Innovation is an important driver of economic growth. The enterprise innovation behavior continues to attract the attention of the government,academia and media. Although studies have shown that innovation improves firms' long term performance,however,in the evaluation of fund performance,there is little paper focus on the relationship between fund preferences for innovation firms and fund performance. In this paper,the mutual fund's portfolio data is employed to investigate whether mutual funds investment preferences for innovative listed firms can improve funds performance and whether different degrees of innovation preferences and the characteristic of mutual funds can influence the performance of funds,which invest in innovative firms. Results show that funds investing more in innovative companies outperform others in long term. Further,a fund's industry preferences,its team manager and portfolio concentration degree are all have positive effects on the performance of funds investing in innovative firms. Our finding provides clear policy implications for the evaluation of innovation firm for investors,fund companies,and regulators.