To find those long-term outperformers, I require that passing funds must have recorded average annual returns at least equal to the Standard & Poor's 500 Index ($INX) over the past one, three and five years.

Screening parameter: 1-year return greater than or equal to S & P 500.

Screening parameter: 3-year return greater than or equal to S & P 500.

Screening parameter: 5-year return greater than or equal to S & P 500.

It's about more than returns

Whether you're talking about individual stocks or mutual funds, many analysts consider risk-adjusted return -- which compares historical returns with historical volatility -- to be more significant than returns alone.

Morningstar uses its own proprietary version of risk-adjusted return to rate all funds with at least a three-year history from one to five stars, with five being best. Funds with the highest risk-adjusted return within the same category -- for example, small-cap growth and technology -- get the highest ratings.

There's no guarantee that a five-star fund will continue to outperform lower-rated funds, but in my experience it's a good place to start. I've had the best results sticking with five-star funds, but consider adding four-star funds to the screen if you want to see more funds.

Screening parameter: Morningstar star rating = five stars.

Minimize volatility

Though Morningstar's star ratings consider volatility, a high-volatility fund can still gain a high star rating if its returns are high enough. So to minimize risk, you need to consider volatility by itself.

Morningstar's risk rating compares each fund's historical volatility to that of other funds in its category. The possible ratings are high, above average, average, below average and low. While the lower the better, low-rated funds generally don't produce market-beating returns. So I accept both low and below-average ratings.

Screening parameter: Morningstar risk better than or equal to below average.

Avoid new managers

The historical risk-and-return figures are meaningless if the fund manager responsible for those results has jumped ship. Because I base my analysis on five-year returns, it makes sense to require that managers have been on board for that time.

Screening parameter: Manager tenure greater than or equal to five years.

Watch those expenses

The expense ratio is the percentage of a fund's assets that goes to pay a fund's operating expenses, such as salaries, office rents and marketing. The expense ratio directly subtracts from your returns.

For example, say two funds each earned a 15% return on their investments last year. Fund A's expense ratio was 0.5%, while Fund B's ratio was 2.0%. Fund A's shareholders enjoyed a 14.5% return for the year, while Fund B's shareholders netted only 13%.

While some expense ratios are as high as 2.5%, you should be able to find a good selection of funds with ratios below 1.5%, and that's where I set my limit. The next lower expense ratio selection available on Morningstar's screener is 1.0%, and not many funds would meet that requirement.

Screening parameter: Expense ratio less than or equal to 1.5%.

Sorting through the list

Click "show results" to see the list of qualifying funds. When I ran the screen, the screener listed 45 funds. However, many are available only through financial advisers or corporate retirement plans. To screen those out, click on a fund name to display the fund report and then navigate to the purchase report, which lists brokers handling that fund. If your broker isn't listed, the fund probably isn't available to individual investors. In the end, I came up with only five widely available domestic stock funds:

When I changed the "fund group" selection to "international stock," my screen listed 21 funds, but only four appeared to be available via online discount brokers:

You can use MSN Money's top 25 holdings, report to see the number of stocks in any fund's portfolio, as well as the list of top 25 stocks by percentage of the fund's assets. Funds holding 100 or more stocks are generally less volatile than those holding fewer stocks. Also, by examining the top 25 stocks, you can see whether the fund is betting on a particular sector or industry.

Pay attention to the standard-deviation figure listed both on the screen results and in the portfolio report on MSN Money. Generally, when you're comparing two funds, the one with the lower standard deviation is safer.

The portfolio report also shows the fund's weighting in terms of industry sectors. Funds with heavy weightings in a currently hot sector are riskier bets than more diversified funds. The portfolio report also shows the asset allocation among stocks, bonds and cash.

Funds holding 10% to 20% bonds are usually less volatile than funds with no bonds. However, they typically produce lower returns in strong markets.

Check each fund's returns for individual calendar years on MSN Money's returns report, and avoid funds that racked up losses in years when the market was strong.

Take time to review all of the available information for each fund. The more you know about your funds, the better your results.

At the time of publication, Harry Domash did not own shares of any mutual fund mentioned in this column.