[Nick1984]

Finding a good fund takes a lot of work. I work myself in the financial services industry and finding a few good funds out the the hundreds on offer is a nightmare thats why so many people go to financial planners.

If you're going to do it yourself I would suggest that you first decide what type of fund manager you like: value, growth, ethical etc...
Once you find what type of fund manager you like you need to look at the index the fund is basing itself off and how its returns compare to its benchmark index.

Next comes fees. Like brown just said, fees and commissions can eat up a lot of your money. Retail funds charge up to 4% entrance commissions in Australia with trailing commission as well every year on top of standard managent fees, possible administration and member fees as well. Returns on the fund should really be shown inclusive of fees to be as accurate as possible.

You also need to make sure that you invest your funds according to your risk preferences. If you're very conservative there is little point in overexposing yourself to a highly volatile sector such as international shares or in geared funds.

All that being said, fund managers do provide a relatively hastle free way of investing surplus cash flows which can sit and grow in the long term.