The all-stars are back!

Last December I noted

here that many of Wall Street's biggest stars were having a bad 2006.

It wasn't just Bill Miller at the

Legg Mason

(LMVTX) - Get Report

Value fund (LMVTX). From Fidelity's Will Danoff to Bill Nygren at Oakmark, it seemed that many of those who had trounced the Street over the previous decade were either falling behind -- or at best struggling along back in the pack.

The big question: Could these all-star players get back on top in 2007?

We're coming up on the halfway point, and many of them are answering their critics.

With some conviction, too.

Manu Daftary at

Quaker

(QUAGX) - Get Report

Strategic Growth (QUAGX) leads the field -- he's up 15.3% this year as of June 13. David Williams at

Excelsior

(UMBIX)

Value & Restructuring (UMBIX) is up 14.2%. Bob Rodriguez at

(FPTAX)

FPA Capital (FPATX) is ahead 13.7%. Mason Hawkins and Staley Cates at

(LLPFX) - Get Report

Longleaf Partners (LLPFX) are ahead 9.9%.

Overall, I had my eye on 15 all-star managers with terrific long-term results. Nearly all struggled in 2006. But as I've said here before, I'd rather bet on someone with a great long-term record, through good markets and bad, than someone with a "hot hand" or a good couple of quarters.

An evenly weighted portfolio of the funds run by these 15 managers would have made you 8.8% this year through June 13.

The Wall Street average, as measured by the total return on

Standard & Poor's 500

index? 7.8%.

In other words, the all-star team is a full percentage point ahead.

For a six-month period, that's pretty respectable. Especially for a diversified portfolio of 15 different funds.

Nine of these managers are beating the market.

Five are clustered around the 8.5% mark: Joel Tillinghast at

Fidelity

(FLPSX) - Get Report

Low-Priced Stock (FLPSX), stablemate Will Danoff at

(FCNTX) - Get Report

Contrafund (FCNTX), Brian Rogers at

T. Rowe Price

(PRFDX) - Get Report

Equity Income (PRFDX), Saul Pannell at

(ITHAX) - Get Report

Hartford Capital Appreciation (ITHAX) and veteran Marty Whitman at

(TAVFX) - Get Report

Third Avenue Value (TAVFX).

Yes, six are trailing the index. For three of them -- Ron Baron at

(BPTRX) - Get Report

Baron Partners (BPTRX), Bill Nygren at

(OAKLX) - Get Report

Oakmark Select (OAKLX) and Ron Muhlenkamp at his own

(MUHLX) - Get Report

Muhlenkamp Fund (MUHLX) -- the gap is about one percentage point or less.

The picture is worse for Richie Freeman at

Legg Mason Partners

(SHRAX) - Get Report

Aggressive Growth (SHRAX), up 5.8%, and the little-known

(BRUFX) - Get Report

Bruce Fund (BRUFX), up just 5.0%.

As for Bill Miller at Legg Mason Value? His fund's 15-year record of beating the Street ran into the buffers last year. And he's lagging again in 2007. The fund is up just 5.6% so far.

However, as I noted

here a few weeks ago, the picture is very different over at Miller's riskier, and much more flexible,

(LMOPX) - Get Report

Opportunity Fund (LMOPX). So far, the Opportunity Fund is up 13.9% this year. Not bad.

And if we count Miller's Opportunity Fund instead of Value Trust for our all-star portfolio, the impressive performance becomes a lot better. Instead of a 8.8% gain through June 13, it would be up 9.4%.

It's worth adding that over a longer stretch of time, all of these fund managers have amply proved their worth.

Where are the all-stars putting their money right now? An analysis by Lipper shows some of their biggest bets are on blue-chip turnarounds: like scandal-battered health insurance giant

UnitedHealth Group

(UNH) - Get Report

, Chuck Prince's shape-up or break-up

Citigroup

(C) - Get Report

, computer giant

Dell

(DELL) - Get Report

and breaking-up conglomerate

Tyco

(TYC)

.

Other big holdings include

Washington Mutual

(WM) - Get Report

,

J.P. Morgan Chase

(JPM) - Get Report

, Mexican cement giant

Cemex

(CM) - Get Report

and

Time Warner

(TWX)

.

The kicker? History shows it is much harder for active managers to outperform the market on the way up than on the way down. Wall Street is booming right now, but most of these guys are still beating it. Again.

Full disclosure: My own investment portfolio, as previously reported, includes the Quaker Strategic Growth, Oakmark Select, Muhlenkamp, Baron Partners and Hartford Capital Appreciation mutual funds."

In keeping with TSC's editorial policy, Brett Arends doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Arends takes a critical look inside mutual funds and the personal finance industry in a twice-weekly column that ranges from investment advice for the general reader to the industry's latest scoop. Prior to joining TheStreet.com in 2006, he worked for more than two years at the Boston Herald, where he revived the paper's well-known 'On State Street' finance column and was part of a team that won two SABEW awards in 2005. He had previously written for the Daily Telegraph and Daily Mail newspapers in London, the magazine Private Eye, and for Global Agenda, the official magazine of the World Economic Summit in Davos, Switzerland. Arends has also written a book on sports 'futures' betting.