COMMENTS RECEIVED ON JULY 5, 2012
FROM EDWARD BARTZ
FIDELITY CAPITAL TRUST (File Nos. 002-61760 and 811-02841)
Fidelity Stock Selector All Cap Fund
POST-EFFECTIVE AMENDMENT NO. 104
1. "Fund Summary" (prospectuses)
"Fee Table"
C: The Staff requests we update the maximum contingent deferred sales charge line item to read "0.75%" for Class A and "0.25%" for Class T instead of "none."
R: Were we to make the requested change, the table would reflect more than one type of sales charge. We understand that this is appropriate, in accordance with Instruction 2(a)(ii) to Item 3, "[i]f more than one type of sales charge (load) is imposed (e.g., a deferred sales charge (load) and a front-end sales charge (load))" (in which case the first caption in the table would read "Maximum Sales Charge (Load)" and would show the maximum cumulative percentage). However, we believe this result would not be appropriate for these funds as they do not charge both a front-end sales charge and deferred sales charge with respect to the same shares, and therefore reflecting a maximum cumulative percentage would overstate the maximum that could be charged. Since we believe it is important to communicate that certain purchases not subject to a front-end sales charge may be subject to a deferred sales charge instead, we disclose the maximum front-end sales charge in the table and include a footnote to the table, consistent with Instruction 2(a)(i), related to the amount of the deferred sales charge that may apply if a front-end sales charge does not. Accordingly, we have not modified disclosure.
2. Fund Summary" (prospectuses)
"Fee Table"
C: The Staff requests that the footnotes below the "Shareholder fees" able be relocated to the end of the "Annual class operating expenses" table..
R: As we have previously discussed with the Staff, we believe that the information included under the subheadings "Shareholder fees" and "Annual class operating expenses" in the "Fee Table" section of the prospectus is presented in a manner consistent with Item 3 of Form N-1A. The footnotes that support the information under each subheading are provided in the closest proximity possible to that information to facilitate shareholder understanding of the information presented. We note that General Instruction C.1(a) to Form N-1A states that a fund should use document design techniques that promote effective communication, and we believe this format most effectively communicates the information presented.
3. "Fund Summary" (prospectuses)
"Fee Table"
Management fee (fluctuates based on the fund's performance relative to a securities market index) |
| __% |
Distribution and/or Service (12b-1) fees |
| None |
Other expensesA |
| % |
Total annual operating expenses |
| % |
ABased on estimated amounts for the current fiscal year.
C: The Staff suggests that acquired fund fees and expenses should be included as a line item in the Fee Table, given the fund's investment in central funds.
R: Because the fees and expenses incurred indirectly by the fund as a result of investment in shares of one or more acquired funds did not exceed one basis point of average net assets of the fund, these fees and expenses will be included in "Other Expenses," as permitted by Instruction 3(f)(i) to Item 3 of Form N-1A.
4. "Fund Summary" and "Investment Details" (prospectuses)
"Principal Investment Strategies"
"Normally investing at least 80% of assets in stocks."
"Normally investing primarily in common stocks."
C: The Staff requests that we revise disclosure to clarify that the fund invests primarily in central funds that invest substantially or all assets in stocks.
R: We believe the disclosure included in the prospectus satisfies Item 4 and Item 9 of Form N-1A and appropriately describes the fund's principal investment strategies of "normally investing at least 80% of assets in stocks" and "normally investing primarily in common stocks." We call the Staff's attention to the disclosure excerpted below, which we believe addresses the spirit of the Staff's comment in that it conveys that investment in underlying central funds is the means by which the fund implements the strategies at issue.
Fund Summary:
Investment Details:
"FMR allocates the fund's assets among sector central funds that provide exposure to different sectors of the U.S. stock market. Sector central funds are specialized investment vehicles designed by Fidelity for use by Fidelity funds.
Each sector central fund is managed in an effort to outperform a different sector of the U.S. stock market. At present, these sectors include consumer discretionary, consumer staples, energy, financials, health care, industrials, information technology, materials, telecom services, and utilities.
FMR expects the fund's allocations to the sector central funds will approximate the sector weightings of the S&P 500® Index, a broadly diversified measure of the performance of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance. While FMR may overweight or underweight one or more sectors from time to time, FMR expects the returns of the fund to be driven primarily by the security selections of the sector central funds."
5. "Fund Summary" (prospectuses)
"Principal Investment Strategies"
"Normally investing at least 80% of assets in stocks."
C: The Staff requests that we disclose the market capitalization policy for the fund in the Fund Summary section.
R: The fund does not have a principal investment strategy of investing in securities of companies with a particular market capitalization. Instead, it implements its investment strategies via investment in underlying sector central funds that are not limited to investing in securities of a specific market capitalization. In this regard we note that under Form N-1A, a negative strategy is not considered a principal investment strategy. Accordingly, we have not modified disclosure.
6. "Fund Summary" (prospectuses)
"Principal Investment Risks"
C: The Staff requests that we add growth and value investing risks to "Principal Investment Risks" in the "Fund Summary" section.
R: The risks associated with these specific investment styles are not principal investment risks of the fund. Accordingly, we have not added disclosure. Note, however, that while not a principal riskper se, the possibility for market developments to affect different types of securities (for example, growth stocks vs. value stocks) differently is one of the factors addressed under "Principal Investment Risks" - "Stock Market Volatility" in the "Investment Details" section.
7. "Fund Summary" (prospectuses)
"Principal Investment Risks"
C: The Staff requests that small and mid cap risks be added to "Principal Investment Risks."
R: We believe that the disclosure under the sub-heading "Principal Investment Risks" in the "Fund Summary" section appropriately discloses the fund's principal investment risks. Accordingly, we have not added disclosure.
8. "Investment Details" (prospectuses)
"Principal Investment Strategies"
"In addition to the principal investment strategies discussed above, FMR may use various techniques, such asbuying and selling futures contracts and exchange traded funds, to increase or decrease the fund's exposure to changing security prices or other factors that affect security values."
C: The Staff questions whether the fund will use derivatives to meet the 80% test.
R: Though we understand that in appropriate circumstances derivatives may qualify for a fund's name test, at this time the fund does not intend to count derivatives for purposes of its 80% policy.
9. "Trustees and Officers" (SAI)
Experience, Skills, Attributes, and Qualifications of the Fund's Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoccommittees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
C: The Staff asserts that the current disclosure in the "Trustees and Officers" section does not adequately describe the reasoning behind each Trustee's appointment to the Board. The Staff also requests that additional information be added describing why a particular Trustee's skills or background are conducive to their position on the Board.
R: We continue to be of the view that, as required by Item 17(b)(10), the current disclosure in the "Trustees and Officers" section includes a brief discussion of the experience, qualifications, attributes, or skills that led to the conclusion that each Trustee should serve as a Trustee for the fund. In addition to the disclosure cited by the Staff, we call the Staff's attention to the disclosure under "Standing Committees of the Fund's Trustees" that describes certain minimum qualifications for Independent Trustees, and to each Trustee's biographical information, which includes each Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to each Trustee's qualifications to serve as a Trustee, and which led to the conclusion that each Trustee should serve as a Trustee for the fund.
10. "Trustees and Officers" (SAI)
C: The Staff would like confirmation that biographies reflect all directorships for the past five years.
R: In accordance with Item 17 of Form N-1A, directorships held during the past five years are disclosed.
11. Tandy Representations (prospectuses and SAI)
C: The Staff would like us to affirm the following three statements:
1) The fund is responsible for the adequacy and accuracy of the disclosure in the filings.
2) Staff comments or changes to disclosure in response to Staff comments in the filings reviewed by the Staff do not foreclose the Commission from taking any action with respect to the filing.
3) The fund may not assert Staff comments as a defense in any proceeding initiated by the Commission or any other person under the Federal Securities Laws.
R: We affirm the aforementioned statements.
