What the Best Are Buying Now We talked with the smartest managers we could find in four different corners of the fund industry. Here's how they plan to profit in the year ahead.
By Margaret Boitano

(FORTUNE Magazine) – Pity the poor mutual fund manager. Six years ago it was a cinch to beat the S&P 500: More than two-thirds of all actively managed U.S. stock funds did. This year, only one-third can make that claim. No wonder people are putting less cash in active equity funds and choosing index funds instead.

Sound bleak? Not for the funds featured here. For these profiles, FORTUNE chose managers who defied conventional wisdom and put the S&P to shame.

Leading the pack is Kevin Landis of Firsthand Funds. Good thing Landis decided to make a career out of his longtime hobby: stock picking. The fund is Lipper Inc.'s top performer over the past five years.

Our next manager is way out of the mainstream. That's because he's a classic "value" investor, who looks for beaten-up stocks in hopes they'll recover--an approach that's not exactly the rage today. Still, we found a gem in Wally Weitz. Against all odds, he has beaten the S&P 500 for the past decade. We went to Denver for our third guru, Thomas Marsico. He's beaten the S&P in 12 out of the past 19 years, and he's come close in the other seven. Indeed, Marsico has been called the next Peter Lynch.

Our story wouldn't be complete without a look overseas, especially now that markets abroad are getting over their long convalescence. And Joe Joseph, Nigel Hart, and Joshua Byrne of Putnam International Voyager have built one of the steadiest records on the global stage.

All told, we've rounded up some of the savviest money managers in the business. To find out what they're thinking (and buying), read on.

--Margaret Boitano