There are two main reasons why a new fund has a better chance of outperforming its older peers. If you trade stocks, you probably know the first reason very well the buy decision is a lot easier than the sell decision. Most mistakes are made not when buying, but when selling. In a new fund, as the money rolls in, the job of the portfolio manager is mostly selecting and buying stocks. A reasonable degree of diligence on the buy side can give rise to the fund outperforming its peers.
Little energy needs to be spent on the sell side.
However, after a year or two, the fund manager has to spend increasingly more of his or her energy on the sell decisions. If they are not as effective as the buy decisions, the portfolio performance may start sagging. After a few years, the fund may just become an average performer, or worse. That may improve their efficiency. The second reason why new funds can outperform the index is their asset size.