That doesn’t mean, however, that historical returns can’t provide useful insight into a fund. In particular, they tell us how well a management team and their strategy performed for existing investors, and how in sync that strategy was with what’s happening in the broader market.

“When it comes to making investment decisions, all we really have to rely on is what happened in the past,” says Leslie Beck, owner of Compass Wealth Management LLC in Rutherford, N.J. While it might be foolish to expect that history to repeat itself, Ms. Beck still finds careful study of a portfolio manager’s record to be useful. “Without that information, I don’t have any sense of how a manager might fare in a time of crisis, or whether the risks they take are paying off.”

That is one reason why The Wall Street Journal singles out a handful of actively managed U.S. equity mutual funds that have trounced their peers (based on their record over the previous 12 months) at the end of every quarter. Another reason is to show how those managers have been rewarded in the short term, either for high-risk investment decisions made years ago, or because they have been in the right place at the right time.

But is a rolling 12-month analysis the right time frame to use? Certainly, some Journal readers believe we should analyse three-, five- or even 10-year investment returns before identifying a particular fund as a “winner.”

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Scott Opsal, director of research at Leuthold Group, a Minneapolis-based investment-research firm, is one of those critics. “If you owned the top-performing stock for each of the past 10 years, its median one-year return was 181%, and any mutual fund that had, say, a 3% position in that stock would have seen its overall returns boosted by more than 5 percentage points,” he says. “So, one-year returns really come down to whether or not you own one of those biggest out-performers, whether a big tech giant or a company that was the target of a buyout. That is not a pattern that I would like to invest in.”

What that boils down to is even the best-performing managers acknowledge that while they pick stocks they expect to outperform, which ones actually do in any given year depends on events beyond the managers’ control. They may believe that a stock will do brilliantly, but if there is a trade war, or a takeover, it could do better, or worse, than they expect, and in a different time frame.

A recent review of funds that have dominated the Winners’ Circle list at The Wall Street Journal suggests that Mr. Opsal’s analysis is on point. Many of the top performers in the short term have owned big, outperforming stocks (like Apple, Facebook and others), and have maintained overweight positions in them. Many also have been concentrated funds, with managers holding as few as 25 to 30 stocks to ensure that their portfolio will be disproportionately rewarded if one or two of these are among the year’s best performers.

Repeatability of that outperformance is a big issue for investors, who can’t retire based on a single year’s gains but must rely on their investments’ ability to deliver a string of solid returns over decades to provide them with a decent nest egg.

“I can’t guarantee much, but I guarantee the fund that did the best in the last 12 months won’t be the one that outperforms over a 10-year time frame, and often that’s what has the biggest impact on my clients’ success,” says Kelly Graves, executive vice president of Carroll Financial Associates Inc., an independent financial advisory firm in Charlotte, N.C.

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In fact, for Mr. Graves, one-year returns serve as a kind of contrarian indicator. “I do want to know what were the hottest funds in the previous year, because if all the money is flowing into a specific style or fund, it’s getting too hot,” he says.

Indeed, the history of Winners column seems to support that. Funds with outsize exposure to crude-oil stocks topped that list in the aftermath of the Arab Spring in early 2011 but vanished from the rankings thereafter, as energy prices have languished. Microcap stock funds had a moment in the sun, as did managers who profited (even if briefly) from heavy overweight positions in biotechnology startups. A handful of managers have made repeat appearances in this column, and it isn’t uncommon for one or two individual funds or teams to repeat a top performance for two or three quarters in a row.

“It’s whether those returns are repeatable over more than a single year that is crucial,” says Jack Ablin, chief investment officer of Cresset Capital Management LLC, a Chicago-based wealth-management firm. “A one-year return is, I would argue, about 90% random. Certainly, it’s too short a period for someone to declare victory.”

Having said that, the big question remains: What is the right historical period to study? Five years? Ten years? Longer?

That question has become even trickier to answer as the bull market approaches the end of its 11th year. Anyone studying a fund’s 10-year record today won’t get any insights into how well managers handled the last great financial crisis, for instance. Instead, they’ll have to rely on studying much shorter periods of financial stress, such as 2015 or the final quarter of 2018, to get insight into a manager’s ability to limit the extent to which his or her fund participates in a selloff, or the degree to which it beats the market in the subsequent rebound.

Studying long-term returns can become difficult for other reasons. The longer the time period you’re trying to evaluate, the higher the risk that there has been some management turnover and that the fund’s current strategy and style has altered as a result.

Then there is the fact that short-term success can distort a fund, as investors respond to outsize gains by a management team by flooding it with new cash.

“It may be easy to outperform with a couple of good ideas if you have a tiny fund,” says Mr. Ablin. But trying to repeat that success running billions of dollars rather than, say, $50 million, requires a management team to try to come up with an unfeasible large number of stocks that they expect to do extraordinarily well “to move the needle,” he says. “As the successors to Peter Lynch at Fidelity’s Magellan Fund could tell you, that’s tough.”

For most investment professionals, grabbing hold of whatever insights they can identify by studying an array of historical return patterns appears to the answer. Toss out the extremes – the very short-term and the very long-term returns – and emphasise how a fund has done in the medium term, taking into consideration asset size, style and any management-team changes.

Potential investors also keep an eye open for any patterns.

“If I see a blip in absolute or relative performance in one year, that won’t alarm me that much,” says Ms. Beck. “You can forgive that; it was probably a fluke. But if it continues, while the fund’s peers still do well, then there is an issue.”

Conversely, a fund that struggles against broad market benchmarks in both the short and longer term may do so because its managers are floundering – or because its strategy is simply out of sync with the market cycle.

“If you own a fund whose style is in sync with the market, it had better have been delivering returns,” says Mr. Opsal. “If its style is out of favour, well, underwhelming results aren’t the problem, because we’re in a market where growth rules. The bigger problem to look out for is being able to identify which funds should be doing well, but aren’t.”

– Ms. McGee is a writer in New England. She can be reached at [email protected].