Best Mutual Fund #2: Fidelity Low-Priced Stock (FLPSX)
Specializing in stocks that sell for under $35 per share leads Fidelity Low-Priced Stock (FLPSX) to many midcap and small-cap names. This mid-blend fund has benefited from the steady direction of long-time manager Joel Tillinghast, who has the fund up 31% YTD.
This also is a story of size. FLPSX has a very large asset base of more than $30 billion, and it also holds a large number of stocks — currently more than 800 holdings make up the portfolio. Yet turnover remains modest at just 11% annually.
Domestic stocks make up the bulk of the portfolio, but there is foreign exposure here as well, with 14% of the fund in Europe, 6% in Japan and 5% invested in Canadian firms. Current top holdings include: UnitedHealth Group (UNH), Microsoft (MSFT), Best Buy (BBY), Ross Stores (ROST) and Bed Bath & Beyond (BBBY).
FLPSX has gained an annualized 10.7% more than the last 10 years, good enough to land it in the top 7% of its Morningstar category over the long haul — certainly good enough to be considered among the best mutual funds for a 401k.
Fund expenses run a modest 0.8%.