This paper intends to exploit the information contained in the fund holdings as an identification of fund manager skills. Specifically, using the idiosyncratic risk contained in fund portfolio holdings as a proxy for fund manager`s private information, this study examines the relationship between fund performance and idiosyncratic risk, so as other characteristics of fund. It employs the data of U.S. equity funds collected from CRSP and Thomson Reuters over the period 1992-2007. The findings indicate that the idiosyncratic risk between portfolios of winning funds and losing funds is significantly different. Also there is a significant positive relationship between idiosyncratic risk and fund abnormal returns, indicating that idiosyncratic risk is correlated with traditional performance measures capturing managerial skills and is consistent with the private information argument. Furthermore, the results also find that funds with a senior manager or with a management structure as solo-managed can utilize the private information in more efficient way.