Deciding who's in, who's out of our favorite 25 mutual funds is a carefully considered process. By Nellie S. Huang, Senior Associate Editor From Kiplinger's Personal Finance, May 2013 We don't craft a list of 25 new funds every year. Once a fund makes the kiplinger 25, we think long and hard before removing it — and we have to have a worthy fund with which to replace it. Indeed, dropping a fund for performance reasons is always a tricky call. But in some cases, the fund makes it easy for us. We replaced BBH Core Select (symbol BBTEX), for example, because it closed to new investors in November 2012.See Also: The Kiplinger 25 at a Glance All of which leads to how we go about finding a good fund. We start by screening for no-load funds with above-average long-term performance, low-to-moderate expenses and a reasonable initial minimum investment. But it's not enough to look at a fund's long-term returns. One superb year may make a mediocre fund look better than it really is. So we also pay attention to year-by-year results. How did a fund weather the catastrophe of 2008? Or 2002? How does a fund stack up against other funds in its peer group? Against its benchmark? We want a fund that consistently shows up in the top half of its category. We pay attention to risk. We look at standard deviation (a measure of volatility) and how a fund has performed in down markets. And with regard to bond funds in particular, we're trying to make sure that the funds we recommend won’t crater once interest rates start to rise (bond prices and rates usually move in opposite directions). We also look to see that a fund's current manager or team of managers is responsible for the long-term record. But we don't automatically rule out a new manager if he or she has compiled a fine record elsewhere. Size is important, too. A $10 billion fund that focuses on small firms, for example, wouldn’t pass muster. We make exceptions for incumbent funds on a case-by-case basis. For instance, Fidelity Low-Priced Stock (FLPSX) has a whopping $37 billion in assets. Size hasn't hindered lead manager Joel Tillinghast yet, but we probably wouldn’t add such a big fund today. Our final step: a discussion with the managers. Although shareholder letters and annual reports can be informative, we get a better measure of a manager through direct contact, either face-to-face or over the phone. Several times in recent years, we've come close to adding a fund, only to find that a manager is taking on too much risk or relies more on quantitative data than on fundamental research. In short, if the manager interview turns up any concerns about the fund, we walk away. If it doesn't, then we have a winner.