Scott Offen rose from Fidelity file clerk to mastermind of a market-beating fund. By Katy Marquardt, Staff Writer August 31, 2006 From the day his high school economics class visited Fidelity Investments' offices nearly 30 years ago, Scott Offen knew he'd one day manage money for the Boston fund giant. Offen struck out twice in his quest for employment with Fidelity. But after dropping out of college, he landed a temporary job as a file clerk in Fidelity's research library. The rest, as they say, is history. Offen showed enough spunk and smarts to eventually win a promotion to stock analyst. Over the next 17 years, he covered more than 15 industries and ran eight sector funds.Today Offen continues to prove that a college degree isn't a prerequisite for success in the high-powered world of mutual fund management. Since December 2002 he's been in charge of a diversified stock fund that has handily outpaced the overall market. Over the past three years to July 3, Fidelity Value Discovery returned 19% annualized, an average of eight percentage points per year ahead of Standard Poor's 500-stock index and four points per year better than all U.S.-oriented funds that target bargain-priced stocks. Offen's background aside (he's the only degree-less manager in a shop filled with MBAs), Value Discovery is intriguing for several other reasons. First, with assets of $575 million, the fund is relatively small by Fidelity standards. That gives Offen, 46, the opportunity to buy and sell stocks without disturbing share prices. And that's important because Offen, who designed Value Discovery with flexibility in mind, invests in undervalued companies of all sizes. Moreover, he takes an expansive view of value investing and therefore doesn't restrict himself to any particular formula or strategy. "It doesn't make sense to be dogmatic and rigid," says Offen. "To me, this is a better way of investing from a value perspective." Like many classic value investors, Offen seeks companies with shares that sell at a low price in relation to profits or assets. But he's also willing to invest in companies that are cheap in relation to their competitors, their growth potential or the overall stock market. At last report, the fund held 267 stocks, with 21% of assets in the financial sector, 17% in technology and 15% in energy. According to Morningstar, 56% of assets were in large companies and 35% were in midsize concerns. The fund's biggest holdings as of March 31 were JPMorgan Chase, Pfizer, National Oilwell Varco, Valero Energy and American International Group. Value Discovery (symbol FVDFX; 800-544-8544) requires an initial minimum investment of $2,500. The fund doesn't charge commissions, and its annual expense ratio of 0.99% is below average. It's a reasonable choice for the part of your portfolio dedicated to bargain-priced stocks.