When evaluating a mutual fund looking only at the trailing numbers may not tell you the whole story. Let’s look at a couple of examples.

Fidelity Balanced Fund (FBALX) has a solid trailing track record. The fund ranked in the top 7% of all funds in its category for the 10 years ended 12/31/09 and in the top 14% for the trailing 15 years. The fund ranked in the top half of its category in 9 of the 10 years of the decade 2000-2009.

However, the fund laid a real “egg” in 2008 losing 31.33% and ranking in the bottom 24% of the funds in its category. This is a balanced fund (its Morningstar category is Moderate Target Risk). This type of fund is balanced between stocks and bonds and should be a somewhat stable component of one’s portfolio.

In November of 2008, Fidelity revamped the fund, placing it in the hands of multiple managers for different parts of the fund’s portfolio. The new lead manager is Robert Stansky, a former manager of giant Fidelity Magellan. Essentially, the group that compiled the fund’s mostly solid track record has been replaced.

The new group did a credible job in 2009 earning a return of 28.05% for 2009, the fund ranked in the top 24% of its category.

Should you buy this fund? Difficult to say. The fund’s trailing track record is pretty meaningless with the new fund management team in place. The “new guys” did well in ’09 an outstanding year for both the equity and fixed income markets. The question investors should ask themselves is whether or not they feel that this new management team and their philosophy fits with their objectives for a balanced portfolio.

Dodge and Cox Stock (DODGX) ranks in the bottom 20% of the Large Value category for the three years ended 12/31/09 and in the bottom 34% for the trailing five years. However, the fund ranked in the top 4% for the trailing 10 years and the top 2% for the trailing 15 years.

Much of the fund’s management team has been in place for the entire 15 year period. The fund’s nearer term track record includes 2007 when the fund ranked in the bottom 38% of its category and 2008 when the fund lost 43.31% and ranked in the bottom 9% of its category.

Dodge & Cox made the mistake of replicating what worked for the fund in 2001-2002; years when the fund placed in the top 3% and 4% of its category respectively. This period marked a major market drop starting with the dot-com bubble bursting and continuing with the post-911 market decline. This was a period, however where certain parts of the market proved to be relatively safe havens. This included many traditional value stocks such as financials.

The 2008-2009 market decline saw virtually no safe havens. Financial and other traditional value type stocks were hit hard. Many of the financial holdings of this fund took a real beating. Did the managers of the fund suddenly lose their touch? Or was their investing style simply out of style?

The fund rebounded nicely in 2009 earning 31.27% for the year and ranking in the top 14% of the Large Value category.

Should you buy or own either fund? Should you sell either or both if you already own them? In both cases the numbers might lead you to one decision, but in both cases an investor should look beyond the numbers in reaching their decision.

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