UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-2737
Fidelity Summer Street Trust
(Exact name of registrant as specified in charter)
245 Summer St., Boston, MA 02210
(Address of principal executive offices) (Zip code)
Marc Bryant, Secretary
245 Summer St.
Boston, Massachusetts 02210
(Name and address of agent for service)
Registrant's telephone number, including area code:
617-563-7000
Date of fiscal year end: | April 30 |
Date of reporting period: | October 31, 2016 |
Item 1.
Reports to Stockholders
Fidelity® High Income Fund Semi-Annual Report October 31, 2016 |
Contents
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2016 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Fund nor Fidelity Distributors Corporation is a bank.
Investment Summary (Unaudited)
Top Five Holdings as of October 31, 2016
(by issuer, excluding cash equivalents) | % of fund's net assets | % of fund's net assets 6 months ago |
Valeant Pharmaceuticals International, Inc. | 2.4 | 1.9 |
Laureate Education, Inc. | 2.3 | 2.6 |
Community Health Systems, Inc. | 2.0 | 2.3 |
Tenet Healthcare Corp. | 1.7 | 2.3 |
Chesapeake Energy Corp. | 1.5 | 0.9 |
9.9 |
Top Five Market Sectors as of October 31, 2016
% of fund's net assets | % of fund's net assets 6 months ago | |
Healthcare | 12.9 | 12.6 |
Energy | 11.5 | 8.2 |
Telecommunications | 8.4 | 10.1 |
Banks & Thrifts | 6.8 | 6.8 |
Services | 5.9 | 6.6 |
Quality Diversification (% of fund's net assets)
As of October 31, 2016 | ||
BBB | 0.9% | |
BB | 32.3% | |
B | 40.7% | |
CCC,CC,C | 16.9% | |
Not Rated | 0.7% | |
Equities | 0.8% | |
Short-Term Investments and Net Other Assets | 7.7% |
As of April 30, 2016 | ||
BBB | 1.1% | |
BB | 31.4% | |
B | 42.2% | |
CCC,CC,C | 17.1% | |
Not Rated | 0.9% | |
Equities | 0.9% | |
Short-Term Investments and Net Other Assets | 6.4% |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes.
Asset Allocation (% of fund's net assets)
As of October 31, 2016* | ||
Nonconvertible Bonds | 77.4% | |
Convertible Bonds, Preferred Stocks | 0.6% | |
Common Stocks | 0.2% | |
Bank Loan Obligations | 8.9% | |
Other Investments | 5.2% | |
Short-Term Investments and Net Other Assets (Liabilities) | 7.7% |
* Foreign investments - 21.7%
As of April 30, 2016 * | ||
Nonconvertible Bonds | 79.7% | |
Convertible Bonds, Preferred Stocks | 0.6% | |
Common Stocks | 0.3% | |
Bank Loan Obligations | 7.8% | |
Other Investments | 5.2% | |
Short-Term Investments and Net Other Assets (Liabilities) | 6.4% |
* Foreign investments - 22.3%
Investments October 31, 2016 (Unaudited)
Showing Percentage of Net Assets
Corporate Bonds - 77.4% | |||
Principal Amount (000s) | Value (000s) | ||
Convertible Bonds - 0.0% | |||
Capital Goods - 0.0% | |||
General Cable Corp. 4.5% 11/15/29 (a) | $1,126 | $726 | |
Nonconvertible Bonds - 77.4% | |||
Aerospace - 0.2% | |||
Huntington Ingalls Industries, Inc. 5% 11/15/25 (b) | 4,755 | 5,002 | |
Orbital ATK, Inc. 5.5% 10/1/23 | 4,310 | 4,482 | |
9,484 | |||
Air Transportation - 0.2% | |||
U.S. Airways pass-thru certificates Series 2013-1 Class B, 5.375% 5/15/23 | 2,734 | 2,822 | |
United Continental Holdings, Inc. 6.375% 6/1/18 | 1,270 | 1,335 | |
XPO Logistics, Inc. 6.125% 9/1/23 (b) | 4,030 | 4,146 | |
8,303 | |||
Automotive & Auto Parts - 0.5% | |||
Allison Transmission, Inc. 5% 10/1/24 (b) | 6,465 | 6,594 | |
American Tire Distributors, Inc. 10.25% 3/1/22 (b) | 4,145 | 3,811 | |
Penske Automotive Group, Inc. 5.5% 5/15/26 | 4,275 | 4,243 | |
Tenneco, Inc. 5% 7/15/26 | 3,735 | 3,754 | |
The Goodyear Tire & Rubber Co. 5% 5/31/26 | 6,400 | 6,456 | |
24,858 | |||
Banks & Thrifts - 1.1% | |||
Ally Financial, Inc.: | |||
4.25% 4/15/21 | 12,440 | 12,564 | |
5.75% 11/20/25 | 17,105 | 17,511 | |
Royal Bank of Scotland Group PLC 5.125% 5/28/24 | 22,935 | 22,714 | |
52,789 | |||
Broadcasting - 0.7% | |||
CBS Radio, Inc. 7.25% 11/1/24 (b) | 3,410 | 3,542 | |
Clear Channel Communications, Inc.: | |||
5.5% 12/15/16 | 7,460 | 7,348 | |
10% 1/15/18 | 8,795 | 6,244 | |
Gray Television, Inc. 5.875% 7/15/26 (b) | 2,530 | 2,517 | |
iHeartCommunications, Inc.: | |||
9% 9/15/22 | 4,320 | 3,067 | |
10.625% 3/15/23 | 6,665 | 4,807 | |
Sirius XM Radio, Inc. 5.375% 7/15/26 (b) | 5,050 | 5,129 | |
32,654 | |||
Building Materials - 0.9% | |||
Builders FirstSource, Inc. 5.625% 9/1/24 (b) | 4,140 | 4,181 | |
Building Materials Corp. of America 6% 10/15/25 (b) | 6,360 | 6,789 | |
CEMEX Finance LLC 6% 4/1/24 (b) | 4,395 | 4,549 | |
GCP Applied Technologies, Inc. 9.5% 2/1/23 (b) | 4,155 | 4,706 | |
Herc Rentals, Inc.: | |||
7.5% 6/1/22 (b) | 2,140 | 2,140 | |
7.75% 6/1/24 (b) | 2,140 | 2,151 | |
Standard Industries, Inc. 5.5% 2/15/23 (b) | 6,160 | 6,406 | |
U.S. Concrete, Inc. 6.375% 6/1/24 | 2,470 | 2,569 | |
USG Corp.: | |||
5.5% 3/1/25 (b) | 2,150 | 2,290 | |
5.875% 11/1/21 (b) | 3,875 | 4,059 | |
39,840 | |||
Cable/Satellite TV - 4.5% | |||
Altice SA 7.75% 5/15/22 (b) | 58,900 | 61,514 | |
Altice U.S. Finance SA: | |||
5.375% 7/15/23 (b) | 12,165 | 12,445 | |
5.5% 5/15/26 (b) | 17,910 | 18,268 | |
CCO Holdings LLC/CCO Holdings Capital Corp.: | |||
5.125% 2/15/23 | 4,795 | 4,963 | |
5.125% 5/1/23 (b) | 1,000 | 1,033 | |
5.5% 5/1/26 (b) | 14,635 | 14,992 | |
5.75% 9/1/23 | 7,160 | 7,554 | |
5.875% 4/1/24 (b) | 12,305 | 13,013 | |
Cequel Communications Holdings I LLC/Cequel Capital Corp.: | |||
5.125% 12/15/21 (b) | 4,955 | 4,881 | |
5.125% 12/15/21 (b) | 4,795 | 4,663 | |
CSC Holdings, Inc. 5.5% 4/15/27 (b) | 11,570 | 11,736 | |
DISH DBS Corp.: | |||
5% 3/15/23 | 5,810 | 5,723 | |
5.875% 7/15/22 | 3,210 | 3,314 | |
6.75% 6/1/21 | 5,543 | 5,955 | |
7.75% 7/1/26 | 2,150 | 2,361 | |
Virgin Media Finance PLC 4.875% 2/15/22 | 5,635 | 4,848 | |
Virgin Media Secured Finance PLC 5.5% 8/15/26 (b) | 5,000 | 5,044 | |
VTR Finance BV 6.875% 1/15/24 (b) | 6,835 | 7,151 | |
Ziggo Bond Finance BV 6% 1/15/27 (b) | 4,310 | 4,232 | |
Ziggo Secured Finance BV 5.5% 1/15/27 (b) | 12,905 | 12,744 | |
206,434 | |||
Capital Goods - 1.6% | |||
AECOM Technology Corp. 5.75% 10/15/22 | 3,225 | 3,385 | |
Amsted Industries, Inc. 5% 3/15/22 (b) | 3,440 | 3,449 | |
Belden, Inc. 5.25% 7/15/24 (b) | 8,579 | 8,643 | |
CNH Industrial NV 4.5% 8/15/23 | 4,300 | 4,322 | |
General Cable Corp. 5.75% 10/1/22 (c) | 36,550 | 34,540 | |
Shale-Inland Holdings LLC/Shale-Inland Finance Corp. 8.75% 11/15/19 (b) | 18,020 | 10,767 | |
SPL Logistics Escrow LLC/SPL Logistics Finance Corp. 8.875% 8/1/20 (b) | 3,270 | 2,780 | |
SPX Flow, Inc.: | |||
5.625% 8/15/24 (b) | 2,150 | 2,180 | |
5.875% 8/15/26 (b) | 2,150 | 2,182 | |
72,248 | |||
Chemicals - 2.6% | |||
A. Schulman, Inc. 6.875% 6/1/23 (b) | 9,175 | 9,336 | |
Axalta Coating Systems 4.875% 8/15/24 (b) | 6,450 | 6,547 | |
Blue Cube Spinco, Inc.: | |||
9.75% 10/15/23 | 5,980 | 7,027 | |
10% 10/15/25 | 11,615 | 13,938 | |
Evolution Escrow Issuer LLC 7.5% 3/15/22 (b) | 9,210 | 8,243 | |
Momentive Performance Materials, Inc. 3.88% 10/24/21 | 22,866 | 20,351 | |
MPM Escrow LLC/MPM Finance Escrow Corp. 8.875% 10/15/20 (d) | 19,122 | 0 | |
Trinseo Materials Operating SCA/Trinseo Materials Finance, Inc. 6.75% 5/1/22 (b) | 2,440 | 2,574 | |
Tronox Finance LLC 6.375% 8/15/20 | 45,120 | 40,495 | |
Valvoline Finco Two LLC 5.5% 7/15/24 (b) | 1,890 | 1,994 | |
Versum Materials, Inc. 5.5% 9/30/24 (b) | 2,685 | 2,745 | |
W. R. Grace & Co.-Conn.: | |||
5.125% 10/1/21 (b) | 4,485 | 4,777 | |
5.625% 10/1/24 (b) | 1,800 | 1,949 | |
119,976 | |||
Consumer Products - 0.3% | |||
Tempur Sealy International, Inc.: | |||
5.5% 6/15/26 | 6,420 | 6,613 | |
5.625% 10/15/23 | 4,315 | 4,466 | |
Wolverine World Wide, Inc. 5% 9/1/26 (b) | 4,295 | 4,295 | |
15,374 | |||
Containers - 2.2% | |||
Ardagh Packaging Finance PLC/Ardagh MP Holdings U.S.A., Inc.: | |||
4.067% 5/15/21 (b)(c) | 11,510 | 11,740 | |
4.625% 5/15/23 (b) | 21,095 | 21,306 | |
7% 11/15/20 (b) | 2,189 | 2,255 | |
7.25% 5/15/24 (b) | 1,225 | 1,292 | |
Consolidated Container Co. LLC/Consolidated Container Capital, Inc. 10.125% 7/15/20 (b) | 18,500 | 18,685 | |
Crown Americas LLC/Crown Americas Capital Corp. IV 4.5% 1/15/23 | 1,975 | 2,024 | |
Crown Americas LLC/Crown Americas Capital Corp. V 4.25% 9/30/26 (b) | 2,155 | 2,115 | |
Graphic Packaging International, Inc. 4.125% 8/15/24 | 6,175 | 6,144 | |
Owens-Brockway Glass Container, Inc.: | |||
5% 1/15/22 (b) | 6,190 | 6,476 | |
5.375% 1/15/25 (b) | 4,130 | 4,254 | |
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer (Luxembourg) SA: | |||
5.125% 7/15/23 (b) | 8,975 | 9,213 | |
5.75% 10/15/20 | 9,525 | 9,775 | |
Sealed Air Corp. 5.25% 4/1/23 (b) | 6,590 | 6,920 | |
102,199 | |||
Diversified Financial Services - 4.6% | |||
Adient Global Holdings Ltd. 4.875% 8/15/26 (b) | 4,265 | 4,195 | |
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust: | |||
3.95% 2/1/22 | 12,355 | 12,592 | |
4.5% 5/15/21 | 5,395 | 5,608 | |
Aircastle Ltd.: | |||
4.625% 12/15/18 | 1,810 | 1,887 | |
5% 4/1/23 | 2,640 | 2,732 | |
5.125% 3/15/21 | 12,830 | 13,616 | |
5.5% 2/15/22 | 3,085 | 3,309 | |
6.25% 12/1/19 | 5,815 | 6,331 | |
7.625% 4/15/20 | 4,630 | 5,267 | |
CIT Group, Inc.: | |||
5% 8/15/22 | 5,515 | 5,880 | |
5.375% 5/15/20 | 11,850 | 12,665 | |
FLY Leasing Ltd.: | |||
6.375% 10/15/21 | 15,728 | 16,082 | |
6.75% 12/15/20 | 4,320 | 4,504 | |
Icahn Enterprises LP/Icahn Enterprises Finance Corp.: | |||
4.875% 3/15/19 | 14,035 | 13,946 | |
6% 8/1/20 | 3,610 | 3,547 | |
ILFC E-Capital Trust I 4% 12/21/65 (b)(c) | 7,105 | 5,666 | |
ILFC E-Capital Trust II 4.25% 12/21/65 (b)(c) | 9,720 | 7,898 | |
Inception Merger Sub, Inc./Rackspace Hosting, Inc. 8.625% 11/15/24 (b) | 4,115 | 4,115 | |
International Lease Finance Corp.: | |||
4.625% 4/15/21 | 6,665 | 6,957 | |
5.875% 8/15/22 | 4,115 | 4,532 | |
8.25% 12/15/20 | 2,000 | 2,380 | |
8.625% 1/15/22 | 7,715 | 9,461 | |
MSCI, Inc.: | |||
4.75% 8/1/26 (b) | 4,890 | 4,927 | |
5.75% 8/15/25 (b) | 3,285 | 3,492 | |
Navient Corp.: | |||
5% 10/26/20 | 2,165 | 2,138 | |
6.625% 7/26/21 | 3,750 | 3,751 | |
SLM Corp.: | |||
4.875% 6/17/19 | 15,065 | 15,197 | |
5.5% 1/25/23 | 2,320 | 2,105 | |
6.125% 3/25/24 | 3,990 | 3,651 | |
7.25% 1/25/22 | 5,390 | 5,444 | |
8% 3/25/20 | 12,692 | 13,771 | |
Springleaf Financial Corp. 8.25% 12/15/20 | 4,990 | 5,414 | |
213,060 | |||
Diversified Media - 1.9% | |||
Clear Channel Worldwide Holdings, Inc.: | |||
Series A: | |||
6.5% 11/15/22 | 11,160 | 11,216 | |
7.625% 3/15/20 | 15,605 | 14,747 | |
7.625% 3/15/20 | 2,350 | 2,274 | |
Lamar Media Corp. 5.75% 2/1/26 | 2,825 | 3,025 | |
MDC Partners, Inc. 6.5% 5/1/24 (b) | 33,286 | 28,376 | |
National CineMedia LLC 5.75% 8/15/26 (b) | 4,295 | 4,424 | |
Nielsen Finance LLC/Nielsen Finance Co. 5% 4/15/22 (b) | 21,950 | 22,389 | |
86,451 | |||
Energy - 11.0% | |||
AmeriGas Finance LLC/AmeriGas Finance Corp. 7% 5/20/22 | 3,800 | 4,000 | |
Antero Midstream Partners LP/Antero Midstream Finance Corp. 5.375% 9/15/24 (b) | 2,000 | 2,015 | |
Antero Resources Corp.: | |||
5.125% 12/1/22 | 2,440 | 2,458 | |
5.625% 6/1/23 (Reg. S) | 3,960 | 4,039 | |
Antero Resources Finance Corp. 5.375% 11/1/21 | 5,955 | 6,044 | |
Baytex Energy Corp.: | |||
5.125% 6/1/21 (b) | 3,070 | 2,586 | |
5.625% 6/1/24 (b) | 3,655 | 2,942 | |
Callon Petroleum Co. 6.125% 10/1/24 (b) | 1,865 | 1,921 | |
Chesapeake Energy Corp.: | |||
4.875% 4/15/22 | 24,342 | 20,691 | |
5.375% 6/15/21 | 14,960 | 13,015 | |
5.75% 3/15/23 | 3,500 | 3,028 | |
6.125% 2/15/21 | 7,470 | 6,835 | |
8% 12/15/22 (b) | 12,185 | 12,360 | |
Citgo Petroleum Corp. 6.25% 8/15/22 (b) | 26,495 | 27,091 | |
Compressco Partners LP/Compressco Finance, Inc. 7.25% 8/15/22 | 4,755 | 4,541 | |
Concho Resources, Inc. 5.5% 4/1/23 | 350 | 358 | |
Continental Resources, Inc.: | |||
4.5% 4/15/23 | 4,270 | 4,067 | |
5% 9/15/22 | 18,525 | 18,155 | |
Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp. 6.25% 4/1/23 | 2,070 | 2,096 | |
CVR Refining LLC/Coffeyville Finance, Inc. 6.5% 11/1/22 | 9,618 | 8,897 | |
Denbury Resources, Inc.: | |||
4.625% 7/15/23 | 7,530 | 5,478 | |
5.5% 5/1/22 | 7,840 | 6,194 | |
Ensco PLC: | |||
4.5% 10/1/24 | 4,355 | 3,484 | |
4.7% 3/15/21 | 1,290 | 1,191 | |
5.2% 3/15/25 | 2,345 | 1,908 | |
5.75% 10/1/44 | 6,460 | 4,312 | |
EP Energy LLC/Everest Acquisition Finance, Inc. 7.75% 9/1/22 | 1,210 | 823 | |
Ferrellgas LP/Ferrellgas Finance Corp. 6.5% 5/1/21 | 2,915 | 2,747 | |
Gulfmark Offshore, Inc. 6.375% 3/15/22 | 2,373 | 1,163 | |
Halcon Resources Corp. 8.625% 2/1/20 (b) | 4,330 | 4,417 | |
Hilcorp Energy I LP/Hilcorp Finance Co.: | |||
5% 12/1/24 (b) | 9,745 | 9,501 | |
5.75% 10/1/25 (b) | 5,380 | 5,393 | |
Holly Energy Partners LP/Holly Finance Corp. 6% 8/1/24 (b) | 3,230 | 3,359 | |
Hornbeck Offshore Services, Inc.: | |||
5% 3/1/21 | 250 | 149 | |
5.875% 4/1/20 | 505 | 326 | |
LINN Energy LLC/LINN Energy Finance Corp. 6.25% 11/1/19 (c)(d) | 4,385 | 1,458 | |
NGL Energy Partners LP/NGL Energy Finance Corp.: | |||
5.125% 7/15/19 | 3,230 | 3,198 | |
7.5% 11/1/23 (b) | 4,705 | 4,717 | |
Noble Holding International Ltd.: | |||
4.625% 3/1/21 | 6,465 | 5,459 | |
5.25% 3/15/42 | 3,445 | 1,946 | |
6.05% 3/1/41 | 860 | 502 | |
Northern Tier Energy LLC/Northern Tier Finance Corp. 7.125% 11/15/20 | 3,745 | 3,829 | |
NRG Yield Operating LLC 5% 9/15/26 (b) | 4,295 | 4,166 | |
Pacific Drilling SA 5.375% 6/1/20 (b) | 1,700 | 485 | |
Parsley Energy LLC/Parsley 6.25% 6/1/24 (b) | 925 | 971 | |
PBF Holding Co. LLC/PBF Finance Corp. 7% 11/15/23 (b) | 14,775 | 13,667 | |
PBF Logistics LP/PBF Logistics Finance, Inc. 6.875% 5/15/23 | 820 | 795 | |
PDC Energy, Inc. 6.125% 9/15/24 (b) | 1,625 | 1,690 | |
Plains Exploration & Production Co.: | |||
6.75% 2/1/22 | 3,540 | 3,620 | |
6.875% 2/15/23 | 4,275 | 4,435 | |
Range Resources Corp. 5% 3/15/23 (b) | 2,140 | 2,070 | |
Rice Energy, Inc.: | |||
6.25% 5/1/22 | 2,305 | 2,345 | |
7.25% 5/1/23 | 1,700 | 1,802 | |
Rose Rock Midstream LP/Rose Rock Finance Corp.: | |||
5.625% 7/15/22 | 4,315 | 4,121 | |
5.625% 11/15/23 | 4,380 | 4,205 | |
Sabine Pass Liquefaction LLC: | |||
5.625% 2/1/21 (c) | 4,695 | 4,941 | |
5.625% 4/15/23 (c) | 13,985 | 14,859 | |
5.625% 3/1/25 | 6,295 | 6,661 | |
5.75% 5/15/24 | 8,500 | 8,989 | |
6.25% 3/15/22 | 14,170 | 15,516 | |
SM Energy Co.: | |||
5% 1/15/24 | 7,235 | 6,729 | |
5.625% 6/1/25 | 6,395 | 6,091 | |
6.125% 11/15/22 | 12,935 | 13,000 | |
6.5% 11/15/21 | 3,615 | 3,669 | |
6.5% 1/1/23 | 9,245 | 9,199 | |
6.75% 9/15/26 | 2,055 | 2,106 | |
Southwestern Energy Co.: | |||
4.1% 3/15/22 | 10,600 | 9,487 | |
5.8% 1/23/20 (c) | 13,300 | 13,234 | |
SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp. 7.375% 2/1/20 (b) | 2,625 | 2,527 | |
Sunoco LP/Sunoco Finance Corp.: | |||
6.25% 4/15/21 | 8,740 | 8,959 | |
6.375% 4/1/23 | 9,220 | 9,427 | |
Targa Resources Partners LP/Targa Resources Partners Finance Corp.: | |||
4.25% 11/15/23 | 6,115 | 5,748 | |
5.125% 2/1/25 (b) | 2,610 | 2,603 | |
5.25% 5/1/23 | 2,920 | 2,898 | |
5.375% 2/1/27 (b) | 2,610 | 2,610 | |
6.375% 8/1/22 | 2,365 | 2,436 | |
6.75% 3/15/24 | 1,230 | 1,316 | |
Teine Energy Ltd. 6.875% 9/30/22 (b) | 410 | 417 | |
Tesoro Logistics LP/Tesoro Logistics Finance Corp.: | |||
5.875% 10/1/20 | 4,105 | 4,223 | |
6.125% 10/15/21 | 7,935 | 8,302 | |
6.25% 10/15/22 | 5,645 | 5,984 | |
Transocean, Inc. 9% 7/15/23 (b) | 4,330 | 4,230 | |
Weatherford International Ltd.: | |||
4.5% 4/15/22 | 2,140 | 1,926 | |
6.5% 8/1/36 | 4,305 | 3,401 | |
7% 3/15/38 | 6,455 | 5,325 | |
7.75% 6/15/21 | 6,230 | 6,292 | |
8.25% 6/15/23 | 15,340 | 15,877 | |
Weatherford International, Inc. 6.8% 6/15/37 | 9,910 | 7,928 | |
Western Refining Logistics LP/WNRL Finance Co. 7.5% 2/15/23 | 2,305 | 2,409 | |
Whiting Petroleum Corp.: | |||
5% 3/15/19 | 4,070 | 3,867 | |
5.75% 3/15/21 | 9,990 | 9,266 | |
6.25% 4/1/23 | 2,535 | 2,339 | |
WPX Energy, Inc.: | |||
6% 1/15/22 | 6,383 | 6,367 | |
7.5% 8/1/20 | 3,715 | 3,915 | |
8.25% 8/1/23 | 4,575 | 4,941 | |
513,079 | |||
Entertainment/Film - 0.6% | |||
AMC Entertainment Holdings, Inc. 5.875% 11/15/26 (b)(e) | 4,285 | 4,301 | |
CBS Outdoor Americas Capital LLC/CBS Outdoor Americas Capital Corp.: | |||
5.25% 2/15/22 | 7,095 | 7,343 | |
5.625% 2/15/24 | 2,800 | 2,912 | |
5.875% 3/15/25 | 10,155 | 10,612 | |
New Cotai LLC/New Cotai Capital Corp. 10.625% 5/1/19 pay-in-kind (b)(c) | 5,750 | 3,087 | |
28,255 | |||
Environmental - 1.1% | |||
Clean Harbors, Inc. 5.125% 6/1/21 | 2,420 | 2,477 | |
Covanta Holding Corp.: | |||
5.875% 3/1/24 | 8,520 | 8,403 | |
6.375% 10/1/22 | 6,490 | 6,604 | |
7.25% 12/1/20 | 4,832 | 4,959 | |
LBC Tank Terminals Holding Netherlands BV 6.875% 5/15/23 (b) | 18,820 | 18,867 | |
Tervita Corp.: | |||
8% 11/15/18 (b) | 8,970 | 8,880 | |
9.75% 11/1/19 (b) | 10,805 | 621 | |
10.875% 2/15/18 (b) | 8,035 | 462 | |
51,273 | |||
Food & Drug Retail - 2.2% | |||
Albertsons Companies LLC/Safeway, Inc./New Albertson's, Inc./Albertson's LLC: | |||
5.75% 3/15/25 (b) | 9,565 | 9,442 | |
6.625% 6/15/24 (b) | 4,845 | 5,027 | |
BI-LO LLC/BI-LO Finance Corp.: | |||
8.625% 9/15/18 pay-in-kind (b)(c) | 33,335 | 21,001 | |
9.25% 2/15/19 (b) | 33,780 | 29,304 | |
Performance Food Group, Inc. 5.5% 6/1/24 (b) | 2,765 | 2,848 | |
Rite Aid Corp. 7.7% 2/15/27 | 3,030 | 3,757 | |
Tops Holding LLC/Tops Markets II Corp. 8% 6/15/22 (b) | 32,220 | 28,354 | |
99,733 | |||
Food/Beverage/Tobacco - 2.5% | |||
C&S Group Enterprises LLC 5.375% 7/15/22 (b) | 34,227 | 33,200 | |
Cott Beverages, Inc.: | |||
5.375% 7/1/22 | 370 | 376 | |
6.75% 1/1/20 | 205 | 213 | |
ESAL GmbH 6.25% 2/5/23 (b) | 21,070 | 20,280 | |
JBS Investments GmbH: | |||
7.25% 4/3/24 (b) | 9,250 | 9,343 | |
7.75% 10/28/20 (b) | 15,005 | 15,643 | |
JBS U.S.A. LLC/JBS U.S.A. Finance, Inc.: | |||
5.75% 6/15/25 (b) | 2,625 | 2,573 | |
7.25% 6/1/21 (b) | 14,640 | 15,006 | |
7.25% 6/1/21 (b) | 5,070 | 5,197 | |
Minerva Luxembourg SA 6.5% 9/20/26 (b) | 4,285 | 4,197 | |
Post Holdings, Inc. 7.75% 3/15/24 (b) | 3,655 | 4,040 | |
U.S. Foods, Inc. 5.875% 6/15/24 (b) | 4,305 | 4,477 | |
Vector Group Ltd. 7.75% 2/15/21 | 2,900 | 3,038 | |
117,583 | |||
Gaming - 1.3% | |||
Boyd Gaming Corp. 6.375% 4/1/26 (b) | 2,050 | 2,194 | |
Caesars Growth Properties Holdings LLC/Caesars Growth Properties Finance, Inc. 9.375% 5/1/22 | 8,685 | 9,228 | |
GLP Capital LP/GLP Financing II, Inc. 5.375% 4/15/26 | 1,850 | 1,966 | |
MCE Finance Ltd. 5% 2/15/21 (b) | 890 | 890 | |
MGM Growth Properties Operating Partnership LP 4.5% 9/1/26 (b) | 6,120 | 6,013 | |
MGM Mirage, Inc. 7.75% 3/15/22 | 2,230 | 2,581 | |
Scientific Games Corp.: | |||
6.625% 5/15/21 | 16,730 | 13,760 | |
7% 1/1/22 (b) | 5,015 | 5,334 | |
10% 12/1/22 | 7,785 | 7,201 | |
Seminole Hard Rock Entertainment, Inc. 5.875% 5/15/21 (b) | 3,705 | 3,673 | |
Wynn Macau Ltd. 5.25% 10/15/21 (b) | 6,790 | 6,814 | |
59,654 | |||
Healthcare - 12.1% | |||
Acadia Healthcare Co., Inc. 5.625% 2/15/23 | 2,315 | 2,318 | |
AMAG Pharmaceuticals, Inc. 7.875% 9/1/23 (b) | 7,765 | 7,280 | |
AmSurg Corp. 5.625% 7/15/22 | 5,345 | 5,452 | |
Centene Corp. 4.75% 5/15/22 | 6,640 | 6,740 | |
Community Health Systems, Inc.: | |||
5.125% 8/1/21 | 25,895 | 24,147 | |
6.875% 2/1/22 | 76,450 | 58,293 | |
7.125% 7/15/20 | 6,425 | 5,188 | |
CTR Partnership LP/CareTrust Capital Corp. 5.875% 6/1/21 | 4,410 | 4,542 | |
DaVita HealthCare Partners, Inc.: | |||
5% 5/1/25 | 7,445 | 7,184 | |
5.125% 7/15/24 | 9,575 | 9,366 | |
Double Eagle Acquisition Sub, Inc. 7.5% 10/1/24 (b) | 1,795 | 1,849 | |
Endo Finance LLC: | |||
5.375% 1/15/23 (b)(c) | 16,235 | 13,800 | |
5.75% 1/15/22 (b) | 1,505 | 1,355 | |
Endo Finance LLC/Endo Ltd./Endo Finco, Inc.: | |||
6% 7/15/23 (b) | 11,025 | 9,592 | |
6.5% 2/1/25 (b)(c) | 14,850 | 12,511 | |
HCA Holdings, Inc.: | |||
4.5% 2/15/27 | 4,300 | 4,246 | |
5.25% 6/15/26 | 5,705 | 5,962 | |
5.375% 2/1/25 | 4,215 | 4,302 | |
5.875% 3/15/22 | 9,465 | 10,412 | |
5.875% 5/1/23 | 12,595 | 13,363 | |
5.875% 2/15/26 | 2,805 | 2,945 | |
6.25% 2/15/21 | 7,735 | 8,344 | |
7.5% 11/6/33 | 2,576 | 2,782 | |
HealthSouth Corp. 5.75% 9/15/25 | 5,215 | 5,398 | |
Horizon Pharma PLC 6.625% 5/1/23 | 11,287 | 10,652 | |
Horizon Pharma, Inc. 8.75% 11/1/24 (b) | 3,595 | 3,649 | |
IMS Health, Inc. 5% 10/15/26 (b) | 5,885 | 6,084 | |
Kindred Healthcare, Inc.: | |||
8% 1/15/20 | 24,440 | 24,684 | |
8.75% 1/15/23 | 4,980 | 4,831 | |
Mallinckrodt International Finance SA/Mallinckrodt CB LLC: | |||
4.875% 4/15/20 (b) | 2,545 | 2,555 | |
5.625% 10/15/23 (b) | 5,615 | 5,278 | |
5.75% 8/1/22 (b) | 4,305 | 4,079 | |
MPT Operating Partnership LP/MPT Finance Corp.: | |||
5.25% 8/1/26 | 1,825 | 1,862 | |
5.5% 5/1/24 | 3,770 | 3,883 | |
6.375% 3/1/24 | 3,810 | 4,105 | |
Ortho-Clinical Diagnostics, Inc. 6.625% 5/15/22 (b) | 15,873 | 13,611 | |
Sabra Health Care LP/Sabra Capital Corp.: | |||
5.375% 6/1/23 | 15,645 | 15,958 | |
5.5% 2/1/21 | 16,370 | 17,066 | |
Teleflex, Inc. 4.875% 6/1/26 | 5,655 | 5,796 | |
Tenet Healthcare Corp.: | |||
4.3503% 6/15/20 (c) | 7,975 | 8,035 | |
4.375% 10/1/21 | 23,865 | 23,746 | |
4.5% 4/1/21 | 780 | 780 | |
6% 10/1/20 | 2,530 | 2,665 | |
8.125% 4/1/22 | 41,410 | 40,478 | |
Valeant Pharmaceuticals International, Inc.: | |||
5.375% 3/15/20 (b) | 18,640 | 16,124 | |
5.5% 3/1/23 (b) | 7,920 | 6,217 | |
5.625% 12/1/21 (b) | 3,595 | 2,948 | |
5.875% 5/15/23 (b) | 25,905 | 20,400 | |
6.125% 4/15/25 (b) | 28,300 | 22,357 | |
6.75% 8/15/21 (b) | 20,648 | 17,861 | |
7% 10/1/20 (b) | 1,230 | 1,101 | |
7.25% 7/15/22 (b) | 21,360 | 18,583 | |
7.5% 7/15/21 (b) | 5,200 | 4,628 | |
VPI Escrow Corp. 6.375% 10/15/20 (b) | 28,440 | 24,530 | |
561,917 | |||
Homebuilders/Real Estate - 1.1% | |||
Beazer Homes U.S.A., Inc. 8.75% 3/15/22 (b) | 3,115 | 3,310 | |
Brookfield Residential Properties, Inc./Brookfield Residential U.S. Corp. 6.125% 7/1/22 (b) | 1,825 | 1,852 | |
Brookfield Residential Properties, Inc.: | |||
6.375% 5/15/25 (b) | 2,426 | 2,420 | |
6.5% 12/15/20 (b) | 4,585 | 4,723 | |
Kennedy-Wilson, Inc. 5.875% 4/1/24 | 4,295 | 4,343 | |
Realogy Group LLC/Realogy Co.-Issuer Corp. 5.25% 12/1/21 (b) | 4,130 | 4,342 | |
Shea Homes Ltd. Partnership/Corp. 6.125% 4/1/25 (b) | 2,325 | 2,290 | |
Taylor Morrison Communities, Inc./Monarch Communities, Inc. 5.625% 3/1/24 (b) | 11,417 | 11,845 | |
TRI Pointe Homes, Inc. 5.875% 6/15/24 | 2,260 | 2,342 | |
William Lyon Homes, Inc.: | |||
5.75% 4/15/19 | 2,530 | 2,581 | |
7% 8/15/22 | 3,905 | 4,061 | |
8.5% 11/15/20 | 7,090 | 7,427 | |
51,536 | |||
Hotels - 0.4% | |||
ESH Hospitality, Inc. 5.25% 5/1/25 (b) | 13,885 | 13,746 | |
Hilton Escrow Issuer LLC 4.25% 9/1/24 (b) | 5,980 | 5,995 | |
19,741 | |||
Insurance - 0.6% | |||
Hockey Merger Sub 2, Inc. 7.875% 10/1/21 (b) | 12,898 | 13,184 | |
Hub Holdings LLC/Hub Holdings Finance, Inc. 8.125% 7/15/19 pay-in-kind (b)(c) | 15,545 | 15,156 | |
28,340 | |||
Leisure - 0.0% | |||
24 Hour Holdings III LLC 8% 6/1/22 (b) | 1,475 | 1,224 | |
Metals/Mining - 2.0% | |||
Bluescope Steel Ltd./Bluescope Steel Finance 6.5% 5/15/21 (b) | 1,510 | 1,593 | |
Cloud Peak Energy Resources LLC/Cloud Peak Energy Finance Corp. 12% 11/1/21 | 1,279 | 1,295 | |
CONSOL Energy, Inc. 5.875% 4/15/22 | 5,125 | 4,737 | |
Eldorado Gold Corp. 6.125% 12/15/20 (b) | 3,800 | 3,838 | |
First Quantum Minerals Ltd.: | |||
6.75% 2/15/20 (b) | 5,775 | 5,530 | |
7% 2/15/21 (b) | 4,555 | 4,324 | |
7.25% 5/15/22 (b) | 1,975 | 1,869 | |
Freeport-McMoRan, Inc.: | |||
3.55% 3/1/22 | 11,010 | 10,102 | |
3.875% 3/15/23 | 8,450 | 7,626 | |
4.55% 11/14/24 | 20,585 | 18,887 | |
5.4% 11/14/34 | 8,590 | 7,398 | |
Novelis Corp.: | |||
5.875% 9/30/26 (b) | 4,300 | 4,354 | |
6.25% 8/15/24 (b) | 4,295 | 4,467 | |
Peabody Energy Corp. 10% 3/15/22 (b)(d) | 4,900 | 3,540 | |
SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp. 7.375% 2/1/20 (b) | 2,995 | 2,883 | |
Teck Resources Ltd.: | |||
8% 6/1/21 (b) | 3,215 | 3,512 | |
8.5% 6/1/24 (b) | 5,220 | 6,042 | |
Walter Energy, Inc. 9.5% 10/15/19 (b)(d) | 5,823 | 0 | |
91,997 | |||
Paper - 0.1% | |||
Boise Cascade Co. 5.625% 9/1/24 (b) | 1,855 | 1,876 | |
Louisiana-Pacific Corp. 4.875% 9/15/24 (b) | 2,150 | 2,112 | |
NewPage Corp. 11.375% 12/31/14 (d) | 30,721 | 0 | |
3,988 | |||
Restaurants - 0.1% | |||
KFC Holding Co./Pizza Hut Holding LLC 5% 6/1/24 (b) | 3,940 | 4,098 | |
Services - 4.0% | |||
Algeco Scotsman Global Finance PLC 8.5% 10/15/18 (b) | 8,540 | 7,750 | |
Anna Merger Sub, Inc. 7.75% 10/1/22 (b) | 30,765 | 26,381 | |
APX Group, Inc.: | |||
6.375% 12/1/19 | 9,020 | 9,302 | |
7.875% 12/1/22 | 12,845 | 13,519 | |
8.75% 12/1/20 | 12,930 | 12,510 | |
Aramark Services, Inc.: | |||
4.75% 6/1/26 (b) | 4,275 | 4,275 | |
5.125% 1/15/24 | 3,160 | 3,310 | |
5.125% 1/15/24 (b) | 1,935 | 2,027 | |
Avis Budget Car Rental LLC/Avis Budget Finance, Inc. 5.125% 6/1/22 (b) | 6,440 | 6,311 | |
Corrections Corp. of America 5% 10/15/22 | 2,110 | 1,904 | |
Everi Payments, Inc. 10% 1/15/22 | 1,415 | 1,350 | |
Garda World Security Corp. 7.25% 11/15/21 (b) | 4,762 | 4,548 | |
Hertz Corp. 6.25% 10/15/22 | 6,090 | 6,242 | |
IHS Markit Ltd. 5% 11/1/22 (b) | 1,360 | 1,438 | |
Laureate Education, Inc. 10% 9/1/19 (b)(c) | 77,014 | 71,223 | |
The GEO Group, Inc. 6% 4/15/26 | 1,840 | 1,587 | |
TMS International Corp. 7.625% 10/15/21 (b) | 340 | 281 | |
United Rentals North America, Inc.: | |||
5.5% 5/15/27 (e) | 3,270 | 3,254 | |
5.875% 9/15/26 | 8,500 | 8,658 | |
185,870 | |||
Steel - 0.3% | |||
Cliffs Natural Resources, Inc. 8.25% 3/31/20 (b) | 2,650 | 2,879 | |
Commercial Metals Co. 4.875% 5/15/23 | 4,120 | 4,079 | |
Evraz, Inc. NA Canada 7.5% 11/15/19 (b) | 5,295 | 5,341 | |
12,299 | |||
Super Retail - 1.4% | |||
Argos Merger Sub, Inc. 7.125% 3/15/23 (b) | 20,610 | 21,563 | |
Asbury Automotive Group, Inc. 6% 12/15/24 | 6,190 | 6,376 | |
Chinos Intermediate Holdings A, Inc. 7.75% 5/1/19 pay-in-kind (b)(c) | 12,311 | 4,524 | |
Claire's Stores, Inc.: | |||
6.125% 3/15/20 (b) | 6,325 | 3,099 | |
9% 3/15/19 (b) | 16,690 | 8,345 | |
DBP Holding Corp. 7.75% 10/15/20 (b) | 13,445 | 10,218 | |
JC Penney Corp., Inc.: | |||
6.375% 10/15/36 | 5,590 | 4,752 | |
7.4% 4/1/37 | 2,963 | 2,711 | |
Netflix, Inc. 4.375% 11/15/26 (b) | 4,700 | 4,624 | |
66,212 | |||
Technology - 2.4% | |||
CDW LLC/CDW Finance Corp. 5.5% 12/1/24 | 3,295 | 3,461 | |
Compiler Finance Sub, Inc. 7% 5/1/21 (b) | 6,390 | 2,971 | |
Diamond 1 Finance Corp./Diamond 2 Finance Corp.: | |||
5.45% 6/15/23 (b) | 8,555 | 9,165 | |
5.875% 6/15/21 (b) | 10,205 | 10,756 | |
6.02% 6/15/26 (b) | 2,731 | 2,976 | |
7.125% 6/15/24 (b) | 4,480 | 4,908 | |
Lucent Technologies, Inc.: | |||
6.45% 3/15/29 | 21,495 | 23,698 | |
6.5% 1/15/28 | 1,190 | 1,267 | |
Micron Technology, Inc.: | |||
5.25% 1/15/24 (b) | 13,155 | 12,826 | |
5.5% 2/1/25 | 2,130 | 2,088 | |
7.5% 9/15/23 (b) | 7,550 | 8,333 | |
Open Text Corp. 5.875% 6/1/26 (b) | 4,285 | 4,564 | |
Parametric Technology Corp. 6% 5/15/24 | 1,535 | 1,623 | |
Qorvo, Inc. 6.75% 12/1/23 | 6,175 | 6,762 | |
Sabre GLBL, Inc. 5.25% 11/15/23 (b) | 4,250 | 4,362 | |
VeriSign, Inc. 4.625% 5/1/23 | 4,455 | 4,589 | |
Western Digital Corp.: | |||
7.375% 4/1/23 (b) | 4,230 | 4,627 | |
10.5% 4/1/24 (b) | 3,460 | 3,996 | |
112,972 | |||
Telecommunications - 8.3% | |||
Altice Financing SA: | |||
6.5% 1/15/22 (b) | 16,974 | 17,742 | |
7.5% 5/15/26 (b) | 11,220 | 11,557 | |
Altice Finco SA: | |||
7.625% 2/15/25 (b) | 7,755 | 7,677 | |
8.125% 1/15/24 (b) | 25,430 | 26,066 | |
Broadview Networks Holdings, Inc. 10.5% 11/15/17 | 9,374 | 8,812 | |
Cincinnati Bell, Inc. 7% 7/15/24 (b) | 4,310 | 4,515 | |
Columbus International, Inc. 7.375% 3/30/21 (b) | 27,500 | 29,425 | |
CommScope Technologies Finance LLC 6% 6/15/25 (b) | 1,620 | 1,701 | |
Digicel Group Ltd. 6% 4/15/21 (b) | 10,920 | 9,770 | |
Frontier Communications Corp.: | |||
8.875% 9/15/20 | 2,830 | 3,007 | |
10.5% 9/15/22 | 4,315 | 4,488 | |
11% 9/15/25 | 18,305 | 18,742 | |
GCI, Inc. 6.875% 4/15/25 | 6,590 | 6,689 | |
Inmarsat Finance PLC 4.875% 5/15/22 (b) | 2,245 | 2,117 | |
Intelsat Jackson Holdings SA: | |||
5.5% 8/1/23 | 13,085 | 8,669 | |
7.5% 4/1/21 | 2,385 | 1,753 | |
8% 2/15/24 (b) | 4,100 | 4,121 | |
Intelsat Luxembourg SA 7.75% 6/1/21 | 6,385 | 2,075 | |
Level 3 Financing, Inc.: | |||
5.125% 5/1/23 | 13,140 | 13,271 | |
5.25% 3/15/26 (b) | 4,095 | 4,156 | |
5.375% 1/15/24 | 10,640 | 10,853 | |
Millicom International Cellular SA 4.75% 5/22/20 (b) | 4,010 | 4,026 | |
Neptune Finco Corp.: | |||
6.625% 10/15/25 (b) | 7,010 | 7,597 | |
10.125% 1/15/23 (b) | 4,595 | 5,181 | |
10.875% 10/15/25 (b) | 6,000 | 6,900 | |
Sable International Finance Ltd. 6.875% 8/1/22 (b) | 9,020 | 9,336 | |
SFR Group SA: | |||
6% 5/15/22 (b) | 10,880 | 11,155 | |
6.25% 5/15/24 (b) | 4,450 | 4,447 | |
7.375% 5/1/26 (b) | 10,355 | 10,459 | |
Sprint Capital Corp.: | |||
6.875% 11/15/28 | 8,180 | 7,526 | |
6.9% 5/1/19 | 8,964 | 9,435 | |
Sprint Communications, Inc. 6% 11/15/22 | 18,465 | 17,207 | |
Sprint Corp.: | |||
7.125% 6/15/24 | 11,730 | 11,026 | |
7.25% 9/15/21 | 15,875 | 16,252 | |
7.875% 9/15/23 | 18,985 | 18,795 | |
T-Mobile U.S.A., Inc.: | |||
6% 3/1/23 | 3,700 | 3,894 | |
6% 4/15/24 | 8,240 | 8,765 | |
6.125% 1/15/22 | 5,435 | 5,734 | |
6.625% 4/1/23 | 16,025 | 17,029 | |
Wind Acquisition Finance SA: | |||
4.75% 7/15/20 (b) | 12,545 | 12,608 | |
7.375% 4/23/21 (b) | 2,025 | 2,081 | |
386,659 | |||
Transportation Ex Air/Rail - 1.1% | |||
Navios Maritime Acquisition Corp./Navios Acquisition Finance U.S., Inc. 8.125% 11/15/21 (b) | 10,505 | 7,931 | |
Navios Maritime Holdings, Inc.: | |||
7.375% 1/15/22 (b) | 28,180 | 14,654 | |
8.125% 2/15/19 | 16,681 | 9,675 | |
Navios South American Logistics, Inc./Navios Logistics Finance U.S., Inc. 7.25% 5/1/22 (b) | 3,145 | 2,485 | |
Teekay Corp. 8.5% 1/15/20 | 18,238 | 16,597 | |
Ultrapetrol (Bahamas) Ltd. 8.875% 6/15/21 (d) | 9,100 | 1,729 | |
53,071 | |||
Utilities - 3.5% | |||
Calpine Corp. 5.5% 2/1/24 | 2,040 | 1,989 | |
Cortes NP Acquisition Corp. 9.25% 10/15/24 (b) | 6,465 | 6,752 | |
Dolphin Subsidiary II, Inc. 7.25% 10/15/21 | 8,980 | 9,373 | |
Dynegy, Inc.: | |||
7.375% 11/1/22 | 20,975 | 20,228 | |
7.625% 11/1/24 | 43,235 | 41,398 | |
GenOn Energy, Inc. 9.875% 10/15/20 | 1,613 | 1,206 | |
Global Partners LP/GLP Finance Corp.: | |||
6.25% 7/15/22 | 5,245 | 5,009 | |
7% 6/15/23 | 15,805 | 15,094 | |
InterGen NV 7% 6/30/23 (b) | 24,935 | 21,132 | |
NRG Energy, Inc.: | |||
7.25% 5/15/26 (b) | 1,000 | 984 | |
7.875% 5/15/21 | 571 | 597 | |
NSG Holdings II LLC/NSG Holdings, Inc. 7.75% 12/15/25 (b) | 7,551 | 8,117 | |
PPL Energy Supply LLC: | |||
4.6% 12/15/21 | 5,165 | 4,232 | |
6.5% 6/1/25 | 5,125 | 4,279 | |
RJS Power Holdings LLC 4.625% 7/15/19 (b)(c) | 13,140 | 12,483 | |
The AES Corp.: | |||
3.8421% 6/1/19 (c) | 1,395 | 1,393 | |
6% 5/15/26 | 8,415 | 8,667 | |
162,933 | |||
TOTAL NONCONVERTIBLE BONDS | 3,596,104 | ||
TOTAL CORPORATE BONDS | |||
(Cost $3,683,765) | 3,596,830 | ||
Shares | Value (000s) | ||
Common Stocks - 0.2% | |||
Automotive & Auto Parts - 0.1% | |||
Chassix Holdings, Inc. (f) | 103,457 | 3,250 | |
Chassix Holdings, Inc. warrants 7/29/20 (f) | 27,176 | 196 | |
TOTAL AUTOMOTIVE & AUTO PARTS | 3,446 | ||
Banks & Thrifts - 0.1% | |||
CIT Group, Inc. | 58,981 | 2,143 | |
Chemicals - 0.0% | |||
LyondellBasell Industries NV Class A | 306 | 24 | |
Healthcare - 0.0% | |||
HealthSouth Corp. warrants 1/17/17 (f) | 2,671 | 4 | |
Metals/Mining - 0.0% | |||
Warrior Met Coal LLC Class A (g) | 3,015 | 778 | |
Telecommunications - 0.0% | |||
Broadview Networks Holdings, Inc. (f)(h) | 609,310 | 762 | |
TOTAL COMMON STOCKS | |||
(Cost $21,197) | 7,157 | ||
Convertible Preferred Stocks - 0.6% | |||
Banks & Thrifts - 0.4% | |||
Bank of America Corp. Series L 7.25% (f) | 15,158 | 18,659 | |
Energy - 0.2% | |||
Chesapeake Energy Corp. Series A 5.75% | 24,000 | 11,610 | |
TOTAL CONVERTIBLE PREFERRED STOCKS | |||
(Cost $30,576) | 30,269 | ||
Principal Amount (000s) | Value (000s) | ||
Bank Loan Obligations - 8.9% | |||
Aerospace - 0.2% | |||
TransDigm, Inc.: | |||
Tranche C, term loan 3.8214% 2/28/20 (c) | 4,400 | 4,393 | |
Tranche D, term loan 3.8316% 6/4/21 (c) | 7,058 | 7,042 | |
TOTAL AEROSPACE | 11,435 | ||
Air Transportation - 0.1% | |||
XPO Logistics, Inc. Tranche B2 1LN, term loan 4.25% 10/30/21 (c) | 4,354 | 4,374 | |
Automotive & Auto Parts - 0.0% | |||
Chassix, Inc. term loan 12% 7/29/19 | 1,208 | 1,238 | |
Broadcasting - 0.2% | |||
CBS Radio, Inc. term loan 4.5% 10/17/23 (c) | 10,835 | 10,889 | |
Cable/Satellite TV - 0.3% | |||
Charter Communications Operating LLC: | |||
Tranche E, term loan 3% 7/1/20 (c) | 2,109 | 2,113 | |
Tranche F, term loan 3% 1/3/21 (c) | 4,051 | 4,056 | |
WideOpenWest Finance LLC Tranche B, term loan 4.5% 8/19/23 (c) | 8,605 | 8,582 | |
TOTAL CABLE/SATELLITE TV | 14,751 | ||
Capital Goods - 0.2% | |||
Rexnord LLC Tranche B, term loan 4% 8/21/20 (c) | 5,672 | 5,685 | |
SRAM LLC. Tranche B, term loan 4.0146% 4/10/20 (c) | 4,235 | 4,129 | |
TOTAL CAPITAL GOODS | 9,814 | ||
Chemicals - 0.2% | |||
MacDermid, Inc. term loan 5% 6/7/23 (c) | 1,560 | 1,572 | |
Trinseo Materials Operating SCA/Trinseo Materials Finance, Inc. Tranche B 1LN, term loan 4.25% 11/5/21 (c) | 1,817 | 1,827 | |
Tronox Pigments (Netherlands) B.V. Tranche B, term loan 4.5% 3/19/20 (c) | 6,811 | 6,776 | |
TOTAL CHEMICALS | 10,175 | ||
Containers - 0.1% | |||
Reynolds Group Holdings, Inc. Tranche B, term loan 4.25% 2/5/23 (c) | 6,565 | 6,580 | |
Diversified Media - 0.1% | |||
WMG Acquisition Corp. term loan 3.75% 7/1/20 (c) | 3,223 | 3,216 | |
Energy - 0.3% | |||
California Resources Corp. Tranche 1LN, term loan 11.375% 12/31/21 (c) | 4,570 | 4,907 | |
Energy Transfer Equity LP Tranche B, term loan 3.2924% 12/2/19 (c) | 8,045 | 7,977 | |
Seadrill Operating LP Tranche B, term loan 4% 2/21/21 (c) | 6,568 | 3,649 | |
TOTAL ENERGY | 16,533 | ||
Entertainment/Film - 0.1% | |||
CBS Outdoor Americas Capital LLC/CBS Outdoor Americas Capital Corp. Tranche B, term loan 3% 1/31/21 (c) | 5,317 | 5,323 | |
Environmental - 0.5% | |||
ADS Waste Holdings, Inc. Tranche B 2LN, term loan 3.75% 10/9/19 (c) | 21,558 | 21,564 | |
Food & Drug Retail - 0.1% | |||
Albertson's LLC Tranche B 4LN, term loan 4.5% 8/25/21 (c) | 4,224 | 4,254 | |
Food/Beverage/Tobacco - 0.1% | |||
Chobani LLC Tranche B, term loan 5.25% 10/7/23 (c) | 4,380 | 4,427 | |
Gaming - 0.6% | |||
Caesars Growth Properties Holdings, LLC Tranche 1LN, term loan 6.25% 5/8/21 (c) | 26,286 | 26,242 | |
Healthcare - 0.8% | |||
Community Health Systems, Inc. Tranche H, term loan 4% 1/27/21 (c) | 4,312 | 4,067 | |
DJO Finance LLC Tranche B 1LN, term loan 4.25% 6/7/20 (c) | 7,847 | 7,759 | |
Horizon Pharmaceuticals, Inc. term loan 5/7/21 (i) | 805 | 806 | |
Kindred Healthcare, Inc. Tranche B, term loan 4.25% 4/9/21 (c) | 6,371 | 6,366 | |
Ortho-Clinical Diagnostics, Inc. Tranche B, term loan 4.75% 6/30/21 (c) | 11,695 | 11,412 | |
Valeant Pharmaceuticals International, Inc. Tranche E, term loan 5.25% 8/5/20 (c) | 5,445 | 5,423 | |
TOTAL HEALTHCARE | 35,833 | ||
Hotels - 0.1% | |||
ESH Hospitality, Inc. Tranche B, term loan 8/30/23 (i) | 4,300 | 4,322 | |
Insurance - 0.4% | |||
HUB International Ltd. Tranche B 1LN, term loan 4% 10/2/20 (c) | 19,813 | 19,799 | |
Lonestar Intermediate Super Holdings LLC term loan 10% 8/31/21 pay-in-kind (c) | 710 | 715 | |
TOTAL INSURANCE | 20,514 | ||
Services - 1.9% | |||
Acosta, Inc. Tranche B, term loan 4.25% 9/26/21 (c) | 13,197 | 12,683 | |
Ancestry.Com Operations, Inc. Tranche B 1LN, term loan 5.25% 10/19/23 (c) | 8,470 | 8,483 | |
ARAMARK Corp. Tranche F, term loan 3.3377% 2/24/21 (c) | 6,231 | 6,262 | |
Brand Energy & Infrastructure Services, Inc. Tranche B, term loan 4.75% 11/26/20 (c) | 12,594 | 12,419 | |
Garda World Security Corp.: | |||
term loan 4% 11/8/20 (c) | 6,584 | 6,499 | |
Tranche DD, term loan 4.0039% 11/8/20 (c) | 1,823 | 1,799 | |
Laureate Education, Inc. Tranche B, term loan 8.8679% 3/17/21 (c) | 38,449 | 38,113 | |
TOTAL SERVICES | 86,258 | ||
Steel - 0.1% | |||
JMC Steel Group, Inc. Tranche B, term loan 6% 6/14/21 (c) | 3,865 | 3,889 | |
Super Retail - 0.9% | |||
Davids Bridal, Inc. Tranche B, term loan 5% 10/11/19 (c) | 10,892 | 10,130 | |
J. Crew Group, Inc. Tranche B, term loan 4% 3/5/21 (c) | 21,055 | 16,025 | |
PetSmart, Inc. term loan 4% 3/11/22 (c) | 8,815 | 8,832 | |
Sears Holdings Corp. Tranche ABL, term loan 5.5% 6/30/18 (c) | 5,941 | 5,811 | |
TOTAL SUPER RETAIL | 40,798 | ||
Technology - 0.5% | |||
BMC Software Finance, Inc. Tranche B, term loan 5% 9/10/20 (c) | 5,157 | 5,075 | |
Generac Power Systems, Inc. Tranche B, term loan 3.5956% 5/31/20 (c) | 4,189 | 4,192 | |
Kronos, Inc. term loan 10/20/23 (i) | 9,565 | 9,603 | |
Renaissance Learning, Inc. Tranche 1LN, term loan 4.5% 4/9/21 (c) | 3,066 | 3,056 | |
TOTAL TECHNOLOGY | 21,926 | ||
Telecommunications - 0.1% | |||
Polycom, Inc. Tranche B, term loan 7.5% 9/27/23 (c) | 4,380 | 4,265 | |
Utilities - 1.0% | |||
Calpine Construction Finance Co. LP Tranche B 1LN, term loan 3.09% 5/3/20 (c) | 11,892 | 11,803 | |
Cortes NP Acquisition Corp. Tranche B, term loan 9/30/23 (i) | 6,565 | 6,524 | |
Dynegy Finance IV, Inc. Tranche C, term loan 5% 6/27/23 (c) | 14,805 | 14,842 | |
Tex Operations Co. LLC: | |||
Tranche B, term loan 5% 8/4/23 (c) | 8,896 | 8,974 | |
Tranche C, term loan 5% 8/4/23 (c) | 2,029 | 2,047 | |
TOTAL UTILITIES | 44,190 | ||
TOTAL BANK LOAN OBLIGATIONS | |||
(Cost $413,190) | 412,810 | ||
Preferred Securities - 5.2% | |||
Banks & Thrifts - 5.2% | |||
Bank of America Corp.: | |||
6.1% (c)(j) | 12,150 | 12,786 | |
6.25% (c)(j) | 6,240 | 6,598 | |
Barclays Bank PLC 7.625% 11/21/22 | 18,275 | 21,020 | |
Barclays PLC: | |||
6.625% (c)(j) | 21,820 | 20,207 | |
8.25% (c)(j) | 13,960 | 14,283 | |
Citigroup, Inc.: | |||
5.875% (c)(j) | 41,035 | 41,904 | |
6.3% (c)(j) | 10,320 | 10,865 | |
Credit Agricole SA: | |||
6.625% (b)(c)(j) | 8,755 | 8,576 | |
7.875% (b)(c)(j) | 11,570 | 11,821 | |
8.125% (b)(c)(j) | 4,165 | 4,509 | |
Credit Suisse Group AG: | |||
6.25% (b)(c)(j) | 2,730 | 2,698 | |
7.5% (b)(c)(j) | 6,165 | 6,561 | |
Deutsche Bank AG 7.5% (c)(j) | 5,800 | 4,954 | |
Goldman Sachs Group, Inc. 5.375% (c)(j) | 4,385 | 4,519 | |
JPMorgan Chase & Co.: | |||
5.3% (c)(j) | 9,520 | 9,915 | |
6.125% (c)(j) | 3,445 | 3,649 | |
6.75% (c)(j) | 4,255 | 4,795 | |
Lloyds Banking Group PLC 7.5% (c)(j) | 14,060 | 14,583 | |
Royal Bank of Scotland Group PLC: | |||
7.5% (c)(j) | 16,570 | 15,312 | |
8% (c)(j) | 3,715 | 3,555 | |
8.625% (c)(j) | 6,045 | 6,075 | |
Societe Generale: | |||
6% (b)(c)(j) | 925 | 864 | |
8% (b)(c)(j) | 10,780 | 10,953 | |
TOTAL PREFERRED SECURITIES | |||
(Cost $238,101) | 241,002 | ||
Shares | Value (000s) | ||
Money Market Funds - 6.6% | |||
Fidelity Cash Central Fund, 0.41% (k) | |||
(Cost $307,475) | 307,461,977 | 307,554 | |
TOTAL INVESTMENT PORTFOLIO - 98.9% | |||
(Cost $4,694,304) | 4,595,622 | ||
NET OTHER ASSETS (LIABILITIES) - 1.1% | 51,091 | ||
NET ASSETS - 100% | $4,646,713 |
Values shown as $0 may reflect amounts less than $500.
Legend
(a) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end.
(b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $1,778,718,000 or 38.3% of net assets.
(c) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end.
(d) Non-income producing - Security is in default.
(e) Security or a portion of the security purchased on a delayed delivery or when-issued basis.
(f) Non-income producing
(g) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $778,000 or 0.0% of net assets.
(h) Affiliated company
(i) The coupon rate will be determined upon settlement of the loan after period end.
(j) Security is perpetual in nature with no stated maturity date.
(k) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.
Additional information on each restricted holding is as follows:
Security | Acquisition Date | Acquisition Cost (000s) |
Warrior Met Coal LLC Class A | 4/11/14 - 7/8/14 | $5,839 |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
Fund | Income earned |
(Amounts in thousands) | |
Fidelity Cash Central Fund | $669 |
Total | $669 |
Other Affiliated Issuers
An affiliated company is a company in which the Fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows:
Affiliate (Amounts in thousands) | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value, end of period |
Broadview Networks Holdings, Inc. | $883 | $-- | $-- | $-- | $762 |
Total | $883 | $-- | $-- | $-- | $762 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
(Amounts in thousands) | ||||
Investments in Securities: | ||||
Equities: | ||||
Consumer Discretionary | $3,446 | $-- | $-- | $3,446 |
Energy | 12,388 | -- | 11,610 | 778 |
Financials | 20,802 | 20,802 | -- | -- |
Health Care | 4 | 4 | -- | -- |
Materials | 24 | 24 | -- | -- |
Telecommunication Services | 762 | 762 | -- | -- |
Corporate Bonds | 3,596,830 | -- | 3,596,830 | -- |
Bank Loan Obligations | 412,810 | -- | 411,572 | 1,238 |
Preferred Securities | 241,002 | -- | 241,002 | -- |
Money Market Funds | 307,554 | 307,554 | -- | -- |
Total Investments in Securities: | $4,595,622 | $329,146 | $4,261,014 | $5,462 |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
United States of America | 78.3% |
Canada | 4.0% |
Luxembourg | 4.0% |
United Kingdom | 3.1% |
Ireland | 2.6% |
Netherlands | 1.8% |
Bermuda | 1.4% |
France | 1.3% |
Marshall Islands | 1.2% |
Others (Individually Less Than 1%) | 2.3% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) | October 31, 2016 (Unaudited) | |
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $4,375,483) | $4,287,306 | |
Fidelity Central Funds (cost $307,475) | 307,554 | |
Other affiliated issuers (cost $11,346) | 762 | |
Total Investments (cost $4,694,304) | $4,595,622 | |
Cash | 6,627 | |
Receivable for investments sold | 17,466 | |
Receivable for fund shares sold | 2,968 | |
Interest receivable | 67,466 | |
Distributions receivable from Fidelity Central Funds | 116 | |
Prepaid expenses | 12 | |
Other receivables | 1 | |
Total assets | 4,690,278 | |
Liabilities | ||
Payable for investments purchased | ||
Regular delivery | $25,080 | |
Delayed delivery | 7,555 | |
Payable for fund shares redeemed | 4,343 | |
Distributions payable | 3,735 | |
Accrued management fee | 2,200 | |
Other affiliated payables | 577 | |
Other payables and accrued expenses | 75 | |
Total liabilities | 43,565 | |
Net Assets | $4,646,713 | |
Net Assets consist of: | ||
Paid in capital | $4,900,736 | |
Undistributed net investment income | 23,414 | |
Accumulated undistributed net realized gain (loss) on investments | (178,755) | |
Net unrealized appreciation (depreciation) on investments | (98,682) | |
Net Assets, for 538,207 shares outstanding | $4,646,713 | |
Net Asset Value, offering price and redemption price per share ($4,646,713 ÷ 538,207 shares) | $8.63 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Amounts in thousands | Six months ended October 31, 2016 (Unaudited) | |
Investment Income | ||
Dividends | $8,334 | |
Interest | 143,280 | |
Income from Fidelity Central Funds | 669 | |
Total income | 152,283 | |
Expenses | ||
Management fee | $12,997 | |
Transfer agent fees | 2,879 | |
Accounting fees and expenses | 579 | |
Custodian fees and expenses | 28 | |
Independent trustees' fees and expenses | 10 | |
Registration fees | 77 | |
Audit | 57 | |
Legal | 242 | |
Miscellaneous | 24 | |
Total expenses before reductions | 16,893 | |
Expense reductions | (10) | 16,883 |
Net investment income (loss) | 135,400 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | (35,131) | |
Fidelity Central Funds | 33 | |
Total net realized gain (loss) | (35,098) | |
Change in net unrealized appreciation (depreciation) on investment securities | 205,245 | |
Net gain (loss) | 170,147 | |
Net increase (decrease) in net assets resulting from operations | $305,547 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Amounts in thousands | Six months ended October 31, 2016 (Unaudited) | Year ended April 30, 2016 |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $135,400 | $278,008 |
Net realized gain (loss) | (35,098) | (138,943) |
Change in net unrealized appreciation (depreciation) | 205,245 | (299,412) |
Net increase (decrease) in net assets resulting from operations | 305,547 | (160,347) |
Distributions to shareholders from net investment income | (125,817) | (272,331) |
Share transactions | ||
Proceeds from sales of shares | 480,928 | 818,801 |
Reinvestment of distributions | 103,476 | 222,565 |
Cost of shares redeemed | (551,722) | (1,521,524) |
Net increase (decrease) in net assets resulting from share transactions | 32,682 | (480,158) |
Redemption fees | 130 | 295 |
Total increase (decrease) in net assets | 212,542 | (912,541) |
Net Assets | ||
Beginning of period | 4,434,171 | 5,346,712 |
End of period | $4,646,713 | $4,434,171 |
Other Information | ||
Undistributed net investment income end of period | $23,414 | $13,831 |
Shares | ||
Sold | 57,031 | 98,618 |
Issued in reinvestment of distributions | 12,153 | 26,703 |
Redeemed | (64,696) | (183,352) |
Net increase (decrease) | 4,488 | (58,031) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity High Income Fund
Six months ended (Unaudited) October 31, | Years ended April 30, | |||||
2016 | 2016 | 2015 | 2014 | 2013 | 2012 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $8.31 | $9.04 | $9.45 | $9.59 | $9.05 | $9.23 |
Income from Investment Operations | ||||||
Net investment income (loss)A | .248 | .503 | .495 | .523 | .551 | .600 |
Net realized and unrealized gain (loss) | .302 | (.741) | (.291) | (.091) | .538 | (.185) |
Total from investment operations | .550 | (.238) | .204 | .432 | 1.089 | .415 |
Distributions from net investment income | (.230) | (.493) | (.486) | (.509) | (.504) | (.597) |
Distributions from net realized gain | – | – | (.129) | (.064) | (.046) | – |
Total distributions | (.230) | (.493) | (.615) | (.573) | (.550) | (.597) |
Redemption fees added to paid in capitalA | –B | .001 | .001 | .001 | .001 | .002 |
Net asset value, end of period | $8.63 | $8.31 | $9.04 | $9.45 | $9.59 | $9.05 |
Total ReturnC,D | 6.69% | (2.47)% | 2.29% | 4.74% | 12.44% | 4.90% |
Ratios to Average Net AssetsE,F | ||||||
Expenses before reductions | .72%G | .73% | .72% | .72% | .72% | .76% |
Expenses net of fee waivers, if any | .72%G | .73% | .72% | .72% | .72% | .76% |
Expenses net of all reductions | .72%G | .73% | .72% | .72% | .72% | .76% |
Net investment income (loss) | 5.79%G | 6.00% | 5.38% | 5.58% | 5.96% | 6.79% |
Supplemental Data | ||||||
Net assets, end of period (in millions) | $4,647 | $4,434 | $5,347 | $6,372 | $6,678 | $5,717 |
Portfolio turnover rateH | 54%G | 33% | 37% | 56% | 44% | 35% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.0005 per share.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
G Annualized
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements (Unaudited)
For the period ended October 31, 2016
(Amounts in thousands except percentages)
1. Organization.
Fidelity High Income Fund (the Fund) is a fund of Fidelity Summer Street Trust (the Trust) and is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds, bank loan obligations and preferred securities are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances. The Fund invests a significant portion of its assets in below investment grade securities. The value of these securities can be more volatile due to changes in the credit quality of the issuer and is sensitive to changes in economic, market and regulatory conditions.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016 is included at the end of the Fund's Schedule of Investments.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.
Expenses. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Dividends are declared and recorded daily and paid monthly from net investment income. Distributions from realized gains, if any, are declared and recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to market discount, contingent interest, deferred trustees compensation, certain conversion ratio adjustments, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $158,239 |
Gross unrealized depreciation | (240,619) |
Net unrealized appreciation (depreciation) on securities | $(82,380) |
Tax cost | $4,678,002 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of prior fiscal period end and is subject to adjustment.
No expiration | |
Short-term | $(59,377) |
Long-term | (82,024) |
Total no expiration | $(141,401) |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.00% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Delayed Delivery Transactions and When-Issued Securities. During the period, the Fund transacted in securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. The securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Loans and Other Direct Debt Instruments. The Fund invests in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. These instruments may be in the form of loans, trade claims or other receivables and may include standby financing commitments such as revolving credit facilities that obligate the Fund to supply additional cash to the borrower on demand. Loans may be acquired through assignment or participation. The Fund did not have any unfunded loan commitments, which are contractual obligations for future funding, at period end.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,164,189 and $1,200,875, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and an annualized group fee rate that averaged .11% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .56% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .12% of average net assets.
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The fee is based on the level of average net assets for each month.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were less than five hundred dollars for the period.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Other. During the period, the investment adviser reimbursed the Fund for certain losses in the amount of $16.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $8 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Expense Reductions.
Through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $2.
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses in the amount of $8.
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
9. Litigation.
The Fund, and other entities managed by FMR or its affiliates, became aware in March 2015 that they were named as defendants in a lawsuit originally filed in the United States Bankruptcy Court for the Southern District of New York in 2009. The lawsuit was brought by creditors of Motors Liquidation Company (f/k/a General Motors), which went through Chapter 11 bankruptcy proceedings in 2009, and is captioned Official Committee of Unsecured Creditors of Motors Liquidation Company v. JPMorgan Chase Bank, N.A., et al., Adversary No. 09-00504 (REG). The plaintiffs are seeking an order that the Fund and other defendants return proceeds received in 2009 in full payment of the principal and interest on General Motors secured debt. The plaintiffs contend that the Fund and the other defendants were not secured creditors at the time of the 2009 payments and, thus, were not entitled to payment in full. In January 2015, the Court of Appeals ruled that JPMorgan, as administrative agent for all of the debtholders, released the security interest on certain collateral securing the debt prior to the 2009 payments. The parties to the dispute have commenced discovery on the value of remaining, unreleased collateral. At this time, Management cannot determine the amount of loss that may be realized, but expects the amount to be less than the $13,206 received in 2009. The Fund was not previously aware that it had been named as a defendant in this case because, in 2009, the Bankruptcy Court allowed the plaintiffs to refrain from serving any of the defendants other than JPMorgan with notice of the filing of the lawsuit. The Fund will explore all available options for minimizing any loss to the Fund. The Fund will also incur legal costs in defending the case.
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (May 1, 2016 to October 31, 2016).
Actual Expenses
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Annualized Expense Ratio-A | Beginning Account Value May 1, 2016 | Ending Account Value October 31, 2016 | Expenses Paid During Period-B May 1, 2016 to October 31, 2016 | |
Actual | .72% | $1,000.00 | $1,066.90 | $3.75 |
Hypothetical-C | $1,000.00 | $1,021.58 | $3.67 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
C 5% return per year before expenses
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity High Income Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to all of the Fidelity funds.
At its July 2016 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and would be realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by FMR, the sub-advisers (together with FMR, the Investment Advisers), and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.In 2014, the Board formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs; (iv) broadening eligibility requirements for certain lower-priced share classes of, and streamlining the fee structure for, certain existing equity index funds; (v) lowering expense caps for certain existing funds and classes to reduce expenses paid by shareholders; (vi) eliminating redemption fees for certain variable insurance product funds and classes; (vii) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (viii) launching a lower cost share class for use by the Freedom Index Fund product line; (ix) rationalizing product lines and gaining increased efficiencies through fund mergers and share class consolidations; (x) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; (xi) implementing investment enhancements to further strengthen Fidelity's target date product line to increase investors' probability of success in achieving their goals; (xii) accelerating the conversion of all remaining Class B shares to Class A shares, which have a lower expense structure; and (xiii) implementing changes to Fidelity's money market fund product line in response to recent regulatory reforms.Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history.The Board took into account discussions with representatives of the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund, for different time periods, measured against a securities market index ("benchmark index") and a peer group of funds with similar objectives ("peer group"), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for the fund and an appropriate benchmark index and peer group for the most recent one-, three-, and five-year periods, as shown below. Returns are shown compared to the 25th percentile (top of box, 75% beaten) and 75th percentile (bottom of box, 25% beaten) of the peer universe.Fidelity High Income Fund
Fidelity High Income Fund
Corporate Headquarters
245 Summer St.
Boston, MA 02210
www.fidelity.com
SPH-SANN-1216
1.538299.119
Fidelity® Capital & Income Fund Semi-Annual Report October 31, 2016 |
Contents
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2016 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Fund nor Fidelity Distributors Corporation is a bank.
Investment Summary (Unaudited)
Top Five Holdings as of October 31, 2016
(by issuer, excluding cash equivalents) | % of fund's net assets | % of fund's net assets 6 months ago |
Ally Financial, Inc. | 3.5 | 3.6 |
T-Mobile U.S.A., Inc. | 2.4 | 3.2 |
SFR Group SA | 2.3 | 2.6 |
HCA Holdings, Inc. | 1.9 | 2.1 |
Energy Future Intermediate Holding Co. LLC/Energy Future Intermediate Holding Finance, Inc. | 1.9 | 1.5 |
12.0 |
Top Five Market Sectors as of October 31, 2016
% of fund's net assets | % of fund's net assets 6 months ago | |
Telecommunications | 13.4 | 14.8 |
Technology | 10.4 | 10.1 |
Energy | 9.7 | 6.0 |
Banks & Thrifts | 9.6 | 9.7 |
Diversified Financial Services | 6.9 | 8.9 |
Quality Diversification (% of fund's net assets)
As of October 31, 2016 | ||
AAA,AA,A | 0.1% | |
BBB | 4.6% | |
BB | 28.6% | |
B | 26.7% | |
CCC,CC,C | 13.3% | |
Not Rated | 3.5% | |
Equities | 20.7% | |
Short-Term Investments and Net Other Assets | 2.5% |
As of April 30, 2016 | ||
AAA,AA,A | 0.7% | |
BBB | 5.5% | |
BB | 30.9% | |
B | 24.7% | |
CCC,CC,C | 10.9% | |
Not Rated | 4.7% | |
Equities | 18.8% | |
Short-Term Investments and Net Other Assets | 3.8% |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes.
Asset Allocation (% of fund's net assets)
As of October 31, 2016* | ||
Nonconvertible Bonds | 67.5% | |
Convertible Bonds, Preferred Stocks | 0.1% | |
Common Stocks | 20.6% | |
Bank Loan Obligations | 3.2% | |
Other Investments | 6.1% | |
Short-Term Investments and Net Other Assets (Liabilities) | 2.5% |
* Foreign investments - 18.3%
As of April 30, 2016* | ||
Nonconvertible Bonds | 67.8% | |
Convertible Bonds, Preferred Stocks | 0.3% | |
Common Stocks | 18.5% | |
Bank Loan Obligations | 3.6% | |
Other Investments | 6.0% | |
Short-Term Investments and Net Other Assets (Liabilities) | 3.8% |
* Foreign investments - 17.7%
Investments October 31, 2016
Showing Percentage of Net Assets
Corporate Bonds - 67.5% | |||
Principal Amount (000s) | Value (000s) | ||
Convertible Bonds - 0.0% | |||
Automotive & Auto Parts - 0.0% | |||
Exide Technologies 7% 4/30/25 pay-in-kind | $2,426 | $1,310 | |
Nonconvertible Bonds - 67.5% | |||
Aerospace - 0.6% | |||
Huntington Ingalls Industries, Inc. 5% 11/15/25 (a) | 10,820 | 11,381 | |
KLX, Inc. 5.875% 12/1/22 (a) | 27,955 | 28,450 | |
TransDigm, Inc. 6.375% 6/15/26 (a) | 10,825 | 11,070 | |
Triumph Group, Inc. 4.875% 4/1/21 | 9,715 | 8,986 | |
59,887 | |||
Air Transportation - 0.5% | |||
Air Canada 5.375% 11/15/22 (a) | 2,783 | 2,916 | |
Allegiant Travel Co. 5.5% 7/15/19 | 3,350 | 3,480 | |
Continental Airlines, Inc. pass-thru trust certificates 6.903% 4/19/22 | 1,458 | 1,547 | |
Delta Air Lines, Inc. pass-thru trust certificates 8.021% 8/10/22 | 8,205 | 9,354 | |
Hawaiian Airlines pass-thru certificates Series 2013-1 Class B, 4.95% 7/15/23 | 4,247 | 4,252 | |
Northwest Airlines, Inc. pass-thru trust certificates 8.028% 11/1/17 | 1,623 | 1,717 | |
U.S. Airways pass-thru certificates: | |||
Series 2011-1 Class A, 7.125% 4/22/25 | 9,709 | 11,469 | |
Series 2012-2 Class B, 6.75% 12/3/22 | 3,060 | 3,320 | |
Series 2013-1 Class B, 5.375% 5/15/23 | 4,184 | 4,320 | |
XPO Logistics, Inc. 6.125% 9/1/23 (a) | 8,900 | 9,156 | |
51,531 | |||
Automotive - 0.1% | |||
International Automotive Components Group SA 9.125% 6/1/18 (a) | 13,750 | 13,028 | |
Automotive & Auto Parts - 0.8% | |||
Allison Transmission, Inc. 5% 10/1/24 (a) | 11,405 | 11,633 | |
Dana Holding Corp. 6% 9/15/23 | 7,475 | 7,802 | |
Exide Technologies 11% 4/30/20 pay-in-kind | 2,330 | 1,790 | |
General Motors Financial Co., Inc. 4.25% 5/15/23 | 5,620 | 5,834 | |
IHO Verwaltungs GmbH: | |||
4.125% 9/15/21 pay-in-kind (a)(b) | 7,810 | 7,995 | |
4.5% 9/15/23 pay-in-kind (a)(b) | 5,340 | 5,407 | |
4.75% 9/15/26 pay-in-kind (a)(b) | 6,440 | 6,424 | |
Lear Corp. 4.75% 1/15/23 | 12,337 | 12,800 | |
LKQ Corp. 4.75% 5/15/23 | 2,190 | 2,247 | |
Penske Automotive Group, Inc. 5.5% 5/15/26 | 8,565 | 8,501 | |
Tenneco, Inc. 5% 7/15/26 | 8,345 | 8,387 | |
78,820 | |||
Banks & Thrifts - 3.7% | |||
Ally Financial, Inc.: | |||
4.125% 2/13/22 | 22,220 | 22,227 | |
4.625% 3/30/25 | 37,190 | 37,841 | |
5.125% 9/30/24 | 85,095 | 89,775 | |
8% 11/1/31 | 179,366 | 214,323 | |
General Motors Acceptance Corp. 8% 11/1/31 | 20,638 | 24,714 | |
388,880 | |||
Broadcasting - 0.9% | |||
AMC Networks, Inc. 4.75% 12/15/22 | 5,930 | 6,049 | |
CBS Radio, Inc. 7.25% 11/1/24 (a) | 7,525 | 7,817 | |
Clear Channel Communications, Inc.: | |||
11.25% 3/1/21 | 11,170 | 8,461 | |
14% 2/1/21 pay-in-kind (b) | 11,904 | 4,464 | |
iHeartCommunications, Inc. 10.625% 3/15/23 | 29,269 | 21,110 | |
Sirius XM Radio, Inc.: | |||
4.625% 5/15/23 (a) | 4,925 | 4,956 | |
5.375% 4/15/25 (a) | 12,000 | 12,239 | |
5.375% 7/15/26 (a) | 11,315 | 11,492 | |
Tegna, Inc.: | |||
4.875% 9/15/21 (a) | 8,440 | 8,799 | |
5.5% 9/15/24 (a) | 8,440 | 8,651 | |
94,038 | |||
Building Materials - 0.1% | |||
American Builders & Contractors Supply Co., Inc. 5.625% 4/15/21 (a) | 3,005 | 3,103 | |
U.S. Concrete, Inc. 6.375% 6/1/24 | 5,535 | 5,756 | |
8,859 | |||
Cable/Satellite TV - 3.0% | |||
Altice SA: | |||
7.625% 2/15/25 (a) | 30,480 | 31,699 | |
7.75% 5/15/22 (a) | 67,520 | 70,516 | |
Altice U.S. Finance SA: | |||
5.375% 7/15/23 (a) | 19,460 | 19,909 | |
5.5% 5/15/26 (a) | 11,375 | 11,603 | |
CCO Holdings LLC/CCO Holdings Capital Corp.: | |||
5.125% 2/15/23 | 30,665 | 31,738 | |
5.125% 5/1/23 (a) | 14,050 | 14,507 | |
5.375% 5/1/25 (a) | 14,050 | 14,436 | |
5.5% 5/1/26 (a) | 17,605 | 18,034 | |
5.75% 9/1/23 | 9,495 | 10,017 | |
5.75% 1/15/24 | 11,275 | 11,923 | |
5.75% 2/15/26 (a) | 20,340 | 21,192 | |
Lynx II Corp. 6.375% 4/15/23 (a) | 3,545 | 3,616 | |
RCN Telecom Services LLC/RCN Capital Corp. 8.5% 8/15/20 (a) | 6,335 | 6,751 | |
Virgin Media Finance PLC 4.875% 2/15/22 | 10,880 | 9,361 | |
Wave Holdco LLC/Wave Holdco Corp. 8.25% 7/15/19 pay-in-kind (a)(b) | 2,757 | 2,778 | |
Ziggo Bond Finance BV: | |||
5.875% 1/15/25 (a) | 1,175 | 1,166 | |
6% 1/15/27 (a) | 11,435 | 11,228 | |
Ziggo Secured Finance BV 5.5% 1/15/27 (a) | 22,875 | 22,589 | |
313,063 | |||
Capital Goods - 0.1% | |||
AECOM Technology Corp.: | |||
5.75% 10/15/22 | 5,745 | 6,030 | |
5.875% 10/15/24 | 4,925 | 5,202 | |
11,232 | |||
Chemicals - 1.8% | |||
Kraton Polymers LLC/Kraton Polymers Capital Corp. 10.5% 4/15/23 (a) | 7,250 | 8,120 | |
Momentive Performance Materials, Inc.: | |||
3.88% 10/24/21 | 85,120 | 75,757 | |
4.69% 4/24/22 | 28,622 | 22,325 | |
10% 10/15/20 (c) | 28,622 | 0 | |
MPM Escrow LLC/MPM Finance Escrow Corp. 8.875% 10/15/20 (c) | 85,120 | 0 | |
Nufarm Australia Ltd. 6.375% 10/15/19 (a) | 4,160 | 4,243 | |
Platform Specialty Products Corp.: | |||
6.5% 2/1/22 (a) | 10,570 | 10,253 | |
10.375% 5/1/21 (a) | 3,490 | 3,769 | |
TPC Group, Inc. 8.75% 12/15/20 (a) | 14,165 | 11,722 | |
Valvoline Finco Two LLC 5.5% 7/15/24 (a) | 4,170 | 4,399 | |
Versum Materials, Inc. 5.5% 9/30/24 (a) | 5,910 | 6,043 | |
W. R. Grace & Co.-Conn.: | |||
5.125% 10/1/21 (a) | 33,275 | 35,438 | |
5.625% 10/1/24 (a) | 7,315 | 7,918 | |
189,987 | |||
Consumer Products - 0.6% | |||
Edgewell Personal Care Co. 5.5% 6/15/25 (a) | 7,330 | 7,422 | |
Revlon Consumer Products Corp. 5.75% 2/15/21 (b) | 37,745 | 38,122 | |
Spectrum Brands Holdings, Inc. 5.75% 7/15/25 | 11,680 | 12,644 | |
58,188 | |||
Containers - 1.5% | |||
Ardagh Packaging Finance PLC/Ardagh MP Holdings U.S.A., Inc.: | |||
4.625% 5/15/23 (a) | 11,410 | 11,524 | |
6% 6/30/21 (a) | 7,260 | 7,442 | |
6.25% 1/31/19 (a) | 12,530 | 12,765 | |
6.75% 1/31/21 (a) | 12,465 | 12,839 | |
7% 11/15/20 (a) | 1,029 | 1,060 | |
7.25% 5/15/24 (a) | 20,265 | 21,380 | |
Consolidated Container Co. LLC/Consolidated Container Capital, Inc. 10.125% 7/15/20 (a) | 4,335 | 4,378 | |
Crown Cork & Seal, Inc.: | |||
7.375% 12/15/26 | 4,845 | 5,439 | |
7.5% 12/15/96 | 12,871 | 13,145 | |
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer (Luxembourg) SA: | |||
5.125% 7/15/23 (a) | 22,890 | 23,498 | |
6.875% 2/15/21 (b) | 15,185 | 15,716 | |
7% 7/15/24 (a) | 6,635 | 7,091 | |
8.25% 2/15/21 (b) | 18,196 | 19,010 | |
9.875% 8/15/19 | 564 | 578 | |
Sealed Air Corp. 5.25% 4/1/23 (a) | 5,010 | 5,261 | |
161,126 | |||
Diversified Financial Services - 6.3% | |||
Adient Global Holdings Ltd. 4.875% 8/15/26 (a) | 11,400 | 11,213 | |
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust: | |||
4.25% 7/1/20 | 11,355 | 11,781 | |
4.5% 5/15/21 | 20,650 | 21,466 | |
4.625% 7/1/22 | 26,885 | 28,061 | |
5% 10/1/21 | 5,730 | 6,088 | |
Aircastle Ltd.: | |||
5% 4/1/23 | 6,445 | 6,671 | |
5.5% 2/15/22 | 10,600 | 11,369 | |
7.625% 4/15/20 | 7,830 | 8,907 | |
BCD Acquisition, Inc. 9.625% 9/15/23 (a) | 17,085 | 17,640 | |
CIT Group, Inc.: | |||
5% 8/15/22 | 17,330 | 18,478 | |
5.375% 5/15/20 | 21,665 | 23,154 | |
Icahn Enterprises LP/Icahn Enterprises Finance Corp.: | |||
5.875% 2/1/22 | 73,165 | 69,598 | |
6% 8/1/20 | 20,090 | 19,738 | |
Inception Merger Sub, Inc./Rackspace Hosting, Inc. 8.625% 11/15/24 (a) | 9,220 | 9,220 | |
International Lease Finance Corp.: | |||
4.625% 4/15/21 | 4,735 | 4,942 | |
5.875% 8/15/22 | 49,155 | 54,133 | |
8.25% 12/15/20 | 45,847 | 54,558 | |
8.625% 1/15/22 | 49,205 | 60,338 | |
MSCI, Inc.: | |||
5.25% 11/15/24 (a) | 6,725 | 7,061 | |
5.75% 8/15/25 (a) | 7,185 | 7,639 | |
Navient Corp.: | |||
5% 10/26/20 | 7,625 | 7,530 | |
5.875% 10/25/24 | 28,294 | 25,252 | |
6.625% 7/26/21 | 8,300 | 8,303 | |
Prime Securities Services Borrower LLC/Prime Finance, Inc. 9.25% 5/15/23 (a) | 61,805 | 65,668 | |
SLM Corp.: | |||
5.5% 1/25/23 | 44,765 | 40,624 | |
6.125% 3/25/24 | 9,105 | 8,331 | |
7.25% 1/25/22 | 24,350 | 24,594 | |
8% 3/25/20 | 15,115 | 16,400 | |
Springleaf Financial Corp.: | |||
7.75% 10/1/21 | 1,715 | 1,787 | |
8.25% 12/15/20 | 8,550 | 9,277 | |
659,821 | |||
Diversified Media - 0.7% | |||
Liberty Media Corp.: | |||
8.25% 2/1/30 | 25,528 | 27,315 | |
8.5% 7/15/29 | 16,125 | 17,899 | |
Nielsen Finance LLC/Nielsen Finance Co. 5% 4/15/22 (a) | 6,170 | 6,293 | |
Quebecor Media, Inc. 5.75% 1/15/23 | 15,820 | 16,532 | |
WMG Acquisition Corp. 5.625% 4/15/22 (a) | 2,410 | 2,506 | |
70,545 | |||
Energy - 9.2% | |||
Access Midstream Partners LP/ACMP Finance Corp. 4.875% 3/15/24 | 6,625 | 6,792 | |
American Energy-Permian Basin LLC/AEPB Finance Corp. 13% 11/30/20 (a) | 18,325 | 21,532 | |
Antero Midstream Partners LP/Antero Midstream Finance Corp. 5.375% 9/15/24 (a) | 4,420 | 4,453 | |
Antero Resources Corp.: | |||
5.125% 12/1/22 | 840 | 846 | |
5.625% 6/1/23 (Reg. S) | 10,850 | 11,067 | |
Antero Resources Finance Corp. 5.375% 11/1/21 | 5,830 | 5,917 | |
Callon Petroleum Co. 6.125% 10/1/24 (a) | 4,090 | 4,213 | |
Carrizo Oil & Gas, Inc. 6.25% 4/15/23 | 7,400 | 7,604 | |
Chaparral Energy, Inc. 9.875% 10/1/20 (c) | 3,940 | 3,073 | |
Cheniere Corpus Christi Holdings LLC 7% 6/30/24 (a) | 13,100 | 13,886 | |
Chesapeake Energy Corp.: | |||
5.75% 3/15/23 | 17,100 | 14,792 | |
8% 12/15/22 (a) | 42,695 | 43,309 | |
Citgo Holding, Inc. 10.75% 2/15/20 (a) | 22,810 | 23,289 | |
Compressco Partners LP/Compressco Finance, Inc. 7.25% 8/15/22 | 8,120 | 7,755 | |
Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp.: | |||
6.125% 3/1/22 | 18,692 | 19,113 | |
6.25% 4/1/23 | 9,260 | 9,376 | |
CVR Refining LLC/Coffeyville Finance, Inc. 6.5% 11/1/22 | 20,970 | 19,397 | |
Denbury Resources, Inc.: | |||
4.625% 7/15/23 | 11,210 | 8,155 | |
5.5% 5/1/22 | 18,370 | 14,512 | |
6.375% 8/15/21 | 15,820 | 13,091 | |
Diamondback Energy, Inc. 4.75% 11/1/24 (a) | 6,900 | 6,900 | |
Eagle Rock Energy Partners LP/Eagle Rock Energy Finance Corp. 8.375% 6/1/19 | 14,075 | 7,741 | |
Endeavor Energy Resources LP/EER Finance, Inc. 7% 8/15/21 (a) | 10,660 | 10,847 | |
Energy Transfer Equity LP 5.5% 6/1/27 | 16,735 | 16,317 | |
Ensco PLC: | |||
4.5% 10/1/24 | 12,210 | 9,768 | |
5.2% 3/15/25 | 7,540 | 6,133 | |
5.75% 10/1/44 | 10,983 | 7,331 | |
EP Energy LLC/Everest Acquisition Finance, Inc.: | |||
7.75% 9/1/22 | 1,145 | 779 | |
9.375% 5/1/20 | 10,025 | 7,870 | |
EV Energy Partners LP/EV Energy Finance Corp. 8% 4/15/19 | 9,210 | 6,355 | |
Exterran Partners LP/EXLP Finance Corp. 6% 10/1/22 | 8,075 | 7,611 | |
Forbes Energy Services Ltd. 9% 6/15/19 (c) | 10,305 | 2,576 | |
Forum Energy Technologies, Inc. 6.25% 10/1/21 | 13,870 | 13,731 | |
Genesis Energy LP/Genesis Energy Finance Corp. 5.75% 2/15/21 | 4,655 | 4,643 | |
Gulfmark Offshore, Inc. 6.375% 3/15/22 | 360 | 176 | |
Hilcorp Energy I LP/Hilcorp Finance Co.: | |||
5% 12/1/24 (a) | 9,920 | 9,672 | |
5.75% 10/1/25 (a) | 11,285 | 11,313 | |
7.625% 4/15/21 (a) | 10,609 | 10,874 | |
Holly Energy Partners LP/Holly Finance Corp. 6% 8/1/24 (a) | 7,145 | 7,431 | |
Hornbeck Offshore Services, Inc. 5.875% 4/1/20 | 8,093 | 5,220 | |
Jupiter Resources, Inc. 8.5% 10/1/22 (a) | 27,205 | 22,308 | |
Laredo Petroleum, Inc. 7.375% 5/1/22 (Reg. S) | 9,390 | 9,672 | |
MPLX LP: | |||
4.875% 12/1/24 | 16,745 | 17,519 | |
5.5% 2/15/23 | 7,055 | 7,351 | |
Newfield Exploration Co.: | |||
5.375% 1/1/26 | 9,245 | 9,499 | |
5.625% 7/1/24 | 1,550 | 1,612 | |
Noble Holding International Ltd.: | |||
3.95% 3/15/22 | 4,155 | 3,189 | |
4.625% 3/1/21 | 2,865 | 2,419 | |
6.2% 8/1/40 | 4,305 | 2,529 | |
7.2% 4/1/25 (b) | 9,635 | 7,853 | |
8.2% 4/1/45 (b) | 2,130 | 1,435 | |
Northern Tier Energy LLC/Northern Tier Finance Corp. 7.125% 11/15/20 | 4,500 | 4,601 | |
Parsley Energy LLC/Parsley 6.25% 6/1/24 (a) | 2,055 | 2,158 | |
PBF Holding Co. LLC/PBF Finance Corp.: | |||
7% 11/15/23 (a) | 21,310 | 19,712 | |
8.25% 2/15/20 | 19,835 | 20,232 | |
PBF Logistics LP/PBF Logistics Finance, Inc. 6.875% 5/15/23 | 8,455 | 8,201 | |
PDC Energy, Inc. 6.125% 9/15/24 (a) | 3,555 | 3,697 | |
PetroBakken Energy Ltd. 8.625% 2/1/20 (a)(c) | 23,570 | 1,061 | |
Plains Exploration & Production Co. 6.75% 2/1/22 | 16,510 | 16,881 | |
QEP Resources, Inc. 5.25% 5/1/23 | 12,370 | 12,154 | |
Range Resources Corp. 5% 3/15/23 (a) | 18,145 | 17,555 | |
Rice Energy, Inc.: | |||
6.25% 5/1/22 | 20,020 | 20,370 | |
7.25% 5/1/23 | 9,808 | 10,396 | |
RSP Permian, Inc. 6.625% 10/1/22 | 4,715 | 4,968 | |
Sabine Pass Liquefaction LLC: | |||
5% 3/15/27 (a) | 17,145 | 17,445 | |
5.875% 6/30/26 (a) | 17,145 | 18,477 | |
SemGroup Corp. 7.5% 6/15/21 | 8,325 | 8,512 | |
SM Energy Co.: | |||
5.625% 6/1/25 | 5,480 | 5,220 | |
6.75% 9/15/26 | 4,550 | 4,664 | |
Southern Natural Gas Co.: | |||
7.35% 2/15/31 | 23,497 | 28,134 | |
8% 3/1/32 | 12,475 | 16,036 | |
Southern Star Central Corp. 5.125% 7/15/22 (a) | 6,750 | 6,868 | |
Southwestern Energy Co. 4.1% 3/15/22 | 17,110 | 15,313 | |
Summit Midstream Holdings LLC 7.5% 7/1/21 | 4,145 | 4,311 | |
Sunoco LP/Sunoco Finance Corp.: | |||
6.25% 4/15/21 | 16,355 | 16,764 | |
6.375% 4/1/23 | 7,815 | 7,991 | |
Targa Resources Partners LP/Targa Resources Partners Finance Corp.: | |||
5.125% 2/1/25 (a) | 5,750 | 5,736 | |
5.375% 2/1/27 (a) | 5,750 | 5,750 | |
Teine Energy Ltd. 6.875% 9/30/22 (a) | 11,950 | 12,159 | |
Tennessee Gas Pipeline Co. 7.625% 4/1/37 | 5,445 | 6,522 | |
TerraForm Power Operating LLC: | |||
9.375% 2/1/23 (a)(b) | 30,835 | 30,912 | |
9.625% 6/15/25 (a)(b) | 7,915 | 8,172 | |
Tesoro Logistics LP/Tesoro Logistics Finance Corp.: | |||
6.125% 10/15/21 | 2,890 | 3,024 | |
6.375% 5/1/24 | 4,570 | 4,924 | |
Trinidad Drilling Ltd. 7.875% 1/15/19 (a) | 4,031 | 3,945 | |
Unit Corp. 6.625% 5/15/21 | 2,202 | 2,026 | |
Weatherford International Ltd.: | |||
7.75% 6/15/21 | 11,415 | 11,529 | |
8.25% 6/15/23 | 9,700 | 10,040 | |
Western Refining Logistics LP/WNRL Finance Co. 7.5% 2/15/23 | 13,025 | 13,611 | |
Western Refining, Inc. 6.25% 4/1/21 | 27,830 | 28,039 | |
WPX Energy, Inc.: | |||
5.25% 9/15/24 | 8,725 | 8,289 | |
6% 1/15/22 | 21,830 | 21,775 | |
959,020 | |||
Entertainment/Film - 0.2% | |||
AMC Entertainment Holdings, Inc. 5.875% 11/15/26 (a)(d) | 9,580 | 9,616 | |
AMC Entertainment, Inc. 5.75% 6/15/25 | 3,205 | 3,213 | |
CBS Outdoor Americas Capital LLC/CBS Outdoor Americas Capital Corp.: | |||
5.25% 2/15/22 | 2,380 | 2,463 | |
5.625% 2/15/24 | 2,570 | 2,673 | |
Lions Gate Entertainment Corp. 5.875% 11/1/24 (a) | 3,865 | 3,901 | |
21,866 | |||
Environmental - 0.2% | |||
ADS Waste Holdings, Inc. 5.625% 11/15/24 (a)(d) | 10,140 | 10,191 | |
Covanta Holding Corp. 5.875% 3/1/24 | 7,775 | 7,668 | |
17,859 | |||
Food & Drug Retail - 1.2% | |||
Albertsons Companies LLC/Safeway, Inc./New Albertson's, Inc./Albertson's LLC: | |||
5.75% 3/15/25 (a) | 21,255 | 20,983 | |
6.625% 6/15/24 (a) | 14,645 | 15,194 | |
Albertsons, Inc.: | |||
7.45% 8/1/29 | 13,240 | 12,744 | |
8% 5/1/31 | 12,364 | 12,024 | |
8.7% 5/1/30 | 1,710 | 1,736 | |
BI-LO LLC/BI-LO Finance Corp.: | |||
8.625% 9/15/18 pay-in-kind (a)(b) | 15,260 | 9,614 | |
9.25% 2/15/19 (a) | 24,122 | 20,926 | |
FAGE International SA/FAGE U.S.A. Dairy Industry, Inc. 5.625% 8/15/26 (a) | 16,350 | 16,881 | |
Tops Holding LLC/Tops Markets II Corp. 8% 6/15/22 (a) | 11,295 | 9,940 | |
120,042 | |||
Food/Beverage/Tobacco - 1.8% | |||
B&G Foods, Inc. 4.625% 6/1/21 | 10,575 | 10,866 | |
Constellation Brands, Inc. 4.75% 11/15/24 | 10,985 | 12,029 | |
ESAL GmbH 6.25% 2/5/23 (a) | 28,980 | 27,893 | |
Hearthside Group Holdings LLC/Hearthside Finance, Inc. 6.5% 5/1/22 (a) | 3,220 | 3,180 | |
JBS Investments GmbH 7.25% 4/3/24 (a) | 37,820 | 38,198 | |
JBS U.S.A. LLC/JBS U.S.A. Finance, Inc.: | |||
5.75% 6/15/25 (a) | 20,055 | 19,654 | |
5.875% 7/15/24 (a) | 6,030 | 6,060 | |
7.25% 6/1/21 (a) | 7,350 | 7,534 | |
8.25% 2/1/20 (a) | 7,110 | 7,306 | |
Pilgrim's Pride Corp. 5.75% 3/15/25 (a) | 13,985 | 14,300 | |
Post Holdings, Inc.: | |||
5% 8/15/26 (a) | 17,030 | 16,519 | |
6% 12/15/22 (a) | 6,040 | 6,372 | |
7.75% 3/15/24 (a) | 9,195 | 10,162 | |
8% 7/15/25 (a) | 4,595 | 5,238 | |
TreeHouse Foods, Inc. 4.875% 3/15/22 | 4,150 | 4,306 | |
189,617 | |||
Gaming - 2.0% | |||
Caesars Growth Properties Holdings LLC/Caesars Growth Properties Finance, Inc. 9.375% 5/1/22 | 73,630 | 78,232 | |
MGP Escrow Issuer LLC/MGP Escrow Co.-Issuer, Inc. 5.625% 5/1/24 (a) | 6,770 | 7,206 | |
Paris Las Vegas Holding LLC/Harrah's Las Vegas LLC/Flamingo Las Vegas Holdings, Inc.: | |||
8% 10/1/20 (b) | 38,815 | 40,271 | |
11% 10/1/21 (b) | 55,505 | 59,876 | |
Scientific Games Corp. 10% 12/1/22 | 22,999 | 21,274 | |
Waterford Gaming LLC/Waterford Gaming Finance Corp. 8.625% 3/31/2015 (a)(c) | 1,990 | 0 | |
206,859 | |||
Healthcare - 3.4% | |||
Alere, Inc. 6.375% 7/1/23 (a) | 5,115 | 5,268 | |
AMAG Pharmaceuticals, Inc. 7.875% 9/1/23 (a) | 6,045 | 5,667 | |
AmSurg Corp. 5.625% 7/15/22 | 6,995 | 7,135 | |
CTR Partnership LP/CareTrust Capital Corp. 5.875% 6/1/21 | 1,805 | 1,859 | |
Double Eagle Acquisition Sub, Inc. 7.5% 10/1/24 (a) | 6,825 | 7,030 | |
HCA Holdings, Inc.: | |||
4.75% 5/1/23 | 12,395 | 12,906 | |
5.25% 6/15/26 | 14,055 | 14,687 | |
5.375% 2/1/25 | 22,530 | 22,996 | |
5.875% 5/1/23 | 33,560 | 35,605 | |
5.875% 2/15/26 | 29,610 | 31,091 | |
7.5% 2/15/22 | 10,725 | 12,205 | |
HealthSouth Corp.: | |||
5.125% 3/15/23 | 6,440 | 6,504 | |
5.75% 11/1/24 | 22,135 | 22,827 | |
Hill-Rom Holdings, Inc. 5.75% 9/1/23 (a) | 5,715 | 6,001 | |
Hologic, Inc. 5.25% 7/15/22 (a) | 12,345 | 13,056 | |
Horizon Pharma, Inc. 8.75% 11/1/24 (a) | 8,030 | 8,150 | |
InVentiv Health, Inc. 10% 8/15/18 | 2,237 | 2,238 | |
Jaguar Holding Co. II/Pharmaceutical Product Development LLC 6.375% 8/1/23 (a) | 11,285 | 11,347 | |
MPH Acquisition Holdings LLC 7.125% 6/1/24 (a) | 6,095 | 6,521 | |
MPT Operating Partnership LP/MPT Finance Corp.: | |||
5.25% 8/1/26 | 4,030 | 4,111 | |
6.375% 2/15/22 | 9,445 | 9,799 | |
Quintiles Transnational Corp. 4.875% 5/15/23 (a) | 8,705 | 8,977 | |
RegionalCare Hospital Partners Holdings, Inc. 8.25% 5/1/23 (a) | 12,857 | 13,034 | |
Sabra Health Care LP/Sabra Capital Corp. 5.375% 6/1/23 | 4,945 | 5,044 | |
Surgery Center Holdings, Inc. 8.875% 4/15/21 (a) | 11,400 | 12,141 | |
Tenet Healthcare Corp. 6.875% 11/15/31 | 23,140 | 18,570 | |
Valeant Pharmaceuticals International, Inc.: | |||
5.875% 5/15/23 (a) | 42,000 | 33,075 | |
6.75% 8/15/21 (a) | 2,029 | 1,755 | |
Vizient, Inc. 10.375% 3/1/24 (a) | 12,515 | 13,954 | |
353,553 | |||
Homebuilders/Real Estate - 1.8% | |||
Brookfield Residential Properties, Inc./Brookfield Residential U.S. Corp. 6.125% 7/1/22 (a) | 6,475 | 6,572 | |
Brookfield Residential Properties, Inc. 6.5% 12/15/20 (a) | 5,010 | 5,160 | |
CBRE Group, Inc. 5% 3/15/23 | 35,255 | 37,018 | |
D.R. Horton, Inc.: | |||
4.375% 9/15/22 | 11,400 | 11,970 | |
4.75% 2/15/23 | 9,110 | 9,611 | |
5.75% 8/15/23 | 4,935 | 5,487 | |
Howard Hughes Corp. 6.875% 10/1/21 (a) | 24,190 | 25,557 | |
Shea Homes Ltd. Partnership/Corp.: | |||
5.875% 4/1/23 (a) | 3,545 | 3,483 | |
6.125% 4/1/25 (a) | 3,545 | 3,492 | |
Taylor Morrison Communities, Inc./Monarch Communities, Inc.: | |||
5.25% 4/15/21 (a) | 14,750 | 15,119 | |
5.875% 4/15/23 (a) | 8,405 | 8,867 | |
Toll Brothers Finance Corp.: | |||
4.375% 4/15/23 | 24,055 | 24,416 | |
5.625% 1/15/24 | 3,075 | 3,275 | |
5.875% 2/15/22 | 1,030 | 1,136 | |
TRI Pointe Homes, Inc.: | |||
4.375% 6/15/19 | 6,675 | 6,825 | |
5.875% 6/15/24 | 16,130 | 16,715 | |
William Lyon Homes, Inc. 8.5% 11/15/20 | 4,975 | 5,211 | |
189,914 | |||
Hotels - 0.5% | |||
Choice Hotels International, Inc. 5.75% 7/1/22 | 3,035 | 3,320 | |
FelCor Lodging LP: | |||
5.625% 3/1/23 | 8,085 | 8,344 | |
6% 6/1/25 | 22,215 | 23,048 | |
Playa Resorts Holding BV 8% 8/15/20 (a) | 11,880 | 12,236 | |
46,948 | |||
Insurance - 0.5% | |||
Alliant Holdings Co.-Issuer, Inc./Wayne Merger Sub LLC 8.25% 8/1/23 (a) | 28,500 | 28,999 | |
Hockey Merger Sub 2, Inc. 7.875% 10/1/21 (a) | 22,620 | 23,122 | |
52,121 | |||
Leisure - 0.1% | |||
24 Hour Holdings III LLC 8% 6/1/22 (a) | 4,530 | 3,760 | |
LTF Merger Sub, Inc. 8.5% 6/15/23 (a) | 7,365 | 7,494 | |
11,254 | |||
Metals/Mining - 1.9% | |||
Alcoa Nederland Holding BV: | |||
6.75% 9/30/24 (a) | 7,705 | 7,975 | |
7% 9/30/26 (a) | 6,385 | 6,575 | |
Aleris International, Inc. 6% 6/1/20 (a) | 151 | 151 | |
Bluescope Steel Ltd./Bluescope Steel Finance 6.5% 5/15/21 (a) | 3,500 | 3,693 | |
First Quantum Minerals Ltd.: | |||
6.75% 2/15/20 (a) | 15,045 | 14,406 | |
7% 2/15/21 (a) | 13,590 | 12,902 | |
7.25% 5/15/22 (a) | 7,715 | 7,300 | |
FMG Resources (August 2006) Pty Ltd. 9.75% 3/1/22 (a) | 8,540 | 9,906 | |
Freeport-McMoRan, Inc.: | |||
3.55% 3/1/22 | 5,690 | 5,221 | |
3.875% 3/15/23 | 17,075 | 15,410 | |
5.4% 11/14/34 | 5,430 | 4,677 | |
5.45% 3/15/43 | 35,380 | 29,365 | |
Joseph T Ryerson & Son, Inc. 11% 5/15/22 (a) | 6,445 | 7,041 | |
Lundin Mining Corp.: | |||
7.5% 11/1/20 (a) | 3,930 | 4,176 | |
7.875% 11/1/22 (a) | 570 | 616 | |
Mirabela Nickel Ltd. 1% 9/10/44 pay-in-kind (a)(c) | 41 | 0 | |
New Gold, Inc. 7% 4/15/20 (a) | 3,050 | 3,142 | |
Prince Mineral Holding Corp. 11.5% 12/15/19 (a)(b) | 3,255 | 3,060 | |
Teck Resources Ltd. 8.5% 6/1/24 (a) | 53,315 | 61,712 | |
197,328 | |||
Paper - 0.2% | |||
Boise Cascade Co. 5.625% 9/1/24 (a) | 4,105 | 4,151 | |
NewPage Corp.: | |||
0% 5/1/12 (b)(c) | 6,337 | 0 | |
11.375% 12/31/14 (c) | 12,582 | 0 | |
Xerium Technologies, Inc. 9.5% 8/15/21 (a) | 17,025 | 17,280 | |
21,431 | |||
Publishing/Printing - 0.8% | |||
Cengage Learning, Inc. 9.5% 6/15/24 (a) | 19,915 | 18,770 | |
Cenveo Corp. 6% 8/1/19 (a) | 6,545 | 5,760 | |
McGraw-Hill Global Education Holdings LLC/McGraw-Hill Global Education Finance 7.875% 5/15/24 (a) | 35,315 | 38,228 | |
MHGE Parent LLC/MHGE Parent Finance, Inc. 8.5% 8/1/19 pay-in-kind (a)(b) | 23,575 | 23,840 | |
86,598 | |||
Restaurants - 0.3% | |||
KFC Holding Co./Pizza Hut Holding LLC: | |||
5% 6/1/24 (a) | 8,800 | 9,152 | |
5.25% 6/1/26 (a) | 8,800 | 9,174 | |
Landry's Acquisition Co. 6.75% 10/15/24 (a) | 9,190 | 9,374 | |
27,700 | |||
Services - 1.3% | |||
APX Group, Inc.: | |||
7.875% 12/1/22 | 17,920 | 18,861 | |
8.75% 12/1/20 | 19,025 | 18,407 | |
CBRE Group, Inc. 5.25% 3/15/25 | 13,020 | 13,920 | |
Everi Payments, Inc. 10% 1/15/22 | 11,085 | 10,572 | |
Garda World Security Corp.: | |||
7.25% 11/15/21 (a) | 4,645 | 4,436 | |
7.25% 11/15/21 (a) | 2,745 | 2,621 | |
Laureate Education, Inc. 10% 9/1/19 (a)(b) | 61,085 | 56,504 | |
NES Rentals Holdings, Inc. 7.875% 5/1/18 (a) | 3,020 | 2,960 | |
TMS International Corp. 7.625% 10/15/21 (a) | 2,170 | 1,790 | |
United Rentals North America, Inc. 5.5% 5/15/27 (d) | 7,325 | 7,288 | |
137,359 | |||
Steel - 0.3% | |||
JMC Steel Group, Inc. 9.875% 6/15/23 (a) | 7,500 | 7,894 | |
United States Steel Corp. 8.375% 7/1/21 (a) | 24,580 | 26,116 | |
34,010 | |||
Super Retail - 1.2% | |||
CST Brands, Inc. 5% 5/1/23 | 2,640 | 2,772 | |
Hanesbrands, Inc.: | |||
4.625% 5/15/24 (a) | 5,710 | 5,806 | |
4.875% 5/15/26 (a) | 5,710 | 5,810 | |
L Brands, Inc.: | |||
5.625% 2/15/22 | 14,745 | 16,146 | |
5.625% 10/15/23 | 10,310 | 11,341 | |
6.875% 11/1/35 | 13,095 | 13,881 | |
Netflix, Inc.: | |||
4.375% 11/15/26 (a) | 11,520 | 11,333 | |
5.375% 2/1/21 (a) | 7,725 | 8,372 | |
5.75% 3/1/24 | 12,225 | 13,295 | |
5.875% 2/15/25 | 27,663 | 30,671 | |
Sonic Automotive, Inc. 5% 5/15/23 | 1,610 | 1,574 | |
Springs Industries, Inc. 6.25% 6/1/21 | 2,990 | 3,110 | |
124,111 | |||
Technology - 4.1% | |||
ADT Corp. 6.25% 10/15/21 | 32,065 | 35,071 | |
BMC Software Finance, Inc. 8.125% 7/15/21 (a) | 9,134 | 8,358 | |
Brocade Communications Systems, Inc. 4.625% 1/15/23 | 6,460 | 6,363 | |
Camelot Finance SA 7.875% 10/15/24 (a) | 5,065 | 5,179 | |
CDW LLC/CDW Finance Corp. 5% 9/1/23 | 10,930 | 11,224 | |
Ceridian HCM Holding, Inc. 11% 3/15/21 (a) | 4,675 | 4,920 | |
Ensemble S Merger Sub, Inc. 9% 9/30/23 (a) | 19,115 | 20,071 | |
Entegris, Inc. 6% 4/1/22 (a) | 3,215 | 3,328 | |
JDA Escrow LLC/JDA Bond Finance, Inc. 7.375% 10/15/24 (a) | 4,060 | 4,192 | |
Lucent Technologies, Inc.: | |||
6.45% 3/15/29 | 53,529 | 59,016 | |
6.5% 1/15/28 | 19,936 | 21,232 | |
Micron Technology, Inc.: | |||
5.25% 8/1/23 (a) | 4,485 | 4,395 | |
5.25% 1/15/24 (a) | 9,585 | 9,345 | |
5.5% 2/1/25 | 30,765 | 30,159 | |
5.625% 1/15/26 (a) | 8,440 | 8,187 | |
5.875% 2/15/22 | 6,735 | 6,957 | |
7.5% 9/15/23 (a) | 10,485 | 11,573 | |
Microsemi Corp. 9.125% 4/15/23 (a) | 4,575 | 5,273 | |
Nuance Communications, Inc. 5.375% 8/15/20 (a) | 5,080 | 5,220 | |
NXP BV/NXP Funding LLC: | |||
4.625% 6/15/22 (a) | 5,175 | 5,641 | |
5.75% 3/15/23 (a) | 15,325 | 16,321 | |
Open Text Corp. 5.875% 6/1/26 (a) | 8,535 | 9,090 | |
Parametric Technology Corp. 6% 5/15/24 | 3,490 | 3,691 | |
Qorvo, Inc.: | |||
6.75% 12/1/23 | 8,570 | 9,384 | |
7% 12/1/25 | 25,960 | 28,426 | |
Sensata Technologies BV: | |||
4.875% 10/15/23 (a) | 5,010 | 5,192 | |
5% 10/1/25 (a) | 11,210 | 11,490 | |
Sensata Technologies UK Financing Co. PLC 6.25% 2/15/26 (a) | 11,535 | 12,487 | |
Solera LLC/Solera Finance, Inc. 10.5% 3/1/24 (a) | 29,985 | 33,518 | |
SS&C Technologies Holdings, Inc. 5.875% 7/15/23 | 8,960 | 9,386 | |
VeriSign, Inc.: | |||
4.625% 5/1/23 | 8,755 | 9,018 | |
5.25% 4/1/25 | 11,005 | 11,610 | |
425,317 | |||
Telecommunications - 11.8% | |||
Altice Financing SA: | |||
6.5% 1/15/22 (a) | 26,701 | 27,909 | |
6.625% 2/15/23 (a) | 20,740 | 21,362 | |
7.5% 5/15/26 (a) | 21,660 | 22,310 | |
Altice Finco SA: | |||
8.125% 1/15/24 (a) | 21,880 | 22,427 | |
9.875% 12/15/20 (a) | 10,945 | 11,588 | |
Citizens Communications Co.: | |||
7.875% 1/15/27 | 9,275 | 8,139 | |
9% 8/15/31 | 13,178 | 11,465 | |
CyrusOne LP/CyrusOne Finance Corp. 6.375% 11/15/22 | 7,190 | 7,621 | |
Digicel Group Ltd.: | |||
6% 4/15/21 (a) | 2,020 | 1,807 | |
6.75% 3/1/23 (a) | 1,900 | 1,705 | |
7% 2/15/20 (a) | 2,110 | 2,026 | |
7.125% 4/1/22 (a) | 42,670 | 33,803 | |
8.25% 9/30/20 (a) | 21,044 | 18,624 | |
FairPoint Communications, Inc. 8.75% 8/15/19 (a) | 6,240 | 6,349 | |
Frontier Communications Corp. 11% 9/15/25 | 22,810 | 23,355 | |
GCI, Inc. 6.875% 4/15/25 | 10,905 | 11,069 | |
Intelsat Jackson Holdings SA: | |||
5.5% 8/1/23 | 55,360 | 36,676 | |
7.25% 10/15/20 | 39,625 | 30,041 | |
7.5% 4/1/21 | 21,110 | 15,516 | |
j2 Global, Inc. 8% 8/1/20 | 7,245 | 7,535 | |
Level 3 Communications, Inc. 5.75% 12/1/22 | 11,550 | 11,897 | |
Level 3 Financing, Inc.: | |||
5.125% 5/1/23 | 11,240 | 11,352 | |
5.375% 5/1/25 | 11,240 | 11,409 | |
Millicom International Cellular SA: | |||
4.75% 5/22/20 (a) | 5,180 | 5,200 | |
6% 3/15/25 (a) | 10,745 | 10,847 | |
6.625% 10/15/21 (a) | 6,275 | 6,566 | |
Neptune Finco Corp.: | |||
6.625% 10/15/25 (a) | 22,160 | 24,016 | |
10.125% 1/15/23 (a) | 22,930 | 25,854 | |
10.875% 10/15/25 (a) | 54,425 | 62,589 | |
Sable International Finance Ltd. 6.875% 8/1/22 (a) | 47,295 | 48,950 | |
SFR Group SA: | |||
6% 5/15/22 (a) | 122,140 | 125,233 | |
6.25% 5/15/24 (a) | 75,510 | 75,462 | |
7.375% 5/1/26 (a) | 44,795 | 45,243 | |
Sprint Capital Corp.: | |||
6.875% 11/15/28 | 11,304 | 10,400 | |
8.75% 3/15/32 | 8,446 | 8,573 | |
Sprint Communications, Inc. 6% 11/15/22 | 28,255 | 26,330 | |
Sprint Corp.: | |||
7.125% 6/15/24 | 56,633 | 53,235 | |
7.625% 2/15/25 | 32,350 | 31,299 | |
7.875% 9/15/23 | 29,545 | 29,250 | |
T-Mobile U.S.A., Inc.: | |||
6% 3/1/23 | 19,695 | 20,729 | |
6% 4/15/24 | 17,090 | 18,179 | |
6.375% 3/1/25 | 76,286 | 81,769 | |
6.5% 1/15/24 | 50,680 | 54,228 | |
6.625% 4/1/23 | 46,480 | 49,393 | |
6.731% 4/28/22 | 11,245 | 11,751 | |
6.836% 4/28/23 | 13,357 | 14,265 | |
U.S. West Communications: | |||
7.25% 9/15/25 | 1,480 | 1,614 | |
7.25% 10/15/35 | 5,745 | 5,704 | |
UPCB Finance IV Ltd. 5.375% 1/15/25 (a) | 11,930 | 12,109 | |
Zayo Group LLC/Zayo Capital, Inc. 6% 4/1/23 | 11,035 | 11,614 | |
1,226,387 | |||
Transportation Ex Air/Rail - 0.3% | |||
Navios Maritime Acquisition Corp./Navios Acquisition Finance U.S., Inc. 8.125% 11/15/21 (a) | 2,850 | 2,152 | |
Navios South American Logistics, Inc./Navios Logistics Finance U.S., Inc. 7.25% 5/1/22 (a) | 10,180 | 8,042 | |
Teekay Corp. 8.5% 1/15/20 | 21,637 | 19,690 | |
Ultrapetrol (Bahamas) Ltd. 8.875% 6/15/21 (c) | 1,065 | 202 | |
30,086 | |||
Utilities - 3.7% | |||
Dynegy, Inc.: | |||
7.375% 11/1/22 | 36,240 | 34,949 | |
7.625% 11/1/24 | 41,495 | 39,731 | |
8% 1/15/25 (a) | 14,375 | 13,872 | |
Energy Future Holdings Corp.: | |||
10.875% 11/1/17 (c) | 7,994 | 7,594 | |
11.25% 11/1/17 pay-in-kind (b)(c) | 147 | 140 | |
Energy Future Intermediate Holding Co. LLC/Energy Future Intermediate Holding Finance, Inc.: | |||
11% 10/1/21 (c) | 74,350 | 94,425 | |
12.25% 3/1/22 (a)(c) | 83,211 | 107,134 | |
EnLink Midstream Partners LP: | |||
4.15% 6/1/25 | 8,545 | 8,329 | |
4.4% 4/1/24 | 8,560 | 8,519 | |
Global Partners LP/GLP Finance Corp.: | |||
6.25% 7/15/22 | 2,720 | 2,598 | |
7% 6/15/23 | 11,295 | 10,787 | |
InterGen NV 7% 6/30/23 (a) | 4,475 | 3,793 | |
PPL Energy Supply LLC 6.5% 6/1/25 | 8,945 | 7,469 | |
RJS Power Holdings LLC 4.625% 7/15/19 (a)(b) | 11,305 | 10,740 | |
TXU Corp.: | |||
5.55% 11/15/14 (c) | 4,137 | 1,241 | |
6.5% 11/15/24 (c) | 39,570 | 11,871 | |
6.55% 11/15/34 (c) | 74,878 | 22,463 | |
385,655 | |||
TOTAL NONCONVERTIBLE BONDS | 7,024,040 | ||
TOTAL CORPORATE BONDS | |||
(Cost $6,812,603) | 7,025,350 | ||
Shares | Value (000s) | ||
Common Stocks - 20.6% | |||
Air Transportation - 0.5% | |||
Air Canada (e) | 3,438,100 | 32,425 | |
Delta Air Lines, Inc. | 422,100 | 17,631 | |
TOTAL AIR TRANSPORTATION | 50,056 | ||
Automotive & Auto Parts - 1.3% | |||
Chassix Holdings, Inc. (e) | 677,217 | 21,271 | |
Chassix Holdings, Inc. warrants 7/29/20 (e) | 37,382 | 270 | |
Delphi Automotive PLC | 530,000 | 34,487 | |
Exide Technologies (e) | 9,824 | 0 | |
Exide Technologies (e) | 32,746 | 0 | |
General Motors Co. | 11,348 | 359 | |
Lear Corp. | 480,500 | 58,996 | |
Tenneco, Inc. (e) | 320,700 | 17,661 | |
TOTAL AUTOMOTIVE & AUTO PARTS | 133,044 | ||
Broadcasting - 1.3% | |||
AMC Networks, Inc. Class A (e) | 720,200 | 35,239 | |
DISH Network Corp. Class A (e) | 936,000 | 54,812 | |
Sinclair Broadcast Group, Inc. Class A | 1,638,900 | 41,136 | |
TOTAL BROADCASTING | 131,187 | ||
Building Materials - 0.0% | |||
Ply Gem Holdings, Inc. (e) | 41,200 | 564 | |
Cable/Satellite TV - 0.5% | |||
Naspers Ltd. Class N | 290,300 | 48,655 | |
Capital Goods - 0.2% | |||
AECOM (e) | 601,700 | 16,757 | |
Chemicals - 0.2% | |||
LyondellBasell Industries NV Class A | 224,245 | 17,839 | |
Consumer Products - 0.7% | |||
Harman International Industries, Inc. | 533,800 | 42,549 | |
Newell Brands, Inc. | 412,639 | 19,815 | |
Reddy Ice Holdings, Inc. (e) | 496,439 | 152 | |
Revlon, Inc. (e) | 468,800 | 15,939 | |
TOTAL CONSUMER PRODUCTS | 78,455 | ||
Diversified Financial Services - 0.6% | |||
OneMain Holdings, Inc. (e) | 1,446,000 | 40,980 | |
Penson Worldwide, Inc. Class A (e) | 10,322,034 | 0 | |
PJT Partners, Inc. (f) | 5,092 | 140 | |
The Blackstone Group LP | 867,800 | 21,721 | |
TOTAL DIVERSIFIED FINANCIAL SERVICES | 62,841 | ||
Energy - 0.0% | |||
Crestwood Equity Partners LP | 151,525 | 3,031 | |
Goodrich Petroleum Corp. | 129,527 | 551 | |
Hornbeck Offshore Services, Inc. (e) | 280,600 | 1,114 | |
Ovation Acquisition I LLC (g) | 3,002,269 | 0 | |
TOTAL ENERGY | 4,696 | ||
Food & Drug Retail - 0.2% | |||
CVS Health Corp. | 267,000 | 22,455 | |
Food/Beverage/Tobacco - 0.2% | |||
JBS SA | 8,656,800 | 26,334 | |
Gaming - 1.1% | |||
Red Rock Resorts, Inc. (a) | 5,217,651 | 114,267 | |
Healthcare - 2.7% | |||
Alexion Pharmaceuticals, Inc. (e) | 257,100 | 33,552 | |
Allergan PLC (e) | 279,400 | 58,378 | |
AmSurg Corp. (e) | 522,300 | 31,207 | |
HCA Holdings, Inc. (e) | 1,085,400 | 83,066 | |
HealthSouth Corp. warrants 1/17/17 (e) | 4,199 | 6 | |
Medtronic PLC | 354,000 | 29,035 | |
Patheon NV | 569,000 | 14,447 | |
Regeneron Pharmaceuticals, Inc. (e) | 76,300 | 26,325 | |
Rotech Healthcare, Inc. (e) | 185,710 | 2,489 | |
TOTAL HEALTHCARE | 278,505 | ||
Homebuilders/Real Estate - 0.7% | |||
American Tower Corp. | 11,612 | 1,361 | |
CalAtlantic Group, Inc. | 400,000 | 12,928 | |
Lennar Corp. Class A | 690,000 | 28,766 | |
PulteGroup, Inc. | 820,000 | 15,252 | |
Realogy Holdings Corp. | 51,500 | 1,179 | |
Taylor Morrison Home Corp. (e) | 915,400 | 15,617 | |
TOTAL HOMEBUILDERS/REAL ESTATE | 75,103 | ||
Hotels - 0.3% | |||
Extended Stay America, Inc. unit | 2,289,700 | 32,743 | |
Metals/Mining - 0.2% | |||
Aleris Corp. (e)(g) | 127,520 | 1,268 | |
Freeport-McMoRan, Inc. | 1,385,000 | 15,484 | |
Mirabela Nickel Ltd. (e) | 6,852,955 | 433 | |
TOTAL METALS/MINING | 17,185 | ||
Publishing/Printing - 0.0% | |||
Houghton Mifflin Harcourt Co. warrants 6/22/19 (e)(g) | 127,577 | 270 | |
Restaurants - 0.2% | |||
Starbucks Corp. | 445,300 | 23,632 | |
Services - 2.1% | |||
Air Lease Corp. Class A | 549,800 | 16,637 | |
Avis Budget Group, Inc. (e) | 596,000 | 19,287 | |
Expedia, Inc. | 187,000 | 24,166 | |
HD Supply Holdings, Inc. (e) | 1,088,200 | 35,911 | |
MasterCard, Inc. Class A | 412,300 | 44,124 | |
Penhall Acquisition Co.: | |||
Class A (e) | 26,163 | 2,033 | |
Class B (e) | 8,721 | 678 | |
United Rentals, Inc. (e) | 1,004,000 | 75,963 | |
WP Rocket Holdings, Inc. (e)(g) | 25,255,077 | 1,515 | |
TOTAL SERVICES | 220,314 | ||
Super Retail - 0.3% | |||
Arena Brands Holding Corp. Class B (e)(g) | 659,302 | 1,332 | |
Priceline Group, Inc. (e) | 19,300 | 28,453 | |
TOTAL SUPER RETAIL | 29,785 | ||
Technology - 5.7% | |||
Alphabet, Inc. Class A | 107,300 | 86,902 | |
Apple, Inc. | 198,400 | 22,526 | |
Broadcom Ltd. | 292,000 | 49,722 | |
CDW Corp. | 873,400 | 39,224 | |
Cypress Semiconductor Corp. | 24,992 | 249 | |
Electronic Arts, Inc. (e) | 310,300 | 24,365 | |
Facebook, Inc. Class A (e) | 618,500 | 81,017 | |
Global Payments, Inc. | 274,400 | 19,899 | |
MagnaChip Semiconductor Corp. (e) | 219,804 | 1,363 | |
Microsemi Corp. (e) | 303,883 | 12,803 | |
NXP Semiconductors NV (e) | 624,685 | 62,469 | |
PayPal Holdings, Inc. (e) | 630,400 | 26,262 | |
Qorvo, Inc. (e) | 1,339,397 | 74,537 | |
Skyworks Solutions, Inc. | 1,272,834 | 97,932 | |
TOTAL TECHNOLOGY | 599,270 | ||
Telecommunications - 1.5% | |||
Alibaba Group Holding Ltd. sponsored ADR (e) | 643,800 | 65,468 | |
Baidu.com, Inc. sponsored ADR (e) | 66,200 | 11,708 | |
Qualcomm, Inc. | 460,000 | 31,611 | |
T-Mobile U.S., Inc. (e) | 978,600 | 48,666 | |
TOTAL TELECOMMUNICATIONS | 157,453 | ||
Transportation Ex Air/Rail - 0.1% | |||
DeepOcean Group Holding BV (a)(e) | 1,138,931 | 6,201 | |
U.S. Shipping Partners Corp. (e) | 51,736 | 0 | |
U.S. Shipping Partners Corp. warrants 12/31/29 (e) | 484,379 | 0 | |
TOTAL TRANSPORTATION EX AIR/RAIL | 6,201 | ||
Utilities - 0.0% | |||
Portland General Electric Co. | 14,817 | 647 | |
TOTAL COMMON STOCKS | |||
(Cost $1,968,272) | 2,148,258 | ||
Convertible Preferred Stocks - 0.1% | |||
Consumer Products - 0.0% | |||
Reddy Ice Holdings, Inc. 7.00% pay-in-kind (e) | 199,717 | 1,659 | |
Healthcare - 0.1% | |||
Allergan PLC 5.50% | 13,000 | 9,997 | |
TOTAL CONVERTIBLE PREFERRED STOCKS | |||
(Cost $14,426) | 11,656 | ||
Principal Amount (000s) | Value (000s) | ||
Bank Loan Obligations - 3.2% | |||
Automotive & Auto Parts - 0.1% | |||
Chassix, Inc. term loan 12% 7/29/19 | 8,463 | 8,674 | |
Energy - 0.5% | |||
Alon U.S.A. Partners LP term loan 9.25% 11/26/18 (b) | 6,248 | 6,233 | |
California Resources Corp. Tranche 1LN, term loan 11.375% 12/31/21 (b) | 10,150 | 10,899 | |
Chesapeake Energy Corp. Tranche 1LN, term loan 8.5% 8/23/21 (b) | 14,200 | 15,167 | |
Seadrill Operating LP Tranche B, term loan 4% 2/21/21 (b) | 22,703 | 12,615 | |
TPF II Power, LLC Tranche B, term loan 5% 10/2/21 (b) | 4,344 | 4,386 | |
TOTAL ENERGY | 49,300 | ||
Gaming - 0.5% | |||
Caesars Entertainment Resort Properties LLC Tranche B 1LN, term loan 7% 10/11/20 (b) | 14,154 | 14,224 | |
Caesars Growth Properties Holdings, LLC Tranche 1LN, term loan 6.25% 5/8/21 (b) | 41,320 | 41,251 | |
TOTAL GAMING | 55,475 | ||
Healthcare - 0.2% | |||
InVentiv Health, Inc. Tranche B, term loan 9/29/23 (h) | 22,985 | 22,973 | |
Metals/Mining - 0.2% | |||
Peabody Energy Corp. Tranche B, term loan 0% 9/24/20 (b)(c) | 28,760 | 25,320 | |
Restaurants - 0.0% | |||
TGI Friday's, Inc. Tranche B 1LN, term loan 5.25% 7/15/20 (b) | 981 | 978 | |
Services - 0.2% | |||
KC Mergersub, Inc. Tranche L 2LN, term loan 10.25% 8/13/23 (b) | 4,850 | 4,729 | |
Kuehg Corp. Tranche B 1LN, term loan 5.25% 8/13/22 (b) | 12,999 | 12,999 | |
TOTAL SERVICES | 17,728 | ||
Steel - 0.0% | |||
Essar Steel Algoma, Inc. Tranche B, term loan 0% 8/16/19 (b)(c) | 5,183 | 1,244 | |
Super Retail - 0.1% | |||
Sears Roebuck Acceptance Corp. Tranche B, term loan 8.5% 7/20/20 (b) | 11,405 | 11,409 | |
Technology - 0.6% | |||
BMC Software Finance, Inc. Tranche B, term loan 5% 9/10/20 (b) | 16,527 | 16,264 | |
Kronos, Inc. term loan 10/20/24 (h) | 19,695 | 20,283 | |
Sophia L.P. Tranche B, term loan 4.75% 9/30/22 (b) | 22,519 | 22,541 | |
TOTAL TECHNOLOGY | 59,088 | ||
Telecommunications - 0.1% | |||
Integra Telecom Holdings, Inc. Tranche B 1LN, term loan 5.25% 8/14/20 (b) | 11,101 | 11,039 | |
Utilities - 0.7% | |||
Energy Future Holdings Corp. term loan 4.25% 6/30/17 (b) | 69,676 | 70,068 | |
TOTAL BANK LOAN OBLIGATIONS | |||
(Cost $327,596) | 333,296 | ||
Preferred Securities - 6.1% | |||
Banks & Thrifts - 5.9% | |||
Bank of America Corp.: | |||
5.125% (b)(i) | 28,140 | 28,280 | |
5.2% (b)(i) | 55,385 | 55,274 | |
6.25% (b)(i) | 18,795 | 19,873 | |
Barclays Bank PLC 7.625% 11/21/22 | 22,355 | 25,713 | |
Citigroup, Inc.: | |||
5.8% (b)(i) | 41,925 | 43,625 | |
5.9% (b)(i) | 27,015 | 28,474 | |
5.95% (b)(i) | 51,015 | 53,703 | |
6.25% (b)(i) | 17,065 | 18,925 | |
6.3% (b)(i) | 5,610 | 5,907 | |
Goldman Sachs Group, Inc.: | |||
5.375% (b)(i) | 31,615 | 32,581 | |
5.7% (b)(i) | 35,166 | 36,559 | |
JPMorgan Chase & Co.: | |||
5% (b)(i) | 33,640 | 33,529 | |
5.3% (b)(i) | 16,855 | 17,554 | |
6% (b)(i) | 50,895 | 53,821 | |
6.125% (b)(i) | 15,170 | 16,067 | |
6.75% (b)(i) | 8,330 | 9,387 | |
Royal Bank of Scotland Group PLC 8.625% (b)(i) | 13,375 | 13,442 | |
Wells Fargo & Co.: | |||
5.875% (b)(i) | 50,420 | 55,295 | |
5.9% (b)(i) | 63,075 | 67,406 | |
TOTAL BANKS & THRIFTS | 615,415 | ||
Entertainment/Film - 0.2% | |||
NBCUniversal Enterprise, Inc. 5.25% (a)(i) | 14,560 | 15,601 | |
TOTAL PREFERRED SECURITIES | |||
(Cost $608,447) | 631,016 | ||
Shares | Value (000s) | ||
Money Market Funds - 2.8% | |||
Fidelity Cash Central Fund, 0.41% (j) | 285,494,537 | 285,580 | |
Fidelity Securities Lending Cash Central Fund 0.48% (j)(k) | 39,542 | 40 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $285,537) | 285,620 | ||
TOTAL INVESTMENT PORTFOLIO - 100.3% | |||
(Cost $10,016,881) | 10,435,196 | ||
NET OTHER ASSETS (LIABILITIES) - (0.3)% | (27,089) | ||
NET ASSETS - 100% | $10,408,107 |
Values shown as $0 may reflect amounts less than $500.
Legend
(a) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $3,158,312,000 or 30.3% of net assets.
(b) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end.
(c) Non-income producing - Security is in default.
(d) Security or a portion of the security purchased on a delayed delivery or when-issued basis.
(e) Non-income producing
(f) Security or a portion of the security is on loan at period end.
(g) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $4,385,000 or 0.0% of net assets.
(h) The coupon rate will be determined upon settlement of the loan after period end.
(i) Security is perpetual in nature with no stated maturity date.
(j) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(k) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
Security | Acquisition Date | Acquisition Cost (000s) |
Aleris Corp. | 6/1/10 | $4,464 |
Arena Brands Holding Corp. Class B | 6/18/97 - 1/12/99 | $21,592 |
Houghton Mifflin Harcourt Co. warrants 6/22/19 | 6/22/12 | $246 |
Ovation Acquisition I LLC | 12/23/15 | $30 |
WP Rocket Holdings, Inc. | 6/24/11 - 2/2/15 | $13,154 |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
Fund | Income earned |
(Amounts in thousands) | |
Fidelity Cash Central Fund | $760 |
Fidelity Securities Lending Cash Central Fund | 2 |
Total | $762 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
(Amounts in thousands) | ||||
Investments in Securities: | ||||
Equities: | ||||
Consumer Discretionary | $672,676 | $649,533 | $270 | $22,873 |
Consumer Staples | 66,539 | 64,728 | -- | 1,811 |
Energy | 4,696 | 4,145 | -- | 551 |
Financials | 62,841 | 62,841 | -- | -- |
Health Care | 288,502 | 286,013 | -- | 2,489 |
Industrials | 225,602 | 215,175 | -- | 10,427 |
Information Technology | 752,181 | 752,181 | -- | -- |
Materials | 35,024 | 33,323 | -- | 1,701 |
Real Estate | 2,540 | 2,540 | -- | -- |
Telecommunication Services | 48,666 | 48,666 | -- | -- |
Utilities | 647 | 647 | -- | -- |
Corporate Bonds | 7,025,350 | -- | 7,023,409 | 1,941 |
Bank Loan Obligations | 333,296 | -- | 324,622 | 8,674 |
Preferred Securities | 631,016 | -- | 631,016 | -- |
Money Market Funds | 285,620 | 285,620 | -- | -- |
Total Investments in Securities: | $10,435,196 | $2,405,412 | $7,979,317 | $50,467 |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
United States of America | 81.7% |
Luxembourg | 3.4% |
Ireland | 2.4% |
France | 2.3% |
Canada | 2.2% |
Netherlands | 2.1% |
Cayman Islands | 1.4% |
Others (Individually Less Than 1%) | 4.5% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) | October 31, 2016 | |
Assets | ||
Investment in securities, at value (including securities loaned of $39) — See accompanying schedule: Unaffiliated issuers (cost $9,731,344) | $10,149,576 | |
Fidelity Central Funds (cost $285,537) | 285,620 | |
Total Investments (cost $10,016,881) | $10,435,196 | |
Cash | 90 | |
Receivable for investments sold | 8,891 | |
Receivable for fund shares sold | 10,080 | |
Dividends receivable | 192 | |
Interest receivable | 123,748 | |
Distributions receivable from Fidelity Central Funds | 126 | |
Prepaid expenses | 27 | |
Other receivables | 465 | |
Total assets | 10,578,815 | |
Liabilities | ||
Payable for investments purchased | ||
Regular delivery | $123,538 | |
Delayed delivery | 27,045 | |
Payable for fund shares redeemed | 9,838 | |
Distributions payable | 3,541 | |
Accrued management fee | 4,884 | |
Other affiliated payables | 1,229 | |
Other payables and accrued expenses | 593 | |
Collateral on securities loaned, at value | 40 | |
Total liabilities | 170,708 | |
Net Assets | $10,408,107 | |
Net Assets consist of: | ||
Paid in capital | $9,984,460 | |
Undistributed net investment income | 47,976 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (42,644) | |
Net unrealized appreciation (depreciation) on investments | 418,315 | |
Net Assets, for 1,084,082 shares outstanding | $10,408,107 | |
Net Asset Value, offering price and redemption price per share ($10,408,107 ÷ 1,084,082 shares) | $9.60 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Amounts in thousands | Six months ended October 31, 2016 | |
Investment Income | ||
Dividends | $19,902 | |
Interest | 245,149 | |
Income from Fidelity Central Funds | 762 | |
Total income | 265,813 | |
Expenses | ||
Management fee | $28,859 | |
Transfer agent fees | 6,638 | |
Accounting and security lending fees | 695 | |
Custodian fees and expenses | 56 | |
Independent trustees' fees and expenses | 22 | |
Registration fees | 73 | |
Audit | 111 | |
Legal | 1,695 | |
Miscellaneous | 62 | |
Total expenses before reductions | 38,211 | |
Expense reductions | (22) | 38,189 |
Net investment income (loss) | 227,624 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 46,810 | |
Fidelity Central Funds | 53 | |
Foreign currency transactions | (205) | |
Total net realized gain (loss) | 46,658 | |
Change in net unrealized appreciation (depreciation) on investment securities | 325,797 | |
Net gain (loss) | 372,455 | |
Net increase (decrease) in net assets resulting from operations | $600,079 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Amounts in thousands | Six months ended October 31, 2016 | Year ended April 30, 2016 |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $227,624 | $453,993 |
Net realized gain (loss) | 46,658 | (58,746) |
Change in net unrealized appreciation (depreciation) | 325,797 | (759,117) |
Net increase (decrease) in net assets resulting from operations | 600,079 | (363,870) |
Distributions to shareholders from net investment income | (211,460) | (434,467) |
Distributions to shareholders from net realized gain | – | (65,299) |
Total distributions | (211,460) | (499,766) |
Share transactions | ||
Proceeds from sales of shares | 695,558 | 1,801,252 |
Reinvestment of distributions | 189,621 | 448,854 |
Cost of shares redeemed | (1,054,395) | (2,358,419) |
Net increase (decrease) in net assets resulting from share transactions | (169,216) | (108,313) |
Redemption fees | 246 | 805 |
Total increase (decrease) in net assets | 219,649 | (971,144) |
Net Assets | ||
Beginning of period | 10,188,458 | 11,159,602 |
End of period | $10,408,107 | $10,188,458 |
Other Information | ||
Undistributed net investment income end of period | $47,976 | $31,812 |
Shares | ||
Sold | 73,406 | 190,806 |
Issued in reinvestment of distributions | 19,985 | 47,578 |
Redeemed | (111,417) | (253,202) |
Net increase (decrease) | (18,026) | (14,818) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Capital & Income Fund
Six months endedOctober 31, | Years ended April 30, | |||||
2016 | 2016 | 2015 | 2014 | 2013 | 2012 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $9.24 | $9.99 | $10.07 | $9.86 | $9.23 | $9.95 |
Income from Investment Operations | ||||||
Net investment income (loss)A | .209 | .404 | .416 | .472 | .547 | .535 |
Net realized and unrealized gain (loss) | .345 | (.710) | .276 | .258 | .631 | (.643) |
Total from investment operations | .554 | (.306) | .692 | .730 | 1.178 | (.108) |
Distributions from net investment income | (.194) | (.387) | (.411) | (.458) | (.501) | (.571) |
Distributions from net realized gain | – | (.058) | (.362) | (.063) | (.048) | (.043) |
Total distributions | (.194) | (.445) | (.773) | (.521) | (.549) | (.614) |
Redemption fees added to paid in capitalA | –B | .001 | .001 | .001 | .001 | .002 |
Net asset value, end of period | $9.60 | $9.24 | $9.99 | $10.07 | $9.86 | $9.23 |
Total ReturnC,D | 6.04% | (3.05)% | 7.17% | 7.71% | 13.23% | (.77)% |
Ratios to Average Net AssetsE,F | ||||||
Expenses before reductions | .74%G | .75% | .72% | .71% | .73% | .77% |
Expenses net of fee waivers, if any | .74%G | .75% | .72% | .71% | .73% | .77% |
Expenses net of all reductions | .74%G | .74% | .72% | .71% | .73% | .77% |
Net investment income (loss) | 4.38%G | 4.30% | 4.16% | 4.82% | 5.83% | 5.87% |
Supplemental Data | ||||||
Net assets, end of period (in millions) | $10,408 | $10,188 | $11,160 | $10,382 | $10,205 | $9,632 |
Portfolio turnover rateH | 39%G | 35% | 41% | 47% | 60% | 48% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.0005 per share.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
G Annualized
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended October 31, 2016
(Amounts in thousands except percentages)
1. Organization.
Fidelity Capital & Income Fund (the Fund) is a fund of Fidelity Summer Street Trust (the Trust) and is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds, bank loan obligations and preferred securities are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.
Expenses. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Dividends are declared and recorded daily and paid monthly from net investment income. Distributions from realized gains, if any, are declared and recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to partnerships, foreign currency transactions, market discount, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $969,348 |
Gross unrealized depreciation | (523,287) |
Net unrealized appreciation (depreciation) on securities | $446,061 |
Tax cost | $9,989,135 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of prior fiscal period end and is subject to adjustment.
No expiration | |
Short-term | $(84,709) |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.00% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Delayed Delivery Transactions and When-Issued Securities. During the period, the Fund transacted in securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. The securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Loans and Other Direct Debt Instruments. The Fund invests in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. These instruments may be in the form of loans, trade claims or other receivables and may include standby financing commitments such as revolving credit facilities that obligate the Fund to supply additional cash to the borrower on demand. Loans may be acquired through assignment or participation. The Fund did not have any unfunded loan commitments, which are contractual obligations for future funding, at period end.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,952,392 and $1,980,434, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and an annualized group fee rate that averaged .11% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .56% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .13% of average net assets.
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $10 for the period.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $17 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. At period end, there were no security loans outstanding with FCM. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $2, including an amount of less than five hundred dollars from securities loaned to FCM.
8. Expense Reductions.
Through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's expenses by $1.
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses in the amount of $21.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
10. Litigation.
The Fund, and other entities managed by FMR or its affiliates, became aware in March 2015 that they were named as defendants in a lawsuit originally filed in the United States Bankruptcy Court for the Southern District of New York in 2009. The lawsuit was brought by creditors of Motors Liquidation Company (f/k/a General Motors), which went through Chapter 11 bankruptcy proceedings in 2009, and is captioned Official Committee of Unsecured Creditors of Motors Liquidation Company v. JPMorgan Chase Bank, N.A., et al., Adversary No. 09-00504 (REG). The plaintiffs are seeking an order that the Fund and other defendants return proceeds received in 2009 in full payment of the principal and interest on General Motors secured debt. The plaintiffs contend that the Fund and the other defendants were not secured creditors at the time of the 2009 payments and, thus, were not entitled to payment in full. In January 2015, the Court of Appeals ruled that JPMorgan, as administrative agent for all of the debtholders, released the security interest on certain collateral securing the debt prior to the 2009 payments. The parties to the dispute have commenced discovery on the value of remaining, unreleased collateral. At this time, Management cannot determine the amount of loss that may be realized, but expects the amount to be less than the $100,876 received in 2009. The Fund was not previously aware that it had been named as a defendant in this case because, in 2009, the Bankruptcy Court allowed the plaintiffs to refrain from serving any of the defendants other than JPMorgan with notice of the filing of the lawsuit. The Fund will explore all available options for minimizing any loss to the Fund. The Fund will also incur legal costs in defending the case.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Summer Street Trust and Shareholders of Fidelity Capital & Income Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Capital & Income Fund (a fund of Fidelity Summer Street Trust) (the "Fund") at October 31, 2016, the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2016 by correspondence with the custodian, agent banks and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 16, 2016
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (May 1, 2016 to October 31, 2016).
Actual Expenses
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Annualized Expense Ratio-A | Beginning Account Value May 1, 2016 | Ending Account Value October 31, 2016 | Expenses Paid During Period-B May 1, 2016 to October 31, 2016 | |
Actual | .74% | $1,000.00 | $1,060.40 | $3.84 |
Hypothetical-C | $1,000.00 | $1,021.48 | $3.77 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
C 5% return per year before expenses
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Capital & Income Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to all of the Fidelity funds.
At its July 2016 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and would be realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by FMR, the sub-advisers (together with FMR, the Investment Advisers), and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.In 2014, the Board formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs; (iv) broadening eligibility requirements for certain lower-priced share classes of, and streamlining the fee structure for, certain existing equity index funds; (v) lowering expense caps for certain existing funds and classes to reduce expenses paid by shareholders; (vi) eliminating redemption fees for certain variable insurance product funds and classes; (vii) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (viii) launching a lower cost share class for use by the Freedom Index Fund product line; (ix) rationalizing product lines and gaining increased efficiencies through fund mergers and share class consolidations; (x) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; (xi) implementing investment enhancements to further strengthen Fidelity's target date product line to increase investors' probability of success in achieving their goals; (xii) accelerating the conversion of all remaining Class B shares to Class A shares, which have a lower expense structure; and (xiii) implementing changes to Fidelity's money market fund product line in response to recent regulatory reforms.Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history.The Board took into account discussions with representatives of the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund, for different time periods, measured against a securities market index ("benchmark index") and a peer group of funds with similar objectives ("peer group"), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for the fund and an appropriate benchmark index and peer group for the most recent one-, three-, and five-year periods, as shown below. Returns are shown compared to the 25th percentile (top of box, 75% beaten) and 75th percentile (bottom of box, 25% beaten) of the peer universe.Fidelity Capital & Income Fund
Fidelity Capital & Income Fund
Corporate Headquarters
245 Summer St.
Boston, MA 02210
www.fidelity.com
CAI-SANN-1216
1.538653.119
Fidelity Advisor® Global High Income Fund - Semi-Annual Report October 31, 2016 Class A, Class T, Class C and Class I are classes of Fidelity® Global High Income Fund |
Contents
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2016 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Fund nor Fidelity Distributors Corporation is a bank.
Investment Summary (Unaudited)
Top Five Holdings as of October 31, 2016
(by issuer, excluding cash equivalents) | % of fund's net assets | % of fund's net assets 6 months ago |
Ally Financial, Inc. | 2.0 | 1.9 |
APX Group, Inc. | 1.4 | 1.1 |
Valeant Pharmaceuticals International, Inc. | 1.3 | 1.4 |
T-Mobile U.S.A., Inc. | 1.2 | 1.2 |
Royal Bank of Scotland Group PLC | 1.1 | 0.9 |
7.0 |
Top Five Countries as of October 31, 2016
(excluding cash equivalents) | % of fund's net assets | % of fund's net assets 6 months ago |
United States of America | 45.5 | 48.0 |
Luxembourg | 8.3 | 8.4 |
Netherlands | 6.1 | 5.1 |
Cayman Islands | 4.0 | 4.1 |
United Kingdom | 3.4 | 3.2 |
Top Five Market Sectors as of October 31, 2016
% of fund's net assets | % of fund's net assets 6 months ago | |
Energy | 12.7 | 11.0 |
Telecommunications | 11.8 | 12.3 |
Banks & Thrifts | 10.4 | 10.6 |
Utilities | 6.3 | 6.2 |
Healthcare | 6.0 | 6.5 |
Quality Diversification (% of fund's net assets)
As of October 31, 2016 | ||
BBB | 2.3% | |
BB | 37.2% | |
B | 33.1% | |
CCC,CC,C | 15.2% | |
D | 0.1% | |
Not Rated | 3.9% | |
Equities | 2.1% | |
Short-Term Investments and Net Other Assets | 6.1% |
As of April 30, 2016 | ||
BBB | 3.4% | |
BB | 34.3% | |
B | 31.6% | |
CCC,CC,C | 16.6% | |
Not Rated | 4.1% | |
Equities | 2.3% | |
Short-Term Investments and Net Other Assets | 7.7% |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes.
Asset Allocation (% of fund's net assets)
As of October 31, 2016 * | ||
Corporate Bonds | 83.2% | |
Stocks | 2.1% | |
Preferred Securities | 6.1% | |
Other Investments | 2.5% | |
Short-Term Investments and Net Other Assets (Liabilities) | 6.1% |
* Foreign investments - 48.4%
As of April 30, 2016 * | ||
Corporate Bonds | 80.8% | |
Stocks | 2.3% | |
Preferred Securities | 6.9% | |
Other Investments | 2.3% | |
Short-Term Investments and Net Other Assets (Liabilities) | 7.7% |
* Foreign investments - 44.3%
Investments October 31, 2016 (Unaudited)
Showing Percentage of Net Assets
Nonconvertible Bonds - 83.2% | |||
Principal Amount(a) | Value | ||
Aerospace - 0.3% | |||
Finmeccanica Finance SA 5.25% 1/21/22 | EUR | $100,000 | $128,858 |
Leonardo-Finmeccanica SpA 4.875% 3/24/25 | EUR | 100,000 | 129,930 |
TransDigm, Inc. 6.375% 6/15/26 (b) | 70,000 | 71,582 | |
TOTAL AEROSPACE | 330,370 | ||
Air Transportation - 0.2% | |||
Aeropuertos Argentina 2000 SA 10.75% 12/1/20 (Reg. S) | 119,000 | 129,115 | |
Continental Airlines, Inc. 6.125% 4/29/18 | 55,000 | 57,750 | |
United Continental Holdings, Inc. 6.375% 6/1/18 | 45,000 | 47,306 | |
TOTAL AIR TRANSPORTATION | 234,171 | ||
Automotive - 0.8% | |||
Samvardhana Motherson Automotive Systems Group BV 4.125% 7/15/21 (Reg. S) | EUR | 200,000 | 224,742 |
Schaeffler Finance BV 3.5% 5/15/22 (Reg. S) | EUR | 200,000 | 226,400 |
Tenedora Nemak SA de CV 5.5% 2/28/23 (b) | 300,000 | 311,475 | |
TOTAL AUTOMOTIVE | 762,617 | ||
Automotive & Auto Parts - 1.1% | |||
American Tire Distributors, Inc. 10.25% 3/1/22 (b) | 140,000 | 128,713 | |
Faurecia SA 3.625% 6/15/23 (Reg. S) | EUR | 100,000 | 113,771 |
Fiat Finance & Trade Ltd. SA 7.375% 7/9/18 | EUR | 200,000 | 242,778 |
IHO Verwaltungs GmbH 3.75% 9/15/26 pay-in-kind(Reg. S) (c) | EUR | 200,000 | 216,823 |
Metalsa SA de CV 4.9% 4/24/23 (b) | 200,000 | 196,000 | |
ZF North America Capital, Inc.: | |||
2.25% 4/26/19 (Reg. S) | EUR | 100,000 | 114,001 |
2.75% 4/27/23 (Reg. S) | EUR | 100,000 | 117,083 |
TOTAL AUTOMOTIVE & AUTO PARTS | 1,129,169 | ||
Banks & Thrifts - 6.4% | |||
Ally Financial, Inc.: | |||
5.75% 11/20/25 | 445,000 | 455,569 | |
8% 12/31/18 | 225,000 | 246,938 | |
8% 11/1/31 | 1,195,000 | 1,427,998 | |
Banco de Bogota SA 6.25% 5/12/26 (b) | 200,000 | 206,500 | |
Banco Internacional del Peru SAA 6.625% 3/19/29 (b)(c) | 200,000 | 219,440 | |
Banco Mercantil del Norte SA 5.75% 10/4/31 (b)(c) | 200,000 | 194,500 | |
BBVA Bancomer SA 7.25% 4/22/20 (b) | 200,000 | 221,000 | |
General Motors Acceptance Corp. 8% 11/1/31 | 257,000 | 307,758 | |
GTB Finance BV 6% 11/8/18 (b) | 200,000 | 198,500 | |
Industrial Senior Trust 5.5% 11/1/22 (b) | 200,000 | 199,132 | |
Itau Unibanco Holding SA 6.2% 12/21/21 (b) | 350,000 | 371,158 | |
JSC BGEO Group 6% 7/26/23 (b) | 450,000 | 461,493 | |
JSC Halyk Bank of Kazakhstan 7.25% 1/28/21 (b) | 400,000 | 434,160 | |
Royal Bank of Scotland Group PLC: | |||
3.625% 3/25/24 (Reg. S) (c) | EUR | 100,000 | 109,024 |
5.125% 5/28/24 | 317,000 | 313,950 | |
SB Capital SA 5.5% 2/26/24 (b)(c) | 200,000 | 198,000 | |
Turkiye Garanti Bankasi A/S 4.75% 10/17/19 (b) | 200,000 | 201,902 | |
Turkiye Halk Bankasi A/S 3.875% 2/5/20 (b) | 200,000 | 191,500 | |
Turkiye Is Bankasi A/S 3.75% 10/10/18 (b) | 200,000 | 197,420 | |
Zenith Bank PLC 6.25% 4/22/19 (b) | 400,000 | 389,072 | |
TOTAL BANKS & THRIFTS | 6,545,014 | ||
Broadcasting - 0.6% | |||
AMC Networks, Inc. 4.75% 12/15/22 | 100,000 | 102,000 | |
Clear Channel Communications, Inc. 5.5% 12/15/16 | 185,000 | 182,225 | |
TV Azteca SA de CV 7.5% 5/25/18 (Reg. S) | 350,000 | 301,000 | |
TOTAL BROADCASTING | 585,225 | ||
Building Materials - 2.3% | |||
Builders FirstSource, Inc. 5.625% 9/1/24 (b) | 55,000 | 55,550 | |
CEMEX Finance LLC: | |||
5.25% 4/1/21 (Reg. S) | EUR | 100,000 | 114,122 |
6% 4/1/24 (Reg. S) | 450,000 | 465,750 | |
Elementia S.A.B. de CV 5.5% 1/15/25 (b) | 200,000 | 203,600 | |
GCP Applied Technologies, Inc. 9.5% 2/1/23(b) | 70,000 | 79,275 | |
HD Supply, Inc. 5.75% 4/15/24 (b) | 30,000 | 31,500 | |
HeidelbergCement Finance BV 3.25% 10/21/21 (Reg. S) | EUR | 300,000 | 365,962 |
Herc Rentals, Inc.: | |||
7.5% 6/1/22 (b) | 45,000 | 45,000 | |
7.75% 6/1/24 (b) | 45,000 | 45,225 | |
HMAN Finance Sub Corp. 6.375% 7/15/22 (b) | 100,000 | 92,750 | |
Modern Land China Co. Ltd. 13.875% 11/4/18 (Reg. S) | 100,000 | 107,441 | |
Pratama Agung Pte. Ltd. 6.25% 2/24/20 (Reg. S) | 200,000 | 210,505 | |
Union Andina de Cementos SAA 5.875% 10/30/21 (Reg. S) | 300,000 | 311,700 | |
West China Cement Ltd. 6.5% 9/11/19 | 200,000 | 207,339 | |
TOTAL BUILDING MATERIALS | 2,335,719 | ||
Cable/Satellite TV - 5.3% | |||
Altice SA: | |||
7.625% 2/15/25 (b) | 400,000 | 416,000 | |
7.75% 5/15/22 (b) | 235,000 | 245,428 | |
Altice U.S. Finance SA 7.75% 7/15/25 (b) | 400,000 | 428,000 | |
Cable One, Inc. 5.75% 6/15/22 (b) | 55,000 | 58,025 | |
Cablevision SA 6.5% 6/15/21 (b) | 150,000 | 156,000 | |
CCO Holdings LLC/CCO Holdings Capital Corp.: | |||
5.5% 5/1/26 (b) | 110,000 | 112,682 | |
5.75% 1/15/24 | 615,000 | 650,363 | |
5.75% 2/15/26 (b) | 65,000 | 67,722 | |
Cequel Communications Holdings I LLC/Cequel Capital Corp. 5.125% 12/15/21 (b) | 255,000 | 251,175 | |
CSC Holdings, Inc. 5.5% 4/15/27 (b) | 345,000 | 349,959 | |
DISH DBS Corp. 5% 3/15/23 | 470,000 | 462,950 | |
Myriad International Holding BV 5.5% 7/21/25 (b) | 200,000 | 212,016 | |
RCN Telecom Services LLC/RCN Capital Corp. 8.5% 8/15/20 (b) | 170,000 | 181,156 | |
Telenet Finance VI Luxembourg SCA 4.875% 7/15/27 (Reg. S) | EUR | 100,000 | 114,484 |
Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH: | |||
3.5% 1/15/27 (Reg. S) | EUR | 100,000 | 107,717 |
5.5% 9/15/22 (Reg. S) | EUR | 324,000 | 374,344 |
5.5% 1/15/23 (b) | 200,000 | 207,250 | |
Virgin Media Finance PLC 4.5% 1/15/25 (Reg. S) | EUR | 100,000 | 108,842 |
VTR Finance BV 6.875% 1/15/24 (b) | 600,000 | 627,750 | |
Ziggo Bond Finance BV 6% 1/15/27 (b) | 160,000 | 157,100 | |
Ziggo Secured Finance BV 3.75% 1/15/25 (Reg. S) | EUR | 100,000 | 110,209 |
TOTAL CABLE/SATELLITE TV | 5,399,172 | ||
Capital Goods - 0.3% | |||
Shale-Inland Holdings LLC/Shale-Inland Finance Corp. 8.75% 11/15/19 (b) | 180,000 | 107,550 | |
Zoomlion HK SPV Co. Ltd. 6.125% 12/20/22 (Reg. S) | 200,000 | 190,000 | |
TOTAL CAPITAL GOODS | 297,550 | ||
Chemicals - 1.4% | |||
Blue Cube Spinco, Inc. 10% 10/15/25 | 45,000 | 54,000 | |
Evolution Escrow Issuer LLC 7.5% 3/15/22 (b) | 160,000 | 143,200 | |
INEOS Group Holdings SA 5.75% 2/15/19 (Reg. S) | EUR | 250,000 | 281,276 |
LSB Industries, Inc. 8.5% 8/1/19 | 65,000 | 60,450 | |
Momentive Performance Materials, Inc. 3.88% 10/24/21 | 200,000 | 178,000 | |
MPM Escrow LLC/MPM Finance Escrow Corp. 8.875% 10/15/20 (d) | 140,000 | 0 | |
OCP SA 5.625% 4/25/24 (b) | 200,000 | 215,040 | |
Platform Specialty Products Corp.: | |||
6.5% 2/1/22 (b) | 200,000 | 194,000 | |
10.375% 5/1/21 (b) | 25,000 | 27,000 | |
Tronox Finance LLC 6.375% 8/15/20 | 100,000 | 89,750 | |
Yingde Gases Investment Ltd. 7.25% 2/28/20 (Reg. S) | 200,000 | 185,419 | |
TOTAL CHEMICALS | 1,428,135 | ||
Containers - 1.9% | |||
ARD Finance SA 7.125% 9/15/23 pay-in-kind (b) | 200,000 | 198,000 | |
Ardagh Packaging Finance PLC/Ardagh MP Holdings U.S.A., Inc.: | |||
6.75% 5/15/24 (Reg. S) | EUR | 100,000 | 116,910 |
7% 11/15/20 (b) | 35,294 | 36,353 | |
7.25% 5/15/24 (b) | 200,000 | 211,000 | |
Ball Corp.: | |||
3.5% 12/15/20 | EUR | 100,000 | 121,107 |
4.375% 12/15/23 | EUR | 200,000 | 246,796 |
Consolidated Container Co. LLC/Consolidated Container Capital, Inc. 10.125% 7/15/20 (b) | 155,000 | 156,550 | |
Crown European Holdings SA 3.375% 5/15/25 | EUR | 300,000 | 337,657 |
OI European Group BV 6.75% 9/15/20 (Reg. S) | EUR | 150,000 | 197,315 |
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer (Luxembourg) SA 5.75% 10/15/20 | 285,000 | 292,490 | |
TOTAL CONTAINERS | 1,914,178 | ||
Diversified Financial Services - 5.1% | |||
Aircastle Ltd. 5.125% 3/15/21 | 220,000 | 233,475 | |
Arrow Global Finance PLC 4.951% 11/1/21 (c) | EUR | 200,000 | 226,356 |
Boing Group Financing PLC 6.625% 7/15/19 (Reg. S) | EUR | 100,000 | 105,933 |
Cabot Financial SA (Luxembourg) 5.875% 11/15/21 (Reg. S) (c) | EUR | 150,000 | 160,809 |
CIT Group, Inc. 5% 8/1/23 | 215,000 | 228,997 | |
Comcel Trust 6.875% 2/6/24 (b) | 200,000 | 204,500 | |
Credito Real S.A.B. de CV 7.5% 3/13/19 (b) | 200,000 | 206,250 | |
Garfunkelux Holdco 3 SA 7.5% 8/1/22 (Reg. S) | EUR | 200,000 | 221,526 |
Icahn Enterprises LP/Icahn Enterprises Finance Corp. 5.875% 2/1/22 | 305,000 | 290,131 | |
Inception Merger Sub, Inc./Rackspace Hosting, Inc. 8.625% 11/15/24 (b) | 55,000 | 55,000 | |
International Lease Finance Corp.: | |||
5.875% 8/15/22 | 375,000 | 412,980 | |
8.625% 1/15/22 | 255,000 | 312,694 | |
International Personal Finance PLC 5.75% 4/7/21 (Reg S.) | EUR | 100,000 | 99,895 |
Lock A/S 7% 8/15/21 (Reg. S) | EUR | 100,000 | 114,121 |
MSCI, Inc. 5.75% 8/15/25 (b) | 50,000 | 53,158 | |
Navient Corp.: | |||
5% 10/26/20 | 54,000 | 53,325 | |
7.25% 9/25/23 | 30,000 | 29,550 | |
Prime Securities Services Borrower LLC/Prime Finance, Inc. 9.25% 5/15/23 (b) | 425,000 | 451,563 | |
Schumann SpA 7% 7/31/23 (Reg. S) | EUR | 200,000 | 222,945 |
SLM Corp.: | |||
4.875% 6/17/19 | 30,000 | 30,263 | |
5.5% 1/25/23 | 475,000 | 431,063 | |
6.125% 3/25/24 | 365,000 | 333,975 | |
8% 3/25/20 | 190,000 | 206,150 | |
Verisure Holding AB 6% 11/1/22 (Reg. S) | EUR | 260,000 | 310,389 |
Zhongrong International Bond 2015 Ltd. 6% 6/15/18 (Reg. S) | 200,000 | 203,422 | |
TOTAL DIVERSIFIED FINANCIAL SERVICES | 5,198,470 | ||
Diversified Media - 0.4% | |||
MDC Partners, Inc. 6.5% 5/1/24 (b) | 95,000 | 80,988 | |
National CineMedia LLC 6% 4/15/22 | 300,000 | 312,000 | |
TOTAL DIVERSIFIED MEDIA | 392,988 | ||
Energy - 11.7% | |||
Afren PLC 10.25% 4/8/19 (b)(d) | 285,920 | 29 | |
Antero Resources Corp.: | |||
5.125% 12/1/22 | 420,000 | 423,150 | |
5.625% 6/1/23 (Reg. S) | 80,000 | 81,600 | |
Areva SA 4.875% 9/23/24 | EUR | 200,000 | 220,648 |
Callon Petroleum Co. 6.125% 10/1/24 (b) | 25,000 | 25,750 | |
Carrizo Oil & Gas, Inc. 6.25% 4/15/23 | 55,000 | 56,513 | |
Chesapeake Energy Corp.: | |||
4.13% 4/15/19 (c) | 70,000 | 64,575 | |
4.875% 4/15/22 | 180,000 | 153,000 | |
5.75% 3/15/23 | 65,000 | 56,225 | |
8% 12/15/22 (b) | 365,000 | 370,247 | |
China Oil & Gas Group Ltd. 5.25% 4/25/18 (Reg. S) | 200,000 | 203,000 | |
Citgo Holding, Inc. 10.75% 2/15/20 (b) | 155,000 | 158,255 | |
Concho Resources, Inc.: | |||
5.5% 10/1/22 | 55,000 | 56,513 | |
5.5% 4/1/23 | 25,000 | 25,575 | |
EDC Finance Ltd. 4.875% 4/17/20 (b) | 200,000 | 202,000 | |
Energy Transfer Equity LP 7.5% 10/15/20 | 30,000 | 32,700 | |
Ensco PLC: | |||
4.5% 10/1/24 | 70,000 | 56,000 | |
5.2% 3/15/25 | 5,000 | 4,067 | |
Exterran Partners LP/EXLP Finance Corp. 6% 10/1/22 | 250,000 | 235,625 | |
Gaz Capital SA: | |||
3.389% 3/20/20 (Reg. S) | EUR | 100,000 | 113,500 |
3.6% 2/26/21 (Reg. S) | EUR | 300,000 | 344,178 |
Gibson Energy, Inc. 6.75% 7/15/21 (b) | 370,000 | 380,175 | |
Greenko Dutch BV 8% 8/1/19 (Reg. S) | 200,000 | 213,623 | |
Gulfmark Offshore, Inc. 6.375% 3/15/22 | 340,000 | 166,600 | |
Hilcorp Energy I LP/Hilcorp Finance Co.: | |||
5% 12/1/24 (b) | 320,000 | 312,000 | |
5.75% 10/1/25 (b) | 200,000 | 200,500 | |
7.625% 4/15/21 (b) | 10,000 | 10,250 | |
Hornbeck Offshore Services, Inc.: | |||
5% 3/1/21 | 5,000 | 2,975 | |
5.875% 4/1/20 | 80,000 | 51,600 | |
Indo Energy Finance II BV 6.375% 1/24/23 | 200,000 | 156,013 | |
Jupiter Resources, Inc. 8.5% 10/1/22 (b) | 150,000 | 123,000 | |
Kosmos Energy Ltd. 7.875% 8/1/21 (b) | 200,000 | 192,000 | |
LINN Energy LLC/LINN Energy Finance Corp.: | |||
6.5% 9/15/21 (d) | 35,000 | 11,375 | |
7.75% 2/1/21 (d) | 5,000 | 1,625 | |
Murphy Oil Corp. 6.875% 8/15/24 | 20,000 | 20,820 | |
Noble Holding International Ltd.: | |||
3.95% 3/15/22 | 10,000 | 7,675 | |
4.625% 3/1/21 | 20,000 | 16,889 | |
7.2% 4/1/25 (c) | 25,000 | 20,375 | |
Oasis Petroleum, Inc. 6.875% 3/15/22 | 45,000 | 44,550 | |
Pacific Drilling V Ltd. 7.25% 12/1/17 (b) | 380,000 | 150,100 | |
Pacific Exploration and Production Corp. 12% 12/22/16 | 88,000 | 88,616 | |
Pacific Rubiales Energy Corp. 7.25% 12/12/21 (b)(d) | 500,000 | 100,000 | |
Pan American Energy LLC 7.875% 5/7/21 (b) | 500,000 | 536,875 | |
Parsley Energy LLC/Parsley 6.25% 6/1/24 (b) | 10,000 | 10,500 | |
PBF Holding Co. LLC/PBF Finance Corp. 7% 11/15/23 (b) | 130,000 | 120,250 | |
Petroleos Mexicanos 6.375% 2/4/21 (b) | 200,000 | 218,800 | |
Plains Exploration & Production Co.: | |||
6.5% 11/15/20 | 15,000 | 15,319 | |
6.625% 5/1/21 | 15,000 | 15,300 | |
6.75% 2/1/22 | 50,000 | 51,125 | |
6.875% 2/15/23 | 215,000 | 223,063 | |
Pride International, Inc. 7.875% 8/15/40 | 95,000 | 76,000 | |
Puma International Financing SA 6.75% 2/1/21 (Reg. S) | 200,000 | 206,044 | |
Range Resources Corp. 4.875% 5/15/25 | 60,000 | 57,331 | |
Rice Energy, Inc.: | |||
6.25% 5/1/22 | 40,000 | 40,700 | |
7.25% 5/1/23 | 40,000 | 42,400 | |
Rose Rock Midstream LP/Rose Rock Finance Corp. 5.625% 7/15/22 | 125,000 | 119,375 | |
Sabine Pass Liquefaction LLC: | |||
5% 3/15/27 (b) | 85,000 | 86,488 | |
5.625% 2/1/21 (c) | 260,000 | 273,650 | |
5.625% 4/15/23 (c) | 225,000 | 239,063 | |
5.625% 3/1/25 | 45,000 | 47,617 | |
5.75% 5/15/24 | 80,000 | 84,600 | |
5.875% 6/30/26 (b) | 140,000 | 150,878 | |
SemGroup Corp. 7.5% 6/15/21 | 370,000 | 378,325 | |
SM Energy Co.: | |||
5% 1/15/24 | 65,000 | 60,450 | |
5.625% 6/1/25 | 110,000 | 104,775 | |
6.125% 11/15/22 | 150,000 | 150,750 | |
6.5% 11/15/21 | 30,000 | 30,450 | |
6.5% 1/1/23 | 15,000 | 14,925 | |
6.75% 9/15/26 | 25,000 | 25,625 | |
Summit Midstream Holdings LLC 7.5% 7/1/21 | 100,000 | 104,000 | |
Sunoco LP/Sunoco Finance Corp.: | |||
6.25% 4/15/21 | 110,000 | 112,750 | |
6.375% 4/1/23 | 60,000 | 61,350 | |
Targa Resources Partners LP/Targa Resources Partners Finance Corp.: | |||
5.125% 2/1/25 (b) | 35,000 | 34,913 | |
5.375% 2/1/27 (b) | 35,000 | 35,000 | |
6.375% 8/1/22 | 60,000 | 61,800 | |
Teine Energy Ltd. 6.875% 9/30/22 (b) | 145,000 | 147,538 | |
TerraForm Power Operating LLC: | |||
9.375% 2/1/23 (b)(c) | 340,000 | 340,850 | |
9.625% 6/15/25 (b)(c) | 55,000 | 56,788 | |
Tesoro Logistics LP/Tesoro Logistics Finance Corp.: | |||
6.125% 10/15/21 | 20,000 | 20,925 | |
6.375% 5/1/24 | 45,000 | 48,488 | |
Transportadora de Gas del Sur SA 9.625% 5/14/20 (b) | 431,097 | 464,507 | |
Ultrapar Participacoes SA 5.25% 10/6/26 (b) | 200,000 | 202,750 | |
Weatherford International Ltd.: | |||
4.5% 4/15/22 | 70,000 | 63,000 | |
7.75% 6/15/21 | 90,000 | 90,900 | |
8.25% 6/15/23 | 110,000 | 113,850 | |
Western Refining Logistics LP/WNRL Finance Co. 7.5% 2/15/23 | 40,000 | 41,800 | |
Western Refining, Inc. 6.25% 4/1/21 | 105,000 | 105,788 | |
WPX Energy, Inc.: | |||
5.25% 9/15/24 | 65,000 | 61,750 | |
6% 1/15/22 | 95,000 | 94,763 | |
7.5% 8/1/20 | 65,000 | 68,494 | |
8.25% 8/1/23 | 100,000 | 108,000 | |
YPF SA: | |||
8.5% 3/23/21 (b) | 150,000 | 164,955 | |
8.5% 7/28/25 (b) | 400,000 | 436,000 | |
Zhaikmunai International BV 7.125% 11/13/19 (b) | 400,000 | 369,000 | |
TOTAL ENERGY | 11,944,548 | ||
Entertainment/Film - 0.3% | |||
NAI Entertainment Holdings LLC/NAI Entertainment Finance Corp. 5% 8/1/18 (b) | 170,000 | 171,700 | |
New Cotai LLC/New Cotai Capital Corp. 10.625% 5/1/19 pay-in-kind (b)(c) | 250,000 | 134,219 | |
TOTAL ENTERTAINMENT/FILM | 305,919 | ||
Environmental - 0.4% | |||
Covanta Holding Corp.: | |||
5.875% 3/1/24 | 110,000 | 108,488 | |
6.375% 10/1/22 | 95,000 | 96,663 | |
LBC Tank Terminals Holding Netherlands BV 6.875% 5/15/23 (b) | 200,000 | 200,500 | |
TOTAL ENVIRONMENTAL | 405,651 | ||
Food & Drug Retail - 1.8% | |||
Albertsons Companies LLC/Safeway, Inc./New Albertson's, Inc./Albertson's LLC: | |||
5.75% 3/15/25 (b) | 125,000 | 123,399 | |
6.625% 6/15/24 (b) | 100,000 | 103,750 | |
Casino Guichard Perrachon SA 5.976% 5/26/21 (c) | EUR | 100,000 | 129,260 |
FAGE International SA/FAGE U.S.A. Dairy Industry, Inc. 5.625% 8/15/26 (b) | 200,000 | 206,500 | |
Rite Aid Corp.: | |||
6.875% 12/15/28 (b)(c) | 505,000 | 609,788 | |
7.7% 2/15/27 | 296,000 | 367,040 | |
Tesco PLC 5.125% 4/10/47 | EUR | 100,000 | 108,928 |
Tops Holding LLC/Tops Markets II Corp. 8% 6/15/22 (b) | 165,000 | 145,200 | |
TOTAL FOOD & DRUG RETAIL | 1,793,865 | ||
Food/Beverage/Tobacco - 2.1% | |||
Arcor SAIC 6% 7/6/23 (b) | 100,000 | 106,000 | |
ESAL GmbH 6.25% 2/5/23 (b) | 155,000 | 149,188 | |
Gruma S.A.B. de CV 4.875% 12/1/24 (b) | 300,000 | 325,500 | |
JBS Investments GmbH 7.25% 4/3/24 (b) | 410,000 | 414,100 | |
JBS U.S.A. LLC/JBS U.S.A. Finance, Inc. 5.75% 6/15/25 (b) | 65,000 | 63,700 | |
MHP SA 8.25% 4/2/20 (b) | 200,000 | 195,796 | |
Minerva Luxembourg SA 6.5% 9/20/26 (b) | 400,000 | 391,760 | |
Post Holdings, Inc.: | |||
6.75% 12/1/21 (b) | 190,000 | 203,300 | |
7.75% 3/15/24 (b) | 65,000 | 71,838 | |
8% 7/15/25 (b) | 35,000 | 39,900 | |
TreeHouse Foods, Inc. 6% 2/15/24 (b) | 40,000 | 42,960 | |
U.S. Foods, Inc. 5.875% 6/15/24 (b) | 75,000 | 78,000 | |
Vector Group Ltd. 7.75% 2/15/21 | 50,000 | 52,375 | |
TOTAL FOOD/BEVERAGE/TOBACCO | 2,134,417 | ||
Gaming - 2.0% | |||
Caesars Growth Properties Holdings LLC/Caesars Growth Properties Finance, Inc. 9.375% 5/1/22 | 405,000 | 430,313 | |
Cleopatra Finance Ltd. 4.75% 2/15/23 (Reg. S) | EUR | 200,000 | 237,937 |
GLP Capital LP/GLP Financing II, Inc. 5.375% 4/15/26 | 30,000 | 31,875 | |
Golden Nugget Escrow, Inc. 8.5% 12/1/21 (b) | 130,000 | 136,500 | |
MGM Mirage, Inc. 8.625% 2/1/19 | 115,000 | 129,016 | |
Paris Las Vegas Holding LLC/Harrah's Las Vegas LLC/Flamingo Las Vegas Holdings, Inc. 11% 10/1/21 (c) | 305,000 | 329,019 | |
Scientific Games Corp. 10% 12/1/22 | 270,000 | 249,750 | |
Studio City Finance Ltd. 8.5% 12/1/20 (b) | 200,000 | 207,000 | |
Wynn Macau Ltd. 5.25% 10/15/21 (b) | 300,000 | 301,047 | |
TOTAL GAMING | 2,052,457 | ||
Healthcare - 5.1% | |||
Acadia Healthcare Co., Inc. 5.625% 2/15/23 | 45,000 | 45,056 | |
AMAG Pharmaceuticals, Inc. 7.875% 9/1/23 (b) | 75,000 | 70,313 | |
Cerba European Lab SAS 7% 2/1/20 (Reg. S) | EUR | 200,000 | 226,848 |
Community Health Systems, Inc. 6.875% 2/1/22 | 280,000 | 213,500 | |
CTR Partnership LP/CareTrust Capital Corp. 5.875% 6/1/21 | 40,000 | 41,200 | |
DaVita HealthCare Partners, Inc. 5% 5/1/25 | 95,000 | 91,675 | |
Endo Finance LLC 5.375% 1/15/23 (b)(c) | 20,000 | 17,000 | |
Endo Finance LLC/Endo Ltd./Endo Finco, Inc.: | |||
6% 7/15/23 (b) | 200,000 | 174,000 | |
6.5% 2/1/25 (b)(c) | 295,000 | 248,538 | |
FMC Finance VII SA 5.25% 2/15/21 | EUR | 250,000 | 324,776 |
HCA Holdings, Inc.: | |||
5% 3/15/24 | 185,000 | 192,678 | |
5.875% 3/15/22 | 274,000 | 301,400 | |
5.875% 2/15/26 | 85,000 | 89,250 | |
7.5% 2/15/22 | 180,000 | 204,840 | |
HealthSouth Corp.: | |||
5.75% 11/1/24 | 150,000 | 154,688 | |
5.75% 9/15/25 | 15,000 | 15,525 | |
IMS Health, Inc. 5% 10/15/26 (b) | 200,000 | 206,750 | |
Sabra Health Care LP/Sabra Capital Corp.: | |||
5.375% 6/1/23 | 155,000 | 158,100 | |
5.5% 2/1/21 | 120,000 | 125,100 | |
Team Health, Inc. 7.25% 12/15/23 (b) | 70,000 | 79,188 | |
Tenet Healthcare Corp.: | |||
6.75% 6/15/23 | 140,000 | 128,625 | |
8.125% 4/1/22 | 655,000 | 640,263 | |
Valeant Pharmaceuticals International, Inc.: | |||
5.375% 3/15/20 (b) | 280,000 | 242,200 | |
5.5% 3/1/23 (b) | 115,000 | 90,275 | |
5.625% 12/1/21 (b) | 155,000 | 127,100 | |
5.875% 5/15/23 (b) | 520,000 | 409,500 | |
6.125% 4/15/25 (b) | 205,000 | 161,950 | |
6.75% 8/15/21 (b) | 40,000 | 34,600 | |
7.25% 7/15/22 (b) | 25,000 | 21,750 | |
7.5% 7/15/21 (b) | 313,000 | 278,570 | |
Vizient, Inc. 10.375% 3/1/24 (b) | 80,000 | 89,200 | |
TOTAL HEALTHCARE | 5,204,458 | ||
Homebuilders/Real Estate - 3.8% | |||
Ashton Woods U.S.A. LLC/Ashton Woods Finance Co. 6.875% 2/15/21 (b) | 405,000 | 396,900 | |
Beazer Homes U.S.A., Inc. 7.25% 2/1/23 (c) | 140,000 | 140,700 | |
Brookfield Residential Properties, Inc./Brookfield Residential U.S. Corp. 6.125% 7/1/22 (b) | 5,000 | 5,075 | |
Brookfield Residential Properties, Inc.: | |||
6.375% 5/15/25 (b) | 15,000 | 14,963 | |
6.5% 12/15/20 (b) | 115,000 | 118,450 | |
Cementos Progreso Trust 7.125% 11/6/23 (b) | 200,000 | 211,500 | |
Future Land Development Holding Ltd. 6.25% 11/12/17 (Reg. S) | 200,000 | 203,494 | |
IRSA Propiedades Comerciales SA 8.75% 3/23/23 (b) | 150,000 | 166,500 | |
KWG Property Holding Ltd. 8.25% 8/5/19 (Reg. S) | 200,000 | 212,850 | |
Lodha Developers International Ltd. 12% 3/13/20 (Reg. S) | 200,000 | 200,000 | |
Logan Property Holdings Co. Ltd. 11.25% 6/4/19 (Reg. S) | 200,000 | 217,986 | |
Marquee Land Pte. Ltd. 9.75% 8/5/19 (Reg. S) | 200,000 | 215,760 | |
Powerlong Real Estate Holding Ltd. 7.625% 11/26/18 (Reg. S) | 200,000 | 211,080 | |
Ryland Group, Inc. 5.375% 10/1/22 | 55,000 | 57,819 | |
Shea Homes Ltd. Partnership/Corp.: | |||
5.875% 4/1/23 (b) | 30,000 | 29,475 | |
6.125% 4/1/25 (b) | 30,000 | 29,550 | |
Shimao Property Holdings Ltd. 8.125% 1/22/21 (Reg. S) | 200,000 | 218,502 | |
Shui On Development Holding Ltd. 8.7% 5/19/18 (Reg. S) | 200,000 | 212,742 | |
Theta Capital Pte Ltd. 7% 4/11/22 (Reg. S) | 200,000 | 211,651 | |
Times Property Holdings Ltd. 12.625% 3/21/19 (Reg. S) | 200,000 | 218,493 | |
Weekley Homes LLC/Weekley Finance Corp. 6% 2/1/23 | 90,000 | 81,900 | |
William Lyon Homes, Inc. 8.5% 11/15/20 | 215,000 | 225,213 | |
Woodside Homes Co. LLC/Woodside Homes Finance, Inc. 6.75% 12/15/21 (b) | 265,000 | 257,050 | |
TOTAL HOMEBUILDERS/REAL ESTATE | 3,857,653 | ||
Insurance - 0.4% | |||
Alliant Holdings Co.-Issuer, Inc./Wayne Merger Sub LLC 8.25% 8/1/23 (b) | 100,000 | 101,750 | |
Assicurazioni Generali SpA 10.125% 7/10/42 (c) | EUR | 100,000 | 141,888 |
Hockey Merger Sub 2, Inc. 7.875% 10/1/21 (b) | 140,000 | 143,108 | |
TOTAL INSURANCE | 386,746 | ||
Leisure - 0.1% | |||
24 Hour Holdings III LLC 8% 6/1/22 (b) | 100,000 | 83,000 | |
Metals/Mining - 2.4% | |||
Abja Investment Co. Pte Ltd. 5.95% 7/31/24 (Reg. S) | 200,000 | 201,344 | |
Alpha Natural Resources, Inc. 9.75% 4/15/18 (d) | 210,000 | 1,050 | |
Anglo American Capital PLC 1.75% 4/3/18 (Reg. S) | EUR | 100,000 | 111,149 |
ArcelorMittal SA: | |||
3% 3/25/19 (Reg. S) | EUR | 100,000 | 114,600 |
3.125% 1/14/22 (Reg. S) | EUR | 100,000 | 112,416 |
Bluescope Steel Ltd./Bluescope Steel Finance: | |||
6.5% 5/15/21 (b) | 25,000 | 26,378 | |
7.125% 5/1/18 (b) | 18,000 | 18,360 | |
Compania Minera Ares SAC 7.75% 1/23/21 (b) | 200,000 | 215,750 | |
Gold Fields Orogen Holding BVI Ltd. 4.875% 10/7/20 (b) | 400,000 | 404,500 | |
Joseph T Ryerson & Son, Inc. 11% 5/15/22 (b) | 40,000 | 43,700 | |
MMC Finance Ltd. 6.625% 10/14/22 (Reg. S) | 200,000 | 223,000 | |
Novelis Corp. 5.875% 9/30/26 (b) | 70,000 | 70,875 | |
Peabody Energy Corp. 10% 3/15/22 (b)(d) | 85,000 | 61,413 | |
Prince Mineral Holding Corp. 11.5% 12/15/19 (b)(c) | 55,000 | 51,700 | |
Southern Copper Corp. 7.5% 7/27/35 | 250,000 | 294,147 | |
Teck Resources Ltd.: | |||
8% 6/1/21 (b) | 45,000 | 49,163 | |
8.5% 6/1/24 (b) | 120,000 | 138,900 | |
Vale Overseas Ltd. 5.875% 6/10/21 | 100,000 | 106,625 | |
Vedanta Resources PLC 8.25% 6/7/21 (Reg. S) | 200,000 | 204,760 | |
Walter Energy, Inc. 9.5% 10/15/19 (b)(d) | 155,000 | 0 | |
TOTAL METALS/MINING | 2,449,830 | ||
Paper - 0.3% | |||
Lecta SA 6.5% 8/1/23 (Reg. S) | EUR | 100,000 | 110,461 |
Smurfit Kappa Acquisitions 3.25% 6/1/21 (Reg. S) | EUR | 200,000 | 238,212 |
TOTAL PAPER | 348,673 | ||
Publishing/Printing - 0.8% | |||
Cenveo Corp. 6% 8/1/19 (b) | 145,000 | 127,600 | |
McGraw-Hill Global Education Holdings LLC/McGraw-Hill Global Education Finance 7.875% 5/15/24 (b) | 250,000 | 270,625 | |
MHGE Parent LLC/MHGE Parent Finance, Inc. 8.5% 8/1/19 pay-in-kind (b)(c) | 410,000 | 414,613 | |
TOTAL PUBLISHING/PRINTING | 812,838 | ||
Railroad - 0.1% | |||
RZD Capital Ltd. 3.3744% 5/20/21 (Reg. S) | EUR | 100,000 | 113,782 |
Restaurants - 0.5% | |||
1011778 BC Unlimited Liability Co./New Red Finance, Inc. 4.625% 1/15/22 (b) | 70,000 | 72,275 | |
Arcos Dorados Holdings, Inc. 6.625% 9/27/23 (Reg. S) | 100,000 | 104,500 | |
KFC Holding Co./Pizza Hut Holding LLC: | |||
5% 6/1/24 (b) | 195,000 | 202,800 | |
5.25% 6/1/26 (b) | 100,000 | 104,250 | |
Landry's Acquisition Co. 6.75% 10/15/24 (b) | 55,000 | 56,100 | |
TOTAL RESTAURANTS | 539,925 | ||
Services - 3.5% | |||
APX Group, Inc.: | |||
6.375% 12/1/19 | 140,000 | 144,375 | |
7.875% 12/1/22 | 370,000 | 389,429 | |
8.75% 12/1/20 | 1,000,000 | 967,500 | |
Avis Budget Car Rental LLC/Avis Budget Finance, Inc. 6.375% 4/1/24 (b) | 155,000 | 155,775 | |
Blueline Rent Finance Corp./Volvo 7% 2/1/19 (b) | 95,000 | 82,888 | |
Ephios Holdco II PLC 8.25% 7/1/23 (Reg. S) | EUR | 100,000 | 118,294 |
Everi Payments, Inc. 10% 1/15/22 | 35,000 | 33,381 | |
FTI Consulting, Inc. 6% 11/15/22 | 175,000 | 183,750 | |
Garda World Security Corp.: | |||
7.25% 11/15/21 (b) | 200,000 | 191,000 | |
7.25% 11/15/21 (b) | 100,000 | 95,500 | |
Jurassic Holdings III, Inc. 6.875% 2/15/21 (Reg. S) (b) | 220,000 | 174,900 | |
Laureate Education, Inc. 10% 9/1/19 (b)(c) | 920,000 | 851,000 | |
NES Rentals Holdings, Inc. 7.875% 5/1/18 (b) | 70,000 | 68,600 | |
TMS International Corp. 7.625% 10/15/21 (b) | 55,000 | 45,375 | |
United Rentals North America, Inc.: | |||
5.5% 7/15/25 | 60,000 | 60,750 | |
5.5% 5/15/27 (e) | 45,000 | 44,775 | |
TOTAL SERVICES | 3,607,292 | ||
Steel - 0.8% | |||
EVRAZ Group SA 6.5% 4/22/20 (b) | 200,000 | 205,498 | |
Evraz, Inc. NA Canada 7.5% 11/15/19 (b) | 200,000 | 201,750 | |
Metinvest BV 10.25% 11/30/16 (b) | 79,178 | 67,697 | |
Steel Capital SA 5.9% 10/17/22 (Reg. S) | 200,000 | 216,466 | |
Thyssenkrupp AG 3.125% 10/25/19 (Reg. S) | EUR | 80,000 | 92,979 |
TOTAL STEEL | 784,390 | ||
Super Retail - 0.9% | |||
InRetail Shopping Malls 6.5% 7/9/21 (b) | 200,000 | 210,500 | |
JC Penney Corp., Inc.: | |||
5.65% 6/1/20 | 260,000 | 257,400 | |
7.4% 4/1/37 | 85,000 | 77,775 | |
L Brands, Inc. 6.875% 11/1/35 | 90,000 | 95,400 | |
MPM Global Pte Ltd. 6.75% 9/19/19 (Reg. S) | 100,000 | 104,442 | |
Netflix, Inc. 4.375% 11/15/26 (b) | 110,000 | 108,213 | |
Sally Holdings LLC 5.625% 12/1/25 | 70,000 | 74,725 | |
TOTAL SUPER RETAIL | 928,455 | ||
Technology - 2.5% | |||
BCP Singapore VI Cayman Financing Co. Ltd. 8% 4/15/21 (b) | 200,000 | 197,360 | |
Brocade Communications Systems, Inc. 4.625% 1/15/23 | 135,000 | 132,975 | |
CDW LLC/CDW Finance Corp. 6% 8/15/22 | 155,000 | 164,300 | |
Diamond 1 Finance Corp./Diamond 2 Finance Corp.: | |||
5.875% 6/15/21 (b) | 65,000 | 68,507 | |
7.125% 6/15/24 (b) | 65,000 | 71,205 | |
JDA Escrow LLC/JDA Bond Finance, Inc. 7.375% 10/15/24 (b) | 25,000 | 25,813 | |
Lucent Technologies, Inc. 6.45% 3/15/29 | 425,000 | 468,563 | |
Micron Technology, Inc.: | |||
5.25% 1/15/24 (b) | 60,000 | 58,500 | |
5.5% 2/1/25 | 85,000 | 83,326 | |
Parametric Technology Corp. 6% 5/15/24 | 20,000 | 21,150 | |
Rackspace Hosting, Inc. 6.5% 1/15/24 (b) | 75,000 | 85,781 | |
Sabre GLBL, Inc. 5.25% 11/15/23 (b) | 85,000 | 87,231 | |
Sensata Technologies BV 4.875% 10/15/23 (b) | 120,000 | 124,350 | |
Solera LLC/Solera Finance, Inc. 10.5% 3/1/24 (b) | 320,000 | 357,702 | |
STATS ChipPAC Ltd. 8.5% 11/24/20 (Reg. S) | 200,000 | 207,260 | |
Western Digital Corp. 10.5% 4/1/24 (b) | 110,000 | 127,050 | |
WideOpenWest Finance LLC/WideOpenWest Capital Corp.: | |||
10.25% 7/15/19 | 191,000 | 200,550 | |
13.375% 10/15/19 | 15,000 | 16,050 | |
TOTAL TECHNOLOGY | 2,497,673 | ||
Telecommunications - 10.9% | |||
Altice Financing SA: | |||
6.625% 2/15/23 (b) | 200,000 | 206,000 | |
7.5% 5/15/26 (b) | 200,000 | 206,000 | |
Altice Finco SA: | |||
7.625% 2/15/25 (b) | 600,000 | 594,000 | |
8.125% 1/15/24 (b) | 200,000 | 205,000 | |
Banglalink Digital Communications Ltd.: | |||
8.625% 5/6/19 (b) | 200,000 | 212,500 | |
8.625% 5/6/19 (Reg. S) | 200,000 | 212,500 | |
Broadview Networks Holdings, Inc. 10.5% 11/15/17 | 187,500 | 176,250 | |
Cellnex Telecom Sau 2.375% 1/16/24 (Reg. S) | EUR | 200,000 | 223,008 |
Digicel Group Ltd. 6% 4/15/21 (Reg. S) | 200,000 | 178,940 | |
DigitalGlobe, Inc. 5.25% 2/1/21 (b) | 130,000 | 130,975 | |
FairPoint Communications, Inc. 8.75% 8/15/19 (b) | 245,000 | 249,288 | |
Frontier Communications Corp.: | |||
8.875% 9/15/20 | 40,000 | 42,500 | |
10.5% 9/15/22 | 70,000 | 72,800 | |
GCI, Inc. 6.875% 4/15/25 | 85,000 | 86,275 | |
Globo Comunicacao e Participacoes SA: | |||
4.875% 4/11/22 (Reg. S) | 250,000 | 257,500 | |
5.307% 5/11/22 (Reg. S) (f) | 200,000 | 204,040 | |
GTH Finance BV: | |||
6.25% 4/26/20 (b) | 200,000 | 208,824 | |
7.25% 4/26/23 (b) | 200,000 | 212,900 | |
Intelsat Jackson Holdings SA: | |||
5.5% 8/1/23 | 165,000 | 109,313 | |
8% 2/15/24 (b) | 260,000 | 261,300 | |
Intelsat Luxembourg SA 8.125% 6/1/23 | 285,000 | 94,050 | |
Millicom International Cellular SA 6.625% 10/15/21 (b) | 200,000 | 209,260 | |
MTS International Funding Ltd. 5% 5/30/23 (b) | 350,000 | 361,830 | |
Neptune Finco Corp.: | |||
10.125% 1/15/23 (b) | 350,000 | 394,625 | |
10.875% 10/15/25 (b) | 200,000 | 230,000 | |
Play Topco SA 7.75% 2/28/20 (Reg. S) (c) | EUR | 200,000 | 223,941 |
Sable International Finance Ltd. 6.875% 8/1/22 (b) | 600,000 | 621,000 | |
SFR Group SA 7.375% 5/1/26 (b) | 255,000 | 257,550 | |
Sprint Capital Corp.: | |||
6.875% 11/15/28 | 205,000 | 188,600 | |
6.9% 5/1/19 | 615,000 | 647,288 | |
8.75% 3/15/32 | 115,000 | 116,725 | |
Sprint Communications, Inc. 6% 11/15/22 | 40,000 | 37,275 | |
Sprint Corp.: | |||
7.125% 6/15/24 | 370,000 | 347,800 | |
7.25% 9/15/21 | 10,000 | 10,238 | |
7.875% 9/15/23 | 540,000 | 534,600 | |
T-Mobile U.S.A., Inc.: | |||
6% 4/15/24 | 120,000 | 127,650 | |
6.25% 4/1/21 | 180,000 | 187,425 | |
6.5% 1/15/26 | 120,000 | 131,544 | |
6.625% 4/1/23 | 325,000 | 345,371 | |
6.731% 4/28/22 | 205,000 | 214,225 | |
6.836% 4/28/23 | 285,000 | 304,380 | |
TBG Global Pte. Ltd. 5.25% 2/10/22 (Reg. S) | 200,000 | 209,371 | |
Telecom Italia SpA: | |||
3.625% 5/25/26 (Reg. S) | EUR | 100,000 | 113,214 |
4.875% 9/25/20 (Reg. S) | EUR | 100,000 | 123,829 |
5.25% 3/17/55 | EUR | 100,000 | 111,422 |
Telefonica Celular del Paraguay SA 6.75% 12/13/22 (b) | 200,000 | 208,500 | |
UPCB Finance IV Ltd. 4% 1/15/27 (Reg. S) | EUR | 300,000 | 323,150 |
Wind Acquisition Finance SA 4% 7/15/20 (Reg S.) | EUR | 350,000 | 389,976 |
TOTAL TELECOMMUNICATIONS | 11,114,752 | ||
Textiles/Apparel - 0.2% | |||
Novalis Sas 3% 4/30/22 (Reg. S) | EUR | 200,000 | 223,974 |
Transportation Ex Air/Rail - 0.4% | |||
eHi Car Service Co. Ltd. 7.5% 12/8/18 (Reg. S) | 200,000 | 210,999 | |
Navios Maritime Acquisition Corp./Navios Acquisition Finance U.S., Inc. 8.125% 11/15/21 (b) | 155,000 | 117,025 | |
Teekay Corp. 8.5% 1/15/20 | 5,000 | 4,550 | |
TRAC Intermodal LLC/TRAC Intermodal Corp. 11% 8/15/19 | 27,000 | 28,553 | |
Ultrapetrol (Bahamas) Ltd. 8.875% 6/15/21 (d) | 155,000 | 29,450 | |
TOTAL TRANSPORTATION EX AIR/RAIL | 390,577 | ||
Utilities - 6.1% | |||
Calpine Corp. 7.875% 1/15/23 (b) | 170,000 | 178,288 | |
Dynegy, Inc.: | |||
6.75% 11/1/19 | 125,000 | 126,511 | |
7.375% 11/1/22 | 105,000 | 101,259 | |
7.625% 11/1/24 | 150,000 | 143,625 | |
8% 1/15/25 (b) | 40,000 | 38,600 | |
Enel SpA 5% 1/15/75 (c) | EUR | 300,000 | 351,143 |
Energy Future Intermediate Holding Co. LLC/Energy Future Intermediate Holding Finance, Inc.: | |||
11% 10/1/21 (d) | 31,737 | 40,306 | |
12.25% 3/1/22 (b)(d) | 650,609 | 837,660 | |
Global Partners LP/GLP Finance Corp.: | |||
6.25% 7/15/22 | 60,000 | 57,300 | |
7% 6/15/23 | 85,000 | 81,175 | |
Greenko Investment Co. 4.875% 8/16/23 (Reg. S) | 200,000 | 194,754 | |
InterGen NV 7% 6/30/23 (b) | 610,000 | 516,975 | |
Listrindo Capital BV 4.95% 9/14/26 (b) | 200,000 | 202,006 | |
Majapahit Holding BV 7.875% 6/29/37 (Reg. S) | 200,000 | 258,500 | |
NRG Energy, Inc. 6.625% 3/15/23 | 310,000 | 309,225 | |
NSG Holdings II LLC/NSG Holdings, Inc. 7.75% 12/15/25 (b) | 330,992 | 355,816 | |
Petrobras Global Finance BV 4.75% 1/14/25 | EUR | 400,000 | 419,615 |
Petrobras International Finance Co. Ltd. 5.375% 1/27/21 | 500,000 | 495,100 | |
PPL Energy Supply LLC 6.5% 6/1/25 | 65,000 | 54,275 | |
RJS Power Holdings LLC 4.625% 7/15/19 (b)(c) | 410,000 | 389,500 | |
RWE AG 2.75% 4/21/75 (Reg. S) (c) | EUR | 200,000 | 205,103 |
TXU Corp.: | |||
5.55% 11/15/14 (d) | 1,361,000 | 408,300 | |
6.5% 11/15/24 (d) | 475,000 | 142,500 | |
6.55% 11/15/34 (d) | 1,000,000 | 300,000 | |
TOTAL UTILITIES | 6,207,536 | ||
TOTAL NONCONVERTIBLE BONDS | |||
(Cost $86,217,157) | 84,741,189 | ||
Shares | Value | ||
Common Stocks - 1.5% | |||
Automotive & Auto Parts - 0.3% | |||
Chassix Holdings, Inc. (g) | 3,510 | 110,249 | |
General Motors Co. | 5,768 | 182,269 | |
TOTAL AUTOMOTIVE & AUTO PARTS | 292,518 | ||
Broadcasting - 0.0% | |||
Cumulus Media, Inc. Class A (g) | 10,375 | 14,318 | |
Chemicals - 0.2% | |||
LyondellBasell Industries NV Class A | 2,500 | 198,875 | |
Energy - 0.2% | |||
Extraction Oil & Gas, Inc. | 1,041 | 22,236 | |
Ovation Acquisition I LLC (h) | 60,306 | 1 | |
Pacific Exploration and Production Corp. warrants | 2,200 | 65,472 | |
The Williams Companies, Inc. | 1,900 | 55,480 | |
TOTAL ENERGY | 143,189 | ||
Healthcare - 0.3% | |||
HCA Holdings, Inc. (g) | 3,300 | 252,549 | |
Legend Acquisition, Inc. (g) | 2,128 | 29,792 | |
Legend Acquisition, Inc.: | |||
Class A warrants (g) | 2,195 | 0 | |
Class B warrants (g) | 2,894 | 0 | |
TOTAL HEALTHCARE | 282,341 | ||
Hotels - 0.2% | |||
Extended Stay America, Inc. unit | 15,000 | 214,500 | |
Metals/Mining - 0.0% | |||
Warrior Met Coal LLC Class A (h) | 81 | 20,912 | |
Services - 0.2% | |||
ARAMARK Holdings Corp. | 2,800 | 104,244 | |
United Rentals, Inc. (g) | 1,300 | 98,358 | |
WP Rocket Holdings, Inc. (g)(h) | 356,213 | 21,373 | |
TOTAL SERVICES | 223,975 | ||
Telecommunications - 0.0% | |||
Broadview Networks Holdings, Inc. (g) | 12,187 | 15,234 | |
Utilities - 0.1% | |||
NRG Yield, Inc. Class C | 7,000 | 107,800 | |
TOTAL COMMON STOCKS | |||
(Cost $2,643,201) | 1,513,662 | ||
Convertible Preferred Stocks - 0.6% | |||
Healthcare - 0.5% | |||
Allergan PLC 5.50% | 400 | 307,600 | |
Teva Pharmaceutical Industries Ltd. 7% | 250 | 189,675 | |
TOTAL HEALTHCARE | 497,275 | ||
Utilities - 0.1% | |||
Dynegy, Inc. 7.00% (g) | 1,600 | 119,616 | |
TOTAL CONVERTIBLE PREFERRED STOCKS | |||
(Cost $769,231) | 616,891 | ||
Principal Amount(a) | Value | ||
Bank Loan Obligations - 2.5% | |||
Automotive & Auto Parts - 0.1% | |||
Chassix, Inc. term loan 12% 7/29/19 | 44,659 | 45,775 | |
Energy - 0.6% | |||
California Resources Corp. Tranche 1LN, term loan 11.375% 12/31/21 (c) | 60,000 | 64,425 | |
Chesapeake Energy Corp. Tranche 1LN, term loan 8.5% 8/23/21 (c) | 85,000 | 90,791 | |
Chief Exploration & Development, LLC. Tranche 2LN, term loan 7.7528% 5/16/21 (c) | 255,000 | 243,686 | |
Citgo Holding, Inc. Tranche B, term loan 9.5% 5/12/18 (c) | 34,450 | 34,821 | |
Drillships Ocean Ventures, Inc. Tranche B, term loan 5.5% 7/25/21 (c) | 157,186 | 111,434 | |
Pacific Drilling SA Tranche B, term loan 4.5% 6/3/18 (c) | 48,375 | 13,605 | |
Seadrill Operating LP Tranche B, term loan 4% 2/21/21 (c) | 60,000 | 33,338 | |
Targa Resources Corp. term loan 5.75% 2/27/22 (c) | 27,907 | 27,942 | |
TOTAL ENERGY | 620,042 | ||
Food & Drug Retail - 0.0% | |||
Albertson's LLC Tranche B 6LN, term loan 4.75% 6/22/23 (c) | 27,529 | 27,816 | |
Gaming - 0.1% | |||
Caesars Entertainment Resort Properties LLC Tranche B 1LN, term loan 7% 10/11/20 (c) | 113,509 | 114,077 | |
Healthcare - 0.1% | |||
U.S. Renal Care, Inc. Tranche 2LN, term loan 9% 12/31/23 (c) | 110,000 | 105,050 | |
Homebuilders/Real Estate - 0.1% | |||
DTZ U.S. Borrower LLC Tranche 2LN, term loan 9.25% 11/4/22 (c) | 55,000 | 55,046 | |
Services - 0.6% | |||
Ancestry.Com Operations, Inc.: | |||
Tranche 2LN, term loan 9.25% 10/19/24 (c) | 130,000 | 131,625 | |
Tranche B 1LN, term loan 5.25% 10/19/23 (c) | 230,000 | 230,359 | |
Kuehg Corp. Tranche B 1LN, term loan 5.25% 8/13/22 (c) | 193,050 | 193,050 | |
TOTAL SERVICES | 555,034 | ||
Technology - 0.7% | |||
Compuware Corp. term loan 9.25% 12/12/22 (c) | 120,000 | 116,100 | |
Kronos, Inc. term loan: | |||
10/20/23 (i) | 295,000 | 296,174 | |
10/20/24 (i) | 115,000 | 118,434 | |
Renaissance Learning, Inc.: | |||
Tranche 1LN, term loan 4.5% 4/9/21 (c) | 107,250 | 106,893 | |
Tranche 2LN, term loan 8% 4/9/22 (c) | 95,000 | 93,179 | |
TOTAL TECHNOLOGY | 730,780 | ||
Telecommunications - 0.2% | |||
Intelsat Jackson Holdings SA Tranche B 2LN, term loan 3.75% 6/30/19 (c) | 245,000 | 234,002 | |
LTS Buyer LLC Tranche 2LN, term loan 8% 4/12/21 (c) | 6,325 | 6,329 | |
TOTAL TELECOMMUNICATIONS | 240,331 | ||
TOTAL BANK LOAN OBLIGATIONS | |||
(Cost $2,421,632) | 2,493,951 | ||
Preferred Securities - 6.1% | |||
Banks & Thrifts - 4.0% | |||
Bank of East Asia Ltd. 8.5% (c)(j) | 100,000 | 117,609 | |
Barclays Bank PLC 7.625% 11/21/22 | 455,000 | 523,346 | |
Barclays PLC 8% (c)(j) | EUR | 200,000 | 227,032 |
Chong Hing Bank Ltd. 6.5% (c)(j) | 200,000 | 212,161 | |
Citigroup, Inc. 5.35% (c)(j) | 680,000 | 687,456 | |
Credit Agricole SA: | |||
6.5%(Reg S.) (c)(j) | EUR | 200,000 | 226,559 |
6.625% (b)(c)(j) | 315,000 | 308,573 | |
8.125% (b)(c)(j) | 200,000 | 216,509 | |
Intesa Sanpaolo SpA 8.047% (c)(j) | EUR | 350,000 | 422,427 |
Royal Bank of Scotland Group PLC: | |||
7.0916% (c)(j) | EUR | 50,000 | 54,476 |
8% (c)(j) | 450,000 | 430,665 | |
8.625% (c)(j) | 200,000 | 200,998 | |
Standard Chartered PLC 7.5% (b)(c)(j) | 200,000 | 204,459 | |
Woori Bank 4.5% (Reg. S) (c)(j) | 200,000 | 200,383 | |
TOTAL BANKS & THRIFTS | 4,032,653 | ||
Cable/Satellite TV - 0.1% | |||
SES SA 4.625% (Reg. S) (c)(j) | EUR | 100,000 | 114,791 |
Chemicals - 0.1% | |||
Solvay SA 5.869%(Reg. S) (c)(j) | EUR | 100,000 | 123,081 |
Consumer Products - 0.5% | |||
Cosan Overseas Ltd. 8.25% (j) | 500,000 | 507,990 | |
Diversified Financial Services - 0.2% | |||
Hutchison Whampoa Europe Finance, Ltd. 3.75% (Reg. S) (c)(j) | EUR | 150,000 | 172,462 |
Energy - 0.2% | |||
Gas Natural Fenosa Finance BV 4.125% (Reg. S) (c)(j) | EUR | 200,000 | 235,125 |
Homebuilders/Real Estate - 0.2% | |||
Grand City Properties SA 3.75% (c)(j) | EUR | 200,000 | 229,075 |
Insurance - 0.1% | |||
Groupama SA 6.298% (c)(j) | EUR | 100,000 | 107,936 |
Telecommunications - 0.7% | |||
Koninklijke KPN NV 6.125% (Reg S.) (c)(j) | EUR | 200,000 | 237,231 |
Telefonica Europe BV: | |||
5% (Reg. S) (c)(j) | EUR | 300,000 | 352,171 |
6.5% (Reg. S) (c)(j) | EUR | 100,000 | 117,872 |
TOTAL TELECOMMUNICATIONS | 707,274 | ||
TOTAL PREFERRED SECURITIES | |||
(Cost $6,301,047) | 6,230,387 | ||
Shares | Value | ||
Money Market Funds - 4.9% | |||
Fidelity Cash Central Fund, 0.41% (k) | |||
(Cost $4,986,276) | 4,985,648 | 4,987,144 | |
TOTAL INVESTMENT PORTFOLIO - 98.8% | |||
(Cost $103,338,544) | 100,583,224 | ||
NET OTHER ASSETS (LIABILITIES) - 1.2% | 1,266,689 | ||
NET ASSETS - 100% | $101,849,913 |
Currency Abbreviations
EUR – European Monetary Unit
Legend
(a) Amount is stated in United States dollars unless otherwise noted.
(b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $38,711,320 or 38.0% of net assets.
(c) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end.
(d) Non-income producing - Security is in default.
(e) Security or a portion of the security purchased on a delayed delivery or when-issued basis.
(f) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end.
(g) Non-income producing
(h) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $42,285 or 0.0% of net assets.
(i) The coupon rate will be determined upon settlement of the loan after period end.
(j) Security is perpetual in nature with no stated maturity date.
(k) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.
Additional information on each restricted holding is as follows:
Security | Acquisition Date | Acquisition Cost |
Ovation Acquisition I LLC | 12/23/15 | $603 |
Warrior Met Coal LLC Class A | 9/19/13 - 3/19/14 | $154,316 |
WP Rocket Holdings, Inc. | 6/24/11 - 2/2/15 | $184,731 |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
Fund | Income earned |
Fidelity Cash Central Fund | $10,063 |
Fidelity Securities Lending Cash Central Fund | 3 |
Total | $10,066 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Equities: | ||||
Consumer Discretionary | $625,580 | $515,331 | $-- | $110,249 |
Consumer Staples | 1 | -- | -- | 1 |
Energy | 141,864 | 55,480 | -- | 86,384 |
Financials | 22,236 | 22,236 | -- | -- |
Health Care | 779,616 | 560,149 | 189,675 | 29,792 |
Industrials | 119,731 | 98,358 | -- | 21,373 |
Materials | 198,875 | 198,875 | -- | -- |
Telecommunication Services | 15,234 | 15,234 | -- | -- |
Utilities | 227,416 | 227,416 | -- | -- |
Corporate Bonds | 84,741,189 | -- | 84,672,413 | 68,776 |
Bank Loan Obligations | 2,493,951 | -- | 2,448,176 | 45,775 |
Preferred Securities | 6,230,387 | -- | 6,230,387 | -- |
Money Market Funds | 4,987,144 | 4,987,144 | -- | -- |
Total Investments in Securities: | $100,583,224 | $6,680,223 | $93,540,651 | $362,350 |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
United States of America | 51.6% |
Luxembourg | 8.3% |
Netherlands | 6.1% |
Cayman Islands | 4.0% |
United Kingdom | 3.4% |
Canada | 3.2% |
Ireland | 2.3% |
France | 2.2% |
Argentina | 2.2% |
Mexico | 2.1% |
Italy | 1.4% |
Brazil | 1.4% |
Singapore | 1.2% |
British Virgin Islands | 1.2% |
Germany | 1.2% |
Others (Individually Less Than 1%) | 8.2% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
October 31, 2016 (Unaudited) | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $98,352,268) | $95,596,080 | |
Fidelity Central Funds (cost $4,986,276) | 4,987,144 | |
Total Investments (cost $103,338,544) | $100,583,224 | |
Cash | 331,306 | |
Receivable for investments sold | 183,873 | |
Receivable for fund shares sold | 108,842 | |
Dividends receivable | 12,115 | |
Interest receivable | 1,568,195 | |
Distributions receivable from Fidelity Central Funds | 1,757 | |
Prepaid expenses | 265 | |
Receivable from investment adviser for expense reductions | 11,663 | |
Other receivables | 6 | |
Total assets | 102,801,246 | |
Liabilities | ||
Payable for investments purchased | ||
Regular delivery | $622,448 | |
Delayed delivery | 45,000 | |
Payable for fund shares redeemed | 86,205 | |
Distributions payable | 67,992 | |
Accrued management fee | 60,992 | |
Distribution and service plan fees payable | 5,068 | |
Other affiliated payables | 19,877 | |
Other payables and accrued expenses | 43,751 | |
Total liabilities | 951,333 | |
Net Assets | $101,849,913 | |
Net Assets consist of: | ||
Paid in capital | $106,892,527 | |
Undistributed net investment income | 186,107 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (2,469,522) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (2,759,199) | |
Net Assets | $101,849,913 | |
Calculation of Maximum Offering Price | ||
Class A: | ||
Net Asset Value and redemption price per share ($8,011,830 ÷ 859,576 shares) | $9.32 | |
Maximum offering price per share (100/96.00 of $9.32) | $9.71 | |
Class T: | ||
Net Asset Value and redemption price per share ($1,898,327 ÷ 203,678 shares) | $9.32 | |
Maximum offering price per share (100/96.00 of $9.32) | $9.71 | |
Class C: | ||
Net Asset Value and offering price per share ($3,745,860 ÷ 401,861 shares)(a) | $9.32 | |
Global High Income: | ||
Net Asset Value, offering price and redemption price per share ($85,970,028 ÷ 9,222,747 shares) | $9.32 | |
Class I: | ||
Net Asset Value, offering price and redemption price per share ($2,223,868 ÷ 238,575 shares) | $9.32 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended October 31, 2016 (Unaudited) | ||
Investment Income | ||
Dividends | $282,497 | |
Interest | 2,997,123 | |
Income from Fidelity Central Funds | 10,066 | |
Total income | 3,289,686 | |
Expenses | ||
Management fee | $363,543 | |
Transfer agent fees | 112,489 | |
Distribution and service plan fees | 28,034 | |
Accounting and security lending fees | 21,256 | |
Custodian fees and expenses | 11,609 | |
Independent trustees' fees and expenses | 219 | |
Registration fees | 24,201 | |
Audit | 39,942 | |
Legal | (1,441) | |
Miscellaneous | 698 | |
Total expenses before reductions | 600,550 | |
Expense reductions | (56,138) | 544,412 |
Net investment income (loss) | 2,745,274 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 117,546 | |
Fidelity Central Funds | (45) | |
Foreign currency transactions | 8,230 | |
Total net realized gain (loss) | 125,731 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 2,305,505 | |
Assets and liabilities in foreign currencies | (11,301) | |
Total change in net unrealized appreciation (depreciation) | 2,294,204 | |
Net gain (loss) | 2,419,935 | |
Net increase (decrease) in net assets resulting from operations | $5,165,209 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended October 31, 2016 (Unaudited) | Year ended April 30, 2016 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $2,745,274 | $6,251,820 |
Net realized gain (loss) | 125,731 | (3,365,369) |
Change in net unrealized appreciation (depreciation) | 2,294,204 | (4,945,526) |
Net increase (decrease) in net assets resulting from operations | 5,165,209 | (2,059,075) |
Distributions to shareholders from net investment income | (2,476,644) | (6,161,519) |
Share transactions - net increase (decrease) | (7,083,374) | (20,379,577) |
Redemption fees | 23,330 | 37,133 |
Total increase (decrease) in net assets | (4,371,479) | (28,563,038) |
Net Assets | ||
Beginning of period | 106,221,392 | 134,784,430 |
End of period | $101,849,913 | $106,221,392 |
Other Information | ||
Undistributed net investment income end of period | $186,107 | $– |
Distributions in excess of net investment income end of period | $– | $(82,523) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Global High Income Fund Class A
Six months ended (Unaudited) October 31, | Years ended April 30, | |||||
2016 | 2016 | 2015 | 2014 | 2013 | 2012 A | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $9.07 | $9.60 | $10.21 | $10.46 | $9.74 | $10.00 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .238 | .462 | .476 | .506 | .526 | .476 |
Net realized and unrealized gain (loss) | .224 | (.541) | (.293)C | (.036) | .714 | (.317) |
Total from investment operations | .462 | (.079) | .183 | .470 | 1.240 | .159 |
Distributions from net investment income | (.214) | (.454) | (.486) | (.483) | (.477) | (.423) |
Distributions from net realized gain | – | – | (.310) | (.239) | (.046) | – |
Total distributions | (.214) | (.454) | (.796) | (.722) | (.523) | (.423) |
Redemption fees added to paid in capitalB | .002 | .003 | .003 | .002 | .003 | .004 |
Net asset value, end of period | $9.32 | $9.07 | $9.60 | $10.21 | $10.46 | $9.74 |
Total ReturnD,E,F | 5.16% | (.65)% | 1.97%C | 4.86% | 13.13% | 1.80% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | 1.32%I | 1.38% | 1.28% | 1.23% | 1.24% | 1.38%I |
Expenses net of fee waivers, if any | 1.25%I | 1.25% | 1.25% | 1.23% | 1.24% | 1.25%I |
Expenses net of all reductions | 1.25%I | 1.25% | 1.25% | 1.23% | 1.24% | 1.25%I |
Net investment income (loss) | 5.12%I | 5.11% | 4.82% | 5.03% | 5.25% | 5.15%I |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $8,012 | $6,187 | $7,036 | $8,000 | $6,419 | $10,102 |
Portfolio turnover rateJ | 46%I | 41% | 44% | 72% | 55% | 36%K |
A For the period May 11, 2011 (commencement of operations) to April 30, 2012.
B Calculated based on average shares outstanding during the period.
C Amount includes a reimbursement from the investment adviser for an operational error which amounted to less than $.01 per share. Excluding this reimbursement, the total return would have been 1.93%.
D Total returns for periods of less than one year are not annualized.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the sales charges.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Global High Income Fund Class T
Six months ended (Unaudited) October 31, | Years ended April 30, | |||||
2016 | 2016 | 2015 | 2014 | 2013 | 2012 A | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $9.07 | $9.60 | $10.21 | $10.46 | $9.74 | $10.00 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .238 | .462 | .474 | .504 | .523 | .477 |
Net realized and unrealized gain (loss) | .224 | (.541) | (.291)C | (.036) | .712 | (.318) |
Total from investment operations | .462 | (.079) | .183 | .468 | 1.235 | .159 |
Distributions from net investment income | (.214) | (.454) | (.486) | (.481) | (.472) | (.423) |
Distributions from net realized gain | – | – | (.310) | (.239) | (.046) | – |
Total distributions | (.214) | (.454) | (.796) | (.720) | (.518) | (.423) |
Redemption fees added to paid in capitalB | .002 | .003 | .003 | .002 | .003 | .004 |
Net asset value, end of period | $9.32 | $9.07 | $9.60 | $10.21 | $10.46 | $9.74 |
Total ReturnD,E,F | 5.16% | (.65)% | 1.98%C | 4.84% | 13.08% | 1.80% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | 1.43%I | 1.48% | 1.40% | 1.35% | 1.25% | 1.39%I |
Expenses net of fee waivers, if any | 1.25%I | 1.25% | 1.25% | 1.25% | 1.25% | 1.25%I |
Expenses net of all reductions | 1.25%I | 1.25% | 1.25% | 1.25% | 1.25% | 1.25%I |
Net investment income (loss) | 5.12%I | 5.11% | 4.82% | 5.01% | 5.24% | 5.15%I |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $1,898 | $1,436 | $1,745 | $1,595 | $1,349 | $9,362 |
Portfolio turnover rateJ | 46%I | 41% | 44% | 72% | 55% | 36%K |
A For the period May 11, 2011 (commencement of operations) to April 30, 2012.
B Calculated based on average shares outstanding during the period.
C Amount includes a reimbursement from the investment adviser for an operational error which amounted to less than $.01 per share. Excluding this reimbursement, the total return would have been 1.94%.
D Total returns for periods of less than one year are not annualized.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the sales charges.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Global High Income Fund Class C
Six months ended (Unaudited) October 31, | Years ended April 30, | |||||
2016 | 2016 | 2015 | 2014 | 2013 | 2012 A | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $9.07 | $9.60 | $10.21 | $10.46 | $9.74 | $10.00 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .204 | .394 | .401 | .428 | .448 | .407 |
Net realized and unrealized gain (loss) | .223 | (.540) | (.292)C | (.035) | .712 | (.317) |
Total from investment operations | .427 | (.146) | .109 | .393 | 1.160 | .090 |
Distributions from net investment income | (.179) | (.387) | (.412) | (.406) | (.397) | (.354) |
Distributions from net realized gain | – | – | (.310) | (.239) | (.046) | – |
Total distributions | (.179) | (.387) | (.722) | (.645) | (.443) | (.354) |
Redemption fees added to paid in capitalB | .002 | .003 | .003 | .002 | .003 | .004 |
Net asset value, end of period | $9.32 | $9.07 | $9.60 | $10.21 | $10.46 | $9.74 |
Total ReturnD,E,F | 4.76% | (1.39)% | 1.22%C | 4.05% | 12.23% | 1.07% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | 2.13%I | 2.20% | 2.12% | 2.05% | 2.01% | 2.15%I |
Expenses net of fee waivers, if any | 2.00%I | 2.00% | 2.00% | 2.00% | 2.00% | 2.00%I |
Expenses net of all reductions | 2.00%I | 2.00% | 2.00% | 2.00% | 2.00% | 2.00%I |
Net investment income (loss) | 4.37%I | 4.36% | 4.07% | 4.26% | 4.49% | 4.40%I |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $3,746 | $3,437 | $3,811 | $3,720 | $2,941 | $9,878 |
Portfolio turnover rateJ | 46%I | 41% | 44% | 72% | 55% | 36%K |
A For the period May 11, 2011 (commencement of operations) to April 30, 2012.
B Calculated based on average shares outstanding during the period.
C Amount includes a reimbursement from the investment adviser for an operational error which amounted to less than $.01 per share. Excluding this reimbursement, the total return would have been 1.18%.
D Total returns for periods of less than one year are not annualized.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the contingent deferred sales charge.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Global High Income Fund
Six months ended (Unaudited) October 31, | Years ended April 30, | |||||
2016 | 2016 | 2015 | 2014 | 2013 | 2012 A | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $9.07 | $9.60 | $10.21 | $10.47 | $9.74 | $10.00 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .250 | .486 | .508 | .534 | .555 | .495 |
Net realized and unrealized gain (loss) | .224 | (.542) | (.301)C | (.046) | .724 | (.312) |
Total from investment operations | .474 | (.056) | .207 | .488 | 1.279 | .183 |
Distributions from net investment income | (.226) | (.477) | (.510) | (.511) | (.506) | (.447) |
Distributions from net realized gain | – | – | (.310) | (.239) | (.046) | – |
Total distributions | (.226) | (.477) | (.820) | (.750) | (.552) | (.447) |
Redemption fees added to paid in capitalB | .002 | .003 | .003 | .002 | .003 | .004 |
Net asset value, end of period | $9.32 | $9.07 | $9.60 | $10.21 | $10.47 | $9.74 |
Total ReturnD,E | 5.29% | (.40)% | 2.23%C | 5.05% | 13.56% | 2.06% |
Ratios to Average Net AssetsF,G | ||||||
Expenses before reductions | 1.11%H | 1.20% | 1.05% | .95% | .96% | 1.07%H |
Expenses net of fee waivers, if any | 1.00%H | 1.00% | 1.00% | .95% | .96% | 1.00%H |
Expenses net of all reductions | 1.00%H | 1.00% | 1.00% | .95% | .96% | 1.00%H |
Net investment income (loss) | 5.37%H | 5.35% | 5.07% | 5.30% | 5.53% | 5.39%H |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $85,970 | $93,256 | $119,712 | $344,206 | $345,210 | $197,480 |
Portfolio turnover rateI | 46%H | 41% | 44% | 72% | 55% | 36%J |
A For the period May 11, 2011 (commencement of operations) to April 30, 2012.
B Calculated based on average shares outstanding during the period.
C Amount includes a reimbursement from the investment adviser for an operational error which amounted to less than $.01 per share. Excluding this reimbursement, the total return would have been 2.19%.
D Total returns for periods of less than one year are not annualized.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Global High Income Fund Class I
Six months ended (Unaudited) October 31, | Years ended April 30, | |||||
2016 | 2016 | 2015 | 2014 | 2013 | 2012 A | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $9.07 | $9.60 | $10.21 | $10.47 | $9.74 | $10.00 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .250 | .483 | .501 | .532 | .549 | .499 |
Net realized and unrealized gain (loss) | .224 | (.539) | (.293)C | (.046) | .728 | (.317) |
Total from investment operations | .474 | (.056) | .208 | .486 | 1.277 | .182 |
Distributions from net investment income | (.226) | (.477) | (.511) | (.509) | (.504) | (.446) |
Distributions from net realized gain | – | – | (.310) | (.239) | (.046) | – |
Total distributions | (.226) | (.477) | (.821) | (.748) | (.550) | (.446) |
Redemption fees added to paid in capitalB | .002 | .003 | .003 | .002 | .003 | .004 |
Net asset value, end of period | $9.32 | $9.07 | $9.60 | $10.21 | $10.47 | $9.74 |
Total ReturnD,E | 5.29% | (.40)% | 2.23%C | 5.03% | 13.54% | 2.05% |
Ratios to Average Net AssetsF,G | ||||||
Expenses before reductions | 1.10%H | 1.10% | 1.02% | .97% | .98% | 1.13%H |
Expenses net of fee waivers, if any | 1.00%H | 1.00% | 1.00% | .97% | .98% | 1.00%H |
Expenses net of all reductions | 1.00%H | 1.00% | 1.00% | .97% | .98% | 1.00%H |
Net investment income (loss) | 5.37%H | 5.35% | 5.07% | 5.28% | 5.51% | 5.40%H |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $2,224 | $1,905 | $2,481 | $5,344 | $6,049 | $11,617 |
Portfolio turnover rateI | 46%H | 41% | 44% | 72% | 55% | 36%J |
A For the period May 11, 2011 (commencement of operations) to April 30, 2012.
B Calculated based on average shares outstanding during the period.
C Amount includes a reimbursement from the investment adviser for an operational error which amounted to less than $.01 per share. Excluding this reimbursement, the total return would have been 2.19%.
D Total returns for periods of less than one year are not annualized.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements (Unaudited)
For the period ended October 31, 2016
1. Organization.
Fidelity Global High Income Fund (the Fund) is a fund of Fidelity Summer Street Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class C, Global High Income Fund and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds, bank loan obligations and preferred securities are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances. The Fund invests a significant portion of its assets in below investment grade securities. The value of these securities can be more volatile due to changes in the credit quality of the issuer and is sensitive to changes in economic, market and regulatory conditions.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Dividends are declared and recorded daily and paid monthly from net investment income. Distributions from realized gains, if any, are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, defaulted bonds, market discount, partnerships and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $4,357,535 |
Gross unrealized depreciation | (6,633,070) |
Net unrealized appreciation (depreciation) on securities | $(2,275,535) |
Tax cost | $102,858,759 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of prior fiscal period end and is subject to adjustment.
No expiration | |
Short-term | $(1,315,528) |
Long-term | (1,276,696) |
Total capital loss carryforward | $(2,592,224) |
The Fund intends to elect to defer to its next fiscal year $428,007 of capital losses recognized during the period November 1, 2015 to April 30, 2016.
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.00% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Delayed Delivery Transactions and When-Issued Securities. During the period, the Fund transacted in securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. The securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Loans and Other Direct Debt Instruments. The Fund invests in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. These instruments may be in the form of loans, trade claims or other receivables and may include standby financing commitments such as revolving credit facilities that obligate the Fund to supply additional cash to the borrower on demand. Loans may be acquired through assignment or participation. The Fund did not have any unfunded loan commitments, which are contractual obligations for future funding, at period end.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $22,481,428 and $27,444,954, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .60% of the Fund's average net assets and an annualized group fee rate that averaged .11% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .70% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
Class A | -% | .25% | $8,737 | $262 |
Class T | -% | .25% | 1,890 | – |
Class C | .75% | .25% | 17,407 | 4,142 |
$28,034 | $4,404 |
Sales Load. FDC may receive a front-end sales charge of up to 4.00% for selling Class A shares and Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T and Class C redemptions. The deferred sales charges are 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained by FDC | |
Class A | $239 |
Class T | 759 |
Class C(a) | 263 |
$1,261 |
(a) When Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
Amount | % of Class-Level Average Net Assets(a) | |
Class A | $6,551 | .19 |
Class T | 2,193 | .29 |
Class C | 4,413 | .25 |
Global High Income | 97,153 | .22 |
Class I | 2,179 | .21 |
$ 112,489 |
(a) Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $170 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $3. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
The investment adviser voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense Limitations | Reimbursement | |
Class A | 1.25% | $2,510 |
Class T | 1.25% | 1,357 |
Class C | 2.00% | 2,366 |
Global High Income | 1.00% | 48,656 |
Class I | 1.00% | 1,017 |
$55,906 |
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $2 for the period. In addition, through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $1.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $229.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended October 31, 2016 | Year ended April 30, 2016 | |
From net investment income | ||
Class A | $161,562 | $323,762 |
Class T | 35,046 | 79,903 |
Class C | 67,595 | 150,970 |
Global High Income | 2,161,527 | 5,458,208 |
Class I | 50,914 | 148,676 |
Total | $2,476,644 | $6,161,519 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
Shares | Shares | Dollars | Dollars | |
Six months ended October 31, 2016 | Year ended April 30, 2016 | Six months ended October 31, 2016 | Year ended April 30, 2016 | |
Class A | ||||
Shares sold | 222,372 | 157,252 | $2,062,554 | $1,422,895 |
Reinvestment of distributions | 16,306 | 32,992 | 151,056 | 297,671 |
Shares redeemed | (60,914) | (241,453) | (562,430) | (2,170,274) |
Net increase (decrease) | 177,764 | (51,209) | $1,651,180 | $(449,708) |
Class T | ||||
Shares sold | 66,942 | 37,827 | $628,420 | $339,624 |
Reinvestment of distributions | 3,541 | 8,329 | 32,767 | 75,115 |
Shares redeemed | (25,099) | (69,705) | (233,442) | (627,856) |
Net increase (decrease) | 45,384 | (23,549) | $427,745 | $(213,117) |
Class C | ||||
Shares sold | 63,556 | 150,954 | $591,532 | $1,353,877 |
Reinvestment of distributions | 6,255 | 14,343 | 57,866 | 129,529 |
Shares redeemed | (46,724) | (183,576) | (429,930) | (1,640,260) |
Net increase (decrease) | 23,087 | (18,279) | $219,468 | $(156,854) |
Global High Income | ||||
Shares sold | 1,469,275 | 3,468,417 | $13,532,275 | $31,565,075 |
Reinvestment of distributions | 193,179 | 519,268 | 1,786,459 | 4,696,700 |
Shares redeemed | (2,716,424) | (6,182,571) | (24,963,427) | (55,426,381) |
Net increase (decrease) | (1,053,970) | (2,194,886) | $(9,644,693) | $(19,164,606) |
Class I | ||||
Shares sold | 47,999 | 116,138 | $439,650 | $1,078,461 |
Reinvestment of distributions | 2,461 | 5,400 | 22,783 | 48,617 |
Shares redeemed | (21,865) | (169,995) | (199,507) | (1,522,370) |
Net increase (decrease) | 28,595 | (48,457) | $262,926 | $(395,292) |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
12. Credit Risk.
The Fund's relatively large investment in countries with limited or developing capital markets may involve greater risks than investments in more developed markets and the prices of such investments may be volatile. The yields of emerging market debt obligations reflect, among other things, perceived credit risk. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of the Fund's investments and the income they generate, as well as the Fund's ability to repatriate such amounts.
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (May 1, 2016 to October 31, 2016).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Annualized Expense Ratio-A | Beginning Account Value May 1, 2016 | Ending Account Value October 31, 2016 | Expenses Paid During Period-B May 1, 2016 to October 31, 2016 | |
Class A | 1.25% | |||
Actual | $1,000.00 | $1,051.60 | $6.46 | |
Hypothetical-C | $1,000.00 | $1,018.90 | $6.36 | |
Class T | 1.25% | |||
Actual | $1,000.00 | $1,051.60 | $6.46 | |
Hypothetical-C | $1,000.00 | $1,018.90 | $6.36 | |
Class C | 2.00% | |||
Actual | $1,000.00 | $1,047.60 | $10.32 | |
Hypothetical-C | $1,000.00 | $1,015.12 | $10.16 | |
Global High Income | 1.00% | |||
Actual | $1,000.00 | $1,052.90 | $5.17 | |
Hypothetical-C | $1,000.00 | $1,020.16 | $5.09 | |
Class I | 1.00% | |||
Actual | $1,000.00 | $1,052.90 | $5.17 | |
Hypothetical-C | $1,000.00 | $1,020.16 | $5.09 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
C 5% return per year before expenses
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Global High Income Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to all of the Fidelity funds.
At its July 2016 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and would be realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by FMR, the sub-advisers (together with FMR, the Investment Advisers), and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.In 2014, the Board formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs; (iv) broadening eligibility requirements for certain lower-priced share classes of, and streamlining the fee structure for, certain existing equity index funds; (v) lowering expense caps for certain existing funds and classes to reduce expenses paid by shareholders; (vi) eliminating redemption fees for certain variable insurance product funds and classes; (vii) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (viii) launching a lower cost share class for use by the Freedom Index Fund product line; (ix) rationalizing product lines and gaining increased efficiencies through fund mergers and share class consolidations; (x) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; (xi) implementing investment enhancements to further strengthen Fidelity's target date product line to increase investors' probability of success in achieving their goals; (xii) accelerating the conversion of all remaining Class B shares to Class A shares, which have a lower expense structure; and (xiii) implementing changes to Fidelity's money market fund product line in response to recent regulatory reforms.Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history.The Board took into account discussions with representatives of the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund, for different time periods, measured against a securities market index ("benchmark index") and a peer group of funds with similar objectives ("peer group"), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for the fund and an appropriate benchmark index for the most recent one- and three-year periods, as shown below. A peer group is not shown below because the fund does not generally utilize a peer group for performance comparison purposes.Fidelity Global High Income Fund
Fidelity Global High Income Fund
AGHI-SANN-1216
1.926292.105
Fidelity® Series High Income Fund Semi-Annual Report October 31, 2016 |
Contents
Board Approval of Investment Advisory Contracts and Management Fees | |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-800-544-8544, or for Class F, call 1-800-835-5092, to request a free copy of the proxy voting guidelines.
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Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2016 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Fund nor Fidelity Distributors Corporation is a bank.
Investment Summary (Unaudited)
Top Five Holdings as of October 31, 2016
(by issuer, excluding cash equivalents) | % of fund's net assets | % of fund's net assets 6 months ago |
Valeant Pharmaceuticals International, Inc. | 2.9 | 2.1 |
Laureate Education, Inc. | 2.7 | 3.0 |
Community Health Systems, Inc. | 2.3 | 2.4 |
Tenet Healthcare Corp. | 1.7 | 2.4 |
Chesapeake Energy Corp. | 1.7 | 0.9 |
11.3 |
Top Five Market Sectors as of October 31, 2016
% of fund's net assets | % of fund's net assets 6 months ago | |
Healthcare | 13.8 | 12.6 |
Energy | 12.6 | 8.2 |
Telecommunications | 8.1 | 10.3 |
Banks & Thrifts | 6.8 | 6.3 |
Services | 5.7 | 6.9 |
Quality Diversification (% of fund's net assets)
As of October 31, 2016 | ||
BBB | 0.6% | |
BB | 30.3% | |
B | 40.7% | |
CCC,CC,C | 19.0% | |
Not Rated | 0.6% | |
Equities | 1.2% | |
Short-Term Investments and Net Other Assets | 7.6% |
As of April 30, 2016 | ||
BBB | 1.0% | |
BB | 31.4% | |
B | 43.0% | |
CCC,CC,C | 18.0% | |
Not Rated | 0.9% | |
Equities | 1.0% | |
Short-Term Investments and Net Other Assets | 4.7% |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes.
Asset Allocation (% of fund's net assets)
As of October 31, 2016* | ||
Nonconvertible Bonds | 79.1% | |
Convertible Bonds, Preferred Stocks | 0.8% | |
Common Stocks | 0.4% | |
Bank Loan Obligations | 6.8% | |
Other Investments | 5.3% | |
Short-Term Investments and Net Other Assets (Liabilities) | 7.6% |
* Foreign investments - 22.9%
As of April 30, 2016* | ||
Nonconvertible Bonds | 80.9% | |
Convertible Bonds, Preferred Stocks | 0.6% | |
Common Stocks | 0.5% | |
Bank Loan Obligations | 8.3% | |
Other Investments | 5.0% | |
Short-Term Investments and Net Other Assets (Liabilities) | 4.7% |
* Foreign investments - 23.0%
Investments October 31, 2016 (Unaudited)
Showing Percentage of Net Assets
Corporate Bonds - 79.1% | |||
Principal Amount | Value | ||
Convertible Bonds - 0.0% | |||
Capital Goods - 0.0% | |||
General Cable Corp. 4.5% 11/15/29 (a) | $1,814,000 | $1,168,896 | |
Nonconvertible Bonds - 79.1% | |||
Aerospace - 0.1% | |||
Huntington Ingalls Industries, Inc. 5% 11/15/25 (b) | 3,480,000 | 3,660,542 | |
Air Transportation - 0.1% | |||
XPO Logistics, Inc. 6.125% 9/1/23 (b) | 4,480,000 | 4,608,800 | |
Automotive & Auto Parts - 0.5% | |||
Allison Transmission, Inc. 5% 10/1/24 (b) | 7,155,000 | 7,298,100 | |
American Tire Distributors, Inc. 10.25% 3/1/22 (b) | 4,590,000 | 4,219,954 | |
Tenneco, Inc. 5% 7/15/26 | 4,145,000 | 4,165,725 | |
The Goodyear Tire & Rubber Co. 5% 5/31/26 | 5,225,000 | 5,270,719 | |
20,954,498 | |||
Banks & Thrifts - 1.1% | |||
Ally Financial, Inc.: | |||
4.25% 4/15/21 | 4,770,000 | 4,817,700 | |
5.75% 11/20/25 | 17,635,000 | 18,053,831 | |
Royal Bank of Scotland Group PLC 5.125% 5/28/24 | 22,330,000 | 22,115,141 | |
44,986,672 | |||
Broadcasting - 0.9% | |||
CBS Radio, Inc. 7.25% 11/1/24 (b) | 3,765,000 | 3,910,894 | |
Clear Channel Communications, Inc.: | |||
5.5% 12/15/16 | 13,185,000 | 12,987,225 | |
10% 1/15/18 | 8,070,000 | 5,729,700 | |
Gray Television, Inc. 5.875% 7/15/26 (b) | 2,805,000 | 2,790,975 | |
iHeartCommunications, Inc.: | |||
9% 9/15/22 | 4,755,000 | 3,376,050 | |
10.625% 3/15/23 | 6,900,000 | 4,976,625 | |
Sirius XM Radio, Inc. 5.375% 7/15/26 (b) | 5,670,000 | 5,758,622 | |
39,530,091 | |||
Building Materials - 0.7% | |||
Builders FirstSource, Inc. 5.625% 9/1/24 (b) | 4,600,000 | 4,646,000 | |
Building Materials Corp. of America 6% 10/15/25 (b) | 4,195,000 | 4,477,953 | |
CEMEX Finance LLC 6% 4/1/24 (b) | 4,695,000 | 4,859,325 | |
GCP Applied Technologies, Inc. 9.5% 2/1/23 (b) | 2,910,000 | 3,295,575 | |
Standard Industries, Inc. 5.5% 2/15/23 (b) | 7,430,000 | 7,727,200 | |
U.S. Concrete, Inc. 6.375% 6/1/24 | 2,770,000 | 2,880,800 | |
USG Corp. 5.5% 3/1/25 (b) | 2,770,000 | 2,950,050 | |
30,836,903 | |||
Cable/Satellite TV - 4.5% | |||
Altice SA 7.75% 5/15/22 (b) | 58,320,000 | 60,907,950 | |
Altice U.S. Finance SA: | |||
5.375% 7/15/23 (b) | 10,690,000 | 10,936,405 | |
5.5% 5/15/26 (b) | 15,835,000 | 16,151,700 | |
CCO Holdings LLC/CCO Holdings Capital Corp.: | |||
5.125% 2/15/23 | 8,450,000 | 8,745,750 | |
5.5% 5/1/26 (b) | 7,285,000 | 7,462,608 | |
5.75% 9/1/23 | 8,740,000 | 9,220,700 | |
5.875% 4/1/24 (b) | 17,080,000 | 18,062,100 | |
Cequel Communications Holdings I LLC/Cequel Capital Corp. 5.125% 12/15/21 (b) | 9,500,000 | 9,357,500 | |
CSC Holdings, Inc. 5.5% 4/15/27 (b) | 10,810,000 | 10,965,394 | |
DISH DBS Corp.: | |||
5.875% 7/15/22 | 4,135,000 | 4,269,388 | |
6.75% 6/1/21 | 4,995,000 | 5,366,528 | |
7.75% 7/1/26 | 2,390,000 | 2,624,531 | |
Virgin Media Finance PLC 4.875% 2/15/22 | 8,120,000 | 6,986,286 | |
Virgin Media Secured Finance PLC 5.5% 8/15/26 (b) | 1,550,000 | 1,563,563 | |
VTR Finance BV 6.875% 1/15/24 (b) | 2,000,000 | 2,092,500 | |
Ziggo Secured Finance BV 5.5% 1/15/27 (b) | 14,260,000 | 14,081,750 | |
188,794,653 | |||
Capital Goods - 1.5% | |||
AECOM Technology Corp. 5.75% 10/15/22 | 4,425,000 | 4,644,392 | |
Belden, Inc. 5.25% 7/15/24 (b) | 7,435,000 | 7,490,763 | |
General Cable Corp. 5.75% 10/1/22 (c) | 34,701,000 | 32,792,445 | |
Shale-Inland Holdings LLC/Shale-Inland Finance Corp. 8.75% 11/15/19 (b) | 30,105,000 | 17,987,738 | |
62,915,338 | |||
Chemicals - 2.7% | |||
A. Schulman, Inc. 6.875% 6/1/23 (b) | 5,155,000 | 5,245,213 | |
Blue Cube Spinco, Inc.: | |||
9.75% 10/15/23 | 7,655,000 | 8,994,625 | |
10% 10/15/25 | 8,125,000 | 9,750,000 | |
Evolution Escrow Issuer LLC 7.5% 3/15/22 (b) | 7,285,000 | 6,520,075 | |
Momentive Performance Materials, Inc. 3.88% 10/24/21 | 23,676,000 | 21,071,640 | |
MPM Escrow LLC/MPM Finance Escrow Corp. 8.875% 10/15/20 (d) | 27,576,000 | 3 | |
Trinseo Materials Operating SCA/Trinseo Materials Finance, Inc. 6.75% 5/1/22 (b) | 2,675,000 | 2,822,125 | |
Tronox Finance LLC 6.375% 8/15/20 | 50,085,000 | 44,951,288 | |
Valvoline Finco Two LLC 5.5% 7/15/24 (b) | 2,075,000 | 2,189,125 | |
Versum Materials, Inc. 5.5% 9/30/24 (b) | 2,965,000 | 3,031,713 | |
W. R. Grace & Co.-Conn.: | |||
5.125% 10/1/21 (b) | 6,165,000 | 6,565,725 | |
5.625% 10/1/24 (b) | 2,475,000 | 2,679,188 | |
113,820,720 | |||
Consumer Products - 0.1% | |||
Tempur Sealy International, Inc. 5.625% 10/15/23 | 4,855,000 | 5,024,925 | |
Containers - 2.2% | |||
Ardagh Packaging Finance PLC/Ardagh MP Holdings U.S.A., Inc.: | |||
4.067% 5/15/21 (b)(c) | 13,230,000 | 13,494,600 | |
4.625% 5/15/23 (b) | 14,285,000 | 14,427,850 | |
7% 11/15/20 (b) | 4,597,059 | 4,734,971 | |
7.25% 5/15/24 (b) | 1,155,000 | 1,218,525 | |
Consolidated Container Co. LLC/Consolidated Container Capital, Inc. 10.125% 7/15/20 (b) | 16,541,000 | 16,706,410 | |
Crown Americas LLC/Crown Americas Capital Corp. V 4.25% 9/30/26 (b) | 2,385,000 | 2,340,281 | |
Owens-Brockway Glass Container, Inc.: | |||
5% 1/15/22 (b) | 4,710,000 | 4,927,838 | |
5.375% 1/15/25 (b) | 6,140,000 | 6,324,200 | |
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer (Luxembourg) SA: | |||
5.125% 7/15/23 (b) | 9,950,000 | 10,214,272 | |
5.75% 10/15/20 | 10,205,000 | 10,473,187 | |
Sealed Air Corp. 5.25% 4/1/23 (b) | 5,920,000 | 6,216,000 | |
91,078,134 | |||
Diversified Financial Services - 4.1% | |||
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust 4.5% 5/15/21 | 6,995,000 | 7,271,303 | |
Aircastle Ltd.: | |||
4.625% 12/15/18 | 2,715,000 | 2,830,388 | |
5% 4/1/23 | 3,195,000 | 3,306,825 | |
5.125% 3/15/21 | 17,325,000 | 18,386,156 | |
6.25% 12/1/19 | 8,475,000 | 9,227,156 | |
CIT Group, Inc. 5% 8/15/22 | 9,475,000 | 10,102,719 | |
FLY Leasing Ltd.: | |||
6.375% 10/15/21 | 15,522,000 | 15,871,245 | |
6.75% 12/15/20 | 4,975,000 | 5,186,438 | |
Icahn Enterprises LP/Icahn Enterprises Finance Corp. 4.875% 3/15/19 | 11,245,000 | 11,173,707 | |
ILFC E-Capital Trust I 4% 12/21/65 (b)(c) | 8,630,000 | 6,882,425 | |
ILFC E-Capital Trust II 4.25% 12/21/65 (b)(c) | 9,553,000 | 7,761,813 | |
Inception Merger Sub, Inc./Rackspace Hosting, Inc. 8.625% 11/15/24 (b) | 3,740,000 | 3,740,000 | |
International Lease Finance Corp.: | |||
4.625% 4/15/21 | 3,525,000 | 3,679,219 | |
5.875% 8/15/22 | 2,230,000 | 2,455,854 | |
8.625% 1/15/22 | 4,920,000 | 6,033,150 | |
MSCI, Inc.: | |||
4.75% 8/1/26 (b) | 5,430,000 | 5,470,725 | |
5.75% 8/15/25 (b) | 3,635,000 | 3,864,550 | |
Navient Corp.: | |||
5% 10/26/20 | 2,425,000 | 2,394,688 | |
6.625% 7/26/21 | 4,160,000 | 4,161,331 | |
SLM Corp.: | |||
4.875% 6/17/19 | 8,285,000 | 8,357,494 | |
5.5% 1/25/23 | 3,030,000 | 2,749,725 | |
6.125% 3/25/24 | 2,170,000 | 1,985,550 | |
7.25% 1/25/22 | 5,925,000 | 5,984,250 | |
8% 3/25/20 | 16,743,000 | 18,166,155 | |
Springleaf Financial Corp. 8.25% 12/15/20 | 5,895,000 | 6,396,075 | |
173,438,941 | |||
Diversified Media - 1.8% | |||
Clear Channel Worldwide Holdings, Inc.: | |||
Series A: | |||
6.5% 11/15/22 | 9,895,000 | 9,944,475 | |
7.625% 3/15/20 | 15,685,000 | 14,822,325 | |
7.625% 3/15/20 | 2,135,000 | 2,065,613 | |
Lamar Media Corp. 5.75% 2/1/26 | 3,345,000 | 3,581,324 | |
MDC Partners, Inc. 6.5% 5/1/24 (b) | 31,238,000 | 26,630,395 | |
National CineMedia LLC 5.75% 8/15/26 (b) | 4,780,000 | 4,923,400 | |
Nielsen Finance LLC/Nielsen Finance Co. 5% 4/15/22 (b) | 15,730,000 | 16,044,600 | |
78,012,132 | |||
Energy - 12.0% | |||
AmeriGas Finance LLC/AmeriGas Finance Corp. 7% 5/20/22 | 3,450,000 | 3,631,125 | |
Antero Midstream Partners LP/Antero Midstream Finance Corp. 5.375% 9/15/24 (b) | 2,215,000 | 2,231,613 | |
Antero Resources Corp. 5.625% 6/1/23 (Reg. S) | 6,440,000 | 6,568,800 | |
Antero Resources Finance Corp. 5.375% 11/1/21 | 3,765,000 | 3,821,475 | |
Baytex Energy Corp.: | |||
5.125% 6/1/21 (b) | 3,495,000 | 2,944,538 | |
5.625% 6/1/24 (b) | 4,760,000 | 3,831,800 | |
Callon Petroleum Co. 6.125% 10/1/24 (b) | 2,060,000 | 2,121,800 | |
Chesapeake Energy Corp.: | |||
4.875% 4/15/22 | 24,015,000 | 20,412,750 | |
5.375% 6/15/21 | 17,730,000 | 15,425,100 | |
6.125% 2/15/21 | 7,370,000 | 6,743,550 | |
8% 12/15/22 (b) | 11,911,000 | 12,082,221 | |
Citgo Petroleum Corp. 6.25% 8/15/22 (b) | 25,223,000 | 25,790,518 | |
Concho Resources, Inc. 5.5% 4/1/23 | 395,000 | 404,085 | |
Continental Resources, Inc.: | |||
4.5% 4/15/23 | 4,815,000 | 4,586,288 | |
5% 9/15/22 | 11,400,000 | 11,172,000 | |
Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp. 6.25% 4/1/23 | 2,590,000 | 2,622,375 | |
CVR Refining LLC/Coffeyville Finance, Inc. 6.5% 11/1/22 | 8,900,000 | 8,232,500 | |
Denbury Resources, Inc.: | |||
4.625% 7/15/23 | 7,584,000 | 5,517,360 | |
5.5% 5/1/22 | 6,985,000 | 5,518,150 | |
Ensco PLC: | |||
4.5% 10/1/24 | 4,807,000 | 3,845,600 | |
4.7% 3/15/21 | 1,435,000 | 1,325,223 | |
5.2% 3/15/25 | 2,605,000 | 2,119,011 | |
5.75% 10/1/44 | 7,160,000 | 4,779,300 | |
EP Energy LLC/Everest Acquisition Finance, Inc. 7.75% 9/1/22 | 1,375,000 | 935,000 | |
Gulfmark Offshore, Inc. 6.375% 3/15/22 | 2,530,000 | 1,239,700 | |
Halcon Resources Corp. 8.625% 2/1/20 (b) | 4,790,000 | 4,885,800 | |
Hilcorp Energy I LP/Hilcorp Finance Co.: | |||
5% 12/1/24 (b) | 10,160,000 | 9,906,000 | |
5.75% 10/1/25 (b) | 4,650,000 | 4,661,625 | |
Holly Energy Partners LP/Holly Finance Corp. 6% 8/1/24 (b) | 3,555,000 | 3,697,200 | |
Hornbeck Offshore Services, Inc.: | |||
5% 3/1/21 | 275,000 | 163,625 | |
5.875% 4/1/20 | 560,000 | 361,200 | |
LINN Energy LLC/LINN Energy Finance Corp. 6.25% 11/1/19 (c)(d) | 4,880,000 | 1,622,600 | |
NGL Energy Partners LP/NGL Energy Finance Corp.: | |||
5.125% 7/15/19 | 3,205,000 | 3,172,950 | |
7.5% 11/1/23 (b) | 4,270,000 | 4,280,675 | |
Noble Holding International Ltd.: | |||
4.625% 3/1/21 | 7,155,000 | 6,042,154 | |
5.25% 3/15/42 | 3,815,000 | 2,155,475 | |
6.05% 3/1/41 | 955,000 | 557,481 | |
Northern Tier Energy LLC/Northern Tier Finance Corp. 7.125% 11/15/20 | 5,705,000 | 5,833,363 | |
NRG Yield Operating LLC 5% 9/15/26 (b) | 4,780,000 | 4,636,600 | |
Parsley Energy LLC/Parsley 6.25% 6/1/24 (b) | 1,030,000 | 1,081,500 | |
PBF Holding Co. LLC/PBF Finance Corp. 7% 11/15/23 (b) | 15,290,000 | 14,143,250 | |
PBF Logistics LP/PBF Logistics Finance, Inc. 6.875% 5/15/23 | 995,000 | 965,150 | |
PDC Energy, Inc. 6.125% 9/15/24 (b) | 1,795,000 | 1,866,800 | |
Plains Exploration & Production Co.: | |||
6.75% 2/1/22 | 3,970,000 | 4,059,325 | |
6.875% 2/15/23 | 4,810,000 | 4,990,375 | |
Range Resources Corp. 5% 3/15/23 (b) | 2,405,000 | 2,326,838 | |
Rice Energy, Inc.: | |||
6.25% 5/1/22 | 2,780,000 | 2,828,650 | |
7.25% 5/1/23 | 2,065,000 | 2,188,900 | |
Rose Rock Midstream LP/Rose Rock Finance Corp.: | |||
5.625% 7/15/22 | 4,540,000 | 4,335,700 | |
5.625% 11/15/23 | 4,810,000 | 4,617,600 | |
Sabine Pass Liquefaction LLC: | |||
5.625% 4/15/23 (c) | 14,630,000 | 15,544,375 | |
5.625% 3/1/25 | 8,115,000 | 8,586,887 | |
5.75% 5/15/24 | 8,875,000 | 9,385,313 | |
6.25% 3/15/22 | 14,530,000 | 15,910,350 | |
SM Energy Co.: | |||
5% 1/15/24 | 8,500,000 | 7,905,000 | |
5.625% 6/1/25 | 7,185,000 | 6,843,713 | |
6.125% 11/15/22 | 12,320,000 | 12,381,600 | |
6.5% 1/1/23 | 10,270,000 | 10,218,650 | |
6.75% 9/15/26 | 2,280,000 | 2,337,000 | |
Southwestern Energy Co.: | |||
4.1% 3/15/22 | 12,105,000 | 10,833,975 | |
5.8% 1/23/20 (c) | 10,505,000 | 10,452,475 | |
SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp. 7.375% 2/1/20 (b) | 4,445,000 | 4,278,313 | |
Sunoco LP/Sunoco Finance Corp.: | |||
6.25% 4/15/21 | 5,590,000 | 5,729,750 | |
6.375% 4/1/23 | 9,490,000 | 9,703,525 | |
Targa Resources Partners LP/Targa Resources Partners Finance Corp.: | |||
4.25% 11/15/23 | 7,185,000 | 6,753,900 | |
5.125% 2/1/25 (b) | 2,885,000 | 2,877,788 | |
5.25% 5/1/23 | 5,510,000 | 5,469,226 | |
5.375% 2/1/27 (b) | 2,885,000 | 2,885,000 | |
6.375% 8/1/22 | 5,058,000 | 5,209,740 | |
6.75% 3/15/24 | 1,490,000 | 1,594,300 | |
Teine Energy Ltd. 6.875% 9/30/22 (b) | 525,000 | 534,188 | |
Tesoro Logistics LP/Tesoro Logistics Finance Corp.: | |||
5.875% 10/1/20 | 5,828,000 | 5,995,555 | |
6.125% 10/15/21 | 4,620,000 | 4,833,675 | |
6.25% 10/15/22 | 6,965,000 | 7,382,900 | |
Transocean, Inc. 9% 7/15/23 (b) | 4,755,000 | 4,645,041 | |
Weatherford International Ltd.: | |||
4.5% 4/15/22 | 2,405,000 | 2,164,500 | |
6.5% 8/1/36 | 4,780,000 | 3,776,200 | |
7% 3/15/38 | 7,165,000 | 5,911,125 | |
7.75% 6/15/21 | 6,910,000 | 6,979,100 | |
8.25% 6/15/23 | 14,630,000 | 15,142,050 | |
Weatherford International, Inc. 6.8% 6/15/37 | 10,990,000 | 8,792,000 | |
Western Refining Logistics LP/WNRL Finance Co. 7.5% 2/15/23 | 2,965,000 | 3,098,425 | |
Whiting Petroleum Corp.: | |||
5% 3/15/19 | 4,560,000 | 4,332,000 | |
5.75% 3/15/21 | 9,475,000 | 8,788,063 | |
6.25% 4/1/23 | 2,910,000 | 2,684,475 | |
WPX Energy, Inc.: | |||
6% 1/15/22 | 7,505,000 | 7,486,238 | |
7.5% 8/1/20 | 2,230,000 | 2,349,863 | |
8.25% 8/1/23 | 4,555,000 | 4,919,400 | |
507,998,396 | |||
Entertainment/Film - 0.6% | |||
AMC Entertainment Holdings, Inc. 5.875% 11/15/26 (b)(e) | 3,890,000 | 3,904,588 | |
CBS Outdoor Americas Capital LLC/CBS Outdoor Americas Capital Corp.: | |||
5.25% 2/15/22 | 9,435,000 | 9,765,225 | |
5.625% 2/15/24 | 4,285,000 | 4,456,400 | |
5.875% 3/15/25 | 3,515,000 | 3,673,175 | |
New Cotai LLC/New Cotai Capital Corp. 10.625% 5/1/19 pay-in-kind (b)(c) | 6,390,000 | 3,430,631 | |
25,230,019 | |||
Environmental - 1.2% | |||
Covanta Holding Corp.: | |||
5.875% 3/1/24 | 9,245,000 | 9,117,881 | |
6.375% 10/1/22 | 7,804,000 | 7,940,570 | |
LBC Tank Terminals Holding Netherlands BV 6.875% 5/15/23 (b) | 21,015,000 | 21,067,538 | |
Tervita Corp.: | |||
8% 11/15/18 (b) | 10,285,000 | 10,182,150 | |
9.75% 11/1/19 (b) | 13,535,000 | 778,263 | |
10.875% 2/15/18 (b) | 13,965,000 | 802,988 | |
49,889,390 | |||
Food & Drug Retail - 2.6% | |||
Albertsons Companies LLC/Safeway, Inc./New Albertson's, Inc./Albertson's LLC: | |||
5.75% 3/15/25 (b) | 10,625,000 | 10,488,894 | |
6.625% 6/15/24 (b) | 5,435,000 | 5,638,813 | |
BI-LO LLC/BI-LO Finance Corp.: | |||
8.625% 9/15/18 pay-in-kind (b)(c) | 36,320,000 | 22,881,600 | |
9.25% 2/15/19 (b) | 37,815,000 | 32,804,513 | |
Performance Food Group, Inc. 5.5% 6/1/24 (b) | 3,110,000 | 3,203,300 | |
Rite Aid Corp. 7.7% 2/15/27 | 4,550,000 | 5,642,000 | |
Tops Holding LLC/Tops Markets II Corp. 8% 6/15/22 (b) | 32,460,000 | 28,564,800 | |
109,223,920 | |||
Food/Beverage/Tobacco - 2.9% | |||
C&S Group Enterprises LLC 5.375% 7/15/22 (b) | 39,860,000 | 38,664,200 | |
Cott Beverages, Inc.: | |||
5.375% 7/1/22 | 445,000 | 451,675 | |
6.75% 1/1/20 | 250,000 | 259,688 | |
ESAL GmbH 6.25% 2/5/23 (b) | 24,845,000 | 23,913,313 | |
JBS Investments GmbH: | |||
7.25% 4/3/24 (b) | 7,980,000 | 8,059,800 | |
7.75% 10/28/20 (b) | 16,665,000 | 17,373,263 | |
JBS U.S.A. LLC/JBS U.S.A. Finance, Inc.: | |||
5.75% 6/15/25 (b) | 2,990,000 | 2,930,200 | |
7.25% 6/1/21 (b) | 11,335,000 | 11,618,375 | |
7.25% 6/1/21 (b) | 5,649,000 | 5,790,225 | |
Minerva Luxembourg SA 6.5% 9/20/26 (b) | 4,745,000 | 4,647,253 | |
Post Holdings, Inc. 7.75% 3/15/24 (b) | 4,060,000 | 4,487,112 | |
U.S. Foods, Inc. 5.875% 6/15/24 (b) | 4,780,000 | 4,971,200 | |
123,166,304 | |||
Gaming - 1.3% | |||
Caesars Growth Properties Holdings LLC/Caesars Growth Properties Finance, Inc. 9.375% 5/1/22 | 10,030,000 | 10,656,875 | |
GLP Capital LP/GLP Financing II, Inc. 5.375% 4/15/26 | 2,185,000 | 2,321,563 | |
MCE Finance Ltd. 5% 2/15/21 (b) | 1,110,000 | 1,109,916 | |
MGM Growth Properties Operating Partnership LP 4.5% 9/1/26 (b) | 6,805,000 | 6,685,913 | |
Scientific Games Corp.: | |||
6.625% 5/15/21 | 19,975,000 | 16,429,438 | |
7% 1/1/22 (b) | 4,825,000 | 5,131,870 | |
10% 12/1/22 | 8,110,000 | 7,501,750 | |
Wynn Macau Ltd. 5.25% 10/15/21 (b) | 4,350,000 | 4,365,182 | |
54,202,507 | |||
Healthcare - 13.0% | |||
AMAG Pharmaceuticals, Inc. 7.875% 9/1/23 (b) | 6,397,000 | 5,997,188 | |
AmSurg Corp. 5.625% 7/15/22 | 4,570,000 | 4,661,400 | |
Centene Corp. 4.75% 5/15/22 | 6,940,000 | 7,044,100 | |
Community Health Systems, Inc.: | |||
5.125% 8/1/21 | 26,855,000 | 25,042,288 | |
6.875% 2/1/22 | 82,799,000 | 63,134,238 | |
7.125% 7/15/20 | 6,020,000 | 4,861,150 | |
CTR Partnership LP/CareTrust Capital Corp. 5.875% 6/1/21 | 6,380,000 | 6,571,400 | |
DaVita HealthCare Partners, Inc. 5.125% 7/15/24 | 9,975,000 | 9,756,797 | |
Double Eagle Acquisition Sub, Inc. 7.5% 10/1/24 (b) | 1,985,000 | 2,044,550 | |
Endo Finance LLC: | |||
5.375% 1/15/23 (b)(c) | 13,075,000 | 11,113,750 | |
5.75% 1/15/22 (b) | 1,675,000 | 1,507,500 | |
Endo Finance LLC/Endo Ltd./Endo Finco, Inc.: | |||
6% 7/15/23 (b) | 14,000,000 | 12,180,000 | |
6.5% 2/1/25 (b)(c) | 13,215,000 | 11,133,638 | |
HCA Holdings, Inc.: | |||
4.5% 2/15/27 | 4,780,000 | 4,720,250 | |
5.25% 6/15/26 | 6,930,000 | 7,241,850 | |
5.375% 2/1/25 | 4,665,000 | 4,761,566 | |
5.875% 3/15/22 | 4,715,000 | 5,186,500 | |
5.875% 5/1/23 | 11,350,000 | 12,041,669 | |
5.875% 2/15/26 | 3,680,000 | 3,864,000 | |
6.25% 2/15/21 | 8,100,000 | 8,737,875 | |
7.5% 11/6/33 | 2,199,000 | 2,374,920 | |
HealthSouth Corp. 5.75% 9/15/25 | 5,890,000 | 6,096,150 | |
Horizon Pharma PLC 6.625% 5/1/23 | 10,785,000 | 10,178,344 | |
Horizon Pharma, Inc. 8.75% 11/1/24 (b) | 3,265,000 | 3,313,975 | |
IMS Health, Inc. 5% 10/15/26 (b) | 6,510,000 | 6,729,713 | |
Kindred Healthcare, Inc.: | |||
8% 1/15/20 | 24,875,000 | 25,123,750 | |
8.75% 1/15/23 | 3,875,000 | 3,758,750 | |
Mallinckrodt International Finance SA/Mallinckrodt CB LLC: | |||
4.875% 4/15/20 (b) | 2,800,000 | 2,810,500 | |
5.625% 10/15/23 (b) | 3,310,000 | 3,111,400 | |
5.75% 8/1/22 (b) | 4,825,000 | 4,571,688 | |
MPT Operating Partnership LP/MPT Finance Corp.: | |||
5.25% 8/1/26 | 2,005,000 | 2,045,100 | |
5.5% 5/1/24 | 3,365,000 | 3,465,950 | |
6.375% 3/1/24 | 4,595,000 | 4,951,113 | |
Ortho-Clinical Diagnostics, Inc. 6.625% 5/15/22 (b) | 13,732,000 | 11,775,190 | |
Sabra Health Care LP/Sabra Capital Corp.: | |||
5.375% 6/1/23 | 20,260,000 | 20,665,200 | |
5.5% 2/1/21 | 9,985,000 | 10,409,363 | |
Teleflex, Inc. 4.875% 6/1/26 | 4,340,000 | 4,448,500 | |
Tenet Healthcare Corp.: | |||
4.375% 10/1/21 | 24,420,000 | 24,297,900 | |
6% 10/1/20 | 3,980,000 | 4,192,452 | |
8.125% 4/1/22 | 41,586,000 | 40,650,315 | |
Valeant Pharmaceuticals International, Inc.: | |||
5.375% 3/15/20 (b) | 23,370,000 | 20,215,050 | |
5.5% 3/1/23 (b) | 10,070,000 | 7,904,950 | |
5.625% 12/1/21 (b) | 6,495,000 | 5,325,900 | |
5.875% 5/15/23 (b) | 31,085,000 | 24,479,438 | |
6.125% 4/15/25 (b) | 29,500,000 | 23,305,000 | |
6.75% 8/15/21 (b) | 18,731,000 | 16,202,315 | |
7% 10/1/20 (b) | 3,905,000 | 3,494,975 | |
7.25% 7/15/22 (b) | 16,406,000 | 14,273,220 | |
7.5% 7/15/21 (b) | 1,425,000 | 1,268,250 | |
VPI Escrow Corp. 6.375% 10/15/20 (b) | 30,095,000 | 25,956,938 | |
548,998,018 | |||
Homebuilders/Real Estate - 0.9% | |||
Beazer Homes U.S.A., Inc. 8.75% 3/15/22 (b) | 3,450,000 | 3,665,625 | |
Brookfield Residential Properties, Inc.: | |||
6.375% 5/15/25 (b) | 2,935,000 | 2,927,663 | |
6.5% 12/15/20 (b) | 5,555,000 | 5,721,650 | |
Realogy Group LLC/Realogy Co.-Issuer Corp. 5.25% 12/1/21 (b) | 5,140,000 | 5,403,425 | |
Shea Homes Ltd. Partnership/Corp. 6.125% 4/1/25 (b) | 2,175,000 | 2,142,375 | |
Taylor Morrison Communities, Inc./Monarch Communities, Inc. 5.625% 3/1/24 (b) | 10,164,000 | 10,545,150 | |
William Lyon Homes, Inc.: | |||
7% 8/15/22 | 3,175,000 | 3,302,000 | |
8.5% 11/15/20 | 6,335,000 | 6,635,913 | |
40,343,801 | |||
Hotels - 0.3% | |||
ESH Hospitality, Inc. 5.25% 5/1/25 (b) | 13,520,000 | 13,384,800 | |
Insurance - 0.7% | |||
Hockey Merger Sub 2, Inc. 7.875% 10/1/21 (b) | 12,940,000 | 13,227,268 | |
Hub Holdings LLC/Hub Holdings Finance, Inc. 8.125% 7/15/19 pay-in-kind (b)(c) | 15,210,000 | 14,829,750 | |
28,057,018 | |||
Leisure - 0.0% | |||
24 Hour Holdings III LLC 8% 6/1/22 (b) | 1,525,000 | 1,265,750 | |
Metals/Mining - 1.8% | |||
Bluescope Steel Ltd./Bluescope Steel Finance 6.5% 5/15/21 (b) | 1,740,000 | 1,835,874 | |
Cloud Peak Energy Resources LLC/Cloud Peak Energy Finance Corp. 12% 11/1/21 | 1,649,000 | 1,669,613 | |
CONSOL Energy, Inc. 5.875% 4/15/22 | 3,345,000 | 3,092,034 | |
First Quantum Minerals Ltd.: | |||
6.75% 2/15/20 (b) | 3,990,000 | 3,820,425 | |
7% 2/15/21 (b) | 5,270,000 | 5,003,206 | |
7.25% 5/15/22 (b) | 2,480,000 | 2,346,700 | |
Freeport-McMoRan, Inc.: | |||
3.55% 3/1/22 | 10,380,000 | 9,523,650 | |
3.875% 3/15/23 | 3,665,000 | 3,307,663 | |
4.55% 11/14/24 | 20,995,000 | 19,262,913 | |
5.4% 11/14/34 | 8,570,000 | 7,380,913 | |
Peabody Energy Corp. 10% 3/15/22 (b)(d) | 6,200,000 | 4,479,500 | |
SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp. 7.375% 2/1/20 (b) | 3,860,000 | 3,715,250 | |
Teck Resources Ltd.: | |||
8% 6/1/21 (b) | 3,605,000 | 3,938,463 | |
8.5% 6/1/24 (b) | 4,445,000 | 5,145,088 | |
Walter Energy, Inc. 9.5% 10/15/19 (b)(d) | 7,630,000 | 1 | |
74,521,293 | |||
Paper - 0.1% | |||
Louisiana-Pacific Corp. 4.875% 9/15/24 (b) | 2,390,000 | 2,348,175 | |
NewPage Corp. 11.375% 12/31/14 (d) | 56,458,756 | 6 | |
2,348,181 | |||
Restaurants - 0.1% | |||
KFC Holding Co./Pizza Hut Holding LLC 5% 6/1/24 (b) | 4,380,000 | 4,555,200 | |
Services - 4.3% | |||
Algeco Scotsman Global Finance PLC 8.5% 10/15/18 (b) | 7,480,000 | 6,788,100 | |
Anna Merger Sub, Inc. 7.75% 10/1/22 (b) | 29,830,000 | 25,579,225 | |
APX Group, Inc.: | |||
6.375% 12/1/19 | 9,600,000 | 9,900,000 | |
7.875% 12/1/22 | 14,405,000 | 15,161,407 | |
8.75% 12/1/20 | 12,615,000 | 12,205,013 | |
Aramark Services, Inc.: | |||
4.75% 6/1/26 (b) | 4,810,000 | 4,810,000 | |
5.125% 1/15/24 | 3,660,000 | 3,833,850 | |
Avis Budget Car Rental LLC/Avis Budget Finance, Inc. 5.125% 6/1/22 (b) | 4,900,000 | 4,802,000 | |
Corrections Corp. of America 5% 10/15/22 | 2,265,000 | 2,044,163 | |
Everi Payments, Inc. 10% 1/15/22 | 1,570,000 | 1,497,388 | |
Garda World Security Corp. 7.25% 11/15/21 (b) | 5,615,000 | 5,362,325 | |
IHS Markit Ltd. 5% 11/1/22 (b) | 1,370,000 | 1,448,775 | |
Laureate Education, Inc. 10% 9/1/19 (b)(c) | 84,389,000 | 78,059,785 | |
The GEO Group, Inc. 6% 4/15/26 | 2,175,000 | 1,875,938 | |
United Rentals North America, Inc.: | |||
5.5% 5/15/27 (e) | 2,975,000 | 2,960,125 | |
5.875% 9/15/26 | 6,660,000 | 6,783,876 | |
183,111,970 | |||
Steel - 0.2% | |||
Cliffs Natural Resources, Inc. 8.25% 3/31/20 (b) | 550,000 | 597,438 | |
Commercial Metals Co. 4.875% 5/15/23 | 4,115,000 | 4,073,850 | |
Evraz, Inc. NA Canada 7.5% 11/15/19 (b) | 3,775,000 | 3,808,031 | |
8,479,319 | |||
Super Retail - 1.5% | |||
Argos Merger Sub, Inc. 7.125% 3/15/23 (b) | 16,545,000 | 17,310,206 | |
Asbury Automotive Group, Inc. 6% 12/15/24 | 6,975,000 | 7,184,250 | |
Chinos Intermediate Holdings A, Inc. 7.75% 5/1/19 pay-in-kind (b)(c) | 13,335,687 | 4,900,865 | |
Claire's Stores, Inc.: | |||
6.125% 3/15/20 (b) | 10,985,000 | 5,382,650 | |
9% 3/15/19 (b) | 15,250,000 | 7,625,000 | |
DBP Holding Corp. 7.75% 10/15/20 (b) | 15,040,000 | 11,430,400 | |
JC Penney Corp., Inc.: | |||
6.375% 10/15/36 | 3,985,000 | 3,387,250 | |
7.4% 4/1/37 | 3,605,000 | 3,298,575 | |
Netflix, Inc. 4.375% 11/15/26 (b) | 4,275,000 | 4,205,531 | |
64,724,727 | |||
Technology - 2.3% | |||
CDW LLC/CDW Finance Corp. 5.5% 12/1/24 | 4,100,000 | 4,306,271 | |
Compiler Finance Sub, Inc. 7% 5/1/21 (b) | 12,715,000 | 5,912,475 | |
Diamond 1 Finance Corp./Diamond 2 Finance Corp.: | |||
5.875% 6/15/21 (b) | 11,310,000 | 11,920,265 | |
6.02% 6/15/26 (b) | 3,070,000 | 3,345,133 | |
7.125% 6/15/24 (b) | 4,970,000 | 5,444,411 | |
Lucent Technologies, Inc.: | |||
6.45% 3/15/29 | 19,542,000 | 21,545,055 | |
6.5% 1/15/28 | 1,395,000 | 1,485,675 | |
Micron Technology, Inc.: | |||
5.25% 1/15/24 (b) | 14,815,000 | 14,444,625 | |
7.5% 9/15/23 (b) | 5,625,000 | 6,208,594 | |
Open Text Corp. 5.875% 6/1/26 (b) | 4,800,000 | 5,112,000 | |
Parametric Technology Corp. 6% 5/15/24 | 1,745,000 | 1,845,338 | |
Qorvo, Inc. 6.75% 12/1/23 | 4,835,000 | 5,294,325 | |
Sabre GLBL, Inc. 5.25% 11/15/23 (b) | 4,910,000 | 5,038,888 | |
VeriSign, Inc. 4.625% 5/1/23 | 4,185,000 | 4,310,550 | |
96,213,605 | |||
Telecommunications - 8.0% | |||
Altice Financing SA: | |||
6.5% 1/15/22 (b) | 1,140,000 | 1,191,585 | |
7.5% 5/15/26 (b) | 10,735,000 | 11,057,050 | |
Altice Finco SA: | |||
7.625% 2/15/25 (b) | 4,790,000 | 4,742,100 | |
8.125% 1/15/24 (b) | 26,760,000 | 27,429,000 | |
Broadview Networks Holdings, Inc. 10.5% 11/15/17 | 8,001,000 | 7,520,940 | |
Cincinnati Bell, Inc. 7% 7/15/24 (b) | 4,765,000 | 4,991,338 | |
Columbus International, Inc. 7.375% 3/30/21 (b) | 26,510,000 | 28,365,700 | |
CommScope Technologies Finance LLC 6% 6/15/25 (b) | 2,890,000 | 3,034,500 | |
Digicel Group Ltd. 6% 4/15/21 (b) | 6,970,000 | 6,236,059 | |
Frontier Communications Corp.: | |||
8.875% 9/15/20 | 3,185,000 | 3,384,063 | |
10.5% 9/15/22 | 4,855,000 | 5,049,200 | |
11% 9/15/25 | 13,300,000 | 13,617,870 | |
GCI, Inc. 6.875% 4/15/25 | 3,450,000 | 3,501,750 | |
Intelsat Jackson Holdings SA: | |||
5.5% 8/1/23 | 10,290,000 | 6,817,125 | |
7.5% 4/1/21 | 2,980,000 | 2,190,300 | |
8% 2/15/24 (b) | 4,960,000 | 4,984,800 | |
Intelsat Luxembourg SA 7.75% 6/1/21 | 5,600,000 | 1,820,000 | |
Level 3 Financing, Inc.: | |||
5.125% 5/1/23 | 4,440,000 | 4,484,400 | |
5.25% 3/15/26 (b) | 4,965,000 | 5,039,475 | |
5.375% 1/15/24 | 12,255,000 | 12,500,100 | |
Neptune Finco Corp.: | |||
6.625% 10/15/25 (b) | 4,865,000 | 5,272,444 | |
10.125% 1/15/23 (b) | 4,660,000 | 5,254,150 | |
10.875% 10/15/25 (b) | 6,085,000 | 6,997,750 | |
Sable International Finance Ltd. 6.875% 8/1/22 (b) | 9,800,000 | 10,143,000 | |
SFR Group SA: | |||
6% 5/15/22 (b) | 13,155,000 | 13,488,085 | |
6.25% 5/15/24 (b) | 3,895,000 | 3,892,546 | |
7.375% 5/1/26 (b) | 10,300,000 | 10,403,000 | |
Sprint Capital Corp.: | |||
6.875% 11/15/28 | 7,894,000 | 7,262,480 | |
6.9% 5/1/19 | 6,348,000 | 6,681,270 | |
Sprint Communications, Inc. 6% 11/15/22 | 16,860,000 | 15,711,497 | |
Sprint Corp.: | |||
7.125% 6/15/24 | 8,670,000 | 8,149,800 | |
7.25% 9/15/21 | 15,180,000 | 15,540,525 | |
7.875% 9/15/23 | 23,950,000 | 23,710,500 | |
T-Mobile U.S.A., Inc.: | |||
6% 4/15/24 | 9,970,000 | 10,605,588 | |
6.5% 1/15/26 | 4,370,000 | 4,790,394 | |
6.625% 4/1/23 | 14,270,000 | 15,164,444 | |
ViaSat, Inc. 6.875% 6/15/20 | 3,970,000 | 4,108,950 | |
Wind Acquisition Finance SA: | |||
4.75% 7/15/20 (b) | 12,135,000 | 12,195,675 | |
7.375% 4/23/21 (b) | 2,415,000 | 2,481,413 | |
339,810,866 | |||
Transportation Ex Air/Rail - 1.4% | |||
Navios Maritime Acquisition Corp./Navios Acquisition Finance U.S., Inc. 8.125% 11/15/21 (b) | 12,370,000 | 9,339,350 | |
Navios Maritime Holdings, Inc.: | |||
7.375% 1/15/22 (b) | 29,215,000 | 15,191,800 | |
8.125% 2/15/19 | 17,951,000 | 10,411,580 | |
Navios South American Logistics, Inc./Navios Logistics Finance U.S., Inc. 7.25% 5/1/22 (b) | 3,350,000 | 2,646,500 | |
Teekay Corp. 8.5% 1/15/20 | 19,085,000 | 17,367,350 | |
Ultrapetrol (Bahamas) Ltd. 8.875% 6/15/21 (d) | 15,050,000 | 2,859,500 | |
57,816,080 | |||
Utilities - 3.6% | |||
Calpine Corp. 5.5% 2/1/24 | 2,425,000 | 2,364,375 | |
Cortes NP Acquisition Corp. 9.25% 10/15/24 (b) | 7,145,000 | 7,462,059 | |
Dolphin Subsidiary II, Inc. 7.25% 10/15/21 | 6,330,000 | 6,606,938 | |
Dynegy, Inc.: | |||
7.375% 11/1/22 | 21,380,000 | 20,618,338 | |
7.625% 11/1/24 | 41,300,000 | 39,544,750 | |
Global Partners LP/GLP Finance Corp.: | |||
6.25% 7/15/22 | 6,670,000 | 6,369,850 | |
7% 6/15/23 | 13,760,000 | 13,140,800 | |
InterGen NV 7% 6/30/23 (b) | 23,255,000 | 19,708,613 | |
NRG Energy, Inc. 7.875% 5/15/21 | 743,000 | 776,435 | |
NSG Holdings II LLC/NSG Holdings, Inc. 7.75% 12/15/25 (b) | 8,844,982 | 9,508,356 | |
PPL Energy Supply LLC: | |||
4.6% 12/15/21 | 5,735,000 | 4,699,259 | |
6.5% 6/1/25 | 5,640,000 | 4,709,400 | |
RJS Power Holdings LLC 4.625% 7/15/19 (b)(c) | 7,280,000 | 6,916,000 | |
The AES Corp. 6% 5/15/26 | 9,475,000 | 9,759,250 | |
152,184,423 | |||
TOTAL NONCONVERTIBLE BONDS | 3,343,187,936 | ||
TOTAL CORPORATE BONDS | |||
(Cost $3,465,046,876) | 3,344,356,832 | ||
Shares | Value | ||
Common Stocks - 0.4% | |||
Automotive & Auto Parts - 0.3% | |||
Chassix Holdings, Inc. (f) | 180,386 | 5,665,924 | |
Chassix Holdings, Inc. warrants 7/29/20 (f) | 48,708 | 351,185 | |
General Motors Co. | 141,723 | 4,478,447 | |
General Motors Co. warrants 7/10/19 (f) | 5,208 | 71,350 | |
Motors Liquidation Co. GUC Trust (f) | 49,155 | 516,128 | |
TOTAL AUTOMOTIVE & AUTO PARTS | 11,083,034 | ||
Banks & Thrifts - 0.0% | |||
CIT Group, Inc. | 49,400 | 1,794,702 | |
Metals/Mining - 0.0% | |||
Aleris Corp. (f)(g) | 46,900 | 466,186 | |
Warrior Met Coal LLC Class A (g) | 3,949 | 1,019,513 | |
TOTAL METALS/MINING | 1,485,699 | ||
Telecommunications - 0.0% | |||
Broadview Networks Holdings, Inc. (f)(h) | 520,065 | 650,081 | |
Transportation Ex Air/Rail - 0.1% | |||
DeepOcean Group Holding BV (b)(f) | 419,352 | 2,283,305 | |
Navios Maritime Holdings, Inc. (f)(i) | 771,100 | 817,366 | |
TOTAL TRANSPORTATION EX AIR/RAIL | 3,100,671 | ||
TOTAL COMMON STOCKS | |||
(Cost $41,439,993) | 18,114,187 | ||
Convertible Preferred Stocks - 0.8% | |||
Banks & Thrifts - 0.4% | |||
Bank of America Corp. Series L 7.25% (f) | 14,300 | 17,603,300 | |
Energy - 0.4% | |||
Chesapeake Energy Corp. Series A 5.75% | 29,700 | 14,367,375 | |
TOTAL CONVERTIBLE PREFERRED STOCKS | |||
(Cost $34,769,665) | 31,970,675 | ||
Principal Amount | Value | ||
Bank Loan Obligations - 6.8% | |||
Aerospace - 0.1% | |||
TransDigm, Inc. Tranche C, term loan 3.8214% 2/28/20 (c) | 5,158,270 | 5,150,223 | |
Air Transportation - 0.1% | |||
XPO Logistics, Inc. Tranche B2 1LN, term loan 4.25% 10/30/21 (c) | 4,837,875 | 4,860,323 | |
Automotive & Auto Parts - 0.1% | |||
Chassix, Inc. term loan 12% 7/29/19 | 2,100,237 | 2,152,743 | |
Broadcasting - 0.1% | |||
Univision Communications, Inc. Tranche C 4LN, term loan 4% 3/1/20 (c) | 4,712,882 | 4,720,234 | |
Cable/Satellite TV - 0.2% | |||
Charter Communications Operating LLC Tranche E, term loan 3% 7/1/20 (c) | 2,472,224 | 2,476,253 | |
WideOpenWest Finance LLC Tranche B, term loan 4.5% 8/19/23 (c) | 4,850,000 | 4,836,760 | |
TOTAL CABLE/SATELLITE TV | 7,313,013 | ||
Capital Goods - 0.3% | |||
Rexnord LLC Tranche B, term loan 4% 8/21/20 (c) | 5,977,682 | 5,991,132 | |
SRAM LLC. Tranche B, term loan 4.0146% 4/10/20 (c) | 5,326,704 | 5,193,537 | |
TOTAL CAPITAL GOODS | 11,184,669 | ||
Chemicals - 0.2% | |||
Trinseo Materials Operating SCA/Trinseo Materials Finance, Inc. Tranche B 1LN, term loan 4.25% 11/5/21 (c) | 2,620,497 | 2,635,565 | |
Tronox Pigments (Netherlands) B.V. Tranche B, term loan 4.5% 3/19/20 (c) | 3,173,599 | 3,157,001 | |
TOTAL CHEMICALS | 5,792,566 | ||
Containers - 0.1% | |||
Reynolds Group Holdings, Inc. Tranche B, term loan 4.25% 2/5/23 (c) | 5,255,000 | 5,266,719 | |
Energy - 0.2% | |||
California Resources Corp. Tranche 1LN, term loan 11.375% 12/31/21 (c) | 5,080,000 | 5,454,650 | |
Seadrill Operating LP Tranche B, term loan 4% 2/21/21 (c) | 7,221,436 | 4,012,446 | |
TOTAL ENERGY | 9,467,096 | ||
Entertainment/Film - 0.1% | |||
CBS Outdoor Americas Capital LLC/CBS Outdoor Americas Capital Corp. Tranche B, term loan 3% 1/31/21 (c) | 4,041,750 | 4,046,802 | |
Environmental - 0.3% | |||
ADS Waste Holdings, Inc. Tranche B 2LN, term loan 3.75% 10/9/19 (c) | 13,226,278 | 13,229,981 | |
Food/Beverage/Tobacco - 0.1% | |||
Chobani LLC Tranche B, term loan 5.25% 10/7/23 (c) | 4,835,000 | 4,886,396 | |
Gaming - 0.6% | |||
Caesars Growth Properties Holdings, LLC Tranche 1LN, term loan 6.25% 5/8/21 (c) | 22,772,940 | 22,734,909 | |
Healthcare - 0.8% | |||
Community Health Systems, Inc. Tranche H, term loan 4% 1/27/21 (c) | 4,792,866 | 4,520,871 | |
DJO Finance LLC Tranche B 1LN, term loan 4.25% 6/7/20 (c) | 8,717,929 | 8,619,853 | |
Horizon Pharmaceuticals, Inc. term loan 5/7/21 (j) | 735,000 | 735,919 | |
Kindred Healthcare, Inc. Tranche B, term loan 4.25% 4/9/21 (c) | 7,360,861 | 7,354,752 | |
Ortho-Clinical Diagnostics, Inc. Tranche B, term loan 4.75% 6/30/21 (c) | 11,166,441 | 10,896,548 | |
Valeant Pharmaceuticals International, Inc. Tranche E, term loan 5.25% 8/5/20 (c) | 2,605,903 | 2,595,037 | |
TOTAL HEALTHCARE | 34,722,980 | ||
Insurance - 0.5% | |||
HUB International Ltd. Tranche B 1LN, term loan 4% 10/2/20 (c) | 20,880,981 | 20,866,573 | |
Lonestar Intermediate Super Holdings LLC term loan 10% 8/31/21 pay-in-kind (c) | 790,000 | 795,269 | |
TOTAL INSURANCE | 21,661,842 | ||
Services - 1.4% | |||
Acosta, Inc. Tranche B, term loan 4.25% 9/26/21 (c) | 9,428,322 | 9,060,618 | |
Brand Energy & Infrastructure Services, Inc. Tranche B, term loan 4.75% 11/26/20 (c) | 6,885,914 | 6,789,993 | |
Garda World Security Corp.: | |||
term loan 4% 11/8/20 (c) | 3,271,843 | 3,229,571 | |
Tranche DD, term loan 4.0039% 11/8/20 (c) | 568,352 | 561,009 | |
Laureate Education, Inc. Tranche B, term loan 8.8679% 3/17/21 (c) | 40,381,554 | 40,028,216 | |
TOTAL SERVICES | 59,669,407 | ||
Steel - 0.1% | |||
JMC Steel Group, Inc. Tranche B, term loan 6% 6/14/21 (c) | 4,289,250 | 4,316,058 | |
Super Retail - 0.7% | |||
Davids Bridal, Inc. Tranche B, term loan 5% 10/11/19 (c) | 9,599,305 | 8,927,353 | |
J. Crew Group, Inc. Tranche B, term loan 4% 3/5/21 (c) | 20,169,697 | 15,351,358 | |
Sears Holdings Corp. Tranche ABL, term loan 5.5% 6/30/18 (c) | 6,406,149 | 6,265,214 | |
TOTAL SUPER RETAIL | 30,543,925 | ||
Technology - 0.2% | |||
Kronos, Inc. term loan 10/20/23 (j) | 8,685,000 | 8,719,566 | |
Telecommunications - 0.1% | |||
Polycom, Inc. Tranche B, term loan 7.5% 9/27/23 (c) | 4,835,000 | 4,708,081 | |
Utilities - 0.5% | |||
Cortes NP Acquisition Corp. Tranche B, term loan 9/30/23 (j) | 7,255,000 | 7,209,656 | |
Dynegy Finance IV, Inc. Tranche C, term loan 5% 6/27/23 (c) | 13,015,000 | 13,047,538 | |
TOTAL UTILITIES | 20,257,194 | ||
TOTAL BANK LOAN OBLIGATIONS | |||
(Cost $286,104,338) | 285,404,727 | ||
Preferred Securities - 5.3% | |||
Banks & Thrifts - 5.3% | |||
Bank of America Corp.: | |||
6.1% (c)(k) | 5,230,000 | 5,503,753 | |
6.25% (c)(k) | 3,190,000 | 3,372,918 | |
Barclays Bank PLC 7.625% 11/21/22 | 18,860,000 | 21,693,356 | |
Barclays PLC: | |||
6.625% (c)(k) | 22,135,000 | 20,498,211 | |
8.25% (c)(k) | 15,517,000 | 15,876,257 | |
Citigroup, Inc.: | |||
5.875% (c)(k) | 40,450,000 | 41,306,741 | |
6.3% (c)(k) | 9,715,000 | 10,228,470 | |
Credit Agricole SA: | |||
6.625% (b)(c)(k) | 5,565,000 | 5,451,464 | |
7.875% (b)(c)(k) | 14,001,000 | 14,305,067 | |
8.125% (b)(c)(k) | 4,855,000 | 5,255,758 | |
Credit Suisse Group AG: | |||
6.25% (b)(c)(k) | 3,080,000 | 3,043,730 | |
7.5% (b)(c)(k) | 4,680,000 | 4,980,939 | |
Deutsche Bank AG 7.5% (c)(k) | 4,800,000 | 4,099,967 | |
Goldman Sachs Group, Inc. 5.375% (c)(k) | 4,810,000 | 4,956,996 | |
JPMorgan Chase & Co.: | |||
5.3% (c)(k) | 5,465,000 | 5,691,797 | |
6.125% (c)(k) | 3,995,000 | 4,231,250 | |
6.75% (c)(k) | 3,065,000 | 3,453,872 | |
Lloyds Banking Group PLC 7.5% (c)(k) | 13,540,000 | 14,043,844 | |
Royal Bank of Scotland Group PLC: | |||
7.5% (c)(k) | 17,480,000 | 16,153,153 | |
8% (c)(k) | 4,100,000 | 3,923,835 | |
8.625% (c)(k) | 6,720,000 | 6,753,549 | |
Societe Generale: | |||
6% (b)(c)(k) | 1,130,000 | 1,056,002 | |
8% (b)(c)(k) | 9,145,000 | 9,291,712 | |
TOTAL PREFERRED SECURITIES | |||
(Cost $222,266,634) | 225,172,641 | ||
Shares | Value | ||
Money Market Funds - 5.9% | |||
Fidelity Cash Central Fund, 0.41% (l) | 247,645,689 | 247,719,983 | |
Fidelity Securities Lending Cash Central Fund 0.48% (l)(m) | 855,740 | 855,911 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $248,538,492) | 248,575,894 | ||
TOTAL INVESTMENT PORTFOLIO - 98.3% | |||
(Cost $4,298,165,998) | 4,153,594,956 | ||
NET OTHER ASSETS (LIABILITIES) - 1.7% | 71,514,302 | ||
NET ASSETS - 100% | $4,225,109,258 |
Legend
(a) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end.
(b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $1,673,638,501 or 39.6% of net assets.
(c) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end.
(d) Non-income producing - Security is in default.
(e) Security or a portion of the security purchased on a delayed delivery or when-issued basis.
(f) Non-income producing
(g) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $1,485,699 or 0.0% of net assets.
(h) Affiliated company
(i) Security or a portion of the security is on loan at period end.
(j) The coupon rate will be determined upon settlement of the loan after period end.
(k) Security is perpetual in nature with no stated maturity date.
(l) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.
(m) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
Security | Acquisition Date | Acquisition Cost |
Aleris Corp. | 3/11/11 | $2,860,900 |
Warrior Met Coal LLC Class A | 6/4/14 - 7/8/14 | $7,623,332 |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
Fund | Income earned |
Fidelity Cash Central Fund | $545,043 |
Fidelity Securities Lending Cash Central Fund | 21,574 |
Total | $566,617 |
Other Affiliated Issuers
An affiliated company is a company in which the Fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows:
Affiliate | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value, end of period |
Broadview Networks Holdings, Inc. | $754,094 | $-- | $-- | $-- | $650,081 |
Total | $754,094 | $-- | $-- | $-- | $650,081 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Equities: | ||||
Consumer Discretionary | $10,566,906 | $4,549,797 | $-- | $6,017,109 |
Energy | 15,386,888 | -- | 14,367,375 | 1,019,513 |
Financials | 19,914,130 | 19,914,130 | -- | -- |
Industrials | 3,100,671 | 817,366 | -- | 2,283,305 |
Materials | 466,186 | -- | -- | 466,186 |
Telecommunication Services | 650,081 | 650,081 | -- | -- |
Corporate Bonds | 3,344,356,832 | -- | 3,344,356,822 | 10 |
Bank Loan Obligations | 285,404,727 | -- | 283,251,984 | 2,152,743 |
Preferred Securities | 225,172,641 | -- | 225,172,641 | -- |
Money Market Funds | 248,575,894 | 248,575,894 | -- | -- |
Total Investments in Securities: | $4,153,594,956 | $274,507,268 | $3,867,148,822 | $11,938,866 |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
United States of America | 77.1% |
Canada | 4.6% |
Luxembourg | 3.7% |
United Kingdom | 3.5% |
Ireland | 2.5% |
Netherlands | 1.6% |
Bermuda | 1.5% |
Marshall Islands | 1.4% |
France | 1.3% |
Austria | 1.2% |
Others (Individually Less Than 1%) | 1.6% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
October 31, 2016 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $725,676) — See accompanying schedule: Unaffiliated issuers (cost $4,039,842,311) | $3,904,368,981 | |
Fidelity Central Funds (cost $248,538,492) | 248,575,894 | |
Other affiliated issuers (cost $9,785,195) | 650,081 | |
Total Investments (cost $4,298,165,998) | $4,153,594,956 | |
Cash | 5,589,934 | |
Receivable for investments sold | 33,387,651 | |
Receivable for fund shares sold | 30,177 | |
Interest receivable | 65,167,033 | |
Distributions receivable from Fidelity Central Funds | 104,767 | |
Prepaid expenses | 13,485 | |
Total assets | 4,257,888,003 | |
Liabilities | ||
Payable for investments purchased | ||
Regular delivery | $20,150,250 | |
Delayed delivery | 6,865,000 | |
Payable for fund shares redeemed | 2,384,344 | |
Distributions payable | 73 | |
Accrued management fee | 2,149,879 | |
Other affiliated payables | 309,889 | |
Other payables and accrued expenses | 63,560 | |
Collateral on securities loaned, at value | 855,750 | |
Total liabilities | 32,778,745 | |
Net Assets | $4,225,109,258 | |
Net Assets consist of: | ||
Paid in capital | $4,583,612,562 | |
Undistributed net investment income | 23,890,539 | |
Accumulated undistributed net realized gain (loss) on investments | (237,822,801) | |
Net unrealized appreciation (depreciation) on investments | (144,571,042) | |
Net Assets | $4,225,109,258 | |
Series High Income: | ||
Net Asset Value, offering price and redemption price per share ($1,959,904,738 ÷ 210,522,107 shares) | $9.31 | |
Class F: | ||
Net Asset Value, offering price and redemption price per share ($2,265,204,520 ÷ 243,316,206 shares) | $9.31 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended October 31, 2016 (Unaudited) | ||
Investment Income | ||
Dividends | $9,242,617 | |
Interest | 159,287,554 | |
Income from Fidelity Central Funds | 566,617 | |
Total income | 169,096,788 | |
Expenses | ||
Management fee | $14,145,806 | |
Transfer agent fees | 1,286,788 | |
Accounting and security lending fees | 587,204 | |
Custodian fees and expenses | 31,735 | |
Independent trustees' fees and expenses | 10,935 | |
Audit | 36,916 | |
Legal | 9,417 | |
Miscellaneous | 29,655 | |
Total expenses before reductions | 16,138,456 | |
Expense reductions | (12,170) | 16,126,286 |
Net investment income (loss) | 152,970,502 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | (38,541,047) | |
Fidelity Central Funds | 54,307 | |
Total net realized gain (loss) | (38,486,740) | |
Change in net unrealized appreciation (depreciation) on investment securities | 234,780,609 | |
Net gain (loss) | 196,293,869 | |
Net increase (decrease) in net assets resulting from operations | $349,264,371 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended October 31, 2016 (Unaudited) | Year ended April 30, 2016 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $152,970,502 | $323,912,935 |
Net realized gain (loss) | (38,486,740) | (185,171,101) |
Change in net unrealized appreciation (depreciation) | 234,780,609 | (328,769,675) |
Net increase (decrease) in net assets resulting from operations | 349,264,371 | (190,027,841) |
Distributions to shareholders from net investment income | (143,120,432) | (322,051,932) |
Distributions to shareholders from net realized gain | – | (27,727,499) |
Total distributions | (143,120,432) | (349,779,431) |
Share transactions - net increase (decrease) | (1,083,876,350) | (240,056,093) |
Total increase (decrease) in net assets | (877,732,411) | (779,863,365) |
Net Assets | ||
Beginning of period | 5,102,841,669 | 5,882,705,034 |
End of period | $4,225,109,258 | $5,102,841,669 |
Other Information | ||
Undistributed net investment income end of period | $23,890,539 | $14,040,469 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Series High Income Fund
Six months ended (Unaudited) October 31, | Years ended April 30, | |||||
2016 | 2016 | 2015 | 2014 | 2013 | 2012 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $8.96 | $9.87 | $10.58 | $10.63 | $9.96 | $10.12 |
Income from Investment Operations | ||||||
Net investment income (loss)A | .275 | .550 | .565 | .566 | .587 | .599 |
Net realized and unrealized gain (loss) | .332 | (.867) | (.382) | (.033) | .655 | (.163) |
Total from investment operations | .607 | (.317) | .183 | .533 | 1.242 | .436 |
Distributions from net investment income | (.257) | (.546) | (.552) | (.554) | (.550) | (.584) |
Distributions from net realized gain | – | (.047) | (.341) | (.029) | (.022) | (.012) |
Total distributions | (.257) | (.593) | (.893) | (.583) | (.572) | (.596) |
Net asset value, end of period | $9.31 | $8.96 | $9.87 | $10.58 | $10.63 | $9.96 |
Total ReturnB,C | 6.85% | (3.08)% | 1.86% | 5.23% | 12.85% | 4.66% |
Ratios to Average Net AssetsD,E | ||||||
Expenses before reductions | .69%F | .69% | .69% | .70% | .71% | .72% |
Expenses net of fee waivers, if any | .69%F | .69% | .69% | .70% | .71% | .72% |
Expenses net of all reductions | .69%F | .69% | .69% | .69% | .71% | .72% |
Net investment income (loss) | 5.95%F | 6.07% | 5.51% | 5.42% | 5.74% | 6.19% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $1,959,905 | $2,417,317 | $2,835,891 | $5,367,464 | $5,381,081 | $5,533,077 |
Portfolio turnover rateG | 46%F | 34% | 31% | 54% | 45% | 39% |
A Calculated based on average shares outstanding during the period.
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Annualized
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Series High Income Fund Class F
Six months ended (Unaudited) October 31, | Years ended April 30, | |||||
2016 | 2016 | 2015 | 2014 | 2013 | 2012 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $8.96 | $9.87 | $10.58 | $10.63 | $9.96 | $10.12 |
Income from Investment Operations | ||||||
Net investment income (loss)A | .280 | .559 | .575 | .578 | .600 | .610 |
Net realized and unrealized gain (loss) | .332 | (.866) | (.381) | (.033) | .654 | (.161) |
Total from investment operations | .612 | (.307) | .194 | .545 | 1.254 | .449 |
Distributions from net investment income | (.262) | (.556) | (.563) | (.566) | (.562) | (.597) |
Distributions from net realized gain | – | (.047) | (.341) | (.029) | (.022) | (.012) |
Total distributions | (.262) | (.603) | (.904) | (.595) | (.584) | (.609) |
Net asset value, end of period | $9.31 | $8.96 | $9.87 | $10.58 | $10.63 | $9.96 |
Total ReturnB,C | 6.90% | (2.98)% | 1.97% | 5.35% | 12.99% | 4.80% |
Ratios to Average Net AssetsD,E | ||||||
Expenses before reductions | .58%F | .59% | .58% | .58% | .58% | .59% |
Expenses net of fee waivers, if any | .58%F | .59% | .58% | .58% | .58% | .59% |
Expenses net of all reductions | .58%F | .59% | .58% | .58% | .58% | .59% |
Net investment income (loss) | 6.05%F | 6.17% | 5.62% | 5.53% | 5.87% | 6.32% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $2,265,205 | $2,685,525 | $3,046,814 | $5,424,535 | $5,025,275 | $3,614,081 |
Portfolio turnover rateG | 46%F | 34% | 31% | 54% | 45% | 39% |
A Calculated based on average shares outstanding during the period.
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Annualized
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements (Unaudited)
For the period ended October 31, 2016
1. Organization.
Fidelity Series High Income Fund (the Fund) is a fund of Fidelity Summer Street Trust (the Trust) and is authorized to issue an unlimited number of shares. Shares of the Fund are only available for purchase by mutual funds for which Fidelity Management & Research Company (FMR) or an affiliate serves as an investment manager. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Series High Income and Class F shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds, bank loan obligations and preferred securities are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. The Fund invests a significant portion of its assets in below investment grade securities. The value of these securities can be more volatile due to changes in the credit quality of the issuer and is sensitive to changes in economic, market and regulatory conditions.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016, is included at the end of the Fund's Schedule of Investments.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Dividends are declared and recorded daily and paid monthly from net investment income. Distributions from realized gains, if any, are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to market discount, contingent interest, certain conversion ratio adjustments, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $152,240,288 |
Gross unrealized depreciation | (280,841,548) |
Net unrealized appreciation (depreciation) on securities | $(128,601,260) |
Tax cost | $4,282,196,216 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of prior fiscal period end and is subject to adjustment.
No expiration | |
Short-term | $(57,850,706) |
Long-term | (137,666,422) |
Total capital loss carryforward | $(195,517,128) |
Delayed Delivery Transactions and When-Issued Securities. During the period, the Fund transacted in securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. The securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Loans and Other Direct Debt Instruments. The Fund invests in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. These instruments may be in the form of loans, trade claims or other receivables and may include standby financing commitments such as revolving credit facilities that obligate the Fund to supply additional cash to the borrower on demand. Loans may be acquired through assignment or participation. The Fund did not have any unfunded loan commitments, which are contractual obligations for future funding, at period end.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,093,575,472 and $2,252,693,038, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and an annualized group fee rate that averaged .11% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .56% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of Series High Income. FIIOC receives no fees for providing transfer agency services to Class F. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each applicable class were as follows:
Amount | % of Class-Level Average Net Assets(a) | |
Series High Income | $1,286,788 | .11 |
(a) Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $41 for the period.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Other. During the period, the investment adviser reimbursed the Fund for certain losses in the amount of $18,188.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $8,502 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $21,574. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $2,070.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $10,100.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended October 31, 2016 | Year ended April 30, 2016 | |
From net investment income | ||
Series High Income | $66,777,785 | $152,156,686 |
Class F | 76,342,647 | 169,895,246 |
Total | $143,120,432 | $322,051,932 |
From net realized gain | ||
Series High Income | $– | $13,405,543 |
Class F | – | 14,321,956 |
Total | $– | $27,727,499 |
10. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Shares | Dollars | Dollars | |
Six months ended October 31, 2016 | Year ended April 30, 2016 | Six months ended October 31, 2016 | Year ended April 30, 2016 | |
Series High Income | ||||
Shares sold | 315,857 | 14,080,695 | $2,847,966 | $127,272,292 |
Reinvestment of distributions | 7,276,791 | 18,271,788 | 66,777,785 | 165,562,229 |
Shares redeemed | (66,911,627) | (49,908,275) | (624,573,649) | (451,056,809) |
Net increase (decrease) | (59,318,979) | (17,555,792) | $(554,947,898) | $(158,222,288) |
Class F | ||||
Shares sold | 645,575 | 26,420,668 | $5,840,883 | $238,153,117 |
Reinvestment of distributions | 8,318,247 | 20,348,889 | 76,342,647 | 184,217,202 |
Shares redeemed | (65,428,979) | (55,760,573) | (611,111,982) | (504,204,124) |
Net increase (decrease) | (56,465,157) | (8,991,016) | $(528,928,452) | $(81,833,805) |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, mutual funds managed by the investment adviser or its affiliates were the owners of record of all of the outstanding shares of the Fund.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Series High Income Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to all of the Fidelity funds.
At its July 2016 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and would be realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by FMR, the sub-advisers (together with FMR, the Investment Advisers), and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.In 2014, the Board formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs; (iv) broadening eligibility requirements for certain lower-priced share classes of, and streamlining the fee structure for, certain existing equity index funds; (v) lowering expense caps for certain existing funds and classes to reduce expenses paid by shareholders; (vi) eliminating redemption fees for certain variable insurance product funds and classes; (vii) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (viii) launching a lower cost share class for use by the Freedom Index Fund product line; (ix) rationalizing product lines and gaining increased efficiencies through fund mergers and share class consolidations; (x) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; (xi) implementing investment enhancements to further strengthen Fidelity's target date product line to increase investors' probability of success in achieving their goals; (xii) accelerating the conversion of all remaining Class B shares to Class A shares, which have a lower expense structure; and (xiii) implementing changes to Fidelity's money market fund product line in response to recent regulatory reforms.Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history.The Board took into account discussions with representatives of the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund, for different time periods, measured against a securities market index ("benchmark index") and a peer group of funds with similar objectives ("peer group"), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for the fund and an appropriate benchmark index and peer group for the most recent one- and three-year periods, as shown below. Returns are shown compared to the 25th percentile (top of box, 75% beaten) and 75th percentile (bottom of box, 25% beaten) of the peer universe.Fidelity Series High Income Fund
Fidelity Series High Income Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (May 1, 2016 to October 31, 2016).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Annualized Expense Ratio-A | Beginning Account Value May 1, 2016 | Ending Account Value October 31, 2016 | Expenses Paid During Period-B May 1, 2016 to October 31, 2016 | |
Series High Income | .69% | |||
Actual | $1,000.00 | $1,068.50 | $3.60 | |
Hypothetical-C | $1,000.00 | $1,021.73 | $3.52 | |
Class F | .58% | |||
Actual | $1,000.00 | $1,069.00 | $3.02 | |
Hypothetical-C | $1,000.00 | $1,022.28 | $2.96 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
C 5% return per year before expenses
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Fidelity® Focused High Income Fund Semi-Annual Report October 31, 2016 |
Contents
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
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Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2016 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Fund nor Fidelity Distributors Corporation is a bank.
Investment Summary (Unaudited)
Top Five Holdings as of October 31, 2016
(by issuer, excluding cash equivalents) | % of fund's net assets | % of fund's net assets 6 months ago |
Sabine Pass Liquefaction LLC | 4.0 | 3.2 |
Citigroup, Inc. | 3.0 | 2.8 |
Icahn Enterprises LP/Icahn Enterprises Finance Corp. | 2.9 | 2.4 |
Steel Dynamics, Inc. | 2.7 | 2.4 |
Wynn Macau Ltd. | 2.7 | 2.3 |
15.3 |
Top Five Market Sectors as of October 31, 2016
% of fund's net assets | % of fund's net assets 6 months ago | |
Energy | 11.5 | 9.0 |
Telecommunications | 10.2 | 12.3 |
Banks & Thrifts | 10.1 | 10.7 |
Diversified Financial Services | 8.5 | 8.1 |
Technology | 7.7 | 5.3 |
Quality Diversification (% of fund's net assets)
As of October 31, 2016 | ||
AAA,AA,A | 0.1% | |
BBB | 1.8% | |
BB | 79.8% | |
B | 13.7% | |
Not Rated | 0.2% | |
Short-Term Investments and Net Other Assets | 4.4% |
As of April 30, 2016 | ||
AAA,AA,A | 0.1% | |
BBB | 3.6% | |
BB | 73.4% | |
B | 15.5% | |
CCC,CC,C | 0.5% | |
Not Rated | 0.4% | |
Short-Term Investments and Net Other Assets | 6.5% |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes.
Asset Allocation (% of fund's net assets)
As of October 31, 2016* | ||
Nonconvertible Bonds | 80.2% | |
Bank Loan Obligations | 6.0% | |
Other Investments | 9.4% | |
Short-Term Investments and Net Other Assets (Liabilities) | 4.4% |
* Foreign investments - 27.1%
As of April 30, 2016* | ||
Nonconvertible Bonds | 78.2% | |
Bank Loan Obligations | 4.7% | |
Other Investments | 10.6% | |
Short-Term Investments and Net Other Assets (Liabilities) | 6.5% |
* Foreign investments - 24.1%
Investments October 31, 2016 (Unaudited)
Showing Percentage of Net Assets
Nonconvertible Bonds - 80.2% | |||
Principal Amount | Value | ||
Air Transportation - 1.2% | |||
Air Canada Trust Series 2015-1 equipment trust certificate Class C, 5% 3/15/20 (a) | $1,335,000 | $1,338,605 | |
Allegiant Travel Co. 5.5% 7/15/19 | 1,555,000 | 1,615,256 | |
Continental Airlines, Inc.: | |||
pass-thru trust certificates 9.798% 4/1/21 | 78,254 | 86,275 | |
5.5% 4/29/22 | 1,476,478 | 1,550,302 | |
6.25% 10/11/21 | 1,529,279 | 1,621,036 | |
9.25% 5/10/17 | 365,240 | 368,893 | |
Delta Air Lines, Inc. pass-thru trust certificates 8.021% 8/10/22 | 880,416 | 1,003,674 | |
United Air Lines, Inc. pass-thru trust certificates: | |||
Class B, 7.336% 7/2/19 | 91,580 | 97,075 | |
9.75% 1/15/17 | 451,342 | 458,933 | |
TOTAL AIR TRANSPORTATION | 8,140,049 | ||
Automotive & Auto Parts - 1.2% | |||
Allison Transmission, Inc. 5% 10/1/24 (a) | 1,295,000 | 1,320,900 | |
IHO Verwaltungs GmbH: | |||
4.125% 9/15/21 pay-in-kind (a)(b) | 535,000 | 547,706 | |
4.5% 9/15/23 pay-in-kind (a)(b) | 365,000 | 369,563 | |
4.75% 9/15/26 pay-in-kind (a)(b) | 440,000 | 438,900 | |
The Goodyear Tire & Rubber Co. 5% 5/31/26 | 1,900,000 | 1,916,625 | |
ZF North America Capital, Inc. 4.75% 4/29/25 (a) | 3,485,000 | 3,676,675 | |
TOTAL AUTOMOTIVE & AUTO PARTS | 8,270,369 | ||
Banks & Thrifts - 1.0% | |||
Ally Financial, Inc.: | |||
4.25% 4/15/21 | 1,410,000 | 1,424,100 | |
5.75% 11/20/25 | 1,540,000 | 1,576,575 | |
Royal Bank of Scotland Group PLC 5.125% 5/28/24 | 4,100,000 | 4,060,550 | |
TOTAL BANKS & THRIFTS | 7,061,225 | ||
Broadcasting - 0.7% | |||
AMC Networks, Inc. 5% 4/1/24 | 1,990,000 | 2,014,875 | |
Sirius XM Radio, Inc. 5.375% 7/15/26 (a) | 2,845,000 | 2,889,467 | |
TOTAL BROADCASTING | 4,904,342 | ||
Building Materials - 1.6% | |||
Building Materials Corp. of America: | |||
5.375% 11/15/24 (a) | 6,750,000 | 6,977,813 | |
6% 10/15/25 (a) | 1,585,000 | 1,691,908 | |
Eagle Materials, Inc. 4.5% 8/1/26 | 900,000 | 907,484 | |
Masco Corp. 4.375% 4/1/26 | 955,000 | 993,200 | |
TOTAL BUILDING MATERIALS | 10,570,405 | ||
Cable/Satellite TV - 4.2% | |||
Altice U.S. Finance SA: | |||
5.375% 7/15/23 (a) | 11,745,000 | 12,015,722 | |
5.5% 5/15/26 (a) | 1,870,000 | 1,907,400 | |
CCO Holdings LLC/CCO Holdings Capital Corp.: | |||
5.125% 5/1/23 (a) | 610,000 | 629,825 | |
5.5% 5/1/26 (a) | 5,000,000 | 5,121,900 | |
CSC Holdings, Inc. 5.5% 4/15/27 (a) | 1,745,000 | 1,770,084 | |
DISH DBS Corp. 5.125% 5/1/20 | 3,155,000 | 3,265,425 | |
Virgin Media Secured Finance PLC: | |||
5.5% 1/15/25 (a) | 590,000 | 604,750 | |
5.5% 8/15/26 (a) | 2,035,000 | 2,052,806 | |
Ziggo Secured Finance BV 5.5% 1/15/27 (a) | 1,470,000 | 1,451,625 | |
TOTAL CABLE/SATELLITE TV | 28,819,537 | ||
Capital Goods - 0.3% | |||
Belden, Inc. 5.25% 7/15/24 (a) | 2,000,000 | 2,015,000 | |
Chemicals - 0.1% | |||
Versum Materials, Inc. 5.5% 9/30/24 (a) | 400,000 | 409,000 | |
Consumer Products - 0.6% | |||
Edgewell Personal Care Co. 5.5% 6/15/25 (a) | 3,930,000 | 3,979,125 | |
Containers - 1.1% | |||
Ardagh Packaging Finance PLC/Ardagh MP Holdings U.S.A., Inc.: | |||
3.8503% 12/15/19 (a)(b) | 3,565,000 | 3,622,931 | |
4.067% 5/15/21 (a)(b) | 1,415,000 | 1,443,300 | |
4.625% 5/15/23 (a) | 840,000 | 848,400 | |
Crown Americas LLC/Crown Americas Capital Corp. V 4.25% 9/30/26 (a) | 1,300,000 | 1,275,625 | |
TOTAL CONTAINERS | 7,190,256 | ||
Diversified Financial Services - 8.2% | |||
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust: | |||
3.95% 2/1/22 | 1,860,000 | 1,895,749 | |
4.625% 7/1/22 | 1,305,000 | 1,362,094 | |
5% 10/1/21 | 2,995,000 | 3,182,188 | |
Aircastle Ltd.: | |||
5% 4/1/23 | 490,000 | 507,150 | |
5.125% 3/15/21 | 1,340,000 | 1,422,075 | |
FLY Leasing Ltd.: | |||
6.375% 10/15/21 | 1,970,000 | 2,014,325 | |
6.75% 12/15/20 | 5,700,000 | 5,942,250 | |
Icahn Enterprises LP/Icahn Enterprises Finance Corp.: | |||
4.875% 3/15/19 | 2,379,000 | 2,363,917 | |
5.875% 2/1/22 | 11,220,000 | 10,673,025 | |
6% 8/1/20 | 7,325,000 | 7,196,813 | |
ILFC E-Capital Trust I 4% 12/21/65 (a)(b) | 580,000 | 462,550 | |
ILFC E-Capital Trust II 4.25% 12/21/65 (a)(b) | 2,430,000 | 1,974,375 | |
International Lease Finance Corp. 6.25% 5/15/19 | 2,410,000 | 2,605,813 | |
MSCI, Inc.: | |||
4.75% 8/1/26 (a) | 2,135,000 | 2,151,013 | |
5.25% 11/15/24 (a) | 1,370,000 | 1,438,500 | |
Navient Corp.: | |||
5% 10/26/20 | 150,000 | 148,125 | |
5.875% 3/25/21 | 1,270,000 | 1,271,588 | |
5.875% 10/25/24 | 245,000 | 218,663 | |
SLM Corp.: | |||
4.875% 6/17/19 | 4,185,000 | 4,221,619 | |
5.5% 1/15/19 | 3,080,000 | 3,141,600 | |
5.5% 1/25/23 | 1,990,000 | 1,805,925 | |
TOTAL DIVERSIFIED FINANCIAL SERVICES | 55,999,357 | ||
Energy - 11.5% | |||
Antero Resources Corp.: | |||
5.125% 12/1/22 | 5,421,000 | 5,461,658 | |
5.625% 6/1/23 (Reg. S) | 3,565,000 | 3,636,300 | |
Antero Resources Finance Corp. 5.375% 11/1/21 | 1,490,000 | 1,512,350 | |
Cheniere Corpus Christi Holdings LLC 7% 6/30/24 (a) | 1,000,000 | 1,060,000 | |
Concho Resources, Inc. 5.5% 4/1/23 | 1,500,000 | 1,534,500 | |
CVR Refining LLC/Coffeyville Finance, Inc. 6.5% 11/1/22 | 1,760,000 | 1,628,000 | |
Ensco PLC: | |||
4.5% 10/1/24 | 375,000 | 300,000 | |
4.7% 3/15/21 | 1,080,000 | 997,380 | |
5.2% 3/15/25 | 2,055,000 | 1,671,619 | |
Gibson Energy, Inc. 6.75% 7/15/21 (a) | 3,265,000 | 3,354,788 | |
Hilcorp Energy I LP/Hilcorp Finance Co.: | |||
5% 12/1/24 (a) | 2,495,000 | 2,432,625 | |
5.75% 10/1/25 (a) | 1,015,000 | 1,017,538 | |
7.625% 4/15/21 (a) | 185,000 | 189,625 | |
Noble Holding International Ltd. 4.625% 3/1/21 | 2,880,000 | 2,432,062 | |
NRG Yield Operating LLC 5% 9/15/26 (a) | 1,340,000 | 1,299,800 | |
PBF Holding Co. LLC/PBF Finance Corp. 8.25% 2/15/20 | 1,265,000 | 1,290,300 | |
Pride International, Inc. 6.875% 8/15/20 | 1,480,000 | 1,505,900 | |
Sabine Pass Liquefaction LLC: | |||
5% 3/15/27 (a) | 1,450,000 | 1,475,375 | |
5.625% 2/1/21 (b) | 4,470,000 | 4,704,675 | |
5.625% 3/1/25 | 9,925,000 | 10,502,139 | |
5.75% 5/15/24 | 7,460,000 | 7,888,950 | |
5.875% 6/30/26 (a) | 1,270,000 | 1,368,679 | |
6.25% 3/15/22 | 1,075,000 | 1,177,125 | |
Southwestern Energy Co.: | |||
5.8% 1/23/20 (b) | 975,000 | 970,125 | |
6.7% 1/23/25 (b) | 535,000 | 509,588 | |
Sunoco LP/Sunoco Finance Corp. 5.5% 8/1/20 | 1,595,000 | 1,618,925 | |
Targa Resources Partners LP/Targa Resources Partners Finance Corp.: | |||
4.125% 11/15/19 | 2,120,000 | 2,138,550 | |
5.125% 2/1/25 (a) | 390,000 | 389,025 | |
5.25% 5/1/23 | 1,445,000 | 1,434,307 | |
5.375% 2/1/27 (a) | 390,000 | 390,000 | |
6.75% 3/15/24 | 1,875,000 | 2,006,250 | |
6.875% 2/1/21 | 940,000 | 972,900 | |
Tesoro Logistics LP/Tesoro Logistics Finance Corp.: | |||
5.5% 10/15/19 | 510,000 | 544,425 | |
5.875% 10/1/20 | 545,000 | 560,669 | |
6.125% 10/15/21 | 575,000 | 601,594 | |
6.25% 10/15/22 | 1,010,000 | 1,070,600 | |
The Williams Companies, Inc.: | |||
3.7% 1/15/23 | 1,385,000 | 1,339,988 | |
4.55% 6/24/24 | 1,850,000 | 1,882,375 | |
Weatherford International Ltd.: | |||
4.5% 4/15/22 | 855,000 | 769,500 | |
7.75% 6/15/21 | 950,000 | 959,500 | |
8.25% 6/15/23 | 1,470,000 | 1,521,450 | |
TOTAL ENERGY | 78,121,159 | ||
Environmental - 0.8% | |||
Covanta Holding Corp. 5.875% 3/1/24 | 5,175,000 | 5,103,844 | |
Food & Drug Retail - 0.4% | |||
Tesco PLC 6.15% 11/15/37 (a) | 2,750,000 | 2,742,858 | |
Food/Beverage/Tobacco - 5.5% | |||
C&S Group Enterprises LLC 5.375% 7/15/22 (a) | 2,000,000 | 1,940,000 | |
Darling International, Inc. 5.375% 1/15/22 | 1,492,000 | 1,555,410 | |
ESAL GmbH 6.25% 2/5/23 (a) | 13,060,000 | 12,570,250 | |
JBS Investments GmbH: | |||
7.25% 4/3/24 (a) | 385,000 | 388,850 | |
7.75% 10/28/20 (a) | 3,020,000 | 3,148,350 | |
JBS U.S.A. LLC/JBS U.S.A. Finance, Inc.: | |||
5.875% 7/15/24 (a) | 4,470,000 | 4,492,350 | |
7.25% 6/1/21 (a) | 965,000 | 989,125 | |
7.25% 6/1/21 (a) | 2,100,000 | 2,152,500 | |
Minerva Luxembourg SA 6.5% 9/20/26 (a) | 1,430,000 | 1,400,542 | |
Vector Group Ltd. 7.75% 2/15/21 | 8,250,000 | 8,641,875 | |
TOTAL FOOD/BEVERAGE/TOBACCO | 37,279,252 | ||
Gaming - 5.5% | |||
GLP Capital LP/GLP Financing II, Inc. 5.375% 4/15/26 | 330,000 | 350,625 | |
MCE Finance Ltd. 5% 2/15/21 (a) | 11,290,000 | 11,289,142 | |
MGM Growth Properties Operating Partnership LP 4.5% 9/1/26 (a) | 1,455,000 | 1,429,538 | |
Scientific Games Corp. 7% 1/1/22 (a) | 5,825,000 | 6,195,470 | |
Wynn Macau Ltd. 5.25% 10/15/21 (a) | 18,280,000 | 18,343,780 | |
TOTAL GAMING | 37,608,555 | ||
Healthcare - 2.6% | |||
Centene Corp. 4.75% 1/15/25 (c) | 1,310,000 | 1,304,269 | |
HCA Holdings, Inc.: | |||
4.5% 2/15/27 | 1,785,000 | 1,762,688 | |
5% 3/15/24 | 1,385,000 | 1,442,478 | |
5.25% 6/15/26 | 3,540,000 | 3,699,300 | |
HealthSouth Corp. 5.125% 3/15/23 | 355,000 | 358,550 | |
IMS Health, Inc. 5% 10/15/26 (a) | 885,000 | 914,869 | |
Mallinckrodt International Finance SA/Mallinckrodt CB LLC: | |||
4.875% 4/15/20 (a) | 285,000 | 286,069 | |
5.5% 4/15/25 (a) | 270,000 | 249,750 | |
MPT Operating Partnership LP/MPT Finance Corp.: | |||
5.25% 8/1/26 | 270,000 | 275,400 | |
6.375% 3/1/24 | 880,000 | 948,200 | |
Sabra Health Care LP/Sabra Capital Corp.: | |||
5.375% 6/1/23 | 620,000 | 632,400 | |
5.5% 2/1/21 | 2,570,000 | 2,679,225 | |
Teleflex, Inc. 4.875% 6/1/26 | 2,155,000 | 2,208,875 | |
Universal Health Services, Inc. 4.75% 8/1/22 (a) | 1,200,000 | 1,232,400 | |
TOTAL HEALTHCARE | 17,994,473 | ||
Homebuilders/Real Estate - 2.0% | |||
CalAtlantic Group, Inc. 5.25% 6/1/26 | 2,000,000 | 1,980,000 | |
CBRE Group, Inc. 5% 3/15/23 | 3,805,000 | 3,995,280 | |
Lennar Corp. 4.875% 12/15/23 | 2,500,000 | 2,550,000 | |
PulteGroup, Inc.: | |||
4.25% 3/1/21 | 2,385,000 | 2,504,250 | |
5% 1/15/27 | 895,000 | 888,288 | |
VEREIT Operating Partnership LP: | |||
4.125% 6/1/21 | 650,000 | 676,000 | |
4.875% 6/1/26 | 650,000 | 683,196 | |
TOTAL HOMEBUILDERS/REAL ESTATE | 13,277,014 | ||
Hotels - 0.2% | |||
Hilton Escrow Issuer LLC 4.25% 9/1/24 (a) | 1,625,000 | 1,629,063 | |
Leisure - 0.2% | |||
Speedway Motorsports, Inc. 5.125% 2/1/23 | 1,395,000 | 1,405,142 | |
Metals/Mining - 0.9% | |||
Freeport-McMoRan, Inc.: | |||
3.55% 3/1/22 | 4,100,000 | 3,761,750 | |
3.875% 3/15/23 | 1,185,000 | 1,069,463 | |
4.55% 11/14/24 | 1,540,000 | 1,412,950 | |
TOTAL METALS/MINING | 6,244,163 | ||
Publishing/Printing - 0.2% | |||
R.R. Donnelley & Sons Co. 6.5% 11/15/23 | 1,285,000 | 1,249,663 | |
Services - 3.2% | |||
APX Group, Inc. 6.375% 12/1/19 | 15,055,000 | 15,525,469 | |
Aramark Services, Inc. 4.75% 6/1/26 (a) | 925,000 | 925,000 | |
United Rentals North America, Inc. 4.625% 7/15/23 | 5,282,000 | 5,453,665 | |
TOTAL SERVICES | 21,904,134 | ||
Steel - 2.7% | |||
Steel Dynamics, Inc.: | |||
5.125% 10/1/21 | 11,445,000 | 11,931,413 | |
5.25% 4/15/23 | 1,045,000 | 1,081,575 | |
5.5% 10/1/24 | 575,000 | 606,625 | |
6.125% 8/15/19 | 4,845,000 | 5,014,575 | |
TOTAL STEEL | 18,634,188 | ||
Super Retail - 0.6% | |||
L Brands, Inc.: | |||
6.75% 7/1/36 | 3,280,000 | 3,481,720 | |
6.875% 11/1/35 | 870,000 | 922,200 | |
TOTAL SUPER RETAIL | 4,403,920 | ||
Technology - 7.3% | |||
Lucent Technologies, Inc.: | |||
6.45% 3/15/29 | 7,325,000 | 8,075,813 | |
6.5% 1/15/28 | 485,000 | 516,525 | |
Micron Technology, Inc.: | |||
5.25% 8/1/23 (a) | 1,760,000 | 1,724,800 | |
5.25% 1/15/24 (a) | 580,000 | 565,500 | |
5.5% 2/1/25 | 615,000 | 602,891 | |
5.625% 1/15/26 (a) | 2,825,000 | 2,740,250 | |
NCR Corp.: | |||
4.625% 2/15/21 | 475,000 | 480,938 | |
5% 7/15/22 | 1,465,000 | 1,487,883 | |
Nuance Communications, Inc.: | |||
5.375% 8/15/20 (a) | 5,360,000 | 5,507,400 | |
6% 7/1/24 (a) | 1,710,000 | 1,795,500 | |
NXP BV/NXP Funding LLC: | |||
3.875% 9/1/22 (a) | 2,225,000 | 2,344,594 | |
4.125% 6/1/21 (a) | 4,490,000 | 4,793,075 | |
4.625% 6/15/22 (a) | 1,560,000 | 1,700,400 | |
4.625% 6/1/23 (a) | 905,000 | 990,975 | |
Open Text Corp. 5.875% 6/1/26 (a) | 4,225,000 | 4,499,625 | |
Qorvo, Inc.: | |||
6.75% 12/1/23 | 6,560,000 | 7,183,200 | |
7% 12/1/25 | 1,836,000 | 2,010,420 | |
Rackspace Hosting, Inc. 6.5% 1/15/24 (a) | 1,125,000 | 1,286,719 | |
Sensata Technologies BV 5% 10/1/25 (a) | 1,170,000 | 1,199,250 | |
Sensata Technologies UK Financing Co. PLC 6.25% 2/15/26 (a) | 435,000 | 470,888 | |
TOTAL TECHNOLOGY | 49,976,646 | ||
Telecommunications - 10.2% | |||
Altice Financing SA: | |||
6.5% 1/15/22 (a) | 3,575,000 | 3,736,769 | |
6.625% 2/15/23 (a) | 4,860,000 | 5,005,800 | |
7.5% 5/15/26 (a) | 3,400,000 | 3,502,000 | |
Columbus International, Inc. 7.375% 3/30/21 (a) | 8,764,000 | 9,377,480 | |
DigitalGlobe, Inc. 5.25% 2/1/21 (a) | 5,750,000 | 5,793,125 | |
Millicom International Cellular SA 6% 3/15/25 (a) | 4,460,000 | 4,502,147 | |
Sable International Finance Ltd. 6.875% 8/1/22 (a) | 5,025,000 | 5,200,875 | |
Sprint Communications, Inc. 7% 3/1/20 (a) | 3,875,000 | 4,214,063 | |
T-Mobile U.S.A., Inc.: | |||
6% 3/1/23 | 3,765,000 | 3,962,663 | |
6.375% 3/1/25 | 6,210,000 | 6,656,375 | |
6.5% 1/15/24 | 2,535,000 | 2,712,450 | |
6.5% 1/15/26 | 1,175,000 | 1,288,035 | |
6.625% 4/1/23 | 1,755,000 | 1,865,003 | |
6.731% 4/28/22 | 1,340,000 | 1,400,300 | |
Telecom Italia Capital SA: | |||
6% 9/30/34 | 2,590,000 | 2,577,050 | |
6.375% 11/15/33 | 2,670,000 | 2,735,415 | |
Telecom Italia SpA 5.303% 5/30/24 (a) | 650,000 | 660,563 | |
Wind Acquisition Finance SA 4.75% 7/15/20 (a) | 4,070,000 | 4,090,350 | |
TOTAL TELECOMMUNICATIONS | 69,280,463 | ||
Utilities - 6.2% | |||
Calpine Corp. 5.25% 6/1/26 (a) | 2,755,000 | 2,796,325 | |
Dolphin Subsidiary II, Inc. 7.25% 10/15/21 | 6,140,000 | 6,408,625 | |
DPL, Inc. 6.75% 10/1/19 | 2,580,000 | 2,676,750 | |
NRG Energy, Inc. 6.625% 1/15/27 (a) | 1,265,000 | 1,184,748 | |
NSG Holdings II LLC/NSG Holdings, Inc. 7.75% 12/15/25 (a) | 10,427,564 | 11,209,631 | |
PPL Energy Supply LLC 6.5% 6/1/25 | 530,000 | 442,550 | |
RJS Power Holdings LLC 4.625% 7/15/19 (a)(b) | 5,975,000 | 5,676,250 | |
The AES Corp.: | |||
3.8421% 6/1/19 (b) | 532,000 | 531,335 | |
4.875% 5/15/23 | 1,820,000 | 1,805,786 | |
6% 5/15/26 | 1,455,000 | 1,498,650 | |
7.375% 7/1/21 | 6,925,000 | 7,807,938 | |
TOTAL UTILITIES | 42,038,588 | ||
TOTAL NONCONVERTIBLE BONDS | |||
(Cost $529,991,750) | 546,251,790 | ||
Bank Loan Obligations - 6.0% | |||
Aerospace - 0.6% | |||
TransDigm, Inc.: | |||
Tranche D, term loan 3.8316% 6/4/21 (b) | 1,498,964 | 1,495,592 | |
Tranche F, term loan 3.75% 6/9/23 (b) | 2,575,000 | 2,563,747 | |
TOTAL AEROSPACE | 4,059,339 | ||
Air Transportation - 0.8% | |||
Air Canada Tranche B, term loan 3.6143% 10/6/23 (b) | 1,350,000 | 1,351,688 | |
American Airlines, Inc. Tranche B, term loan 3.25% 10/10/21 (b) | 3,943,708 | 3,944,260 | |
TOTAL AIR TRANSPORTATION | 5,295,948 | ||
Broadcasting - 0.2% | |||
Nielsen Finance LLC Tranche B 3LN, term loan 3.0311% 10/4/23 (b) | 1,210,000 | 1,214,731 | |
Cable/Satellite TV - 0.4% | |||
CSC Holdings LLC Tranche B, term loan 3.8761% 10/11/24 (b) | 1,368,421 | 1,372,704 | |
Ziggo Secured Finance Partnership Tranche D, term loan 3.5346% 8/31/24 (b) | 1,460,000 | 1,459,343 | |
TOTAL CABLE/SATELLITE TV | 2,832,047 | ||
Chemicals - 0.0% | |||
MacDermid, Inc. term loan 5% 6/7/23 (b) | 225,000 | 226,688 | |
Containers - 0.2% | |||
Ardagh Holdings U.S.A., Inc. Tranche B, term loan 4% 12/17/21 (b) | 1,585,272 | 1,599,635 | |
Food & Drug Retail - 0.0% | |||
Albertson's LLC Tranche B 6LN, term loan 4.75% 6/22/23 (b) | 297,143 | 300,239 | |
Food/Beverage/Tobacco - 0.1% | |||
Chobani LLC Tranche B, term loan 5.25% 10/7/23 (b) | 775,000 | 783,238 | |
Gaming - 0.2% | |||
Scientific Games Corp. Tranche B 2LN, term loan 6% 10/1/21 (b) | 1,630,950 | 1,637,066 | |
Healthcare - 1.4% | |||
Horizon Pharmaceuticals, Inc. term loan 5/7/21 (d) | 120,000 | 120,150 | |
Valeant Pharmaceuticals International, Inc. Tranche BD 2LN, term loan 5% 2/13/19 (b) | 9,462,638 | 9,432,262 | |
TOTAL HEALTHCARE | 9,552,412 | ||
Leisure - 0.0% | |||
24 Hour Fitness Worldwide, Inc. Tranche B, term loan 4.75% 5/30/21 (b) | 151,513 | 147,914 | |
Publishing/Printing - 0.1% | |||
McGraw-Hill Global Education Holdings, LLC term loan 5% 5/4/22 (b) | 389,025 | 387,971 | |
Services - 0.8% | |||
Garda World Security Corp.: | |||
term loan 4% 11/8/20 (b) | 4,174,861 | 4,120,922 | |
Tranche DD, term loan 4.0039% 11/8/20 (b) | 996,306 | 983,434 | |
TOTAL SERVICES | 5,104,356 | ||
Super Retail - 0.2% | |||
PetSmart, Inc. term loan 4% 3/11/22 (b) | 1,465,281 | 1,468,152 | |
Technology - 0.4% | |||
ON Semiconductor Corp. term loan 3.7772% 3/31/23 (b) | 1,590,000 | 1,598,745 | |
Rackspace Hosting, Inc. term loan 10/26/23 (d) | 335,000 | 336,779 | |
TTM Technologies, Inc. Tranche B 1LN, term loan 5.25% 5/31/21 (b) | 425,000 | 426,063 | |
TOTAL TECHNOLOGY | 2,361,587 | ||
Utilities - 0.6% | |||
Calpine Construction Finance Co. LP Tranche B 1LN, term loan 3.09% 5/3/20 (b) | 4,024,960 | 3,994,773 | |
TOTAL BANK LOAN OBLIGATIONS | |||
(Cost $40,502,753) | 40,966,096 | ||
Preferred Securities - 9.4% | |||
Banks & Thrifts - 9.1% | |||
Bank of America Corp.: | |||
6.1% (b)(e) | 2,835,000 | 2,983,392 | |
6.25% (b)(e) | 10,440,000 | 11,038,642 | |
6.5% (b)(e) | 3,150,000 | 3,422,813 | |
Barclays Bank PLC 7.625% 11/21/22 | 10,410,000 | 11,973,904 | |
Barclays PLC 6.625% (b)(e) | 2,490,000 | 2,305,875 | |
BNP Paribas SA 7.375% (a)(b)(e) | 1,795,000 | 1,868,739 | |
Citigroup, Inc.: | |||
5.875% (b)(e) | 3,785,000 | 3,865,167 | |
5.95% (b)(e) | 12,010,000 | 12,610,337 | |
5.95% (b)(e) | 1,070,000 | 1,110,913 | |
6.125% (b)(e) | 2,475,000 | 2,657,395 | |
Credit Agricole SA: | |||
6.625% (a)(b)(e) | 5,703,000 | 5,586,649 | |
7.875% (a)(b)(e) | 1,295,000 | 1,323,124 | |
JPMorgan Chase & Co. 6.1% (b)(e) | 985,000 | 1,040,254 | |
TOTAL BANKS & THRIFTS | 61,787,204 | ||
Diversified Financial Services - 0.3% | |||
American Express Co. 4.9% (b)(e) | 1,925,000 | 1,901,634 | |
TOTAL PREFERRED SECURITIES | |||
(Cost $61,376,736) | 63,688,838 | ||
Shares | Value | ||
Money Market Funds - 4.3% | |||
Fidelity Cash Central Fund, 0.41% (f) | |||
(Cost $29,222,397) | 29,217,494 | 29,226,259 | |
TOTAL INVESTMENT PORTFOLIO - 99.9% | |||
(Cost $661,093,636) | 680,132,983 | ||
NET OTHER ASSETS (LIABILITIES) - 0.1% | 977,445 | ||
NET ASSETS - 100% | $681,110,428 |
Legend
(a) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $255,070,443 or 37.4% of net assets.
(b) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end.
(c) Security or a portion of the security purchased on a delayed delivery or when-issued basis.
(d) The coupon rate will be determined upon settlement of the loan after period end.
(e) Security is perpetual in nature with no stated maturity date.
(f) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
Fund | Income earned |
Fidelity Cash Central Fund | $55,007 |
Total | $55,007 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Corporate Bonds | $546,251,790 | $-- | $546,251,790 | $-- |
Bank Loan Obligations | 40,966,096 | -- | 40,966,096 | -- |
Preferred Securities | 63,688,838 | -- | 63,688,838 | -- |
Money Market Funds | 29,226,259 | 29,226,259 | -- | -- |
Total Investments in Securities: | $680,132,983 | $29,226,259 | $650,906,724 | $-- |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
United States of America | 72.9% |
Cayman Islands | 5.6% |
Luxembourg | 4.0% |
United Kingdom | 4.0% |
Austria | 2.4% |
Canada | 2.4% |
Ireland | 2.2% |
Netherlands | 1.9% |
Bermuda | 1.6% |
Barbados | 1.4% |
France | 1.3% |
Others (Individually Less Than 1%) | 0.3% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
October 31, 2016 (Unaudited) | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $631,871,239) | $650,906,724 | |
Fidelity Central Funds (cost $29,222,397) | 29,226,259 | |
Total Investments (cost $661,093,636) | $680,132,983 | |
Cash | 299,750 | |
Receivable for investments sold | 269,969 | |
Receivable for fund shares sold | 539,059 | |
Interest receivable | 8,212,316 | |
Distributions receivable from Fidelity Central Funds | 8,474 | |
Prepaid expenses | 1,869 | |
Total assets | 689,464,420 | |
Liabilities | ||
Payable for investments purchased | ||
Regular delivery | $5,573,849 | |
Delayed delivery | 1,310,000 | |
Payable for fund shares redeemed | 287,131 | |
Distributions payable | 681,467 | |
Accrued management fee | 321,292 | |
Other affiliated payables | 138,105 | |
Other payables and accrued expenses | 42,148 | |
Total liabilities | 8,353,992 | |
Net Assets | $681,110,428 | |
Net Assets consist of: | ||
Paid in capital | $694,068,843 | |
Distributions in excess of net investment income | (57,679) | |
Accumulated undistributed net realized gain (loss) on investments | (31,940,083) | |
Net unrealized appreciation (depreciation) on investments | 19,039,347 | |
Net Assets, for 80,159,300 shares outstanding | $681,110,428 | |
Net Asset Value, offering price and redemption price per share ($681,110,428 ÷ 80,159,300 shares) | $8.50 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended October 31, 2016 (Unaudited) | ||
Investment Income | ||
Dividends | $2,289,001 | |
Interest | 17,787,231 | |
Income from Fidelity Central Funds | 55,007 | |
Total income | 20,131,239 | |
Expenses | ||
Management fee | $1,998,833 | |
Transfer agent fees | 711,517 | |
Accounting fees and expenses | 135,972 | |
Custodian fees and expenses | 5,453 | |
Independent trustees' fees and expenses | 1,551 | |
Registration fees | 33,837 | |
Audit | 43,683 | |
Legal | 1,063 | |
Miscellaneous | 3,562 | |
Total expenses before reductions | 2,935,471 | |
Expense reductions | (2,293) | 2,933,178 |
Net investment income (loss) | 17,198,061 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 582,357 | |
Fidelity Central Funds | 1,748 | |
Total net realized gain (loss) | 584,105 | |
Change in net unrealized appreciation (depreciation) on investment securities | 21,370,814 | |
Net gain (loss) | 21,954,919 | |
Net increase (decrease) in net assets resulting from operations | $39,152,980 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended October 31, 2016 (Unaudited) | Year ended April 30, 2016 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $17,198,061 | $34,671,455 |
Net realized gain (loss) | 584,105 | (31,373,324) |
Change in net unrealized appreciation (depreciation) | 21,370,814 | (12,385,134) |
Net increase (decrease) in net assets resulting from operations | 39,152,980 | (9,087,003) |
Distributions to shareholders from net investment income | (16,084,976) | (34,011,201) |
Share transactions | ||
Proceeds from sales of shares | 136,726,068 | 399,113,904 |
Reinvestment of distributions | 12,158,961 | 28,452,979 |
Cost of shares redeemed | (260,729,113) | (240,281,822) |
Net increase (decrease) in net assets resulting from share transactions | (111,844,084) | 187,285,061 |
Redemption fees | 154,735 | 131,537 |
Total increase (decrease) in net assets | (88,621,345) | 144,318,394 |
Net Assets | ||
Beginning of period | 769,731,773 | 625,413,379 |
End of period | $681,110,428 | $769,731,773 |
Other Information | ||
Distributions in excess of net investment income end of period | $(57,679) | $(1,170,764) |
Shares | ||
Sold | 16,347,995 | 47,996,455 |
Issued in reinvestment of distributions | 1,448,324 | 3,451,643 |
Redeemed | (31,267,714) | (29,436,492) |
Net increase (decrease) | (13,471,395) | 22,011,606 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Focused High Income Fund
Six months ended (Unaudited) October 31, | Years ended April 30, | |||||
2016 | 2016 | 2015 | 2014 | 2013 | 2012 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $8.22 | $8.73 | $9.12 | $9.55 | $9.23 | $9.42 |
Income from Investment Operations | ||||||
Net investment income (loss)A | .202 | .396 | .390 | .444 | .489 | .538 |
Net realized and unrealized gain (loss) | .265 | (.519) | (.116) | (.102) | .402 | .045 |
Total from investment operations | .467 | (.123) | .274 | .342 | .891 | .583 |
Distributions from net investment income | (.189) | (.389) | (.388) | (.438) | (.468) | (.544) |
Distributions from net realized gain | – | – | (.278) | (.335) | (.104) | (.230) |
Total distributions | (.189) | (.389) | (.666) | (.773) | (.572) | (.774) |
Redemption fees added to paid in capitalA | .002 | .002 | .002 | .001 | .001 | .001 |
Net asset value, end of period | $8.50 | $8.22 | $8.73 | $9.12 | $9.55 | $9.23 |
Total ReturnB,C | 5.75% | (1.30)% | 3.20% | 3.92% | 9.99% | 6.65% |
Ratios to Average Net AssetsD,E | ||||||
Expenses before reductions | .82%F | .85% | .85% | .83% | .81% | .82% |
Expenses net of fee waivers, if any | .82%F | .85% | .85% | .83% | .81% | .82% |
Expenses net of all reductions | .82%F | .85% | .85% | .83% | .81% | .82% |
Net investment income (loss) | 4.78%F | 4.80% | 4.40% | 4.86% | 5.23% | 5.92% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $681,110 | $769,732 | $625,413 | $754,153 | $902,605 | $941,643 |
Portfolio turnover rateG | 56%F | 47% | 62% | 77% | 47% | 52% |
A Calculated based on average shares outstanding during the period.
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
F Annualized
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements (Unaudited)
For the period ended October 31, 2016
1. Organization.
Fidelity Focused High Income Fund (the Fund) is a fund of Fidelity Summer Street Trust (the Trust) and is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds, bank loan obligations and preferred securities are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances. The Fund invests a significant portion of its assets in below investment grade securities. The value of these securities can be more volatile due to changes in the credit quality of the issuer and is sensitive to changes in economic, market and regulatory conditions.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016 is included at the end of the Fund's Schedule of Investments.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.
Expenses. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Dividends are declared and recorded daily and paid monthly from net investment income. Distributions from realized gains, if any, are declared and recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to market discount, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $23,113,664 |
Gross unrealized depreciation | (3,051,877) |
Net unrealized appreciation (depreciation) on securities | $20,061,787 |
Tax cost | $660,071,196 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of prior fiscal period end and is subject to adjustment.
No expiration | |
Short-term | $(18,196,158) |
Long-term | (14,267,510) |
Total capital loss carryforward | $(32,463,668) |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.00% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Delayed Delivery Transactions and When-Issued Securities. During the period, the Fund transacted in securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. The securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Loans and Other Direct Debt Instruments. The Fund invests in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. These instruments may be in the form of loans, trade claims or other receivables and may include standby financing commitments such as revolving credit facilities that obligate the Fund to supply additional cash to the borrower on demand. Loans may be acquired through assignment or participation. The Fund did not have any unfunded loan commitments, which are contractual obligations for future funding, at period end.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $191,862,813 and $282,009,085, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and an annualized group fee rate that averaged .11% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .56% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .20% of average net assets.
Accounting Fees. Fidelity Service Company, Inc. (FSC),an affiliate of the investment adviser, maintains the Fund's accounting records. The fee is based on the level of average net assets for each month.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,204 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Expense Reductions.
Through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $806.
In addition, during the period the investment adviser reimbursed and/waived a portion of operating expenses in the amount of $1,487.
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (May 1, 2016 to October 31, 2016).
Actual Expenses
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Annualized Expense Ratio-A | Beginning Account Value May 1, 2016 | Ending Account Value October 31, 2016 | Expenses Paid During Period-B May 1, 2016 to October 31, 2016 | |
Actual | .82% | $1,000.00 | $1,057.50 | $4.25 |
Hypothetical-C | $1,000.00 | $1,021.07 | $4.18 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
C 5% return per year before expenses
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Focused High Income Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to all of the Fidelity funds.
At its July 2016 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and would be realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by FMR, the sub-advisers (together with FMR, the Investment Advisers), and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.In 2014, the Board formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs; (iv) broadening eligibility requirements for certain lower-priced share classes of, and streamlining the fee structure for, certain existing equity index funds; (v) lowering expense caps for certain existing funds and classes to reduce expenses paid by shareholders; (vi) eliminating redemption fees for certain variable insurance product funds and classes; (vii) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (viii) launching a lower cost share class for use by the Freedom Index Fund product line; (ix) rationalizing product lines and gaining increased efficiencies through fund mergers and share class consolidations; (x) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; (xi) implementing investment enhancements to further strengthen Fidelity's target date product line to increase investors' probability of success in achieving their goals; (xii) accelerating the conversion of all remaining Class B shares to Class A shares, which have a lower expense structure; and (xiii) implementing changes to Fidelity's money market fund product line in response to recent regulatory reforms.Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history.The Board took into account discussions with representatives of the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund, for different time periods, measured against a securities market index ("benchmark index") and a peer group of funds with similar objectives ("peer group"), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for the fund and an appropriate benchmark index and peer group for the most recent one-, three-, and five-year periods, as shown below. Returns are shown compared to the 25th percentile (top of box, 75% beaten) and 75th percentile (bottom of box, 25% beaten) of the peer universe.Fidelity Focused High Income Fund
Fidelity Focused High Income Fund
Corporate Headquarters
245 Summer St.
Boston, MA 02210
www.fidelity.com
FFH-SANN-1216
1.801609.113
Fidelity Advisor® Short Duration High Income Fund - Semi-Annual Report October 31, 2016 Class A, Class T, Class C and Class I are classes of Fidelity® Short Duration High Income Fund |
Contents
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2016 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Fund nor Fidelity Distributors Corporation is a bank.
Investment Summary (Unaudited)
Top Five Holdings as of October 31, 2016
(by issuer, excluding cash equivalents) | % of fund's net assets | % of fund's net assets 6 months ago |
Dynegy, Inc. | 2.8 | 1.7 |
Kindred Healthcare, Inc. | 2.8 | 1.7 |
NXP BV/NXP Funding LLC | 2.8 | 0.0 |
Wynn Macau Ltd. | 2.6 | 2.4 |
Sprint Communications, Inc. | 2.6 | 3.0 |
13.6 |
Top Five Market Sectors as of October 31, 2016
% of fund's net assets | % of fund's net assets 6 months ago | |
Telecommunications | 13.2 | 14.7 |
Energy | 13.2 | 9.3 |
Healthcare | 10.2 | 8.3 |
Technology | 7.5 | 1.2 |
Utilities | 7.2 | 6.6 |
Quality Diversification (% of fund's net assets)
As of October 31, 2016 | ||
U.S. Government and U.S. Government Agency Obligations | 0.6% | |
AAA,AA,A | 1.2% | |
BBB | 5.4% | |
BB | 33.0% | |
B | 50.4% | |
CCC,CC,C | 7.0% | |
Not Rated | 1.3% | |
Equities | 0.2% | |
Short-Term Investments and Net Other Assets | 0.9% |
As of April 30, 2016 | ||
AAA,AA,A | 1.3% | |
BBB | 4.4% | |
BB | 36.9% | |
B | 42.2% | |
CCC,CC,C | 10.2% | |
Not Rated | 0.6% | |
Equities | 0.3% | |
Short-Term Investments and Net Other Assets | 4.1% |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes.
Asset Allocation (% of fund's net assets)
As of October 31, 2016* | ||
Nonconvertible Bonds | 84.4% | |
Convertible Bonds, Preferred Stocks | 0.2% | |
U.S. Government and U.S. Government Agency Obligations | 0.6% | |
Bank Loan Obligations | 13.0% | |
Other Investments | 0.9% | |
Short-Term Investments and Net Other Assets (Liabilities) | 0.9% |
* Foreign investments - 26.4%
As of April 30, 2016* | ||
Nonconvertible Bonds | 82.8% | |
Convertible Bonds, Preferred Stocks | 0.3% | |
Bank Loan Obligations | 11.9% | |
Other Investments | 0.9% | |
Short-Term Investments and Net Other Assets (Liabilities) | 4.1% |
* Foreign investments - 22.9%
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Investments October 31, 2016 (Unaudited)
Showing Percentage of Net Assets
Nonconvertible Bonds - 84.4% | |||
Principal Amount | Value | ||
Aerospace - 0.5% | |||
TransDigm, Inc. 6% 7/15/22 | $415,000 | $432,638 | |
Air Transportation - 5.4% | |||
Air Canada 7.75% 4/15/21 (a) | 840,000 | 921,900 | |
Air Canada Trust Series 2015-1 equipment trust certificate Class C, 5% 3/15/20 (a) | 75,000 | 75,203 | |
Allegiant Travel Co. 5.5% 7/15/19 | 725,000 | 753,094 | |
American Airlines Group, Inc.: | |||
4.625% 3/1/20 (a) | 490,000 | 493,063 | |
5.5% 10/1/19 (a) | 485,000 | 500,763 | |
U.S. Airways Group, Inc. 6.125% 6/1/18 | 1,030,000 | 1,069,913 | |
United Continental Holdings, Inc.: | |||
6% 12/1/20 | 200,000 | 215,250 | |
6.375% 6/1/18 | 500,000 | 525,625 | |
TOTAL AIR TRANSPORTATION | 4,554,811 | ||
Automotive - 0.2% | |||
Ford Motor Credit Co. LLC 2.875% 10/1/18 | 200,000 | 203,865 | |
Automotive & Auto Parts - 1.6% | |||
American Tire Distributors, Inc. 10.25% 3/1/22 (a) | 560,000 | 514,853 | |
General Motors Financial Co., Inc. 2.35% 10/4/19 | 100,000 | 99,894 | |
IHO Verwaltungs GmbH 4.125% 9/15/21 pay-in-kind (a)(b) | 600,000 | 614,250 | |
ZF North America Capital, Inc. 4% 4/29/20 (a) | 150,000 | 157,875 | |
TOTAL AUTOMOTIVE & AUTO PARTS | 1,386,872 | ||
Banks & Thrifts - 0.7% | |||
Bank of America Corp. 2.625% 4/19/21 | 250,000 | 253,032 | |
Goldman Sachs Group, Inc. 2.625% 4/25/21 | 100,000 | 101,221 | |
JPMorgan Chase & Co. 2.55% 3/1/21 | 200,000 | 203,073 | |
TOTAL BANKS & THRIFTS | 557,326 | ||
Broadcasting - 0.6% | |||
Clear Channel Communications, Inc.: | |||
5.5% 12/15/16 | 445,000 | 438,325 | |
9% 12/15/19 | 110,000 | 83,463 | |
TOTAL BROADCASTING | 521,788 | ||
Building Materials - 1.3% | |||
CEMEX S.A.B. de CV 6.5% 12/10/19 (a) | 920,000 | 982,100 | |
Standard Industries, Inc. 5.125% 2/15/21 (a) | 120,000 | 126,000 | |
TOTAL BUILDING MATERIALS | 1,108,100 | ||
Cable/Satellite TV - 2.6% | |||
Altice SA 7.75% 5/15/22 (a) | 1,000,000 | 1,044,375 | |
CSC Holdings LLC 6.75% 11/15/21 | 885,000 | 931,463 | |
Time Warner Cable, Inc. 5.85% 5/1/17 | 200,000 | 204,441 | |
TOTAL CABLE/SATELLITE TV | 2,180,279 | ||
Chemicals - 0.8% | |||
LSB Industries, Inc. 8.5% 8/1/19 | 193,000 | 179,490 | |
Nufarm Australia Ltd. 6.375% 10/15/19 (a) | 510,000 | 520,200 | |
TOTAL CHEMICALS | 699,690 | ||
Containers - 0.7% | |||
Ardagh Packaging Finance PLC/Ardagh MP Holdings U.S.A., Inc.: | |||
3.8503% 12/15/19 (a)(b) | 150,000 | 152,438 | |
4.067% 5/15/21 (a)(b) | 200,000 | 204,000 | |
7% 11/15/20 (a) | 167,647 | 172,676 | |
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer (Luxembourg) SA 4.38% 7/15/21 (a)(b) | 50,000 | 51,000 | |
TOTAL CONTAINERS | 580,114 | ||
Diversified Financial Services - 4.9% | |||
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust 3.95% 2/1/22 | 300,000 | 305,766 | |
Discover Financial Services 6.45% 6/12/17 | 200,000 | 205,964 | |
FLY Leasing Ltd.: | |||
6.375% 10/15/21 | 200,000 | 204,500 | |
6.75% 12/15/20 | 65,000 | 67,763 | |
Hyundai Capital America 2.55% 2/6/19 (a) | 100,000 | 101,496 | |
Icahn Enterprises LP/Icahn Enterprises Finance Corp.: | |||
4.875% 3/15/19 | 1,180,000 | 1,172,519 | |
5.875% 2/1/22 | 85,000 | 80,856 | |
6% 8/1/20 | 370,000 | 363,525 | |
ILFC E-Capital Trust I 4% 12/21/65 (a)(b) | 105,000 | 83,738 | |
ILFC E-Capital Trust II 4.25% 12/21/65 (a)(b) | 150,000 | 121,875 | |
IntercontinentalExchange, Inc. 2.75% 12/1/20 | 250,000 | 257,480 | |
Morgan Stanley 2.5% 4/21/21 | 250,000 | 251,805 | |
Navient Corp. 5.875% 3/25/21 | 100,000 | 100,125 | |
NiSource Finance Corp. 5.45% 9/15/20 | 102,000 | 113,812 | |
SLM Corp. 5.5% 1/15/19 | 375,000 | 382,500 | |
Springleaf Financial Corp. 7.75% 10/1/21 | 272,000 | 283,397 | |
TOTAL DIVERSIFIED FINANCIAL SERVICES | 4,097,121 | ||
Diversified Media - 1.2% | |||
21st Century Fox America, Inc. 4.5% 2/15/21 | 200,000 | 220,472 | |
Nielsen Finance LLC/Nielsen Finance Co. 5% 4/15/22 (a) | 800,000 | 816,000 | |
TOTAL DIVERSIFIED MEDIA | 1,036,472 | ||
Energy - 12.9% | |||
Antero Resources Corp. 5.125% 12/1/22 | 300,000 | 302,250 | |
Antero Resources Finance Corp. 5.375% 11/1/21 | 60,000 | 60,900 | |
Chesapeake Energy Corp.: | |||
4.875% 4/15/22 | 700,000 | 595,000 | |
6.125% 2/15/21 | 45,000 | 41,175 | |
Citgo Holding, Inc. 10.75% 2/15/20 (a) | 115,000 | 117,415 | |
Denbury Resources, Inc. 6.375% 8/15/21 | 250,000 | 206,875 | |
Ensco PLC 4.7% 3/15/21 | 790,000 | 729,565 | |
EP Energy LLC/Everest Acquisition Finance, Inc. 9.375% 5/1/20 | 270,000 | 211,950 | |
Ferrellgas LP/Ferrellgas Finance Corp.: | |||
6.5% 5/1/21 | 200,000 | 188,500 | |
6.75% 1/15/22 | 100,000 | 93,750 | |
Forbes Energy Services Ltd. 9% 6/15/19 (c) | 345,000 | 86,250 | |
Forum Energy Technologies, Inc. 6.25% 10/1/21 | 30,000 | 29,700 | |
Halcon Resources Corp. 8.625% 2/1/20 (a) | 395,000 | 402,900 | |
Noble Holding International Ltd. 4.625% 3/1/21 | 245,000 | 206,894 | |
PBF Holding Co. LLC/PBF Finance Corp. 8.25% 2/15/20 | 100,000 | 102,000 | |
Petroleos Mexicanos 3.5% 7/18/18 | 250,000 | 254,063 | |
Plains All American Pipeline LP/PAA Finance Corp. 2.6% 12/15/19 | 100,000 | 101,190 | |
Pride International, Inc. 6.875% 8/15/20 | 1,400,000 | 1,424,500 | |
Sabine Pass Liquefaction LLC: | |||
5.625% 2/1/21 (b) | 1,030,000 | 1,084,075 | |
6.25% 3/15/22 | 300,000 | 328,500 | |
SM Energy Co. 6.5% 11/15/21 | 700,000 | 710,500 | |
Southwestern Energy Co. 7.5% 2/1/18 | 60,000 | 62,850 | |
Sunoco LP/Sunoco Finance Corp.: | |||
5.5% 8/1/20 | 960,000 | 974,400 | |
6.25% 4/15/21 | 80,000 | 82,000 | |
Targa Resources Partners LP/Targa Resources Partners Finance Corp. 4.125% 11/15/19 | 207,000 | 208,811 | |
Tesoro Logistics LP/Tesoro Logistics Finance Corp.: | |||
5.5% 10/15/19 | 255,000 | 272,213 | |
5.875% 10/1/20 | 210,000 | 216,038 | |
6.125% 10/15/21 | 10,000 | 10,463 | |
6.25% 10/15/22 | 365,000 | 386,900 | |
Weatherford International Ltd.: | |||
4.5% 4/15/22 | 70,000 | 63,000 | |
7.75% 6/15/21 | 60,000 | 60,600 | |
Western Gas Partners LP 2.6% 8/15/18 | 200,000 | 200,320 | |
Whiting Petroleum Corp.: | |||
5% 3/15/19 | 15,000 | 14,250 | |
6.5% 10/1/18 | 125,000 | 123,125 | |
WPX Energy, Inc.: | |||
6% 1/15/22 | 250,000 | 249,375 | |
7.5% 8/1/20 | 625,000 | 658,594 | |
TOTAL ENERGY | 10,860,891 | ||
Entertainment/Film - 0.2% | |||
New Cotai LLC/New Cotai Capital Corp. 10.625% 5/1/19 pay-in-kind (a)(b) | 263,281 | 141,349 | |
Food & Drug Retail - 0.6% | |||
BI-LO LLC/BI-LO Finance Corp. 9.25% 2/15/19 (a) | 105,000 | 91,088 | |
Perrigo Finance PLC 3.5% 12/15/21 | 200,000 | 206,524 | |
Tops Holding LLC/Tops Markets II Corp. 8% 6/15/22 (a) | 200,000 | 176,000 | |
TOTAL FOOD & DRUG RETAIL | 473,612 | ||
Food/Beverage/Tobacco - 2.2% | |||
Anheuser-Busch InBev Finance, Inc. 2.65% 2/1/21 | 200,000 | 205,041 | |
C&S Group Enterprises LLC 5.375% 7/15/22 (a) | 20,000 | 19,400 | |
Darling International, Inc. 5.375% 1/15/22 | 10,000 | 10,425 | |
Imperial Tobacco Finance PLC 2.95% 7/21/20 (a) | 200,000 | 205,388 | |
JBS Investments GmbH 7.75% 10/28/20 (a) | 900,000 | 938,250 | |
JBS U.S.A. LLC/JBS U.S.A. Finance, Inc. 7.25% 6/1/21 (a) | 300,000 | 307,500 | |
Vector Group Ltd. 7.75% 2/15/21 | 185,000 | 193,788 | |
TOTAL FOOD/BEVERAGE/TOBACCO | 1,879,792 | ||
Gaming - 2.9% | |||
GLP Capital LP/GLP Financing II, Inc. 4.375% 4/15/21 | 60,000 | 63,150 | |
MCE Finance Ltd. 5% 2/15/21 (a) | 200,000 | 199,985 | |
Wynn Macau Ltd. 5.25% 10/15/21 (a) | 2,200,000 | 2,207,678 | |
TOTAL GAMING | 2,470,813 | ||
Healthcare - 9.4% | |||
Community Health Systems, Inc.: | |||
5.125% 8/15/18 | 41,000 | 40,641 | |
6.875% 2/1/22 | 400,000 | 305,000 | |
7.125% 7/15/20 | 250,000 | 201,875 | |
DaVita HealthCare Partners, Inc. 5.75% 8/15/22 | 200,000 | 205,004 | |
Endo Finance LLC 5.75% 1/15/22 (a) | 1,300,000 | 1,170,000 | |
Forest Laboratories, Inc. 5% 12/15/21 (a) | 200,000 | 223,289 | |
HCA Holdings, Inc. 6.25% 2/15/21 | 600,000 | 647,250 | |
Kindred Healthcare, Inc. 8% 1/15/20 | 2,340,000 | 2,363,386 | |
Mallinckrodt International Finance SA/Mallinckrodt CB LLC 4.875% 4/15/20 (a) | 300,000 | 301,125 | |
Mylan N.V. 3.15% 6/15/21 (a) | 200,000 | 203,384 | |
Shire Acquisitions Investments Ireland DAC 2.4% 9/23/21 | 200,000 | 198,527 | |
Tenet Healthcare Corp. 4.75% 6/1/20 | 200,000 | 204,500 | |
Universal Health Services, Inc. 4.75% 8/1/22 (a) | 65,000 | 66,755 | |
Valeant Pharmaceuticals International, Inc.: | |||
5.375% 3/15/20 (a) | 790,000 | 683,350 | |
5.625% 12/1/21 (a) | 365,000 | 299,300 | |
6.75% 8/15/18 (a) | 540,000 | 527,040 | |
VPI Escrow Corp. 6.375% 10/15/20 (a) | 280,000 | 241,500 | |
TOTAL HEALTHCARE | 7,881,926 | ||
Homebuilders/Real Estate - 4.4% | |||
Beazer Homes U.S.A., Inc. 8.75% 3/15/22 (a) | 115,000 | 122,188 | |
Brandywine Operating Partnership LP 4.95% 4/15/18 | 150,000 | 156,209 | |
DDR Corp. 4.75% 4/15/18 | 150,000 | 155,318 | |
Essex Portfolio LP 5.5% 3/15/17 | 250,000 | 253,676 | |
Lennar Corp. 4.75% 4/1/21 | 115,000 | 121,829 | |
Liberty Property LP 6.625% 10/1/17 | 150,000 | 156,923 | |
M/I Homes, Inc. 6.75% 1/15/21 | 140,000 | 147,350 | |
Mack-Cali Realty LP 2.5% 12/15/17 | 150,000 | 150,530 | |
PulteGroup, Inc. 4.25% 3/1/21 | 485,000 | 509,250 | |
Rialto Holdings LLC/Rialto Corp. 7% 12/1/18 (a) | 85,000 | 86,063 | |
Taylor Morrison Communities, Inc./Monarch Communities, Inc. 5.25% 4/15/21 (a) | 75,000 | 76,875 | |
Ventas Realty LP/Ventas Capital Corp. 4.75% 6/1/21 | 200,000 | 220,664 | |
William Lyon Homes, Inc. 5.75% 4/15/19 | 1,535,000 | 1,565,700 | |
TOTAL HOMEBUILDERS/REAL ESTATE | 3,722,575 | ||
Insurance - 0.4% | |||
American International Group, Inc. 3.3% 3/1/21 | 200,000 | 209,210 | |
ING U.S., Inc. 2.9% 2/15/18 (b) | 153,000 | 155,521 | |
TOTAL INSURANCE | 364,731 | ||
Metals/Mining - 1.3% | |||
Freeport-McMoRan, Inc.: | |||
2.375% 3/15/18 | 200,000 | 197,500 | |
3.55% 3/1/22 | 730,000 | 669,775 | |
Lundin Mining Corp. 7.5% 11/1/20 (a) | 20,000 | 21,250 | |
Signode Industrial Group Lux SA/Signode Industrial Group U.S., Inc. 6.375% 5/1/22 (a) | 200,000 | 202,000 | |
TOTAL METALS/MINING | 1,090,525 | ||
Publishing/Printing - 0.2% | |||
R.R. Donnelley & Sons Co. 7.875% 3/15/21 | 120,000 | 129,000 | |
Services - 3.2% | |||
Air Lease Corp. 2.125% 1/15/20 | 200,000 | 199,718 | |
Anna Merger Sub, Inc. 7.75% 10/1/22 (a) | 300,000 | 257,250 | |
APX Group, Inc.: | |||
6.375% 12/1/19 | 1,875,000 | 1,933,594 | |
8.75% 12/1/20 | 230,000 | 222,525 | |
Garda World Security Corp. 7.25% 11/15/21 (a) | 10,000 | 9,550 | |
Hertz Corp. 6.75% 4/15/19 | 72,000 | 73,455 | |
TOTAL SERVICES | 2,696,092 | ||
Super Retail - 1.2% | |||
JC Penney Corp., Inc.: | |||
5.65% 6/1/20 | 729,000 | 721,710 | |
8.125% 10/1/19 | 260,000 | 283,075 | |
TOTAL SUPER RETAIL | 1,004,785 | ||
Technology - 5.4% | |||
Micron Technology, Inc. 5.875% 2/15/22 | 1,000,000 | 1,032,900 | |
NCR Corp.: | |||
4.625% 2/15/21 | 535,000 | 541,688 | |
5% 7/15/22 | 100,000 | 101,562 | |
5.875% 12/15/21 | 185,000 | 194,481 | |
NXP BV/NXP Funding LLC: | |||
3.875% 9/1/22 (a) | 1,000,000 | 1,053,750 | |
4.125% 6/1/21 (a) | 400,000 | 427,000 | |
4.625% 6/15/22 (a) | 795,000 | 866,550 | |
Sungard Availability Services Capital, Inc. 8.75% 4/1/22 (a) | 75,000 | 51,750 | |
WideOpenWest Finance LLC/WideOpenWest Capital Corp.: | |||
10.25% 7/15/19 | 285,000 | 299,250 | |
13.375% 10/15/19 | 18,000 | 19,260 | |
TOTAL TECHNOLOGY | 4,588,191 | ||
Telecommunications - 12.8% | |||
Altice Financing SA 6.5% 1/15/22 (a) | 600,000 | 627,150 | |
AT&T, Inc. 2.8% 2/17/21 | 200,000 | 202,764 | |
Columbus International, Inc. 7.375% 3/30/21 (a) | 1,400,000 | 1,498,000 | |
DigitalGlobe, Inc. 5.25% 2/1/21 (a) | 500,000 | 503,750 | |
MetroPCS Wireless, Inc. 6.625% 11/15/20 | 130,000 | 133,575 | |
Sable International Finance Ltd. 6.875% 8/1/22 (a) | 600,000 | 621,000 | |
SFR Group SA 6% 5/15/22 (a) | 1,000,000 | 1,025,320 | |
Sprint Communications, Inc.: | |||
6% 11/15/22 | 500,000 | 465,940 | |
7% 3/1/20 (a) | 1,480,000 | 1,609,500 | |
9% 11/15/18 (a) | 115,000 | 126,500 | |
Sprint Corp. 7.25% 9/15/21 | 375,000 | 383,906 | |
T-Mobile U.S.A., Inc.: | |||
6.464% 4/28/19 | 1,275,000 | 1,295,719 | |
6.542% 4/28/20 | 465,000 | 480,113 | |
6.731% 4/28/22 | 90,000 | 94,050 | |
Verizon Communications, Inc. 3.65% 9/14/18 | 250,000 | 259,366 | |
Wind Acquisition Finance SA: | |||
4.75% 7/15/20 (a) | 1,070,000 | 1,075,350 | |
7.375% 4/23/21 (a) | 400,000 | 411,000 | |
TOTAL TELECOMMUNICATIONS | 10,813,003 | ||
Transportation Ex Air/Rail - 0.5% | |||
Navios Maritime Acquisition Corp./Navios Acquisition Finance U.S., Inc. 8.125% 11/15/21 (a) | 540,000 | 407,700 | |
Navios South American Logistics, Inc./Navios Logistics Finance U.S., Inc. 7.25% 5/1/22 (a) | 10,000 | 7,900 | |
TOTAL TRANSPORTATION EX AIR/RAIL | 415,600 | ||
Utilities - 6.3% | |||
Calpine Corp. 6% 1/15/22 (a) | 300,000 | 313,593 | |
DCP Midstream Operating LP 2.5% 12/1/17 | 100,000 | 99,250 | |
Dolphin Subsidiary II, Inc. 7.25% 10/15/21 | 258,000 | 269,288 | |
DPL, Inc. 6.75% 10/1/19 | 855,000 | 887,063 | |
Dynegy, Inc.: | |||
6.75% 11/1/19 | 1,515,000 | 1,533,316 | |
7.375% 11/1/22 | 900,000 | 867,938 | |
Global Partners LP/GLP Finance Corp. 6.25% 7/15/22 | 135,000 | 128,925 | |
RJS Power Holdings LLC 4.625% 7/15/19 (a)(b) | 865,000 | 821,750 | |
The AES Corp.: | |||
3.8421% 6/1/19 (b) | 28,000 | 27,965 | |
4.875% 5/15/23 | 5,000 | 4,961 | |
7.375% 7/1/21 | 280,000 | 315,700 | |
TOTAL UTILITIES | 5,269,749 | ||
TOTAL NONCONVERTIBLE BONDS | |||
(Cost $70,541,668) | 71,161,710 | ||
U.S. Treasury Obligations - 0.6% | |||
U.S. Treasury Notes: | |||
1.125% 9/30/21 | $110,000 | $108,977 | |
1.25% 10/31/21 | 393,000 | 391,849 | |
TOTAL U.S. TREASURY OBLIGATIONS | |||
(Cost $501,167) | 500,826 | ||
Shares | Value | ||
Common Stocks - 0.0% | |||
Energy - 0.0% | |||
Southwestern Energy Co. (d) | |||
(Cost $4,905) | 373 | 3,875 | |
Convertible Preferred Stocks - 0.2% | |||
Energy - 0.2% | |||
Southwestern Energy Co. Series B 6.25% | |||
(Cost $111,697) | 6,300 | 157,941 | |
Principal Amount | Value | ||
Bank Loan Obligations - 13.0% | |||
Aerospace - 0.7% | |||
TransDigm, Inc.: | |||
Tranche D, term loan 3.8316% 6/4/21 (b) | 191,104 | 190,674 | |
Tranche F, term loan 3.75% 6/9/23 (b) | 435,000 | 433,099 | |
TOTAL AEROSPACE | 623,773 | ||
Air Transportation - 0.6% | |||
Air Canada Tranche B, term loan 3.6143% 10/6/23 (b) | 180,000 | 180,225 | |
American Airlines, Inc. Tranche B, term loan 3.25% 10/10/21 (b) | 349,781 | 349,830 | |
TOTAL AIR TRANSPORTATION | 530,055 | ||
Broadcasting - 0.6% | |||
Clear Channel Communications, Inc. Tranche D, term loan 7.2843% 1/30/19 (b) | 275,000 | 207,749 | |
Nielsen Finance LLC Tranche B 3LN, term loan 3.0311% 10/4/23 (b) | 165,000 | 165,645 | |
Univision Communications, Inc. Tranche C 4LN, term loan 4% 3/1/20 (b) | 98,683 | 98,837 | |
TOTAL BROADCASTING | 472,231 | ||
Building Materials - 1.2% | |||
American Builders & Contractors Supply Co., Inc. Tranche B, term loan 3.5% 9/23/23 (b) | 215,000 | 215,806 | |
GYP Holdings III Corp. Tranche B, term loan 4.5% 4/1/21 (b) | 281,258 | 280,906 | |
HD Supply, Inc. Tranche B, term loan 3.63% 10/17/23 (b) | 280,000 | 280,176 | |
LBM Borrower LLC Tranche B 1LN, term loan 6.25% 8/20/22 (b) | 232,650 | 232,480 | |
TOTAL BUILDING MATERIALS | 1,009,368 | ||
Cable/Satellite TV - 0.9% | |||
Numericable LLC: | |||
Tranche B 6LN, term loan 4.75% 2/10/23 (b) | 287,825 | 287,825 | |
Tranche B, term loan 5.1373% 1/15/24 (b) | 34,825 | 35,112 | |
WideOpenWest Finance LLC Tranche B, term loan 4.5% 8/19/23 (b) | 225,000 | 224,386 | |
Ziggo Secured Finance Partnership Tranche D, term loan 3.5346% 8/31/24 (b) | 180,000 | 179,919 | |
TOTAL CABLE/SATELLITE TV | 727,242 | ||
Capital Goods - 0.2% | |||
Rexnord LLC Tranche B, term loan 4% 8/21/20 (b) | 140,204 | 140,519 | |
Chemicals - 0.0% | |||
MacDermid, Inc. term loan 5% 6/7/23 (b) | 40,000 | 40,300 | |
Containers - 1.0% | |||
Ardagh Holdings U.S.A., Inc. Tranche B, term loan 4% 12/17/21 (b) | 237,093 | 239,242 | |
Reynolds Group Holdings, Inc. Tranche B, term loan 4.25% 2/5/23 (b) | 310,000 | 310,691 | |
Signode Packaging Systems, Inc. Tranche B, term loan 3.75% 5/1/21 (b) | 277,368 | 276,674 | |
TOTAL CONTAINERS | 826,607 | ||
Diversified Financial Services - 0.1% | |||
IBC Capital U.S. LLC: | |||
Tranche 2LN, term loan 8% 9/11/22 (b) | 100,000 | 90,750 | |
Tranche B 1LN, term loan 4.9847% 9/11/21 (b) | 24,625 | 24,215 | |
TOTAL DIVERSIFIED FINANCIAL SERVICES | 114,965 | ||
Energy - 0.1% | |||
Crestwood Holdings Partners LLC Tranche B, term loan 9% 6/19/19 (b) | 93,563 | 87,950 | |
Food & Drug Retail - 0.0% | |||
Albertson's LLC Tranche B 6LN, term loan 4.75% 6/22/23 (b) | 38,095 | 38,492 | |
Food/Beverage/Tobacco - 0.1% | |||
Chobani LLC Tranche B, term loan 5.25% 10/7/23 (b) | 105,000 | 106,116 | |
Gaming - 0.3% | |||
Scientific Games Corp. Tranche B 2LN, term loan 6% 10/1/21 (b) | 235,800 | 236,684 | |
Healthcare - 0.8% | |||
Horizon Pharmaceuticals, Inc. term loan 5/7/21 (e) | 20,000 | 20,025 | |
InVentiv Health, Inc. Tranche B, term loan 9/29/23 (e) | 280,000 | 279,849 | |
Valeant Pharmaceuticals International, Inc. Tranche BD 2LN, term loan 5% 2/13/19 (b) | 397,619 | 396,343 | |
TOTAL HEALTHCARE | 696,217 | ||
Leisure - 0.1% | |||
24 Hour Fitness Worldwide, Inc. Tranche B, term loan 4.75% 5/30/21 (b) | 44,359 | 43,305 | |
Metals/Mining - 0.2% | |||
Murray Energy Corp. Tranche B 2LN, term loan 8.25% 4/16/20 (b) | 200,000 | 182,812 | |
Publishing/Printing - 0.6% | |||
McGraw-Hill Global Education Holdings, LLC term loan 5% 5/4/22 (b) | 44,888 | 44,766 | |
Springer Science+Business Media Deutschland GmbH Tranche B 9LN, term loan 4.75% 8/14/20 (b) | 456,766 | 445,918 | |
TOTAL PUBLISHING/PRINTING | 490,684 | ||
Services - 1.4% | |||
Acosta, Inc. Tranche B, term loan 4.25% 9/26/21 (b) | 258,687 | 248,598 | |
Brand Energy & Infrastructure Services, Inc. Tranche B, term loan 4.75% 11/26/20 (b) | 68,075 | 67,127 | |
Garda World Security Corp.: | |||
term loan 4% 11/8/20 (b) | 417,228 | 411,837 | |
Tranche DD, term loan 4.0039% 11/8/20 (b) | 98,033 | 96,767 | |
Laureate Education, Inc. Tranche B, term loan 8.8679% 3/17/21 (b) | 219,579 | 217,657 | |
Lineage Logistics Holdings, LLC. Tranche B, term loan 4.5% 4/7/21 (b) | 167,994 | 164,634 | |
TOTAL SERVICES | 1,206,620 | ||
Super Retail - 0.7% | |||
JC Penney Corp., Inc. Tranche B, term loan 5.25% 6/23/23 (b) | 173,750 | 174,749 | |
PetSmart, Inc. term loan 4% 3/11/22 (b) | 380,081 | 380,826 | |
TOTAL SUPER RETAIL | 555,575 | ||
Technology - 2.1% | |||
Ceridian HCM Holding, Inc. Tranche B 2LN, term loan 4.5% 9/15/20 (b) | 100,000 | 98,000 | |
Epicor Software Corp. Tranche B, term loan 4.75% 6/1/22(b) | 143,546 | 141,797 | |
Kronos, Inc. term loan: | |||
10/20/23 (e) | 395,000 | 396,572 | |
10/20/24 (e) | 100,000 | 102,986 | |
ON Semiconductor Corp. term loan 3.7772% 3/31/23 (b) | 215,000 | 216,183 | |
Quest Software U.S. Holdings, Inc. Tranche B, term loan 9/27/22 (e) | 130,000 | 129,903 | |
Rackspace Hosting, Inc. term loan 10/26/23 (e) | 55,000 | 55,292 | |
TTM Technologies, Inc. Tranche B 1LN, term loan 5.25% 5/31/21 (b) | 182,675 | 183,132 | |
Uber Technologies, Inc. Tranche B, term loan 5% 7/13/23 (b) | 450,000 | 453,096 | |
TOTAL TECHNOLOGY | 1,776,961 | ||
Telecommunications - 0.4% | |||
LTS Buyer LLC Tranche B 1LN, term loan 4.0877% 4/11/20 (b) | 24,681 | 24,706 | |
Polycom, Inc. Tranche B, term loan 7.5% 9/27/23 (b) | 285,000 | 277,519 | |
TOTAL TELECOMMUNICATIONS | 302,225 | ||
Utilities - 0.9% | |||
Calpine Construction Finance Co. LP Tranche B 1LN, term loan 3.09% 5/3/20 (b) | 259,977 | 258,027 | |
Calpine Corp. Tranche B 6LN, term loan 4% 1/1/23 (b) | 168,725 | 169,449 | |
Moxie Patriot LLC Tranche B, term loan 6.75% 12/19/20 (b) | 304,201 | 296,976 | |
TOTAL UTILITIES | 724,452 | ||
TOTAL BANK LOAN OBLIGATIONS | |||
(Cost $10,901,489) | 10,933,153 | ||
Bank Notes - 0.3% | |||
Regions Bank 7.5% 5/15/18 | |||
(Cost $268,152) | 250,000 | 270,910 | |
Preferred Securities - 0.6% | |||
Banks & Thrifts - 0.6% | |||
Citigroup, Inc.: | |||
5.95% (b)(f) | $100,000 | $104,999 | |
5.95% (b)(f) | 10,000 | 10,382 | |
Royal Bank of Scotland Group PLC 7.5% (b)(f) | 400,000 | 369,637 | |
TOTAL BANKS & THRIFTS | 485,018 | ||
Diversified Financial Services - 0.0% | |||
American Express Co. 4.9% (b)(f) | 20,000 | 19,757 | |
TOTAL PREFERRED SECURITIES | |||
(Cost $513,354) | 504,775 | ||
Shares | Value | ||
Money Market Funds - 4.3% | |||
Fidelity Cash Central Fund, 0.41% (g) | |||
(Cost $3,616,660) | 3,616,496 | 3,617,581 | |
TOTAL INVESTMENT PORTFOLIO - 103.4% | |||
(Cost $86,459,092) | 87,150,771 | ||
NET OTHER ASSETS (LIABILITIES) - (3.4)% | (2,868,187) | ||
NET ASSETS - 100% | $84,282,584 |
Legend
(a) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $28,399,236 or 33.7% of net assets.
(b) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end.
(c) Non-income producing - Security is in default.
(d) Non-income producing
(e) The coupon rate will be determined upon settlement of the loan after period end.
(f) Security is perpetual in nature with no stated maturity date.
(g) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
Fund | Income earned |
Fidelity Cash Central Fund | $9,678 |
Total | $9,678 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Equities: | ||||
Energy | $161,816 | $161,816 | $-- | $-- |
Corporate Bonds | 71,161,710 | -- | 71,161,710 | -- |
U.S. Government and Government Agency Obligations | 500,826 | -- | 500,826 | -- |
Bank Loan Obligations | 10,933,153 | -- | 10,933,153 | -- |
Bank Notes | 270,910 | -- | 270,910 | -- |
Preferred Securities | 504,775 | -- | 504,775 | -- |
Money Market Funds | 3,617,581 | 3,617,581 | -- | -- |
Total Investments in Securities: | $87,150,771 | $3,779,397 | $83,371,374 | $-- |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
United States of America | 73.6% |
Luxembourg | 4.1% |
Canada | 3.8% |
Cayman Islands | 3.7% |
Netherlands | 3.2% |
Barbados | 1.8% |
United Kingdom | 1.7% |
Ireland | 1.6% |
Mexico | 1.5% |
Germany | 1.2% |
France | 1.2% |
Austria | 1.1% |
Others (Individually Less Than 1%) | 1.5% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
October 31, 2016 (Unaudited) | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $82,842,432) | $83,533,190 | |
Fidelity Central Funds (cost $3,616,660) | 3,617,581 | |
Total Investments (cost $86,459,092) | $87,150,771 | |
Cash | 754,861 | |
Receivable for investments sold | 881,673 | |
Receivable for fund shares sold | 151,834 | |
Interest receivable | 1,068,967 | |
Distributions receivable from Fidelity Central Funds | 2,078 | |
Prepaid expenses | 160 | |
Receivable from investment adviser for expense reductions | 39,500 | |
Other receivables | 43 | |
Total assets | 90,049,887 | |
Liabilities | ||
Payable for investments purchased | $4,864,765 | |
Payable for fund shares redeemed | 759,480 | |
Distributions payable | 49,797 | |
Accrued management fee | 37,407 | |
Distribution and service plan fees payable | 5,955 | |
Other affiliated payables | 9,618 | |
Other payables and accrued expenses | 40,281 | |
Total liabilities | 5,767,303 | |
Net Assets | $84,282,584 | |
Net Assets consist of: | ||
Paid in capital | $88,985,779 | |
Undistributed net investment income | 241,033 | |
Accumulated undistributed net realized gain (loss) on investments | (5,635,907) | |
Net unrealized appreciation (depreciation) on investments | 691,679 | |
Net Assets | $84,282,584 | |
Calculation of Maximum Offering Price | ||
Class A: | ||
Net Asset Value and redemption price per share ($8,563,611 ÷ 910,890 shares) | $9.40 | |
Maximum offering price per share (100/96.00 of $9.40) | $9.79 | |
Class T: | ||
Net Asset Value and redemption price per share ($2,625,029 ÷ 279,250 shares) | $9.40 | |
Maximum offering price per share (100/96.00 of $9.40) | $9.79 | |
Class C: | ||
Net Asset Value and offering price per share ($4,457,062 ÷ 474,054 shares)(a) | $9.40 | |
Short Duration High Income: | ||
Net Asset Value, offering price and redemption price per share ($61,751,476 ÷ 6,568,278 shares) | $9.40 | |
Class I: | ||
Net Asset Value, offering price and redemption price per share ($6,885,406 ÷ 732,363 shares) | $9.40 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended October 31, 2016 (Unaudited) | ||
Investment Income | ||
Dividends | $33,508 | |
Interest | 1,794,123 | |
Income from Fidelity Central Funds | 9,678 | |
Total income | 1,837,309 | |
Expenses | ||
Management fee | $185,368 | |
Transfer agent fees | 39,584 | |
Distribution and service plan fees | 32,670 | |
Accounting fees and expenses | 13,742 | |
Custodian fees and expenses | 7,062 | |
Independent trustees' fees and expenses | 135 | |
Registration fees | 64,064 | |
Audit | 36,878 | |
Legal | 1,002 | |
Miscellaneous | 270 | |
Total expenses before reductions | 380,775 | |
Expense reductions | (80,888) | 299,887 |
Net investment income (loss) | 1,537,422 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | (305,442) | |
Fidelity Central Funds | 1,305 | |
Total net realized gain (loss) | (304,137) | |
Change in net unrealized appreciation (depreciation) on investment securities | 1,779,612 | |
Net gain (loss) | 1,475,475 | |
Net increase (decrease) in net assets resulting from operations | $3,012,897 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended October 31, 2016 (Unaudited) | Year ended April 30, 2016 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $1,537,422 | $2,971,015 |
Net realized gain (loss) | (304,137) | (3,941,175) |
Change in net unrealized appreciation (depreciation) | 1,779,612 | (845,412) |
Net increase (decrease) in net assets resulting from operations | 3,012,897 | (1,815,572) |
Distributions to shareholders from net investment income | (1,381,635) | (2,846,056) |
Distributions to shareholders from net realized gain | – | (12,975) |
Total distributions | (1,381,635) | (2,859,031) |
Share transactions - net increase (decrease) | 19,179,854 | 6,284,384 |
Redemption fees | 8,696 | 19,692 |
Total increase (decrease) in net assets | 20,819,812 | 1,629,473 |
Net Assets | ||
Beginning of period | 63,462,772 | 61,833,299 |
End of period | $84,282,584 | $63,462,772 |
Other Information | ||
Undistributed net investment income end of period | $241,033 | $85,246 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Short Duration High Income Fund Class A
Six months ended (Unaudited) October 31, | Years ended April 30, | |||
2016 | 2016 | 2015 | 2014 A | |
Selected Per–Share Data | ||||
Net asset value, beginning of period | $9.14 | $9.86 | $10.10 | $10.00 |
Income from Investment Operations | ||||
Net investment income (loss)B | .208 | .429 | .358 | .132 |
Net realized and unrealized gain (loss) | .238 | (.737) | (.246) | .091 |
Total from investment operations | .446 | (.308) | .112 | .223 |
Distributions from net investment income | (.187) | (.413) | (.358) | (.124) |
Distributions from net realized gain | – | (.002) | – | – |
Total distributions | (.187) | (.415) | (.358) | (.124) |
Redemption fees added to paid in capitalB | .001 | .003 | .006 | .001 |
Net asset value, end of period | $9.40 | $9.14 | $9.86 | $10.10 |
Total ReturnC,D,E | 4.93% | (3.06)% | 1.22% | 2.25% |
Ratios to Average Net AssetsF,G | ||||
Expenses before reductions | 1.30%H | 1.24% | 1.29% | 1.61%H |
Expenses net of fee waivers, if any | 1.05%H | 1.05% | 1.05% | 1.05%H |
Expenses net of all reductions | 1.05%H | 1.05% | 1.05% | 1.05%H |
Net investment income (loss) | 4.46%H | 4.65% | 3.63% | 2.72%H |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $8,564 | $6,823 | $4,398 | $3,043 |
Portfolio turnover rateI | 70%H | 56% | 84% | 20%J |
A For the period November 5, 2013 (commencement of operations) to April 30, 2014.
B Calculated based on average shares outstanding during the period.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Short Duration High Income Fund Class T
Six months ended (Unaudited) October 31, | Years ended April 30, | |||
2016 | 2016 | 2015 | 2014 A | |
Selected Per–Share Data | ||||
Net asset value, beginning of period | $9.14 | $9.86 | $10.10 | $10.00 |
Income from Investment Operations | ||||
Net investment income (loss)B | .209 | .433 | .360 | .132 |
Net realized and unrealized gain (loss) | .237 | (.741) | (.247) | .091 |
Total from investment operations | .446 | (.308) | .113 | .223 |
Distributions from net investment income | (.187) | (.413) | (.359) | (.124) |
Distributions from net realized gain | – | (.002) | – | – |
Total distributions | (.187) | (.415) | (.359) | (.124) |
Redemption fees added to paid in capitalB | .001 | .003 | .006 | .001 |
Net asset value, end of period | $9.40 | $9.14 | $9.86 | $10.10 |
Total ReturnC,D,E | 4.93% | (3.06)% | 1.23% | 2.25% |
Ratios to Average Net AssetsF,G | ||||
Expenses before reductions | 1.30%H | 1.25% | 1.31% | 1.61%H |
Expenses net of fee waivers, if any | 1.05%H | 1.05% | 1.05% | 1.05%H |
Expenses net of all reductions | 1.05%H | 1.05% | 1.05% | 1.05%H |
Net investment income (loss) | 4.46%H | 4.65% | 3.63% | 2.72%H |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $2,625 | $2,426 | $2,930 | $2,946 |
Portfolio turnover rateI | 70%H | 56% | 84% | 20%J |
A For the period November 5, 2013 (commencement of operations) to April 30, 2014.
B Calculated based on average shares outstanding during the period.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Short Duration High Income Fund Class C
Six months ended (Unaudited) October 31, | Years ended April 30, | |||
2016 | 2016 | 2015 | 2014 A | |
Selected Per–Share Data | ||||
Net asset value, beginning of period | $9.15 | $9.86 | $10.10 | $10.00 |
Income from Investment Operations | ||||
Net investment income (loss)B | .173 | .360 | .285 | .096 |
Net realized and unrealized gain (loss) | .228 | (.728) | (.247) | .090 |
Total from investment operations | .401 | (.368) | .038 | .186 |
Distributions from net investment income | (.152) | (.343) | (.284) | (.087) |
Distributions from net realized gain | – | (.002) | – | – |
Total distributions | (.152) | (.345) | (.284) | (.087) |
Redemption fees added to paid in capitalB | .001 | .003 | .006 | .001 |
Net asset value, end of period | $9.40 | $9.15 | $9.86 | $10.10 |
Total ReturnC,D,E | 4.43% | (3.68)% | .47% | 1.88% |
Ratios to Average Net AssetsF,G | ||||
Expenses before reductions | 2.07%H | 2.00% | 2.08% | 2.37%H |
Expenses net of fee waivers, if any | 1.80%H | 1.80% | 1.80% | 1.80%H |
Expenses net of all reductions | 1.80%H | 1.80% | 1.80% | 1.80%H |
Net investment income (loss) | 3.71%H | 3.90% | 2.88% | 1.97%H |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $4,457 | $3,827 | $3,465 | $3,114 |
Portfolio turnover rateI | 70%H | 56% | 84% | 20%J |
A For the period November 5, 2013 (commencement of operations) to April 30, 2014.
B Calculated based on average shares outstanding during the period.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Short Duration High Income Fund
Six months ended (Unaudited) October 31, | Years ended April 30, | |||
2016 | 2016 | 2015 | 2014 A | |
Selected Per–Share Data | ||||
Net asset value, beginning of period | $9.15 | $9.86 | $10.10 | $10.00 |
Income from Investment Operations | ||||
Net investment income (loss)B | .220 | .455 | .385 | .142 |
Net realized and unrealized gain (loss) | .228 | (.730) | (.248) | .093 |
Total from investment operations | .448 | (.275) | .137 | .235 |
Distributions from net investment income | (.199) | (.436) | (.383) | (.136) |
Distributions from net realized gain | – | (.002) | – | – |
Total distributions | (.199) | (.438) | (.383) | (.136) |
Redemption fees added to paid in capitalB | .001 | .003 | .006 | .001 |
Net asset value, end of period | $9.40 | $9.15 | $9.86 | $10.10 |
Total ReturnC,D | 4.95% | (2.71)% | 1.48% | 2.37% |
Ratios to Average Net AssetsE,F | ||||
Expenses before reductions | 1.03%G | .96% | 1.00% | 1.24%G |
Expenses net of fee waivers, if any | .80%G | .80% | .80% | .80%G |
Expenses net of all reductions | .80%G | .80% | .80% | .80%G |
Net investment income (loss) | 4.71%G | 4.90% | 3.88% | 2.96%G |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $61,751 | $47,531 | $45,109 | $54,547 |
Portfolio turnover rateH | 70%G | 56% | 84% | 20%I |
A For the period November 5, 2013 (commencement of operations) to April 30, 2014.
B Calculated based on average shares outstanding during the period.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Annualized
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
I Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Short Duration High Income Fund Class I
Six months ended (Unaudited) October 31, | Years ended April 30, | |||
2016 | 2016 | 2015 | 2014 A | |
Selected Per–Share Data | ||||
Net asset value, beginning of period | $9.15 | $9.86 | $10.10 | $10.00 |
Income from Investment Operations | ||||
Net investment income (loss)B | .219 | .460 | .383 | .143 |
Net realized and unrealized gain (loss) | .229 | (.735) | (.246) | .091 |
Total from investment operations | .448 | (.275) | .137 | .234 |
Distributions from net investment income | (.199) | (.436) | (.383) | (.135) |
Distributions from net realized gain | – | (.002) | – | – |
Total distributions | (.199) | (.438) | (.383) | (.135) |
Redemption fees added to paid in capitalB | .001 | .003 | .006 | .001 |
Net asset value, end of period | $9.40 | $9.15 | $9.86 | $10.10 |
Total ReturnC,D | 4.95% | (2.71)% | 1.48% | 2.37% |
Ratios to Average Net AssetsE,F | ||||
Expenses before reductions | 1.09%G | .99% | 1.04% | 1.34%G |
Expenses net of fee waivers, if any | .80%G | .80% | .80% | .80%G |
Expenses net of all reductions | .80%G | .80% | .80% | .80%G |
Net investment income (loss) | 4.71%G | 4.90% | 3.88% | 2.97%G |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $6,885 | $2,856 | $5,932 | $4,419 |
Portfolio turnover rateH | 70%G | 56% | 84% | 20%I |
A For the period November 5, 2013 (commencement of operations) to April 30, 2014.
B Calculated based on average shares outstanding during the period.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Annualized
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
I Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements (Unaudited)
For the period ended October 31, 2016
1. Organization.
Fidelity Short Duration High Income Fund (the Fund) is a fund of Fidelity Summer Street Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class C, Short Duration High Income and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds, bank notes, bank loan obligations, preferred securities and U.S. government and government agency obligations are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances. The Fund invests a significant portion of its assets in below investment grade securities. The value of these securities can be more volatile due to changes in the credit quality of the issuer and is sensitive to changes in economic, market and regulatory conditions.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016 is included at the end of the Fund's Schedule of Investments.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Dividends are declared and recorded daily and paid monthly from net investment income. Distributions from realized gains, if any, are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to market discount, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $1,853,859 |
Gross unrealized depreciation | (1,031,076) |
Net unrealized appreciation (depreciation) on securities | $822,783 |
Tax cost | $86,327,988 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of prior fiscal period end and is subject to adjustment.
No expiration | |
Short-term | $(3,407,494) |
Long-term | (1,862,687) |
Total capital loss carryforward | $(5,270,181) |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.00% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Loans and Other Direct Debt Instruments. The Fund invests in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. These instruments may be in the form of loans, trade claims or other receivables and may include standby financing commitments such as revolving credit facilities that obligate the Fund to supply additional cash to the borrower on demand. Loans may be acquired through assignment or participation. The Fund did not have any unfunded loan commitments, which are contractual obligations for future funding, at period end.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $40,809,263 and $20,102,574, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and an annualized group fee rate that averaged .11% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
Class A | -% | .25% | $9,403 | $9,403 |
Class T | -% | .25% | 3,181 | 3,181 |
Class C | .75% | .25% | 20,086 | 20,086 |
$32,670 | $32,670 |
Sales Load. FDC may receive a front-end sales charge of up to 4.00% for selling Class A shares and Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T and Class C redemptions. The deferred sales charges are 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained by FDC | |
Class A | $1,757 |
Class T | 752 |
Class C(a) | 88 |
$2,597 |
(a) When Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
Amount | % of Class-Level Average Net Assets(a) | |
Class A | $5,061 | .13 |
Class T | 1,665 | .13 |
Class C | 3,191 | .16 |
Short Duration High Income | 26,854 | .11 |
Class I | 2,813 | .14 |
$39,584 |
(a) Annualized
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The fee is based on the level of average net assets for each month.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $3 for the period.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $105 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Expense Reductions.
The investment adviser contractually agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. This reimbursement will remain in place through June 30, 2017. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense Limitations | Reimbursement | |
Class A | 1.05% | $9,584 |
Class T | 1.05% | 3,167 |
Class C | 1.80% | 5,480 |
Short Duration High Income | .80% | 56,905 |
Class I | .80% | 5,614 |
$80,750 |
Through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $16.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $122.
8. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended October 31, 2016 | Year ended April 30, 2016 | |
From net investment income | ||
Class A | $151,151 | $261,851 |
Class T | 51,102 | 113,395 |
Class C | 66,051 | 153,106 |
Short Duration High Income | 1,030,771 | 2,143,928 |
Class I | 82,560 | 173,776 |
Total | $1,381,635 | $2,846,056 |
From net realized gain | ||
Class A | $– | $1,377 |
Class T | – | 600 |
Class C | – | 875 |
Short Duration High Income | – | 9,541 |
Class I | – | 582 |
Total | $– | $12,975 |
9. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
Shares | Shares | Dollars | Dollars | |
Six months ended October 31, 2016 | Year ended April 30, 2016 | Six months ended October 31, 2016 | Year ended April 30, 2016 | |
Class A | ||||
Shares sold | 318,479 | 648,174 | $2,974,931 | $6,098,106 |
Reinvestment of distributions | 13,585 | 25,250 | 126,487 | 232,560 |
Shares redeemed | (167,328) | (373,249) | (1,559,646) | (3,497,952) |
Net increase (decrease) | 164,736 | 300,175 | $1,541,772 | $2,832,714 |
Class T | ||||
Shares sold | 99,790 | 132,992 | $931,126 | $1,223,867 |
Reinvestment of distributions | 5,081 | 11,962 | 47,279 | 110,701 |
Shares redeemed | (90,904) | (176,831) | (846,073) | (1,640,461) |
Net increase (decrease) | 13,967 | (31,877) | $132,332 | $(305,893) |
Class C | ||||
Shares sold | 153,637 | 526,097 | $1,428,312 | $4,814,727 |
Reinvestment of distributions | 6,647 | 15,870 | 61,829 | 145,912 |
Shares redeemed | (104,720) | (474,823) | (968,323) | (4,353,191) |
Net increase (decrease) | 55,564 | 67,144 | $521,818 | $607,448 |
Short Duration High Income | ||||
Shares sold | 2,728,640 | 3,424,433 | $25,497,838 | $32,122,226 |
Reinvestment of distributions | 92,721 | 204,798 | 863,203 | 1,895,696 |
Shares redeemed | (1,450,400) | (3,006,493) | (13,329,375) | (28,043,458) |
Net increase (decrease) | 1,370,961 | 622,738 | $13,031,666 | $5,974,464 |
Class I | ||||
Shares sold | 484,318 | 222,094 | $4,544,911 | $1,996,917 |
Reinvestment of distributions | 5,897 | 16,585 | 54,888 | 154,263 |
Shares redeemed | (70,100) | (528,003) | (647,533) | (4,975,529) |
Net increase (decrease) | 420,115 | (289,324) | $3,952,266 | $(2,824,349) |
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (May 1, 2016 to October 31, 2016).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Annualized Expense Ratio-A | Beginning Account Value May 1, 2016 | Ending Account Value October 31, 2016 | Expenses Paid During Period-B May 1, 2016 to October 31, 2016 | |
Class A | 1.05% | |||
Actual | $1,000.00 | $1,049.30 | $5.42 | |
Hypothetical-C | $1,000.00 | $1,019.91 | $5.35 | |
Class T | 1.05% | |||
Actual | $1,000.00 | $1,049.30 | $5.42 | |
Hypothetical-C | $1,000.00 | $1,019.91 | $5.35 | |
Class C | 1.80% | |||
Actual | $1,000.00 | $1,044.30 | $9.27 | |
Hypothetical-C | $1,000.00 | $1,016.13 | $9.15 | |
Short Duration High Income | .80% | |||
Actual | $1,000.00 | $1,049.50 | $4.13 | |
Hypothetical-C | $1,000.00 | $1,021.17 | $4.08 | |
Class I | .80% | |||
Actual | $1,000.00 | $1,049.50 | $4.13 | |
Hypothetical-C | $1,000.00 | $1,021.17 | $4.08 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
C 5% return per year before expenses
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Short Duration High Income Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to all of the Fidelity funds.
At its July 2016 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and would be realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by FMR, the sub-advisers (together with FMR, the Investment Advisers), and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.In 2014, the Board formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs; (iv) broadening eligibility requirements for certain lower-priced share classes of, and streamlining the fee structure for, certain existing equity index funds; (v) lowering expense caps for certain existing funds and classes to reduce expenses paid by shareholders; (vi) eliminating redemption fees for certain variable insurance product funds and classes; (vii) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (viii) launching a lower cost share class for use by the Freedom Index Fund product line; (ix) rationalizing product lines and gaining increased efficiencies through fund mergers and share class consolidations; (x) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; (xi) implementing investment enhancements to further strengthen Fidelity's target date product line to increase investors' probability of success in achieving their goals; (xii) accelerating the conversion of all remaining Class B shares to Class A shares, which have a lower expense structure; and (xiii) implementing changes to Fidelity's money market fund product line in response to recent regulatory reforms.Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history.The Board took into account discussions with representatives of the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund, for different time periods, measured against a securities market index ("benchmark index") and a peer group of funds with similar objectives ("peer group"), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for the fund and an appropriate benchmark index for the most recent one-year period, as shown below. A peer group is not shown below because the fund does not generally utilize a peer group for performance comparison purposes.Fidelity Short Duration High Income Fund
Fidelity Short Duration High Income Fund
ASDH-SANN-1216
1.969458.102
Fidelity® Global High Income Fund Semi-Annual Report October 31, 2016 |
Contents
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2016 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Fund nor Fidelity Distributors Corporation is a bank.
Investment Summary (Unaudited)
Top Five Holdings as of October 31, 2016
(by issuer, excluding cash equivalents) | % of fund's net assets | % of fund's net assets 6 months ago |
Ally Financial, Inc. | 2.0 | 1.9 |
APX Group, Inc. | 1.4 | 1.1 |
Valeant Pharmaceuticals International, Inc. | 1.3 | 1.4 |
T-Mobile U.S.A., Inc. | 1.2 | 1.2 |
Royal Bank of Scotland Group PLC | 1.1 | 0.9 |
7.0 |
Top Five Countries as of October 31, 2016
(excluding cash equivalents) | % of fund's net assets | % of fund's net assets 6 months ago |
United States of America | 45.5 | 48.0 |
Luxembourg | 8.3 | 8.4 |
Netherlands | 6.1 | 5.1 |
Cayman Islands | 4.0 | 4.1 |
United Kingdom | 3.4 | 3.2 |
Top Five Market Sectors as of October 31, 2016
% of fund's net assets | % of fund's net assets 6 months ago | |
Energy | 12.7 | 11.0 |
Telecommunications | 11.8 | 12.3 |
Banks & Thrifts | 10.4 | 10.6 |
Utilities | 6.3 | 6.2 |
Healthcare | 6.0 | 6.5 |
Quality Diversification (% of fund's net assets)
As of October 31, 2016 | ||
BBB | 2.3% | |
BB | 37.2% | |
B | 33.1% | |
CCC,CC,C | 15.2% | |
D | 0.1% | |
Not Rated | 3.9% | |
Equities | 2.1% | |
Short-Term Investments and Net Other Assets | 6.1% |
As of April 30, 2016 | ||
BBB | 3.4% | |
BB | 34.3% | |
B | 31.6% | |
CCC,CC,C | 16.6% | |
Not Rated | 4.1% | |
Equities | 2.3% | |
Short-Term Investments and Net Other Assets | 7.7% |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes.
Asset Allocation (% of fund's net assets)
As of October 31, 2016 * | ||
Corporate Bonds | 83.2% | |
Stocks | 2.1% | |
Preferred Securities | 6.1% | |
Other Investments | 2.5% | |
Short-Term Investments and Net Other Assets (Liabilities) | 6.1% |
* Foreign investments - 48.4%
As of April 30, 2016 * | ||
Corporate Bonds | 80.8% | |
Stocks | 2.3% | |
Preferred Securities | 6.9% | |
Other Investments | 2.3% | |
Short-Term Investments and Net Other Assets (Liabilities) | 7.7% |
* Foreign investments - 44.3%
Investments October 31, 2016 (Unaudited)
Showing Percentage of Net Assets
Nonconvertible Bonds - 83.2% | |||
Principal Amount(a) | Value | ||
Aerospace - 0.3% | |||
Finmeccanica Finance SA 5.25% 1/21/22 | EUR | $100,000 | $128,858 |
Leonardo-Finmeccanica SpA 4.875% 3/24/25 | EUR | 100,000 | 129,930 |
TransDigm, Inc. 6.375% 6/15/26 (b) | 70,000 | 71,582 | |
TOTAL AEROSPACE | 330,370 | ||
Air Transportation - 0.2% | |||
Aeropuertos Argentina 2000 SA 10.75% 12/1/20 (Reg. S) | 119,000 | 129,115 | |
Continental Airlines, Inc. 6.125% 4/29/18 | 55,000 | 57,750 | |
United Continental Holdings, Inc. 6.375% 6/1/18 | 45,000 | 47,306 | |
TOTAL AIR TRANSPORTATION | 234,171 | ||
Automotive - 0.8% | |||
Samvardhana Motherson Automotive Systems Group BV 4.125% 7/15/21 (Reg. S) | EUR | 200,000 | 224,742 |
Schaeffler Finance BV 3.5% 5/15/22 (Reg. S) | EUR | 200,000 | 226,400 |
Tenedora Nemak SA de CV 5.5% 2/28/23 (b) | 300,000 | 311,475 | |
TOTAL AUTOMOTIVE | 762,617 | ||
Automotive & Auto Parts - 1.1% | |||
American Tire Distributors, Inc. 10.25% 3/1/22 (b) | 140,000 | 128,713 | |
Faurecia SA 3.625% 6/15/23 (Reg. S) | EUR | 100,000 | 113,771 |
Fiat Finance & Trade Ltd. SA 7.375% 7/9/18 | EUR | 200,000 | 242,778 |
IHO Verwaltungs GmbH 3.75% 9/15/26 pay-in-kind(Reg. S) (c) | EUR | 200,000 | 216,823 |
Metalsa SA de CV 4.9% 4/24/23 (b) | 200,000 | 196,000 | |
ZF North America Capital, Inc.: | |||
2.25% 4/26/19 (Reg. S) | EUR | 100,000 | 114,001 |
2.75% 4/27/23 (Reg. S) | EUR | 100,000 | 117,083 |
TOTAL AUTOMOTIVE & AUTO PARTS | 1,129,169 | ||
Banks & Thrifts - 6.4% | |||
Ally Financial, Inc.: | |||
5.75% 11/20/25 | 445,000 | 455,569 | |
8% 12/31/18 | 225,000 | 246,938 | |
8% 11/1/31 | 1,195,000 | 1,427,998 | |
Banco de Bogota SA 6.25% 5/12/26 (b) | 200,000 | 206,500 | |
Banco Internacional del Peru SAA 6.625% 3/19/29 (b)(c) | 200,000 | 219,440 | |
Banco Mercantil del Norte SA 5.75% 10/4/31 (b)(c) | 200,000 | 194,500 | |
BBVA Bancomer SA 7.25% 4/22/20 (b) | 200,000 | 221,000 | |
General Motors Acceptance Corp. 8% 11/1/31 | 257,000 | 307,758 | |
GTB Finance BV 6% 11/8/18 (b) | 200,000 | 198,500 | |
Industrial Senior Trust 5.5% 11/1/22 (b) | 200,000 | 199,132 | |
Itau Unibanco Holding SA 6.2% 12/21/21 (b) | 350,000 | 371,158 | |
JSC BGEO Group 6% 7/26/23 (b) | 450,000 | 461,493 | |
JSC Halyk Bank of Kazakhstan 7.25% 1/28/21 (b) | 400,000 | 434,160 | |
Royal Bank of Scotland Group PLC: | |||
3.625% 3/25/24 (Reg. S) (c) | EUR | 100,000 | 109,024 |
5.125% 5/28/24 | 317,000 | 313,950 | |
SB Capital SA 5.5% 2/26/24 (b)(c) | 200,000 | 198,000 | |
Turkiye Garanti Bankasi A/S 4.75% 10/17/19 (b) | 200,000 | 201,902 | |
Turkiye Halk Bankasi A/S 3.875% 2/5/20 (b) | 200,000 | 191,500 | |
Turkiye Is Bankasi A/S 3.75% 10/10/18 (b) | 200,000 | 197,420 | |
Zenith Bank PLC 6.25% 4/22/19 (b) | 400,000 | 389,072 | |
TOTAL BANKS & THRIFTS | 6,545,014 | ||
Broadcasting - 0.6% | |||
AMC Networks, Inc. 4.75% 12/15/22 | 100,000 | 102,000 | |
Clear Channel Communications, Inc. 5.5% 12/15/16 | 185,000 | 182,225 | |
TV Azteca SA de CV 7.5% 5/25/18 (Reg. S) | 350,000 | 301,000 | |
TOTAL BROADCASTING | 585,225 | ||
Building Materials - 2.3% | |||
Builders FirstSource, Inc. 5.625% 9/1/24 (b) | 55,000 | 55,550 | |
CEMEX Finance LLC: | |||
5.25% 4/1/21 (Reg. S) | EUR | 100,000 | 114,122 |
6% 4/1/24 (Reg. S) | 450,000 | 465,750 | |
Elementia S.A.B. de CV 5.5% 1/15/25 (b) | 200,000 | 203,600 | |
GCP Applied Technologies, Inc. 9.5% 2/1/23(b) | 70,000 | 79,275 | |
HD Supply, Inc. 5.75% 4/15/24 (b) | 30,000 | 31,500 | |
HeidelbergCement Finance BV 3.25% 10/21/21 (Reg. S) | EUR | 300,000 | 365,962 |
Herc Rentals, Inc.: | |||
7.5% 6/1/22 (b) | 45,000 | 45,000 | |
7.75% 6/1/24 (b) | 45,000 | 45,225 | |
HMAN Finance Sub Corp. 6.375% 7/15/22 (b) | 100,000 | 92,750 | |
Modern Land China Co. Ltd. 13.875% 11/4/18 (Reg. S) | 100,000 | 107,441 | |
Pratama Agung Pte. Ltd. 6.25% 2/24/20 (Reg. S) | 200,000 | 210,505 | |
Union Andina de Cementos SAA 5.875% 10/30/21 (Reg. S) | 300,000 | 311,700 | |
West China Cement Ltd. 6.5% 9/11/19 | 200,000 | 207,339 | |
TOTAL BUILDING MATERIALS | 2,335,719 | ||
Cable/Satellite TV - 5.3% | |||
Altice SA: | |||
7.625% 2/15/25 (b) | 400,000 | 416,000 | |
7.75% 5/15/22 (b) | 235,000 | 245,428 | |
Altice U.S. Finance SA 7.75% 7/15/25 (b) | 400,000 | 428,000 | |
Cable One, Inc. 5.75% 6/15/22 (b) | 55,000 | 58,025 | |
Cablevision SA 6.5% 6/15/21 (b) | 150,000 | 156,000 | |
CCO Holdings LLC/CCO Holdings Capital Corp.: | |||
5.5% 5/1/26 (b) | 110,000 | 112,682 | |
5.75% 1/15/24 | 615,000 | 650,363 | |
5.75% 2/15/26 (b) | 65,000 | 67,722 | |
Cequel Communications Holdings I LLC/Cequel Capital Corp. 5.125% 12/15/21 (b) | 255,000 | 251,175 | |
CSC Holdings, Inc. 5.5% 4/15/27 (b) | 345,000 | 349,959 | |
DISH DBS Corp. 5% 3/15/23 | 470,000 | 462,950 | |
Myriad International Holding BV 5.5% 7/21/25 (b) | 200,000 | 212,016 | |
RCN Telecom Services LLC/RCN Capital Corp. 8.5% 8/15/20 (b) | 170,000 | 181,156 | |
Telenet Finance VI Luxembourg SCA 4.875% 7/15/27 (Reg. S) | EUR | 100,000 | 114,484 |
Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH: | |||
3.5% 1/15/27 (Reg. S) | EUR | 100,000 | 107,717 |
5.5% 9/15/22 (Reg. S) | EUR | 324,000 | 374,344 |
5.5% 1/15/23 (b) | 200,000 | 207,250 | |
Virgin Media Finance PLC 4.5% 1/15/25 (Reg. S) | EUR | 100,000 | 108,842 |
VTR Finance BV 6.875% 1/15/24 (b) | 600,000 | 627,750 | |
Ziggo Bond Finance BV 6% 1/15/27 (b) | 160,000 | 157,100 | |
Ziggo Secured Finance BV 3.75% 1/15/25 (Reg. S) | EUR | 100,000 | 110,209 |
TOTAL CABLE/SATELLITE TV | 5,399,172 | ||
Capital Goods - 0.3% | |||
Shale-Inland Holdings LLC/Shale-Inland Finance Corp. 8.75% 11/15/19 (b) | 180,000 | 107,550 | |
Zoomlion HK SPV Co. Ltd. 6.125% 12/20/22 (Reg. S) | 200,000 | 190,000 | |
TOTAL CAPITAL GOODS | 297,550 | ||
Chemicals - 1.4% | |||
Blue Cube Spinco, Inc. 10% 10/15/25 | 45,000 | 54,000 | |
Evolution Escrow Issuer LLC 7.5% 3/15/22 (b) | 160,000 | 143,200 | |
INEOS Group Holdings SA 5.75% 2/15/19 (Reg. S) | EUR | 250,000 | 281,276 |
LSB Industries, Inc. 8.5% 8/1/19 | 65,000 | 60,450 | |
Momentive Performance Materials, Inc. 3.88% 10/24/21 | 200,000 | 178,000 | |
MPM Escrow LLC/MPM Finance Escrow Corp. 8.875% 10/15/20 (d) | 140,000 | 0 | |
OCP SA 5.625% 4/25/24 (b) | 200,000 | 215,040 | |
Platform Specialty Products Corp.: | |||
6.5% 2/1/22 (b) | 200,000 | 194,000 | |
10.375% 5/1/21 (b) | 25,000 | 27,000 | |
Tronox Finance LLC 6.375% 8/15/20 | 100,000 | 89,750 | |
Yingde Gases Investment Ltd. 7.25% 2/28/20 (Reg. S) | 200,000 | 185,419 | |
TOTAL CHEMICALS | 1,428,135 | ||
Containers - 1.9% | |||
ARD Finance SA 7.125% 9/15/23 pay-in-kind (b) | 200,000 | 198,000 | |
Ardagh Packaging Finance PLC/Ardagh MP Holdings U.S.A., Inc.: | |||
6.75% 5/15/24 (Reg. S) | EUR | 100,000 | 116,910 |
7% 11/15/20 (b) | 35,294 | 36,353 | |
7.25% 5/15/24 (b) | 200,000 | 211,000 | |
Ball Corp.: | |||
3.5% 12/15/20 | EUR | 100,000 | 121,107 |
4.375% 12/15/23 | EUR | 200,000 | 246,796 |
Consolidated Container Co. LLC/Consolidated Container Capital, Inc. 10.125% 7/15/20 (b) | 155,000 | 156,550 | |
Crown European Holdings SA 3.375% 5/15/25 | EUR | 300,000 | 337,657 |
OI European Group BV 6.75% 9/15/20 (Reg. S) | EUR | 150,000 | 197,315 |
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer (Luxembourg) SA 5.75% 10/15/20 | 285,000 | 292,490 | |
TOTAL CONTAINERS | 1,914,178 | ||
Diversified Financial Services - 5.1% | |||
Aircastle Ltd. 5.125% 3/15/21 | 220,000 | 233,475 | |
Arrow Global Finance PLC 4.951% 11/1/21 (c) | EUR | 200,000 | 226,356 |
Boing Group Financing PLC 6.625% 7/15/19 (Reg. S) | EUR | 100,000 | 105,933 |
Cabot Financial SA (Luxembourg) 5.875% 11/15/21 (Reg. S) (c) | EUR | 150,000 | 160,809 |
CIT Group, Inc. 5% 8/1/23 | 215,000 | 228,997 | |
Comcel Trust 6.875% 2/6/24 (b) | 200,000 | 204,500 | |
Credito Real S.A.B. de CV 7.5% 3/13/19 (b) | 200,000 | 206,250 | |
Garfunkelux Holdco 3 SA 7.5% 8/1/22 (Reg. S) | EUR | 200,000 | 221,526 |
Icahn Enterprises LP/Icahn Enterprises Finance Corp. 5.875% 2/1/22 | 305,000 | 290,131 | |
Inception Merger Sub, Inc./Rackspace Hosting, Inc. 8.625% 11/15/24 (b) | 55,000 | 55,000 | |
International Lease Finance Corp.: | |||
5.875% 8/15/22 | 375,000 | 412,980 | |
8.625% 1/15/22 | 255,000 | 312,694 | |
International Personal Finance PLC 5.75% 4/7/21 (Reg S.) | EUR | 100,000 | 99,895 |
Lock A/S 7% 8/15/21 (Reg. S) | EUR | 100,000 | 114,121 |
MSCI, Inc. 5.75% 8/15/25 (b) | 50,000 | 53,158 | |
Navient Corp.: | |||
5% 10/26/20 | 54,000 | 53,325 | |
7.25% 9/25/23 | 30,000 | 29,550 | |
Prime Securities Services Borrower LLC/Prime Finance, Inc. 9.25% 5/15/23 (b) | 425,000 | 451,563 | |
Schumann SpA 7% 7/31/23 (Reg. S) | EUR | 200,000 | 222,945 |
SLM Corp.: | |||
4.875% 6/17/19 | 30,000 | 30,263 | |
5.5% 1/25/23 | 475,000 | 431,063 | |
6.125% 3/25/24 | 365,000 | 333,975 | |
8% 3/25/20 | 190,000 | 206,150 | |
Verisure Holding AB 6% 11/1/22 (Reg. S) | EUR | 260,000 | 310,389 |
Zhongrong International Bond 2015 Ltd. 6% 6/15/18 (Reg. S) | 200,000 | 203,422 | |
TOTAL DIVERSIFIED FINANCIAL SERVICES | 5,198,470 | ||
Diversified Media - 0.4% | |||
MDC Partners, Inc. 6.5% 5/1/24 (b) | 95,000 | 80,988 | |
National CineMedia LLC 6% 4/15/22 | 300,000 | 312,000 | |
TOTAL DIVERSIFIED MEDIA | 392,988 | ||
Energy - 11.7% | |||
Afren PLC 10.25% 4/8/19 (b)(d) | 285,920 | 29 | |
Antero Resources Corp.: | |||
5.125% 12/1/22 | 420,000 | 423,150 | |
5.625% 6/1/23 (Reg. S) | 80,000 | 81,600 | |
Areva SA 4.875% 9/23/24 | EUR | 200,000 | 220,648 |
Callon Petroleum Co. 6.125% 10/1/24 (b) | 25,000 | 25,750 | |
Carrizo Oil & Gas, Inc. 6.25% 4/15/23 | 55,000 | 56,513 | |
Chesapeake Energy Corp.: | |||
4.13% 4/15/19 (c) | 70,000 | 64,575 | |
4.875% 4/15/22 | 180,000 | 153,000 | |
5.75% 3/15/23 | 65,000 | 56,225 | |
8% 12/15/22 (b) | 365,000 | 370,247 | |
China Oil & Gas Group Ltd. 5.25% 4/25/18 (Reg. S) | 200,000 | 203,000 | |
Citgo Holding, Inc. 10.75% 2/15/20 (b) | 155,000 | 158,255 | |
Concho Resources, Inc.: | |||
5.5% 10/1/22 | 55,000 | 56,513 | |
5.5% 4/1/23 | 25,000 | 25,575 | |
EDC Finance Ltd. 4.875% 4/17/20 (b) | 200,000 | 202,000 | |
Energy Transfer Equity LP 7.5% 10/15/20 | 30,000 | 32,700 | |
Ensco PLC: | |||
4.5% 10/1/24 | 70,000 | 56,000 | |
5.2% 3/15/25 | 5,000 | 4,067 | |
Exterran Partners LP/EXLP Finance Corp. 6% 10/1/22 | 250,000 | 235,625 | |
Gaz Capital SA: | |||
3.389% 3/20/20 (Reg. S) | EUR | 100,000 | 113,500 |
3.6% 2/26/21 (Reg. S) | EUR | 300,000 | 344,178 |
Gibson Energy, Inc. 6.75% 7/15/21 (b) | 370,000 | 380,175 | |
Greenko Dutch BV 8% 8/1/19 (Reg. S) | 200,000 | 213,623 | |
Gulfmark Offshore, Inc. 6.375% 3/15/22 | 340,000 | 166,600 | |
Hilcorp Energy I LP/Hilcorp Finance Co.: | |||
5% 12/1/24 (b) | 320,000 | 312,000 | |
5.75% 10/1/25 (b) | 200,000 | 200,500 | |
7.625% 4/15/21 (b) | 10,000 | 10,250 | |
Hornbeck Offshore Services, Inc.: | |||
5% 3/1/21 | 5,000 | 2,975 | |
5.875% 4/1/20 | 80,000 | 51,600 | |
Indo Energy Finance II BV 6.375% 1/24/23 | 200,000 | 156,013 | |
Jupiter Resources, Inc. 8.5% 10/1/22 (b) | 150,000 | 123,000 | |
Kosmos Energy Ltd. 7.875% 8/1/21 (b) | 200,000 | 192,000 | |
LINN Energy LLC/LINN Energy Finance Corp.: | |||
6.5% 9/15/21 (d) | 35,000 | 11,375 | |
7.75% 2/1/21 (d) | 5,000 | 1,625 | |
Murphy Oil Corp. 6.875% 8/15/24 | 20,000 | 20,820 | |
Noble Holding International Ltd.: | |||
3.95% 3/15/22 | 10,000 | 7,675 | |
4.625% 3/1/21 | 20,000 | 16,889 | |
7.2% 4/1/25 (c) | 25,000 | 20,375 | |
Oasis Petroleum, Inc. 6.875% 3/15/22 | 45,000 | 44,550 | |
Pacific Drilling V Ltd. 7.25% 12/1/17 (b) | 380,000 | 150,100 | |
Pacific Exploration and Production Corp. 12% 12/22/16 | 88,000 | 88,616 | |
Pacific Rubiales Energy Corp. 7.25% 12/12/21 (b)(d) | 500,000 | 100,000 | |
Pan American Energy LLC 7.875% 5/7/21 (b) | 500,000 | 536,875 | |
Parsley Energy LLC/Parsley 6.25% 6/1/24 (b) | 10,000 | 10,500 | |
PBF Holding Co. LLC/PBF Finance Corp. 7% 11/15/23 (b) | 130,000 | 120,250 | |
Petroleos Mexicanos 6.375% 2/4/21 (b) | 200,000 | 218,800 | |
Plains Exploration & Production Co.: | |||
6.5% 11/15/20 | 15,000 | 15,319 | |
6.625% 5/1/21 | 15,000 | 15,300 | |
6.75% 2/1/22 | 50,000 | 51,125 | |
6.875% 2/15/23 | 215,000 | 223,063 | |
Pride International, Inc. 7.875% 8/15/40 | 95,000 | 76,000 | |
Puma International Financing SA 6.75% 2/1/21 (Reg. S) | 200,000 | 206,044 | |
Range Resources Corp. 4.875% 5/15/25 | 60,000 | 57,331 | |
Rice Energy, Inc.: | |||
6.25% 5/1/22 | 40,000 | 40,700 | |
7.25% 5/1/23 | 40,000 | 42,400 | |
Rose Rock Midstream LP/Rose Rock Finance Corp. 5.625% 7/15/22 | 125,000 | 119,375 | |
Sabine Pass Liquefaction LLC: | |||
5% 3/15/27 (b) | 85,000 | 86,488 | |
5.625% 2/1/21 (c) | 260,000 | 273,650 | |
5.625% 4/15/23 (c) | 225,000 | 239,063 | |
5.625% 3/1/25 | 45,000 | 47,617 | |
5.75% 5/15/24 | 80,000 | 84,600 | |
5.875% 6/30/26 (b) | 140,000 | 150,878 | |
SemGroup Corp. 7.5% 6/15/21 | 370,000 | 378,325 | |
SM Energy Co.: | |||
5% 1/15/24 | 65,000 | 60,450 | |
5.625% 6/1/25 | 110,000 | 104,775 | |
6.125% 11/15/22 | 150,000 | 150,750 | |
6.5% 11/15/21 | 30,000 | 30,450 | |
6.5% 1/1/23 | 15,000 | 14,925 | |
6.75% 9/15/26 | 25,000 | 25,625 | |
Summit Midstream Holdings LLC 7.5% 7/1/21 | 100,000 | 104,000 | |
Sunoco LP/Sunoco Finance Corp.: | |||
6.25% 4/15/21 | 110,000 | 112,750 | |
6.375% 4/1/23 | 60,000 | 61,350 | |
Targa Resources Partners LP/Targa Resources Partners Finance Corp.: | |||
5.125% 2/1/25 (b) | 35,000 | 34,913 | |
5.375% 2/1/27 (b) | 35,000 | 35,000 | |
6.375% 8/1/22 | 60,000 | 61,800 | |
Teine Energy Ltd. 6.875% 9/30/22 (b) | 145,000 | 147,538 | |
TerraForm Power Operating LLC: | |||
9.375% 2/1/23 (b)(c) | 340,000 | 340,850 | |
9.625% 6/15/25 (b)(c) | 55,000 | 56,788 | |
Tesoro Logistics LP/Tesoro Logistics Finance Corp.: | |||
6.125% 10/15/21 | 20,000 | 20,925 | |
6.375% 5/1/24 | 45,000 | 48,488 | |
Transportadora de Gas del Sur SA 9.625% 5/14/20 (b) | 431,097 | 464,507 | |
Ultrapar Participacoes SA 5.25% 10/6/26 (b) | 200,000 | 202,750 | |
Weatherford International Ltd.: | |||
4.5% 4/15/22 | 70,000 | 63,000 | |
7.75% 6/15/21 | 90,000 | 90,900 | |
8.25% 6/15/23 | 110,000 | 113,850 | |
Western Refining Logistics LP/WNRL Finance Co. 7.5% 2/15/23 | 40,000 | 41,800 | |
Western Refining, Inc. 6.25% 4/1/21 | 105,000 | 105,788 | |
WPX Energy, Inc.: | |||
5.25% 9/15/24 | 65,000 | 61,750 | |
6% 1/15/22 | 95,000 | 94,763 | |
7.5% 8/1/20 | 65,000 | 68,494 | |
8.25% 8/1/23 | 100,000 | 108,000 | |
YPF SA: | |||
8.5% 3/23/21 (b) | 150,000 | 164,955 | |
8.5% 7/28/25 (b) | 400,000 | 436,000 | |
Zhaikmunai International BV 7.125% 11/13/19 (b) | 400,000 | 369,000 | |
TOTAL ENERGY | 11,944,548 | ||
Entertainment/Film - 0.3% | |||
NAI Entertainment Holdings LLC/NAI Entertainment Finance Corp. 5% 8/1/18 (b) | 170,000 | 171,700 | |
New Cotai LLC/New Cotai Capital Corp. 10.625% 5/1/19 pay-in-kind (b)(c) | 250,000 | 134,219 | |
TOTAL ENTERTAINMENT/FILM | 305,919 | ||
Environmental - 0.4% | |||
Covanta Holding Corp.: | |||
5.875% 3/1/24 | 110,000 | 108,488 | |
6.375% 10/1/22 | 95,000 | 96,663 | |
LBC Tank Terminals Holding Netherlands BV 6.875% 5/15/23 (b) | 200,000 | 200,500 | |
TOTAL ENVIRONMENTAL | 405,651 | ||
Food & Drug Retail - 1.8% | |||
Albertsons Companies LLC/Safeway, Inc./New Albertson's, Inc./Albertson's LLC: | |||
5.75% 3/15/25 (b) | 125,000 | 123,399 | |
6.625% 6/15/24 (b) | 100,000 | 103,750 | |
Casino Guichard Perrachon SA 5.976% 5/26/21 (c) | EUR | 100,000 | 129,260 |
FAGE International SA/FAGE U.S.A. Dairy Industry, Inc. 5.625% 8/15/26 (b) | 200,000 | 206,500 | |
Rite Aid Corp.: | |||
6.875% 12/15/28 (b)(c) | 505,000 | 609,788 | |
7.7% 2/15/27 | 296,000 | 367,040 | |
Tesco PLC 5.125% 4/10/47 | EUR | 100,000 | 108,928 |
Tops Holding LLC/Tops Markets II Corp. 8% 6/15/22 (b) | 165,000 | 145,200 | |
TOTAL FOOD & DRUG RETAIL | 1,793,865 | ||
Food/Beverage/Tobacco - 2.1% | |||
Arcor SAIC 6% 7/6/23 (b) | 100,000 | 106,000 | |
ESAL GmbH 6.25% 2/5/23 (b) | 155,000 | 149,188 | |
Gruma S.A.B. de CV 4.875% 12/1/24 (b) | 300,000 | 325,500 | |
JBS Investments GmbH 7.25% 4/3/24 (b) | 410,000 | 414,100 | |
JBS U.S.A. LLC/JBS U.S.A. Finance, Inc. 5.75% 6/15/25 (b) | 65,000 | 63,700 | |
MHP SA 8.25% 4/2/20 (b) | 200,000 | 195,796 | |
Minerva Luxembourg SA 6.5% 9/20/26 (b) | 400,000 | 391,760 | |
Post Holdings, Inc.: | |||
6.75% 12/1/21 (b) | 190,000 | 203,300 | |
7.75% 3/15/24 (b) | 65,000 | 71,838 | |
8% 7/15/25 (b) | 35,000 | 39,900 | |
TreeHouse Foods, Inc. 6% 2/15/24 (b) | 40,000 | 42,960 | |
U.S. Foods, Inc. 5.875% 6/15/24 (b) | 75,000 | 78,000 | |
Vector Group Ltd. 7.75% 2/15/21 | 50,000 | 52,375 | |
TOTAL FOOD/BEVERAGE/TOBACCO | 2,134,417 | ||
Gaming - 2.0% | |||
Caesars Growth Properties Holdings LLC/Caesars Growth Properties Finance, Inc. 9.375% 5/1/22 | 405,000 | 430,313 | |
Cleopatra Finance Ltd. 4.75% 2/15/23 (Reg. S) | EUR | 200,000 | 237,937 |
GLP Capital LP/GLP Financing II, Inc. 5.375% 4/15/26 | 30,000 | 31,875 | |
Golden Nugget Escrow, Inc. 8.5% 12/1/21 (b) | 130,000 | 136,500 | |
MGM Mirage, Inc. 8.625% 2/1/19 | 115,000 | 129,016 | |
Paris Las Vegas Holding LLC/Harrah's Las Vegas LLC/Flamingo Las Vegas Holdings, Inc. 11% 10/1/21 (c) | 305,000 | 329,019 | |
Scientific Games Corp. 10% 12/1/22 | 270,000 | 249,750 | |
Studio City Finance Ltd. 8.5% 12/1/20 (b) | 200,000 | 207,000 | |
Wynn Macau Ltd. 5.25% 10/15/21 (b) | 300,000 | 301,047 | |
TOTAL GAMING | 2,052,457 | ||
Healthcare - 5.1% | |||
Acadia Healthcare Co., Inc. 5.625% 2/15/23 | 45,000 | 45,056 | |
AMAG Pharmaceuticals, Inc. 7.875% 9/1/23 (b) | 75,000 | 70,313 | |
Cerba European Lab SAS 7% 2/1/20 (Reg. S) | EUR | 200,000 | 226,848 |
Community Health Systems, Inc. 6.875% 2/1/22 | 280,000 | 213,500 | |
CTR Partnership LP/CareTrust Capital Corp. 5.875% 6/1/21 | 40,000 | 41,200 | |
DaVita HealthCare Partners, Inc. 5% 5/1/25 | 95,000 | 91,675 | |
Endo Finance LLC 5.375% 1/15/23 (b)(c) | 20,000 | 17,000 | |
Endo Finance LLC/Endo Ltd./Endo Finco, Inc.: | |||
6% 7/15/23 (b) | 200,000 | 174,000 | |
6.5% 2/1/25 (b)(c) | 295,000 | 248,538 | |
FMC Finance VII SA 5.25% 2/15/21 | EUR | 250,000 | 324,776 |
HCA Holdings, Inc.: | |||
5% 3/15/24 | 185,000 | 192,678 | |
5.875% 3/15/22 | 274,000 | 301,400 | |
5.875% 2/15/26 | 85,000 | 89,250 | |
7.5% 2/15/22 | 180,000 | 204,840 | |
HealthSouth Corp.: | |||
5.75% 11/1/24 | 150,000 | 154,688 | |
5.75% 9/15/25 | 15,000 | 15,525 | |
IMS Health, Inc. 5% 10/15/26 (b) | 200,000 | 206,750 | |
Sabra Health Care LP/Sabra Capital Corp.: | |||
5.375% 6/1/23 | 155,000 | 158,100 | |
5.5% 2/1/21 | 120,000 | 125,100 | |
Team Health, Inc. 7.25% 12/15/23 (b) | 70,000 | 79,188 | |
Tenet Healthcare Corp.: | |||
6.75% 6/15/23 | 140,000 | 128,625 | |
8.125% 4/1/22 | 655,000 | 640,263 | |
Valeant Pharmaceuticals International, Inc.: | |||
5.375% 3/15/20 (b) | 280,000 | 242,200 | |
5.5% 3/1/23 (b) | 115,000 | 90,275 | |
5.625% 12/1/21 (b) | 155,000 | 127,100 | |
5.875% 5/15/23 (b) | 520,000 | 409,500 | |
6.125% 4/15/25 (b) | 205,000 | 161,950 | |
6.75% 8/15/21 (b) | 40,000 | 34,600 | |
7.25% 7/15/22 (b) | 25,000 | 21,750 | |
7.5% 7/15/21 (b) | 313,000 | 278,570 | |
Vizient, Inc. 10.375% 3/1/24 (b) | 80,000 | 89,200 | |
TOTAL HEALTHCARE | 5,204,458 | ||
Homebuilders/Real Estate - 3.8% | |||
Ashton Woods U.S.A. LLC/Ashton Woods Finance Co. 6.875% 2/15/21 (b) | 405,000 | 396,900 | |
Beazer Homes U.S.A., Inc. 7.25% 2/1/23 (c) | 140,000 | 140,700 | |
Brookfield Residential Properties, Inc./Brookfield Residential U.S. Corp. 6.125% 7/1/22 (b) | 5,000 | 5,075 | |
Brookfield Residential Properties, Inc.: | |||
6.375% 5/15/25 (b) | 15,000 | 14,963 | |
6.5% 12/15/20 (b) | 115,000 | 118,450 | |
Cementos Progreso Trust 7.125% 11/6/23 (b) | 200,000 | 211,500 | |
Future Land Development Holding Ltd. 6.25% 11/12/17 (Reg. S) | 200,000 | 203,494 | |
IRSA Propiedades Comerciales SA 8.75% 3/23/23 (b) | 150,000 | 166,500 | |
KWG Property Holding Ltd. 8.25% 8/5/19 (Reg. S) | 200,000 | 212,850 | |
Lodha Developers International Ltd. 12% 3/13/20 (Reg. S) | 200,000 | 200,000 | |
Logan Property Holdings Co. Ltd. 11.25% 6/4/19 (Reg. S) | 200,000 | 217,986 | |
Marquee Land Pte. Ltd. 9.75% 8/5/19 (Reg. S) | 200,000 | 215,760 | |
Powerlong Real Estate Holding Ltd. 7.625% 11/26/18 (Reg. S) | 200,000 | 211,080 | |
Ryland Group, Inc. 5.375% 10/1/22 | 55,000 | 57,819 | |
Shea Homes Ltd. Partnership/Corp.: | |||
5.875% 4/1/23 (b) | 30,000 | 29,475 | |
6.125% 4/1/25 (b) | 30,000 | 29,550 | |
Shimao Property Holdings Ltd. 8.125% 1/22/21 (Reg. S) | 200,000 | 218,502 | |
Shui On Development Holding Ltd. 8.7% 5/19/18 (Reg. S) | 200,000 | 212,742 | |
Theta Capital Pte Ltd. 7% 4/11/22 (Reg. S) | 200,000 | 211,651 | |
Times Property Holdings Ltd. 12.625% 3/21/19 (Reg. S) | 200,000 | 218,493 | |
Weekley Homes LLC/Weekley Finance Corp. 6% 2/1/23 | 90,000 | 81,900 | |
William Lyon Homes, Inc. 8.5% 11/15/20 | 215,000 | 225,213 | |
Woodside Homes Co. LLC/Woodside Homes Finance, Inc. 6.75% 12/15/21 (b) | 265,000 | 257,050 | |
TOTAL HOMEBUILDERS/REAL ESTATE | 3,857,653 | ||
Insurance - 0.4% | |||
Alliant Holdings Co.-Issuer, Inc./Wayne Merger Sub LLC 8.25% 8/1/23 (b) | 100,000 | 101,750 | |
Assicurazioni Generali SpA 10.125% 7/10/42 (c) | EUR | 100,000 | 141,888 |
Hockey Merger Sub 2, Inc. 7.875% 10/1/21 (b) | 140,000 | 143,108 | |
TOTAL INSURANCE | 386,746 | ||
Leisure - 0.1% | |||
24 Hour Holdings III LLC 8% 6/1/22 (b) | 100,000 | 83,000 | |
Metals/Mining - 2.4% | |||
Abja Investment Co. Pte Ltd. 5.95% 7/31/24 (Reg. S) | 200,000 | 201,344 | |
Alpha Natural Resources, Inc. 9.75% 4/15/18 (d) | 210,000 | 1,050 | |
Anglo American Capital PLC 1.75% 4/3/18 (Reg. S) | EUR | 100,000 | 111,149 |
ArcelorMittal SA: | |||
3% 3/25/19 (Reg. S) | EUR | 100,000 | 114,600 |
3.125% 1/14/22 (Reg. S) | EUR | 100,000 | 112,416 |
Bluescope Steel Ltd./Bluescope Steel Finance: | |||
6.5% 5/15/21 (b) | 25,000 | 26,378 | |
7.125% 5/1/18 (b) | 18,000 | 18,360 | |
Compania Minera Ares SAC 7.75% 1/23/21 (b) | 200,000 | 215,750 | |
Gold Fields Orogen Holding BVI Ltd. 4.875% 10/7/20 (b) | 400,000 | 404,500 | |
Joseph T Ryerson & Son, Inc. 11% 5/15/22 (b) | 40,000 | 43,700 | |
MMC Finance Ltd. 6.625% 10/14/22 (Reg. S) | 200,000 | 223,000 | |
Novelis Corp. 5.875% 9/30/26 (b) | 70,000 | 70,875 | |
Peabody Energy Corp. 10% 3/15/22 (b)(d) | 85,000 | 61,413 | |
Prince Mineral Holding Corp. 11.5% 12/15/19 (b)(c) | 55,000 | 51,700 | |
Southern Copper Corp. 7.5% 7/27/35 | 250,000 | 294,147 | |
Teck Resources Ltd.: | |||
8% 6/1/21 (b) | 45,000 | 49,163 | |
8.5% 6/1/24 (b) | 120,000 | 138,900 | |
Vale Overseas Ltd. 5.875% 6/10/21 | 100,000 | 106,625 | |
Vedanta Resources PLC 8.25% 6/7/21 (Reg. S) | 200,000 | 204,760 | |
Walter Energy, Inc. 9.5% 10/15/19 (b)(d) | 155,000 | 0 | |
TOTAL METALS/MINING | 2,449,830 | ||
Paper - 0.3% | |||
Lecta SA 6.5% 8/1/23 (Reg. S) | EUR | 100,000 | 110,461 |
Smurfit Kappa Acquisitions 3.25% 6/1/21 (Reg. S) | EUR | 200,000 | 238,212 |
TOTAL PAPER | 348,673 | ||
Publishing/Printing - 0.8% | |||
Cenveo Corp. 6% 8/1/19 (b) | 145,000 | 127,600 | |
McGraw-Hill Global Education Holdings LLC/McGraw-Hill Global Education Finance 7.875% 5/15/24 (b) | 250,000 | 270,625 | |
MHGE Parent LLC/MHGE Parent Finance, Inc. 8.5% 8/1/19 pay-in-kind (b)(c) | 410,000 | 414,613 | |
TOTAL PUBLISHING/PRINTING | 812,838 | ||
Railroad - 0.1% | |||
RZD Capital Ltd. 3.3744% 5/20/21 (Reg. S) | EUR | 100,000 | 113,782 |
Restaurants - 0.5% | |||
1011778 BC Unlimited Liability Co./New Red Finance, Inc. 4.625% 1/15/22 (b) | 70,000 | 72,275 | |
Arcos Dorados Holdings, Inc. 6.625% 9/27/23 (Reg. S) | 100,000 | 104,500 | |
KFC Holding Co./Pizza Hut Holding LLC: | |||
5% 6/1/24 (b) | 195,000 | 202,800 | |
5.25% 6/1/26 (b) | 100,000 | 104,250 | |
Landry's Acquisition Co. 6.75% 10/15/24 (b) | 55,000 | 56,100 | |
TOTAL RESTAURANTS | 539,925 | ||
Services - 3.5% | |||
APX Group, Inc.: | |||
6.375% 12/1/19 | 140,000 | 144,375 | |
7.875% 12/1/22 | 370,000 | 389,429 | |
8.75% 12/1/20 | 1,000,000 | 967,500 | |
Avis Budget Car Rental LLC/Avis Budget Finance, Inc. 6.375% 4/1/24 (b) | 155,000 | 155,775 | |
Blueline Rent Finance Corp./Volvo 7% 2/1/19 (b) | 95,000 | 82,888 | |
Ephios Holdco II PLC 8.25% 7/1/23 (Reg. S) | EUR | 100,000 | 118,294 |
Everi Payments, Inc. 10% 1/15/22 | 35,000 | 33,381 | |
FTI Consulting, Inc. 6% 11/15/22 | 175,000 | 183,750 | |
Garda World Security Corp.: | |||
7.25% 11/15/21 (b) | 200,000 | 191,000 | |
7.25% 11/15/21 (b) | 100,000 | 95,500 | |
Jurassic Holdings III, Inc. 6.875% 2/15/21 (Reg. S) (b) | 220,000 | 174,900 | |
Laureate Education, Inc. 10% 9/1/19 (b)(c) | 920,000 | 851,000 | |
NES Rentals Holdings, Inc. 7.875% 5/1/18 (b) | 70,000 | 68,600 | |
TMS International Corp. 7.625% 10/15/21 (b) | 55,000 | 45,375 | |
United Rentals North America, Inc.: | |||
5.5% 7/15/25 | 60,000 | 60,750 | |
5.5% 5/15/27 (e) | 45,000 | 44,775 | |
TOTAL SERVICES | 3,607,292 | ||
Steel - 0.8% | |||
EVRAZ Group SA 6.5% 4/22/20 (b) | 200,000 | 205,498 | |
Evraz, Inc. NA Canada 7.5% 11/15/19 (b) | 200,000 | 201,750 | |
Metinvest BV 10.25% 11/30/16 (b) | 79,178 | 67,697 | |
Steel Capital SA 5.9% 10/17/22 (Reg. S) | 200,000 | 216,466 | |
Thyssenkrupp AG 3.125% 10/25/19 (Reg. S) | EUR | 80,000 | 92,979 |
TOTAL STEEL | 784,390 | ||
Super Retail - 0.9% | |||
InRetail Shopping Malls 6.5% 7/9/21 (b) | 200,000 | 210,500 | |
JC Penney Corp., Inc.: | |||
5.65% 6/1/20 | 260,000 | 257,400 | |
7.4% 4/1/37 | 85,000 | 77,775 | |
L Brands, Inc. 6.875% 11/1/35 | 90,000 | 95,400 | |
MPM Global Pte Ltd. 6.75% 9/19/19 (Reg. S) | 100,000 | 104,442 | |
Netflix, Inc. 4.375% 11/15/26 (b) | 110,000 | 108,213 | |
Sally Holdings LLC 5.625% 12/1/25 | 70,000 | 74,725 | |
TOTAL SUPER RETAIL | 928,455 | ||
Technology - 2.5% | |||
BCP Singapore VI Cayman Financing Co. Ltd. 8% 4/15/21 (b) | 200,000 | 197,360 | |
Brocade Communications Systems, Inc. 4.625% 1/15/23 | 135,000 | 132,975 | |
CDW LLC/CDW Finance Corp. 6% 8/15/22 | 155,000 | 164,300 | |
Diamond 1 Finance Corp./Diamond 2 Finance Corp.: | |||
5.875% 6/15/21 (b) | 65,000 | 68,507 | |
7.125% 6/15/24 (b) | 65,000 | 71,205 | |
JDA Escrow LLC/JDA Bond Finance, Inc. 7.375% 10/15/24 (b) | 25,000 | 25,813 | |
Lucent Technologies, Inc. 6.45% 3/15/29 | 425,000 | 468,563 | |
Micron Technology, Inc.: | |||
5.25% 1/15/24 (b) | 60,000 | 58,500 | |
5.5% 2/1/25 | 85,000 | 83,326 | |
Parametric Technology Corp. 6% 5/15/24 | 20,000 | 21,150 | |
Rackspace Hosting, Inc. 6.5% 1/15/24 (b) | 75,000 | 85,781 | |
Sabre GLBL, Inc. 5.25% 11/15/23 (b) | 85,000 | 87,231 | |
Sensata Technologies BV 4.875% 10/15/23 (b) | 120,000 | 124,350 | |
Solera LLC/Solera Finance, Inc. 10.5% 3/1/24 (b) | 320,000 | 357,702 | |
STATS ChipPAC Ltd. 8.5% 11/24/20 (Reg. S) | 200,000 | 207,260 | |
Western Digital Corp. 10.5% 4/1/24 (b) | 110,000 | 127,050 | |
WideOpenWest Finance LLC/WideOpenWest Capital Corp.: | |||
10.25% 7/15/19 | 191,000 | 200,550 | |
13.375% 10/15/19 | 15,000 | 16,050 | |
TOTAL TECHNOLOGY | 2,497,673 | ||
Telecommunications - 10.9% | |||
Altice Financing SA: | |||
6.625% 2/15/23 (b) | 200,000 | 206,000 | |
7.5% 5/15/26 (b) | 200,000 | 206,000 | |
Altice Finco SA: | |||
7.625% 2/15/25 (b) | 600,000 | 594,000 | |
8.125% 1/15/24 (b) | 200,000 | 205,000 | |
Banglalink Digital Communications Ltd.: | |||
8.625% 5/6/19 (b) | 200,000 | 212,500 | |
8.625% 5/6/19 (Reg. S) | 200,000 | 212,500 | |
Broadview Networks Holdings, Inc. 10.5% 11/15/17 | 187,500 | 176,250 | |
Cellnex Telecom Sau 2.375% 1/16/24 (Reg. S) | EUR | 200,000 | 223,008 |
Digicel Group Ltd. 6% 4/15/21 (Reg. S) | 200,000 | 178,940 | |
DigitalGlobe, Inc. 5.25% 2/1/21 (b) | 130,000 | 130,975 | |
FairPoint Communications, Inc. 8.75% 8/15/19 (b) | 245,000 | 249,288 | |
Frontier Communications Corp.: | |||
8.875% 9/15/20 | 40,000 | 42,500 | |
10.5% 9/15/22 | 70,000 | 72,800 | |
GCI, Inc. 6.875% 4/15/25 | 85,000 | 86,275 | |
Globo Comunicacao e Participacoes SA: | |||
4.875% 4/11/22 (Reg. S) | 250,000 | 257,500 | |
5.307% 5/11/22 (Reg. S) (f) | 200,000 | 204,040 | |
GTH Finance BV: | |||
6.25% 4/26/20 (b) | 200,000 | 208,824 | |
7.25% 4/26/23 (b) | 200,000 | 212,900 | |
Intelsat Jackson Holdings SA: | |||
5.5% 8/1/23 | 165,000 | 109,313 | |
8% 2/15/24 (b) | 260,000 | 261,300 | |
Intelsat Luxembourg SA 8.125% 6/1/23 | 285,000 | 94,050 | |
Millicom International Cellular SA 6.625% 10/15/21 (b) | 200,000 | 209,260 | |
MTS International Funding Ltd. 5% 5/30/23 (b) | 350,000 | 361,830 | |
Neptune Finco Corp.: | |||
10.125% 1/15/23 (b) | 350,000 | 394,625 | |
10.875% 10/15/25 (b) | 200,000 | 230,000 | |
Play Topco SA 7.75% 2/28/20 (Reg. S) (c) | EUR | 200,000 | 223,941 |
Sable International Finance Ltd. 6.875% 8/1/22 (b) | 600,000 | 621,000 | |
SFR Group SA 7.375% 5/1/26 (b) | 255,000 | 257,550 | |
Sprint Capital Corp.: | |||
6.875% 11/15/28 | 205,000 | 188,600 | |
6.9% 5/1/19 | 615,000 | 647,288 | |
8.75% 3/15/32 | 115,000 | 116,725 | |
Sprint Communications, Inc. 6% 11/15/22 | 40,000 | 37,275 | |
Sprint Corp.: | |||
7.125% 6/15/24 | 370,000 | 347,800 | |
7.25% 9/15/21 | 10,000 | 10,238 | |
7.875% 9/15/23 | 540,000 | 534,600 | |
T-Mobile U.S.A., Inc.: | |||
6% 4/15/24 | 120,000 | 127,650 | |
6.25% 4/1/21 | 180,000 | 187,425 | |
6.5% 1/15/26 | 120,000 | 131,544 | |
6.625% 4/1/23 | 325,000 | 345,371 | |
6.731% 4/28/22 | 205,000 | 214,225 | |
6.836% 4/28/23 | 285,000 | 304,380 | |
TBG Global Pte. Ltd. 5.25% 2/10/22 (Reg. S) | 200,000 | 209,371 | |
Telecom Italia SpA: | |||
3.625% 5/25/26 (Reg. S) | EUR | 100,000 | 113,214 |
4.875% 9/25/20 (Reg. S) | EUR | 100,000 | 123,829 |
5.25% 3/17/55 | EUR | 100,000 | 111,422 |
Telefonica Celular del Paraguay SA 6.75% 12/13/22 (b) | 200,000 | 208,500 | |
UPCB Finance IV Ltd. 4% 1/15/27 (Reg. S) | EUR | 300,000 | 323,150 |
Wind Acquisition Finance SA 4% 7/15/20 (Reg S.) | EUR | 350,000 | 389,976 |
TOTAL TELECOMMUNICATIONS | 11,114,752 | ||
Textiles/Apparel - 0.2% | |||
Novalis Sas 3% 4/30/22 (Reg. S) | EUR | 200,000 | 223,974 |
Transportation Ex Air/Rail - 0.4% | |||
eHi Car Service Co. Ltd. 7.5% 12/8/18 (Reg. S) | 200,000 | 210,999 | |
Navios Maritime Acquisition Corp./Navios Acquisition Finance U.S., Inc. 8.125% 11/15/21 (b) | 155,000 | 117,025 | |
Teekay Corp. 8.5% 1/15/20 | 5,000 | 4,550 | |
TRAC Intermodal LLC/TRAC Intermodal Corp. 11% 8/15/19 | 27,000 | 28,553 | |
Ultrapetrol (Bahamas) Ltd. 8.875% 6/15/21 (d) | 155,000 | 29,450 | |
TOTAL TRANSPORTATION EX AIR/RAIL | 390,577 | ||
Utilities - 6.1% | |||
Calpine Corp. 7.875% 1/15/23 (b) | 170,000 | 178,288 | |
Dynegy, Inc.: | |||
6.75% 11/1/19 | 125,000 | 126,511 | |
7.375% 11/1/22 | 105,000 | 101,259 | |
7.625% 11/1/24 | 150,000 | 143,625 | |
8% 1/15/25 (b) | 40,000 | 38,600 | |
Enel SpA 5% 1/15/75 (c) | EUR | 300,000 | 351,143 |
Energy Future Intermediate Holding Co. LLC/Energy Future Intermediate Holding Finance, Inc.: | |||
11% 10/1/21 (d) | 31,737 | 40,306 | |
12.25% 3/1/22 (b)(d) | 650,609 | 837,660 | |
Global Partners LP/GLP Finance Corp.: | |||
6.25% 7/15/22 | 60,000 | 57,300 | |
7% 6/15/23 | 85,000 | 81,175 | |
Greenko Investment Co. 4.875% 8/16/23 (Reg. S) | 200,000 | 194,754 | |
InterGen NV 7% 6/30/23 (b) | 610,000 | 516,975 | |
Listrindo Capital BV 4.95% 9/14/26 (b) | 200,000 | 202,006 | |
Majapahit Holding BV 7.875% 6/29/37 (Reg. S) | 200,000 | 258,500 | |
NRG Energy, Inc. 6.625% 3/15/23 | 310,000 | 309,225 | |
NSG Holdings II LLC/NSG Holdings, Inc. 7.75% 12/15/25 (b) | 330,992 | 355,816 | |
Petrobras Global Finance BV 4.75% 1/14/25 | EUR | 400,000 | 419,615 |
Petrobras International Finance Co. Ltd. 5.375% 1/27/21 | 500,000 | 495,100 | |
PPL Energy Supply LLC 6.5% 6/1/25 | 65,000 | 54,275 | |
RJS Power Holdings LLC 4.625% 7/15/19 (b)(c) | 410,000 | 389,500 | |
RWE AG 2.75% 4/21/75 (Reg. S) (c) | EUR | 200,000 | 205,103 |
TXU Corp.: | |||
5.55% 11/15/14 (d) | 1,361,000 | 408,300 | |
6.5% 11/15/24 (d) | 475,000 | 142,500 | |
6.55% 11/15/34 (d) | 1,000,000 | 300,000 | |
TOTAL UTILITIES | 6,207,536 | ||
TOTAL NONCONVERTIBLE BONDS | |||
(Cost $86,217,157) | 84,741,189 | ||
Shares | Value | ||
Common Stocks - 1.5% | |||
Automotive & Auto Parts - 0.3% | |||
Chassix Holdings, Inc. (g) | 3,510 | 110,249 | |
General Motors Co. | 5,768 | 182,269 | |
TOTAL AUTOMOTIVE & AUTO PARTS | 292,518 | ||
Broadcasting - 0.0% | |||
Cumulus Media, Inc. Class A (g) | 10,375 | 14,318 | |
Chemicals - 0.2% | |||
LyondellBasell Industries NV Class A | 2,500 | 198,875 | |
Energy - 0.2% | |||
Extraction Oil & Gas, Inc. | 1,041 | 22,236 | |
Ovation Acquisition I LLC (h) | 60,306 | 1 | |
Pacific Exploration and Production Corp. warrants | 2,200 | 65,472 | |
The Williams Companies, Inc. | 1,900 | 55,480 | |
TOTAL ENERGY | 143,189 | ||
Healthcare - 0.3% | |||
HCA Holdings, Inc. (g) | 3,300 | 252,549 | |
Legend Acquisition, Inc. (g) | 2,128 | 29,792 | |
Legend Acquisition, Inc.: | |||
Class A warrants (g) | 2,195 | 0 | |
Class B warrants (g) | 2,894 | 0 | |
TOTAL HEALTHCARE | 282,341 | ||
Hotels - 0.2% | |||
Extended Stay America, Inc. unit | 15,000 | 214,500 | |
Metals/Mining - 0.0% | |||
Warrior Met Coal LLC Class A (h) | 81 | 20,912 | |
Services - 0.2% | |||
ARAMARK Holdings Corp. | 2,800 | 104,244 | |
United Rentals, Inc. (g) | 1,300 | 98,358 | |
WP Rocket Holdings, Inc. (g)(h) | 356,213 | 21,373 | |
TOTAL SERVICES | 223,975 | ||
Telecommunications - 0.0% | |||
Broadview Networks Holdings, Inc. (g) | 12,187 | 15,234 | |
Utilities - 0.1% | |||
NRG Yield, Inc. Class C | 7,000 | 107,800 | |
TOTAL COMMON STOCKS | |||
(Cost $2,643,201) | 1,513,662 | ||
Convertible Preferred Stocks - 0.6% | |||
Healthcare - 0.5% | |||
Allergan PLC 5.50% | 400 | 307,600 | |
Teva Pharmaceutical Industries Ltd. 7% | 250 | 189,675 | |
TOTAL HEALTHCARE | 497,275 | ||
Utilities - 0.1% | |||
Dynegy, Inc. 7.00% (g) | 1,600 | 119,616 | |
TOTAL CONVERTIBLE PREFERRED STOCKS | |||
(Cost $769,231) | 616,891 | ||
Principal Amount(a) | Value | ||
Bank Loan Obligations - 2.5% | |||
Automotive & Auto Parts - 0.1% | |||
Chassix, Inc. term loan 12% 7/29/19 | 44,659 | 45,775 | |
Energy - 0.6% | |||
California Resources Corp. Tranche 1LN, term loan 11.375% 12/31/21 (c) | 60,000 | 64,425 | |
Chesapeake Energy Corp. Tranche 1LN, term loan 8.5% 8/23/21 (c) | 85,000 | 90,791 | |
Chief Exploration & Development, LLC. Tranche 2LN, term loan 7.7528% 5/16/21 (c) | 255,000 | 243,686 | |
Citgo Holding, Inc. Tranche B, term loan 9.5% 5/12/18 (c) | 34,450 | 34,821 | |
Drillships Ocean Ventures, Inc. Tranche B, term loan 5.5% 7/25/21 (c) | 157,186 | 111,434 | |
Pacific Drilling SA Tranche B, term loan 4.5% 6/3/18 (c) | 48,375 | 13,605 | |
Seadrill Operating LP Tranche B, term loan 4% 2/21/21 (c) | 60,000 | 33,338 | |
Targa Resources Corp. term loan 5.75% 2/27/22 (c) | 27,907 | 27,942 | |
TOTAL ENERGY | 620,042 | ||
Food & Drug Retail - 0.0% | |||
Albertson's LLC Tranche B 6LN, term loan 4.75% 6/22/23 (c) | 27,529 | 27,816 | |
Gaming - 0.1% | |||
Caesars Entertainment Resort Properties LLC Tranche B 1LN, term loan 7% 10/11/20 (c) | 113,509 | 114,077 | |
Healthcare - 0.1% | |||
U.S. Renal Care, Inc. Tranche 2LN, term loan 9% 12/31/23 (c) | 110,000 | 105,050 | |
Homebuilders/Real Estate - 0.1% | |||
DTZ U.S. Borrower LLC Tranche 2LN, term loan 9.25% 11/4/22 (c) | 55,000 | 55,046 | |
Services - 0.6% | |||
Ancestry.Com Operations, Inc.: | |||
Tranche 2LN, term loan 9.25% 10/19/24 (c) | 130,000 | 131,625 | |
Tranche B 1LN, term loan 5.25% 10/19/23 (c) | 230,000 | 230,359 | |
Kuehg Corp. Tranche B 1LN, term loan 5.25% 8/13/22 (c) | 193,050 | 193,050 | |
TOTAL SERVICES | 555,034 | ||
Technology - 0.7% | |||
Compuware Corp. term loan 9.25% 12/12/22 (c) | 120,000 | 116,100 | |
Kronos, Inc. term loan: | |||
10/20/23 (i) | 295,000 | 296,174 | |
10/20/24 (i) | 115,000 | 118,434 | |
Renaissance Learning, Inc.: | |||
Tranche 1LN, term loan 4.5% 4/9/21 (c) | 107,250 | 106,893 | |
Tranche 2LN, term loan 8% 4/9/22 (c) | 95,000 | 93,179 | |
TOTAL TECHNOLOGY | 730,780 | ||
Telecommunications - 0.2% | |||
Intelsat Jackson Holdings SA Tranche B 2LN, term loan 3.75% 6/30/19 (c) | 245,000 | 234,002 | |
LTS Buyer LLC Tranche 2LN, term loan 8% 4/12/21 (c) | 6,325 | 6,329 | |
TOTAL TELECOMMUNICATIONS | 240,331 | ||
TOTAL BANK LOAN OBLIGATIONS | |||
(Cost $2,421,632) | 2,493,951 | ||
Preferred Securities - 6.1% | |||
Banks & Thrifts - 4.0% | |||
Bank of East Asia Ltd. 8.5% (c)(j) | 100,000 | 117,609 | |
Barclays Bank PLC 7.625% 11/21/22 | 455,000 | 523,346 | |
Barclays PLC 8% (c)(j) | EUR | 200,000 | 227,032 |
Chong Hing Bank Ltd. 6.5% (c)(j) | 200,000 | 212,161 | |
Citigroup, Inc. 5.35% (c)(j) | 680,000 | 687,456 | |
Credit Agricole SA: | |||
6.5%(Reg S.) (c)(j) | EUR | 200,000 | 226,559 |
6.625% (b)(c)(j) | 315,000 | 308,573 | |
8.125% (b)(c)(j) | 200,000 | 216,509 | |
Intesa Sanpaolo SpA 8.047% (c)(j) | EUR | 350,000 | 422,427 |
Royal Bank of Scotland Group PLC: | |||
7.0916% (c)(j) | EUR | 50,000 | 54,476 |
8% (c)(j) | 450,000 | 430,665 | |
8.625% (c)(j) | 200,000 | 200,998 | |
Standard Chartered PLC 7.5% (b)(c)(j) | 200,000 | 204,459 | |
Woori Bank 4.5% (Reg. S) (c)(j) | 200,000 | 200,383 | |
TOTAL BANKS & THRIFTS | 4,032,653 | ||
Cable/Satellite TV - 0.1% | |||
SES SA 4.625% (Reg. S) (c)(j) | EUR | 100,000 | 114,791 |
Chemicals - 0.1% | |||
Solvay SA 5.869%(Reg. S) (c)(j) | EUR | 100,000 | 123,081 |
Consumer Products - 0.5% | |||
Cosan Overseas Ltd. 8.25% (j) | 500,000 | 507,990 | |
Diversified Financial Services - 0.2% | |||
Hutchison Whampoa Europe Finance, Ltd. 3.75% (Reg. S) (c)(j) | EUR | 150,000 | 172,462 |
Energy - 0.2% | |||
Gas Natural Fenosa Finance BV 4.125% (Reg. S) (c)(j) | EUR | 200,000 | 235,125 |
Homebuilders/Real Estate - 0.2% | |||
Grand City Properties SA 3.75% (c)(j) | EUR | 200,000 | 229,075 |
Insurance - 0.1% | |||
Groupama SA 6.298% (c)(j) | EUR | 100,000 | 107,936 |
Telecommunications - 0.7% | |||
Koninklijke KPN NV 6.125% (Reg S.) (c)(j) | EUR | 200,000 | 237,231 |
Telefonica Europe BV: | |||
5% (Reg. S) (c)(j) | EUR | 300,000 | 352,171 |
6.5% (Reg. S) (c)(j) | EUR | 100,000 | 117,872 |
TOTAL TELECOMMUNICATIONS | 707,274 | ||
TOTAL PREFERRED SECURITIES | |||
(Cost $6,301,047) | 6,230,387 | ||
Shares | Value | ||
Money Market Funds - 4.9% | |||
Fidelity Cash Central Fund, 0.41% (k) | |||
(Cost $4,986,276) | 4,985,648 | 4,987,144 | |
TOTAL INVESTMENT PORTFOLIO - 98.8% | |||
(Cost $103,338,544) | 100,583,224 | ||
NET OTHER ASSETS (LIABILITIES) - 1.2% | 1,266,689 | ||
NET ASSETS - 100% | $101,849,913 |
Currency Abbreviations
EUR – European Monetary Unit
Legend
(a) Amount is stated in United States dollars unless otherwise noted.
(b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $38,711,320 or 38.0% of net assets.
(c) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end.
(d) Non-income producing - Security is in default.
(e) Security or a portion of the security purchased on a delayed delivery or when-issued basis.
(f) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end.
(g) Non-income producing
(h) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $42,285 or 0.0% of net assets.
(i) The coupon rate will be determined upon settlement of the loan after period end.
(j) Security is perpetual in nature with no stated maturity date.
(k) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.
Additional information on each restricted holding is as follows:
Security | Acquisition Date | Acquisition Cost |
Ovation Acquisition I LLC | 12/23/15 | $603 |
Warrior Met Coal LLC Class A | 9/19/13 - 3/19/14 | $154,316 |
WP Rocket Holdings, Inc. | 6/24/11 - 2/2/15 | $184,731 |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
Fund | Income earned |
Fidelity Cash Central Fund | $10,063 |
Fidelity Securities Lending Cash Central Fund | 3 |
Total | $10,066 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Equities: | ||||
Consumer Discretionary | $625,580 | $515,331 | $-- | $110,249 |
Consumer Staples | 1 | -- | -- | 1 |
Energy | 141,864 | 55,480 | -- | 86,384 |
Financials | 22,236 | 22,236 | -- | -- |
Health Care | 779,616 | 560,149 | 189,675 | 29,792 |
Industrials | 119,731 | 98,358 | -- | 21,373 |
Materials | 198,875 | 198,875 | -- | -- |
Telecommunication Services | 15,234 | 15,234 | -- | -- |
Utilities | 227,416 | 227,416 | -- | -- |
Corporate Bonds | 84,741,189 | -- | 84,672,413 | 68,776 |
Bank Loan Obligations | 2,493,951 | -- | 2,448,176 | 45,775 |
Preferred Securities | 6,230,387 | -- | 6,230,387 | -- |
Money Market Funds | 4,987,144 | 4,987,144 | -- | -- |
Total Investments in Securities: | $100,583,224 | $6,680,223 | $93,540,651 | $362,350 |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
United States of America | 51.6% |
Luxembourg | 8.3% |
Netherlands | 6.1% |
Cayman Islands | 4.0% |
United Kingdom | 3.4% |
Canada | 3.2% |
Ireland | 2.3% |
France | 2.2% |
Argentina | 2.2% |
Mexico | 2.1% |
Italy | 1.4% |
Brazil | 1.4% |
Singapore | 1.2% |
British Virgin Islands | 1.2% |
Germany | 1.2% |
Others (Individually Less Than 1%) | 8.2% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
October 31, 2016 (Unaudited) | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $98,352,268) | $95,596,080 | |
Fidelity Central Funds (cost $4,986,276) | 4,987,144 | |
Total Investments (cost $103,338,544) | $100,583,224 | |
Cash | 331,306 | |
Receivable for investments sold | 183,873 | |
Receivable for fund shares sold | 108,842 | |
Dividends receivable | 12,115 | |
Interest receivable | 1,568,195 | |
Distributions receivable from Fidelity Central Funds | 1,757 | |
Prepaid expenses | 265 | |
Receivable from investment adviser for expense reductions | 11,663 | |
Other receivables | 6 | |
Total assets | 102,801,246 | |
Liabilities | ||
Payable for investments purchased | ||
Regular delivery | $622,448 | |
Delayed delivery | 45,000 | |
Payable for fund shares redeemed | 86,205 | |
Distributions payable | 67,992 | |
Accrued management fee | 60,992 | |
Distribution and service plan fees payable | 5,068 | |
Other affiliated payables | 19,877 | |
Other payables and accrued expenses | 43,751 | |
Total liabilities | 951,333 | |
Net Assets | $101,849,913 | |
Net Assets consist of: | ||
Paid in capital | $106,892,527 | |
Undistributed net investment income | 186,107 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (2,469,522) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (2,759,199) | |
Net Assets | $101,849,913 | |
Calculation of Maximum Offering Price | ||
Class A: | ||
Net Asset Value and redemption price per share ($8,011,830 ÷ 859,576 shares) | $9.32 | |
Maximum offering price per share (100/96.00 of $9.32) | $9.71 | |
Class T: | ||
Net Asset Value and redemption price per share ($1,898,327 ÷ 203,678 shares) | $9.32 | |
Maximum offering price per share (100/96.00 of $9.32) | $9.71 | |
Class C: | ||
Net Asset Value and offering price per share ($3,745,860 ÷ 401,861 shares)(a) | $9.32 | |
Global High Income: | ||
Net Asset Value, offering price and redemption price per share ($85,970,028 ÷ 9,222,747 shares) | $9.32 | |
Class I: | ||
Net Asset Value, offering price and redemption price per share ($2,223,868 ÷ 238,575 shares) | $9.32 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended October 31, 2016 (Unaudited) | ||
Investment Income | ||
Dividends | $282,497 | |
Interest | 2,997,123 | |
Income from Fidelity Central Funds | 10,066 | |
Total income | 3,289,686 | |
Expenses | ||
Management fee | $363,543 | |
Transfer agent fees | 112,489 | |
Distribution and service plan fees | 28,034 | |
Accounting and security lending fees | 21,256 | |
Custodian fees and expenses | 11,609 | |
Independent trustees' fees and expenses | 219 | |
Registration fees | 24,201 | |
Audit | 39,942 | |
Legal | (1,441) | |
Miscellaneous | 698 | |
Total expenses before reductions | 600,550 | |
Expense reductions | (56,138) | 544,412 |
Net investment income (loss) | 2,745,274 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 117,546 | |
Fidelity Central Funds | (45) | |
Foreign currency transactions | 8,230 | |
Total net realized gain (loss) | 125,731 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 2,305,505 | |
Assets and liabilities in foreign currencies | (11,301) | |
Total change in net unrealized appreciation (depreciation) | 2,294,204 | |
Net gain (loss) | 2,419,935 | |
Net increase (decrease) in net assets resulting from operations | $5,165,209 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended October 31, 2016 (Unaudited) | Year ended April 30, 2016 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $2,745,274 | $6,251,820 |
Net realized gain (loss) | 125,731 | (3,365,369) |
Change in net unrealized appreciation (depreciation) | 2,294,204 | (4,945,526) |
Net increase (decrease) in net assets resulting from operations | 5,165,209 | (2,059,075) |
Distributions to shareholders from net investment income | (2,476,644) | (6,161,519) |
Share transactions - net increase (decrease) | (7,083,374) | (20,379,577) |
Redemption fees | 23,330 | 37,133 |
Total increase (decrease) in net assets | (4,371,479) | (28,563,038) |
Net Assets | ||
Beginning of period | 106,221,392 | 134,784,430 |
End of period | $101,849,913 | $106,221,392 |
Other Information | ||
Undistributed net investment income end of period | $186,107 | $– |
Distributions in excess of net investment income end of period | $– | $(82,523) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Global High Income Fund Class A
Six months ended (Unaudited) October 31, | Years ended April 30, | |||||
2016 | 2016 | 2015 | 2014 | 2013 | 2012 A | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $9.07 | $9.60 | $10.21 | $10.46 | $9.74 | $10.00 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .238 | .462 | .476 | .506 | .526 | .476 |
Net realized and unrealized gain (loss) | .224 | (.541) | (.293)C | (.036) | .714 | (.317) |
Total from investment operations | .462 | (.079) | .183 | .470 | 1.240 | .159 |
Distributions from net investment income | (.214) | (.454) | (.486) | (.483) | (.477) | (.423) |
Distributions from net realized gain | – | – | (.310) | (.239) | (.046) | – |
Total distributions | (.214) | (.454) | (.796) | (.722) | (.523) | (.423) |
Redemption fees added to paid in capitalB | .002 | .003 | .003 | .002 | .003 | .004 |
Net asset value, end of period | $9.32 | $9.07 | $9.60 | $10.21 | $10.46 | $9.74 |
Total ReturnD,E,F | 5.16% | (.65)% | 1.97%C | 4.86% | 13.13% | 1.80% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | 1.32%I | 1.38% | 1.28% | 1.23% | 1.24% | 1.38%I |
Expenses net of fee waivers, if any | 1.25%I | 1.25% | 1.25% | 1.23% | 1.24% | 1.25%I |
Expenses net of all reductions | 1.25%I | 1.25% | 1.25% | 1.23% | 1.24% | 1.25%I |
Net investment income (loss) | 5.12%I | 5.11% | 4.82% | 5.03% | 5.25% | 5.15%I |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $8,012 | $6,187 | $7,036 | $8,000 | $6,419 | $10,102 |
Portfolio turnover rateJ | 46%I | 41% | 44% | 72% | 55% | 36%K |
A For the period May 11, 2011 (commencement of operations) to April 30, 2012.
B Calculated based on average shares outstanding during the period.
C Amount includes a reimbursement from the investment adviser for an operational error which amounted to less than $.01 per share. Excluding this reimbursement, the total return would have been 1.93%.
D Total returns for periods of less than one year are not annualized.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the sales charges.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Global High Income Fund Class T
Six months ended (Unaudited) October 31, | Years ended April 30, | |||||
2016 | 2016 | 2015 | 2014 | 2013 | 2012 A | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $9.07 | $9.60 | $10.21 | $10.46 | $9.74 | $10.00 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .238 | .462 | .474 | .504 | .523 | .477 |
Net realized and unrealized gain (loss) | .224 | (.541) | (.291)C | (.036) | .712 | (.318) |
Total from investment operations | .462 | (.079) | .183 | .468 | 1.235 | .159 |
Distributions from net investment income | (.214) | (.454) | (.486) | (.481) | (.472) | (.423) |
Distributions from net realized gain | – | – | (.310) | (.239) | (.046) | – |
Total distributions | (.214) | (.454) | (.796) | (.720) | (.518) | (.423) |
Redemption fees added to paid in capitalB | .002 | .003 | .003 | .002 | .003 | .004 |
Net asset value, end of period | $9.32 | $9.07 | $9.60 | $10.21 | $10.46 | $9.74 |
Total ReturnD,E,F | 5.16% | (.65)% | 1.98%C | 4.84% | 13.08% | 1.80% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | 1.43%I | 1.48% | 1.40% | 1.35% | 1.25% | 1.39%I |
Expenses net of fee waivers, if any | 1.25%I | 1.25% | 1.25% | 1.25% | 1.25% | 1.25%I |
Expenses net of all reductions | 1.25%I | 1.25% | 1.25% | 1.25% | 1.25% | 1.25%I |
Net investment income (loss) | 5.12%I | 5.11% | 4.82% | 5.01% | 5.24% | 5.15%I |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $1,898 | $1,436 | $1,745 | $1,595 | $1,349 | $9,362 |
Portfolio turnover rateJ | 46%I | 41% | 44% | 72% | 55% | 36%K |
A For the period May 11, 2011 (commencement of operations) to April 30, 2012.
B Calculated based on average shares outstanding during the period.
C Amount includes a reimbursement from the investment adviser for an operational error which amounted to less than $.01 per share. Excluding this reimbursement, the total return would have been 1.94%.
D Total returns for periods of less than one year are not annualized.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the sales charges.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Global High Income Fund Class C
Six months ended (Unaudited) October 31, | Years ended April 30, | |||||
2016 | 2016 | 2015 | 2014 | 2013 | 2012 A | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $9.07 | $9.60 | $10.21 | $10.46 | $9.74 | $10.00 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .204 | .394 | .401 | .428 | .448 | .407 |
Net realized and unrealized gain (loss) | .223 | (.540) | (.292)C | (.035) | .712 | (.317) |
Total from investment operations | .427 | (.146) | .109 | .393 | 1.160 | .090 |
Distributions from net investment income | (.179) | (.387) | (.412) | (.406) | (.397) | (.354) |
Distributions from net realized gain | – | – | (.310) | (.239) | (.046) | – |
Total distributions | (.179) | (.387) | (.722) | (.645) | (.443) | (.354) |
Redemption fees added to paid in capitalB | .002 | .003 | .003 | .002 | .003 | .004 |
Net asset value, end of period | $9.32 | $9.07 | $9.60 | $10.21 | $10.46 | $9.74 |
Total ReturnD,E,F | 4.76% | (1.39)% | 1.22%C | 4.05% | 12.23% | 1.07% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | 2.13%I | 2.20% | 2.12% | 2.05% | 2.01% | 2.15%I |
Expenses net of fee waivers, if any | 2.00%I | 2.00% | 2.00% | 2.00% | 2.00% | 2.00%I |
Expenses net of all reductions | 2.00%I | 2.00% | 2.00% | 2.00% | 2.00% | 2.00%I |
Net investment income (loss) | 4.37%I | 4.36% | 4.07% | 4.26% | 4.49% | 4.40%I |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $3,746 | $3,437 | $3,811 | $3,720 | $2,941 | $9,878 |
Portfolio turnover rateJ | 46%I | 41% | 44% | 72% | 55% | 36%K |
A For the period May 11, 2011 (commencement of operations) to April 30, 2012.
B Calculated based on average shares outstanding during the period.
C Amount includes a reimbursement from the investment adviser for an operational error which amounted to less than $.01 per share. Excluding this reimbursement, the total return would have been 1.18%.
D Total returns for periods of less than one year are not annualized.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the contingent deferred sales charge.
G Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Global High Income Fund
Six months ended (Unaudited) October 31, | Years ended April 30, | |||||
2016 | 2016 | 2015 | 2014 | 2013 | 2012 A | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $9.07 | $9.60 | $10.21 | $10.47 | $9.74 | $10.00 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .250 | .486 | .508 | .534 | .555 | .495 |
Net realized and unrealized gain (loss) | .224 | (.542) | (.301)C | (.046) | .724 | (.312) |
Total from investment operations | .474 | (.056) | .207 | .488 | 1.279 | .183 |
Distributions from net investment income | (.226) | (.477) | (.510) | (.511) | (.506) | (.447) |
Distributions from net realized gain | – | – | (.310) | (.239) | (.046) | – |
Total distributions | (.226) | (.477) | (.820) | (.750) | (.552) | (.447) |
Redemption fees added to paid in capitalB | .002 | .003 | .003 | .002 | .003 | .004 |
Net asset value, end of period | $9.32 | $9.07 | $9.60 | $10.21 | $10.47 | $9.74 |
Total ReturnD,E | 5.29% | (.40)% | 2.23%C | 5.05% | 13.56% | 2.06% |
Ratios to Average Net AssetsF,G | ||||||
Expenses before reductions | 1.11%H | 1.20% | 1.05% | .95% | .96% | 1.07%H |
Expenses net of fee waivers, if any | 1.00%H | 1.00% | 1.00% | .95% | .96% | 1.00%H |
Expenses net of all reductions | 1.00%H | 1.00% | 1.00% | .95% | .96% | 1.00%H |
Net investment income (loss) | 5.37%H | 5.35% | 5.07% | 5.30% | 5.53% | 5.39%H |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $85,970 | $93,256 | $119,712 | $344,206 | $345,210 | $197,480 |
Portfolio turnover rateI | 46%H | 41% | 44% | 72% | 55% | 36%J |
A For the period May 11, 2011 (commencement of operations) to April 30, 2012.
B Calculated based on average shares outstanding during the period.
C Amount includes a reimbursement from the investment adviser for an operational error which amounted to less than $.01 per share. Excluding this reimbursement, the total return would have been 2.19%.
D Total returns for periods of less than one year are not annualized.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Global High Income Fund Class I
Six months ended (Unaudited) October 31, | Years ended April 30, | |||||
2016 | 2016 | 2015 | 2014 | 2013 | 2012 A | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $9.07 | $9.60 | $10.21 | $10.47 | $9.74 | $10.00 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .250 | .483 | .501 | .532 | .549 | .499 |
Net realized and unrealized gain (loss) | .224 | (.539) | (.293)C | (.046) | .728 | (.317) |
Total from investment operations | .474 | (.056) | .208 | .486 | 1.277 | .182 |
Distributions from net investment income | (.226) | (.477) | (.511) | (.509) | (.504) | (.446) |
Distributions from net realized gain | – | – | (.310) | (.239) | (.046) | – |
Total distributions | (.226) | (.477) | (.821) | (.748) | (.550) | (.446) |
Redemption fees added to paid in capitalB | .002 | .003 | .003 | .002 | .003 | .004 |
Net asset value, end of period | $9.32 | $9.07 | $9.60 | $10.21 | $10.47 | $9.74 |
Total ReturnD,E | 5.29% | (.40)% | 2.23%C | 5.03% | 13.54% | 2.05% |
Ratios to Average Net AssetsF,G | ||||||
Expenses before reductions | 1.10%H | 1.10% | 1.02% | .97% | .98% | 1.13%H |
Expenses net of fee waivers, if any | 1.00%H | 1.00% | 1.00% | .97% | .98% | 1.00%H |
Expenses net of all reductions | 1.00%H | 1.00% | 1.00% | .97% | .98% | 1.00%H |
Net investment income (loss) | 5.37%H | 5.35% | 5.07% | 5.28% | 5.51% | 5.40%H |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $2,224 | $1,905 | $2,481 | $5,344 | $6,049 | $11,617 |
Portfolio turnover rateI | 46%H | 41% | 44% | 72% | 55% | 36%J |
A For the period May 11, 2011 (commencement of operations) to April 30, 2012.
B Calculated based on average shares outstanding during the period.
C Amount includes a reimbursement from the investment adviser for an operational error which amounted to less than $.01 per share. Excluding this reimbursement, the total return would have been 2.19%.
D Total returns for periods of less than one year are not annualized.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements (Unaudited)
For the period ended October 31, 2016
1. Organization.
Fidelity Global High Income Fund (the Fund) is a fund of Fidelity Summer Street Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class C, Global High Income Fund and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds, bank loan obligations and preferred securities are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances. The Fund invests a significant portion of its assets in below investment grade securities. The value of these securities can be more volatile due to changes in the credit quality of the issuer and is sensitive to changes in economic, market and regulatory conditions.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Dividends are declared and recorded daily and paid monthly from net investment income. Distributions from realized gains, if any, are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, defaulted bonds, market discount, partnerships and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $4,357,535 |
Gross unrealized depreciation | (6,633,070) |
Net unrealized appreciation (depreciation) on securities | $(2,275,535) |
Tax cost | $102,858,759 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of prior fiscal period end and is subject to adjustment.
No expiration | |
Short-term | $(1,315,528) |
Long-term | (1,276,696) |
Total capital loss carryforward | $(2,592,224) |
The Fund intends to elect to defer to its next fiscal year $428,007 of capital losses recognized during the period November 1, 2015 to April 30, 2016.
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.00% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Delayed Delivery Transactions and When-Issued Securities. During the period, the Fund transacted in securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. The securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Loans and Other Direct Debt Instruments. The Fund invests in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. These instruments may be in the form of loans, trade claims or other receivables and may include standby financing commitments such as revolving credit facilities that obligate the Fund to supply additional cash to the borrower on demand. Loans may be acquired through assignment or participation. The Fund did not have any unfunded loan commitments, which are contractual obligations for future funding, at period end.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $22,481,428 and $27,444,954, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .60% of the Fund's average net assets and an annualized group fee rate that averaged .11% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .70% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
Class A | -% | .25% | $8,737 | $262 |
Class T | -% | .25% | 1,890 | – |
Class C | .75% | .25% | 17,407 | 4,142 |
$28,034 | $4,404 |
Sales Load. FDC may receive a front-end sales charge of up to 4.00% for selling Class A shares and Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T and Class C redemptions. The deferred sales charges are 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained by FDC | |
Class A | $239 |
Class T | 759 |
Class C(a) | 263 |
$1,261 |
(a) When Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
Amount | % of Class-Level Average Net Assets(a) | |
Class A | $6,551 | .19 |
Class T | 2,193 | .29 |
Class C | 4,413 | .25 |
Global High Income | 97,153 | .22 |
Class I | 2,179 | .21 |
$ 112,489 |
(a) Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $170 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $3. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
The investment adviser voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense Limitations | Reimbursement | |
Class A | 1.25% | $2,510 |
Class T | 1.25% | 1,357 |
Class C | 2.00% | 2,366 |
Global High Income | 1.00% | 48,656 |
Class I | 1.00% | 1,017 |
$55,906 |
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $2 for the period. In addition, through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $1.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $229.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended October 31, 2016 | Year ended April 30, 2016 | |
From net investment income | ||
Class A | $161,562 | $323,762 |
Class T | 35,046 | 79,903 |
Class C | 67,595 | 150,970 |
Global High Income | 2,161,527 | 5,458,208 |
Class I | 50,914 | 148,676 |
Total | $2,476,644 | $6,161,519 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
Shares | Shares | Dollars | Dollars | |
Six months ended October 31, 2016 | Year ended April 30, 2016 | Six months ended October 31, 2016 | Year ended April 30, 2016 | |
Class A | ||||
Shares sold | 222,372 | 157,252 | $2,062,554 | $1,422,895 |
Reinvestment of distributions | 16,306 | 32,992 | 151,056 | 297,671 |
Shares redeemed | (60,914) | (241,453) | (562,430) | (2,170,274) |
Net increase (decrease) | 177,764 | (51,209) | $1,651,180 | $(449,708) |
Class T | ||||
Shares sold | 66,942 | 37,827 | $628,420 | $339,624 |
Reinvestment of distributions | 3,541 | 8,329 | 32,767 | 75,115 |
Shares redeemed | (25,099) | (69,705) | (233,442) | (627,856) |
Net increase (decrease) | 45,384 | (23,549) | $427,745 | $(213,117) |
Class C | ||||
Shares sold | 63,556 | 150,954 | $591,532 | $1,353,877 |
Reinvestment of distributions | 6,255 | 14,343 | 57,866 | 129,529 |
Shares redeemed | (46,724) | (183,576) | (429,930) | (1,640,260) |
Net increase (decrease) | 23,087 | (18,279) | $219,468 | $(156,854) |
Global High Income | ||||
Shares sold | 1,469,275 | 3,468,417 | $13,532,275 | $31,565,075 |
Reinvestment of distributions | 193,179 | 519,268 | 1,786,459 | 4,696,700 |
Shares redeemed | (2,716,424) | (6,182,571) | (24,963,427) | (55,426,381) |
Net increase (decrease) | (1,053,970) | (2,194,886) | $(9,644,693) | $(19,164,606) |
Class I | ||||
Shares sold | 47,999 | 116,138 | $439,650 | $1,078,461 |
Reinvestment of distributions | 2,461 | 5,400 | 22,783 | 48,617 |
Shares redeemed | (21,865) | (169,995) | (199,507) | (1,522,370) |
Net increase (decrease) | 28,595 | (48,457) | $262,926 | $(395,292) |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
12. Credit Risk.
The Fund's relatively large investment in countries with limited or developing capital markets may involve greater risks than investments in more developed markets and the prices of such investments may be volatile. The yields of emerging market debt obligations reflect, among other things, perceived credit risk. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of the Fund's investments and the income they generate, as well as the Fund's ability to repatriate such amounts.
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (May 1, 2016 to October 31, 2016).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Annualized Expense Ratio-A | Beginning Account Value May 1, 2016 | Ending Account Value October 31, 2016 | Expenses Paid During Period-B May 1, 2016 to October 31, 2016 | |
Class A | 1.25% | |||
Actual | $1,000.00 | $1,051.60 | $6.46 | |
Hypothetical-C | $1,000.00 | $1,018.90 | $6.36 | |
Class T | 1.25% | |||
Actual | $1,000.00 | $1,051.60 | $6.46 | |
Hypothetical-C | $1,000.00 | $1,018.90 | $6.36 | |
Class C | 2.00% | |||
Actual | $1,000.00 | $1,047.60 | $10.32 | |
Hypothetical-C | $1,000.00 | $1,015.12 | $10.16 | |
Global High Income | 1.00% | |||
Actual | $1,000.00 | $1,052.90 | $5.17 | |
Hypothetical-C | $1,000.00 | $1,020.16 | $5.09 | |
Class I | 1.00% | |||
Actual | $1,000.00 | $1,052.90 | $5.17 | |
Hypothetical-C | $1,000.00 | $1,020.16 | $5.09 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
C 5% return per year before expenses
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Global High Income Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to all of the Fidelity funds.
At its July 2016 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and would be realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by FMR, the sub-advisers (together with FMR, the Investment Advisers), and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.In 2014, the Board formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs; (iv) broadening eligibility requirements for certain lower-priced share classes of, and streamlining the fee structure for, certain existing equity index funds; (v) lowering expense caps for certain existing funds and classes to reduce expenses paid by shareholders; (vi) eliminating redemption fees for certain variable insurance product funds and classes; (vii) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (viii) launching a lower cost share class for use by the Freedom Index Fund product line; (ix) rationalizing product lines and gaining increased efficiencies through fund mergers and share class consolidations; (x) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; (xi) implementing investment enhancements to further strengthen Fidelity's target date product line to increase investors' probability of success in achieving their goals; (xii) accelerating the conversion of all remaining Class B shares to Class A shares, which have a lower expense structure; and (xiii) implementing changes to Fidelity's money market fund product line in response to recent regulatory reforms.Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history.The Board took into account discussions with representatives of the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund, for different time periods, measured against a securities market index ("benchmark index") and a peer group of funds with similar objectives ("peer group"), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for the fund and an appropriate benchmark index for the most recent one- and three-year periods, as shown below. A peer group is not shown below because the fund does not generally utilize a peer group for performance comparison purposes.Fidelity Global High Income Fund
Fidelity Global High Income Fund
Corporate Headquarters
245 Summer St.
Boston, MA 02210
www.fidelity.com
GHI-SANN-1216
1.926252.105
Fidelity® Short Duration High Income Fund Semi-Annual Report October 31, 2016 |
Contents
Board Approval of Investment Advisory Contracts and Management Fees |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
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Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2016 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Fund nor Fidelity Distributors Corporation is a bank.
Investment Summary (Unaudited)
Top Five Holdings as of October 31, 2016
(by issuer, excluding cash equivalents) | % of fund's net assets | % of fund's net assets 6 months ago |
Dynegy, Inc. | 2.8 | 1.7 |
Kindred Healthcare, Inc. | 2.8 | 1.7 |
NXP BV/NXP Funding LLC | 2.8 | 0.0 |
Wynn Macau Ltd. | 2.6 | 2.4 |
Sprint Communications, Inc. | 2.6 | 3.0 |
13.6 |
Top Five Market Sectors as of October 31, 2016
% of fund's net assets | % of fund's net assets 6 months ago | |
Telecommunications | 13.2 | 14.7 |
Energy | 13.2 | 9.3 |
Healthcare | 10.2 | 8.3 |
Technology | 7.5 | 1.2 |
Utilities | 7.2 | 6.6 |
Quality Diversification (% of fund's net assets)
As of October 31, 2016 | ||
U.S. Government and U.S. Government Agency Obligations | 0.6% | |
AAA,AA,A | 1.2% | |
BBB | 5.4% | |
BB | 33.0% | |
B | 50.4% | |
CCC,CC,C | 7.0% | |
Not Rated | 1.3% | |
Equities | 0.2% | |
Short-Term Investments and Net Other Assets | 0.9% |
As of April 30, 2016 | ||
AAA,AA,A | 1.3% | |
BBB | 4.4% | |
BB | 36.9% | |
B | 42.2% | |
CCC,CC,C | 10.2% | |
Not Rated | 0.6% | |
Equities | 0.3% | |
Short-Term Investments and Net Other Assets | 4.1% |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes.
Asset Allocation (% of fund's net assets)
As of October 31, 2016* | ||
Nonconvertible Bonds | 84.4% | |
Convertible Bonds, Preferred Stocks | 0.2% | |
U.S. Government and U.S. Government Agency Obligations | 0.6% | |
Bank Loan Obligations | 13.0% | |
Other Investments | 0.9% | |
Short-Term Investments and Net Other Assets (Liabilities) | 0.9% |
* Foreign investments - 26.4%
As of April 30, 2016* | ||
Nonconvertible Bonds | 82.8% | |
Convertible Bonds, Preferred Stocks | 0.3% | |
Bank Loan Obligations | 11.9% | |
Other Investments | 0.9% | |
Short-Term Investments and Net Other Assets (Liabilities) | 4.1% |
* Foreign investments - 22.9%
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Investments October 31, 2016 (Unaudited)
Showing Percentage of Net Assets
Nonconvertible Bonds - 84.4% | |||
Principal Amount | Value | ||
Aerospace - 0.5% | |||
TransDigm, Inc. 6% 7/15/22 | $415,000 | $432,638 | |
Air Transportation - 5.4% | |||
Air Canada 7.75% 4/15/21 (a) | 840,000 | 921,900 | |
Air Canada Trust Series 2015-1 equipment trust certificate Class C, 5% 3/15/20 (a) | 75,000 | 75,203 | |
Allegiant Travel Co. 5.5% 7/15/19 | 725,000 | 753,094 | |
American Airlines Group, Inc.: | |||
4.625% 3/1/20 (a) | 490,000 | 493,063 | |
5.5% 10/1/19 (a) | 485,000 | 500,763 | |
U.S. Airways Group, Inc. 6.125% 6/1/18 | 1,030,000 | 1,069,913 | |
United Continental Holdings, Inc.: | |||
6% 12/1/20 | 200,000 | 215,250 | |
6.375% 6/1/18 | 500,000 | 525,625 | |
TOTAL AIR TRANSPORTATION | 4,554,811 | ||
Automotive - 0.2% | |||
Ford Motor Credit Co. LLC 2.875% 10/1/18 | 200,000 | 203,865 | |
Automotive & Auto Parts - 1.6% | |||
American Tire Distributors, Inc. 10.25% 3/1/22 (a) | 560,000 | 514,853 | |
General Motors Financial Co., Inc. 2.35% 10/4/19 | 100,000 | 99,894 | |
IHO Verwaltungs GmbH 4.125% 9/15/21 pay-in-kind (a)(b) | 600,000 | 614,250 | |
ZF North America Capital, Inc. 4% 4/29/20 (a) | 150,000 | 157,875 | |
TOTAL AUTOMOTIVE & AUTO PARTS | 1,386,872 | ||
Banks & Thrifts - 0.7% | |||
Bank of America Corp. 2.625% 4/19/21 | 250,000 | 253,032 | |
Goldman Sachs Group, Inc. 2.625% 4/25/21 | 100,000 | 101,221 | |
JPMorgan Chase & Co. 2.55% 3/1/21 | 200,000 | 203,073 | |
TOTAL BANKS & THRIFTS | 557,326 | ||
Broadcasting - 0.6% | |||
Clear Channel Communications, Inc.: | |||
5.5% 12/15/16 | 445,000 | 438,325 | |
9% 12/15/19 | 110,000 | 83,463 | |
TOTAL BROADCASTING | 521,788 | ||
Building Materials - 1.3% | |||
CEMEX S.A.B. de CV 6.5% 12/10/19 (a) | 920,000 | 982,100 | |
Standard Industries, Inc. 5.125% 2/15/21 (a) | 120,000 | 126,000 | |
TOTAL BUILDING MATERIALS | 1,108,100 | ||
Cable/Satellite TV - 2.6% | |||
Altice SA 7.75% 5/15/22 (a) | 1,000,000 | 1,044,375 | |
CSC Holdings LLC 6.75% 11/15/21 | 885,000 | 931,463 | |
Time Warner Cable, Inc. 5.85% 5/1/17 | 200,000 | 204,441 | |
TOTAL CABLE/SATELLITE TV | 2,180,279 | ||
Chemicals - 0.8% | |||
LSB Industries, Inc. 8.5% 8/1/19 | 193,000 | 179,490 | |
Nufarm Australia Ltd. 6.375% 10/15/19 (a) | 510,000 | 520,200 | |
TOTAL CHEMICALS | 699,690 | ||
Containers - 0.7% | |||
Ardagh Packaging Finance PLC/Ardagh MP Holdings U.S.A., Inc.: | |||
3.8503% 12/15/19 (a)(b) | 150,000 | 152,438 | |
4.067% 5/15/21 (a)(b) | 200,000 | 204,000 | |
7% 11/15/20 (a) | 167,647 | 172,676 | |
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer (Luxembourg) SA 4.38% 7/15/21 (a)(b) | 50,000 | 51,000 | |
TOTAL CONTAINERS | 580,114 | ||
Diversified Financial Services - 4.9% | |||
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust 3.95% 2/1/22 | 300,000 | 305,766 | |
Discover Financial Services 6.45% 6/12/17 | 200,000 | 205,964 | |
FLY Leasing Ltd.: | |||
6.375% 10/15/21 | 200,000 | 204,500 | |
6.75% 12/15/20 | 65,000 | 67,763 | |
Hyundai Capital America 2.55% 2/6/19 (a) | 100,000 | 101,496 | |
Icahn Enterprises LP/Icahn Enterprises Finance Corp.: | |||
4.875% 3/15/19 | 1,180,000 | 1,172,519 | |
5.875% 2/1/22 | 85,000 | 80,856 | |
6% 8/1/20 | 370,000 | 363,525 | |
ILFC E-Capital Trust I 4% 12/21/65 (a)(b) | 105,000 | 83,738 | |
ILFC E-Capital Trust II 4.25% 12/21/65 (a)(b) | 150,000 | 121,875 | |
IntercontinentalExchange, Inc. 2.75% 12/1/20 | 250,000 | 257,480 | |
Morgan Stanley 2.5% 4/21/21 | 250,000 | 251,805 | |
Navient Corp. 5.875% 3/25/21 | 100,000 | 100,125 | |
NiSource Finance Corp. 5.45% 9/15/20 | 102,000 | 113,812 | |
SLM Corp. 5.5% 1/15/19 | 375,000 | 382,500 | |
Springleaf Financial Corp. 7.75% 10/1/21 | 272,000 | 283,397 | |
TOTAL DIVERSIFIED FINANCIAL SERVICES | 4,097,121 | ||
Diversified Media - 1.2% | |||
21st Century Fox America, Inc. 4.5% 2/15/21 | 200,000 | 220,472 | |
Nielsen Finance LLC/Nielsen Finance Co. 5% 4/15/22 (a) | 800,000 | 816,000 | |
TOTAL DIVERSIFIED MEDIA | 1,036,472 | ||
Energy - 12.9% | |||
Antero Resources Corp. 5.125% 12/1/22 | 300,000 | 302,250 | |
Antero Resources Finance Corp. 5.375% 11/1/21 | 60,000 | 60,900 | |
Chesapeake Energy Corp.: | |||
4.875% 4/15/22 | 700,000 | 595,000 | |
6.125% 2/15/21 | 45,000 | 41,175 | |
Citgo Holding, Inc. 10.75% 2/15/20 (a) | 115,000 | 117,415 | |
Denbury Resources, Inc. 6.375% 8/15/21 | 250,000 | 206,875 | |
Ensco PLC 4.7% 3/15/21 | 790,000 | 729,565 | |
EP Energy LLC/Everest Acquisition Finance, Inc. 9.375% 5/1/20 | 270,000 | 211,950 | |
Ferrellgas LP/Ferrellgas Finance Corp.: | |||
6.5% 5/1/21 | 200,000 | 188,500 | |
6.75% 1/15/22 | 100,000 | 93,750 | |
Forbes Energy Services Ltd. 9% 6/15/19 (c) | 345,000 | 86,250 | |
Forum Energy Technologies, Inc. 6.25% 10/1/21 | 30,000 | 29,700 | |
Halcon Resources Corp. 8.625% 2/1/20 (a) | 395,000 | 402,900 | |
Noble Holding International Ltd. 4.625% 3/1/21 | 245,000 | 206,894 | |
PBF Holding Co. LLC/PBF Finance Corp. 8.25% 2/15/20 | 100,000 | 102,000 | |
Petroleos Mexicanos 3.5% 7/18/18 | 250,000 | 254,063 | |
Plains All American Pipeline LP/PAA Finance Corp. 2.6% 12/15/19 | 100,000 | 101,190 | |
Pride International, Inc. 6.875% 8/15/20 | 1,400,000 | 1,424,500 | |
Sabine Pass Liquefaction LLC: | |||
5.625% 2/1/21 (b) | 1,030,000 | 1,084,075 | |
6.25% 3/15/22 | 300,000 | 328,500 | |
SM Energy Co. 6.5% 11/15/21 | 700,000 | 710,500 | |
Southwestern Energy Co. 7.5% 2/1/18 | 60,000 | 62,850 | |
Sunoco LP/Sunoco Finance Corp.: | |||
5.5% 8/1/20 | 960,000 | 974,400 | |
6.25% 4/15/21 | 80,000 | 82,000 | |
Targa Resources Partners LP/Targa Resources Partners Finance Corp. 4.125% 11/15/19 | 207,000 | 208,811 | |
Tesoro Logistics LP/Tesoro Logistics Finance Corp.: | |||
5.5% 10/15/19 | 255,000 | 272,213 | |
5.875% 10/1/20 | 210,000 | 216,038 | |
6.125% 10/15/21 | 10,000 | 10,463 | |
6.25% 10/15/22 | 365,000 | 386,900 | |
Weatherford International Ltd.: | |||
4.5% 4/15/22 | 70,000 | 63,000 | |
7.75% 6/15/21 | 60,000 | 60,600 | |
Western Gas Partners LP 2.6% 8/15/18 | 200,000 | 200,320 | |
Whiting Petroleum Corp.: | |||
5% 3/15/19 | 15,000 | 14,250 | |
6.5% 10/1/18 | 125,000 | 123,125 | |
WPX Energy, Inc.: | |||
6% 1/15/22 | 250,000 | 249,375 | |
7.5% 8/1/20 | 625,000 | 658,594 | |
TOTAL ENERGY | 10,860,891 | ||
Entertainment/Film - 0.2% | |||
New Cotai LLC/New Cotai Capital Corp. 10.625% 5/1/19 pay-in-kind (a)(b) | 263,281 | 141,349 | |
Food & Drug Retail - 0.6% | |||
BI-LO LLC/BI-LO Finance Corp. 9.25% 2/15/19 (a) | 105,000 | 91,088 | |
Perrigo Finance PLC 3.5% 12/15/21 | 200,000 | 206,524 | |
Tops Holding LLC/Tops Markets II Corp. 8% 6/15/22 (a) | 200,000 | 176,000 | |
TOTAL FOOD & DRUG RETAIL | 473,612 | ||
Food/Beverage/Tobacco - 2.2% | |||
Anheuser-Busch InBev Finance, Inc. 2.65% 2/1/21 | 200,000 | 205,041 | |
C&S Group Enterprises LLC 5.375% 7/15/22 (a) | 20,000 | 19,400 | |
Darling International, Inc. 5.375% 1/15/22 | 10,000 | 10,425 | |
Imperial Tobacco Finance PLC 2.95% 7/21/20 (a) | 200,000 | 205,388 | |
JBS Investments GmbH 7.75% 10/28/20 (a) | 900,000 | 938,250 | |
JBS U.S.A. LLC/JBS U.S.A. Finance, Inc. 7.25% 6/1/21 (a) | 300,000 | 307,500 | |
Vector Group Ltd. 7.75% 2/15/21 | 185,000 | 193,788 | |
TOTAL FOOD/BEVERAGE/TOBACCO | 1,879,792 | ||
Gaming - 2.9% | |||
GLP Capital LP/GLP Financing II, Inc. 4.375% 4/15/21 | 60,000 | 63,150 | |
MCE Finance Ltd. 5% 2/15/21 (a) | 200,000 | 199,985 | |
Wynn Macau Ltd. 5.25% 10/15/21 (a) | 2,200,000 | 2,207,678 | |
TOTAL GAMING | 2,470,813 | ||
Healthcare - 9.4% | |||
Community Health Systems, Inc.: | |||
5.125% 8/15/18 | 41,000 | 40,641 | |
6.875% 2/1/22 | 400,000 | 305,000 | |
7.125% 7/15/20 | 250,000 | 201,875 | |
DaVita HealthCare Partners, Inc. 5.75% 8/15/22 | 200,000 | 205,004 | |
Endo Finance LLC 5.75% 1/15/22 (a) | 1,300,000 | 1,170,000 | |
Forest Laboratories, Inc. 5% 12/15/21 (a) | 200,000 | 223,289 | |
HCA Holdings, Inc. 6.25% 2/15/21 | 600,000 | 647,250 | |
Kindred Healthcare, Inc. 8% 1/15/20 | 2,340,000 | 2,363,386 | |
Mallinckrodt International Finance SA/Mallinckrodt CB LLC 4.875% 4/15/20 (a) | 300,000 | 301,125 | |
Mylan N.V. 3.15% 6/15/21 (a) | 200,000 | 203,384 | |
Shire Acquisitions Investments Ireland DAC 2.4% 9/23/21 | 200,000 | 198,527 | |
Tenet Healthcare Corp. 4.75% 6/1/20 | 200,000 | 204,500 | |
Universal Health Services, Inc. 4.75% 8/1/22 (a) | 65,000 | 66,755 | |
Valeant Pharmaceuticals International, Inc.: | |||
5.375% 3/15/20 (a) | 790,000 | 683,350 | |
5.625% 12/1/21 (a) | 365,000 | 299,300 | |
6.75% 8/15/18 (a) | 540,000 | 527,040 | |
VPI Escrow Corp. 6.375% 10/15/20 (a) | 280,000 | 241,500 | |
TOTAL HEALTHCARE | 7,881,926 | ||
Homebuilders/Real Estate - 4.4% | |||
Beazer Homes U.S.A., Inc. 8.75% 3/15/22 (a) | 115,000 | 122,188 | |
Brandywine Operating Partnership LP 4.95% 4/15/18 | 150,000 | 156,209 | |
DDR Corp. 4.75% 4/15/18 | 150,000 | 155,318 | |
Essex Portfolio LP 5.5% 3/15/17 | 250,000 | 253,676 | |
Lennar Corp. 4.75% 4/1/21 | 115,000 | 121,829 | |
Liberty Property LP 6.625% 10/1/17 | 150,000 | 156,923 | |
M/I Homes, Inc. 6.75% 1/15/21 | 140,000 | 147,350 | |
Mack-Cali Realty LP 2.5% 12/15/17 | 150,000 | 150,530 | |
PulteGroup, Inc. 4.25% 3/1/21 | 485,000 | 509,250 | |
Rialto Holdings LLC/Rialto Corp. 7% 12/1/18 (a) | 85,000 | 86,063 | |
Taylor Morrison Communities, Inc./Monarch Communities, Inc. 5.25% 4/15/21 (a) | 75,000 | 76,875 | |
Ventas Realty LP/Ventas Capital Corp. 4.75% 6/1/21 | 200,000 | 220,664 | |
William Lyon Homes, Inc. 5.75% 4/15/19 | 1,535,000 | 1,565,700 | |
TOTAL HOMEBUILDERS/REAL ESTATE | 3,722,575 | ||
Insurance - 0.4% | |||
American International Group, Inc. 3.3% 3/1/21 | 200,000 | 209,210 | |
ING U.S., Inc. 2.9% 2/15/18 (b) | 153,000 | 155,521 | |
TOTAL INSURANCE | 364,731 | ||
Metals/Mining - 1.3% | |||
Freeport-McMoRan, Inc.: | |||
2.375% 3/15/18 | 200,000 | 197,500 | |
3.55% 3/1/22 | 730,000 | 669,775 | |
Lundin Mining Corp. 7.5% 11/1/20 (a) | 20,000 | 21,250 | |
Signode Industrial Group Lux SA/Signode Industrial Group U.S., Inc. 6.375% 5/1/22 (a) | 200,000 | 202,000 | |
TOTAL METALS/MINING | 1,090,525 | ||
Publishing/Printing - 0.2% | |||
R.R. Donnelley & Sons Co. 7.875% 3/15/21 | 120,000 | 129,000 | |
Services - 3.2% | |||
Air Lease Corp. 2.125% 1/15/20 | 200,000 | 199,718 | |
Anna Merger Sub, Inc. 7.75% 10/1/22 (a) | 300,000 | 257,250 | |
APX Group, Inc.: | |||
6.375% 12/1/19 | 1,875,000 | 1,933,594 | |
8.75% 12/1/20 | 230,000 | 222,525 | |
Garda World Security Corp. 7.25% 11/15/21 (a) | 10,000 | 9,550 | |
Hertz Corp. 6.75% 4/15/19 | 72,000 | 73,455 | |
TOTAL SERVICES | 2,696,092 | ||
Super Retail - 1.2% | |||
JC Penney Corp., Inc.: | |||
5.65% 6/1/20 | 729,000 | 721,710 | |
8.125% 10/1/19 | 260,000 | 283,075 | |
TOTAL SUPER RETAIL | 1,004,785 | ||
Technology - 5.4% | |||
Micron Technology, Inc. 5.875% 2/15/22 | 1,000,000 | 1,032,900 | |
NCR Corp.: | |||
4.625% 2/15/21 | 535,000 | 541,688 | |
5% 7/15/22 | 100,000 | 101,562 | |
5.875% 12/15/21 | 185,000 | 194,481 | |
NXP BV/NXP Funding LLC: | |||
3.875% 9/1/22 (a) | 1,000,000 | 1,053,750 | |
4.125% 6/1/21 (a) | 400,000 | 427,000 | |
4.625% 6/15/22 (a) | 795,000 | 866,550 | |
Sungard Availability Services Capital, Inc. 8.75% 4/1/22 (a) | 75,000 | 51,750 | |
WideOpenWest Finance LLC/WideOpenWest Capital Corp.: | |||
10.25% 7/15/19 | 285,000 | 299,250 | |
13.375% 10/15/19 | 18,000 | 19,260 | |
TOTAL TECHNOLOGY | 4,588,191 | ||
Telecommunications - 12.8% | |||
Altice Financing SA 6.5% 1/15/22 (a) | 600,000 | 627,150 | |
AT&T, Inc. 2.8% 2/17/21 | 200,000 | 202,764 | |
Columbus International, Inc. 7.375% 3/30/21 (a) | 1,400,000 | 1,498,000 | |
DigitalGlobe, Inc. 5.25% 2/1/21 (a) | 500,000 | 503,750 | |
MetroPCS Wireless, Inc. 6.625% 11/15/20 | 130,000 | 133,575 | |
Sable International Finance Ltd. 6.875% 8/1/22 (a) | 600,000 | 621,000 | |
SFR Group SA 6% 5/15/22 (a) | 1,000,000 | 1,025,320 | |
Sprint Communications, Inc.: | |||
6% 11/15/22 | 500,000 | 465,940 | |
7% 3/1/20 (a) | 1,480,000 | 1,609,500 | |
9% 11/15/18 (a) | 115,000 | 126,500 | |
Sprint Corp. 7.25% 9/15/21 | 375,000 | 383,906 | |
T-Mobile U.S.A., Inc.: | |||
6.464% 4/28/19 | 1,275,000 | 1,295,719 | |
6.542% 4/28/20 | 465,000 | 480,113 | |
6.731% 4/28/22 | 90,000 | 94,050 | |
Verizon Communications, Inc. 3.65% 9/14/18 | 250,000 | 259,366 | |
Wind Acquisition Finance SA: | |||
4.75% 7/15/20 (a) | 1,070,000 | 1,075,350 | |
7.375% 4/23/21 (a) | 400,000 | 411,000 | |
TOTAL TELECOMMUNICATIONS | 10,813,003 | ||
Transportation Ex Air/Rail - 0.5% | |||
Navios Maritime Acquisition Corp./Navios Acquisition Finance U.S., Inc. 8.125% 11/15/21 (a) | 540,000 | 407,700 | |
Navios South American Logistics, Inc./Navios Logistics Finance U.S., Inc. 7.25% 5/1/22 (a) | 10,000 | 7,900 | |
TOTAL TRANSPORTATION EX AIR/RAIL | 415,600 | ||
Utilities - 6.3% | |||
Calpine Corp. 6% 1/15/22 (a) | 300,000 | 313,593 | |
DCP Midstream Operating LP 2.5% 12/1/17 | 100,000 | 99,250 | |
Dolphin Subsidiary II, Inc. 7.25% 10/15/21 | 258,000 | 269,288 | |
DPL, Inc. 6.75% 10/1/19 | 855,000 | 887,063 | |
Dynegy, Inc.: | |||
6.75% 11/1/19 | 1,515,000 | 1,533,316 | |
7.375% 11/1/22 | 900,000 | 867,938 | |
Global Partners LP/GLP Finance Corp. 6.25% 7/15/22 | 135,000 | 128,925 | |
RJS Power Holdings LLC 4.625% 7/15/19 (a)(b) | 865,000 | 821,750 | |
The AES Corp.: | |||
3.8421% 6/1/19 (b) | 28,000 | 27,965 | |
4.875% 5/15/23 | 5,000 | 4,961 | |
7.375% 7/1/21 | 280,000 | 315,700 | |
TOTAL UTILITIES | 5,269,749 | ||
TOTAL NONCONVERTIBLE BONDS | |||
(Cost $70,541,668) | 71,161,710 | ||
U.S. Treasury Obligations - 0.6% | |||
U.S. Treasury Notes: | |||
1.125% 9/30/21 | $110,000 | $108,977 | |
1.25% 10/31/21 | 393,000 | 391,849 | |
TOTAL U.S. TREASURY OBLIGATIONS | |||
(Cost $501,167) | 500,826 | ||
Shares | Value | ||
Common Stocks - 0.0% | |||
Energy - 0.0% | |||
Southwestern Energy Co. (d) | |||
(Cost $4,905) | 373 | 3,875 | |
Convertible Preferred Stocks - 0.2% | |||
Energy - 0.2% | |||
Southwestern Energy Co. Series B 6.25% | |||
(Cost $111,697) | 6,300 | 157,941 | |
Principal Amount | Value | ||
Bank Loan Obligations - 13.0% | |||
Aerospace - 0.7% | |||
TransDigm, Inc.: | |||
Tranche D, term loan 3.8316% 6/4/21 (b) | 191,104 | 190,674 | |
Tranche F, term loan 3.75% 6/9/23 (b) | 435,000 | 433,099 | |
TOTAL AEROSPACE | 623,773 | ||
Air Transportation - 0.6% | |||
Air Canada Tranche B, term loan 3.6143% 10/6/23 (b) | 180,000 | 180,225 | |
American Airlines, Inc. Tranche B, term loan 3.25% 10/10/21 (b) | 349,781 | 349,830 | |
TOTAL AIR TRANSPORTATION | 530,055 | ||
Broadcasting - 0.6% | |||
Clear Channel Communications, Inc. Tranche D, term loan 7.2843% 1/30/19 (b) | 275,000 | 207,749 | |
Nielsen Finance LLC Tranche B 3LN, term loan 3.0311% 10/4/23 (b) | 165,000 | 165,645 | |
Univision Communications, Inc. Tranche C 4LN, term loan 4% 3/1/20 (b) | 98,683 | 98,837 | |
TOTAL BROADCASTING | 472,231 | ||
Building Materials - 1.2% | |||
American Builders & Contractors Supply Co., Inc. Tranche B, term loan 3.5% 9/23/23 (b) | 215,000 | 215,806 | |
GYP Holdings III Corp. Tranche B, term loan 4.5% 4/1/21 (b) | 281,258 | 280,906 | |
HD Supply, Inc. Tranche B, term loan 3.63% 10/17/23 (b) | 280,000 | 280,176 | |
LBM Borrower LLC Tranche B 1LN, term loan 6.25% 8/20/22 (b) | 232,650 | 232,480 | |
TOTAL BUILDING MATERIALS | 1,009,368 | ||
Cable/Satellite TV - 0.9% | |||
Numericable LLC: | |||
Tranche B 6LN, term loan 4.75% 2/10/23 (b) | 287,825 | 287,825 | |
Tranche B, term loan 5.1373% 1/15/24 (b) | 34,825 | 35,112 | |
WideOpenWest Finance LLC Tranche B, term loan 4.5% 8/19/23 (b) | 225,000 | 224,386 | |
Ziggo Secured Finance Partnership Tranche D, term loan 3.5346% 8/31/24 (b) | 180,000 | 179,919 | |
TOTAL CABLE/SATELLITE TV | 727,242 | ||
Capital Goods - 0.2% | |||
Rexnord LLC Tranche B, term loan 4% 8/21/20 (b) | 140,204 | 140,519 | |
Chemicals - 0.0% | |||
MacDermid, Inc. term loan 5% 6/7/23 (b) | 40,000 | 40,300 | |
Containers - 1.0% | |||
Ardagh Holdings U.S.A., Inc. Tranche B, term loan 4% 12/17/21 (b) | 237,093 | 239,242 | |
Reynolds Group Holdings, Inc. Tranche B, term loan 4.25% 2/5/23 (b) | 310,000 | 310,691 | |
Signode Packaging Systems, Inc. Tranche B, term loan 3.75% 5/1/21 (b) | 277,368 | 276,674 | |
TOTAL CONTAINERS | 826,607 | ||
Diversified Financial Services - 0.1% | |||
IBC Capital U.S. LLC: | |||
Tranche 2LN, term loan 8% 9/11/22 (b) | 100,000 | 90,750 | |
Tranche B 1LN, term loan 4.9847% 9/11/21 (b) | 24,625 | 24,215 | |
TOTAL DIVERSIFIED FINANCIAL SERVICES | 114,965 | ||
Energy - 0.1% | |||
Crestwood Holdings Partners LLC Tranche B, term loan 9% 6/19/19 (b) | 93,563 | 87,950 | |
Food & Drug Retail - 0.0% | |||
Albertson's LLC Tranche B 6LN, term loan 4.75% 6/22/23 (b) | 38,095 | 38,492 | |
Food/Beverage/Tobacco - 0.1% | |||
Chobani LLC Tranche B, term loan 5.25% 10/7/23 (b) | 105,000 | 106,116 | |
Gaming - 0.3% | |||
Scientific Games Corp. Tranche B 2LN, term loan 6% 10/1/21 (b) | 235,800 | 236,684 | |
Healthcare - 0.8% | |||
Horizon Pharmaceuticals, Inc. term loan 5/7/21 (e) | 20,000 | 20,025 | |
InVentiv Health, Inc. Tranche B, term loan 9/29/23 (e) | 280,000 | 279,849 | |
Valeant Pharmaceuticals International, Inc. Tranche BD 2LN, term loan 5% 2/13/19 (b) | 397,619 | 396,343 | |
TOTAL HEALTHCARE | 696,217 | ||
Leisure - 0.1% | |||
24 Hour Fitness Worldwide, Inc. Tranche B, term loan 4.75% 5/30/21 (b) | 44,359 | 43,305 | |
Metals/Mining - 0.2% | |||
Murray Energy Corp. Tranche B 2LN, term loan 8.25% 4/16/20 (b) | 200,000 | 182,812 | |
Publishing/Printing - 0.6% | |||
McGraw-Hill Global Education Holdings, LLC term loan 5% 5/4/22 (b) | 44,888 | 44,766 | |
Springer Science+Business Media Deutschland GmbH Tranche B 9LN, term loan 4.75% 8/14/20 (b) | 456,766 | 445,918 | |
TOTAL PUBLISHING/PRINTING | 490,684 | ||
Services - 1.4% | |||
Acosta, Inc. Tranche B, term loan 4.25% 9/26/21 (b) | 258,687 | 248,598 | |
Brand Energy & Infrastructure Services, Inc. Tranche B, term loan 4.75% 11/26/20 (b) | 68,075 | 67,127 | |
Garda World Security Corp.: | |||
term loan 4% 11/8/20 (b) | 417,228 | 411,837 | |
Tranche DD, term loan 4.0039% 11/8/20 (b) | 98,033 | 96,767 | |
Laureate Education, Inc. Tranche B, term loan 8.8679% 3/17/21 (b) | 219,579 | 217,657 | |
Lineage Logistics Holdings, LLC. Tranche B, term loan 4.5% 4/7/21 (b) | 167,994 | 164,634 | |
TOTAL SERVICES | 1,206,620 | ||
Super Retail - 0.7% | |||
JC Penney Corp., Inc. Tranche B, term loan 5.25% 6/23/23 (b) | 173,750 | 174,749 | |
PetSmart, Inc. term loan 4% 3/11/22 (b) | 380,081 | 380,826 | |
TOTAL SUPER RETAIL | 555,575 | ||
Technology - 2.1% | |||
Ceridian HCM Holding, Inc. Tranche B 2LN, term loan 4.5% 9/15/20 (b) | 100,000 | 98,000 | |
Epicor Software Corp. Tranche B, term loan 4.75% 6/1/22(b) | 143,546 | 141,797 | |
Kronos, Inc. term loan: | |||
10/20/23 (e) | 395,000 | 396,572 | |
10/20/24 (e) | 100,000 | 102,986 | |
ON Semiconductor Corp. term loan 3.7772% 3/31/23 (b) | 215,000 | 216,183 | |
Quest Software U.S. Holdings, Inc. Tranche B, term loan 9/27/22 (e) | 130,000 | 129,903 | |
Rackspace Hosting, Inc. term loan 10/26/23 (e) | 55,000 | 55,292 | |
TTM Technologies, Inc. Tranche B 1LN, term loan 5.25% 5/31/21 (b) | 182,675 | 183,132 | |
Uber Technologies, Inc. Tranche B, term loan 5% 7/13/23 (b) | 450,000 | 453,096 | |
TOTAL TECHNOLOGY | 1,776,961 | ||
Telecommunications - 0.4% | |||
LTS Buyer LLC Tranche B 1LN, term loan 4.0877% 4/11/20 (b) | 24,681 | 24,706 | |
Polycom, Inc. Tranche B, term loan 7.5% 9/27/23 (b) | 285,000 | 277,519 | |
TOTAL TELECOMMUNICATIONS | 302,225 | ||
Utilities - 0.9% | |||
Calpine Construction Finance Co. LP Tranche B 1LN, term loan 3.09% 5/3/20 (b) | 259,977 | 258,027 | |
Calpine Corp. Tranche B 6LN, term loan 4% 1/1/23 (b) | 168,725 | 169,449 | |
Moxie Patriot LLC Tranche B, term loan 6.75% 12/19/20 (b) | 304,201 | 296,976 | |
TOTAL UTILITIES | 724,452 | ||
TOTAL BANK LOAN OBLIGATIONS | |||
(Cost $10,901,489) | 10,933,153 | ||
Bank Notes - 0.3% | |||
Regions Bank 7.5% 5/15/18 | |||
(Cost $268,152) | 250,000 | 270,910 | |
Preferred Securities - 0.6% | |||
Banks & Thrifts - 0.6% | |||
Citigroup, Inc.: | |||
5.95% (b)(f) | $100,000 | $104,999 | |
5.95% (b)(f) | 10,000 | 10,382 | |
Royal Bank of Scotland Group PLC 7.5% (b)(f) | 400,000 | 369,637 | |
TOTAL BANKS & THRIFTS | 485,018 | ||
Diversified Financial Services - 0.0% | |||
American Express Co. 4.9% (b)(f) | 20,000 | 19,757 | |
TOTAL PREFERRED SECURITIES | |||
(Cost $513,354) | 504,775 | ||
Shares | Value | ||
Money Market Funds - 4.3% | |||
Fidelity Cash Central Fund, 0.41% (g) | |||
(Cost $3,616,660) | 3,616,496 | 3,617,581 | |
TOTAL INVESTMENT PORTFOLIO - 103.4% | |||
(Cost $86,459,092) | 87,150,771 | ||
NET OTHER ASSETS (LIABILITIES) - (3.4)% | (2,868,187) | ||
NET ASSETS - 100% | $84,282,584 |
Legend
(a) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $28,399,236 or 33.7% of net assets.
(b) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end.
(c) Non-income producing - Security is in default.
(d) Non-income producing
(e) The coupon rate will be determined upon settlement of the loan after period end.
(f) Security is perpetual in nature with no stated maturity date.
(g) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
Fund | Income earned |
Fidelity Cash Central Fund | $9,678 |
Total | $9,678 |
Investment Valuation
The following is a summary of the inputs used, as of October 31, 2016, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Equities: | ||||
Energy | $161,816 | $161,816 | $-- | $-- |
Corporate Bonds | 71,161,710 | -- | 71,161,710 | -- |
U.S. Government and Government Agency Obligations | 500,826 | -- | 500,826 | -- |
Bank Loan Obligations | 10,933,153 | -- | 10,933,153 | -- |
Bank Notes | 270,910 | -- | 270,910 | -- |
Preferred Securities | 504,775 | -- | 504,775 | -- |
Money Market Funds | 3,617,581 | 3,617,581 | -- | -- |
Total Investments in Securities: | $87,150,771 | $3,779,397 | $83,371,374 | $-- |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
United States of America | 73.6% |
Luxembourg | 4.1% |
Canada | 3.8% |
Cayman Islands | 3.7% |
Netherlands | 3.2% |
Barbados | 1.8% |
United Kingdom | 1.7% |
Ireland | 1.6% |
Mexico | 1.5% |
Germany | 1.2% |
France | 1.2% |
Austria | 1.1% |
Others (Individually Less Than 1%) | 1.5% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
October 31, 2016 (Unaudited) | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $82,842,432) | $83,533,190 | |
Fidelity Central Funds (cost $3,616,660) | 3,617,581 | |
Total Investments (cost $86,459,092) | $87,150,771 | |
Cash | 754,861 | |
Receivable for investments sold | 881,673 | |
Receivable for fund shares sold | 151,834 | |
Interest receivable | 1,068,967 | |
Distributions receivable from Fidelity Central Funds | 2,078 | |
Prepaid expenses | 160 | |
Receivable from investment adviser for expense reductions | 39,500 | |
Other receivables | 43 | |
Total assets | 90,049,887 | |
Liabilities | ||
Payable for investments purchased | $4,864,765 | |
Payable for fund shares redeemed | 759,480 | |
Distributions payable | 49,797 | |
Accrued management fee | 37,407 | |
Distribution and service plan fees payable | 5,955 | |
Other affiliated payables | 9,618 | |
Other payables and accrued expenses | 40,281 | |
Total liabilities | 5,767,303 | |
Net Assets | $84,282,584 | |
Net Assets consist of: | ||
Paid in capital | $88,985,779 | |
Undistributed net investment income | 241,033 | |
Accumulated undistributed net realized gain (loss) on investments | (5,635,907) | |
Net unrealized appreciation (depreciation) on investments | 691,679 | |
Net Assets | $84,282,584 | |
Calculation of Maximum Offering Price | ||
Class A: | ||
Net Asset Value and redemption price per share ($8,563,611 ÷ 910,890 shares) | $9.40 | |
Maximum offering price per share (100/96.00 of $9.40) | $9.79 | |
Class T: | ||
Net Asset Value and redemption price per share ($2,625,029 ÷ 279,250 shares) | $9.40 | |
Maximum offering price per share (100/96.00 of $9.40) | $9.79 | |
Class C: | ||
Net Asset Value and offering price per share ($4,457,062 ÷ 474,054 shares)(a) | $9.40 | |
Short Duration High Income: | ||
Net Asset Value, offering price and redemption price per share ($61,751,476 ÷ 6,568,278 shares) | $9.40 | |
Class I: | ||
Net Asset Value, offering price and redemption price per share ($6,885,406 ÷ 732,363 shares) | $9.40 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended October 31, 2016 (Unaudited) | ||
Investment Income | ||
Dividends | $33,508 | |
Interest | 1,794,123 | |
Income from Fidelity Central Funds | 9,678 | |
Total income | 1,837,309 | |
Expenses | ||
Management fee | $185,368 | |
Transfer agent fees | 39,584 | |
Distribution and service plan fees | 32,670 | |
Accounting fees and expenses | 13,742 | |
Custodian fees and expenses | 7,062 | |
Independent trustees' fees and expenses | 135 | |
Registration fees | 64,064 | |
Audit | 36,878 | |
Legal | 1,002 | |
Miscellaneous | 270 | |
Total expenses before reductions | 380,775 | |
Expense reductions | (80,888) | 299,887 |
Net investment income (loss) | 1,537,422 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | (305,442) | |
Fidelity Central Funds | 1,305 | |
Total net realized gain (loss) | (304,137) | |
Change in net unrealized appreciation (depreciation) on investment securities | 1,779,612 | |
Net gain (loss) | 1,475,475 | |
Net increase (decrease) in net assets resulting from operations | $3,012,897 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended October 31, 2016 (Unaudited) | Year ended April 30, 2016 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $1,537,422 | $2,971,015 |
Net realized gain (loss) | (304,137) | (3,941,175) |
Change in net unrealized appreciation (depreciation) | 1,779,612 | (845,412) |
Net increase (decrease) in net assets resulting from operations | 3,012,897 | (1,815,572) |
Distributions to shareholders from net investment income | (1,381,635) | (2,846,056) |
Distributions to shareholders from net realized gain | – | (12,975) |
Total distributions | (1,381,635) | (2,859,031) |
Share transactions - net increase (decrease) | 19,179,854 | 6,284,384 |
Redemption fees | 8,696 | 19,692 |
Total increase (decrease) in net assets | 20,819,812 | 1,629,473 |
Net Assets | ||
Beginning of period | 63,462,772 | 61,833,299 |
End of period | $84,282,584 | $63,462,772 |
Other Information | ||
Undistributed net investment income end of period | $241,033 | $85,246 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Short Duration High Income Fund Class A
Six months ended (Unaudited) October 31, | Years ended April 30, | |||
2016 | 2016 | 2015 | 2014 A | |
Selected Per–Share Data | ||||
Net asset value, beginning of period | $9.14 | $9.86 | $10.10 | $10.00 |
Income from Investment Operations | ||||
Net investment income (loss)B | .208 | .429 | .358 | .132 |
Net realized and unrealized gain (loss) | .238 | (.737) | (.246) | .091 |
Total from investment operations | .446 | (.308) | .112 | .223 |
Distributions from net investment income | (.187) | (.413) | (.358) | (.124) |
Distributions from net realized gain | – | (.002) | – | – |
Total distributions | (.187) | (.415) | (.358) | (.124) |
Redemption fees added to paid in capitalB | .001 | .003 | .006 | .001 |
Net asset value, end of period | $9.40 | $9.14 | $9.86 | $10.10 |
Total ReturnC,D,E | 4.93% | (3.06)% | 1.22% | 2.25% |
Ratios to Average Net AssetsF,G | ||||
Expenses before reductions | 1.30%H | 1.24% | 1.29% | 1.61%H |
Expenses net of fee waivers, if any | 1.05%H | 1.05% | 1.05% | 1.05%H |
Expenses net of all reductions | 1.05%H | 1.05% | 1.05% | 1.05%H |
Net investment income (loss) | 4.46%H | 4.65% | 3.63% | 2.72%H |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $8,564 | $6,823 | $4,398 | $3,043 |
Portfolio turnover rateI | 70%H | 56% | 84% | 20%J |
A For the period November 5, 2013 (commencement of operations) to April 30, 2014.
B Calculated based on average shares outstanding during the period.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Short Duration High Income Fund Class T
Six months ended (Unaudited) October 31, | Years ended April 30, | |||
2016 | 2016 | 2015 | 2014 A | |
Selected Per–Share Data | ||||
Net asset value, beginning of period | $9.14 | $9.86 | $10.10 | $10.00 |
Income from Investment Operations | ||||
Net investment income (loss)B | .209 | .433 | .360 | .132 |
Net realized and unrealized gain (loss) | .237 | (.741) | (.247) | .091 |
Total from investment operations | .446 | (.308) | .113 | .223 |
Distributions from net investment income | (.187) | (.413) | (.359) | (.124) |
Distributions from net realized gain | – | (.002) | – | – |
Total distributions | (.187) | (.415) | (.359) | (.124) |
Redemption fees added to paid in capitalB | .001 | .003 | .006 | .001 |
Net asset value, end of period | $9.40 | $9.14 | $9.86 | $10.10 |
Total ReturnC,D,E | 4.93% | (3.06)% | 1.23% | 2.25% |
Ratios to Average Net AssetsF,G | ||||
Expenses before reductions | 1.30%H | 1.25% | 1.31% | 1.61%H |
Expenses net of fee waivers, if any | 1.05%H | 1.05% | 1.05% | 1.05%H |
Expenses net of all reductions | 1.05%H | 1.05% | 1.05% | 1.05%H |
Net investment income (loss) | 4.46%H | 4.65% | 3.63% | 2.72%H |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $2,625 | $2,426 | $2,930 | $2,946 |
Portfolio turnover rateI | 70%H | 56% | 84% | 20%J |
A For the period November 5, 2013 (commencement of operations) to April 30, 2014.
B Calculated based on average shares outstanding during the period.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Short Duration High Income Fund Class C
Six months ended (Unaudited) October 31, | Years ended April 30, | |||
2016 | 2016 | 2015 | 2014 A | |
Selected Per–Share Data | ||||
Net asset value, beginning of period | $9.15 | $9.86 | $10.10 | $10.00 |
Income from Investment Operations | ||||
Net investment income (loss)B | .173 | .360 | .285 | .096 |
Net realized and unrealized gain (loss) | .228 | (.728) | (.247) | .090 |
Total from investment operations | .401 | (.368) | .038 | .186 |
Distributions from net investment income | (.152) | (.343) | (.284) | (.087) |
Distributions from net realized gain | – | (.002) | – | – |
Total distributions | (.152) | (.345) | (.284) | (.087) |
Redemption fees added to paid in capitalB | .001 | .003 | .006 | .001 |
Net asset value, end of period | $9.40 | $9.15 | $9.86 | $10.10 |
Total ReturnC,D,E | 4.43% | (3.68)% | .47% | 1.88% |
Ratios to Average Net AssetsF,G | ||||
Expenses before reductions | 2.07%H | 2.00% | 2.08% | 2.37%H |
Expenses net of fee waivers, if any | 1.80%H | 1.80% | 1.80% | 1.80%H |
Expenses net of all reductions | 1.80%H | 1.80% | 1.80% | 1.80%H |
Net investment income (loss) | 3.71%H | 3.90% | 2.88% | 1.97%H |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $4,457 | $3,827 | $3,465 | $3,114 |
Portfolio turnover rateI | 70%H | 56% | 84% | 20%J |
A For the period November 5, 2013 (commencement of operations) to April 30, 2014.
B Calculated based on average shares outstanding during the period.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Short Duration High Income Fund
Six months ended (Unaudited) October 31, | Years ended April 30, | |||
2016 | 2016 | 2015 | 2014 A | |
Selected Per–Share Data | ||||
Net asset value, beginning of period | $9.15 | $9.86 | $10.10 | $10.00 |
Income from Investment Operations | ||||
Net investment income (loss)B | .220 | .455 | .385 | .142 |
Net realized and unrealized gain (loss) | .228 | (.730) | (.248) | .093 |
Total from investment operations | .448 | (.275) | .137 | .235 |
Distributions from net investment income | (.199) | (.436) | (.383) | (.136) |
Distributions from net realized gain | – | (.002) | – | – |
Total distributions | (.199) | (.438) | (.383) | (.136) |
Redemption fees added to paid in capitalB | .001 | .003 | .006 | .001 |
Net asset value, end of period | $9.40 | $9.15 | $9.86 | $10.10 |
Total ReturnC,D | 4.95% | (2.71)% | 1.48% | 2.37% |
Ratios to Average Net AssetsE,F | ||||
Expenses before reductions | 1.03%G | .96% | 1.00% | 1.24%G |
Expenses net of fee waivers, if any | .80%G | .80% | .80% | .80%G |
Expenses net of all reductions | .80%G | .80% | .80% | .80%G |
Net investment income (loss) | 4.71%G | 4.90% | 3.88% | 2.96%G |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $61,751 | $47,531 | $45,109 | $54,547 |
Portfolio turnover rateH | 70%G | 56% | 84% | 20%I |
A For the period November 5, 2013 (commencement of operations) to April 30, 2014.
B Calculated based on average shares outstanding during the period.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Annualized
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
I Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Short Duration High Income Fund Class I
Six months ended (Unaudited) October 31, | Years ended April 30, | |||
2016 | 2016 | 2015 | 2014 A | |
Selected Per–Share Data | ||||
Net asset value, beginning of period | $9.15 | $9.86 | $10.10 | $10.00 |
Income from Investment Operations | ||||
Net investment income (loss)B | .219 | .460 | .383 | .143 |
Net realized and unrealized gain (loss) | .229 | (.735) | (.246) | .091 |
Total from investment operations | .448 | (.275) | .137 | .234 |
Distributions from net investment income | (.199) | (.436) | (.383) | (.135) |
Distributions from net realized gain | – | (.002) | – | – |
Total distributions | (.199) | (.438) | (.383) | (.135) |
Redemption fees added to paid in capitalB | .001 | .003 | .006 | .001 |
Net asset value, end of period | $9.40 | $9.15 | $9.86 | $10.10 |
Total ReturnC,D | 4.95% | (2.71)% | 1.48% | 2.37% |
Ratios to Average Net AssetsE,F | ||||
Expenses before reductions | 1.09%G | .99% | 1.04% | 1.34%G |
Expenses net of fee waivers, if any | .80%G | .80% | .80% | .80%G |
Expenses net of all reductions | .80%G | .80% | .80% | .80%G |
Net investment income (loss) | 4.71%G | 4.90% | 3.88% | 2.97%G |
Supplemental Data | ||||
Net assets, end of period (000 omitted) | $6,885 | $2,856 | $5,932 | $4,419 |
Portfolio turnover rateH | 70%G | 56% | 84% | 20%I |
A For the period November 5, 2013 (commencement of operations) to April 30, 2014.
B Calculated based on average shares outstanding during the period.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Annualized
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
I Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements (Unaudited)
For the period ended October 31, 2016
1. Organization.
Fidelity Short Duration High Income Fund (the Fund) is a fund of Fidelity Summer Street Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class C, Short Duration High Income and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds, bank notes, bank loan obligations, preferred securities and U.S. government and government agency obligations are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances. The Fund invests a significant portion of its assets in below investment grade securities. The value of these securities can be more volatile due to changes in the credit quality of the issuer and is sensitive to changes in economic, market and regulatory conditions.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of October 31, 2016 is included at the end of the Fund's Schedule of Investments.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Dividends are declared and recorded daily and paid monthly from net investment income. Distributions from realized gains, if any, are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to market discount, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $1,853,859 |
Gross unrealized depreciation | (1,031,076) |
Net unrealized appreciation (depreciation) on securities | $822,783 |
Tax cost | $86,327,988 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of prior fiscal period end and is subject to adjustment.
No expiration | |
Short-term | $(3,407,494) |
Long-term | (1,862,687) |
Total capital loss carryforward | $(5,270,181) |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.00% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Loans and Other Direct Debt Instruments. The Fund invests in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. These instruments may be in the form of loans, trade claims or other receivables and may include standby financing commitments such as revolving credit facilities that obligate the Fund to supply additional cash to the borrower on demand. Loans may be acquired through assignment or participation. The Fund did not have any unfunded loan commitments, which are contractual obligations for future funding, at period end.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $40,809,263 and $20,102,574, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and an annualized group fee rate that averaged .11% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
Class A | -% | .25% | $9,403 | $9,403 |
Class T | -% | .25% | 3,181 | 3,181 |
Class C | .75% | .25% | 20,086 | 20,086 |
$32,670 | $32,670 |
Sales Load. FDC may receive a front-end sales charge of up to 4.00% for selling Class A shares and Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T and Class C redemptions. The deferred sales charges are 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained by FDC | |
Class A | $1,757 |
Class T | 752 |
Class C(a) | 88 |
$2,597 |
(a) When Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
Amount | % of Class-Level Average Net Assets(a) | |
Class A | $5,061 | .13 |
Class T | 1,665 | .13 |
Class C | 3,191 | .16 |
Short Duration High Income | 26,854 | .11 |
Class I | 2,813 | .14 |
$39,584 |
(a) Annualized
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The fee is based on the level of average net assets for each month.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $3 for the period.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $105 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Expense Reductions.
The investment adviser contractually agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. This reimbursement will remain in place through June 30, 2017. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
Expense Limitations | Reimbursement | |
Class A | 1.05% | $9,584 |
Class T | 1.05% | 3,167 |
Class C | 1.80% | 5,480 |
Short Duration High Income | .80% | 56,905 |
Class I | .80% | 5,614 |
$80,750 |
Through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $16.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $122.
8. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended October 31, 2016 | Year ended April 30, 2016 | |
From net investment income | ||
Class A | $151,151 | $261,851 |
Class T | 51,102 | 113,395 |
Class C | 66,051 | 153,106 |
Short Duration High Income | 1,030,771 | 2,143,928 |
Class I | 82,560 | 173,776 |
Total | $1,381,635 | $2,846,056 |
From net realized gain | ||
Class A | $– | $1,377 |
Class T | – | 600 |
Class C | – | 875 |
Short Duration High Income | – | 9,541 |
Class I | – | 582 |
Total | $– | $12,975 |
9. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
Shares | Shares | Dollars | Dollars | |
Six months ended October 31, 2016 | Year ended April 30, 2016 | Six months ended October 31, 2016 | Year ended April 30, 2016 | |
Class A | ||||
Shares sold | 318,479 | 648,174 | $2,974,931 | $6,098,106 |
Reinvestment of distributions | 13,585 | 25,250 | 126,487 | 232,560 |
Shares redeemed | (167,328) | (373,249) | (1,559,646) | (3,497,952) |
Net increase (decrease) | 164,736 | 300,175 | $1,541,772 | $2,832,714 |
Class T | ||||
Shares sold | 99,790 | 132,992 | $931,126 | $1,223,867 |
Reinvestment of distributions | 5,081 | 11,962 | 47,279 | 110,701 |
Shares redeemed | (90,904) | (176,831) | (846,073) | (1,640,461) |
Net increase (decrease) | 13,967 | (31,877) | $132,332 | $(305,893) |
Class C | ||||
Shares sold | 153,637 | 526,097 | $1,428,312 | $4,814,727 |
Reinvestment of distributions | 6,647 | 15,870 | 61,829 | 145,912 |
Shares redeemed | (104,720) | (474,823) | (968,323) | (4,353,191) |
Net increase (decrease) | 55,564 | 67,144 | $521,818 | $607,448 |
Short Duration High Income | ||||
Shares sold | 2,728,640 | 3,424,433 | $25,497,838 | $32,122,226 |
Reinvestment of distributions | 92,721 | 204,798 | 863,203 | 1,895,696 |
Shares redeemed | (1,450,400) | (3,006,493) | (13,329,375) | (28,043,458) |
Net increase (decrease) | 1,370,961 | 622,738 | $13,031,666 | $5,974,464 |
Class I | ||||
Shares sold | 484,318 | 222,094 | $4,544,911 | $1,996,917 |
Reinvestment of distributions | 5,897 | 16,585 | 54,888 | 154,263 |
Shares redeemed | (70,100) | (528,003) | (647,533) | (4,975,529) |
Net increase (decrease) | 420,115 | (289,324) | $3,952,266 | $(2,824,349) |
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (May 1, 2016 to October 31, 2016).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Annualized Expense Ratio-A | Beginning Account Value May 1, 2016 | Ending Account Value October 31, 2016 | Expenses Paid During Period-B May 1, 2016 to October 31, 2016 | |
Class A | 1.05% | |||
Actual | $1,000.00 | $1,049.30 | $5.42 | |
Hypothetical-C | $1,000.00 | $1,019.91 | $5.35 | |
Class T | 1.05% | |||
Actual | $1,000.00 | $1,049.30 | $5.42 | |
Hypothetical-C | $1,000.00 | $1,019.91 | $5.35 | |
Class C | 1.80% | |||
Actual | $1,000.00 | $1,044.30 | $9.27 | |
Hypothetical-C | $1,000.00 | $1,016.13 | $9.15 | |
Short Duration High Income | .80% | |||
Actual | $1,000.00 | $1,049.50 | $4.13 | |
Hypothetical-C | $1,000.00 | $1,021.17 | $4.08 | |
Class I | .80% | |||
Actual | $1,000.00 | $1,049.50 | $4.13 | |
Hypothetical-C | $1,000.00 | $1,021.17 | $4.08 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
C 5% return per year before expenses
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Short Duration High Income Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to all of the Fidelity funds.
At its July 2016 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and would be realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by FMR, the sub-advisers (together with FMR, the Investment Advisers), and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.In 2014, the Board formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs; (iv) broadening eligibility requirements for certain lower-priced share classes of, and streamlining the fee structure for, certain existing equity index funds; (v) lowering expense caps for certain existing funds and classes to reduce expenses paid by shareholders; (vi) eliminating redemption fees for certain variable insurance product funds and classes; (vii) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (viii) launching a lower cost share class for use by the Freedom Index Fund product line; (ix) rationalizing product lines and gaining increased efficiencies through fund mergers and share class consolidations; (x) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; (xi) implementing investment enhancements to further strengthen Fidelity's target date product line to increase investors' probability of success in achieving their goals; (xii) accelerating the conversion of all remaining Class B shares to Class A shares, which have a lower expense structure; and (xiii) implementing changes to Fidelity's money market fund product line in response to recent regulatory reforms.Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history.The Board took into account discussions with representatives of the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund, for different time periods, measured against a securities market index ("benchmark index") and a peer group of funds with similar objectives ("peer group"), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for the fund and an appropriate benchmark index for the most recent one-year period, as shown below. A peer group is not shown below because the fund does not generally utilize a peer group for performance comparison purposes.Fidelity Short Duration High Income Fund
Fidelity Short Duration High Income Fund
Corporate Headquarters
245 Summer St.
Boston, MA 02210
www.fidelity.com
SDH-SANN-1216
1.969437.102
Item 2.
Code of Ethics
Not applicable.
Item 3.
Audit Committee Financial Expert
Not applicable.
Item 4.
Principal Accountant Fees and Services
Not applicable.
Item 5.
Audit Committee of Listed Registrants
Not applicable.
Item 6.
Investments
(a)
Not applicable.
(b)
Not applicable
Item 7.
Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8.
Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9.
Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10.
Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the Fidelity Summer Street Trust’s Board of Trustees.
Item 11.
Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Fidelity Summer Street Trust’s (the “Trust”) disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the Trust’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.
Item 12.
Exhibits
(a) | (1) | Not applicable. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(a) | (3) | Not applicable. |
(b) | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Summer Street Trust
By: | /s/Stacie M. Smith |
Stacie M. Smith | |
President and Treasurer | |
Date: | December 23, 2016 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/Stacie M. Smith |
Stacie M. Smith | |
President and Treasurer | |
Date: | December 23, 2016 |
By: | /s/Howard J. Galligan III |
Howard J. Galligan III | |
Chief Financial Officer | |
Date: | December 23, 2016 |