There hasn t been a worse time to launch a mutual fund, and yet companies keep trying. Since the market peaked three years ago, more than a thousand new funds have opened their doors. Attracting investors is always a challenge for a new fund because the firms that rate them rely heavily on three-year performance. In fact, many fund companies hold off on a real marketing push for a young fund until it passes that three-year mark. Funds that launched during the last three years are at a particular disadvantage: Their entire track records were written as investors were playing catch-up in a volatile market.

Still, a significant portion of the funds on the market today were launched during this period. Just under 15% of the bond and domestic equity funds that Standard & Poor s rates are less than three years old. (The firm starts rating funds at 6 months.)

Because most research relies on three-year performance data, investors considering a new fund will have to do a little more digging to determine if it s right for them, says Todd Rosenbluth, a mutual fund analyst at Standard & Poor s. Investors should check out the fund s expense ratio and turnover rate, and see if there have been any management changes. They ll also have to make a judgment about the quality and risk profile of the fund s holdings. A shorter history means investors won t be able to see how the fund has performed in both bear and bull markets, Rosenbluth says. But investors shouldn t necessarily rule out young funds, he says.

Morningstar found 1,071 new funds that have launched since Oct. 9, 2007. We looked for low-cost funds and found the top-performing young funds year-to-date but ruled out funds that have returned less than 1% since their inception.

The funds we found pursued different strategies. The John Hancock Global Opportunities Fund (JGPNX) is a value-oriented fund that typically has at least 40% of its assets in international stocks. The Walthausen Small Cap Value Fund (WSCVX) sticks closer to home, focusing on small-cap stocks with potential for growth. The Northern Multi-Manager Emerging Markets Equity Fund (NMMEX) allocates portions of its assets to sub-advisors who may have different strategies, but all of the fund s assets are invested in emerging markets.

The Criteria: The funds in the table are less than three years old. They re open to new investors, require less than a $5,000 minimum investment, and charge an expense ratio less than 1.5%. We did not include load funds.

Clarification: Although the F-2 share class of the Small Cap World Fund listed above launched on Aug. 1, 2008, the fund launched on April 30, 1990.