Look overseas for better small-cap values, says Fidelity's Tillinghast

Manager expects stock-market returns to be below historical norms.

Michael Ryval 11 June, 2015 | 5:00PM

Veteran value manager Joel Tillinghast says that, given the significant run-up in U.S. stocks, better opportunities may exist elsewhere. With the launch last month of two new Fidelity funds for Canadian investors, that's where Tillinghast and his Boston-based team at Fidelity Investments have been focusing.

The US$46-billion Fidelity Low-Priced Stock, which Tillinghast has managed for investors in the U.S. since the fund's inception in December 1989, has always invested mostly in U.S. small-cap stocks and continues to do so. "But I am finding a fair number of good stocks in international small-caps, in Japan, South Korea and parts of Europe," he says.

Having expanded considerably since the market rebound began in 2009, U.S. share-price multiples are not cheap and investors should lower their return expectations, says Tillinghast, who has been in the industry since 1980 and joined Fidelity in 1986, after several years as an analyst at Drexel Burnham Lambert and Value Line Investment.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Best Buy Co Inc85.50 USD-5.27
UnitedHealth Group Inc277.79 USD-7.84

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Michael Ryval

Michael Ryval