Well, so far so good.

Since the launch of my Champion Funds newsletter service back in March, we've recommended 18 top-notch funds to subscribers, 16 of which we're currently tracking on our online scorecard. (Tracking begins for the latest pair of picks a month after I give 'em the nod.) Of those sweet 16, all but one have made money for our subscribers, and the funds look rock-solid on a relative basis, too: All but four are beating their respective indexes, some by huge margins.

For example, our most successful Fund of the Month -- one that counts companies such as Sony (NYSE:SNE) and Vodafone (NYSE:VOD) among its top holdings -- has returned a whopping 26.7% through yesterday's close of business. That mark, for the record, surpasses that of Vanguard's S&P tracker, 500 Index (FUND:VFINX), over the period by more than 19 percentage points.

Another fund, a value-leaning pick that tilts toward such stocks as ConocoPhillips (NYSE:COP), ChevronTexaco (NYSE:CVX), Citigroup (NYSE:C), and Verizon Communications (NYSE:VZ), has more than doubled the S&P's return since appearing in our pages. We don't offer our list of recommendations as a portfolio -- folks need to cherry-pick the Champs that work with their asset-allocation plan. All told, however, our funds are beating their bogeys by nearly three percentage points, a significant margin in the wonderful world of mutual funds.

But you know what? As Bill Murray and his happy campers once chanted in the classic teen flick Meatballs, it just doesn't matter.

It's always more fun to be up than down, of course, but short-term performance doesn't mean a whole heckuva lot, especially not when it comes to mutual funds. They are, after all, are the ideal investment vehicles for long-term types, particularly those who have much better things to do than check their stock portfolios every five minutes.

If, say, you happen to have an "active trader" in the family, and if also, say, you just happen to attend a family reunion where that guy (and it's always a guy) is attendance, I'm pretty sure you know what I mean.

That's why, as I do the research that leads up to each issue's recommendations, I take a hard look at long-term performance. I aim to pick funds that have what it takes to beat the market over the next three to five years, and so that's the number worth touting -- provided, of course, that it belongs to the fund manager who's currently calling the shots.

Which is precisely where many otherwise smart investors go wrong, albeit for reasons that are easy to understand. Fund companies are notorious for touting their most successful funds' historical track records and star ratings. Only rarely, however, do they bother to mention whether the manager who is responsible for that record and those stars is still on the scene. So here's a word to the Foolishly wise: If he isn't, chances are strong that you shouldn't be, either.

The price you pay
Another major sticking point with me when it comes to recommending mutual funds is its price tag or, as it's otherwise known, its expense ratio. The typical domestic stock fund will shave about 1.5% off your returns each year for expenses. Some of my favorite funds, on the other hand, charge less than 1%.

One recent Champion Funds recommendation, for example, has surpassed the S&P over both five- and 10-year trailing periods, boasts a long-term manager who's been in place since 1987, and -- get this -- comes with an expense ratio of just 0.91%. That's a potent combination of qualities, one that should certainly help keep returns competitive over time.

As I never tire of pointing out, with mutual funds, you usually get what you don't pay for.

It's Stratego!
Another salient quality of any fund that might wear the Championship label is a sensible stock-picking strategy, one that successfully balances risk with potential reward. Funds that placed big ol' bets on tech in early 1999, after all, didn't look quite so red-hot come early 2000. Indeed, even index investors got caught in the crosshairs of that particular spurt of irrational exuberance: Those who plunked down a chunk of change on Cubes (AMEX:QQQ), the exchange-traded fund that tracks the Nasdaq 100, are still waiting for a return on their investment. And, sad to say, they'll likely be waiting for quite a while longer.

No, to make the grade as a Champ -- and I do grade the funds, by the way -- a manager has to pursue a valuation-conscious stock-picking strategy and employ an approach to what the pros call "portfolio construction" that places an emphasis on meaningful diversification. Generally speaking, that is, I want to see a portfolio of stocks culled from across the market's various industries.

To be sure, I'm open to managers who make intelligent "sector bets." Having the courage of your stock-picking convictions is what makes it possible to beat up on the market. But when managers place bets with my money or yours, they better have a clear rationale for it. To that end, Champion Funds also features monthly interviews with some of the finest money managers in the business.

Do we cover all the bases or what?

Shannon Zimmerman played third base in Little League and bass guitar in his college rock band, the Field Trips. Perhaps you've heard of them? No? Well, you can always test-drive his newsletter for 30 days (for free). Shannon doesn't own any of the securities mentioned. The Motley Fool has a strict disclosure policy .