Dude, it doesn't work that way.
If you invest in any fund for only 1 year, you will most definitely lose money.
Unless you were so lucky to buy in a bull market like this year's.......
The reason you see 1 year performance better than 5 years is..........
Nifty on 30th November, 2009 ------ 5032
Current Nifty ------- 8477
Net Points ------- 3445
% Appreciation ------ 68.46%
5 year CAGR -----10.99%
CAGR - Compounded Annual Growth Rate.
Nifty on 30th November, 2013 ------ 6176
Current Nifty ---- 8477
Net Points ----- 2301 (more than 2/3 rds of what was made from 2009 to 2014 in just one year)
% Appreciation ------ 37.25%.
Compare this figure to the 5 year CAGR and you will get your answer as to why the 1 year performance is better everywhere.
And the other reason as to why you see the recent performance better is they advertise it so......I'll explain.
As long as this bull market continues you will always see the 1 year performance highlighted. Because the mutual funds will always select the best possible figure to attract investors. If 1 year performance is better they will highlight that. And I am sure that when a decline comes in the future they will move back to the 5 year figure from the 1 year so that the recent fall in the value is out of the focus.
This shift would also have happened around October, 2008 when the 1 year performance would have been a negative 51% but the 5 year CAGR was still positive at 13%.
In short, if your timing is better ("lucky"), you will make a better return in 1 year in each year from now. And trust me, no one is that lucky. So you will always be better off investing for more than 5 years. Always base your selection on a fund's performance of more than 3 years and not 1 year. Even I would be lucky to beat a falling market in 1 year.........
Always think longer term. My suggestion would be ( as @Einstein pointed out) that you invest in a passive Index fund (eg. Nifty Bees), so that you are damn well guaranteed to make good money in the longer term (10 years+), regardless of who runs the fund.
P.S. : I am basing all this calculation on the Nifty performance. And the actual fund performance would differ from these figures. But i am sure it would not have been much different from these figures.
Cheers!