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 811-2841
Fidelity Capital Trust
(Exact name of registrant as specified in charter)
245 Summer St., Boston, Massachusetts 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: | September 30 |
| |
Date of reporting period: | September 30, 2016 |
Item 1.
Reports to Stockholders
Fidelity Advisor® Stock Selector All Cap Fund - Class A, Class T, Class C, Class I and Class Z
Annual Report September 30, 2016 Class A, Class T, Class C, Class I and Class Z are classes of Fidelity® Stock Selector All Cap Fund |
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Contents
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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended September 30, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | 7.97% | 14.04% | 5.82% |
| Class T (incl. 3.50% sales charge) | 10.26% | 14.35% | 5.97% |
| Class C (incl. contingent deferred sales charge) | 12.68% | 14.70% | 6.13% |
| Class I | 14.87% | 15.65% | 6.57% |
| Class Z | 15.02% | 15.76% | 6.62% |
Class A shares bear a 0.25% 12b-1 fee. The initial offering of Class A shares took place on October 23, 2012. Returns prior to October 23, 2012, are those of Fidelity® Stock Selector All Cap Fund, the original class of the fund, which has no 12b-1 fee. Had Class A's 12b-1 fee been reflected, returns prior to October 23, 2012, would have been lower.
Class T shares bear a 0.50% 12b-1 fee. The initial offering of Class T shares took place on October 23, 2012. Returns prior to October 23, 2012, are those of Fidelity® Stock Selector All Cap Fund, the original class of the fund, which has no 12b-1 fee. Had Class T's 12b-1 fee been reflected, returns prior to October 23, 2012, would have been lower.
Class C shares bear a 1.00% 12b-1 fee. The initial offering of Class C shares took place on October 23, 2012. Returns prior to October 23, 2012, are those of Fidelity® Stock Selector All Cap Fund, the original class of the fund, which has no 12b-1 fee. Had Class C's 12b-1 fee been reflected, returns prior to October 23, 2012, would have been lower.
Class C shares' contingent deferred sales charges included in the past one year, past five years and past ten years total return figures are 1%, 0% and 0%, respectively.
The initial offering of Class I shares took place on October 23, 2012. Returns prior to October 23, 2012 are those of Fidelity® Stock Selector All Cap Fund, the original class of the fund.
The initial offering of Class Z shares took place on August 13, 2013. Returns between October 23, 2012 and August 13, 2013, are those of Class I. Returns prior to October 23, 2012, are those of Fidelity® Stock Selector All Cap Fund, the original class of the fund.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Stock Selector All Cap Fund - Class A on September 30, 2006, and the current 5.75% sales charge was paid.
The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
See previous page for additional information regarding the performance of Class A.
| Period Ending Values |
| $17,612 | Fidelity Advisor® Stock Selector All Cap Fund - Class A |
| $20,114 | S&P 500® Index |
Management's Discussion of Fund Performance
Market Recap: The S&P 500
® index rose 15.43% for the year ending September 2016, overcoming uncertainty about the global economy, U.S. Federal Reserve monetary policy and the U.K.’s June vote to leave the European Union (Brexit). Volatility peaked in early 2016, as continued oil-price weakness and U.S.-dollar strength pushed the S&P 500
® to its worst January since 2009. Markets regained positive momentum amid U.S. job gains, a rally in energy and materials markets, global economic stimulus and perceived softening of U.S. monetary policy. The June 23 Brexit vote surprised markets, though, and was followed by a two-day near-tumult. Sentiment rebounded rapidly and stayed largely positive through September. For the year, value-oriented and small-cap stocks outperformed. Among S&P 500
® sectors, dividend-rich telecom services (+27%) led amid strong demand for yield, especially earlier in the period, as well as increased competition and consolidation. Utilities (+17%) and consumer staples (+16%) also benefited. Added demand for perceived safe-haven investments such as precious metals-related securities boosted materials (+22%). Information technology (+23%) was helped by strong results from some of the largest and best-known tech names. The newly created real estate sector (+17%) finished far ahead of financials (+6%), which was held back by low interest rates that squeezed bank profits.
Comments from Co-Lead Portfolio Managers Geoff Stein and Christopher Sharpe: For the year, the fund's share classes (excluding sales charges, if applicable) posted gains of between 14% and 15%, lagging the benchmark S&P 500
®. Our sector-focused co-managers generally struggled, with only two of the 11 underlying investment strategies notably leading their respective index components. Primary detractors were stock picks in health care and consumer discretionary. An average cash stake of roughly 2% across the central funds detracted amid the market rally that occurred from mid-February through mid-August. Among individual stocks, underweighting software heavyweight and index component Microsoft hurt relative performance the most, followed by an out-of-benchmark position in generic-drugmaker Teva Pharmaceutical Industries, and not owning pharmaceutical giant and index constituent Johnson & Johnson. On the positive side, the information technology central fund added considerable value, led by picks in semiconductors and software & services. Security selection in energy also meaningfully contributed. The top individual contributors were single-serve coffee giant Keurig Green Mountain, which was taken private in March, a sizable underweighting in consumer electronics giant Apple and lighter-than-benchmark exposure to biotechnology firm Gilead Sciences.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Notes to shareholders: On November 1, 2016, Katherine Shaw (consumer discretionary) and Samuel Wald (real estate) became Co-Portfolio Managers of the fund. Katherine Shaw succeeds Peter Dixon.
Investment Summary (Unaudited)
The information in the following tables is based on the Fund’s pro-rata share of the investments of Fidelity’s Equity Central Funds.Top Ten Stocks as of September 30, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Apple, Inc. | 2.4 | 2.3 |
| Amazon.com, Inc. | 1.8 | 1.2 |
| Facebook, Inc. Class A | 1.5 | 1.2 |
| Medtronic PLC | 1.4 | 1.3 |
| Alphabet, Inc. Class C | 1.3 | 1.2 |
| Alphabet, Inc. Class A | 1.3 | 1.1 |
| Procter & Gamble Co. | 1.2 | 1.4 |
| Allergan PLC | 1.1 | 0.8 |
| General Electric Co. | 1.1 | 1.4 |
| British American Tobacco PLC sponsored ADR | 1.1 | 1.1 |
| | 14.2 | |
Top Five Market Sectors as of September 30, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Information Technology | 20.7 | 19.2 |
| Health Care | 14.5 | 13.9 |
| Financials | 12.3 | 14.8 |
| Consumer Discretionary | 12.0 | 12.9 |
| Consumer Staples | 9.6 | 10.2 |
At period end, investments in foreign securities including the Fund's pro-rata share of Fidelity's Equity Central Funds, was 17.8% of net assets.
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or institutional.fidelity.com, as applicable.
Investments September 30, 2016
Showing Percentage of Net Assets
| Equity Central Funds - 100.1% | | | |
| | | Shares | Value (000s) |
| Fidelity Consumer Discretionary Central Fund (a) | | 2,998,969 | $746,023 |
| Fidelity Consumer Staples Central Fund (a) | | 2,903,349 | 661,964 |
| Fidelity Energy Central Fund (a) | | 3,954,397 | 504,027 |
| Fidelity Financials Central Fund (a) | | 13,784,906 | 1,168,133 |
| Fidelity Health Care Central Fund (a) | | 2,782,116 | 969,985 |
| Fidelity Industrials Central Fund (a) | | 2,611,443 | 632,518 |
| Fidelity Information Technology Central Fund (a) | | 4,777,683 | 1,577,782 |
| Fidelity Materials Central Fund (a) | | 807,733 | 172,322 |
| Fidelity Telecom Services Central Fund (a) | | 1,076,927 | 206,199 |
| Fidelity Utilities Central Fund (a) | | 1,361,861 | 221,874 |
| TOTAL EQUITY CENTRAL FUNDS | | | |
| (Cost $4,658,166) | | | 6,860,827 |
|
| Money Market Central Funds - 0.0% | | | |
| Fidelity Cash Central Fund, 0.43% (b) | | | |
| (Cost $963) | | 963,353 | 964 |
| TOTAL INVESTMENT PORTFOLIO - 100.1% | | | |
| (Cost $4,659,129) | | | 6,861,791 |
| NET OTHER ASSETS (LIABILITIES) - (0.1)% | | | (3,725) |
| NET ASSETS - 100% | | | $6,858,066 |
Legend
(a) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's website at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or institutional.fidelity.com, as applicable. 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.
(b) 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.
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 | $3 |
| Fidelity Consumer Discretionary Central Fund | 10,677 |
| Fidelity Consumer Staples Central Fund | 14,398 |
| Fidelity Energy Central Fund | 6,617 |
| Fidelity Financials Central Fund | 19,373 |
| Fidelity Health Care Central Fund | 6,895 |
| Fidelity Industrials Central Fund | 8,936 |
| Fidelity Information Technology Central Fund | 11,067 |
| Fidelity Materials Central Fund | 3,524 |
| Fidelity Telecom Services Central Fund | 4,338 |
| Fidelity Utilities Central Fund | 5,772 |
| Total | $91,600 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows:
| Fund (Amounts in thousands) | Value, beginning of period | Purchases | Sales Proceeds | Value, end of period | % ownership, end of period |
| Fidelity Consumer Discretionary Central Fund | $651,791 | $150,832 | $97,736 | $746,023 | 47.2% |
| Fidelity Consumer Staples Central Fund | 531,724 | 149,636 | 91,283 | 661,964 | 51.5% |
| Fidelity Energy Central Fund | 383,522 | 108,099 | 83,281 | 504,027 | 50.2% |
| Fidelity Financials Central Fund | 982,495 | 284,946 | 147,823 | 1,168,133 | 45.9% |
| Fidelity Health Care Central Fund | 804,763 | 231,569 | 132,782 | 969,985 | 49.5% |
| Fidelity Industrials Central Fund | 508,860 | 91,861 | 51,133 | 632,518 | 46.0% |
| Fidelity Information Technology Central Fund | 1,162,489 | 271,680 | 176,590 | 1,577,782 | 49.0% |
| Fidelity Materials Central Fund | 151,680 | 14,289 | 14,042 | 172,322 | 43.0% |
| Fidelity Telecom Services Central Fund | 135,594 | 55,913 | 23,331 | 206,199 | 53.7% |
| Fidelity Utilities Central Fund | 183,672 | 38,843 | 26,888 | 221,874 | 47.9% |
| Total | $5,496,590 | $1,397,668 | $844,889 | $6,860,827 | |
Investment Valuation
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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 please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
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 | 82.2% |
| Ireland | 3.4% |
| Japan | 2.1% |
| United Kingdom | 2.1% |
| Cayman Islands | 1.6% |
| Taiwan | 1.0% |
| Switzerland | 1.0% |
| Others (Individually Less Than 1%) | 6.6% |
| | 100.0% |
The information in the above table is based on the Fund's pro-rata share of the investments of Fidelity's Equity Central Funds.
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 amounts) | | September 30, 2016 |
| Assets | | |
| Investments in Fidelity Central Funds (cost $4,659,129) | | $6,861,791 |
| Cash | | 10 |
| Receivable for investments sold | | 4,405 |
| Receivable for fund shares sold | | 4,584 |
| Dividends receivable | | 7 |
| Prepaid expenses | | 20 |
| Total assets | | 6,870,817 |
| Liabilities | | |
| Payable for investments purchased | $10 | |
| Payable for fund shares redeemed | 9,166 | |
| Accrued management fee | 2,413 | |
| Transfer agent fee payable | 800 | |
| Distribution and service plan fees payable | 142 | |
| Other affiliated payables | 97 | |
| Other payables and accrued expenses | 123 | |
| Total liabilities | | 12,751 |
| Net Assets | | $6,858,066 |
| Net Assets consist of: | | |
| Paid in capital | | $5,725,548 |
| Undistributed net investment income | | 37,820 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (1,107,964) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 2,202,662 |
| Net Assets | | $6,858,066 |
| Calculation of Maximum Offering Price | | |
| Class A: | | |
| Net Asset Value and redemption price per share ($192,563 ÷ 5,350.21 shares) | | $35.99 |
| Maximum offering price per share (100/94.25 of $35.99) | | $38.19 |
| Class T: | | |
| Net Asset Value and redemption price per share ($118,907 ÷ 3,308.86 shares) | | $35.94 |
| Maximum offering price per share (100/96.50 of $35.94) | | $37.24 |
| Class C: | | |
| Net Asset Value and offering price per share ($63,141 ÷ 1,774.17 shares)(a) | | $35.59 |
| Stock Selector All Cap: | | |
| Net Asset Value, offering price and redemption price per share ($6,078,178 ÷ 168,676.29 shares) | | $36.03 |
| Class K: | | |
| Net Asset Value, offering price and redemption price per share ($100,456 ÷ 2,785.70 shares) | | $36.06 |
| Class I: | | |
| Net Asset Value, offering price and redemption price per share ($296,940 ÷ 8,239.31 shares) | | $36.04 |
| Class Z: | | |
| Net Asset Value, offering price and redemption price per share ($7,881 ÷ 219.01 shares) | | $35.98 |
(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
| Amounts in thousands | | Year ended September 30, 2016 |
| Investment Income | | |
| Dividends | | $3 |
| Income from Fidelity Central Funds | | 91,600 |
| Total income | | 91,603 |
| Expenses | | |
| Management fee | | |
| Basic fee | $33,948 | |
| Performance adjustment | (4,954) | |
| Transfer agent fees | 9,098 | |
| Distribution and service plan fees | 1,748 | |
| Accounting fees and expenses | 1,130 | |
| Independent trustees' fees and expenses | 26 | |
| Registration fees | 411 | |
| Audit | 49 | |
| Legal | 55 | |
| Miscellaneous | 44 | |
| Total expenses before reductions | 41,555 | |
| Expense reductions | (186) | 41,369 |
| Net investment income (loss) | | 50,234 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (2,983) | |
| Fidelity Central Funds | (49,218) | |
| Total net realized gain (loss) | | (52,201) |
Change in net unrealized appreciation (depreciation) on:
Investment securities | 863,918 | |
| Total change in net unrealized appreciation (depreciation) | | 863,918 |
| Net gain (loss) | | 811,717 |
| Net increase (decrease) in net assets resulting from operations | | $861,951 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Amounts in thousands | Year ended September 30, 2016 | Year ended September 30, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $50,234 | $33,786 |
| Net realized gain (loss) | (52,201) | 11,455 |
| Change in net unrealized appreciation (depreciation) | 863,918 | (243,217) |
| Net increase (decrease) in net assets resulting from operations | 861,951 | (197,976) |
| Distributions to shareholders from net investment income | (36,464) | (33,541) |
| Distributions to shareholders from net realized gain | (253,884) | (508,950) |
| Total distributions | (290,348) | (542,491) |
| Share transactions - net increase (decrease) | 792,579 | 1,113,215 |
| Total increase (decrease) in net assets | 1,364,182 | 372,748 |
| Net Assets | | |
| Beginning of period | 5,493,884 | 5,121,136 |
| End of period | $6,858,066 | $5,493,884 |
| Other Information | | |
| Undistributed net investment income end of period | $37,820 | $23,775 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class A
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | | | | |
| Net asset value, beginning of period | $32.94 | $38.00 | $34.65 | $27.78 |
| Income from Investment Operations | | | | |
| Net investment income (loss)B | .18 | .12 | .15 | .17 |
| Net realized and unrealized gain (loss) | 4.47 | (1.25) | 5.35 | 6.79 |
| Total from investment operations | 4.65 | (1.13) | 5.50 | 6.96 |
| Distributions from net investment income | (.10) | (.09) | (.16) | (.07) |
| Distributions from net realized gain | (1.50) | (3.84) | (1.99) | (.02) |
| Total distributions | (1.60) | (3.93) | (2.15) | (.09) |
| Net asset value, end of period | $35.99 | $32.94 | $38.00 | $34.65 |
| Total ReturnC,D,E | 14.55% | (3.39)% | 16.60% | 25.12% |
| Ratios to Average Net AssetsF,G | | | | |
| Expenses before reductions | .96% | 1.06% | 1.01% | 1.06%H |
| Expenses net of fee waivers, if any | .96% | 1.06% | 1.01% | 1.06%H |
| Expenses net of all reductions | .96% | 1.05% | 1.00% | 1.04%H |
| Net investment income (loss) | .52% | .33% | .41% | .59%H |
| Supplemental Data | | | | |
| Net assets, end of period (in millions) | $193 | $197 | $222 | $226 |
| Portfolio turnover rateI | 14% | 6% | 10%J | 8%J,K |
A For the period October 23, 2012 (commencement of sale of shares) to September 30, 2013.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Portfolio turnover rate excludes securities received or delivered in-kind.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class T
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | | | | |
| Net asset value, beginning of period | $32.88 | $37.91 | $34.58 | $27.78 |
| Income from Investment Operations | | | | |
| Net investment income (loss)B | .09 | .03 | .06 | .10 |
| Net realized and unrealized gain (loss) | 4.47 | (1.25) | 5.34 | 6.77 |
| Total from investment operations | 4.56 | (1.22) | 5.40 | 6.87 |
| Distributions from net investment income | – | – | (.08) | (.05) |
| Distributions from net realized gain | (1.50) | (3.81) | (1.99) | (.02) |
| Total distributions | (1.50) | (3.81) | (2.07) | (.07) |
| Net asset value, end of period | $35.94 | $32.88 | $37.91 | $34.58 |
| Total ReturnC,D,E | 14.26% | (3.63)% | 16.31% | 24.81% |
| Ratios to Average Net AssetsF,G | | | | |
| Expenses before reductions | 1.23% | 1.32% | 1.27% | 1.32%H |
| Expenses net of fee waivers, if any | 1.23% | 1.32% | 1.27% | 1.31%H |
| Expenses net of all reductions | 1.22% | 1.31% | 1.26% | 1.29%H |
| Net investment income (loss) | .25% | .07% | .15% | .34%H |
| Supplemental Data | | | | |
| Net assets, end of period (in millions) | $119 | $120 | $137 | $131 |
| Portfolio turnover rateI | 14% | 6% | 10%J | 8%J,K |
A For the period October 23, 2012 (commencement of sale of shares) to September 30, 2013.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Portfolio turnover rate excludes securities received or delivered in-kind.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class C
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | | | | |
| Net asset value, beginning of period | $32.70 | $37.68 | $34.44 | $27.78 |
| Income from Investment Operations | | | | |
| Net investment income (loss)B | (.09) | (.16) | (.13) | (.05) |
| Net realized and unrealized gain (loss) | 4.44 | (1.23) | 5.33 | 6.76 |
| Total from investment operations | 4.35 | (1.39) | 5.20 | 6.71 |
| Distributions from net investment income | – | – | – | (.03) |
| Distributions from net realized gain | (1.46) | (3.59) | (1.96) | (.02) |
| Total distributions | (1.46) | (3.59) | (1.96) | (.05) |
| Net asset value, end of period | $35.59 | $32.70 | $37.68 | $34.44 |
| Total ReturnC,D,E | 13.68% | (4.14)% | 15.73% | 24.19% |
| Ratios to Average Net AssetsF,G | | | | |
| Expenses before reductions | 1.74% | 1.83% | 1.78% | 1.84%H |
| Expenses net of fee waivers, if any | 1.73% | 1.83% | 1.78% | 1.84%H |
| Expenses net of all reductions | 1.73% | 1.82% | 1.78% | 1.82%H |
| Net investment income (loss) | (.25)% | (.44)% | (.36)% | (.18)%H |
| Supplemental Data | | | | |
| Net assets, end of period (in millions) | $63 | $63 | $72 | $65 |
| Portfolio turnover rateI | 14% | 6% | 10%J | 8%J,K |
A For the period October 23, 2012 (commencement of sale of shares) to September 30, 2013.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Portfolio turnover rate excludes securities received or delivered in-kind.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $33.00 | $38.12 | $34.75 | $28.48 | $22.21 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .29 | .24 | .28 | .30 | .24 |
| Net realized and unrealized gain (loss) | 4.47 | (1.25) | 5.35 | 6.28 | 6.18 |
| Total from investment operations | 4.76 | (1.01) | 5.63 | 6.58 | 6.42 |
| Distributions from net investment income | (.23) | (.27) | (.27) | (.27) | (.14) |
| Distributions from net realized gain | (1.50) | (3.84) | (1.99) | (.04) | (.02) |
| Total distributions | (1.73) | (4.11) | (2.26) | (.31) | (.15)B |
| Net asset value, end of period | $36.03 | $33.00 | $38.12 | $34.75 | $28.48 |
| Total ReturnC | 14.92% | (3.05)% | 16.98% | 23.36% | 29.02% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | .64% | .72% | .67% | .71% | .72% |
| Expenses net of fee waivers, if any | .64% | .72% | .67% | .71% | .72% |
| Expenses net of all reductions | .63% | .71% | .66% | .69% | .71% |
| Net investment income (loss) | .85% | .67% | .75% | .96% | .90% |
| Supplemental Data | | | | | |
| Net assets, end of period (in millions) | $6,078 | $4,722 | $4,230 | $2,953 | $2,361 |
| Portfolio turnover rateF | 14% | 6% | 10%G | 8%G,H | 21% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $.15 per share is comprised of distributions from net investment income of $.136 and distributions from net realized gain of $.015 per share.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Portfolio turnover rate excludes securities received or delivered in-kind.
H The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class K
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $33.02 | $38.14 | $34.77 | $28.50 | $22.23 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .32 | .28 | .31 | .33 | .27 |
| Net realized and unrealized gain (loss) | 4.47 | (1.26) | 5.36 | 6.28 | 6.19 |
| Total from investment operations | 4.79 | (.98) | 5.67 | 6.61 | 6.46 |
| Distributions from net investment income | (.25) | (.31) | (.31) | (.30) | (.17) |
| Distributions from net realized gain | (1.50) | (3.84) | (1.99) | (.04) | (.02) |
| Total distributions | (1.75) | (4.14)B | (2.30) | (.34) | (.19) |
| Net asset value, end of period | $36.06 | $33.02 | $38.14 | $34.77 | $28.50 |
| Total ReturnC | 15.02% | (2.96)% | 17.09% | 23.47% | 29.18% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | .54% | .64% | .58% | .61% | .61% |
| Expenses net of fee waivers, if any | .54% | .64% | .58% | .61% | .61% |
| Expenses net of all reductions | .54% | .63% | .57% | .59% | .59% |
| Net investment income (loss) | .94% | .75% | .84% | 1.06% | 1.02% |
| Supplemental Data | | | | | |
| Net assets, end of period (in millions) | $100 | $76 | $109 | $105 | $47 |
| Portfolio turnover rateF | 14% | 6% | 10%G | 8%G,H | 21% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $4.14 per share is comprised of distributions from net investment income of $.307 and distributions from net realized gain of $3.836 per share.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Portfolio turnover rate excludes securities received or delivered in-kind.
H The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class I
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | | | | |
| Net asset value, beginning of period | $32.99 | $38.10 | $34.72 | $27.78 |
| Income from Investment Operations | | | | |
| Net investment income (loss)B | .27 | .22 | .25 | .25 |
| Net realized and unrealized gain (loss) | 4.48 | (1.26) | 5.36 | 6.79 |
| Total from investment operations | 4.75 | (1.04) | 5.61 | 7.04 |
| Distributions from net investment income | (.20) | (.23) | (.25) | (.08) |
| Distributions from net realized gain | (1.50) | (3.84) | (1.99) | (.02) |
| Total distributions | (1.70) | (4.07) | (2.23)C | (.10) |
| Net asset value, end of period | $36.04 | $32.99 | $38.10 | $34.72 |
| Total ReturnD,E | 14.87% | (3.14)% | 16.93% | 25.43% |
| Ratios to Average Net AssetsF,G | | | | |
| Expenses before reductions | .69% | .79% | .74% | .78%H |
| Expenses net of fee waivers, if any | .69% | .79% | .74% | .78%H |
| Expenses net of all reductions | .69% | .78% | .73% | .76%H |
| Net investment income (loss) | .79% | .60% | .68% | .87%H |
| Supplemental Data | | | | |
| Net assets, end of period (in millions) | $297 | $304 | $336 | $297 |
| Portfolio turnover rateI | 14% | 6% | 10%J | 8%J,K |
A For the period October 23, 2012 (commencement of sale of shares) to September 30, 2013.
B Calculated based on average shares outstanding during the period.
C Total distributions of $2.23 per share is comprised of distributions from net investment income of $.245 and distributions from net realized gain of $1.987 per share.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Portfolio turnover rate excludes securities received or delivered in-kind.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class Z
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | | | | |
| Net asset value, beginning of period | $32.95 | $38.09 | $34.73 | $34.24 |
| Income from Investment Operations | | | | |
| Net investment income (loss)B | .32 | .27 | .32 | .06 |
| Net realized and unrealized gain (loss) | 4.46 | (1.25) | 5.34 | .43 |
| Total from investment operations | 4.78 | (.98) | 5.66 | .49 |
| Distributions from net investment income | (.25) | (.32) | (.32) | – |
| Distributions from net realized gain | (1.50) | (3.84) | (1.99) | – |
| Total distributions | (1.75) | (4.16) | (2.30)C | – |
| Net asset value, end of period | $35.98 | $32.95 | $38.09 | $34.73 |
| Total ReturnD,E | 15.02% | (2.98)% | 17.10% | 1.43% |
| Ratios to Average Net AssetsF,G | | | | |
| Expenses before reductions | .54% | .64% | .58% | .61%H |
| Expenses net of fee waivers, if any | .54% | .64% | .58% | .61%H |
| Expenses net of all reductions | .54% | .63% | .57% | .59%H |
| Net investment income (loss) | .94% | .75% | .84% | 1.36%H |
| Supplemental Data | | | | |
| Net assets, end of period (000 omitted) | $7,881 | $7,300 | $5,812 | $101 |
| Portfolio turnover rateI | 14% | 6% | 10%J | 8%J,K |
A For the period August 13, 2013 (commencement of sale of shares) to September 30, 2013.
B Calculated based on average shares outstanding during the period.
C Total distributions of $2.30 per share is comprised of distributions from net investment income of $.315 and distributions from net realized gain of $1.987 per share.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Portfolio turnover rate excludes securities received or delivered in-kind.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended September 30, 2016
(Amounts in thousands except percentages)
1. Organization.
Fidelity Stock Selector All Cap Fund (the Fund) is a fund of Fidelity Capital 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, Stock Selector All Cap, Class K, Class I and Class Z 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.
After the close of business on June 24, 2016, all outstanding Class B shares were converted to Class A shares. All current fiscal period dollar and share amounts for Class B presented in the Notes to Financial Statements are for the period October 1, 2015 through June 24, 2016.
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, 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.
Based on its investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of theFund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. 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%. The following summarizes the Fund's investment in each non-money market Fidelity Central Fund.
| Fidelity Central Fund | Investment Manager | Investment Objective | Investment Practices | Expense Ratio(a) |
| Fidelity Equity Central Funds | FMR Co., Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities
Foreign Securities
Restricted Securities | Less than .005% to .01% |
(a) Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or institutional.fidelity.com as applicable. 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 contain the significant accounting policies (including investment valuation policies) of those 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. 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.
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.
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. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's NAV.
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. As of September 30, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. 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.
Distributions 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, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation and expiring capital loss carryforwards.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $1,165,472 |
| Gross unrealized depreciation | (8,105) |
| Net unrealized appreciation (depreciation) on securities | $1,157,367 |
| Tax Cost | $5,704,424 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $41,676 |
| Capital loss carryforward | $(66,524) |
| Net unrealized appreciation (depreciation) on securities and other investments | $1,157,367 |
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 fiscal period end and is subject to adjustment.
| No expiration | |
| Short-term | $(66,524) |
The tax character of distributions paid was as follows:
| | September 30, 2016 | September 30, 2015 |
| Ordinary Income | $43,463 | $ 158,155 |
| Long-term Capital Gains | 246,885 | 384,336 |
| Total | $290,348 | $ 542,491 |
4. Purchases and Sales of Investments.
Purchases and sales of securities (include the Equity Central Funds), other than short-term securities, aggregated $1,397,668 and $844,889, 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 .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% 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. In addition, the management fee is subject to a performance adjustment (up to a maximum of +/- .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Stock Selector All Cap as compared to its benchmark index, the S&P 500 Index, over the same 36 month performance period. For the reporting period, the total annual management fee rate, including the performance adjustment, was .47% of the Fund's average net assets. The performance adjustment included in the management fee rate may be higher or lower than the maximum performance adjustment rate due to the difference between the average net assets for the reporting and performance periods.
The investment adviser pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
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% | $491 | $– |
| Class T | .25% | .25% | 590 | – |
| Class B | .75% | .25% | 30 | 23 |
| Class C | .75% | .25% | 637 | 14 |
| | | | $1,748 | $37 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling 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, Class B and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 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 | | | $20 |
| Class T | | | 7 |
| Class B(a) | | | –(b) |
| Class C(a) | | | 3 |
| | | | $30 |
(a) When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
(b) In the amount of less than $500.
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, except for Class K and Class Z. FIIOC receives an asset-based fee of Class K's and Class Z's average net assets. 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 |
| Class A | $429 | .22 |
| Class T | 274 | .23 |
| Class B | 9 | .28 |
| Class C | 153 | .24 |
| Stock Selector All Cap | 7,605 | .14 |
| Class K | 37 | .05 |
| Class I | 588 | .19 |
| Class Z | 3 | .05 |
| | $9,098 | |
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.
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 $12 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.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund and the Equity Central Funds include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $143 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 in the amount of less than five hundred dollars.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $43.
8. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended September 30, | 2016 | 2015 |
| From net investment income | | |
| Class A | $564 | $525 |
| Stock Selector All Cap | 33,578 | 30,087 |
| Class K | 571 | 851 |
| Class I | 1,712 | 2,028 |
| Class Z | 39 | 50 |
| Total | $36,464 | $33,541 |
| From net realized gain | | |
| Class A | $8,730 | $21,876 |
| Class T | 5,253 | 13,580 |
| Class B | 198 | 674 |
| Class C | 2,777 | 6,829 |
| Stock Selector All Cap | 220,234 | 421,227 |
| Class K | 3,401 | 10,630 |
| Class I | 13,057 | 33,538 |
| Class Z | 234 | 596 |
| Total | $253,884 | $508,950 |
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 |
| | Year ended
September 30, 2016 | Year ended September 30, 2015 | Year ended
September 30, 2016 | Year ended September 30, 2015 |
| Class A | | | | |
| Shares sold | 494 | 576 | $16,634 | $20,919 |
| Reinvestment of distributions | 276 | 636 | 9,096 | 21,837 |
| Shares redeemed | (1,396) | (1,083) | (47,634) | (39,392) |
| Net increase (decrease) | (626) | 129 | $(21,904) | $3,364 |
| Class T | | | | |
| Shares sold | 190 | 274 | $6,375 | $9,899 |
| Reinvestment of distributions | 156 | 389 | 5,159 | 13,337 |
| Shares redeemed | (679) | (639) | (22,950) | (23,191) |
| Net increase (decrease) | (333) | 24 | $(11,416) | $45 |
| Class B | | | | |
| Shares sold | 1 | 2 | $19 | $48 |
| Reinvestment of distributions | 5 | 17 | 165 | 597 |
| Shares redeemed | (159) | (91) | (5,272) | (3,319) |
| Net increase (decrease) | (153) | (72) | $(5,088) | $(2,674) |
| Class C | | | | |
| Shares sold | 106 | 173 | $3,582 | $6,272 |
| Reinvestment of distributions | 78 | 180 | 2,546 | 6,168 |
| Shares redeemed | (349) | (333) | (11,749) | (12,027) |
| Net increase (decrease) | (165) | 20 | $(5,621) | $413 |
| Stock Selector All Cap | | | | |
| Shares sold | 60,114 | 37,980 | $2,029,587 | $1,365,446 |
| Reinvestment of distributions | 7,613 | 12,983 | 250,922 | 445,053 |
| Shares redeemed | (42,115) | (18,864) | (1,426,107) | (690,763) |
| Net increase (decrease) | 25,612 | 32,099 | $854,402 | $1,119,736 |
| Class K | | | | |
| Shares sold | 819 | 275 | $29,079 | $9,998 |
| Reinvestment of distributions | 120 | 335 | 3,972 | 11,481 |
| Shares redeemed | (465) | (1,149) | (15,711) | (42,097) |
| Net increase (decrease) | 474 | (539) | $17,340 | $(20,618) |
| Class I | | | | |
| Shares sold | 1,014 | 1,572 | $34,105 | $55,299 |
| Reinvestment of distributions | 443 | 1,026 | 14,615 | 35,171 |
| Shares redeemed | (2,420) | (2,217) | (83,697) | (80,052) |
| Net increase (decrease) | (963) | 381 | $(34,977) | $10,418 |
| Class Z | | | | |
| Shares sold | 91 | 82 | $3,001 | $3,045 |
| Reinvestment of distributions | 8 | 19 | 273 | 646 |
| Shares redeemed | (102) | (32) | (3,431) | (1,160) |
| Net increase (decrease) | (3) | 69 | $(157) | $2,531 |
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.
At the end of the period, a shareholder of record owned approximately 28% of the total outstanding shares of the Fund.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Capital Trust and Shareholders of Fidelity Stock Selector All Cap Fund:
We have audited the accompanying statement of assets and liabilities of Fidelity Stock Selector All Cap Fund (the Fund), a fund of Fidelity Capital Trust, including the schedule of investments, as of September 30, 2016, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits 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 and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2016, by correspondence with the custodians. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Stock Selector All Cap Fund as of September 30, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
November 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Each of the Trustees oversees 170 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.
Experience, Skills, Attributes, and Qualifications of the 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 hoc committees 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.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present), a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2002
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (U.K.) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Previously, Mr. Goebel served as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016), Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Thomas C. Hense (1964)
Year of Election or Appointment: 2008, 2010, or 2015
Vice President
Mr. Hense serves as Vice President of Fidelity Advisor® Multi-Asset Income Fund (2015) and other funds (High Income (2008), Small Cap (2008), and Value (2010) funds), and is an employee of Fidelity Investments (1993-present). Previously, Mr. Hense served as a portfolio manager for Fidelity's Institutional Money Management Group (Pyramis) (2003-2008).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (U.K.) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bear their proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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, 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 (April 1, 2016 to September 30, 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.
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.
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
April 1, 2016 | Ending
Account Value
September 30, 2016 | Expenses Paid
During Period-B
April 1, 2016
to September 30, 2016 |
| Class A | .95% | | | |
| Actual | | $1,000.00 | $1,084.00 | $4.95 |
| Hypothetical-C | | $1,000.00 | $1,020.25 | $4.80 |
| Class T | 1.22% | | | |
| Actual | | $1,000.00 | $1,082.90 | $6.35 |
| Hypothetical-C | | $1,000.00 | $1,018.90 | $6.16 |
| Class C | 1.73% | | | |
| Actual | | $1,000.00 | $1,079.80 | $9.00 |
| Hypothetical-C | | $1,000.00 | $1,016.35 | $8.72 |
| Stock Selector All Cap | .63% | | | |
| Actual | | $1,000.00 | $1,085.60 | $3.28 |
| Hypothetical-C | | $1,000.00 | $1,021.85 | $3.18 |
| Class K | .53% | | | |
| Actual | | $1,000.00 | $1,086.10 | $2.76 |
| Hypothetical-C | | $1,000.00 | $1,022.35 | $2.68 |
| Class I | .68% | | | |
| Actual | | $1,000.00 | $1,085.50 | $3.55 |
| Hypothetical-C | | $1,000.00 | $1,021.60 | $3.44 |
| Class Z | .54% | | | |
| Actual | | $1,000.00 | $1,086.00 | $2.82 |
| Hypothetical-C | | $1,000.00 | $1,022.30 | $2.73 |
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 183/366 (to reflect the one-half year period). In addition to the expenses noted above, the Fund also indirectly bears its proportional share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half year ranged from less than .005% to .01%.
C 5% return per year before expenses
Distributions (Unaudited)
Stock Selector All Cap designates 100% of the dividends distributed during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
Class A designates 100%; Class T designates 100%; Stock Selector All Cap designates 96%; Class K designates 88%; Class I designates 100%; and Class Z designates 88%; of the dividends, respectively during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Stock Selector All Cap 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 Stock Selector All Cap Fund
The Board also considered that the fund's management fee is subject to upward or downward adjustment depending upon whether, and to what extent, the fund's investment performance for the performance period exceeds, or is exceeded by, a securities index, thus leading to a performance adjustment for the same period. The Board noted that the performance adjustment provides FMR with a strong economic incentive to seek to achieve superior performance for the fund's shareholders and helps to more closely align the interests of FMR and the shareholders of the fund.
Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should continue to benefit the shareholders of the fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered the fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes created for the purpose of facilitating the Trustees' competitive analysis of management fees and total expenses. Fidelity creates "mapped groups" by combining similar Broadridge investment objective categories that have comparable investment mandates. Combining Broadridge investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison.
Management Fee. The Board considered two proprietary management fee comparisons for the 12-month periods shown in basis points (BP) in the chart below. The group of Broadridge funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps, and without giving effect to the fund's performance adjustment, relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. Funds with comparable investment mandates offer exposure to similar types of securities. Funds with comparable management fee structures have similar management fee contractual arrangements (
e.g., flat rate charged for advisory services, all-inclusive fee rate,
etc.). "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a hypothetical TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher, and 20% had lower, management fees than the fund. The fund's actual TMG %s and the number of funds in the Total Mapped Group are in the chart below. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure without taking into account performance adjustments, if any. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee rate ranked and the impact of the fund's performance adjustment, is also included in the chart and considered by the Board.
Fidelity Stock Selector All Cap Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015. The Board also noted the effect of the fund's performance adjustment, if any, on the fund's management fee ranking.
The Board noted that, in 2014, the ad hoc Committee on Group Fee was formed by it and the boards of other Fidelity funds to conduct an in-depth review of the "group fee" component of the management fee of funds with such management fee structures. The Committee's focus included the mechanics of the group fee, the competitive landscape of group fee structures, Fidelity funds with no group fee component and investment products not included in group fee assets. The Board also considered that, for funds subject to the group fee, FMR agreed to voluntarily waive fees over a specified period of time in amounts designed to account for assets converted from certain funds to certain collective investment trusts.
The Board also noted that, in 2013, the ad hoc Committee on Management Fees was formed to conduct an in-depth review of the management fee rates of Fidelity's active equity mutual funds. The Committee focused on the following areas: (i) standard fee structures; (ii) research consumption and trading evolution; (iii) management fee competitiveness/profitability by category; and (iv) factors that drive institutional pricing.
Based on its review, the Board concluded that the fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.
Total Expense Ratio. In its review of each class's total expense ratio, the Board considered the fund's management fee rate as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund-paid 12b-1 fees, and custodial, legal, and audit fees. The Board noted the impact of the fund's performance adjustment. The Board also noted that Fidelity may agree to waive fees and expenses from time to time, and the extent to which, if any, it has done so for the fund. As part of its review, the Board also considered the current and historical total expense ratios of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expense ratio of each of Class A, Class C, Class I, Class Z, the retail class, and Class K ranked below the competitive median for 2015 and the total expense ratio of Class T ranked above the competitive median for 2015. The Board considered that, in general, various factors can affect total expense ratios. The Board noted that the total expense ratio of Class T was above the competitive median primarily because of higher 12b-1 fees on Class T as compared to most competitor funds. Class T has a higher 12b-1 fee, but a lower front-end sales charge, than traditionally priced front-end sales charge classes. The Board considered that Class T is primarily sold load-waived in the retirement plan market where its 0.50% 12b-1 fee is comparable to competing no-load, higher 12b-1 fee classes designed specifically for retirement plans. The Board noted that the fund offers multiple classes, each of which has a different sales load and 12b-1 fee structure, and that the multiple structures are intended to offer a range of pricing options for the intermediary market. The Board also noted that the total expense ratios of the classes vary primarily by the level of their 12b-1 fees, although differences in transfer agent fees may also cause expenses to vary from class to class.
Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients with similar mandates. The Board noted the findings of the 2013 ad hoc joint committee (created with the board of other Fidelity funds), which reviewed and compared Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds, including the differences in services provided, fees charged, and costs incurred, as well as competition in their respective marketplaces.
Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that, although Class T was above the median of the universe presented for comparison, the total expense ratio of each class of the fund was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and servicing the fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, Fidelity presents to the Board information about the profitability of its relationship with the fund. Fidelity calculates profitability information for each fund, as well as aggregate profitability information for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and was satisfied that the profitability was not excessive.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale as assets grow through increased services to the fund, through waivers or reimbursements, or through fee or expense ratio reductions. The Board also noted that in 2013, it and the boards of other Fidelity funds created an ad hoc committee (the Economies of Scale Committee) to analyze whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total group assets increase, and for higher group fee rates as total group assets decrease (with "group assets" defined to include fund assets under FMR's management plus the assets of sector funds previously under FMR's management). FMR calculates the group fee rates based on a tiered asset "breakpoint" schedule that varies based on asset class. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total Fidelity fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will benefit from lower management fees as group assets increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including: (i) fund performance trends and Fidelity's long-term strategies for certain funds; (ii) the various share classes employed by Fidelity and the attributes of each class, together with similar information on the distribution and servicing payments made by Fidelity or the funds to third-party participants in the distribution channels; (iii) fund profitability, and fund performance in relation to fund profitability; (iv) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (v) annual fund profitability margins; (vi) the realization of fall-out benefits in and attribution of fall-out benefits to certain Fidelity business units; (vii) the appropriateness of certain funds' benchmarks; (viii) the rationalization for certain share classes and expenses; (ix) sub-advisory fee rates for comparable investment mandates; (x) product strategy for certain underperforming funds; and (xi) Fidelity's resources and strategy for cybersecurity.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
AFSS-ANN-1116
1.946020.103
Fidelity® Stock Selector All Cap Fund Class K
Annual Report September 30, 2016 |
|
Contents
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 1-800-835-5092 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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended September 30, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Class K | 15.02% | 15.83% | 6.72% |
The initial offering of Class K shares took place on May 9, 2008. Returns prior to May 9, 2008 are those of Fidelity® Stock Selector All Cap Fund, the original class of the fund.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Stock Selector All Cap Fund - Class K on September 30, 2006. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period. See above for additional information regarding the performance of Class K.
| Period Ending Values |
| $19,161 | Fidelity® Stock Selector All Cap Fund - Class K |
| $20,114 | S&P 500® Index |
Management's Discussion of Fund Performance
Market Recap: The S&P 500
® index rose 15.43% for the year ending September 2016, overcoming uncertainty about the global economy, U.S. Federal Reserve monetary policy and the U.K.’s June vote to leave the European Union (Brexit). Volatility peaked in early 2016, as continued oil-price weakness and U.S.-dollar strength pushed the S&P 500
® to its worst January since 2009. Markets regained positive momentum amid U.S. job gains, a rally in energy and materials markets, global economic stimulus and perceived softening of U.S. monetary policy. The June 23 Brexit vote surprised markets, though, and was followed by a two-day near-tumult. Sentiment rebounded rapidly and stayed largely positive through September. For the year, value-oriented and small-cap stocks outperformed. Among S&P 500
® sectors, dividend-rich telecom services (+27%) led amid strong demand for yield, especially earlier in the period, as well as increased competition and consolidation. Utilities (+17%) and consumer staples (+16%) also benefited. Added demand for perceived safe-haven investments such as precious metals-related securities boosted materials (+22%). Information technology (+23%) was helped by strong results from some of the largest and best-known tech names. The newly created real estate sector (+17%) finished far ahead of financials (+6%), which was held back by low interest rates that squeezed bank profits.
Comments from Co-Lead Portfolio Managers Geoff Stein and Christopher Sharpe: For the year, the fund's share classes (excluding sales charges, if applicable) posted gains of between 14% and 15%, lagging the benchmark S&P 500
®. Our sector-focused co-managers generally struggled, with only two of the 11 underlying investment strategies notably leading their respective index components. Primary detractors were stock picks in health care and consumer discretionary. An average cash stake of roughly 2% across the central funds detracted amid the market rally that occurred from mid-February through mid-August. Among individual stocks, underweighting software heavyweight and index component Microsoft hurt relative performance the most, followed by an out-of-benchmark position in generic-drugmaker Teva Pharmaceutical Industries, and not owning pharmaceutical giant and index constituent Johnson & Johnson. On the positive side, the information technology central fund added considerable value, led by picks in semiconductors and software & services. Security selection in energy also meaningfully contributed. The top individual contributors were single-serve coffee giant Keurig Green Mountain, which was taken private in March, a sizable underweighting in consumer electronics giant Apple and lighter-than-benchmark exposure to biotechnology firm Gilead Sciences.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Notes to shareholders: On November 1, 2016, Katherine Shaw (consumer discretionary) and Samuel Wald (real estate) became Co-Portfolio Managers of the fund. Katherine Shaw succeeds Peter Dixon.
Investment Summary (Unaudited)
The information in the following tables is based on the Fund’s pro-rata share of the investments of Fidelity’s Equity Central Funds.Top Ten Stocks as of September 30, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Apple, Inc. | 2.4 | 2.3 |
| Amazon.com, Inc. | 1.8 | 1.2 |
| Facebook, Inc. Class A | 1.5 | 1.2 |
| Medtronic PLC | 1.4 | 1.3 |
| Alphabet, Inc. Class C | 1.3 | 1.2 |
| Alphabet, Inc. Class A | 1.3 | 1.1 |
| Procter & Gamble Co. | 1.2 | 1.4 |
| Allergan PLC | 1.1 | 0.8 |
| General Electric Co. | 1.1 | 1.4 |
| British American Tobacco PLC sponsored ADR | 1.1 | 1.1 |
| | 14.2 | |
Top Five Market Sectors as of September 30, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Information Technology | 20.7 | 19.2 |
| Health Care | 14.5 | 13.9 |
| Financials | 12.3 | 14.8 |
| Consumer Discretionary | 12.0 | 12.9 |
| Consumer Staples | 9.6 | 10.2 |
At period end, investments in foreign securities including the Fund's pro-rata share of Fidelity's Equity Central Funds, was 17.8% of net assets.
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or institutional.fidelity.com, as applicable.
Investments September 30, 2016
Showing Percentage of Net Assets
| Equity Central Funds - 100.1% | | | |
| | | Shares | Value (000s) |
| Fidelity Consumer Discretionary Central Fund (a) | | 2,998,969 | $746,023 |
| Fidelity Consumer Staples Central Fund (a) | | 2,903,349 | 661,964 |
| Fidelity Energy Central Fund (a) | | 3,954,397 | 504,027 |
| Fidelity Financials Central Fund (a) | | 13,784,906 | 1,168,133 |
| Fidelity Health Care Central Fund (a) | | 2,782,116 | 969,985 |
| Fidelity Industrials Central Fund (a) | | 2,611,443 | 632,518 |
| Fidelity Information Technology Central Fund (a) | | 4,777,683 | 1,577,782 |
| Fidelity Materials Central Fund (a) | | 807,733 | 172,322 |
| Fidelity Telecom Services Central Fund (a) | | 1,076,927 | 206,199 |
| Fidelity Utilities Central Fund (a) | | 1,361,861 | 221,874 |
| TOTAL EQUITY CENTRAL FUNDS | | | |
| (Cost $4,658,166) | | | 6,860,827 |
|
| Money Market Central Funds - 0.0% | | | |
| Fidelity Cash Central Fund, 0.43% (b) | | | |
| (Cost $963) | | 963,353 | 964 |
| TOTAL INVESTMENT PORTFOLIO - 100.1% | | | |
| (Cost $4,659,129) | | | 6,861,791 |
| NET OTHER ASSETS (LIABILITIES) - (0.1)% | | | (3,725) |
| NET ASSETS - 100% | | | $6,858,066 |
Legend
(a) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's website at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or institutional.fidelity.com, as applicable. 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.
(b) 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.
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 | $3 |
| Fidelity Consumer Discretionary Central Fund | 10,677 |
| Fidelity Consumer Staples Central Fund | 14,398 |
| Fidelity Energy Central Fund | 6,617 |
| Fidelity Financials Central Fund | 19,373 |
| Fidelity Health Care Central Fund | 6,895 |
| Fidelity Industrials Central Fund | 8,936 |
| Fidelity Information Technology Central Fund | 11,067 |
| Fidelity Materials Central Fund | 3,524 |
| Fidelity Telecom Services Central Fund | 4,338 |
| Fidelity Utilities Central Fund | 5,772 |
| Total | $91,600 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows:
| Fund (Amounts in thousands) | Value, beginning of period | Purchases | Sales Proceeds | Value, end of period | % ownership, end of period |
| Fidelity Consumer Discretionary Central Fund | $651,791 | $150,832 | $97,736 | $746,023 | 47.2% |
| Fidelity Consumer Staples Central Fund | 531,724 | 149,636 | 91,283 | 661,964 | 51.5% |
| Fidelity Energy Central Fund | 383,522 | 108,099 | 83,281 | 504,027 | 50.2% |
| Fidelity Financials Central Fund | 982,495 | 284,946 | 147,823 | 1,168,133 | 45.9% |
| Fidelity Health Care Central Fund | 804,763 | 231,569 | 132,782 | 969,985 | 49.5% |
| Fidelity Industrials Central Fund | 508,860 | 91,861 | 51,133 | 632,518 | 46.0% |
| Fidelity Information Technology Central Fund | 1,162,489 | 271,680 | 176,590 | 1,577,782 | 49.0% |
| Fidelity Materials Central Fund | 151,680 | 14,289 | 14,042 | 172,322 | 43.0% |
| Fidelity Telecom Services Central Fund | 135,594 | 55,913 | 23,331 | 206,199 | 53.7% |
| Fidelity Utilities Central Fund | 183,672 | 38,843 | 26,888 | 221,874 | 47.9% |
| Total | $5,496,590 | $1,397,668 | $844,889 | $6,860,827 | |
Investment Valuation
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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 please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
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 | 82.2% |
| Ireland | 3.4% |
| Japan | 2.1% |
| United Kingdom | 2.1% |
| Cayman Islands | 1.6% |
| Taiwan | 1.0% |
| Switzerland | 1.0% |
| Others (Individually Less Than 1%) | 6.6% |
| | 100.0% |
The information in the above table is based on the Fund's pro-rata share of the investments of Fidelity's Equity Central Funds.
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 amounts) | | September 30, 2016 |
| Assets | | |
| Investments in Fidelity Central Funds (cost $4,659,129) | | $6,861,791 |
| Cash | | 10 |
| Receivable for investments sold | | 4,405 |
| Receivable for fund shares sold | | 4,584 |
| Dividends receivable | | 7 |
| Prepaid expenses | | 20 |
| Total assets | | 6,870,817 |
| Liabilities | | |
| Payable for investments purchased | $10 | |
| Payable for fund shares redeemed | 9,166 | |
| Accrued management fee | 2,413 | |
| Transfer agent fee payable | 800 | |
| Distribution and service plan fees payable | 142 | |
| Other affiliated payables | 97 | |
| Other payables and accrued expenses | 123 | |
| Total liabilities | | 12,751 |
| Net Assets | | $6,858,066 |
| Net Assets consist of: | | |
| Paid in capital | | $5,725,548 |
| Undistributed net investment income | | 37,820 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (1,107,964) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 2,202,662 |
| Net Assets | | $6,858,066 |
| Calculation of Maximum Offering Price | | |
| Class A: | | |
| Net Asset Value and redemption price per share ($192,563 ÷ 5,350.21 shares) | | $35.99 |
| Maximum offering price per share (100/94.25 of $35.99) | | $38.19 |
| Class T: | | |
| Net Asset Value and redemption price per share ($118,907 ÷ 3,308.86 shares) | | $35.94 |
| Maximum offering price per share (100/96.50 of $35.94) | | $37.24 |
| Class C: | | |
| Net Asset Value and offering price per share ($63,141 ÷ 1,774.17 shares)(a) | | $35.59 |
| Stock Selector All Cap: | | |
| Net Asset Value, offering price and redemption price per share ($6,078,178 ÷ 168,676.29 shares) | | $36.03 |
| Class K: | | |
| Net Asset Value, offering price and redemption price per share ($100,456 ÷ 2,785.70 shares) | | $36.06 |
| Class I: | | |
| Net Asset Value, offering price and redemption price per share ($296,940 ÷ 8,239.31 shares) | | $36.04 |
| Class Z: | | |
| Net Asset Value, offering price and redemption price per share ($7,881 ÷ 219.01 shares) | | $35.98 |
(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
| Amounts in thousands | | Year ended September 30, 2016 |
| Investment Income | | |
| Dividends | | $3 |
| Income from Fidelity Central Funds | | 91,600 |
| Total income | | 91,603 |
| Expenses | | |
| Management fee | | |
| Basic fee | $33,948 | |
| Performance adjustment | (4,954) | |
| Transfer agent fees | 9,098 | |
| Distribution and service plan fees | 1,748 | |
| Accounting fees and expenses | 1,130 | |
| Independent trustees' fees and expenses | 26 | |
| Registration fees | 411 | |
| Audit | 49 | |
| Legal | 55 | |
| Miscellaneous | 44 | |
| Total expenses before reductions | 41,555 | |
| Expense reductions | (186) | 41,369 |
| Net investment income (loss) | | 50,234 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (2,983) | |
| Fidelity Central Funds | (49,218) | |
| Total net realized gain (loss) | | (52,201) |
Change in net unrealized appreciation (depreciation) on:
Investment securities | 863,918 | |
| Total change in net unrealized appreciation (depreciation) | | 863,918 |
| Net gain (loss) | | 811,717 |
| Net increase (decrease) in net assets resulting from operations | | $861,951 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Amounts in thousands | Year ended September 30, 2016 | Year ended September 30, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $50,234 | $33,786 |
| Net realized gain (loss) | (52,201) | 11,455 |
| Change in net unrealized appreciation (depreciation) | 863,918 | (243,217) |
| Net increase (decrease) in net assets resulting from operations | 861,951 | (197,976) |
| Distributions to shareholders from net investment income | (36,464) | (33,541) |
| Distributions to shareholders from net realized gain | (253,884) | (508,950) |
| Total distributions | (290,348) | (542,491) |
| Share transactions - net increase (decrease) | 792,579 | 1,113,215 |
| Total increase (decrease) in net assets | 1,364,182 | 372,748 |
| Net Assets | | |
| Beginning of period | 5,493,884 | 5,121,136 |
| End of period | $6,858,066 | $5,493,884 |
| Other Information | | |
| Undistributed net investment income end of period | $37,820 | $23,775 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class A
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | | | | |
| Net asset value, beginning of period | $32.94 | $38.00 | $34.65 | $27.78 |
| Income from Investment Operations | | | | |
| Net investment income (loss)B | .18 | .12 | .15 | .17 |
| Net realized and unrealized gain (loss) | 4.47 | (1.25) | 5.35 | 6.79 |
| Total from investment operations | 4.65 | (1.13) | 5.50 | 6.96 |
| Distributions from net investment income | (.10) | (.09) | (.16) | (.07) |
| Distributions from net realized gain | (1.50) | (3.84) | (1.99) | (.02) |
| Total distributions | (1.60) | (3.93) | (2.15) | (.09) |
| Net asset value, end of period | $35.99 | $32.94 | $38.00 | $34.65 |
| Total ReturnC,D,E | 14.55% | (3.39)% | 16.60% | 25.12% |
| Ratios to Average Net AssetsF,G | | | | |
| Expenses before reductions | .96% | 1.06% | 1.01% | 1.06%H |
| Expenses net of fee waivers, if any | .96% | 1.06% | 1.01% | 1.06%H |
| Expenses net of all reductions | .96% | 1.05% | 1.00% | 1.04%H |
| Net investment income (loss) | .52% | .33% | .41% | .59%H |
| Supplemental Data | | | | |
| Net assets, end of period (in millions) | $193 | $197 | $222 | $226 |
| Portfolio turnover rateI | 14% | 6% | 10%J | 8%J,K |
A For the period October 23, 2012 (commencement of sale of shares) to September 30, 2013.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Portfolio turnover rate excludes securities received or delivered in-kind.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class T
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | | | | |
| Net asset value, beginning of period | $32.88 | $37.91 | $34.58 | $27.78 |
| Income from Investment Operations | | | | |
| Net investment income (loss)B | .09 | .03 | .06 | .10 |
| Net realized and unrealized gain (loss) | 4.47 | (1.25) | 5.34 | 6.77 |
| Total from investment operations | 4.56 | (1.22) | 5.40 | 6.87 |
| Distributions from net investment income | – | – | (.08) | (.05) |
| Distributions from net realized gain | (1.50) | (3.81) | (1.99) | (.02) |
| Total distributions | (1.50) | (3.81) | (2.07) | (.07) |
| Net asset value, end of period | $35.94 | $32.88 | $37.91 | $34.58 |
| Total ReturnC,D,E | 14.26% | (3.63)% | 16.31% | 24.81% |
| Ratios to Average Net AssetsF,G | | | | |
| Expenses before reductions | 1.23% | 1.32% | 1.27% | 1.32%H |
| Expenses net of fee waivers, if any | 1.23% | 1.32% | 1.27% | 1.31%H |
| Expenses net of all reductions | 1.22% | 1.31% | 1.26% | 1.29%H |
| Net investment income (loss) | .25% | .07% | .15% | .34%H |
| Supplemental Data | | | | |
| Net assets, end of period (in millions) | $119 | $120 | $137 | $131 |
| Portfolio turnover rateI | 14% | 6% | 10%J | 8%J,K |
A For the period October 23, 2012 (commencement of sale of shares) to September 30, 2013.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Portfolio turnover rate excludes securities received or delivered in-kind.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class C
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | | | | |
| Net asset value, beginning of period | $32.70 | $37.68 | $34.44 | $27.78 |
| Income from Investment Operations | | | | |
| Net investment income (loss)B | (.09) | (.16) | (.13) | (.05) |
| Net realized and unrealized gain (loss) | 4.44 | (1.23) | 5.33 | 6.76 |
| Total from investment operations | 4.35 | (1.39) | 5.20 | 6.71 |
| Distributions from net investment income | – | – | – | (.03) |
| Distributions from net realized gain | (1.46) | (3.59) | (1.96) | (.02) |
| Total distributions | (1.46) | (3.59) | (1.96) | (.05) |
| Net asset value, end of period | $35.59 | $32.70 | $37.68 | $34.44 |
| Total ReturnC,D,E | 13.68% | (4.14)% | 15.73% | 24.19% |
| Ratios to Average Net AssetsF,G | | | | |
| Expenses before reductions | 1.74% | 1.83% | 1.78% | 1.84%H |
| Expenses net of fee waivers, if any | 1.73% | 1.83% | 1.78% | 1.84%H |
| Expenses net of all reductions | 1.73% | 1.82% | 1.78% | 1.82%H |
| Net investment income (loss) | (.25)% | (.44)% | (.36)% | (.18)%H |
| Supplemental Data | | | | |
| Net assets, end of period (in millions) | $63 | $63 | $72 | $65 |
| Portfolio turnover rateI | 14% | 6% | 10%J | 8%J,K |
A For the period October 23, 2012 (commencement of sale of shares) to September 30, 2013.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Portfolio turnover rate excludes securities received or delivered in-kind.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $33.00 | $38.12 | $34.75 | $28.48 | $22.21 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .29 | .24 | .28 | .30 | .24 |
| Net realized and unrealized gain (loss) | 4.47 | (1.25) | 5.35 | 6.28 | 6.18 |
| Total from investment operations | 4.76 | (1.01) | 5.63 | 6.58 | 6.42 |
| Distributions from net investment income | (.23) | (.27) | (.27) | (.27) | (.14) |
| Distributions from net realized gain | (1.50) | (3.84) | (1.99) | (.04) | (.02) |
| Total distributions | (1.73) | (4.11) | (2.26) | (.31) | (.15)B |
| Net asset value, end of period | $36.03 | $33.00 | $38.12 | $34.75 | $28.48 |
| Total ReturnC | 14.92% | (3.05)% | 16.98% | 23.36% | 29.02% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | .64% | .72% | .67% | .71% | .72% |
| Expenses net of fee waivers, if any | .64% | .72% | .67% | .71% | .72% |
| Expenses net of all reductions | .63% | .71% | .66% | .69% | .71% |
| Net investment income (loss) | .85% | .67% | .75% | .96% | .90% |
| Supplemental Data | | | | | |
| Net assets, end of period (in millions) | $6,078 | $4,722 | $4,230 | $2,953 | $2,361 |
| Portfolio turnover rateF | 14% | 6% | 10%G | 8%G,H | 21% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $.15 per share is comprised of distributions from net investment income of $.136 and distributions from net realized gain of $.015 per share.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Portfolio turnover rate excludes securities received or delivered in-kind.
H The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class K
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $33.02 | $38.14 | $34.77 | $28.50 | $22.23 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .32 | .28 | .31 | .33 | .27 |
| Net realized and unrealized gain (loss) | 4.47 | (1.26) | 5.36 | 6.28 | 6.19 |
| Total from investment operations | 4.79 | (.98) | 5.67 | 6.61 | 6.46 |
| Distributions from net investment income | (.25) | (.31) | (.31) | (.30) | (.17) |
| Distributions from net realized gain | (1.50) | (3.84) | (1.99) | (.04) | (.02) |
| Total distributions | (1.75) | (4.14)B | (2.30) | (.34) | (.19) |
| Net asset value, end of period | $36.06 | $33.02 | $38.14 | $34.77 | $28.50 |
| Total ReturnC | 15.02% | (2.96)% | 17.09% | 23.47% | 29.18% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | .54% | .64% | .58% | .61% | .61% |
| Expenses net of fee waivers, if any | .54% | .64% | .58% | .61% | .61% |
| Expenses net of all reductions | .54% | .63% | .57% | .59% | .59% |
| Net investment income (loss) | .94% | .75% | .84% | 1.06% | 1.02% |
| Supplemental Data | | | | | |
| Net assets, end of period (in millions) | $100 | $76 | $109 | $105 | $47 |
| Portfolio turnover rateF | 14% | 6% | 10%G | 8%G,H | 21% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $4.14 per share is comprised of distributions from net investment income of $.307 and distributions from net realized gain of $3.836 per share.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Portfolio turnover rate excludes securities received or delivered in-kind.
H The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class I
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | | | | |
| Net asset value, beginning of period | $32.99 | $38.10 | $34.72 | $27.78 |
| Income from Investment Operations | | | | |
| Net investment income (loss)B | .27 | .22 | .25 | .25 |
| Net realized and unrealized gain (loss) | 4.48 | (1.26) | 5.36 | 6.79 |
| Total from investment operations | 4.75 | (1.04) | 5.61 | 7.04 |
| Distributions from net investment income | (.20) | (.23) | (.25) | (.08) |
| Distributions from net realized gain | (1.50) | (3.84) | (1.99) | (.02) |
| Total distributions | (1.70) | (4.07) | (2.23)C | (.10) |
| Net asset value, end of period | $36.04 | $32.99 | $38.10 | $34.72 |
| Total ReturnD,E | 14.87% | (3.14)% | 16.93% | 25.43% |
| Ratios to Average Net AssetsF,G | | | | |
| Expenses before reductions | .69% | .79% | .74% | .78%H |
| Expenses net of fee waivers, if any | .69% | .79% | .74% | .78%H |
| Expenses net of all reductions | .69% | .78% | .73% | .76%H |
| Net investment income (loss) | .79% | .60% | .68% | .87%H |
| Supplemental Data | | | | |
| Net assets, end of period (in millions) | $297 | $304 | $336 | $297 |
| Portfolio turnover rateI | 14% | 6% | 10%J | 8%J,K |
A For the period October 23, 2012 (commencement of sale of shares) to September 30, 2013.
B Calculated based on average shares outstanding during the period.
C Total distributions of $2.23 per share is comprised of distributions from net investment income of $.245 and distributions from net realized gain of $1.987 per share.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Portfolio turnover rate excludes securities received or delivered in-kind.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class Z
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | | | | |
| Net asset value, beginning of period | $32.95 | $38.09 | $34.73 | $34.24 |
| Income from Investment Operations | | | | |
| Net investment income (loss)B | .32 | .27 | .32 | .06 |
| Net realized and unrealized gain (loss) | 4.46 | (1.25) | 5.34 | .43 |
| Total from investment operations | 4.78 | (.98) | 5.66 | .49 |
| Distributions from net investment income | (.25) | (.32) | (.32) | – |
| Distributions from net realized gain | (1.50) | (3.84) | (1.99) | – |
| Total distributions | (1.75) | (4.16) | (2.30)C | – |
| Net asset value, end of period | $35.98 | $32.95 | $38.09 | $34.73 |
| Total ReturnD,E | 15.02% | (2.98)% | 17.10% | 1.43% |
| Ratios to Average Net AssetsF,G | | | | |
| Expenses before reductions | .54% | .64% | .58% | .61%H |
| Expenses net of fee waivers, if any | .54% | .64% | .58% | .61%H |
| Expenses net of all reductions | .54% | .63% | .57% | .59%H |
| Net investment income (loss) | .94% | .75% | .84% | 1.36%H |
| Supplemental Data | | | | |
| Net assets, end of period (000 omitted) | $7,881 | $7,300 | $5,812 | $101 |
| Portfolio turnover rateI | 14% | 6% | 10%J | 8%J,K |
A For the period August 13, 2013 (commencement of sale of shares) to September 30, 2013.
B Calculated based on average shares outstanding during the period.
C Total distributions of $2.30 per share is comprised of distributions from net investment income of $.315 and distributions from net realized gain of $1.987 per share.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Portfolio turnover rate excludes securities received or delivered in-kind.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended September 30, 2016
(Amounts in thousands except percentages)
1. Organization.
Fidelity Stock Selector All Cap Fund (the Fund) is a fund of Fidelity Capital 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, Stock Selector All Cap, Class K, Class I and Class Z 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.
After the close of business on June 24, 2016, all outstanding Class B shares were converted to Class A shares. All current fiscal period dollar and share amounts for Class B presented in the Notes to Financial Statements are for the period October 1, 2015 through June 24, 2016.
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, 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.
Based on its investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of theFund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. 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%. The following summarizes the Fund's investment in each non-money market Fidelity Central Fund.
| Fidelity Central Fund | Investment Manager | Investment Objective | Investment Practices | Expense Ratio(a) |
| Fidelity Equity Central Funds | FMR Co., Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities
Foreign Securities
Restricted Securities | Less than .005% to .01% |
(a) Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or institutional.fidelity.com as applicable. 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 contain the significant accounting policies (including investment valuation policies) of those 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. 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.
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.
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. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's NAV.
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. As of September 30, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. 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.
Distributions 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, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation and expiring capital loss carryforwards.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $1,165,472 |
| Gross unrealized depreciation | (8,105) |
| Net unrealized appreciation (depreciation) on securities | $1,157,367 |
| Tax Cost | $5,704,424 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $41,676 |
| Capital loss carryforward | $(66,524) |
| Net unrealized appreciation (depreciation) on securities and other investments | $1,157,367 |
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 fiscal period end and is subject to adjustment.
| No expiration | |
| Short-term | $(66,524) |
The tax character of distributions paid was as follows:
| | September 30, 2016 | September 30, 2015 |
| Ordinary Income | $43,463 | $ 158,155 |
| Long-term Capital Gains | 246,885 | 384,336 |
| Total | $290,348 | $ 542,491 |
4. Purchases and Sales of Investments.
Purchases and sales of securities (include the Equity Central Funds), other than short-term securities, aggregated $1,397,668 and $844,889, 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 .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% 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. In addition, the management fee is subject to a performance adjustment (up to a maximum of +/- .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Stock Selector All Cap as compared to its benchmark index, the S&P 500 Index, over the same 36 month performance period. For the reporting period, the total annual management fee rate, including the performance adjustment, was .47% of the Fund's average net assets. The performance adjustment included in the management fee rate may be higher or lower than the maximum performance adjustment rate due to the difference between the average net assets for the reporting and performance periods.
The investment adviser pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
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% | $491 | $– |
| Class T | .25% | .25% | 590 | – |
| Class B | .75% | .25% | 30 | 23 |
| Class C | .75% | .25% | 637 | 14 |
| | | | $1,748 | $37 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling 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, Class B and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 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 | | | $20 |
| Class T | | | 7 |
| Class B(a) | | | –(b) |
| Class C(a) | | | 3 |
| | | | $30 |
(a) When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
(b) In the amount of less than $500.
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, except for Class K and Class Z. FIIOC receives an asset-based fee of Class K's and Class Z's average net assets. 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 |
| Class A | $429 | .22 |
| Class T | 274 | .23 |
| Class B | 9 | .28 |
| Class C | 153 | .24 |
| Stock Selector All Cap | 7,605 | .14 |
| Class K | 37 | .05 |
| Class I | 588 | .19 |
| Class Z | 3 | .05 |
| | $9,098 | |
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.
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 $12 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.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund and the Equity Central Funds include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $143 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 in the amount of less than five hundred dollars.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $43.
8. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended September 30, | 2016 | 2015 |
| From net investment income | | |
| Class A | $564 | $525 |
| Stock Selector All Cap | 33,578 | 30,087 |
| Class K | 571 | 851 |
| Class I | 1,712 | 2,028 |
| Class Z | 39 | 50 |
| Total | $36,464 | $33,541 |
| From net realized gain | | |
| Class A | $8,730 | $21,876 |
| Class T | 5,253 | 13,580 |
| Class B | 198 | 674 |
| Class C | 2,777 | 6,829 |
| Stock Selector All Cap | 220,234 | 421,227 |
| Class K | 3,401 | 10,630 |
| Class I | 13,057 | 33,538 |
| Class Z | 234 | 596 |
| Total | $253,884 | $508,950 |
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 |
| | Year ended
September 30, 2016 | Year ended September 30, 2015 | Year ended
September 30, 2016 | Year ended September 30, 2015 |
| Class A | | | | |
| Shares sold | 494 | 576 | $16,634 | $20,919 |
| Reinvestment of distributions | 276 | 636 | 9,096 | 21,837 |
| Shares redeemed | (1,396) | (1,083) | (47,634) | (39,392) |
| Net increase (decrease) | (626) | 129 | $(21,904) | $3,364 |
| Class T | | | | |
| Shares sold | 190 | 274 | $6,375 | $9,899 |
| Reinvestment of distributions | 156 | 389 | 5,159 | 13,337 |
| Shares redeemed | (679) | (639) | (22,950) | (23,191) |
| Net increase (decrease) | (333) | 24 | $(11,416) | $45 |
| Class B | | | | |
| Shares sold | 1 | 2 | $19 | $48 |
| Reinvestment of distributions | 5 | 17 | 165 | 597 |
| Shares redeemed | (159) | (91) | (5,272) | (3,319) |
| Net increase (decrease) | (153) | (72) | $(5,088) | $(2,674) |
| Class C | | | | |
| Shares sold | 106 | 173 | $3,582 | $6,272 |
| Reinvestment of distributions | 78 | 180 | 2,546 | 6,168 |
| Shares redeemed | (349) | (333) | (11,749) | (12,027) |
| Net increase (decrease) | (165) | 20 | $(5,621) | $413 |
| Stock Selector All Cap | | | | |
| Shares sold | 60,114 | 37,980 | $2,029,587 | $1,365,446 |
| Reinvestment of distributions | 7,613 | 12,983 | 250,922 | 445,053 |
| Shares redeemed | (42,115) | (18,864) | (1,426,107) | (690,763) |
| Net increase (decrease) | 25,612 | 32,099 | $854,402 | $1,119,736 |
| Class K | | | | |
| Shares sold | 819 | 275 | $29,079 | $9,998 |
| Reinvestment of distributions | 120 | 335 | 3,972 | 11,481 |
| Shares redeemed | (465) | (1,149) | (15,711) | (42,097) |
| Net increase (decrease) | 474 | (539) | $17,340 | $(20,618) |
| Class I | | | | |
| Shares sold | 1,014 | 1,572 | $34,105 | $55,299 |
| Reinvestment of distributions | 443 | 1,026 | 14,615 | 35,171 |
| Shares redeemed | (2,420) | (2,217) | (83,697) | (80,052) |
| Net increase (decrease) | (963) | 381 | $(34,977) | $10,418 |
| Class Z | | | | |
| Shares sold | 91 | 82 | $3,001 | $3,045 |
| Reinvestment of distributions | 8 | 19 | 273 | 646 |
| Shares redeemed | (102) | (32) | (3,431) | (1,160) |
| Net increase (decrease) | (3) | 69 | $(157) | $2,531 |
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.
At the end of the period, a shareholder of record owned approximately 28% of the total outstanding shares of the Fund.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Capital Trust and Shareholders of Fidelity Stock Selector All Cap Fund:
We have audited the accompanying statement of assets and liabilities of Fidelity Stock Selector All Cap Fund (the Fund), a fund of Fidelity Capital Trust, including the schedule of investments, as of September 30, 2016, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits 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 and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2016, by correspondence with the custodians. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Stock Selector All Cap Fund as of September 30, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
November 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Each of the Trustees oversees 170 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-835-5092.
Experience, Skills, Attributes, and Qualifications of the 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 hoc committees 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.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present), a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2002
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (U.K.) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Previously, Mr. Goebel served as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016), Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Thomas C. Hense (1964)
Year of Election or Appointment: 2008, 2010, or 2015
Vice President
Mr. Hense serves as Vice President of Fidelity Advisor® Multi-Asset Income Fund (2015) and other funds (High Income (2008), Small Cap (2008), and Value (2010) funds), and is an employee of Fidelity Investments (1993-present). Previously, Mr. Hense served as a portfolio manager for Fidelity's Institutional Money Management Group (Pyramis) (2003-2008).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (U.K.) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bear their proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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, 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 (April 1, 2016 to September 30, 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.
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.
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
April 1, 2016 | Ending
Account Value
September 30, 2016 | Expenses Paid
During Period-B
April 1, 2016
to September 30, 2016 |
| Class A | .95% | | | |
| Actual | | $1,000.00 | $1,084.00 | $4.95 |
| Hypothetical-C | | $1,000.00 | $1,020.25 | $4.80 |
| Class T | 1.22% | | | |
| Actual | | $1,000.00 | $1,082.90 | $6.35 |
| Hypothetical-C | | $1,000.00 | $1,018.90 | $6.16 |
| Class C | 1.73% | | | |
| Actual | | $1,000.00 | $1,079.80 | $9.00 |
| Hypothetical-C | | $1,000.00 | $1,016.35 | $8.72 |
| Stock Selector All Cap | .63% | | | |
| Actual | | $1,000.00 | $1,085.60 | $3.28 |
| Hypothetical-C | | $1,000.00 | $1,021.85 | $3.18 |
| Class K | .53% | | | |
| Actual | | $1,000.00 | $1,086.10 | $2.76 |
| Hypothetical-C | | $1,000.00 | $1,022.35 | $2.68 |
| Class I | .68% | | | |
| Actual | | $1,000.00 | $1,085.50 | $3.55 |
| Hypothetical-C | | $1,000.00 | $1,021.60 | $3.44 |
| Class Z | .54% | | | |
| Actual | | $1,000.00 | $1,086.00 | $2.82 |
| Hypothetical-C | | $1,000.00 | $1,022.30 | $2.73 |
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 183/366 (to reflect the one-half year period). In addition to the expenses noted above, the Fund also indirectly bears its proportional share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half year ranged from less than .005% to .01%.
C 5% return per year before expenses
Distributions (Unaudited)
Stock Selector All Cap designates 100% of the dividends distributed during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
Class A designates 100%; Class T designates 100%; Stock Selector All Cap designates 96%; Class K designates 88%; Class I designates 100%; and Class Z designates 88%; of the dividends, respectively during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Stock Selector All Cap 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 Stock Selector All Cap Fund
The Board also considered that the fund's management fee is subject to upward or downward adjustment depending upon whether, and to what extent, the fund's investment performance for the performance period exceeds, or is exceeded by, a securities index, thus leading to a performance adjustment for the same period. The Board noted that the performance adjustment provides FMR with a strong economic incentive to seek to achieve superior performance for the fund's shareholders and helps to more closely align the interests of FMR and the shareholders of the fund.
Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should continue to benefit the shareholders of the fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered the fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes created for the purpose of facilitating the Trustees' competitive analysis of management fees and total expenses. Fidelity creates "mapped groups" by combining similar Broadridge investment objective categories that have comparable investment mandates. Combining Broadridge investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison.
Management Fee. The Board considered two proprietary management fee comparisons for the 12-month periods shown in basis points (BP) in the chart below. The group of Broadridge funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps, and without giving effect to the fund's performance adjustment, relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. Funds with comparable investment mandates offer exposure to similar types of securities. Funds with comparable management fee structures have similar management fee contractual arrangements (
e.g., flat rate charged for advisory services, all-inclusive fee rate,
etc.). "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a hypothetical TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher, and 20% had lower, management fees than the fund. The fund's actual TMG %s and the number of funds in the Total Mapped Group are in the chart below. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure without taking into account performance adjustments, if any. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee rate ranked and the impact of the fund's performance adjustment, is also included in the chart and considered by the Board.
Fidelity Stock Selector All Cap Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015. The Board also noted the effect of the fund's performance adjustment, if any, on the fund's management fee ranking.
The Board noted that, in 2014, the ad hoc Committee on Group Fee was formed by it and the boards of other Fidelity funds to conduct an in-depth review of the "group fee" component of the management fee of funds with such management fee structures. The Committee's focus included the mechanics of the group fee, the competitive landscape of group fee structures, Fidelity funds with no group fee component and investment products not included in group fee assets. The Board also considered that, for funds subject to the group fee, FMR agreed to voluntarily waive fees over a specified period of time in amounts designed to account for assets converted from certain funds to certain collective investment trusts.
The Board also noted that, in 2013, the ad hoc Committee on Management Fees was formed to conduct an in-depth review of the management fee rates of Fidelity's active equity mutual funds. The Committee focused on the following areas: (i) standard fee structures; (ii) research consumption and trading evolution; (iii) management fee competitiveness/profitability by category; and (iv) factors that drive institutional pricing.
Based on its review, the Board concluded that the fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.
Total Expense Ratio. In its review of each class's total expense ratio, the Board considered the fund's management fee rate as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund-paid 12b-1 fees, and custodial, legal, and audit fees. The Board noted the impact of the fund's performance adjustment. The Board also noted that Fidelity may agree to waive fees and expenses from time to time, and the extent to which, if any, it has done so for the fund. As part of its review, the Board also considered the current and historical total expense ratios of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expense ratio of each of Class A, Class C, Class I, Class Z, the retail class, and Class K ranked below the competitive median for 2015 and the total expense ratio of Class T ranked above the competitive median for 2015. The Board considered that, in general, various factors can affect total expense ratios. The Board noted that the total expense ratio of Class T was above the competitive median primarily because of higher 12b-1 fees on Class T as compared to most competitor funds. Class T has a higher 12b-1 fee, but a lower front-end sales charge, than traditionally priced front-end sales charge classes. The Board considered that Class T is primarily sold load-waived in the retirement plan market where its 0.50% 12b-1 fee is comparable to competing no-load, higher 12b-1 fee classes designed specifically for retirement plans. The Board noted that the fund offers multiple classes, each of which has a different sales load and 12b-1 fee structure, and that the multiple structures are intended to offer a range of pricing options for the intermediary market. The Board also noted that the total expense ratios of the classes vary primarily by the level of their 12b-1 fees, although differences in transfer agent fees may also cause expenses to vary from class to class.
Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients with similar mandates. The Board noted the findings of the 2013 ad hoc joint committee (created with the board of other Fidelity funds), which reviewed and compared Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds, including the differences in services provided, fees charged, and costs incurred, as well as competition in their respective marketplaces.
Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that, although Class T was above the median of the universe presented for comparison, the total expense ratio of each class of the fund was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and servicing the fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, Fidelity presents to the Board information about the profitability of its relationship with the fund. Fidelity calculates profitability information for each fund, as well as aggregate profitability information for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and was satisfied that the profitability was not excessive.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale as assets grow through increased services to the fund, through waivers or reimbursements, or through fee or expense ratio reductions. The Board also noted that in 2013, it and the boards of other Fidelity funds created an ad hoc committee (the Economies of Scale Committee) to analyze whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total group assets increase, and for higher group fee rates as total group assets decrease (with "group assets" defined to include fund assets under FMR's management plus the assets of sector funds previously under FMR's management). FMR calculates the group fee rates based on a tiered asset "breakpoint" schedule that varies based on asset class. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total Fidelity fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will benefit from lower management fees as group assets increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including: (i) fund performance trends and Fidelity's long-term strategies for certain funds; (ii) the various share classes employed by Fidelity and the attributes of each class, together with similar information on the distribution and servicing payments made by Fidelity or the funds to third-party participants in the distribution channels; (iii) fund profitability, and fund performance in relation to fund profitability; (iv) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (v) annual fund profitability margins; (vi) the realization of fall-out benefits in and attribution of fall-out benefits to certain Fidelity business units; (vii) the appropriateness of certain funds' benchmarks; (viii) the rationalization for certain share classes and expenses; (ix) sub-advisory fee rates for comparable investment mandates; (x) product strategy for certain underperforming funds; and (xi) Fidelity's resources and strategy for cybersecurity.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
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FSS-K-ANN-1116
1.863290.108
Fidelity® Stock Selector All Cap Fund
Annual Report September 30, 2016 |
|
Contents
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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended September 30, 2016 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® Stock Selector All Cap Fund | 14.92% | 15.71% | 6.59% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Stock Selector All Cap Fund, a class of the fund, on September 30, 2006.
The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values |
| $18,938 | Fidelity® Stock Selector All Cap Fund |
| $20,114 | S&P 500® Index |
Management's Discussion of Fund Performance
Market Recap: The S&P 500
® index rose 15.43% for the year ending September 2016, overcoming uncertainty about the global economy, U.S. Federal Reserve monetary policy and the U.K.’s June vote to leave the European Union (Brexit). Volatility peaked in early 2016, as continued oil-price weakness and U.S.-dollar strength pushed the S&P 500
® to its worst January since 2009. Markets regained positive momentum amid U.S. job gains, a rally in energy and materials markets, global economic stimulus and perceived softening of U.S. monetary policy. The June 23 Brexit vote surprised markets, though, and was followed by a two-day near-tumult. Sentiment rebounded rapidly and stayed largely positive through September. For the year, value-oriented and small-cap stocks outperformed. Among S&P 500
® sectors, dividend-rich telecom services (+27%) led amid strong demand for yield, especially earlier in the period, as well as increased competition and consolidation. Utilities (+17%) and consumer staples (+16%) also benefited. Added demand for perceived safe-haven investments such as precious metals-related securities boosted materials (+22%). Information technology (+23%) was helped by strong results from some of the largest and best-known tech names. The newly created real estate sector (+17%) finished far ahead of financials (+6%), which was held back by low interest rates that squeezed bank profits.
Comments from Co-Lead Portfolio Managers Geoff Stein and Christopher Sharpe: For the year, the fund's share classes (excluding sales charges, if applicable) posted gains of between 14% and 15%, lagging the benchmark S&P 500
®. Our sector-focused co-managers generally struggled, with only two of the 11 underlying investment strategies notably leading their respective index components. Primary detractors were stock picks in health care and consumer discretionary. An average cash stake of roughly 2% across the central funds detracted amid the market rally that occurred from mid-February through mid-August. Among individual stocks, underweighting software heavyweight and index component Microsoft hurt relative performance the most, followed by an out-of-benchmark position in generic-drugmaker Teva Pharmaceutical Industries, and not owning pharmaceutical giant and index constituent Johnson & Johnson. On the positive side, the information technology central fund added considerable value, led by picks in semiconductors and software & services. Security selection in energy also meaningfully contributed. The top individual contributors were single-serve coffee giant Keurig Green Mountain, which was taken private in March, a sizable underweighting in consumer electronics giant Apple and lighter-than-benchmark exposure to biotechnology firm Gilead Sciences.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Notes to shareholders: On November 1, 2016, Katherine Shaw (consumer discretionary) and Samuel Wald (real estate) became Co-Portfolio Managers of the fund. Katherine Shaw succeeds Peter Dixon.
Investment Summary (Unaudited)
The information in the following tables is based on the Fund’s pro-rata share of the investments of Fidelity’s Equity Central Funds.Top Ten Stocks as of September 30, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Apple, Inc. | 2.4 | 2.3 |
| Amazon.com, Inc. | 1.8 | 1.2 |
| Facebook, Inc. Class A | 1.5 | 1.2 |
| Medtronic PLC | 1.4 | 1.3 |
| Alphabet, Inc. Class C | 1.3 | 1.2 |
| Alphabet, Inc. Class A | 1.3 | 1.1 |
| Procter & Gamble Co. | 1.2 | 1.4 |
| Allergan PLC | 1.1 | 0.8 |
| General Electric Co. | 1.1 | 1.4 |
| British American Tobacco PLC sponsored ADR | 1.1 | 1.1 |
| | 14.2 | |
Top Five Market Sectors as of September 30, 2016
| | % of fund's net assets | % of fund's net assets 6 months ago |
| Information Technology | 20.7 | 19.2 |
| Health Care | 14.5 | 13.9 |
| Financials | 12.3 | 14.8 |
| Consumer Discretionary | 12.0 | 12.9 |
| Consumer Staples | 9.6 | 10.2 |
At period end, investments in foreign securities including the Fund's pro-rata share of Fidelity's Equity Central Funds, was 17.8% of net assets.
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or institutional.fidelity.com, as applicable.
Investments September 30, 2016
Showing Percentage of Net Assets
| Equity Central Funds - 100.1% | | | |
| | | Shares | Value (000s) |
| Fidelity Consumer Discretionary Central Fund (a) | | 2,998,969 | $746,023 |
| Fidelity Consumer Staples Central Fund (a) | | 2,903,349 | 661,964 |
| Fidelity Energy Central Fund (a) | | 3,954,397 | 504,027 |
| Fidelity Financials Central Fund (a) | | 13,784,906 | 1,168,133 |
| Fidelity Health Care Central Fund (a) | | 2,782,116 | 969,985 |
| Fidelity Industrials Central Fund (a) | | 2,611,443 | 632,518 |
| Fidelity Information Technology Central Fund (a) | | 4,777,683 | 1,577,782 |
| Fidelity Materials Central Fund (a) | | 807,733 | 172,322 |
| Fidelity Telecom Services Central Fund (a) | | 1,076,927 | 206,199 |
| Fidelity Utilities Central Fund (a) | | 1,361,861 | 221,874 |
| TOTAL EQUITY CENTRAL FUNDS | | | |
| (Cost $4,658,166) | | | 6,860,827 |
|
| Money Market Central Funds - 0.0% | | | |
| Fidelity Cash Central Fund, 0.43% (b) | | | |
| (Cost $963) | | 963,353 | 964 |
| TOTAL INVESTMENT PORTFOLIO - 100.1% | | | |
| (Cost $4,659,129) | | | 6,861,791 |
| NET OTHER ASSETS (LIABILITIES) - (0.1)% | | | (3,725) |
| NET ASSETS - 100% | | | $6,858,066 |
Legend
(a) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's website at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or institutional.fidelity.com, as applicable. 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.
(b) 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.
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 | $3 |
| Fidelity Consumer Discretionary Central Fund | 10,677 |
| Fidelity Consumer Staples Central Fund | 14,398 |
| Fidelity Energy Central Fund | 6,617 |
| Fidelity Financials Central Fund | 19,373 |
| Fidelity Health Care Central Fund | 6,895 |
| Fidelity Industrials Central Fund | 8,936 |
| Fidelity Information Technology Central Fund | 11,067 |
| Fidelity Materials Central Fund | 3,524 |
| Fidelity Telecom Services Central Fund | 4,338 |
| Fidelity Utilities Central Fund | 5,772 |
| Total | $91,600 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows:
| Fund (Amounts in thousands) | Value, beginning of period | Purchases | Sales Proceeds | Value, end of period | % ownership, end of period |
| Fidelity Consumer Discretionary Central Fund | $651,791 | $150,832 | $97,736 | $746,023 | 47.2% |
| Fidelity Consumer Staples Central Fund | 531,724 | 149,636 | 91,283 | 661,964 | 51.5% |
| Fidelity Energy Central Fund | 383,522 | 108,099 | 83,281 | 504,027 | 50.2% |
| Fidelity Financials Central Fund | 982,495 | 284,946 | 147,823 | 1,168,133 | 45.9% |
| Fidelity Health Care Central Fund | 804,763 | 231,569 | 132,782 | 969,985 | 49.5% |
| Fidelity Industrials Central Fund | 508,860 | 91,861 | 51,133 | 632,518 | 46.0% |
| Fidelity Information Technology Central Fund | 1,162,489 | 271,680 | 176,590 | 1,577,782 | 49.0% |
| Fidelity Materials Central Fund | 151,680 | 14,289 | 14,042 | 172,322 | 43.0% |
| Fidelity Telecom Services Central Fund | 135,594 | 55,913 | 23,331 | 206,199 | 53.7% |
| Fidelity Utilities Central Fund | 183,672 | 38,843 | 26,888 | 221,874 | 47.9% |
| Total | $5,496,590 | $1,397,668 | $844,889 | $6,860,827 | |
Investment Valuation
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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 please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
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 | 82.2% |
| Ireland | 3.4% |
| Japan | 2.1% |
| United Kingdom | 2.1% |
| Cayman Islands | 1.6% |
| Taiwan | 1.0% |
| Switzerland | 1.0% |
| Others (Individually Less Than 1%) | 6.6% |
| | 100.0% |
The information in the above table is based on the Fund's pro-rata share of the investments of Fidelity's Equity Central Funds.
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 amounts) | | September 30, 2016 |
| Assets | | |
| Investments in Fidelity Central Funds (cost $4,659,129) | | $6,861,791 |
| Cash | | 10 |
| Receivable for investments sold | | 4,405 |
| Receivable for fund shares sold | | 4,584 |
| Dividends receivable | | 7 |
| Prepaid expenses | | 20 |
| Total assets | | 6,870,817 |
| Liabilities | | |
| Payable for investments purchased | $10 | |
| Payable for fund shares redeemed | 9,166 | |
| Accrued management fee | 2,413 | |
| Transfer agent fee payable | 800 | |
| Distribution and service plan fees payable | 142 | |
| Other affiliated payables | 97 | |
| Other payables and accrued expenses | 123 | |
| Total liabilities | | 12,751 |
| Net Assets | | $6,858,066 |
| Net Assets consist of: | | |
| Paid in capital | | $5,725,548 |
| Undistributed net investment income | | 37,820 |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (1,107,964) |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 2,202,662 |
| Net Assets | | $6,858,066 |
| Calculation of Maximum Offering Price | | |
| Class A: | | |
| Net Asset Value and redemption price per share ($192,563 ÷ 5,350.21 shares) | | $35.99 |
| Maximum offering price per share (100/94.25 of $35.99) | | $38.19 |
| Class T: | | |
| Net Asset Value and redemption price per share ($118,907 ÷ 3,308.86 shares) | | $35.94 |
| Maximum offering price per share (100/96.50 of $35.94) | | $37.24 |
| Class C: | | |
| Net Asset Value and offering price per share ($63,141 ÷ 1,774.17 shares)(a) | | $35.59 |
| Stock Selector All Cap: | | |
| Net Asset Value, offering price and redemption price per share ($6,078,178 ÷ 168,676.29 shares) | | $36.03 |
| Class K: | | |
| Net Asset Value, offering price and redemption price per share ($100,456 ÷ 2,785.70 shares) | | $36.06 |
| Class I: | | |
| Net Asset Value, offering price and redemption price per share ($296,940 ÷ 8,239.31 shares) | | $36.04 |
| Class Z: | | |
| Net Asset Value, offering price and redemption price per share ($7,881 ÷ 219.01 shares) | | $35.98 |
(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
| Amounts in thousands | | Year ended September 30, 2016 |
| Investment Income | | |
| Dividends | | $3 |
| Income from Fidelity Central Funds | | 91,600 |
| Total income | | 91,603 |
| Expenses | | |
| Management fee | | |
| Basic fee | $33,948 | |
| Performance adjustment | (4,954) | |
| Transfer agent fees | 9,098 | |
| Distribution and service plan fees | 1,748 | |
| Accounting fees and expenses | 1,130 | |
| Independent trustees' fees and expenses | 26 | |
| Registration fees | 411 | |
| Audit | 49 | |
| Legal | 55 | |
| Miscellaneous | 44 | |
| Total expenses before reductions | 41,555 | |
| Expense reductions | (186) | 41,369 |
| Net investment income (loss) | | 50,234 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (2,983) | |
| Fidelity Central Funds | (49,218) | |
| Total net realized gain (loss) | | (52,201) |
Change in net unrealized appreciation (depreciation) on:
Investment securities | 863,918 | |
| Total change in net unrealized appreciation (depreciation) | | 863,918 |
| Net gain (loss) | | 811,717 |
| Net increase (decrease) in net assets resulting from operations | | $861,951 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Amounts in thousands | Year ended September 30, 2016 | Year ended September 30, 2015 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $50,234 | $33,786 |
| Net realized gain (loss) | (52,201) | 11,455 |
| Change in net unrealized appreciation (depreciation) | 863,918 | (243,217) |
| Net increase (decrease) in net assets resulting from operations | 861,951 | (197,976) |
| Distributions to shareholders from net investment income | (36,464) | (33,541) |
| Distributions to shareholders from net realized gain | (253,884) | (508,950) |
| Total distributions | (290,348) | (542,491) |
| Share transactions - net increase (decrease) | 792,579 | 1,113,215 |
| Total increase (decrease) in net assets | 1,364,182 | 372,748 |
| Net Assets | | |
| Beginning of period | 5,493,884 | 5,121,136 |
| End of period | $6,858,066 | $5,493,884 |
| Other Information | | |
| Undistributed net investment income end of period | $37,820 | $23,775 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class A
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | | | | |
| Net asset value, beginning of period | $32.94 | $38.00 | $34.65 | $27.78 |
| Income from Investment Operations | | | | |
| Net investment income (loss)B | .18 | .12 | .15 | .17 |
| Net realized and unrealized gain (loss) | 4.47 | (1.25) | 5.35 | 6.79 |
| Total from investment operations | 4.65 | (1.13) | 5.50 | 6.96 |
| Distributions from net investment income | (.10) | (.09) | (.16) | (.07) |
| Distributions from net realized gain | (1.50) | (3.84) | (1.99) | (.02) |
| Total distributions | (1.60) | (3.93) | (2.15) | (.09) |
| Net asset value, end of period | $35.99 | $32.94 | $38.00 | $34.65 |
| Total ReturnC,D,E | 14.55% | (3.39)% | 16.60% | 25.12% |
| Ratios to Average Net AssetsF,G | | | | |
| Expenses before reductions | .96% | 1.06% | 1.01% | 1.06%H |
| Expenses net of fee waivers, if any | .96% | 1.06% | 1.01% | 1.06%H |
| Expenses net of all reductions | .96% | 1.05% | 1.00% | 1.04%H |
| Net investment income (loss) | .52% | .33% | .41% | .59%H |
| Supplemental Data | | | | |
| Net assets, end of period (in millions) | $193 | $197 | $222 | $226 |
| Portfolio turnover rateI | 14% | 6% | 10%J | 8%J,K |
A For the period October 23, 2012 (commencement of sale of shares) to September 30, 2013.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Portfolio turnover rate excludes securities received or delivered in-kind.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class T
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | | | | |
| Net asset value, beginning of period | $32.88 | $37.91 | $34.58 | $27.78 |
| Income from Investment Operations | | | | |
| Net investment income (loss)B | .09 | .03 | .06 | .10 |
| Net realized and unrealized gain (loss) | 4.47 | (1.25) | 5.34 | 6.77 |
| Total from investment operations | 4.56 | (1.22) | 5.40 | 6.87 |
| Distributions from net investment income | – | – | (.08) | (.05) |
| Distributions from net realized gain | (1.50) | (3.81) | (1.99) | (.02) |
| Total distributions | (1.50) | (3.81) | (2.07) | (.07) |
| Net asset value, end of period | $35.94 | $32.88 | $37.91 | $34.58 |
| Total ReturnC,D,E | 14.26% | (3.63)% | 16.31% | 24.81% |
| Ratios to Average Net AssetsF,G | | | | |
| Expenses before reductions | 1.23% | 1.32% | 1.27% | 1.32%H |
| Expenses net of fee waivers, if any | 1.23% | 1.32% | 1.27% | 1.31%H |
| Expenses net of all reductions | 1.22% | 1.31% | 1.26% | 1.29%H |
| Net investment income (loss) | .25% | .07% | .15% | .34%H |
| Supplemental Data | | | | |
| Net assets, end of period (in millions) | $119 | $120 | $137 | $131 |
| Portfolio turnover rateI | 14% | 6% | 10%J | 8%J,K |
A For the period October 23, 2012 (commencement of sale of shares) to September 30, 2013.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Portfolio turnover rate excludes securities received or delivered in-kind.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class C
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | | | | |
| Net asset value, beginning of period | $32.70 | $37.68 | $34.44 | $27.78 |
| Income from Investment Operations | | | | |
| Net investment income (loss)B | (.09) | (.16) | (.13) | (.05) |
| Net realized and unrealized gain (loss) | 4.44 | (1.23) | 5.33 | 6.76 |
| Total from investment operations | 4.35 | (1.39) | 5.20 | 6.71 |
| Distributions from net investment income | – | – | – | (.03) |
| Distributions from net realized gain | (1.46) | (3.59) | (1.96) | (.02) |
| Total distributions | (1.46) | (3.59) | (1.96) | (.05) |
| Net asset value, end of period | $35.59 | $32.70 | $37.68 | $34.44 |
| Total ReturnC,D,E | 13.68% | (4.14)% | 15.73% | 24.19% |
| Ratios to Average Net AssetsF,G | | | | |
| Expenses before reductions | 1.74% | 1.83% | 1.78% | 1.84%H |
| Expenses net of fee waivers, if any | 1.73% | 1.83% | 1.78% | 1.84%H |
| Expenses net of all reductions | 1.73% | 1.82% | 1.78% | 1.82%H |
| Net investment income (loss) | (.25)% | (.44)% | (.36)% | (.18)%H |
| Supplemental Data | | | | |
| Net assets, end of period (in millions) | $63 | $63 | $72 | $65 |
| Portfolio turnover rateI | 14% | 6% | 10%J | 8%J,K |
A For the period October 23, 2012 (commencement of sale of shares) to September 30, 2013.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Portfolio turnover rate excludes securities received or delivered in-kind.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $33.00 | $38.12 | $34.75 | $28.48 | $22.21 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .29 | .24 | .28 | .30 | .24 |
| Net realized and unrealized gain (loss) | 4.47 | (1.25) | 5.35 | 6.28 | 6.18 |
| Total from investment operations | 4.76 | (1.01) | 5.63 | 6.58 | 6.42 |
| Distributions from net investment income | (.23) | (.27) | (.27) | (.27) | (.14) |
| Distributions from net realized gain | (1.50) | (3.84) | (1.99) | (.04) | (.02) |
| Total distributions | (1.73) | (4.11) | (2.26) | (.31) | (.15)B |
| Net asset value, end of period | $36.03 | $33.00 | $38.12 | $34.75 | $28.48 |
| Total ReturnC | 14.92% | (3.05)% | 16.98% | 23.36% | 29.02% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | .64% | .72% | .67% | .71% | .72% |
| Expenses net of fee waivers, if any | .64% | .72% | .67% | .71% | .72% |
| Expenses net of all reductions | .63% | .71% | .66% | .69% | .71% |
| Net investment income (loss) | .85% | .67% | .75% | .96% | .90% |
| Supplemental Data | | | | | |
| Net assets, end of period (in millions) | $6,078 | $4,722 | $4,230 | $2,953 | $2,361 |
| Portfolio turnover rateF | 14% | 6% | 10%G | 8%G,H | 21% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $.15 per share is comprised of distributions from net investment income of $.136 and distributions from net realized gain of $.015 per share.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Portfolio turnover rate excludes securities received or delivered in-kind.
H The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class K
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 | 2012 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $33.02 | $38.14 | $34.77 | $28.50 | $22.23 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .32 | .28 | .31 | .33 | .27 |
| Net realized and unrealized gain (loss) | 4.47 | (1.26) | 5.36 | 6.28 | 6.19 |
| Total from investment operations | 4.79 | (.98) | 5.67 | 6.61 | 6.46 |
| Distributions from net investment income | (.25) | (.31) | (.31) | (.30) | (.17) |
| Distributions from net realized gain | (1.50) | (3.84) | (1.99) | (.04) | (.02) |
| Total distributions | (1.75) | (4.14)B | (2.30) | (.34) | (.19) |
| Net asset value, end of period | $36.06 | $33.02 | $38.14 | $34.77 | $28.50 |
| Total ReturnC | 15.02% | (2.96)% | 17.09% | 23.47% | 29.18% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | .54% | .64% | .58% | .61% | .61% |
| Expenses net of fee waivers, if any | .54% | .64% | .58% | .61% | .61% |
| Expenses net of all reductions | .54% | .63% | .57% | .59% | .59% |
| Net investment income (loss) | .94% | .75% | .84% | 1.06% | 1.02% |
| Supplemental Data | | | | | |
| Net assets, end of period (in millions) | $100 | $76 | $109 | $105 | $47 |
| Portfolio turnover rateF | 14% | 6% | 10%G | 8%G,H | 21% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $4.14 per share is comprised of distributions from net investment income of $.307 and distributions from net realized gain of $3.836 per share.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Portfolio turnover rate excludes securities received or delivered in-kind.
H The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class I
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | | | | |
| Net asset value, beginning of period | $32.99 | $38.10 | $34.72 | $27.78 |
| Income from Investment Operations | | | | |
| Net investment income (loss)B | .27 | .22 | .25 | .25 |
| Net realized and unrealized gain (loss) | 4.48 | (1.26) | 5.36 | 6.79 |
| Total from investment operations | 4.75 | (1.04) | 5.61 | 7.04 |
| Distributions from net investment income | (.20) | (.23) | (.25) | (.08) |
| Distributions from net realized gain | (1.50) | (3.84) | (1.99) | (.02) |
| Total distributions | (1.70) | (4.07) | (2.23)C | (.10) |
| Net asset value, end of period | $36.04 | $32.99 | $38.10 | $34.72 |
| Total ReturnD,E | 14.87% | (3.14)% | 16.93% | 25.43% |
| Ratios to Average Net AssetsF,G | | | | |
| Expenses before reductions | .69% | .79% | .74% | .78%H |
| Expenses net of fee waivers, if any | .69% | .79% | .74% | .78%H |
| Expenses net of all reductions | .69% | .78% | .73% | .76%H |
| Net investment income (loss) | .79% | .60% | .68% | .87%H |
| Supplemental Data | | | | |
| Net assets, end of period (in millions) | $297 | $304 | $336 | $297 |
| Portfolio turnover rateI | 14% | 6% | 10%J | 8%J,K |
A For the period October 23, 2012 (commencement of sale of shares) to September 30, 2013.
B Calculated based on average shares outstanding during the period.
C Total distributions of $2.23 per share is comprised of distributions from net investment income of $.245 and distributions from net realized gain of $1.987 per share.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Portfolio turnover rate excludes securities received or delivered in-kind.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Stock Selector All Cap Fund Class Z
| Years ended September 30, | 2016 | 2015 | 2014 | 2013 A |
| Selected Per–Share Data | | | | |
| Net asset value, beginning of period | $32.95 | $38.09 | $34.73 | $34.24 |
| Income from Investment Operations | | | | |
| Net investment income (loss)B | .32 | .27 | .32 | .06 |
| Net realized and unrealized gain (loss) | 4.46 | (1.25) | 5.34 | .43 |
| Total from investment operations | 4.78 | (.98) | 5.66 | .49 |
| Distributions from net investment income | (.25) | (.32) | (.32) | – |
| Distributions from net realized gain | (1.50) | (3.84) | (1.99) | – |
| Total distributions | (1.75) | (4.16) | (2.30)C | – |
| Net asset value, end of period | $35.98 | $32.95 | $38.09 | $34.73 |
| Total ReturnD,E | 15.02% | (2.98)% | 17.10% | 1.43% |
| Ratios to Average Net AssetsF,G | | | | |
| Expenses before reductions | .54% | .64% | .58% | .61%H |
| Expenses net of fee waivers, if any | .54% | .64% | .58% | .61%H |
| Expenses net of all reductions | .54% | .63% | .57% | .59%H |
| Net investment income (loss) | .94% | .75% | .84% | 1.36%H |
| Supplemental Data | | | | |
| Net assets, end of period (000 omitted) | $7,881 | $7,300 | $5,812 | $101 |
| Portfolio turnover rateI | 14% | 6% | 10%J | 8%J,K |
A For the period August 13, 2013 (commencement of sale of shares) to September 30, 2013.
B Calculated based on average shares outstanding during the period.
C Total distributions of $2.30 per share is comprised of distributions from net investment income of $.315 and distributions from net realized gain of $1.987 per share.
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. Based on their most recent shareholder report date, the expenses ranged from less than .005% to .01%.
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 Portfolio turnover rate excludes securities received or delivered in-kind.
K The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended September 30, 2016
(Amounts in thousands except percentages)
1. Organization.
Fidelity Stock Selector All Cap Fund (the Fund) is a fund of Fidelity Capital 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, Stock Selector All Cap, Class K, Class I and Class Z 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.
After the close of business on June 24, 2016, all outstanding Class B shares were converted to Class A shares. All current fiscal period dollar and share amounts for Class B presented in the Notes to Financial Statements are for the period October 1, 2015 through June 24, 2016.
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, 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.
Based on its investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of theFund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. 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%. The following summarizes the Fund's investment in each non-money market Fidelity Central Fund.
| Fidelity Central Fund | Investment Manager | Investment Objective | Investment Practices | Expense Ratio(a) |
| Fidelity Equity Central Funds | FMR Co., Inc. (FMRC) | Each fund seeks capital appreciation by investing primarily in common stocks, with a concentration in a particular industry. | Delayed Delivery & When Issued Securities
Foreign Securities
Restricted Securities | Less than .005% to .01% |
(a) Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or institutional.fidelity.com as applicable. 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 contain the significant accounting policies (including investment valuation policies) of those 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. 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.
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.
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. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's NAV.
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. As of September 30, 2016, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. 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.
Distributions 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, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation and expiring capital loss carryforwards.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $1,165,472 |
| Gross unrealized depreciation | (8,105) |
| Net unrealized appreciation (depreciation) on securities | $1,157,367 |
| Tax Cost | $5,704,424 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $41,676 |
| Capital loss carryforward | $(66,524) |
| Net unrealized appreciation (depreciation) on securities and other investments | $1,157,367 |
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 fiscal period end and is subject to adjustment.
| No expiration | |
| Short-term | $(66,524) |
The tax character of distributions paid was as follows:
| | September 30, 2016 | September 30, 2015 |
| Ordinary Income | $43,463 | $ 158,155 |
| Long-term Capital Gains | 246,885 | 384,336 |
| Total | $290,348 | $ 542,491 |
4. Purchases and Sales of Investments.
Purchases and sales of securities (include the Equity Central Funds), other than short-term securities, aggregated $1,397,668 and $844,889, 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 .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% 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. In addition, the management fee is subject to a performance adjustment (up to a maximum of +/- .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Stock Selector All Cap as compared to its benchmark index, the S&P 500 Index, over the same 36 month performance period. For the reporting period, the total annual management fee rate, including the performance adjustment, was .47% of the Fund's average net assets. The performance adjustment included in the management fee rate may be higher or lower than the maximum performance adjustment rate due to the difference between the average net assets for the reporting and performance periods.
The investment adviser pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
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% | $491 | $– |
| Class T | .25% | .25% | 590 | – |
| Class B | .75% | .25% | 30 | 23 |
| Class C | .75% | .25% | 637 | 14 |
| | | | $1,748 | $37 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling 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, Class B and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 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 | | | $20 |
| Class T | | | 7 |
| Class B(a) | | | –(b) |
| Class C(a) | | | 3 |
| | | | $30 |
(a) When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
(b) In the amount of less than $500.
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, except for Class K and Class Z. FIIOC receives an asset-based fee of Class K's and Class Z's average net assets. 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 |
| Class A | $429 | .22 |
| Class T | 274 | .23 |
| Class B | 9 | .28 |
| Class C | 153 | .24 |
| Stock Selector All Cap | 7,605 | .14 |
| Class K | 37 | .05 |
| Class I | 588 | .19 |
| Class Z | 3 | .05 |
| | $9,098 | |
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.
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 $12 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.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund and the Equity Central Funds include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $143 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 in the amount of less than five hundred dollars.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $43.
8. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended September 30, | 2016 | 2015 |
| From net investment income | | |
| Class A | $564 | $525 |
| Stock Selector All Cap | 33,578 | 30,087 |
| Class K | 571 | 851 |
| Class I | 1,712 | 2,028 |
| Class Z | 39 | 50 |
| Total | $36,464 | $33,541 |
| From net realized gain | | |
| Class A | $8,730 | $21,876 |
| Class T | 5,253 | 13,580 |
| Class B | 198 | 674 |
| Class C | 2,777 | 6,829 |
| Stock Selector All Cap | 220,234 | 421,227 |
| Class K | 3,401 | 10,630 |
| Class I | 13,057 | 33,538 |
| Class Z | 234 | 596 |
| Total | $253,884 | $508,950 |
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 |
| | Year ended
September 30, 2016 | Year ended September 30, 2015 | Year ended
September 30, 2016 | Year ended September 30, 2015 |
| Class A | | | | |
| Shares sold | 494 | 576 | $16,634 | $20,919 |
| Reinvestment of distributions | 276 | 636 | 9,096 | 21,837 |
| Shares redeemed | (1,396) | (1,083) | (47,634) | (39,392) |
| Net increase (decrease) | (626) | 129 | $(21,904) | $3,364 |
| Class T | | | | |
| Shares sold | 190 | 274 | $6,375 | $9,899 |
| Reinvestment of distributions | 156 | 389 | 5,159 | 13,337 |
| Shares redeemed | (679) | (639) | (22,950) | (23,191) |
| Net increase (decrease) | (333) | 24 | $(11,416) | $45 |
| Class B | | | | |
| Shares sold | 1 | 2 | $19 | $48 |
| Reinvestment of distributions | 5 | 17 | 165 | 597 |
| Shares redeemed | (159) | (91) | (5,272) | (3,319) |
| Net increase (decrease) | (153) | (72) | $(5,088) | $(2,674) |
| Class C | | | | |
| Shares sold | 106 | 173 | $3,582 | $6,272 |
| Reinvestment of distributions | 78 | 180 | 2,546 | 6,168 |
| Shares redeemed | (349) | (333) | (11,749) | (12,027) |
| Net increase (decrease) | (165) | 20 | $(5,621) | $413 |
| Stock Selector All Cap | | | | |
| Shares sold | 60,114 | 37,980 | $2,029,587 | $1,365,446 |
| Reinvestment of distributions | 7,613 | 12,983 | 250,922 | 445,053 |
| Shares redeemed | (42,115) | (18,864) | (1,426,107) | (690,763) |
| Net increase (decrease) | 25,612 | 32,099 | $854,402 | $1,119,736 |
| Class K | | | | |
| Shares sold | 819 | 275 | $29,079 | $9,998 |
| Reinvestment of distributions | 120 | 335 | 3,972 | 11,481 |
| Shares redeemed | (465) | (1,149) | (15,711) | (42,097) |
| Net increase (decrease) | 474 | (539) | $17,340 | $(20,618) |
| Class I | | | | |
| Shares sold | 1,014 | 1,572 | $34,105 | $55,299 |
| Reinvestment of distributions | 443 | 1,026 | 14,615 | 35,171 |
| Shares redeemed | (2,420) | (2,217) | (83,697) | (80,052) |
| Net increase (decrease) | (963) | 381 | $(34,977) | $10,418 |
| Class Z | | | | |
| Shares sold | 91 | 82 | $3,001 | $3,045 |
| Reinvestment of distributions | 8 | 19 | 273 | 646 |
| Shares redeemed | (102) | (32) | (3,431) | (1,160) |
| Net increase (decrease) | (3) | 69 | $(157) | $2,531 |
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.
At the end of the period, a shareholder of record owned approximately 28% of the total outstanding shares of the Fund.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Capital Trust and Shareholders of Fidelity Stock Selector All Cap Fund:
We have audited the accompanying statement of assets and liabilities of Fidelity Stock Selector All Cap Fund (the Fund), a fund of Fidelity Capital Trust, including the schedule of investments, as of September 30, 2016, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits 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 and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2016, by correspondence with the custodians. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Stock Selector All Cap Fund as of September 30, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
November 16, 2016
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Each of the Trustees oversees 170 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.
Experience, Skills, Attributes, and Qualifications of the 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 hoc committees 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.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and sector funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. In addition, the Independent Trustees have worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. For example, a working group comprised of Independent Trustees and FMR has worked and continues to work to review the Fidelity® funds' valuation-related activities, reporting and risk management. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-present), and Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the board of Artis-Naples, Naples, Florida, and as a Trustee for Brewster Academy, Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
Charles S. Morrison (1960)
Year of Election or Appointment: 2014
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present), a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), and as a member of the Independent Directors Council (IDC) Governing Council (2010-2015). Mr. Dirks is a member of the Board of Directors for The Brookville Center for Children's Services, Inc. (2009-present).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as Chairman (2014-present) and a member (2010-present) of the Board of Directors of Dave & Buster's Entertainment, Inc. (restaurant and entertainment complexes) and a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association and as a member of the Board of Directors for The Western Union Company (global money transfer, 2006-2011), The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), and Earth Fare, Inc. (retail grocery, 2010-2014).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of Artis-Naples in Naples, Florida (2012-present), a member of the Council on Foreign Relations (1994-present), and a member of the Board of Governors, State University System of Florida (2013-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-present) and the Independent Directors Council (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a Director of the Hamilton Funds of the Bank of New York (2006-2007) and of Arcadia Resources Inc. (health care services and products, 2007-2012).
Robert W. Selander (1950)
Year of Election or Appointment: 2011
Trustee
Mr. Selander also serves as Trustee of other Fidelity® funds. Mr. Selander serves as a Director of The Western Union Company (global money transfer, 2014-present) and a non-executive Chairman of Health Equity, Inc. (health savings custodian, 2015-present). Previously, Mr. Selander served as a Member of the Advisory Board of certain Fidelity® funds (2011), and Executive Vice Chairman (2010), Chief Executive Officer (2009-2010), and President and Chief Executive Officer (1997-2009) of Mastercard, Inc.
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
William S. Stavropoulos (1939)
Year of Election or Appointment: 2002
Trustee
Vice Chairman of the Independent Trustees
Mr. Stavropoulos also serves as Trustee of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of FMR (investment adviser firm) and FMR Co., Inc. (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served on the Special Olympics International Board of Directors (1997-2006).
Marc R. Bryant (1966)
Year of Election or Appointment: 2015
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and CLO of other funds. Mr. Bryant serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company (investment adviser firm, 2015-present) and FMR Co., Inc. (investment adviser firm, 2015-present); Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2015-present) and Fidelity Investments Money Management, Inc. (investment adviser firm, 2015-present); and CLO of Fidelity Management & Research (Hong Kong) Limited and FMR Investment Management (U.K.) Limited (investment adviser firms, 2015-present) and Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present). He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and CLO of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Jeffrey S. Christian (1961)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Christian also serves as Assistant Treasurer of other funds. Mr. Christian is an employee of Fidelity Investments (2003-present).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds, and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
Scott C. Goebel (1968)
Year of Election or Appointment: 2015
Vice President
Mr. Goebel serves as Vice President of other funds and is an employee of Fidelity Investments (2001-present). Previously, Mr. Goebel served as Senior Vice President of Fidelity Management & Research Company (FMR) (investment adviser firm, 2016), Secretary of Fidelity SelectCo, LLC (investment adviser firm, 2013-2015), Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2010-2015), and Fidelity Research and Analysis Company (FRAC) (investment adviser firm, 2010-2015); General Counsel, Secretary, and Senior Vice President of FMR (investment adviser firm, 2008-2015) and FMR Co., Inc. (investment adviser firm, 2008-2015); Assistant Secretary of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2008-2015) and Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2008-2015); Chief Legal Officer (CLO) of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2008-2015); Secretary and CLO of certain Fidelity® funds (2008-2015); Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and certain funds (2007-2008); and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Thomas C. Hense (1964)
Year of Election or Appointment: 2008, 2010, or 2015
Vice President
Mr. Hense serves as Vice President of Fidelity Advisor® Multi-Asset Income Fund (2015) and other funds (High Income (2008), Small Cap (2008), and Value (2010) funds), and is an employee of Fidelity Investments (1993-present). Previously, Mr. Hense served as a portfolio manager for Fidelity's Institutional Money Management Group (Pyramis) (2003-2008).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of FMR Investment Management (U.K.) Limited (investment adviser firm, 2015-present) and Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. Mr. Brian B. Hogan is not related to Mr. Colm A. Hogan.
Colm A. Hogan (1973)
Year of Election or Appointment: 2016
Deputy Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan is an employee of Fidelity Investments (2005-present). Mr. Colm A. Hogan is not related to Mr. Brian B. Hogan.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
John F. Papandrea (1972)
Year of Election or Appointment: 2016
Anti-Money Laundering (AML) Officer
Mr. Papandrea also serves as AML Officer of other funds. Mr. Papandrea is Vice President of FMR LLC (diversified financial services company, 2008-present) and is an employee of Fidelity Investments (2005-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Renee Stagnone (1975)
Year of Election or Appointment: 2016
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Shareholder Expense Example
The Fund invests in Fidelity Central Funds, which are open-end investment companies with similar investment objectives to those of the Fund, available only to other mutual funds and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. In addition to the direct expenses incurred by the Fund presented in the table, as a shareholder of the underlying Fidelity Central Funds, the Fund also indirectly bear their proportionate share of the expenses of the underlying Fidelity Central Funds. These expenses are not included in the Fund's annualized expense ratio used to calculate either the actual or hypothetical expense estimates presented in the table but are summarized in a footnote to the table.
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, 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 (April 1, 2016 to September 30, 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.
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.
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
April 1, 2016 | Ending
Account Value
September 30, 2016 | Expenses Paid
During Period-B
April 1, 2016
to September 30, 2016 |
| Class A | .95% | | | |
| Actual | | $1,000.00 | $1,084.00 | $4.95 |
| Hypothetical-C | | $1,000.00 | $1,020.25 | $4.80 |
| Class T | 1.22% | | | |
| Actual | | $1,000.00 | $1,082.90 | $6.35 |
| Hypothetical-C | | $1,000.00 | $1,018.90 | $6.16 |
| Class C | 1.73% | | | |
| Actual | | $1,000.00 | $1,079.80 | $9.00 |
| Hypothetical-C | | $1,000.00 | $1,016.35 | $8.72 |
| Stock Selector All Cap | .63% | | | |
| Actual | | $1,000.00 | $1,085.60 | $3.28 |
| Hypothetical-C | | $1,000.00 | $1,021.85 | $3.18 |
| Class K | .53% | | | |
| Actual | | $1,000.00 | $1,086.10 | $2.76 |
| Hypothetical-C | | $1,000.00 | $1,022.35 | $2.68 |
| Class I | .68% | | | |
| Actual | | $1,000.00 | $1,085.50 | $3.55 |
| Hypothetical-C | | $1,000.00 | $1,021.60 | $3.44 |
| Class Z | .54% | | | |
| Actual | | $1,000.00 | $1,086.00 | $2.82 |
| Hypothetical-C | | $1,000.00 | $1,022.30 | $2.73 |
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 183/366 (to reflect the one-half year period). In addition to the expenses noted above, the Fund also indirectly bears its proportional share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying Fidelity Central Funds as of their most recent fiscal half year ranged from less than .005% to .01%.
C 5% return per year before expenses
Distributions (Unaudited)
Stock Selector All Cap designates 100% of the dividends distributed during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
Class A designates 100%; Class T designates 100%; Stock Selector All Cap designates 96%; Class K designates 88%; Class I designates 100%; and Class Z designates 88%; of the dividends, respectively during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund will notify shareholders in January 2017 of amounts for use in preparing 2016 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Stock Selector All Cap 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 Stock Selector All Cap Fund
The Board also considered that the fund's management fee is subject to upward or downward adjustment depending upon whether, and to what extent, the fund's investment performance for the performance period exceeds, or is exceeded by, a securities index, thus leading to a performance adjustment for the same period. The Board noted that the performance adjustment provides FMR with a strong economic incentive to seek to achieve superior performance for the fund's shareholders and helps to more closely align the interests of FMR and the shareholders of the fund.
Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should continue to benefit the shareholders of the fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered the fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes created for the purpose of facilitating the Trustees' competitive analysis of management fees and total expenses. Fidelity creates "mapped groups" by combining similar Broadridge investment objective categories that have comparable investment mandates. Combining Broadridge investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison.
Management Fee. The Board considered two proprietary management fee comparisons for the 12-month periods shown in basis points (BP) in the chart below. The group of Broadridge funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps, and without giving effect to the fund's performance adjustment, relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. Funds with comparable investment mandates offer exposure to similar types of securities. Funds with comparable management fee structures have similar management fee contractual arrangements (
e.g., flat rate charged for advisory services, all-inclusive fee rate,
etc.). "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a hypothetical TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher, and 20% had lower, management fees than the fund. The fund's actual TMG %s and the number of funds in the Total Mapped Group are in the chart below. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure without taking into account performance adjustments, if any. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee rate ranked and the impact of the fund's performance adjustment, is also included in the chart and considered by the Board.
Fidelity Stock Selector All Cap Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2015. The Board also noted the effect of the fund's performance adjustment, if any, on the fund's management fee ranking.
The Board noted that, in 2014, the ad hoc Committee on Group Fee was formed by it and the boards of other Fidelity funds to conduct an in-depth review of the "group fee" component of the management fee of funds with such management fee structures. The Committee's focus included the mechanics of the group fee, the competitive landscape of group fee structures, Fidelity funds with no group fee component and investment products not included in group fee assets. The Board also considered that, for funds subject to the group fee, FMR agreed to voluntarily waive fees over a specified period of time in amounts designed to account for assets converted from certain funds to certain collective investment trusts.
The Board also noted that, in 2013, the ad hoc Committee on Management Fees was formed to conduct an in-depth review of the management fee rates of Fidelity's active equity mutual funds. The Committee focused on the following areas: (i) standard fee structures; (ii) research consumption and trading evolution; (iii) management fee competitiveness/profitability by category; and (iv) factors that drive institutional pricing.
Based on its review, the Board concluded that the fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.
Total Expense Ratio. In its review of each class's total expense ratio, the Board considered the fund's management fee rate as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund-paid 12b-1 fees, and custodial, legal, and audit fees. The Board noted the impact of the fund's performance adjustment. The Board also noted that Fidelity may agree to waive fees and expenses from time to time, and the extent to which, if any, it has done so for the fund. As part of its review, the Board also considered the current and historical total expense ratios of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expense ratio of each of Class A, Class C, Class I, Class Z, the retail class, and Class K ranked below the competitive median for 2015 and the total expense ratio of Class T ranked above the competitive median for 2015. The Board considered that, in general, various factors can affect total expense ratios. The Board noted that the total expense ratio of Class T was above the competitive median primarily because of higher 12b-1 fees on Class T as compared to most competitor funds. Class T has a higher 12b-1 fee, but a lower front-end sales charge, than traditionally priced front-end sales charge classes. The Board considered that Class T is primarily sold load-waived in the retirement plan market where its 0.50% 12b-1 fee is comparable to competing no-load, higher 12b-1 fee classes designed specifically for retirement plans. The Board noted that the fund offers multiple classes, each of which has a different sales load and 12b-1 fee structure, and that the multiple structures are intended to offer a range of pricing options for the intermediary market. The Board also noted that the total expense ratios of the classes vary primarily by the level of their 12b-1 fees, although differences in transfer agent fees may also cause expenses to vary from class to class.
Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients with similar mandates. The Board noted the findings of the 2013 ad hoc joint committee (created with the board of other Fidelity funds), which reviewed and compared Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds, including the differences in services provided, fees charged, and costs incurred, as well as competition in their respective marketplaces.
Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that, although Class T was above the median of the universe presented for comparison, the total expense ratio of each class of the fund was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and servicing the fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, Fidelity presents to the Board information about the profitability of its relationship with the fund. Fidelity calculates profitability information for each fund, as well as aggregate profitability information for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and was satisfied that the profitability was not excessive.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale as assets grow through increased services to the fund, through waivers or reimbursements, or through fee or expense ratio reductions. The Board also noted that in 2013, it and the boards of other Fidelity funds created an ad hoc committee (the Economies of Scale Committee) to analyze whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total group assets increase, and for higher group fee rates as total group assets decrease (with "group assets" defined to include fund assets under FMR's management plus the assets of sector funds previously under FMR's management). FMR calculates the group fee rates based on a tiered asset "breakpoint" schedule that varies based on asset class. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total Fidelity fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will benefit from lower management fees as group assets increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including: (i) fund performance trends and Fidelity's long-term strategies for certain funds; (ii) the various share classes employed by Fidelity and the attributes of each class, together with similar information on the distribution and servicing payments made by Fidelity or the funds to third-party participants in the distribution channels; (iii) fund profitability, and fund performance in relation to fund profitability; (iv) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (v) annual fund profitability margins; (vi) the realization of fall-out benefits in and attribution of fall-out benefits to certain Fidelity business units; (vii) the appropriateness of certain funds' benchmarks; (viii) the rationalization for certain share classes and expenses; (ix) sub-advisory fee rates for comparable investment mandates; (x) product strategy for certain underperforming funds; and (xi) Fidelity's resources and strategy for cybersecurity.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
Corporate Headquarters
245 Summer St.
Boston, MA 02210
www.fidelity.com
FSS-ANN-1116
1.538295.119
Item 2.
Code of Ethics
As of the end of the period, September 30, 2016, Fidelity Capital Trust (the trust) has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its President and Treasurer and its Chief Financial Officer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
Item 3.
Audit Committee Financial Expert
The Board of Trustees of the trust has determined that Joseph Mauriello is an audit committee financial expert, as defined in Item 3 of Form N-CSR. Mr. Mauriello is independent for purposes of Item 3 of Form N-CSR.
Item 4.
Principal Accountant Fees and Services
Fees and Services
The following table presents fees billed by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, “Deloitte Entities”) in each of the last two years for services rendered to Fidelity Stock Selector All Cap Fund (the “Fund”):
Services Billed by Deloitte Entities
September 30, 2016 FeesA
| | | | |
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Stock Selector All Cap Fund | $31,000 | $- | $5,200 | $1,200 |
| | | | |
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Stock Selector All Cap Fund | $37,000 | $- | $7,400 | $1,100 |
A Amounts may reflect rounding.
The following table presents fees billed by Deloitte Entities that were required to be approved by the Audit Committee for services that relate directly to the operations and financial reporting of the Fund and that are rendered on behalf of Fidelity Management & Research Company (“FMR”) and entities controlling, controlled by, or under common control with FMR (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Fund (“Fund Service Providers”):
Services Billed by Deloitte Entities
| | | | | |
| September 30, 2016A | September 30, 2015A | |
Audit-Related Fees | $35,000 | $- | |
Tax Fees | $- | $10,000 | |
All Other Fees | $- | $175,000 | |
A Amounts may reflect rounding.
“Audit-Related Fees” represent fees billed for assurance and related services that are reasonably related to the performance of the fund audit or the review of the fund's financial statements and that are not reported under Audit Fees.
“Tax Fees” represent fees billed for tax compliance, tax advice or tax planning that relate directly to the operations and financial reporting of the fund.
“All Other Fees” represent fees billed for services provided to the fund or Fund Service Provider, a significant portion of which are assurance related, that relate directly to the operations and financial reporting of the fund, excluding those services that are reported under Audit Fees, Audit-Related Fees or Tax Fees.
Assurance services must be performed by an independent public accountant.
* * *
The aggregate non-audit fees billed by Deloitte Entities for services rendered to the Fund, FMR (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any Fund Service Provider for each of the last two fiscal years of the Fund are as follows:
| | | | | |
Billed By | September 30, 2016 A | September 30, 2015 A | |
Deloitte Entities | $70,000 | $315,000 | |
A Amounts may reflect rounding.
The trust's Audit Committee has considered non-audit services that were not pre-approved that were provided by Deloitte Entities to Fund Service Providers to be compatible with maintaining the independence of Deloitte Entities in its audit of the Fund, taking into account representations from Deloitte Entities, in accordance with Public Company Accounting Oversight Board rules, regarding its independence from the Fund and its related entities and FMR’s review of the appropriateness and permissibility under applicable law of such non-audit services prior to their provision to the Fund Service Providers.
Audit Committee Pre-Approval Policies and Procedures
The trust’s Audit Committee must pre-approve all audit and non-audit services provided by a fund’s independent registered public accounting firm relating to the operations or financial reporting of the fund. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.
The Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee’s consideration of non-audit services by the audit firms that audit the Fidelity funds. The policies and procedures require that any non-audit service provided by a fund audit firm to a Fidelity fund and any non-audit service provided by a fund auditor to a Fund Service Provider that relates directly to the operations and financial reporting of a Fidelity fund (“Covered Service”) are subject to approval by the Audit Committee before such service is provided.
All Covered Services must be approved in advance of provision of the service either: (i) by formal resolution of the Audit Committee, or (ii) by oral or written approval of the service by the Chair of the Audit Committee (or if the Chair is unavailable, such other member of the Audit Committee as may be designated by the Chair to act in the Chair’s absence). The approval contemplated by (ii) above is permitted where the Treasurer determines that action on such an engagement is necessary before the next meeting of the Audit Committee.
Non-audit services provided by a fund audit firm to a Fund Service Provider that do not relate directly to the operations and financial reporting of a Fidelity fund are reported to the Audit Committee on a periodic basis.
Non-Audit Services Approved Pursuant to Rule 2-01(c)(7)(i)(C) and (ii) of Regulation S-X (“De Minimis Exception”)
There were no non-audit services approved or required to be approved by the Audit Committee pursuant to the De Minimis Exception during the Fund’s last two fiscal years relating to services provided to (i) the Fund or (ii) any Fund Service Provider that relate directly to the operations and financial reporting of the Fund.
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 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 trust’s 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) | Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH. |
(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 Capital Trust
| |
By: | /s/ Stacie M. Smith |
| Stacie M. Smith |
| President and Treasurer |
| |
Date: | November 25, 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: | November 25, 2016 |
| |
By: | /s/Howard J. Galligan III |
| Howard J. Galligan III |
| Chief Financial Officer |
| |
Date: | November 25, 2016 |
