Three of the most celebrated stock-picking mutual fund managers are among the worst performers this year as their bets on a growing economy haven’t panned out, according to a report Monday.

Active mutual funds run by Bruce Berkowitz of Fairholme Capital Management, Kenneth Heebner of Capital Growth Management and Bill Miller of Legg Mason (NYSE: LM) are the three worst performers among large diversified U.S. mutual funds in 2011, according to Bloomberg.

The funds lost more than 10% through June 9, while the S&P 500 was up 3.4%, according to the report.

More investors frustrated with the underperformance of active managers have been turning to passive exchange traded funds that track indexes.

“People assume because certain managers have had good streaks that they are always going to be a step ahead of the market,” Russel Kinnel, director of mutual fund research at Morningstar, told Bloomberg. “It never works out that way.”

Among all U.S. large-cap funds, 65.7% trailed their relevant index, the S&P 500, last year, according to research from Standard & Poor’s.


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