Small-Cap Value Funds With Big-Time Performance
Our findings in the small-cap value pack include some of the category's greatest hits.
Starting at the top, we've got the (FLPSX)Fidelity Low-Priced Stock fund where Joel Tillinghast has called the shots since the fund's launch at the end of 1989. In that time he's topped his average competitor in 10 of the past 12 calendar years. Tillinghast was our pick for fund manager of the year for 2001, when the fund gained 27% and beat its average peer by more than nine percentage points. The fund's near- and long-term track record is even more impressive in light of its biggest drawback: its size.
Most small-cap funds close to new investors before they hit the $2 billion asset mark because a larger asset base makes it tough to shift around nimbly in the less liquid small-cap market. Tillinghast's fund had a whopping $12.4 billion in assets at the start of this month, compared with $350 million for its average peer.
To compensate for the fund's stunning size, Tillinghast spreads the fund's cash among more than 800 small-cap stocks in which he sees a modest valuation and solid earnings growth. That breadth hasn't sapped the fund's returns so far, but it could down the road, so you might want to look at some of the others on our list.
|Small-Cap Value All-Stars
Small is often beautiful when it comes to value funds
|Fund||Five-Year Annualized Return||One-Year Return|
|(FLPSX)Fidelity Low-Priced Stock||14.4%||23.2%|
|(FRMCX)Franklin Micro Cap Value||12.1||33.7|
|Source: Morningstar, returns through Jan. 23.|
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