Performance results, expressed as a percentage, always include reinvested stock dividends and bond interest payments, if any, as well as the price changes for the investments held.

Also, except for sales charges, or loads, if there are any, fund expenses always are subtracted from published performance results.

But though mutual fund performance figures are both visible and reliable, they can be misleading.

Most important, as all fund prospectuses warn, past performance might not repeat in the future. Indeed, funds that show up on top-performer lists in one quarter or year often don't repeat as champs the next time around. Although some managers have shown an ability to "beat the market" over many years, most have not. And even the best don't excel consistently. The other key problem with performance is that there's disagreement over which time periods to emphasize. Certainly you shouldn't focus too heavily on a fund's returns generated over short periods such as several weeks or months. But what about the last one year, three years or five years? Perhaps the best advice here is to favor funds with lengthy track records that encompass different market phases.

Wilkinson looks at a combination of performance over one, three and five years.

"One year is not long enough, but there's often too much change going on over five years," he says. "I find that three years is just about right." But Brouwer says he favors funds that have demonstrated superior performance for at least five years.

And how should you regard a fund's performance if the manager who built the record departed recently? Although this won't necessarily invalidate the numbers--especially if he or she was part of a team--it does raise a red flag.

You need to dig deeper to get a feel for whether the fund's good record can continue under the new regime. If you don't want to worry about managerial turnover, stick with funds run by a team.

The upshot is that you should try to favor funds with a history of good performance generated by the same manager or a stable management team. But don't immediately eliminate funds from consideration simply because they haven't been around for 10 years. You might find your choices severely restricted.