It often pays to stick with unpopular funds.

Selected American Shares (SLASX) has garnered substantial attention from the media for all the wrong reasons. Journalists such as Chuck Jaffe, a senior columnist for MarketWatch, have panned the fund and a number of lesser luminaries at regional outlets have piled on.

The fund’s managers have achieved notoriety on account of a large stake in China-based Sino-Forest Corp (OTC: SNOFF). A commercial forest plantation operator, the firm has been accused by Canadian short-sellers of overvaluing assets and engaging in deceptive accounting practices. Following a series of Chinese reverse-merger scandals, shares of Sino-Forest plummeted to $3 from about $30.

Rather than abandon the position in Sino-Forest, Selected American Shares co-manager Christopher Davis increased the fund’s stake in the beleaguered Chinese firm, stating that the market overreacted to the charges levied against Sino-Forest.

Under normal circumstances, such a move wouldn’t attract much attention. But selected American Shares had devoted 1.4 percent of its investable assets to Sino-forest, and Davis Advisors—Selected American Shares’ advisor—held about 10 percent of the company’s stock across its lineup of funds. Additionally, Davis and co-manager Kenneth Feinberg have found themselves under a microscope amid flagging performance for their once high-flying fund.

Selected American Shares posted a 39.4 percent loss in 2008 and fell to the bottom-third of the Morning-star Large-Blend category, as Davis and Feinberg stuck with financial names such as AIG (NYSE: AIG) and Merrill Lynch throughout the credit crisis. However, 2009 appeared to vindicate their decision. A rally in financials propelled Selected American shares to the top quartile of its category, with a 31.6 percent return. After posting average returns in 2010, the fund has fallen from grace this year, as positions in financial stocks have dragged the fund to the bottom of its category.

The fund’s status as the market’s whipping boy du jour may not be entirely justified. The Sino-Forest debacle, though troubling, is really a red herring. In truth, the position in AIG has been the millstone around the fund’s neck.

Despite its categorization as a blended fund, Davis and Feinberg adopt a deeper-value, almost contrarian approach to investing. Managers seek durable businesses at attractive prices relative to historical and forecasted earnings, as well as undervalued companies in the US and overseas. Management’s decision to buy or sell a stock is guided by a 10-year outlook for the global economy.

Consequently, the portfolio comprises high-conviction stocks that Davis and Feinburg will hold for the long term, as evidenced by the extremely low annual turnover rate of 9 percent.

That investment approach has generated consistent, respectable annual gains that have produced a 15-year return of 8.6 percent, outperforming both the S&P 500 and its peer group by more than 2 percent. Selected American shares has also outperformed the S&P 500 in 100 percent of the rolling 10-year periods since 1993. The fund has hit a rough patch, but it’s endured tough times before, most notably in the mid-1990s. There’s no reason to believe it won’t recover in time.

Historical precedents aside, the fund boasts other attributes that should draw the attention of savvy investors willing to read between the lines. Selected American Shares carries an annual expense ratio of just 0.93 percent, well below the average 1.25 charged by its peers. Both Davis and Feinberg have cast their lot with retail investors by socking away more than $1 million of their own money into the fund—more than enough financial incentive to ride out bouts of underwhelming performance with shareholders.

Management has also proactively set what are known as asset break points, asset levels at which the savings generated by economies of scale are passed on to investors. The fund has also continued to build out a team of analysts, rather than cut costs by slashing headcount during the recession.

There’s no way to ignore the fund’s recent underperformance. But its favorable characteristics make Selected American Shares a very attractive mutual fund. Given that management has maintained the integrity of its investment process, the fund is likely to stage a recovery.