Fund size isn't such a problem for managers who specialize in large-company stocks. These issues have so many shares available that it's hard even for mutual funds and other big institutional investors to influence their prices. And for bond funds, large asset size can be a blessing, since it implies economies of scale that can reduce a fund's expense ratio.

Another factor to watch is a fund's portfolio turnover. This reflects the frequency with which a manager trades stocks or bonds--higher numbers indicate more activity. Since trading costs money, funds with high turnover rates ring up higher shareholder-borne expenses. High-turnover funds also typically are "tax-inefficient." The more a manager trades, the more capital gains he or she will incur. The profits on these gains must be paid out to shareholders each year, and they're taxable. That can be annoying for investors who hold their shares in straight, unsheltered accounts.

Shareholder services can be important. Today, virtually all fund groups offer such features as dividend reinvesting, retirement accounts, free switching among portfolios and access via toll-free phone lines. But certain groups remain behind the curve in providing other services, such as Internet access to your account. Also, companies vary in terms of the breadth and quality of shareholder reports and educational materials. But, most critical, many fund families lack a broad lineup of funds.