What Performance Number Should I Look At?:

The three-year of five-year total return is the most important number to consider when choosing a mutual fund. That number will give you a good impression of the fund’s overall performance and stamina.

You can check a fund’s performance on the fund company’s website, at mutual fund tracker Morningstar.com or at financial news sites like Yahoo! Finance.

Don’t make your buying decision on just great recent returns, but do look at one-month, three-month or year-to-date returns. Recent returns give you an idea of how the fund is doing now. But there’s no telling what the market will be like next month.
What Should I Compare My Fund’s Total Return To?:

Each fund has a benchmark, an index that you can judge it by. Most broad stock market or big company funds compare themselves to the S&P 500. Funds that specialize in a sector, size of company or foreign country will use another index. You may also be able to compare your fund to the particular Lipper Index that tracks mutual funds by type.
The Morningstar Style Box:

Morningstar.com provides a benchmark and the nifty Morningstar style box that categorizes how big and aggressive your fund's companies are.

The style box is like a tick-tack-toe board with nine squares. One box marks where your fund stands. The bottom row is for small companies; the top for big companies. The left column is for value-oriented companies (undervalued or slow-growing). The right column is for growth companies. The middle is the middle.read more