Some of the best fund managers on Wall Street have put together incredible runs of outstanding performance. But barring a huge recovery between now and year-end, 2007 looks like it's the end of the road for some impressive streaks.

According to MarketWatch, 27 mutual funds have outperformed their benchmarks for eight consecutive years. But with the collapse in financials and the drag on the stock market as a whole, many of these funds are in danger of missing out this year. Among them are American Funds' Growth Fund of America and Templeton World Fund, as well as several funds from the Vanguard Group.

Killing the streak
For Growth Fund of America, bigger has been better. But even outsized returns from Microsoft (NASDAQ:MSFT) and Nokia (NYSE:NOK) haven't been enough to make up for losses from Freddie Mac (NYSE:FRE) and Lowe's (NYSE:LOW). Although the fund's growth orientation has left it underweighted in the struggling financial sector, its 13.5% return year to date still lags the growth-fund benchmark by about 1.5%.

Meanwhile, at Templeton World, the global boom continues, but the fund hasn't taken full advantage. Its 10.4% return so far in 2007 leaves it more than 2.5% behind its benchmark, despite picking winners like Navteq (NYSE:NVT) and Chevron (NYSE:CVX).

Much ado about nothing
When funds slip for the first time in nearly a decade, it's easy to make a big deal out of it. Yet the ironic thing is that many of these funds are doing really well in a very difficult market environment. Plenty of investors right now would be happy to bank a 10% to 13% gain on their investments for 2007, even if it meant underperforming a benchmark index.

Now granted, when you pay for active management, you're looking for someone who can do better than an index. After all, with the proliferation of index mutual funds and ETFs, you can usually find an investment that will let you track an appropriate index cheaply and efficiently. So, ideally, the managers you pick will pay for themselves every year.

But realistically, you shouldn't expect your fund managers to outperform their benchmarks every single year. While it's nice when it happens, great long-term performance doesn't depend on beating your bogey year in and year out. Even the best managers suffer through periods when the market doesn't immediately reward their ideas, but that doesn't mean those ideas aren't good. Sometimes, it takes time for the market to figure out what these managers see well in advance. If you keep focused on too short a time period, you'll miss out on some of the most forward-looking ideas that visionary managers have -- the ideas that often prove to be the most successful when you look at a fund's entire history.

Also, even if a fund doesn't beat the index, it still might be among the cream of the crop. Vanguard's Health Care Fund, for instance, is ahead of nearly all of its competition despite trailing its benchmark.

So if you own a fund that's set to underperform for the first time in a while, don't rush for the exits. Seeing how your fund's management team reacts to adversity will give you a new perspective on its style and help you evaluate it better. Over the years, that'll give you a better idea of whether or not you should stick with your fund for the long haul.

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Fool contributor Dan Caplinger usually hopes just to match the index, not beat it. He doesn't own shares of the funds and companies mentioned in this article. Navteq is a Stock Advisor pick, and Microsoft is an Inside Value recommendation. The Fool's disclosure policy never loses.