A fund could have shown a solid rate of return for a particular period, but that could be a result of its holdings having reached peaks from which they might then plateau or decline. A fund is only as good as its management. And fund managers can change. The Magellan Fund survived Peter Lynch's departure, but other funds have not done so well when a dynamic and talented manager has left. There are some exceptions, such as funds in the American Century family, which have no individual manager but are guided by committee.
Past performance is no indication of future results.
This disclaimer should serve as a reminder that last year's hot fund may be this year's big loser. Examine the fund's holdings. Understand the fund manager's style and the fund's strategy. Ensure that the fund's style and strategy fits the investor's goals. These are the first steps towards successful fund investing.