Looking for the better mutual funds

Regular readers of this weblog might remember that I started last year to advise some friends on what Chinese stocks to invest in. I reported initially regularly about it, but as things go, we were all too busy to get involved in the nitty gritty of the stock market and hoped our mutual funds would do well.
This week we had a review of the results and to be honest with you, they were not good. Not because we lost our invested capital, as some of my foreign friends and readers had predicted, but because we our initial investment only grew with 90 percent. That was under-average as some mutual funds performed much better with returns of up to 150 percent.
Since there are no real indications for a negative sentiment on the market, my friends not only decided to increase their initial investment, but also to shift to a larger number of better performing mutual funds. With the help of the Chinese edition of Morning Star we are now trying to identify those better ones. We can now see the performance of most funds over two, and sometimes three years and have a close look at their portfolios.
In terms of performance, we not only look at the total growth of the funds, but also look for a pattern. In 2006 anybody could have made a profit, since the market only went up. In 2007 the market was much more volatile, so if a mutual funds performs better in 2007 than in 2006 it shows the better management skills.
Comparing the companies the better performing funds invest in with the others shows also interesting patterns. Telecom is well represented, but remarkably China Unicom is doing much better than the larger other three, China Mobile, China Netcom and China Telecom. Now, with the possible break-up of China Unicom, I only see that investment in a positive light.
Banking is well represented too, but the second-tier banks like the Industrial Bank or the Merchant bank have the preference of the better mutual funds. ICBC, Bank of China, the Bank of Communication: none are in their portefolios.
I have not seen any airlines in those lists and logistics (against my expectation) was also not heavily represented. Oil of course was, retail not.
Well, we are still roaming the Morning Star database, but if you have good ideas on where we could put our money, do let us know.