Dodge & Cox Stock ( DODGX) returned 15% annually in the five years through March 2004, outdoing the S&P 500 Index by more than 16 percentage points. But then the picture changed. For the five years ending this March, the fund lost 6.6% a year on average, lagging behind the benchmark by 1.8 percentage points.

Does past performance provide any guidance about future results? Investors' frustration is particularly severe these days because of the market turmoil. Funds that once ranked at the top of the standings have suddenly sunk into the cellars.

But the recent erratic showing of funds doesn't mean investors should ignore past performance. By studying performance carefully, investors can get an idea of how a fund is likely to fare in the future relative to benchmarks.

Even the best managers suffer bad stretches, and a single poor year can devastate five-year returns. To get a clearer picture of long-term patterns, examine the results one year at a time.

Consider Dodge & Cox. Since 1980, when Morningstar started tracking the fund, it had outdone the S&P 500 in 17 years and trailed in 12.

While the numbers bounce up and down, there are few surprises. Dodge & Cox is a large-value fund, and it tends to outperform when its style is in favor. From 2000 through 2006, value stocks led the markets, and Dodge & Cox clobbered the S&P 500. Then with financial and other low-priced stocks struggling in recent years, large-value funds trailed the index, and Dodge & Cox also lagged behind.

In 2008, the fund lost 43.3%, trailing the S&P 500 by 6 percentage points. That was a disastrous result, but not the worst relative showing. The fund trailed the benchmark by 23 percentage points in 1998 and by 9 points in 1991, other years when investors shunned financial and value stocks.

Despite the disappointing years, Dodge & Cox has rewarded long-term investors. For the 20 years ending in March, the fund returned 9.1% annually, compared to 7.3% for the S&P 500.

Can Dodge & Cox continue winning over the long term? Yes. Because the portfolio managers are not changing their strategy, there is good reason to believe the fund can outdo the benchmarks in the future as it has in the past.

Over the decades, Dodge & Cox has followed a consistent approach, buying solid stocks that are temporarily selling at cheap prices. After buying, the portfolio managers hold for the long term. Many stocks have been in the portfolio for more than 10 years. The strategy has rarely varied because portfolio managers tend to stay at the firm for years. John Gunn, chairman of Dodge & Cox, has been a portfolio manager on the fund since 1977.

Other large value funds with long-tenured managers that have crushed the S&P 500 over the past 15 years include American Century Value ( TWVLX), American Funds Investment Company of America ( AIVSX) and Sound Shore ( SSHFX).

Performance data can also provide insights about bond funds, such as Calvert Income ( CFICX). During the past five years, the fund returned 0.4%, a percentage point behind the average intermediate-term bond fund. That mediocre record can be attributed to a single bad year. In 2008, the bond fund collapsed, losing 12% and trailing the average intermediate-term bond fund by 7 percentage points. But over the long term, the record has been strong. During the past 15 years, the fund has returned 6% annually, outdoing 85% of its competitors and beating the average intermediate fund by a percentage point. In 11 of the past 15 years, Calvert has outperformed.

Calvert portfolio manager Greg Habeeb has achieved healthy results by following an aggressive style. Searching for undervalued bonds, Habeeb sometimes holds below-investment grade bonds. The strategy usually pays dividends, but last year junk bonds collapsed in the market downturn. Habeeb had another weak showing in 2000, a year when junk bonds fell and the fund lagged competitors by 5 points.

Because Calvert periodically suffers bad patches, it may not be suitable for investors who will need to spend their money in a year or two. But the record demonstrates that the fund delivers the goods over the long term. Patient investors can buy and hold, expecting that this aggressive fund will probably outdo most competitors.

Other aggressive intermediate funds with strong long-term records are Metro West Total Return ( MWTRX) and Loomis Sayles Investment Grade ( LIGRX).
Stan Luxenberg is a freelance writer who specializes in mutual funds and investing. He was formerly executive editor of Individual Investor magazine.