Fidelity Low Priced Stock Fund

U.S. News evaluated 145 Mid-Cap Blend Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Performance

The fund has returned 19.39 percent over the past year, 13.64 percent over the past three years, 8.37 percent over the past five years, and 12.39 percent over the past decade.

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Summary

It may sound like a gimmick—a fund investing most of its assets in stocks trading below $35 a share—but this strategy has worked for the Fidelity Low-Priced Stock fund, which as of the end of the end of the first quarter has logged annualized returns of 15 percent since its 1989 inception.

As of May 03, 2013, the fund has assets totaling $39.65 billion. Its portfolio consists primarily of investments in mid- and small-cap companies, as well as a notable amount of holdings outside the United States.

With about 900 stocks in its portfolio, Fidelity Low-Priced Stock is broadly diversified. The majority of the fund—at least 80 percent—is invested in companies with share prices below $35, which includes names like Oracle and grocery store chain Safeway. More recently, the fund has begun to move more of its assets into healthcare and consumer services. Fairly large international holdings (about 34 percent as of April) allow the fund even more leeway to invest. The fund has returned 19.39 percent over the past year and 13.64 percent over the past three years.

The fund was closed to new investors in December 2003 and reopened in December 2008. Management invests in a combination of value and growth stocks, but manager Joel Tillinghast’s “emphasis on valuation and desire to balance it with a company’s growth potential generally causes the fund to exhibit more of a value orientation,” according to the fund. By design, its preference for low-priced stocks keeps the fund mostly entrenched in smaller companies, but it has also made investments in large-cap firms as the size of the fund has swelled. The fund has returned 8.37 percent over the past five years and 12.39 percent over the past decade.

Investment Strategy

Tillinghast believes “that many low-priced stocks, which typically are smaller-capitalized companies, do not receive the same level of analytical attention from investors. Therefore, there tends to be a greater proportion of mispricings among low-priced stocks,” according to the fund. The fund normally invests at least 80 percent of its assets in companies with stock prices of $35 or lower.

Role in Portfolio

Morningstar says, “Like most smaller-cap funds, this one is a supporting player. However, thanks to the portfolio’s breadth, it’s a much steadier performer than most of its rivals.”

Management

Says Morningstar, “Tillinghast, who’s been at the helm for nearly two decades, employs a value-leaning strategy but invests broadly.”

Fees

Fidelity Low Priced Stock Fund has an expense ratio of 0.76 percent.

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Risk

A huge asset base might make the fund less nimble than its peers.

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Fund Opinions

The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 1 on a scale of 1 to 5, with 1 being the best and 5 the worst.

Value Line 2013-03-12

The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 2 for one year, 1 for five years, and 1 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2013-03-12

The fund's Value Line Risk Rank, a measure of volatility, is 3 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2013-03-12

The fund appears on the 2011 “Kiplinger 25” list of the best no-load mutual funds.

Kiplinger 25

This fund received the Bronze award for the Mid Cap Domestic Equity category in Standard & Poor’s 2010 Mutual Fund Excellence Awards. 

Standard & Poor's

In the May 2010 edition of Louis Rukeyser's Mutual Funds, Peter Staas says, "Fidelity Low-Priced Stock is an excellent core holding for investors seeking long-term growth without excessive risk. The biggest question mark is how long the fund will remain open to new investors."

2010-06-02

In the annual Lipper/Barron’s Fund Families Survey for 2010, Fidelity Funds ranks 33rd out of 57 fund families surveyed.

Lipper

In the annual Lipper/Barron’s Fund Families Survey for 2010, Fidelity Funds ranks 33rd out of 57 fund families surveyed.

Lipper

In the May 2010 edition of Louis Rukeyser's Mutual Funds, Peter Staas says, "Fidelity Low-Priced Stock is an excellent core holding for investors seeking long-term growth without excessive risk. The biggest question mark is how long the fund will remain open to new investors."

2010-06-02