BOSTON ( TheStreet) -- The Fidelity Value Fund ( FDVLX) 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) 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), ACCO Brands ( ABD), Avis Budget Group ( CAR), Macquarie Infrastructure ( MIC), Oshkosh ( OSK), 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.