BOSTON (

TheStreet

) -- The

Fidelity Value Fund

(FDVLX) - Get Report

was the best-performing portfolio in the third quarter among funds with more than $5 billion in assets.

The $8 billion fund, run by Boston-based

Fidelity Investments

, returned 27.4%, beating the 24% advance of the

Russell Midcap Value Index

. The $6.3 billion

DFA U.S. Small Cap Value Portfolio

(DFSVX) - Get Report

ranked No. 2, rising 26.8%. Our list excludes index and sector funds.

Shares of medium-sized companies outperformed large-cap stocks during the third quarter. The

S&P 500 Index

and

Dow Jones Industrial Average

each gained 16%.

The Fidelity Value Fund, managed by Richard Fentin, was upgraded to C-minus, or "hold," based on its performance through Aug. 31 after spending 11 months at "sell."

Fentin targets companies that are likely to increase earnings and assets whose shares are trading at prices he considers cheap. Most of the portfolio's holdings are based in the U.S. More than 11% of the fund is invested in banks, followed by 6.1% in oil and gas stocks and 5.8% in electronics companies. No individual holding accounts for more than 1.5% of assets.

Seven of the fund's holdings more than doubled during the third quarter, including

Brunswick

(BC) - Get Report

,

ACCO Brands

( ABD),

Avis Budget Group

(CAR) - Get Report

,

Macquarie Infrastructure

(MIC) - Get Report

,

Oshkosh

(OSK) - Get Report

,

Solutia

( SOA) and

OfficeMax

(OMX)

.

For more information on mutual fund ratings, check out our

Top-Rated Mutual Funds

page.

-- Reported by Kevin Baker in Jupiter, Fla

.

Follow TheStreet.com on

Twitter

and become a fan on

Facebook.

Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.