This is an interesting article on evaluating mutual funds from BusinessWeek Online: “Is Your Fund Manager on Your Side?” Excerpt:
How can you tell whether a fund is likely to put its shareholders first? Unfortunately, there’s no litmus test. Nor is there a guarantee that a fund with strong policies won’t mess up. . .Nonetheless, you can take steps to protect yourself. Start by examining the extent to which those running your fund — the directors and managers — are motivated to act in your interests. To assess that, ask your fund for the Statement of Additional Information (SAI) that it’s required to file annually with the SEC, or download a copy at sec.gov. (Hint: look for filings with the number “485”). Here you can find out how much the directors are paid. . .