I'm in a similar situation. Graduated in 2012 and have been working as an engineer for 2 years. Just started getting serious about managing investments and planning for early retirement.
There are two thoughts I had when considering your post:
1. There will always be funds that beat the overall market, but they tend to change year to year. Chasing them down may be worth the returns, but it's not unlike picking individual stocks (less risky tho).
2. In the long term most funds track the overall markets in which they invest. And with a high ER, generally the investors (you) get results that underperform.
However, famous economist John Maynard Keys once said, "But this long run is a misleading guide to current affairs. In the long run we are all dead." If you have the time and willpower, I think market beating performance is possible. For me personally, well there's other things I'd rather be doing.
But, as a fellow engineer, I think it's fun to leave behind the common convention and look at the numbers for ourselves.
I used
this tool to compare the effects of expense ratios on an investment. Note that it compares funds assuming the same return. However, it gives a visual idea of why a high ER can really kill an investment. Boils down to this: the compounded value (final value) of the principle removed by the high ER is much higher than the actual amount that leaves your account every year.
On to actual performance. I threw in DREGX, VEIEX (another emerging markets fund), and VGENX into the Fidelity 10k/10yr tool -
results.
The final values are 38.5k, 28.4k, and 34.8k respectively. Impressive performance by DREGX. I did notice that the turnover rate is much higher: 264% (DREGX), 26% (VEIEX), and 17% (VGENX). If it's in a 401k though I don't think it should matter as much.
As others have already mentioned you need to compare funds with similar composition and risk to actually observe the managers performance. The initial case for DREGX looks promising, but I don't know enough about the market or competing funds to make a recommendation.