy sector bets.

Because of its investment criteria, the fund tends to run heavy on technology stocks, which currently account for more than a third of the fund’s holdings.

That weighting has paid off during the current downturn; earnings in the technology sector have held up despite the falloff in business spending. Nevertheless, the technology sector has traditionally suffered a great deal of volatility.

And Gerber and Ngim appear to be building another sector bet, steadily adding to their holdings in Lowe’s Companies (NYSE: LOW) and HomeDepot (NYSE: HD). That’s paid off well so far–both home improvement retailers reporting better than expected first quarter earnings–but there’s always the risk that those numbers were just a flash in the pan. Real estate continues to face substantial headwinds as foreclosures increase the supply and further pressure home prices.

Despite these drawbacks, Ameristock is an excellent candidate for investors with long-term horizons. The fund won’t make you rich, but it does offer consistently impressive yields–almost 7.1percent as of writing–and usually outperforms the S&P 500.