Star Fidelity manager Tillinghast to take leave

BOSTON (Reuters) - Fidelity Investments fund manager Joel Tillinghast will take time off this fall, leaving the mutual fund giant without one of its top performers over the past decade.

Tillinghast, 53 years old, will take a four-month leave from running the $35 billion Fidelity Low-Priced Stock Fund to travel, work on a book for retail investors and mentor other company employees, said Fidelity spokesman Vincent Loporchio.

During his leave, the mid-cap fund's lead manager will be James Harmon, who also will continue to run the $5.2 billion Fidelity Advisor Small Cap Fund , Loporchio said. Harmon will have help from a team of other interim managers on Low-Priced Stock Fund, Fidelity said.

Tillinghast, manager of the Low-Priced Stock Fund since 1989, intends to return to the company in January, Loporchio said. The fund is large for its category, and while its record was mediocre in 2010, Tillinghast has bounced back this year and his longer-term record remains strong.

Through July 12 the fund has beaten 88 percent and 77 percent of peers over the past three and five years, respectively, according to Chicago research firm Morningstar Inc.

While taking a sabbatical in the mutual fund industry is unusual, it is not unheard of. Last year, Robert Rodriguez, whose FPA New Income Fund fund made money every year since 1984, took the year off.

Tillinghast's investing prowess has brought him much attention, earning him a nomination for Morningstar's Fund Manager of the Decade award in 2009. His performance and that of several other active managers at Fidelity has been one of the company's selling points, at a time when investors are increasingly shifting to index funds.

James Lowell, who publishes a newsletter for Fidelity investors, said he does not think the change would merit shareholders shift their assets out of the fund -- though that could change if Tillinghast does not return.

But, Lowell said Harmon's own record is strong and that his style and investment approach are similar to Tillinghast's. "Harmon is no slouch," Lowell said.

(Reporting by Ross Kerber; additional reporting by Svea Herbst-Bayliss. Editing by Robert MacMillan, Bernard Orr)