Firstly, work out your investment aims and timeframes and decide what asset classes you need exposure to in order to achieve those aims. Depending on whether or not you need more growth or defensive orientated assets will dictate what funds you end up choosing.
Secondly, work out what sort of vehicles you want to use to access these assets classes. Basically, you can choose from managed funds, LIC's or ETFs. Elements to consider will be ease of access and whether or not you want to use passive or active management.
Thirdly, you can start looking at funds. There are sources of publicly available information like Morningstar that provide information on hundreds of funds. You'll want to start looking at what a fund is trying to achieve and then whether or not they are achieving it. As wangchung has said, start going to information days, webinars etc. Learn as much as you can from as many different sources.
Looking at performance league tables is useful, but has its limitations. As you said, performance varies. Bear in mind that no manager will turn in a market beating performance every year. What you want to look for is those that outperform more often than not (assuming its an active fund), without taking ridiculous risks. Look at not only what their performance was, but why. What are their objectives? Not all funds want to beat the market every year, some want to provide protection on the downside instead. Look at the business, is it a well established player, or is it a startup? How long a record does the funds have? How much money is it running, will this impact viability or performance?
It takes a long time and lots of effort to get conversant with fund selection. But I'm sure the HC community will help!
