Fidelity Low-Priced Stock: Impressive But Hefty

Veteran manager Joel Tillinghast has produced strong returns investing in stocks priced under $35.

Editor's note: This is part of a continuing series of articles looking at the 20 biggest no-load stock funds.

With little fanfare, Fidelity's longest tenured fund manager, Joel Tillinghast, has compiled one of the best records in the business. During his 17-year reign at Fidelity Low-Priced Stock, the fund has returned a staggering 17% annualized. That beats Standard & Poor's 500-stock index by an average of seven percentage points a year and the small-company Russell 2000 by an average of six points a year.

As the name indicates, the fund, which is closed to new investors, invests primarily in low-priced stocks. Nowadays, that's defined as stocks that sell for less than $35. Shares of small and midsize companies still predominate, but as the fund has grown to gargantuan proportions (assets are nearing $40 billion), the value-conscious Tillinghast has had to own more names and invest in bigger companies. About 20% of the fund was recently invested in large companies, including Safeway, DR Horton, Pfizer, and Oracle. The sprawling, 800-stock portfolio is diversified throughout most sectors. Annual turnover is 26%, about two-thirds less than the average fund that focuses on midsize, undervalued companies.

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Tillinghast has helped boost the fund's returns over the past few years by devoting an increasingly larger slice of the portfolio to foreign companies. Low-Priced Stock currently has nearly 30% of its assets in international stocks, up from about 13% at the end of 2001. Shares of Brazilian oil giant Petrobras, at last report the fund's biggest holding, gained 51% in 2006.

Low-Priced Stock is colossal for a fund that focuses on small and midsize companies. We're not dissing Tillinghast, whose record is terrific, but given the fund's mission and its heft, we rate Low-Priced Stock a HOLD.


Fidelity Low-Priced Stock (FLPSX)

Assets: $39.5 billion

Managers (year started): Joel Tillinghast (1989)

Return (vs. S&P 500)*:

One year: 14.4% (16.7%)

Three years annualized: 16.2% (10.6%)

Five years annualized: 16.2% (7.7%)

Ten years annualized: 15.4% (7.9%)

Expense ratio: 0.88%

Portfolio turnover: 26%

Minimum investment: closed

Phone: 800-544-8544

Web site:

*Returns through February 5

Fund Fact sources: Standard & Poor's, Morningstar

View updated data for this fund and compare the performance of the 20 biggest no-load stock funds.

Go to A Close Look at the 20 Biggest No-Load Stock Funds.

Staff Writer, Kiplinger's Personal Finance