(FORTUNE Magazine) – Now is when the pros were supposed to strut their stuff. For all their boasts during the 1990s boom, active money managers couldn't even keep pace with their soaring benchmarks--those market indexes that were supposed to be the watermark of average performance. Only 27% of large caps bested the S&P 500's run-up over the past ten years. But have faith, they said: Our true worth (and fees) will be justified when things go sour. That's when you need truly hands-on stock pickers! Au contraire.

Since the market peaked in March 2000, the S&P is down 37%. But after fees, only 53% of actively managed large-cap funds have done better, according to Morningstar. The failure to live up to their own hype is decidedly more obvious in the mid- and small-cap sectors.

Raw performance numbers don't tell the whole dismal story. Investors look to active fund managers to help them steer clear of, at the very least, the real landmines. Big mistake. As of this past March, Intel was the sixth-largest holding among large-cap funds. It's down 43% this year. And few managers spotted the biggest unexploded bomb of all--the March 2000 stock market.

Small-cap value funds are one exception to the rule: 67% have beaten their index "rivals" since March 2000, posting an average yearly return of 9.1%. And yes, a few large-cappers continue to defy the trend too. Thanks to timely instincts (avoiding tech) and savvy bets (Philip Morris), the PBHG Clipper Focus fund has averaged 24.3%. --Kimberly L. Allers