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 811-3010
Fidelity Advisor Series VII
(Exact name of registrant as specified in charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address of principal executive offices) (Zip code)
Eric D. Roiter, Secretary
82 Devonshire St.
Boston, Massachusetts 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-563-7000
Date of fiscal year end: | July 31 |
| |
Date of reporting period: | January 31, 2007 |
Item 1. Reports to Stockholders
Fidelity Advisor
Focus Funds®
Class A, Class T, Class B and Class C
Biotechnology
Communications Equipment (formerly Developing Communications)
Consumer Discretionary (formerly Consumer Industries)
Electronics
Energy (formerly Natural Resources)
Financial Services
Health Care
Industrials (formerly Cyclical Industries)
Technology
Utilities (formerly Telecommunications
& Utilities Growth)
Semiannual Report
January 31, 2007
(2_fidelity_logos) (Registered_Trademark)
Contents
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at 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 Corp. or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the funds. This report is not authorized for distribution to prospective investors in the funds 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 quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.advisor.fidelity.com.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the funds nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(Photograph of Edward C. Johnson 3d.)
Dear Shareholder:
We have seen consistently strong performance from stocks and bonds of late, and some relief in energy prices, but the housing market slowdown bears watching for how it might affect the consumer. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies
indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Advisor Biotechnology Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,101.30 | $ 7.41 |
HypotheticalA | $ 1,000.00 | $ 1,018.15 | $ 7.12 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,099.90 | $ 8.73 |
HypotheticalA | $ 1,000.00 | $ 1,016.89 | $ 8.39 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,098.20 | $ 11.37 |
HypotheticalA | $ 1,000.00 | $ 1,014.37 | $ 10.92 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,098.20 | $ 11.37 |
HypotheticalA | $ 1,000.00 | $ 1,014.37 | $ 10.92 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,104.20 | $ 6.10 |
HypotheticalA | $ 1,000.00 | $ 1,019.41 | $ 5.85 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.40% |
Class T | 1.65% |
Class B | 2.15% |
Class C | 2.15% |
Institutional Class | 1.15% |
Semiannual Report
Advisor Biotechnology Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Amgen, Inc. | 13.0 | 5.5 |
Genentech, Inc. | 12.5 | 6.4 |
Gilead Sciences, Inc. | 11.0 | 6.2 |
Biogen Idec, Inc. | 6.8 | 6.8 |
Cephalon, Inc. | 4.4 | 4.4 |
Celgene Corp. | 4.2 | 7.9 |
Genzyme Corp. | 4.1 | 5.8 |
MedImmune, Inc. | 4.0 | 3.2 |
Vertex Pharmaceuticals, Inc. | 3.0 | 3.1 |
Alexion Pharmaceuticals, Inc. | 2.8 | 2.4 |
| 65.8 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
 | Biotechnology | 88.5% | |
 | Pharmaceuticals | 7.4% | |
 | Life Sciences Tools & Services | 2.7% | |
 | Health Care Equipment & Supplies | 1.4% | |
 | Health Care Providers & Services | 0.1% | |
 | All Others* | (0.1)%(dagger) | |
(dagger) Short-term investments and net other assets are not included in the pie chart. |
|
As of July 31, 2006 |
| Biotechnology | 76.6% | |
| Life Sciences Tools & Services | 11.0% | |
| Pharmaceuticals | 9.9% | |
 | Health Care Equipment & Supplies | 2.2% | |
| Health Care Providers & Services | 0.2% | |
 | All Others* | 0.1% | |
* Includes short-term investments and net other assets. |
Biotechnology
Advisor Biotechnology Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 100.1% |
| Shares | | Value (Note 1) |
BIOTECHNOLOGY - 88.5% |
Biotechnology - 88.5% |
Acadia Pharmaceuticals, Inc. (a) | 21,800 | | $ 156,088 |
Acorda Therapeutics, Inc. | 5,600 | | 96,824 |
Affymax, Inc. (a) | 1,500 | | 55,260 |
Alexion Pharmaceuticals, Inc. (a) | 40,200 | | 1,671,114 |
Alkermes, Inc. (a) | 41,640 | | 621,269 |
Alnylam Pharmaceuticals, Inc. (a) | 10,000 | | 211,800 |
Altus Pharmaceuticals, Inc. | 6,212 | | 113,183 |
Amgen, Inc. (a) | 111,310 | | 7,832,882 |
Amylin Pharmaceuticals, Inc. (a) | 35,002 | | 1,357,378 |
Arena Pharmaceuticals, Inc. (a) | 10,800 | | 137,916 |
ARIAD Pharmaceuticals, Inc. (a) | 26,053 | | 133,391 |
Biogen Idec, Inc. (a) | 84,834 | | 4,100,876 |
BioMarin Pharmaceutical, Inc. (a) | 6,624 | | 125,459 |
Celgene Corp. (a) | 46,808 | | 2,512,653 |
Cephalon, Inc. (a) | 36,399 | | 2,635,652 |
Combinatorx, Inc. (a) | 12,700 | | 106,172 |
Cubist Pharmaceuticals, Inc. (a) | 12,500 | | 230,000 |
CV Therapeutics, Inc. (a) | 13,400 | | 180,766 |
Cytos Biotechnology AG (a) | 636 | | 70,312 |
Emergent BioSolutions, Inc. | 15,710 | | 237,064 |
Encysive Pharmaceuticals, Inc. (a) | 13,200 | | 44,220 |
Genentech, Inc. (a) | 86,800 | | 7,583,716 |
Genomic Health, Inc. (a) | 7,900 | | 180,278 |
Genzyme Corp. (a) | 37,520 | | 2,466,190 |
Gilead Sciences, Inc. (a) | 103,300 | | 6,644,256 |
GTx, Inc. (a) | 9,400 | | 174,840 |
Human Genome Sciences, Inc. (a) | 90,230 | | 1,062,909 |
Infinity Pharmaceuticals, Inc. (a) | 1,899 | | 27,668 |
Isis Pharmaceuticals, Inc. (a) | 31,900 | | 331,441 |
Ligand Pharmaceuticals, Inc. Class B (a) | 10,400 | | 135,096 |
MannKind Corp. (a) | 23,300 | | 385,848 |
Martek Biosciences (a) | 8,000 | | 186,480 |
Medarex, Inc. (a) | 64,285 | | 865,919 |
MedImmune, Inc. (a) | 70,000 | | 2,426,200 |
Momenta Pharmaceuticals, Inc. (a) | 11,308 | | 218,131 |
Myriad Genetics, Inc. (a) | 20,044 | | 716,373 |
Neurocrine Biosciences, Inc. (a) | 17,365 | | 242,763 |
Novacea, Inc. | 4,500 | | 31,365 |
OSI Pharmaceuticals, Inc. (a) | 43,500 | | 1,479,870 |
PDL BioPharma, Inc. (a) | 51,500 | | 1,056,265 |
Pharmion Corp. (a) | 17,600 | | 560,560 |
Regeneron Pharmaceuticals, Inc. (a) | 22,499 | | 447,505 |
Savient Pharmaceuticals, Inc. (a) | 19,094 | | 285,073 |
Theravance, Inc. (a) | 19,000 | | 652,080 |
Trubion Pharmaceuticals, Inc. | 4,700 | | 97,948 |
United Therapeutics Corp. (a) | 7,703 | | 412,881 |
Vanda Pharmaceuticals, Inc. | 4,300 | | 128,441 |
Vertex Pharmaceuticals, Inc. (a) | 51,700 | | 1,827,595 |
|
| Shares | | Value (Note 1) |
ViaCell, Inc. (a) | 500 | | $ 2,790 |
Zymogenetics, Inc. (a) | 13,500 | | 215,325 |
| | 53,476,085 |
HEALTH CARE EQUIPMENT & SUPPLIES - 1.4% |
Health Care Equipment - 1.0% |
Clinical Data, Inc. (a) | 2,459 | | 45,885 |
IntraLase Corp. (a) | 300 | | 7,380 |
Quidel Corp. (a) | 39,800 | | 540,882 |
| | 594,147 |
Health Care Supplies - 0.4% |
Gen-Probe, Inc. (a) | 4,723 | | 244,274 |
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | | 838,421 |
HEALTH CARE PROVIDERS & SERVICES - 0.1% |
Health Care Services - 0.1% |
Oracle Healthcare Acquisition Corp. unit | 9,600 | | 83,040 |
LIFE SCIENCES TOOLS & SERVICES - 2.7% |
Life Sciences Tools & Services - 2.7% |
Advanced Magnetics, Inc. (a) | 1,000 | | 60,930 |
Applera Corp. - Celera Genomics Group (a) | 39,700 | | 629,642 |
Exelixis, Inc. (a) | 39,500 | | 387,100 |
QIAGEN NV (a) | 31,800 | | 549,186 |
| | 1,626,858 |
PHARMACEUTICALS - 7.4% |
Pharmaceuticals - 7.4% |
Akorn, Inc. (a) | 19,800 | | 121,374 |
Cardiome Pharma Corp. (a) | 2,600 | | 29,692 |
Catalyst Pharmaceutical Partners, Inc. | 10,200 | | 65,280 |
Cypress Bioscience, Inc. (a) | 19,200 | | 158,592 |
Elan Corp. PLC sponsored ADR (a) | 66,500 | | 827,925 |
New River Pharmaceuticals, Inc. (a) | 27,078 | | 1,513,660 |
Pozen, Inc. (a) | 2,000 | | 33,820 |
Sepracor, Inc. (a) | 25,096 | | 1,431,978 |
Somaxon Pharmaceuticals, Inc. (a) | 2,200 | | 29,238 |
Xenoport, Inc. (a) | 11,600 | | 276,544 |
| | 4,488,103 |
TOTAL COMMON STOCKS (Cost $55,179,377) | 60,512,507 |
Money Market Funds - 0.4% |
| Shares | | Value (Note 1) |
Fidelity Cash Central Fund, 5.35% (b)
(Cost $242,169) | 242,169 | | $ 242,169 |
TOTAL INVESTMENT PORTFOLIO - 100.5% (Cost $55,421,546) | | 60,754,676 |
NET OTHER ASSETS - (0.5)% | | (300,592) |
NET ASSETS - 100% | $ 60,454,084 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 16,203 |
Fidelity Securities Lending Cash Central Fund | 24,633 |
Total | $ 40,836 |
Income Tax Information |
At July 31, 2006, the fund had a capital loss carryforward of approximately $6,990,407 all of which will expire on July 31, 2011. |
See accompanying notes which are an integral part of the financial statements.
Biotechnology
Advisor Biotechnology Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $55,179,377) | $ 60,512,507 | |
Fidelity Central Funds (cost $242,169) | 242,169 | |
Total Investments (cost $55,421,546) | | $ 60,754,676 |
Receivable for investments sold | | 273,493 |
Receivable for fund shares sold | | 102,648 |
Interest receivable | | 1,996 |
Prepaid expenses | | 258 |
Other receivables | | 4,886 |
Total assets | | 61,137,957 |
| | |
Liabilities | | |
Payable for investments purchased | $ 282,922 | |
Payable for fund shares redeemed | 268,666 | |
Accrued management fee | 30,822 | |
Distribution fees payable | 34,424 | |
Other affiliated payables | 21,175 | |
Other payables and accrued expenses | 45,864 | |
Total liabilities | | 683,873 |
| | |
Net Assets | | $ 60,454,084 |
Net Assets consist of: | | |
Paid in capital | | $ 57,381,415 |
Accumulated net investment loss | | (502,295) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (1,758,166) |
Net unrealized appreciation (depreciation) on investments | | 5,333,130 |
Net Assets | | $ 60,454,084 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption price per share ($14,381,708 ÷ 1,917,263 shares) | | $ 7.50 |
| | |
Maximum offering price per share (100/94.25 of $7.50) | | $ 7.96 |
Class T:
Net Asset Value and redemption price per share ($15,063,224 ÷ 2,039,733 shares) | | $ 7.38 |
| | |
Maximum offering price per share (100/96.50 of $7.38) | | $ 7.65 |
Class B:
Net Asset Value and offering price per share ($15,215,157 ÷ 2,125,677 shares)A | | $ 7.16 |
| | |
Class C:
Net Asset Value and offering price per share ($14,572,421 ÷ 2,035,380 shares)A | | $ 7.16 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($1,221,574 ÷ 160,114 shares) | | $ 7.63 |
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.
Semiannual Report
Advisor Biotechnology Fund
Financial Statements - continued
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 2,116 |
Interest | | 53 |
Income from Fidelity Central Funds (including $24,633 from security lending) | | 40,836 |
Total income | | 43,005 |
| | |
Expenses | | |
Management fee | $ 168,407 | |
Transfer agent fees | 121,479 | |
Distribution fees | 203,364 | |
Accounting and security lending fees | 13,822 | |
Custodian fees and expenses | 5,956 | |
Independent trustees' compensation | 100 | |
Registration fees | 40,158 | |
Audit | 22,061 | |
Legal | 837 | |
Miscellaneous | 21,020 | |
Total expenses before reductions | 597,204 | |
Expense reductions | (51,904) | 545,300 |
Net investment income (loss) | | (502,295) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 6,225,855 | |
Foreign currency transactions | (10) | |
Total net realized gain (loss) | | 6,225,845 |
Change in net unrealized appreciation (depreciation) on investment securities | | (60,069) |
Net gain (loss) | | 6,165,776 |
Net increase (decrease) in net assets resulting from operations | | $ 5,663,481 |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (502,295) | $ (1,015,236) |
Net realized gain (loss) | 6,225,845 | 1,447,883 |
Change in net unrealized appreciation (depreciation) | (60,069) | (1,063,236) |
Net increase (decrease) in net assets resulting from operations | 5,663,481 | (630,589) |
Share transactions - net increase (decrease) | (1,549,589) | 1,061,142 |
Redemption fees | 534 | 8,381 |
Total increase (decrease) in net assets | 4,114,426 | 438,934 |
| | |
Net Assets | | |
Beginning of period | 56,339,658 | 55,900,724 |
End of period (including accumulated net investment loss of $502,295 and $0, respectively) | $ 60,454,084 | $ 56,339,658 |
See accompanying notes which are an integral part of the financial statements.
Biotechnology
Financial Highlights - Class A
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.81 | $ 6.80 | $ 6.00 | $ 5.94 | $ 4.39 | $ 7.09 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.09) | (.08) H | (.09) | (.05) | (.07) |
Net realized and unrealized gain (loss) | .74 | .10 | .88 | .15 | 1.60 | (2.64) |
Total from investment operations | .69 | .01 | .80 | .06 | 1.55 | (2.71) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | .01 |
Net asset value, end of period | $ 7.50 | $ 6.81 | $ 6.80 | $ 6.00 | $ 5.94 | $ 4.39 |
Total Return B,C,D | 10.13% | .15% | 13.33% | 1.01% | 35.31% | (38.08)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.57% A | 1.48% | 1.56% | 1.68% | 2.04% | 1.99% |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.45% | 1.50% | 1.50% | 1.50% |
Expenses net of all reductions | 1.40% A | 1.37% | 1.43% | 1.48% | 1.47% | 1.46% |
Net investment income (loss) | (1.25)% A | (1.29)% | (1.36)% H | (1.38)% | (1.11)% | (1.19)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 14,382 | $ 12,539 | $ 11,022 | $ 10,197 | $ 7,718 | $ 4,657 |
Portfolio turnover rate G | 106% A | 62% | 30% | 50% | 71% | 113% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.0004 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.37)%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.71 | $ 6.72 | $ 5.95 | $ 5.90 | $ 4.37 | $ 7.07 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.11) | (.10) H | (.10) | (.06) | (.09) |
Net realized and unrealized gain (loss) | .72 | .10 | .87 | .15 | 1.59 | (2.62) |
Total from investment operations | .67 | (.01) | .77 | .05 | 1.53 | (2.71) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | .01 |
Net asset value, end of period | $ 7.38 | $ 6.71 | $ 6.72 | $ 5.95 | $ 5.90 | $ 4.37 |
Total Return B,C,D | 9.99% | (.15)% | 12.94% | .85% | 35.01% | (38.19)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.89% A | 1.79% | 1.93% | 2.10% | 2.39% | 2.27% |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.70% | 1.75% | 1.75% | 1.75% |
Expenses net of all reductions | 1.65% A | 1.62% | 1.68% | 1.73% | 1.72% | 1.72% |
Net investment income (loss) | (1.50)% A | (1.54)% | (1.61)% H | (1.63)% | (1.36)% | (1.45)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 15,063 | $ 13,808 | $ 14,177 | $ 13,367 | $ 10,281 | $ 6,861 |
Portfolio turnover rate G | 106% A | 62% | 30% | 50% | 71% | 113% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.0004 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.61)%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.52 | $ 6.56 | $ 5.84 | $ 5.82 | $ 4.33 | $ 7.05 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.07) | (.14) | (.13) H | (.13) | (.09) | (.12) |
Net realized and unrealized gain (loss) | .71 | .10 | .85 | .15 | 1.58 | (2.61) |
Total from investment operations | .64 | (.04) | .72 | .02 | 1.49 | (2.73) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | .01 |
Net asset value, end of period | $ 7.16 | $ 6.52 | $ 6.56 | $ 5.84 | $ 5.82 | $ 4.33 |
Total Return B,C,D | 9.82% | (.61)% | 12.33% | .34% | 34.41% | (38.58)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 2.31% A | 2.23% | 2.33% | 2.46% | 2.78% | 2.74% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.19% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.12% | 2.18% | 2.22% | 2.22% | 2.22% |
Net investment income (loss) | (2.00)% A | (2.04)% | (2.11)% H | (2.12)% | (1.86)% | (1.95)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 15,215 | $ 14,938 | $ 16,921 | $ 16,819 | $ 15,154 | $ 10,218 |
Portfolio turnover rate G | 106% A | 62% | 30% | 50% | 71% | 113% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.0004 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (2.11)%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.52 | $ 6.57 | $ 5.84 | $ 5.82 | $ 4.33 | $ 7.05 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.07) | (.14) | (.13) H | (.13) | (.09) | (.12) |
Net realized and unrealized gain (loss) | .71 | .09 | .86 | .15 | 1.58 | (2.61) |
Total from investment operations | .64 | (.05) | .73 | .02 | 1.49 | (2.73) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | .01 |
Net asset value, end of period | $ 7.16 | $ 6.52 | $ 6.57 | $ 5.84 | $ 5.82 | $ 4.33 |
Total Return B,C,D | 9.82% | (.76)% | 12.50% | .34% | 34.41% | (38.58)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 2.27% A | 2.17% | 2.24% | 2.31% | 2.58% | 2.57% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.19% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.12% | 2.18% | 2.23% | 2.22% | 2.22% |
Net investment income (loss) | (2.00)% A | (2.04)% | (2.11)% H | (2.13)% | (1.86)% | (1.95)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 14,572 | $ 13,787 | $ 12,538 | $ 13,215 | $ 10,493 | $ 8,204 |
Portfolio turnover rate G | 106% A | 62% | 30% | 50% | 71% | 113% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.0004 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (2.11)%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Biotechnology
Financial Highlights - Institutional Class
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.91 | $ 6.89 | $ 6.06 | $ 5.97 | $ 4.40 | $ 7.09 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | (.04) | (.07) | (.06) G | (.06) | (.04) | (.06) |
Net realized and unrealized gain (loss) | .76 | .09 | .89 | .15 | 1.61 | (2.64) |
Total from investment operations | .72 | .02 | .83 | .09 | 1.57 | (2.70) |
Redemption fees added to paid in capital D | - I | - I | - I | - I | - I | .01 |
Net asset value, end of period | $ 7.63 | $ 6.91 | $ 6.89 | $ 6.06 | $ 5.97 | $ 4.40 |
Total Return B,C | 10.42% | .29% | 13.70% | 1.51% | 35.68% | (37.94)% |
Ratios to Average Net Assets E,H | | | | | | |
Expenses before reductions | 1.16% A | 1.05% | 1.10% | 1.16% | 1.37% | 1.41% |
Expenses net of fee waivers, if any | 1.15% A | 1.05% | 1.10% | 1.16% | 1.25% | 1.25% |
Expenses net of all reductions | 1.15% A | 1.03% | 1.09% | 1.14% | 1.22% | 1.22% |
Net investment income (loss) | (1.00)% A | (.94)% | (1.02)% G | (1.04)% | (.86)% | (.94)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,222 | $ 1,268 | $ 1,243 | $ 1,146 | $ 1,153 | $ 857 |
Portfolio turnover rate F | 106% A | 62% | 30% | 50% | 71% | 113% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Investment income per share reflects a special dividend which amounted to $.0004 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.02)%. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Biotechnology Fund (the Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available,
are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Biotechnology
1. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 7,897,813 |
Unrealized depreciation | (3,392,840) |
Net unrealized appreciation (depreciation) | $ 4,504,973 |
Cost for federal income tax purposes | $ 56,249,703 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $31,332,854 and $33,249,699, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | .00% | .25% | $ 17,345 | $ 709 |
Class T | .25% | .25% | 36,916 | - |
Class B | .75% | .25% | 77,438 | 58,079 |
Class C | .75% | .25% | 71,665 | 15,976 |
| | | $ 203,364 | $ 74,764 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 7,774 |
Class T | 4,607 |
Class B* | 21,614 |
Class C* | 2,300 |
| $ 36,295 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets* |
Class A | $ 28,147 | .41 |
Class T | 35,126 | .48 |
Class B | 30,984 | .40 |
Class C | 25,602 | .36 |
Institutional Class | 1,620 | .25 |
| $ 121,479 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds, are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
Biotechnology
4. Fees and Other Transactions with Affiliates - continued
Investments in Fidelity Central Funds - continued
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 Fidelity Management & Research Company, FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $161 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $74 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds.
7. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense
Limitations | Reimbursement
from adviser |
Class A | 1.40% | $ 11,679 |
Class T | 1.65% | 17,659 |
Class B | 2.15% | 12,579 |
Class C | 2.15% | 8,601 |
Institutional Class | 1.15% | 75 |
| | $ 50,593 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $1,311 for the period.
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
8. Other - continued
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 | Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 381,291 | 802,915 | $ 2,745,225 | $ 5,733,744 |
Shares redeemed | (305,892) | (581,094) | (2,256,107) | (4,036,446) |
Net increase (decrease) | 75,399 | 221,821 | $ 489,118 | $ 1,697,298 |
Class T | | | | |
Shares sold | 258,991 | 587,840 | $ 1,862,572 | $ 4,097,337 |
Shares redeemed | (276,896) | (638,853) | (2,000,033) | (4,417,619) |
Net increase (decrease) | (17,905) | (51,013) | $ (137,461) | $ (320,282) |
Class B | | | | |
Shares sold | 167,375 | 419,648 | $ 1,142,065 | $ 2,840,429 |
Shares redeemed | (332,781) | (706,101) | (2,328,723) | (4,753,466) |
Net increase (decrease) | (165,406) | (286,453) | $ (1,186,658) | $ (1,913,037) |
Class C | | | | |
Shares sold | 191,419 | 744,203 | $ 1,344,429 | $ 5,179,930 |
Shares redeemed | (270,075) | (539,467) | (1,881,167) | (3,621,319) |
Net increase (decrease) | (78,656) | 204,736 | $ (536,738) | $ 1,558,611 |
Institutional Class | | | | |
Shares sold | 8,890 | 94,904 | $ 66,068 | $ 686,802 |
Shares redeemed | (32,127) | (92,008) | (243,918) | (648,250) |
Net increase (decrease) | (23,237) | 2,896 | $ (177,850) | $ 38,552 |
Biotechnology
Advisor Communications Equipment Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period *
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,146.80 | $ 7.58 |
Hypothetical A | $ 1,000.00 | $ 1,018.15 | $ 7.12 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,146.00 | $ 8.93 |
Hypothetical A | $ 1,000.00 | $ 1,016.89 | $ 8.39 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,143.10 | $ 11.61 |
Hypothetical A | $ 1,000.00 | $ 1,014.37 | $ 10.92 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,143.10 | $ 11.61 |
Hypothetical A | $ 1,000.00 | $ 1,014.37 | $ 10.92 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,150.20 | $ 6.23 |
Hypothetical A | $ 1,000.00 | $ 1,019.41 | $ 5.85 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.40% |
Class T | 1.65% |
Class B | 2.15% |
Class C | 2.15% |
Institutional Class | 1.15% |
Semiannual Report
Advisor Communications Equipment Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
QUALCOMM, Inc. | 20.0 | 7.8 |
Cisco Systems, Inc. | 10.2 | 0.0 |
Comverse Technology, Inc. | 7.7 | 5.5 |
Research In Motion Ltd. | 6.2 | 1.8 |
Motorola, Inc. | 4.5 | 7.0 |
Corning, Inc. | 4.2 | 8.4 |
Powerwave Technologies, Inc. | 3.9 | 0.9 |
F5 Networks, Inc. | 3.6 | 2.3 |
Juniper Networks, Inc. | 3.5 | 2.4 |
Sonus Networks, Inc. | 2.4 | 1.0 |
| 66.2 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Communications Equipment | 80.5% | |
 | Semiconductors & Semiconductor Equipment | 6.3% | |
 | Software | 4.0% | |
| Internet Software & Services | 2.4% | |
 | Wireless Telecommunication Services | 2.2% | |
| All Others * | 4.6% | |
|
As of July 31, 2006 |
| Communications Equipment | 62.3% | |
| Semiconductors & Semiconductor Equipment | 12.1% | |
| Wireless Telecommunication Services | 8.2% | |
| Internet Software & Services | 5.3% | |
| Computers & Peripherals | 3.3% | |
| All Others * | 8.8% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Communications Equipment
Advisor Communications Equipment Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.1% |
| Shares | | Value (Note 1) |
COMMERCIAL SERVICES & SUPPLIES - 1.1% |
Diversified Commercial & Professional Services - 1.1% |
Tele Atlas NV (a) | 5,400 | | $ 111,554 |
COMMUNICATIONS EQUIPMENT - 80.3% |
Communications Equipment - 80.3% |
3Com Corp. (a) | 7,700 | | 30,030 |
Acme Packet, Inc. | 100 | | 1,588 |
ADC Telecommunications, Inc. (a) | 3,900 | | 62,946 |
Adtran, Inc. | 3,183 | | 70,535 |
ADVA AG Optical Networking (a) | 7,013 | | 76,596 |
Alcatel-Lucent SA sponsored ADR | 8,803 | | 114,439 |
Alvarion Ltd. (a) | 3,200 | | 20,768 |
AudioCodes Ltd. (a) | 20,800 | | 205,920 |
Avanex Corp. (a) | 11,600 | | 24,708 |
Bookham, Inc. (a) | 18,772 | | 54,439 |
Ceragon Networks Ltd. (a) | 100 | | 598 |
Ciena Corp. (a) | 5,707 | | 160,310 |
Cisco Systems, Inc. (a) | 40,000 | | 1,063,600 |
Comtech Group, Inc. (a) | 7,601 | | 125,112 |
Comverse Technology, Inc. (a) | 41,606 | | 805,076 |
Corning, Inc. (a) | 21,200 | | 441,808 |
ECI Telecom Ltd. (a) | 5,700 | | 48,564 |
F5 Networks, Inc. (a) | 5,200 | | 371,488 |
Foundry Networks, Inc. (a) | 9,000 | | 130,230 |
Foxconn International Holdings Ltd. (a) | 2,000 | | 5,981 |
Ixia (a) | 2,963 | | 28,000 |
JDS Uniphase Corp. (a) | 4,600 | | 81,788 |
Juniper Networks, Inc. (a) | 20,150 | | 365,118 |
Motorola, Inc. | 23,500 | | 466,475 |
Nortel Networks Corp. (a) | 2,000 | | 53,680 |
Orckit Communications Ltd. (a) | 3,800 | | 37,259 |
Powerwave Technologies, Inc. (a) | 70,600 | | 412,304 |
QUALCOMM, Inc. | 55,300 | | 2,082,599 |
Research In Motion Ltd. (a) | 5,040 | | 644,011 |
Riverstone Networks, Inc. (a) | 30,300 | | 0 |
Sonus Networks, Inc. (a) | 35,304 | | 255,601 |
Symmetricom, Inc. (a) | 8,145 | | 69,558 |
Tekelec (a) | 4,600 | | 70,840 |
Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 22 | | 875 |
| | 8,382,844 |
COMPUTERS & PERIPHERALS - 1.4% |
Computer Hardware - 1.2% |
Compal Electronics, Inc. | 5,670 | | 5,123 |
Concurrent Computer Corp. (a) | 77,917 | | 116,876 |
NEC Corp. sponsored ADR | 90 | | 455 |
| | 122,454 |
Computer Storage & Peripherals - 0.2% |
SanDisk Corp. (a) | 610 | | 24,522 |
TOTAL COMPUTERS & PERIPHERALS | | 146,976 |
|
| Shares | | Value (Note 1) |
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.4% |
Alternative Carriers - 0.4% |
Level 3 Communications, Inc. (a) | 5,900 | | $ 36,639 |
ELECTRICAL EQUIPMENT - 0.1% |
Electrical Components & Equipment - 0.1% |
Energy Conversion Devices, Inc. (a) | 300 | | 10,335 |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.9% |
Electronic Equipment & Instruments - 0.6% |
Chi Mei Optoelectronics Corp. | 7,911 | | 7,712 |
HannStar Display Corp. (a) | 58,000 | | 10,128 |
Nippon Electric Glass Co. Ltd. | 2,000 | | 47,728 |
| | 65,568 |
Electronic Manufacturing Services - 0.3% |
Molex, Inc. | 500 | | 14,695 |
Trimble Navigation Ltd. (a) | 300 | | 16,974 |
| | 31,669 |
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS | | 97,237 |
INTERNET SOFTWARE & SERVICES - 2.4% |
Internet Software & Services - 2.4% |
aQuantive, Inc. (a) | 1,000 | | 26,800 |
Openwave Systems, Inc. (a) | 18,107 | | 159,704 |
RADVision Ltd. (a) | 3,150 | | 61,520 |
| | 248,024 |
MEDIA - 0.0% |
Publishing - 0.0% |
Gemstar-TV Guide International, Inc. (a) | 104 | | 420 |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 6.3% |
Semiconductor Equipment - 0.2% |
EMCORE Corp. (a) | 5,800 | | 23,664 |
Semiconductors - 6.1% |
Actel Corp. (a) | 451 | | 8,055 |
Advanced Analogic Technologies, Inc. (a) | 6,000 | | 34,020 |
AMIS Holdings, Inc. (a) | 5,900 | | 61,006 |
Applied Micro Circuits Corp. (a) | 11,032 | | 37,950 |
Conexant Systems, Inc. (a) | 12,800 | | 23,808 |
Cree, Inc. (a) | 1,100 | | 16,918 |
CSR PLC (a) | 2,000 | | 26,760 |
Exar Corp. (a) | 143 | | 1,873 |
Intersil Corp. Class A | 2,000 | | 47,120 |
Marvell Technology Group Ltd. (a) | 1,200 | | 21,948 |
Microsemi Corp. (a) | 449 | | 8,172 |
Microtune, Inc. (a) | 6,800 | | 34,136 |
Mindspeed Technologies, Inc. (a) | 12,509 | | 24,643 |
MIPS Technologies, Inc. (a) | 1,398 | | 11,631 |
Netlogic Microsystems, Inc. (a) | 1,400 | | 33,432 |
Pericom Semiconductor Corp. (a) | 1,700 | | 16,949 |
Pixelplus Co. Ltd. sponsored ADR (a) | 3,600 | | 5,796 |
PLX Technology, Inc. (a) | 1,400 | | 14,224 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - CONTINUED |
Semiconductors - continued |
Sigma Designs, Inc. (a) | 2,473 | | $ 59,871 |
Silicon Motion Technology Corp. sponsored ADR (a) | 1,800 | | 33,174 |
Silicon On Insulator Technologies SA (SOITEC) (a) | 2,100 | | 61,638 |
Silicon Storage Technology, Inc. (a) | 1,200 | | 5,976 |
SiRF Technology Holdings, Inc. (a) | 200 | | 5,872 |
Skyworks Solutions, Inc. (a) | 4,100 | | 26,937 |
Transmeta Corp. (a) | 5,800 | | 5,336 |
Vimicro International Corp. sponsored ADR (a) | 700 | | 6,629 |
| | 633,874 |
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | | 657,538 |
SOFTWARE - 4.0% |
Application Software - 2.2% |
NAVTEQ Corp. (a) | 2,100 | | 74,508 |
Ulticom, Inc. (a) | 18,198 | | 155,593 |
| | 230,101 |
Home Entertainment Software - 0.3% |
Ubisoft Entertainment SA (a) | 800 | | 32,167 |
Systems Software - 1.5% |
Allot Communications Ltd. | 300 | | 3,126 |
Sandvine Corp. (U.K.) | 58,300 | | 119,127 |
Wind River Systems, Inc. (a) | 2,800 | | 27,776 |
| | 150,029 |
TOTAL SOFTWARE | | 412,297 |
WIRELESS TELECOMMUNICATION SERVICES - 2.2% |
Wireless Telecommunication Services - 2.2% |
Harris Stratex Networks, Inc. (a) | 3,075 | | 67,589 |
MTN Group Ltd. | 3,800 | | 45,619 |
|
| Shares | | Value (Note 1) |
NII Holdings, Inc. (a) | 300 | | $ 22,140 |
Philippine Long Distance Telephone Co. sponsored ADR | 900 | | 47,358 |
Vimpel Communications sponsored ADR (a) | 600 | | 51,258 |
| | 233,964 |
TOTAL COMMON STOCKS (Cost $11,309,267) | 10,337,828 |
Convertible Bonds - 0.2% |
| Principal Amount | | |
COMMUNICATIONS EQUIPMENT - 0.2% |
Communications Equipment - 0.2% |
Ciena Corp. 0.25% 5/1/13
(Cost $20,000) | $ 20,000 | | 18,518 |
Money Market Funds - 1.0% |
| Shares | | |
Fidelity Cash Central Fund, 5.35% (b)
(Cost $108,380) | 108,380 | | 108,380 |
TOTAL INVESTMENT PORTFOLIO - 100.3% (Cost $11,437,647) | | 10,464,726 |
NET OTHER ASSETS - (0.3)% | | (29,505) |
NET ASSETS - 100% | $ 10,435,221 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 4,455 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 81.6% |
Canada | 7.9% |
Israel | 3.6% |
France | 2.0% |
Netherlands | 1.1% |
Others (individually less than 1%) | 3.8% |
| 100.0% |
Income Tax Information |
At July 31, 2006, the fund had a capital loss carryforward of approximately $359,916 all of which will expire on July 31, 2013. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Communications Equipment Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $11,329,267) | $ 10,356,346 | |
Fidelity Central Funds (cost $108,380) | 108,380 | |
Total Investments (cost $11,437,647) | | $ 10,464,726 |
Receivable for investments sold | | 95,465 |
Receivable for fund shares sold | | 2,265 |
Interest receivable | | 627 |
Prepaid expenses | | 52 |
Receivable from investment adviser for expense reductions | | 4,458 |
Other receivables | | 3,965 |
Total assets | | 10,571,558 |
| | |
Liabilities | | |
Payable for fund shares redeemed | $ 93,334 | |
Accrued management fee | 5,028 | |
Distribution fees payable | 5,568 | |
Other affiliated payables | 3,941 | |
Other payables and accrued expenses | 28,466 | |
Total liabilities | | 136,337 |
| | |
Net Assets | | $ 10,435,221 |
Net Assets consist of: | | |
Paid in capital | | $ 11,714,821 |
Accumulated net investment loss | | (78,766) |
Accumulated undistributed net realized gain (loss) on investments | | (227,913) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (972,921) |
Net Assets | | $ 10,435,221 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price
Class A: Net Asset Value and redemption price per share ($2,771,360 ÷ 331,330 shares) | | $ 8.36 |
| | |
Maximum offering price per share (100/94.25 of $8.36) | | $ 8.87 |
Class T:
Net Asset Value and redemption price per share ($3,099,462 ÷ 376,101 shares) | | $ 8.24 |
| | |
Maximum offering price per share (100/96.50 of $8.24) | | $ 8.54 |
Class B:
Net Asset Value and offering price per share ($2,239,424 ÷ 280,162 shares)A | | $ 7.99 |
| | |
Class C:
Net Asset Value and offering price per share ($2,047,368 ÷ 256,223 shares)A | | $ 7.99 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($277,607 ÷ 32,676 shares) | | $ 8.50 |
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.
Communications Equipment
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 13,296 |
Interest | | 123 |
Income from Fidelity Central Funds | | 4,455 |
Total income | | 17,874 |
| | |
Expenses | | |
Management fee | $ 30,968 | |
Transfer agent fees | 23,591 | |
Distribution fees | 33,716 | |
Accounting fees and expenses | 2,245 | |
Custodian fees and expenses | 3,231 | |
Independent trustees' compensation | 19 | |
Registration fees | 43,555 | |
Audit | 22,626 | |
Legal | 296 | |
Miscellaneous | 4,597 | |
Total expenses before reductions | 164,844 | |
Expense reductions | (68,204) | 96,640 |
Net investment income (loss) | | (78,766) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | | 299,026 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 1,293,253 | |
Assets and liabilities in foreign currencies | 5 | |
Total change in net unrealized appreciation (depreciation) | | 1,293,258 |
Net gain (loss) | | 1,592,284 |
Net increase (decrease) in net assets resulting from operations | | $ 1,513,518 |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (78,766) | $ (181,630) |
Net realized gain (loss) | 299,026 | 2,011,059 |
Change in net unrealized appreciation (depreciation) | 1,293,258 | (2,915,095) |
Net increase (decrease) in net assets resulting from operations | 1,513,518 | (1,085,666) |
Share transactions - net increase (decrease) | (1,708,705) | 1,243,705 |
Redemption fees | 149 | 3,257 |
Total increase (decrease) in net assets | (195,038) | 161,296 |
| | |
Net Assets | | |
Beginning of period | 10,630,259 | 10,468,963 |
End of period (including accumulated net investment loss of $78,766 and $0, respectively) | $ 10,435,221 | $ 10,630,259 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.29 | $ 7.70 | $ 6.53 | $ 5.57 | $ 3.96 | $ 8.40 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.09) | (.07) | (.09) | (.04) | (.05) |
Net realized and unrealized gain (loss) | 1.11 | (.32) | 1.24 | 1.01 | 1.65 | (4.40) |
Total from investment operations | 1.07 | (.41) | 1.17 | .92 | 1.61 | (4.45) |
Redemption fees added to paid in capital E | - I | - I | - I | .04 | - I | .01 |
Net asset value, end of period | $ 8.36 | $ 7.29 | $ 7.70 | $ 6.53 | $ 5.57 | $ 3.96 |
Total Return B, C, D | 14.68% | (5.32)% | 17.92% | 17.24% | 40.66% | (52.86)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.61% A | 2.13% | 2.32% | 2.38% | 6.13% | 4.97% |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.45% | 1.50% | 1.50% | 1.50% |
Expenses net of all reductions | 1.40% A | 1.32% | 1.28% | 1.35% | 1.36% | 1.40% |
Net investment income (loss) | (1.07)% A | (1.05)% | (.92)% | (1.18)% | (.82)% | (.85)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 2,771 | $ 3,145 | $ 2,406 | $ 3,480 | $ 970 | $ 371 |
Portfolio turnover rate G | 104% A | 174% | 250% | 306% | 167% | 305% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.19 | $ 7.61 | $ 6.48 | $ 5.54 | $ 3.95 | $ 8.40 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.11) | (.08) | (.10) | (.05) | (.07) |
Net realized and unrealized gain (loss) | 1.10 | (.31) | 1.21 | 1.00 | 1.64 | (4.39) |
Total from investment operations | 1.05 | (.42) | 1.13 | .90 | 1.59 | (4.46) |
Redemption fees added to paid in capital E | - I | - I | - I | .04 | - I | .01 |
Net asset value, end of period | $ 8.24 | $ 7.19 | $ 7.61 | $ 6.48 | $ 5.54 | $ 3.95 |
Total Return B, C, D | 14.60% | (5.52)% | 17.44% | 16.97% | 40.25% | (52.98)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.97% A | 2.51% | 2.78% | 3.06% | 6.82% | 5.36% |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.71% | 1.75% | 1.75% | 1.75% |
Expenses net of all reductions | 1.64% A | 1.57% | 1.54% | 1.60% | 1.61% | 1.64% |
Net investment income (loss) | (1.32)% A | (1.30)% | (1.18)% | (1.43)% | (1.07)% | (1.10)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 3,099 | $ 2,932 | $ 3,034 | $ 3,250 | $ 1,723 | $ 775 |
Portfolio turnover rate G | 104% A | 174% | 250% | 306% | 167% | 305% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Communications Equipment
Financial Highlights - Class B
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 | $ 3.92 | $ 8.37 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.07) | (.14) | (.12) | (.13) | (.07) | (.10) |
Net realized and unrealized gain (loss) | 1.07 | (.31) | 1.20 | .98 | 1.62 | (4.36) |
Total from investment operations | 1.00 | (.45) | 1.08 | .85 | 1.55 | (4.46) |
Redemption fees added to paid in capital E | - I | - I | - I | .04 | - I | .01 |
Net asset value, end of period | $ 7.99 | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 | $ 3.92 |
Total Return B, C, D | 14.31% | (6.05)% | 16.98% | 16.27% | 39.54% | (53.17)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 3.38% A | 2.94% | 3.14% | 3.48% | 6.88% | 5.62% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.20% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.07% | 2.04% | 2.11% | 2.11% | 2.14% |
Net investment income (loss) | (1.82)% A | (1.80)% | (1.68)% | (1.93)% | (1.56)% | (1.60)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 2,239 | $ 2,406 | $ 2,864 | $ 2,998 | $ 1,846 | $ 1,162 |
Portfolio turnover rate G | 104% A | 174% | 250% | 306% | 167% | 305% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 | $ 3.92 | $ 8.37 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.07) | (.15) | (.12) | (.14) | (.07) | (.10) |
Net realized and unrealized gain (loss) | 1.07 | (.30) | 1.20 | .99 | 1.62 | (4.36) |
Total from investment operations | 1.00 | (.45) | 1.08 | .85 | 1.55 | (4.46) |
Redemption fees added to paid in capital E | - I | - I | - I | .04 | - I | .01 |
Net asset value, end of period | $ 7.99 | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 | $ 3.92 |
Total Return B, C, D | 14.31% | (6.05)% | 16.98% | 16.27% | 39.54% | (53.17)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 3.34% A | 2.86% | 3.07% | 3.19% | 6.81% | 5.49% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.19% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 2.14% A | 2.07% | 2.02% | 2.10% | 2.11% | 2.14% |
Net investment income (loss) | (1.82)% A | (1.81)% | (1.66)% | (1.93)% | (1.57)% | (1.60)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 2,047 | $ 1,768 | $ 1,846 | $ 3,180 | $ 1,009 | $ 667 |
Portfolio turnover rate G | 104% A | 174% | 250% | 306% | 167% | 305% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.39 | $ 7.79 | $ 6.60 | $ 5.61 | $ 3.98 | $ 8.42 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | (.03) | (.07) | (.05) | (.07) | (.03) | (.04) |
Net realized and unrealized gain (loss) | 1.14 | (.33) | 1.24 | 1.02 | 1.66 | (4.41) |
Total from investment operations | 1.11 | (.40) | 1.19 | .95 | 1.63 | (4.45) |
Redemption fees added to paid in capital D | - H | - H | - H | .04 | - H | .01 |
Net asset value, end of period | $ 8.50 | $ 7.39 | $ 7.79 | $ 6.60 | $ 5.61 | $ 3.98 |
Total Return B, C | 15.02% | (5.13)% | 18.03% | 17.65% | 40.95% | (52.73)% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | 2.17% A | 1.70% | 1.85% | 1.55% | 5.34% | 4.24% |
Expenses net of fee waivers, if any | 1.15% A | 1.15% | 1.18% | 1.25% | 1.25% | 1.25% |
Expenses net of all reductions | 1.15% A | 1.07% | 1.01% | 1.11% | 1.11% | 1.14% |
Net investment income (loss) | (.82)% A | (.80)% | (.65)% | (.93)% | (.57)% | (.60)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 278 | $ 379 | $ 319 | $ 607 | $ 154 | $ 100 |
Portfolio turnover rate F | 104% A | 174% | 250% | 306% | 167% | 305% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. H Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Communications Equipment
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Communications Equipment Fund (the Fund) (formerly Fidelity Advisor Developing Communications Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, net operating losses, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 601,167 |
Unrealized depreciation | (1,702,267) |
Net unrealized appreciation (depreciation) | $ (1,101,100) |
Cost for federal income tax purposes | $ 11,565,826 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Communications Equipment
3. Purchases and Sales of Investments.
Purchases and sales of securities other than short-term securities, aggregated $5,590,515 and $7,391,780, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 3,874 | $ 77 |
Class T | .25% | .25% | 7,784 | - |
Class B | .75% | .25% | 12,231 | 9,174 |
Class C | .75% | .25% | 9,827 | 2,688 |
| | | $ 33,716 | $ 11,939 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained
by FDC |
Class A | $ 1,423 |
Class T | 802 |
Class B * | 2,251 |
Class C * | 138 |
| $ 4,614 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets * |
Class A | $ 6,320 | .41 |
Class T | 8,011 | .52 |
Class B | 5,055 | .41 |
Class C | 3,783 | .38 |
Institutional Class | 422 | .23 |
| $ 23,591 | |
* Annualized
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds, are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $335 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $14 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense
Limitations | Reimbursement
from adviser |
Class A | 1.40% | $ 18,689 |
Class T | 1.65% | 20,585 |
Class B | 2.15% | 14,967 |
Class C | 2.15% | 11,772 |
Institutional Class | 1.15% | 1,871 |
| | $ 67,884 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $131 for the period.
7. 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.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
Communications Equipment
7. Other - continued
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
8. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2007 | Year ended
July 31,
2006 | Six months ended January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 48,311 | 258,256 | $ 393,156 | $ 2,231,744 |
Shares redeemed | (148,427) | (139,347) | (1,215,893) | (1,139,179) |
Net increase (decrease) | (100,116) | 118,909 | $ (822,737) | $ 1,092,565 |
Class T | | | | |
Shares sold | 41,603 | 114,159 | $ 335,452 | $ 950,677 |
Shares redeemed | (73,149) | (104,980) | (590,334) | (831,470) |
Net increase (decrease) | (31,546) | 9,179 | $ (254,882) | $ 119,207 |
Class B | | | | |
Shares sold | 11,078 | 69,205 | $ 85,659 | $ 569,934 |
Shares redeemed | (75,026) | (109,978) | (591,208) | (860,340) |
Net increase (decrease) | (63,948) | (40,773) | $ (505,549) | $ (290,406) |
Class C | | | | |
Shares sold | 46,418 | 307,489 | $ 368,649 | $ 2,475,377 |
Shares redeemed | (43,165) | (302,626) | (335,642) | (2,257,686) |
Net increase (decrease) | 3,253 | 4,863 | $ 33,007 | $ 217,691 |
Institutional Class | | | | |
Shares sold | 738 | 30,494 | $ 6,215 | $ 275,027 |
Shares redeemed | (19,256) | (20,224) | (164,759) | (170,379) |
Net increase (decrease) | (18,518) | 10,270 | $ (158,544) | $ 104,648 |
Semiannual Report
Advisor Consumer Discretionary Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,168.70 | $ 7.65 |
HypotheticalA | $ 1,000.00 | $ 1,018.15 | $ 7.12 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,167.60 | $ 9.01 |
HypotheticalA | $ 1,000.00 | $ 1,016.89 | $ 8.39 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,164.60 | $ 11.73 |
HypotheticalA | $ 1,000.00 | $ 1,014.37 | $ 10.92 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,165.10 | $ 11.73 |
HypotheticalA | $ 1,000.00 | $ 1,014.37 | $ 10.92 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,170.90 | $ 6.29 |
HypotheticalA | $ 1,000.00 | $ 1,019.41 | $ 5.85 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.40% |
Class T | 1.65% |
Class B | 2.15% |
Class C | 2.15% |
Institutional Class | 1.15% |
Consumer Discretionary
Advisor Consumer Discretionary Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
News Corp. Class A | 6.3 | 2.1 |
Federated Department Stores, Inc. | 6.0 | 5.0 |
Comcast Corp. Class A | 6.0 | 0.0 |
Time Warner, Inc. | 5.9 | 0.0 |
Target Corp. | 3.3 | 1.7 |
Saks, Inc. | 3.0 | 1.0 |
McDonald's Corp. | 3.0 | 0.0 |
McGraw-Hill Companies, Inc. | 2.8 | 1.1 |
JCPenney Co., Inc. | 2.7 | 1.7 |
TJX Companies, Inc. | 2.6 | 0.8 |
| 41.6 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Media | 25.9% | |
| Multiline Retail | 19.0% | |
| Specialty Retail | 19.0% | |
| Hotels, Restaurants & Leisure | 13.6% | |
| Textiles, Apparel & Luxury Goods | 10.5% | |
| All Others* | 12.0% | |
|
As of July 31, 2006 |
| Food Products | 13.0% | |
| Beverages | 12.9% | |
| Food & Staples Retailing | 12.7% | |
| Specialty Retail | 12.2% | |
| Multiline Retail | 10.6% | |
| All Others* | 38.6% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Semiannual Report
Advisor Consumer Discretionary Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 100.0% |
| Shares | | Value (Note 1) |
AUTOMOBILES - 1.2% |
Automobile Manufacturers - 1.2% |
Renault SA | 2,600 | | $ 321,758 |
Toyota Motor Corp. sponsored ADR | 3,400 | | 448,052 |
| | 769,810 |
COMPUTERS & PERIPHERALS - 2.0% |
Computer Hardware - 2.0% |
Apple, Inc. (a) | 1,600 | | 137,168 |
Hewlett-Packard Co. | 25,800 | | 1,116,624 |
| | 1,253,792 |
DIVERSIFIED CONSUMER SERVICES - 1.7% |
Specialized Consumer Services - 1.7% |
Sotheby's Class A (ltd. vtg.) | 28,700 | | 1,064,196 |
DIVERSIFIED FINANCIAL SERVICES - 1.7% |
Specialized Finance - 1.7% |
Moody's Corp. | 14,800 | | 1,059,088 |
FOOD & STAPLES RETAILING - 1.0% |
Food Retail - 1.0% |
Tesco PLC | 20,583 | | 169,041 |
Tesco PLC Sponsored ADR | 18,700 | | 465,630 |
| | 634,671 |
HOTELS, RESTAURANTS & LEISURE - 13.6% |
Casinos & Gaming - 5.3% |
Ameristar Casinos, Inc. | 12,200 | | 372,344 |
Boyd Gaming Corp. | 12,400 | | 589,868 |
International Game Technology | 19,600 | | 851,816 |
Las Vegas Sands Corp. (a) | 5,000 | | 520,350 |
Penn National Gaming, Inc. (a) | 12,700 | | 556,514 |
Wynn Resorts Ltd. | 3,800 | | 424,612 |
| | 3,315,504 |
Hotels, Resorts & Cruise Lines - 2.1% |
Accor SA | 8,600 | | 712,880 |
Marriott International, Inc. Class A | 12,000 | | 577,680 |
| | 1,290,560 |
Restaurants - 6.2% |
McDonald's Corp. | 41,900 | | 1,858,265 |
Starbucks Corp. (a) | 20,600 | | 719,764 |
Tim Hortons, Inc. | 6,265 | | 194,215 |
Wendy's International, Inc. | 33,800 | | 1,147,848 |
| | 3,920,092 |
TOTAL HOTELS, RESTAURANTS & LEISURE | | 8,526,156 |
HOUSEHOLD DURABLES - 1.5% |
Homebuilding - 1.0% |
D.R. Horton, Inc. | 7,700 | | 223,762 |
|
| Shares | | Value (Note 1) |
Ryland Group, Inc. | 2,400 | | $ 134,832 |
Toll Brothers, Inc. (a) | 8,600 | | 290,938 |
| | 649,532 |
Household Appliances - 0.5% |
Whirlpool Corp. | 3,200 | | 292,576 |
TOTAL HOUSEHOLD DURABLES | | 942,108 |
INTERNET & CATALOG RETAIL - 0.4% |
Internet Retail - 0.4% |
Blue Nile, Inc. (a) | 7,600 | | 281,276 |
INTERNET SOFTWARE & SERVICES - 1.4% |
Internet Software & Services - 1.4% |
Google, Inc. Class A (sub. vtg.) (a) | 1,700 | | 852,210 |
MEDIA - 25.9% |
Broadcasting & Cable TV - 7.4% |
Comcast Corp. Class A (a) | 84,900 | | 3,762,768 |
Grupo Televisa SA de CV (CPO) sponsored ADR | 25,900 | | 763,014 |
Liberty Media Holding Corp. - Capital Series A (a) | 1,400 | | 143,220 |
| | 4,669,002 |
Movies & Entertainment - 14.0% |
News Corp.: | | | |
Class A | 170,884 | | 3,973,053 |
Class B | 6,100 | | 149,145 |
Regal Entertainment Group Class A | 6,800 | | 153,000 |
The Walt Disney Co. | 15,900 | | 559,203 |
Time Warner, Inc. | 169,700 | | 3,711,339 |
Viacom, Inc. Class B (non-vtg.) (a) | 5,300 | | 215,551 |
| | 8,761,291 |
Publishing - 4.5% |
McGraw-Hill Companies, Inc. | 26,500 | | 1,777,620 |
R.H. Donnelley Corp. | 16,100 | | 1,071,938 |
| | 2,849,558 |
TOTAL MEDIA | | 16,279,851 |
MULTILINE RETAIL - 19.0% |
Department Stores - 15.0% |
Federated Department Stores, Inc. | 90,900 | | 3,771,441 |
JCPenney Co., Inc. | 20,600 | | 1,673,544 |
Nordstrom, Inc. | 23,600 | | 1,314,756 |
Saks, Inc. | 102,200 | | 1,917,272 |
Sears Holdings Corp. (a) | 4,300 | | 759,595 |
| | 9,436,608 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
MULTILINE RETAIL - CONTINUED |
General Merchandise Stores - 4.0% |
Family Dollar Stores, Inc. | 13,700 | | $ 443,880 |
Target Corp. | 33,300 | | 2,043,288 |
| | 2,487,168 |
TOTAL MULTILINE RETAIL | | 11,923,776 |
PERSONAL PRODUCTS - 1.1% |
Personal Products - 1.1% |
Bare Escentuals, Inc. | 18,300 | | 667,767 |
SPECIALTY RETAIL - 19.0% |
Apparel Retail - 11.0% |
Abercrombie & Fitch Co. Class A | 6,700 | | 532,918 |
Aeropostale, Inc. (a) | 8,500 | | 305,490 |
American Eagle Outfitters, Inc. | 21,400 | | 692,932 |
Casual Male Retail Group, Inc. (a)(d) | 19,900 | | 248,352 |
Charlotte Russe Holding, Inc. (a) | 7,050 | | 215,378 |
Gap, Inc. | 16,700 | | 320,139 |
Gymboree Corp. (a) | 26,800 | | 1,160,172 |
Limited Brands, Inc. | 32,700 | | 913,638 |
Ross Stores, Inc. | 8,700 | | 281,793 |
TJX Companies, Inc. | 54,748 | | 1,618,898 |
Urban Outfitters, Inc. (a) | 6,000 | | 146,400 |
Zumiez, Inc. (a) | 13,600 | | 447,440 |
| | 6,883,550 |
Computer & Electronics Retail - 2.0% |
Best Buy Co., Inc. | 6,450 | | 325,080 |
Circuit City Stores, Inc. | 7,000 | | 142,870 |
RadioShack Corp. (d) | 34,500 | | 762,450 |
| | 1,230,400 |
Home Improvement Retail - 2.3% |
Home Depot, Inc. | 22,600 | | 920,724 |
Lowe's Companies, Inc. | 16,200 | | 546,102 |
| | 1,466,826 |
Specialty Stores - 3.7% |
OfficeMax, Inc. | 8,800 | | 424,952 |
PETsMART, Inc. | 5,600 | | 171,024 |
Staples, Inc. | 55,338 | | 1,423,293 |
Tiffany & Co., Inc. | 8,400 | | 329,784 |
| | 2,349,053 |
TOTAL SPECIALTY RETAIL | | 11,929,829 |
TEXTILES, APPAREL & LUXURY GOODS - 10.5% |
Apparel, Accessories & Luxury Goods - 5.7% |
Coach, Inc. (a) | 30,200 | | 1,384,972 |
|
| Shares | | Value (Note 1) |
Phillips-Van Heusen Corp. | 13,000 | | $ 716,950 |
Polo Ralph Lauren Corp. Class A | 18,100 | | 1,485,105 |
| | 3,587,027 |
Footwear - 4.8% |
Crocs, Inc. | 13,202 | | 664,589 |
Deckers Outdoor Corp. (a) | 16,900 | | 985,439 |
Iconix Brand Group, Inc. (a) | 22,800 | | 453,948 |
NIKE, Inc. Class B | 2,500 | | 247,025 |
Skechers U.S.A., Inc. Class A (sub.vtg.) (a) | 17,700 | | 627,288 |
| | 2,978,289 |
TOTAL TEXTILES, APPAREL & LUXURY GOODS | | 6,565,316 |
TOTAL COMMON STOCKS (Cost $53,685,508) | 62,749,846 |
Money Market Funds - 2.6% |
| | | |
Fidelity Cash Central Fund, 5.35% (b) | 601,647 | | 601,647 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 1,007,250 | | 1,007,250 |
TOTAL MONEY MARKET FUNDS (Cost $1,608,897) | | 1,608,897 |
TOTAL INVESTMENT PORTFOLIO - 102.6% (Cost $55,294,405) | | 64,358,743 |
NET OTHER ASSETS - (2.6)% | | (1,634,263) |
NET ASSETS - 100% | $ 62,724,480 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 38,785 |
Fidelity Securities Lending Cash Central Fund | 2,679 |
Total | $ 41,464 |
See accompanying notes which are an integral part of the financial statements.
Consumer Discretionary
Advisor Consumer Discretionary Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $988,520) - See accompanying schedule: Unaffiliated issuers (cost $53,685,508) | $ 62,749,846 | |
Fidelity Central Funds (cost $1,608,897) | 1,608,897 | |
Total Investments (cost $55,294,405) | | $ 64,358,743 |
Receivable for investments sold | | 333,996 |
Receivable for fund shares sold | | 103,356 |
Dividends receivable | | 7,196 |
Interest receivable | | 3,313 |
Prepaid expenses | | 247 |
Other receivables | | 1,222 |
Total assets | | 64,808,073 |
| | |
Liabilities | | |
Payable to custodian bank | $ 17,118 | |
Payable for investments purchased | 822,283 | |
Payable for fund shares redeemed | 113,507 | |
Accrued management fee | 32,110 | |
Distribution fees payable | 29,666 | |
Other affiliated payables | 20,152 | |
Other payables and accrued expenses | 41,507 | |
Collateral on securities loaned, at value | 1,007,250 | |
Total liabilities | | 2,083,593 |
| | |
Net Assets | | $ 62,724,480 |
Net Assets consist of: | | |
Paid in capital | | $ 52,682,302 |
Undistributed net investment income | | 12,366 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 965,436 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 9,064,376 |
Net Assets | | $ 62,724,480 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption
price per share ($21,864,849 ÷ 1,314,540 shares) | | $ 16.63 |
| | |
Maximum offering price per share (100/94.25 of $16.63) | | $ 17.64 |
Class T:
Net Asset Value and redemption price per share ($15,682,641 ÷ 967,422 shares) | | $ 16.21 |
| | |
Maximum offering price per share (100/96.50 of $16.21) | | $ 16.80 |
Class B:
Net Asset Value and offering price per share ($14,183,863 ÷ 927,153 shares)A | | $ 15.30 |
| | |
Class C:
Net Asset Value and offering price per share ($9,147,503 ÷ 596,743 shares)A | | $ 15.33 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($1,845,624 ÷ 107,636 shares) | | $ 17.15 |
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.
Semiannual Report
Advisor Consumer Discretionary Fund
Financial Statements - continued
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 305,468 |
Special dividends | | 258,300 |
Interest | | 85 |
Income from Fidelity Central Funds | | 41,464 |
Total income | | 605,317 |
| | |
Expenses | | |
Management fee | $ 163,305 | |
Transfer agent fees | 108,194 | |
Distribution fees | 172,560 | |
Accounting and security lending fees | 12,073 | |
Custodian fees and expenses | 9,596 | |
Independent trustees' compensation | 97 | |
Registration fees | 33,735 | |
Audit | 21,870 | |
Legal | 818 | |
Miscellaneous | 15,791 | |
Total expenses before reductions | 538,039 | |
Expense reductions | (38,379) | 499,660 |
Net investment income (loss) | | 105,657 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 3,964,589 | |
Foreign currency transactions | 689 | |
Total net realized gain (loss) | | 3,965,278 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 4,757,668 | |
Assets and liabilities in foreign currencies | (65) | |
Total change in net unrealized appreciation (depreciation) | | 4,757,603 |
Net gain (loss) | | 8,722,881 |
Net increase (decrease) in net assets resulting from operations | | $ 8,828,538 |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 105,657 | $ (348,612) |
Net realized gain (loss) | 3,965,278 | 6,032,685 |
Change in net unrealized appreciation (depreciation) | 4,757,603 | (6,266,158) |
Net increase (decrease) in net assets resulting from operations | 8,828,538 | (582,085) |
Distributions to shareholders from net investment income | (93,271) | - |
Distributions to shareholders from net realized gain | (7,903,621) | (441,481) |
Total distributions | (7,996,892) | (441,481) |
Share transactions - net increase (decrease) | 8,297,621 | (8,793,822) |
Redemption fees | 548 | 4,458 |
Total increase (decrease) in net assets | 9,129,815 | (9,812,930) |
| | |
Net Assets | | |
Beginning of period | 53,594,665 | 63,407,595 |
End of period (including undistributed net investment income of $12,366 and accumulated net investment loss of $20, respectively) | $ 62,724,480 | $ 53,594,665 |
See accompanying notes which are an integral part of the financial statements.
Consumer Discretionary
Financial Highlights - Class A
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.39 | $ 16.62 | $ 14.51 | $ 13.71 | $ 12.71 | $ 15.20 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .06 H | (.04) | (.07) | (.07) | (.04) | (.05) |
Net realized and unrealized gain (loss) | 2.53 | (.07) | 2.71 | .87 | 1.04 | (2.09) |
Total from investment operations | 2.59 | (.11) | 2.64 | .80 | 1.00 | (2.14) |
Distributions from net investment income | (.05) | - | - | - | - | - |
Distributions from net realized gain | (2.30) | (.12) | (.53) | - | - | (.35) |
Total distributions | (2.35) | (.12) | (.53) | - | - | (.35) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 16.63 | $ 16.39 | $ 16.62 | $ 14.51 | $ 13.71 | $ 12.71 |
Total Return B,C,D | 16.87% | (.69)% | 18.85% | 5.84% | 7.87% | (14.30)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.50% A | 1.42% | 1.47% | 1.55% | 1.70% | 1.69% |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.44% | 1.50% | 1.53% | 1.50% |
Expenses net of all reductions | 1.39% A | 1.39% | 1.42% | 1.45% | 1.48% | 1.47% |
Net investment income (loss) | .70% A,H | (.23)% | (.45)% | (.50)% | (.33)% | (.36)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 21,865 | $ 16,935 | $ 17,887 | $ 11,856 | $ 9,101 | $ 7,209 |
Portfolio turnover rate G | 210% A | 81% | 66% | 152% | 88% | 136% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.07 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.19)%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.03 | $ 16.29 | $ 14.27 | $ 13.51 | $ 12.57 | $ 15.06 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .04 H,J | (.07) | (.11) | (.11) | (.07) | (.09) |
Net realized and unrealized gain (loss) | 2.47 | (.07) | 2.66 | .87 | 1.01 | (2.05) |
Total from investment operations | 2.51 | (.14) | 2.55 | .76 | .94 | (2.14) |
Distributions from net investment income | (.03) | - | - | - | - | - |
Distributions from net realized gain | (2.30) | (.12) | (.53) | - | - | (.35) |
Total distributions | (2.33) | (.12) | (.53) | - | - | (.35) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 16.21 | $ 16.03 | $ 16.29 | $ 14.27 | $ 13.51 | $ 12.57 |
Total Return B,C,D | 16.76% | (.89)% | 18.52% | 5.63% | 7.48% | (14.44)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.78% A | 1.69% | 1.75% | 1.81% | 1.87% | 1.89% |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.69% | 1.75% | 1.78% | 1.75% |
Expenses net of all reductions | 1.60% A | 1.62% | 1.67% | 1.70% | 1.73% | 1.72% |
Net investment income (loss) | .49% A,H | (.46)% | (.70)% | (.74)% | (.58)% | (.61)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 15,683 | $ 14,267 | $ 16,782 | $ 15,555 | $ 13,693 | $ 12,132 |
Portfolio turnover rate G | 210% A | 81% | 66% | 152% | 88% | 136% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.07 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.40)%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 15.26 | $ 15.60 | $ 13.75 | $ 13.08 | $ 12.22 | $ 14.73 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - H,J | (.15) | (.17) | (.18) | (.13) | (.15) |
Net realized and unrealized gain (loss) | 2.34 | (.07) | 2.55 | .85 | .99 | (2.01) |
Total from investment operations | 2.34 | (.22) | 2.38 | .67 | .86 | (2.16) |
Distributions from net realized gain | (2.30) | (.12) | (.53) | - | - | (.35) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 15.30 | $ 15.26 | $ 15.60 | $ 13.75 | $ 13.08 | $ 12.22 |
Total Return B,C,D | 16.46% | (1.45)% | 17.97% | 5.12% | 7.04% | (14.91)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 2.29% A | 2.19% | 2.24% | 2.29% | 2.37% | 2.39% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.19% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 2.14% A | 2.14% | 2.16% | 2.20% | 2.19% | 2.22% |
Net investment income (loss) | (.05)% A,H | (.98)% | (1.20)% | (1.25)% | (1.05)% | (1.11)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 14,184 | $ 14,088 | $ 18,862 | $ 17,302 | $ 15,944 | $ 13,807 |
Portfolio turnover rate G | 210% A | 81% | 66% | 152% | 88% | 136% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.07 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.94)%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 15.28 | $ 15.62 | $ 13.77 | $ 13.10 | $ 12.24 | $ 14.75 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - H,J | (.15) I | (.17) | (.18) | (.13) | (.15) |
Net realized and unrealized gain (loss) | 2.35 | (.07) | 2.55 | .85 | .99 | (2.01) |
Total from investment operations | 2.35 | (.22) | 2.38 | .67 | .86 | (2.16) |
Distributions from net realized gain | (2.30) | (.12) | (.53) | - | - | (.35) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 15.33 | $ 15.28 | $ 15.62 | $ 13.77 | $ 13.10 | $ 12.24 |
Total Return B,C,D | 16.51% | (1.45)% | 17.94% | 5.11% | 7.03% | (14.89)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 2.22% A | 2.12% | 2.17% | 2.24% | 2.33% | 2.35% |
Expenses net of fee waivers, if any | 2.15% A | 2.12% | 2.17% | 2.24% | 2.25% | 2.25% |
Expenses net of all reductions | 2.14% A | 2.12% | 2.14% | 2.19% | 2.19% | 2.22% |
Net investment income (loss) | (.05)% A,H | (.95)% | (1.18)% | (1.24)% | (1.05)% | (1.11)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 9,148 | $ 7,160 | $ 8,505 | $ 6,992 | $ 6,759 | $ 5,391 |
Portfolio turnover rate G | 210% A | 81% | 66% | 152% | 88% | 136% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.07 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.94)%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Consumer Discretionary
Financial Highlights - Institutional Class
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.82 | $ 17.01 | $ 14.81 | $ 13.95 | $ 12.91 | $ 15.38 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .08 G | - I | (.03) | (.04) | (.01) | (.02) |
Net realized and unrealized gain (loss) | 2.61 | (.07) | 2.76 | .90 | 1.05 | (2.10) |
Total from investment operations | 2.69 | (.07) | 2.73 | .86 | 1.04 | (2.12) |
Distributions from net investment income | (.06) | - | - | - | - | - |
Distributions from net realized gain | (2.30) | (.12) | (.53) | - | - | (.35) |
Total distributions | (2.36) | (.12) | (.53) | - | - | (.35) |
Redemption fees added to paid in capital D | - I | - I | - I | - I | - I | - I |
Net asset value, end of period | $ 17.15 | $ 16.82 | $ 17.01 | $ 14.81 | $ 13.95 | $ 12.91 |
Total Return B,C | 17.09% | (.44)% | 19.08% | 6.16% | 8.06% | (14.00)% |
Ratios to Average Net Assets E,H | | | | | | |
Expenses before reductions | 1.24% A | 1.18% | 1.26% | 1.34% | 1.49% | 1.39% |
Expenses net of fee waivers, if any | 1.15% A | 1.15% | 1.20% | 1.25% | 1.25% | 1.25% |
Expenses net of all reductions | 1.14% A | 1.14% | 1.17% | 1.20% | 1.19% | 1.22% |
Net investment income (loss) | .95% A,G | .02% | (.21)% | (.25)% | (.05)% | (.11)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,846 | $ 1,144 | $ 1,371 | $ 907 | $ 766 | $ 1,215 |
Portfolio turnover rate F | 210% A | 81% | 66% | 152% | 88% | 136% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Investment income per share reflects a special dividend which amounted to $.07 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been .05%. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Consumer Discretionary Fund (the Fund) (formerly Fidelity Advisor Consumer Industries Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Large, non-recurring dividends recognized by the Fund are presented separately on the Statement of Operations as "Special Dividends" and the impact of these dividends is presented in the Financial Highlights. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable
Consumer Discretionary
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles. In addition, the Fund will claim a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due foreign currency transactions, deferred trustees compensation, net operating losses and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 9,239,889 |
Unrealized depreciation | (217,326) |
Net unrealized appreciation (depreciation) | $ 9,022,563 |
Cost for federal income tax purposes | $ 55,336,180 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $62,273,542 and $59,579,316, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 24,103 | $ 582 |
Class T | .25% | .25% | 37,792 | - |
Class B | .75% | .25% | 71,966 | 53,975 |
Class C | .75% | .25% | 38,699 | 5,087 |
| | | $ 172,560 | $ 59,644 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 11,678 |
Class T | 2,790 |
Class B* | 18,460 |
Class C* | 276 |
| $ 33,204 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets* |
Class A | $ 34,271 | .36 |
Class T | 29,958 | .40 |
Class B | 28,647 | .40 |
Class C | 12,798 | .33 |
Institutional Class | 2,520 | .36 |
| $ 108,194 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity
Consumer Discretionary
4. Fees and Other Transactions with Affiliates - continued
Investments in Fidelity Central Funds - continued
Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $105 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $72 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $2,679.
7. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense
Limitations | Reimbursement
from adviser |
Class A | 1.40% | $ 8,992 |
Class T | 1.65% | 10,341 |
Class B | 2.15% | 10,004 |
Class C | 2.15% | 2,729 |
Institutional Class | 1.15% | 647 |
| | $ 32,713 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $1,834 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction |
Class T | $ 2,936 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
From net investment income | | |
Class A | $ 58,655 | $ - |
Class T | 28,339 | - |
Class C | 505 | - |
Institutional Class | 5,772 | - |
Total | $ 93,271 | $ - |
From net realized gain | | |
Class A | $ 2,496,661 | $ 129,938 |
Class T | 2,054,841 | 112,178 |
Class B | 2,079,901 | 130,928 |
Class C | 1,100,034 | 59,730 |
Institutional Class | 172,184 | 8,707 |
Total | $ 7,903,621 | $ 441,481 |
Consumer Discretionary
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2007 | Year ended
July 31,
2006 | Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 308,566 | 426,479 | $ 5,104,820 | $ 7,019,654 |
Reinvestment of distributions | 141,655 | 7,092 | 2,265,923 | 116,631 |
Shares redeemed | (169,142) | (476,405) | (2,816,885) | (7,879,209) |
Net increase (decrease) | 281,079 | (42,834) | $ 4,553,858 | $ (742,924) |
Class T | | | | |
Shares sold | 84,540 | 183,824 | $ 1,365,298 | $ 2,956,227 |
Reinvestment of distributions | 122,934 | 6,480 | 1,916,483 | 104,320 |
Shares redeemed | (130,228) | (330,058) | (2,126,905) | (5,310,774) |
Net increase (decrease) | 77,246 | (139,754) | $ 1,154,876 | $ (2,250,227) |
Class B | | | | |
Shares sold | 49,559 | 124,427 | $ 758,683 | $ 1,901,339 |
Reinvestment of distributions | 122,770 | 7,467 | 1,810,224 | 114,882 |
Shares redeemed | (168,640) | (417,847) | (2,581,295) | (6,443,082) |
Net increase (decrease) | 3,689 | (285,953) | $ (12,388) | $ (4,426,861) |
Class C | | | | |
Shares sold | 140,358 | 103,187 | $ 2,156,617 | $ 1,601,293 |
Reinvestment of distributions | 59,891 | 3,123 | 884,992 | 48,106 |
Shares redeemed | (71,977) | (182,363) | (1,101,295) | (2,814,524) |
Net increase (decrease) | 128,272 | (76,053) | $ 1,940,314 | $ (1,165,125) |
Institutional Class | | | | |
Shares sold | 40,078 | 14,460 | $ 671,899 | $ 246,044 |
Reinvestment of distributions | 8,916 | 433 | 146,867 | 7,305 |
Shares redeemed | (9,383) | (27,416) | (157,805) | (462,034) |
Net increase (decrease) | 39,611 | (12,523) | $ 660,961 | $ (208,685) |
Semiannual Report
Advisor Electronics Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006 to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,136.90 | $ 7.54 |
HypotheticalA | $ 1,000.00 | $ 1,018.15 | $ 7.12 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,135.80 | $ 8.88 |
HypotheticalA | $ 1,000.00 | $ 1,016.89 | $ 8.39 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,131.00 | $ 11.55 |
HypotheticalA | $ 1,000.00 | $ 1,014.37 | $ 10.92 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,132.60 | $ 11.56 |
HypotheticalA | $ 1,000.00 | $ 1,014.32 | $ 10.92 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,138.50 | $ 6.20 |
HypotheticalA | $ 1,000.00 | $ 1,019.41 | $ 5.85 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.40% |
Class T | 1.65% |
Class B | 2.15% |
Class C | 2.15% |
Institutional Class | 1.15% |
Electronics
Advisor Electronics Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Intel Corp. | 7.2 | 5.8 |
Arrow Electronics, Inc. | 6.9 | 5.5 |
KLA-Tencor Corp. | 6.4 | 6.8 |
Applied Materials, Inc. | 5.8 | 0.0 |
Maxim Integrated Products, Inc. | 5.0 | 5.0 |
Marvell Technology Group Ltd. | 4.8 | 4.8 |
Altera Corp. | 4.6 | 4.2 |
National Semiconductor Corp. | 4.5 | 4.5 |
Lam Research Corp. | 4.5 | 4.1 |
Xilinx, Inc. | 4.0 | 3.6 |
| 53.7 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Semiconductors & Semiconductor Equipment | 78.8% | |
 | Electronic Equipment & Instruments | 15.0% | |
| All Others* | 6.2% | |
|
As of July 31, 2006 |
| Semiconductors & Semiconductor Equipment | 79.1% | |
| Electronic Equipment & Instruments | 14.7% | |
| Communications Equipment | 2.8% | |
| Electrical Equipment | 2.1% | |
 | All Others* | 1.3% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Semiannual Report
Advisor Electronics Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 93.8% |
| Shares | | Value (Note 1) |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 15.0% |
Electronic Manufacturing Services - 4.2% |
Hon Hai Precision Industry Co. Ltd. (Foxconn) | 100,000 | | $ 683,330 |
Jabil Circuit, Inc. | 25,000 | | 599,750 |
| | 1,283,080 |
Technology Distributors - 10.8% |
Arrow Electronics, Inc. (a) | 60,000 | | 2,115,000 |
Avnet, Inc. (a) | 30,000 | | 931,500 |
Wolfson Microelectronics PLC (a) | 50,000 | | 275,065 |
| | 3,321,565 |
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS | | 4,604,645 |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 78.8% |
Semiconductor Equipment - 20.0% |
Applied Materials, Inc. | 100,000 | | 1,773,000 |
Cohu, Inc. | 20,000 | | 400,000 |
KLA-Tencor Corp. | 39,990 | | 1,968,708 |
Lam Research Corp. (a) | 30,030 | | 1,375,674 |
Varian Semiconductor Equipment Associates, Inc. (a) | 15,000 | | 617,250 |
| | 6,134,632 |
Semiconductors - 58.8% |
Altera Corp. (a) | 70,000 | | 1,403,500 |
Analog Devices, Inc. | 29,950 | | 980,863 |
Atheros Communications, Inc. (a) | 5,000 | | 118,800 |
Broadcom Corp. Class A (a) | 30,000 | | 957,600 |
CSR PLC (a) | 50,000 | | 668,997 |
Holtek Semiconductor, Inc. | 201,990 | | 382,178 |
Intel Corp. | 104,990 | | 2,200,590 |
Linear Technology Corp. | 20,000 | | 619,000 |
LSI Logic Corp. (a) | 75,000 | | 705,000 |
Marvell Technology Group Ltd. (a) | 80,000 | | 1,463,200 |
Maxim Integrated Products, Inc. | 50,000 | | 1,540,000 |
National Semiconductor Corp. | 60,020 | | 1,388,263 |
ON Semiconductor Corp. (a) | 50,000 | | 418,000 |
Saifun Semiconductors Ltd. (a) | 9,900 | | 138,105 |
Siliconware Precision Industries Co. Ltd. sponsored ADR (d) | 100,012 | | 877,105 |
|
| Shares | | Value (Note 1) |
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR | 79,999 | | $ 872,789 |
Texas Instruments, Inc. | 35,000 | | 1,091,650 |
Vimicro International Corp. sponsored ADR (a) | 73,000 | | 691,310 |
Volterra Semiconductor Corp. (a) | 25,000 | | 329,500 |
Xilinx, Inc. | 50,000 | | 1,215,000 |
| | 18,061,450 |
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | | 24,196,082 |
TOTAL COMMON STOCKS (Cost $29,861,146) | 28,800,727 |
Money Market Funds - 10.1% |
| | | |
Fidelity Cash Central Fund, 5.35% (b) | 2,350,595 | | 2,350,595 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 739,800 | | 739,800 |
TOTAL MONEY MARKET FUNDS (Cost $3,090,395) | | 3,090,395 |
TOTAL INVESTMENT PORTFOLIO - 103.9% (Cost $32,951,541) | | 31,891,122 |
NET OTHER ASSETS - (3.9)% | | (1,192,285) |
NET ASSETS - 100% | $ 30,698,837 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 28,505 |
Fidelity Securities Lending Cash Central Fund | 10,893 |
Total | $ 39,398 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 80.4% |
Taiwan | 9.1% |
Bermuda | 4.8% |
United Kingdom | 3.1% |
Cayman Islands | 2.2% |
Others (individually less than 1%) | 0.4% |
| 100.0% |
Income Tax Information |
At July 31, 2006, the fund had a capital loss carryforward of approximately $11,946,726 of which $3,573,707, $5,827,947, $2,265,871 and $279,201 will expire on July 31, 2010, 2011, 2012 and 2013, respectively. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Electronics Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $720,894) - See accompanying schedule: Unaffiliated issuers (cost $29,861,146) | $ 28,800,727 | |
Fidelity Central Funds (cost $3,090,395) | 3,090,395 | |
Total Investments (cost $32,951,541) | | $ 31,891,122 |
Foreign currency held at value (cost $1) | | 1 |
Receivable for fund shares sold | | 8,172 |
Dividends receivable | | 4,582 |
Interest receivable | | 6,846 |
Prepaid expenses | | 144 |
Receivable from investment adviser for expense reductions | | 1,464 |
Other receivables | | 4,008 |
Total assets | | 31,916,339 |
| | |
Liabilities | | |
Payable for investments purchased | $ 277,179 | |
Payable for fund shares redeemed | 127,343 | |
Accrued management fee | 14,167 | |
Distribution fees payable | 15,862 | |
Other affiliated payables | 10,482 | |
Other payables and accrued expenses | 32,669 | |
Collateral on securities loaned, at value | 739,800 | |
Total liabilities | | 1,217,502 |
| | |
Net Assets | | $ 30,698,837 |
Net Assets consist of: | | |
Paid in capital | | $ 42,417,935 |
Accumulated net investment loss | | (112,402) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (10,546,277) |
Net unrealized appreciation (depreciation) on investments | | (1,060,419) |
Net Assets | | $ 30,698,837 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption
price per share ($7,869,924 ÷ 938,302 shares) | | $ 8.39 |
| | |
Maximum offering price per share (100/94.25 of $8.39) | | $ 8.90 |
Class T:
Net Asset Value and redemption price per share ($8,621,507 ÷ 1,041,672 shares) | | $ 8.28 |
| | |
Maximum offering price per share (100/96.50 of $8.28) | | $ 8.58 |
Class B:
Net Asset Value and offering price per share ($5,049,032 ÷ 628,571 shares)A | | $ 8.03 |
| | |
Class C:
Net Asset Value and offering price per share ($8,324,449 ÷ 1,037,298 shares)A | | $ 8.03 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($833,925 ÷ 97,575 shares) | | $ 8.55 |
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.
Electronics
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 119,106 |
Interest | | 7 |
Income from Fidelity Central Funds (including $10,893 from security lending) | | 39,398 |
Total income | | 158,511 |
| | |
Expenses | | |
Management fee | $ 86,565 | |
Transfer agent fees | 60,723 | |
Distribution fees | 96,644 | |
Accounting and security lending fees | 7,230 | |
Custodian fees and expenses | 3,359 | |
Independent trustees' compensation | 53 | |
Registration fees | 40,236 | |
Audit | 22,828 | |
Legal | 551 | |
Miscellaneous | 11,772 | |
Total expenses before reductions | 329,961 | |
Expense reductions | (59,048) | 270,913 |
Net investment income (loss) | | (112,402) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 1,603,377 | |
Foreign currency transactions | (1,206) | |
Total net realized gain (loss) | | 1,602,171 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 2,406,859 | |
Assets and liabilities in foreign currencies | (74) | |
Total change in net unrealized appreciation (depreciation) | | 2,406,785 |
Net gain (loss) | | 4,008,956 |
Net increase (decrease) in net assets resulting from operations | | $ 3,896,554 |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (112,402) | $ (355,473) |
Net realized gain (loss) | 1,602,171 | 3,613,218 |
Change in net unrealized appreciation (depreciation) | 2,406,785 | (6,280,048) |
Net increase (decrease) in net assets resulting from operations | 3,896,554 | (3,022,303) |
Share transactions - net increase (decrease) | (4,044,428) | (10,537,180) |
Redemption fees | 751 | 3,363 |
Total increase (decrease) in net assets | (147,123) | (13,556,120) |
| | |
Net Assets | | |
Beginning of period | 30,845,960 | 44,402,080 |
End of period (including accumulated net investment loss of $112,402 and $0, respectively) | $ 30,698,837 | $ 30,845,960 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.38 | $ 8.04 | $ 6.58 | $ 6.59 | $ 5.57 | $ 9.62 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | (.04) | (.07) | (.09) | (.06) | (.10) |
Net realized and unrealized gain (loss) | 1.02 | (.62) | 1.53 | .08 | 1.07 | (3.96) |
Total from investment operations | 1.01 | (.66) | 1.46 | (.01) | 1.01 | (4.06) |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .01 | .01 |
Net asset value, end of period | $ 8.39 | $ 7.38 | $ 8.04 | $ 6.58 | $ 6.59 | $ 5.57 |
Total Return B,C,D | 13.69% | (8.21)% | 22.19% | (.15)% | 18.31% | (42.10)% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.75% A | 1.50% | 1.59% | 1.55% | 1.89% | 1.68% |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.45% | 1.50% | 1.50% | 1.50% |
Expenses net of all reductions | 1.39% A | 1.36% | 1.38% | 1.48% | 1.46% | 1.49% |
Net investment income (loss) | (.36)% A | (.52)% | (.96)% | (1.15)% | (1.09)% | (1.14)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 7,870 | $ 7,916 | $ 11,397 | $ 8,374 | $ 8,116 | $ 4,912 |
Portfolio turnover rate G | 20% A | 95% | 128% | 84% | 66% | 58% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.29 | $ 7.96 | $ 6.53 | $ 6.56 | $ 5.55 | $ 9.62 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.02) | (.06) | (.08) | (.11) | (.07) | (.12) |
Net realized and unrealized gain (loss) | 1.01 | (.61) | 1.51 | .08 | 1.07 | (3.96) |
Total from investment operations | .99 | (.67) | 1.43 | (.03) | 1.00 | (4.08) |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .01 | .01 |
Net asset value, end of period | $ 8.28 | $ 7.29 | $ 7.96 | $ 6.53 | $ 6.56 | $ 5.55 |
Total Return B,C,D | 13.58% | (8.42)% | 21.90% | (.46)% | 18.20% | (42.31)% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 2.05% A | 1.82% | 1.89% | 1.83% | 2.14% | 1.91% |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.69% | 1.75% | 1.75% | 1.75% |
Expenses net of all reductions | 1.63% A | 1.61% | 1.61% | 1.72% | 1.71% | 1.74% |
Net investment income (loss) | (.60)% A | (.77)% | (1.20)% | (1.39)% | (1.33)% | (1.39)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 8,622 | $ 9,048 | $ 12,085 | $ 15,445 | $ 14,362 | $ 11,615 |
Portfolio turnover rate G | 20% A | 95% | 128% | 84% | 66% | 58% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Electronics
Financial Highlights - Class B
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.10 | $ 7.78 | $ 6.42 | $ 6.48 | $ 5.52 | $ 9.60 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.10) | (.12) | (.14) | (.10) | (.16) |
Net realized and unrealized gain (loss) | .97 | (.58) | 1.48 | .08 | 1.06 | (3.93) |
Total from investment operations | .93 | (.68) | 1.36 | (.06) | .96 | (4.09) |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | .01 |
Net asset value, end of period | $ 8.03 | $ 7.10 | $ 7.78 | $ 6.42 | $ 6.48 | $ 5.52 |
Total Return B,C,D | 13.10% | (8.74)% | 21.18% | (.93)% | 17.39% | (42.50)% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 2.51% A | 2.29% | 2.41% | 2.41% | 2.76% | 2.43% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.21% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 2.13% A | 2.11% | 2.13% | 2.23% | 2.21% | 2.24% |
Net investment income (loss) | (1.10)% A | (1.27)% | (1.72)% | (1.90)% | (1.83)% | (1.89)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 5,049 | $ 6,123 | $ 8,963 | $ 8,498 | $ 11,335 | $ 8,362 |
Portfolio turnover rate G | 20% A | 95% | 128% | 84% | 66% | 58% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.09 | $ 7.77 | $ 6.41 | $ 6.47 | $ 5.51 | $ 9.59 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.10) | (.11) | (.14) | (.10) | (.16) |
Net realized and unrealized gain (loss) | .98 | (.58) | 1.47 | .08 | 1.06 | (3.93) |
Total from investment operations | .94 | (.68) | 1.36 | (.06) | .96 | (4.09) |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | .01 |
Net asset value, end of period | $ 8.03 | $ 7.09 | $ 7.77 | $ 6.41 | $ 6.47 | $ 5.51 |
Total Return B,C,D | 13.26% | (8.75)% | 21.22% | (.93)% | 17.42% | (42.54)% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 2.51% A | 2.26% | 2.31% | 2.24% | 2.52% | 2.34% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.18% | 2.24% | 2.25% | 2.25% |
Expenses net of all reductions | 2.13% A | 2.11% | 2.11% | 2.21% | 2.21% | 2.24% |
Net investment income (loss) | (1.10)% A | (1.27)% | (1.69)% | (1.88)% | (1.83)% | (1.89)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 8,324 | $ 7,009 | $ 11,058 | $ 12,322 | $ 13,061 | $ 9,921 |
Portfolio turnover rate G | 20% A | 95% | 128% | 84% | 66% | 58% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.51 | $ 8.15 | $ 6.65 | $ 6.64 | $ 5.60 | $ 9.64 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | - H | (.02) | (.05) | (.06) | (.04) | (.08) |
Net realized and unrealized gain (loss) | 1.04 | (.62) | 1.55 | .07 | 1.07 | (3.97) |
Total from investment operations | 1.04 | (.64) | 1.50 | .01 | 1.03 | (4.05) |
Redemption fees added to paid in capital D | - H | - H | - H | - H | .01 | .01 |
Net asset value, end of period | $ 8.55 | $ 7.51 | $ 8.15 | $ 6.65 | $ 6.64 | $ 5.60 |
Total Return B,C | 13.85% | (7.85)% | 22.56% | .15% | 18.57% | (41.91)% |
Ratios to Average Net Assets E,G | | | | | | |
Expenses before reductions | 1.37% A | 1.11% | 1.16% | 1.12% | 1.46% | 1.31% |
Expenses net of fee waivers, if any | 1.15% A | 1.11% | 1.16% | 1.12% | 1.25% | 1.25% |
Expenses net of all reductions | 1.13% A | 1.07% | 1.08% | 1.09% | 1.21% | 1.24% |
Net investment income (loss) | (.10)% A | (.23)% | (.67)% | (.76)% | (.84)% | (.89)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 834 | $ 750 | $ 899 | $ 687 | $ 625 | $ 1,184 |
Portfolio turnover rate F | 20% A | 95% | 128% | 84% | 66% | 58% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. H Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Electronics
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Electronics Fund (the Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, net operating losses, capital loss carryforwards, losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 2,993,841 |
Unrealized depreciation | (4,255,959) |
Net unrealized appreciation (depreciation) | $ (1,262,118) |
Cost for federal income tax purposes | $ 33,153,240 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $3,042,688 and $8,703,233, respectively.
Electronics
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 10,098 | $ 56 |
Class T | .25% | .25% | 22,546 | - |
Class B | .75% | .25% | 28,687 | 21,517 |
Class C | .75% | .25% | 35,313 | 3,141 |
| | | $ 96,644 | $ 24,714 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1% to .50% 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 | $ 668 |
Class T | 1,176 |
Class B* | 11,781 |
Class C* | 705 |
| $ 14,330 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets* |
Class A | $ 15,387 | .38 |
Class T | 19,350 | .43 |
Class B | 11,211 | .39 |
Class C | 13,764 | .39 |
Institutional Class | 1,011 | .25 |
| $ 60,723 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $105 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $39 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds.
7. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense
Limitations | Reimbursement
from adviser |
Class A | 1.40% | $ 14,167 |
Class T | 1.65% | 18,227 |
Class B | 2.15% | 10,395 |
Class C | 2.15% | 12,814 |
Institutional Class | 1.15% | 910 |
| | $ 56,513 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $1,972 for the period.
Electronics
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2007 | Year ended
July 31,
2006 | Six months ended January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 112,919 | 435,594 | $ 918,655 | $ 3,620,302 |
Shares redeemed | (246,713) | (781,896) | (1,991,618) | (6,327,084) |
Net increase (decrease) | (133,794) | (346,302) | $ (1,072,963) | $ (2,706,782) |
Class T | | | | |
Shares sold | 54,692 | 251,455 | $ 444,186 | $ 2,041,805 |
Shares redeemed | (253,427) | (529,920) | (2,015,653) | (4,209,309) |
Net increase (decrease) | (198,735) | (278,465) | $ (1,571,467) | $ (2,167,504) |
Class B | | | | |
Shares sold | 19,029 | 89,856 | $ 149,855 | $ 712,048 |
Shares redeemed | (253,145) | (378,696) | (1,999,899) | (2,960,769) |
Net increase (decrease) | (234,116) | (288,840) | $ (1,850,044) | $ (2,248,721) |
Class C | | | | |
Shares sold | 289,104 | 184,474 | $ 2,348,289 | $ 1,462,697 |
Shares redeemed | (240,411) | (618,382) | (1,879,722) | (4,840,037) |
Net increase (decrease) | 48,693 | (433,908) | $ 468,567 | $ (3,377,340) |
Institutional Class | | | | |
Shares sold | 10,991 | 66,399 | $ 91,055 | $ 577,320 |
Shares redeemed | (13,210) | (76,867) | (109,576) | (614,153) |
Net increase (decrease) | (2,219) | (10,468) | $ (18,521) | $ (36,833) |
Semiannual Report
Advisor Energy Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,000.50 | $ 6.25 |
Hypothetical A | $ 1,000.00 | $ 1,018.95 | $ 6.31 |
Class T | | | |
Actual | $ 1,000.00 | $ 999.50 | $ 7.26 |
Hypothetical A | $ 1,000.00 | $ 1,017.95 | $ 7.32 |
Class B | | | |
Actual | $ 1,000.00 | $ 996.90 | $ 10.07 |
Hypothetical A | $ 1,000.00 | $ 1,015.12 | $ 10.16 |
Class C | | | |
Actual | $ 1,000.00 | $ 997.10 | $ 9.82 |
Hypothetical A | $ 1,000.00 | $ 1,015.38 | $ 9.91 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,002.10 | $ 4.64 |
Hypothetical A | $ 1,000.00 | $ 1,020.57 | $ 4.69 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.24% |
Class T | 1.44% |
Class B | 2.00% |
Class C | 1.95% |
Institutional Class | .92% |
Energy
Advisor Energy Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Exxon Mobil Corp. | 7.7 | 2.8 |
Valero Energy Corp. | 7.6 | 4.0 |
Chevron Corp. | 7.6 | 2.4 |
ConocoPhillips | 6.9 | 4.0 |
Noble Corp. | 5.9 | 2.6 |
Schlumberger Ltd. (NY Shares) | 5.7 | 4.7 |
Baker Hughes, Inc. | 4.8 | 1.7 |
Range Resources Corp. | 3.8 | 2.1 |
Ultra Petroleum Corp. | 3.6 | 2.1 |
National Oilwell Varco, Inc. | 3.3 | 3.5 |
| 56.9 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Oil, Gas & Consumable Fuels | 60.0% | |
| Energy Equipment & Services | 35.4% | |
| Electrical Equipment | 1.5% | |
| Machinery | 1.3% | |
| Construction & Engineering | 0.9% | |
| All Others * | 0.9% | |
|
As of July 31, 2006 |
| Oil, Gas & Consumable Fuels | 42.6% | |
| Energy Equipment & Services | 29.6% | |
| Metals & Mining | 15.0% | |
| Machinery | 2.1% | |
| Chemicals | 1.9% | |
| All Others * | 8.8% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Semiannual Report
Advisor Energy Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.1% |
| Shares | | Value (Note 1) |
CONSTRUCTION & ENGINEERING - 0.9% |
Construction & Engineering - 0.9% |
Chicago Bridge & Iron Co. NV (NY Shares) | 20,400 | | $ 606,288 |
Fluor Corp. | 17,300 | | 1,428,980 |
Jacobs Engineering Group, Inc. (a) | 57,500 | | 5,206,625 |
| | 7,241,893 |
ELECTRICAL EQUIPMENT - 1.5% |
Electrical Components & Equipment - 0.0% |
Suntech Power Holdings Co. Ltd. sponsored ADR (a) | 9,400 | | 345,920 |
Heavy Electrical Equipment - 1.5% |
Suzlon Energy Ltd. | 11,296 | | 292,817 |
Vestas Wind Systems AS (a) | 244,600 | | 10,796,144 |
| | 11,088,961 |
TOTAL ELECTRICAL EQUIPMENT | | 11,434,881 |
ENERGY EQUIPMENT & SERVICES - 35.4% |
Oil & Gas Drilling - 16.0% |
Diamond Offshore Drilling, Inc. (d) | 266,100 | | 22,469,484 |
GlobalSantaFe Corp. | 422,400 | | 24,503,424 |
Noble Corp. | 597,800 | | 44,805,110 |
Pride International, Inc. (a) | 611,800 | | 17,625,958 |
Transocean, Inc. (a) | 148,500 | | 11,489,445 |
| | 120,893,421 |
Oil & Gas Equipment & Services - 19.4% |
Baker Hughes, Inc. | 528,850 | | 36,506,516 |
Halliburton Co. | 566,400 | | 16,731,456 |
National Oilwell Varco, Inc. (a) | 416,132 | | 25,234,244 |
Oceaneering International, Inc. (a) | 52,200 | | 2,060,334 |
Schlumberger Ltd. (NY Shares) | 684,800 | | 43,477,952 |
Smith International, Inc. | 239,500 | | 9,503,360 |
Superior Energy Services, Inc. (a) | 227,400 | | 6,894,768 |
W-H Energy Services, Inc. (a) | 74,400 | | 3,376,272 |
Weatherford International Ltd. (a) | 79,600 | | 3,214,248 |
| | 146,999,150 |
TOTAL ENERGY EQUIPMENT & SERVICES | | 267,892,571 |
|
| Shares | | Value (Note 1) |
MACHINERY - 1.3% |
Construction & Farm Machinery & Heavy Trucks - 1.3% |
Bucyrus International, Inc. Class A | 65,290 | | $ 3,030,109 |
Joy Global, Inc. | 147,050 | | 6,833,414 |
| | 9,863,523 |
OIL, GAS & CONSUMABLE FUELS - 60.0% |
Coal & Consumable Fuels - 4.0% |
Arch Coal, Inc. | 235,900 | | 7,010,948 |
CONSOL Energy, Inc. | 313,900 | | 10,807,577 |
Foundation Coal Holdings, Inc. | 49,800 | | 1,657,344 |
Peabody Energy Corp. | 269,000 | | 10,983,270 |
| | 30,459,139 |
Integrated Oil & Gas - 24.6% |
Chevron Corp. | 786,036 | | 57,286,304 |
ConocoPhillips | 792,438 | | 52,625,808 |
Exxon Mobil Corp. | 783,060 | | 58,024,745 |
Hess Corp. | 116,600 | | 6,295,234 |
Occidental Petroleum Corp. | 255,500 | | 11,844,980 |
| | 186,077,071 |
Oil & Gas Exploration & Production - 22.7% |
Aurora Oil & Gas Corp. (a) | 310,900 | | 854,975 |
Cabot Oil & Gas Corp. | 257,100 | | 16,675,506 |
Chesapeake Energy Corp. (d) | 666,000 | | 19,720,260 |
Energy Partners Ltd. (a) | 71,800 | | 1,555,188 |
EOG Resources, Inc. | 333,200 | | 23,034,116 |
Forest Oil Corp. (a) | 24,200 | | 772,464 |
Mariner Energy, Inc. (a) | 34,210 | | 687,963 |
Newfield Exploration Co. (a) | 54,700 | | 2,341,707 |
Noble Energy, Inc. | 15,300 | | 817,173 |
Petrohawk Energy Corp. (a) | 315,900 | | 3,645,486 |
Plains Exploration & Production Co. (a) | 290,000 | | 13,989,600 |
Quicksilver Resources, Inc. (a) | 239,550 | | 9,500,553 |
Range Resources Corp. | 930,227 | | 28,548,667 |
Ultra Petroleum Corp. (a) | 523,000 | | 27,300,600 |
XTO Energy, Inc. | 451,400 | | 22,782,158 |
| | 172,226,416 |
Oil & Gas Refining & Marketing - 8.4% |
Petroplus Holdings AG | 9,810 | | 627,051 |
Sunoco, Inc. | 66,400 | | 4,191,832 |
Tesoro Corp. | 7,400 | | 609,686 |
Valero Energy Corp. | 1,064,448 | | 57,778,237 |
| | 63,206,806 |
Oil & Gas Storage & Transport - 0.3% |
Williams Companies, Inc. | 73,600 | | 1,986,464 |
TOTAL OIL, GAS & CONSUMABLE FUELS | | 453,955,896 |
TOTAL COMMON STOCKS (Cost $597,280,852) | 750,388,764 |
Money Market Funds - 4.5% |
| Shares | | Value (Note 1) |
Fidelity Cash Central Fund, 5.35% (b) | 7,418,939 | | $ 7,418,939 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 26,627,000 | | 26,627,000 |
TOTAL MONEY MARKET FUNDS (Cost $34,045,939) | 34,045,939 |
TOTAL INVESTMENT PORTFOLIO - 103.6% (Cost $631,326,791) | | 784,434,703 |
NET OTHER ASSETS - (3.6)% | | (27,311,752) |
NET ASSETS - 100% | $ 757,122,951 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 190,600 |
Fidelity Securities Lending Cash Central Fund | 17,821 |
Total | $ 208,421 |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 79.9% |
Cayman Islands | 9.2% |
Netherlands Antilles | 5.7% |
Canada | 3.6% |
Denmark | 1.4% |
Others (individually less than 1%) | 0.2% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Energy Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $26,323,468) - See accompanying schedule: Unaffiliated issuers (cost $597,280,852) | $ 750,388,764 | |
Fidelity Central Funds (cost $34,045,939) | 34,045,939 | |
Total Investments (cost $631,326,791) | | $ 784,434,703 |
Receivable for investments sold | | 1,339,300 |
Receivable for fund shares sold | | 907,734 |
Dividends receivable | | 3,453 |
Interest receivable | | 16,419 |
Prepaid expenses | | 4,204 |
Other receivables | | 24,554 |
Total assets | | 786,730,367 |
| | |
Liabilities | | |
Payable for fund shares redeemed | $ 1,930,680 | |
Accrued management fee | 341,800 | |
Distribution fees payable | 345,021 | |
Other affiliated payables | 204,340 | |
Other payables and accrued expenses | 158,575 | |
Collateral on securities loaned, at value | 26,627,000 | |
Total liabilities | | 29,607,416 |
| | |
Net Assets | | $ 757,122,951 |
Net Assets consist of: | | |
Paid in capital | | $ 599,894,673 |
Accumulated net investment loss | | (1,789,095) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 5,909,461 |
Net unrealized appreciation (depreciation) on investments | | 153,107,912 |
Net Assets | | $ 757,122,951 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price
Class A: Net Asset Value and redemption price per share ($202,250,269 ÷ 5,111,120 shares) | | $ 39.57 |
| | |
Maximum offering price per share (100/94.25 of $39.57) | | $ 41.98 |
Class T:
Net Asset Value and redemption price per share ($325,334,638 ÷ 8,050,103 shares) | | $ 40.41 |
| | |
Maximum offering price per share (100/96.50 of $40.41) | | $ 41.88 |
Class B:
Net Asset Value and offering price per share ($107,847,856 ÷ 2,810,705 shares) A | | $ 38.37 |
| | |
Class C:
Net Asset Value and offering price per share ($107,470,085 ÷ 2,786,859 shares) A | | $ 38.56 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($14,220,103 ÷ 349,778 shares) | | $ 40.65 |
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.
Energy
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 3,823,541 |
Interest | | 6,775 |
Income from Fidelity Central Funds | | 208,421 |
Total income | | 4,038,737 |
| | |
Expenses | | |
Management fee | $ 2,150,252 | |
Transfer agent fees | 1,116,823 | |
Distribution fees | 2,184,211 | |
Accounting and security lending fees | 140,942 | |
Custodian fees and expenses | 19,264 | |
Independent trustees' compensation | 1,319 | |
Registration fees | 86,610 | |
Audit | 24,164 | |
Legal | 11,519 | |
Interest | 1,122 | |
Miscellaneous | 132,868 | |
Total expenses before reductions | 5,869,094 | |
Expense reductions | (34,587) | 5,834,507 |
Net investment income (loss) | | (1,795,770) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 34,884,308 | |
Foreign currency transactions | (21,232) | |
Total net realized gain (loss) | | 34,863,076 |
Change in net unrealized appreciation (depreciation) on:
Investment securities | (40,688,043) | |
Assets and liabilities in foreign currencies | (1,108) | |
Total change in net unrealized appreciation (depreciation) | | (40,689,151) |
Net gain (loss) | | (5,826,075) |
Net increase (decrease) in net assets resulting from operations | | $ (7,621,845) |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (1,795,770) | $ (2,855,811) |
Net realized gain (loss) | 34,863,076 | 151,070,040 |
Change in net unrealized appreciation (depreciation) | (40,689,151) | 36,149,130 |
Net increase (decrease) in net assets resulting from operations | (7,621,845) | 184,363,359 |
Distributions to shareholders from net realized gain | (117,272,323) | (96,405,578) |
Share transactions - net increase (decrease) | 39,376,374 | 199,114,450 |
Redemption fees | 27,495 | 111,350 |
Total increase (decrease) in net assets | (85,490,299) | 287,183,581 |
| | |
Net Assets | | |
Beginning of period | 842,613,250 | 555,429,669 |
End of period (including accumulated net investment loss of $1,789,095 and undistributed net investment income of $6,675, respectively) | $ 757,122,951 | $ 842,613,250 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 46.39 | $ 40.93 | $ 29.12 | $ 21.65 | $ 20.33 | $ 26.42 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.03) | (.04) | .06 | .07 | .13 | .15 |
Net realized and unrealized gain (loss) | (.28) | 12.30 | 12.21 | 7.50 | 1.30 | (4.36) |
Total from investment operations | (.31) | 12.26 | 12.27 | 7.57 | 1.43 | (4.21) |
Distributions from net investment income | - | - | (.06) | (.10) | (.11) | (.18) |
Distributions from net realized gain | (6.51) | (6.81) | (.41) | - | - | (1.70) |
Total distributions | (6.51) | (6.81) | (.47) | (.10) | (.11) | (1.88) |
Redemption fees added to paid in capital E | - I | .01 | .01 | - I | - I | - I |
Net asset value, end of period | $ 39.57 | $ 46.39 | $ 40.93 | $ 29.12 | $ 21.65 | $ 20.33 |
Total Return B, C, D | .05% | 32.90% | 42.69% | 35.08% | 7.07% | (16.92)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.24% A | 1.21% | 1.25% | 1.30% | 1.36% | 1.28% |
Expenses net of fee waivers, if any | 1.24% A | 1.21% | 1.25% | 1.30% | 1.36% | 1.28% |
Expenses net of all reductions | 1.23% A | 1.17% | 1.19% | 1.29% | 1.32% | 1.24% |
Net investment income (loss) | (.17)% A | (.09)% | .19% | .28% | .63% | .64% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 202,250 | $ 204,391 | $ 90,342 | $ 44,315 | $ 21,798 | $ 21,993 |
Portfolio turnover rate G | 105% A | 139% | 125% | 40% | 41% | 85% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 47.18 | $ 41.46 | $ 29.52 | $ 21.97 | $ 20.61 | $ 26.73 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.08) | (.13) | - I | .03 | .10 | .11 |
Net realized and unrealized gain (loss) | (.27) | 12.49 | 12.37 | 7.60 | 1.32 | (4.42) |
Total from investment operations | (.35) | 12.36 | 12.37 | 7.63 | 1.42 | (4.31) |
Distributions from net investment income | - | - | (.03) | (.08) | (.06) | (.11) |
Distributions from net realized gain | (6.42) | (6.65) | (.41) | - | - | (1.70) |
Total distributions | (6.42) | (6.65) | (.44) | (.08) | (.06) | (1.81) |
Redemption fees added to paid in capital E | - I | .01 | .01 | - I | - I | - I |
Net asset value, end of period | $ 40.41 | $ 47.18 | $ 41.46 | $ 29.52 | $ 21.97 | $ 20.61 |
Total Return B, C, D | (.05)% | 32.60% | 42.41% | 34.82% | 6.91% | (17.07)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.44% A | 1.42% | 1.44% | 1.48% | 1.50% | 1.45% |
Expenses net of fee waivers, if any | 1.44% A | 1.42% | 1.44% | 1.48% | 1.50% | 1.45% |
Expenses net of all reductions | 1.43% A | 1.38% | 1.39% | 1.47% | 1.47% | 1.41% |
Net investment income (loss) | (.37)% A | (.29)% | (.01)% | .10% | .48% | .47% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 325,335 | $ 362,272 | $ 280,820 | $ 201,187 | $ 155,249 | $ 174,670 |
Portfolio turnover rate G | 105% A | 139% | 125% | 40% | 41% | 85% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Energy
Financial Highlights - Class B
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 45.10 | $ 39.89 | $ 28.54 | $ 21.28 | $ 20.02 | $ 26.04 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.18) | (.35) | (.18) | (.11) | (.01) | (.02) |
Net realized and unrealized gain (loss) | (.26) | 11.98 | 11.93 | 7.37 | 1.27 | (4.29) |
Total from investment operations | (.44) | 11.63 | 11.75 | 7.26 | 1.26 | (4.31) |
Distributions from net investment income | - | - | - | - | - | (.01) |
Distributions from net realized gain | (6.29) | (6.43) | (.41) | - | - | (1.70) |
Total distributions | (6.29) | (6.43) | (.41) | - | - | (1.71) |
Redemption fees added to paid in capital E | - I | .01 | .01 | - I | - I | - I |
Net asset value, end of period | $ 38.37 | $ 45.10 | $ 39.89 | $ 28.54 | $ 21.28 | $ 20.02 |
Total Return B, C, D | (.31)% | 31.86% | 41.66% | 34.12% | 6.29% | (17.51)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.00% A | 1.96% | 1.98% | 2.02% | 2.06% | 2.00% |
Expenses net of fee waivers, if any | 2.00% A | 1.96% | 1.98% | 2.02% | 2.06% | 2.00% |
Expenses net of all reductions | 2.00% A | 1.92% | 1.93% | 2.01% | 2.02% | 1.95% |
Net investment income (loss) | (.94)% A | (.84)% | (.55)% | (.44)% | (.07)% | (.07)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 107,848 | $ 130,973 | $ 102,003 | $ 68,347 | $ 50,833 | $ 58,656 |
Portfolio turnover rate G | 105% A | 139% | 125% | 40% | 41% | 85% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 45.33 | $ 40.10 | $ 28.68 | $ 21.38 | $ 20.10 | $ 26.15 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.17) | (.34) | (.17) | (.10) | - I | (.01) |
Net realized and unrealized gain (loss) | (.27) | 12.06 | 11.99 | 7.40 | 1.28 | (4.32) |
Total from investment operations | (.44) | 11.72 | 11.82 | 7.30 | 1.28 | (4.33) |
Distributions from net investment income | - | - | - | - | - | (.02) |
Distributions from net realized gain | (6.33) | (6.50) | (.41) | - | - | (1.70) |
Total distributions | (6.33) | (6.50) | (.41) | - | - | (1.72) |
Redemption fees added to paid in capital E | - I | .01 | .01 | - I | - I | - I |
Net asset value, end of period | $ 38.56 | $ 45.33 | $ 40.10 | $ 28.68 | $ 21.38 | $ 20.10 |
Total Return B, C, D | (.29)% | 31.96% | 41.70% | 34.14% | 6.37% | (17.52)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.95% A | 1.92% | 1.94% | 1.99% | 2.01% | 1.96% |
Expenses net of fee waivers, if any | 1.95% A | 1.92% | 1.94% | 1.99% | 2.01% | 1.96% |
Expenses net of all reductions | 1.94% A | 1.88% | 1.89% | 1.97% | 1.97% | 1.92% |
Net investment income (loss) | (.89)% A | (.79)% | (.51)% | (.41)% | (.02)% | (.03)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 107,470 | $ 125,424 | $ 72,832 | $ 37,206 | $ 22,044 | $ 24,201 |
Portfolio turnover rate G | 105% A | 139% | 125% | 40% | 41% | 85% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 47.48 | $ 41.76 | $ 29.64 | $ 22.03 | $ 20.67 | $ 26.82 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .03 | .12 | .19 | .18 | .22 | .23 |
Net realized and unrealized gain (loss) | (.28) | 12.56 | 12.44 | 7.62 | 1.32 | (4.43) |
Total from investment operations | (.25) | 12.68 | 12.63 | 7.80 | 1.54 | (4.20) |
Distributions from net investment income | - | - | (.11) | (.19) | (.18) | (.25) |
Distributions from net realized gain | (6.58) | (6.97) | (.41) | - | - | (1.70) |
Total distributions | (6.58) | (6.97) | (.52) | (.19) | (.18) | (1.95) |
Redemption fees added to paid in capital D | - H | .01 | .01 | - H | - H | - H |
Net asset value, end of period | $ 40.65 | $ 47.48 | $ 41.76 | $ 29.64 | $ 22.03 | $ 20.67 |
Total Return B, C | .21% | 33.35% | 43.21% | 35.60% | 7.51% | (16.64)% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | .92% A | .87% | .89% | .90% | .95% | .93% |
Expenses net of fee waivers, if any | .92% A | .87% | .89% | .90% | .95% | .93% |
Expenses net of all reductions | .91% A | .83% | .84% | .89% | .91% | .89% |
Net investment income (loss) | .15% A | .26% | .54% | .68% | 1.04% | .99% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 14,220 | $ 19,553 | $ 9,433 | $ 4,206 | $ 2,652 | $ 4,938 |
Portfolio turnover rate F | 105% A | 139% | 125% | 40% | 41% | 85% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. H Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Energy
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Energy Fund (the Fund) (formerly Fidelity Advisor Natural Resources Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile. The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles. In addition, the Fund will claim a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), partnerships (including allocations from Fidelity Central Funds) and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 157,236,071 |
Unrealized depreciation | (6,030,952) |
Net unrealized appreciation (depreciation) | $ 151,205,119 |
Cost for federal income tax purposes | $ 633,229,584 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Energy
3. Purchases and Sales of Investments.
Purchases and sales of securities other than short-term securities, aggregated $406,120,655 and $486,899,255, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 245,121 | $ 8,834 |
Class T | .25% | .25% | 814,564 | 1,370 |
Class B | .75% | .25% | 571,866 | 428,899 |
Class C | .75% | .25% | 552,660 | 154,979 |
| | | $ 2,184,211 | $ 594,082 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 94,963 |
Class T | 28,623 |
Class B * | 111,139 |
Class C * | 24,391 |
| $ 259,116 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets * |
Class A | $ 311,611 | .32 |
Class T | 438,543 | .27 |
Class B | 190,960 | .33 |
Class C | 155,873 | .28 |
Institutional Class | 19,836 | .25 |
| $ 1,116,823 | |
* Annualized
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 Fidelity Management & Research Company, (FMR).
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $613 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Daily Loan Balance | Weighted Average Interest Rate | Interest Expense |
Borrower | $ 7,517,000 | 5.37% | $ 1,122 |
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $984 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $17,821.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $20,089 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $2,749. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction |
Class C | $ 281 |
Energy
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
From net investment income | | |
Class A | $ - | $ - |
Class T | - | - |
Total | $ - | $ - |
From net realized gain | | |
Class A | $ 30,376,126 | $ 17,953,640 |
Class T | 48,658,778 | 46,191,250 |
Class B | 18,098,259 | 17,304,417 |
Class C | 17,464,702 | 12,815,774 |
Institutional Class | 2,674,458 | 2,140,497 |
Total | $ 117,272,323 | $ 96,405,578 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2007 | Year ended
July 31,
2006 | Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 1,142,068 | 2,831,331 | $ 46,219,051 | $ 124,673,619 |
Reinvestment of distributions | 718,214 | 400,806 | 27,808,290 | 16,449,083 |
Shares redeemed | (1,155,165) | (1,033,179) | (44,741,532) | (44,849,856) |
Net increase (decrease) | 705,117 | 2,198,958 | $ 29,285,809 | $ 96,272,846 |
Class T | | | | |
Shares sold | 645,945 | 1,987,040 | $ 26,301,118 | $ 88,233,274 |
Reinvestment of distributions | 1,161,030 | 1,036,774 | 45,909,811 | 43,334,106 |
Shares redeemed | (1,435,509) | (2,118,138) | (58,077,198) | (92,809,287) |
Net increase (decrease) | 371,466 | 905,676 | $ 14,133,731 | $ 38,758,093 |
Class B | | | | |
Shares sold | 249,628 | 1,013,249 | $ 9,804,368 | $ 43,295,228 |
Reinvestment of distributions | 414,176 | 367,313 | 15,589,025 | 14,743,317 |
Shares redeemed | (756,851) | (1,034,052) | (28,553,880) | (43,654,702) |
Net increase (decrease) | (93,047) | 346,510 | $ (3,160,487) | $ 14,383,843 |
Class C | | | | |
Shares sold | 425,312 | 1,465,945 | $ 16,629,905 | $ 63,632,906 |
Reinvestment of distributions | 385,211 | 261,691 | 14,569,023 | 10,551,203 |
Shares redeemed | (790,345) | (777,152) | (29,706,769) | (32,787,487) |
Net increase (decrease) | 20,178 | 950,484 | $ 1,492,159 | $ 41,396,622 |
Institutional Class | | | | |
Shares sold | 74,229 | 261,912 | $ 3,111,532 | $ 11,683,224 |
Reinvestment of distributions | 39,397 | 24,127 | 1,561,516 | 1,012,348 |
Shares redeemed | (175,665) | (100,080) | (7,047,886) | (4,392,526) |
Net increase (decrease) | (62,039) | 185,959 | $ (2,374,838) | $ 8,303,046 |
Energy
Advisor Financial Services Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,133.00 | $ 6.83 |
HypotheticalA | $ 1,000.00 | $ 1,018.80 | $ 6.46 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,131.60 | $ 8.06 |
HypotheticalA | $ 1,000.00 | $ 1,017.64 | $ 7.63 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,128.50 | $ 10.89 |
HypotheticalA | $ 1,000.00 | $ 1,014.97 | $ 10.31 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,128.50 | $ 10.62 |
HypotheticalA | $ 1,000.00 | $ 1,015.22 | $ 10.06 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,134.80 | $ 4.95 |
HypotheticalA | $ 1,000.00 | $ 1,020.57 | $ 4.69 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.27% |
Class T | 1.50% |
Class B | 2.03% |
Class C | 1.98% |
Institutional Class | .92% |
Semiannual Report
Advisor Financial Services Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
American International Group, Inc. | 8.8 | 8.5 |
JPMorgan Chase & Co. | 5.1 | 5.5 |
Bank of America Corp. | 4.9 | 6.6 |
Wells Fargo & Co. | 4.2 | 3.7 |
Wachovia Corp. | 4.1 | 4.2 |
Merrill Lynch & Co., Inc. | 3.7 | 2.9 |
Morgan Stanley | 3.3 | 1.8 |
Endurance Specialty Holdings Ltd. | 2.9 | 2.7 |
ACE Ltd. | 2.8 | 2.6 |
Citigroup, Inc. | 2.6 | 1.5 |
| 42.4 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Insurance | 31.8% | |
| Commercial Banks | 18.0% | |
| Capital Markets | 17.4% | |
| Diversified Financial Services | 13.7% | |
| Real Estate Investment Trusts | 7.7% | |
| All Others* | 11.4% | |
|
As of July 31, 2006 |
| Insurance | 29.2% | |
| Commercial Banks | 18.9% | |
| Capital Markets | 18.0% | |
| Diversified Financial Services | 16.2% | |
| Thrifts & Mortgage Finance | 7.9% | |
| All Others* | 9.8% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Financial Services
Advisor Financial Services Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.8% |
| Shares | | Value (Note 1) |
CAPITAL MARKETS - 17.4% |
Asset Management & Custody Banks - 5.2% |
Affiliated Managers Group, Inc. (a)(d) | 18,900 | | $ 2,105,460 |
American Capital Strategies Ltd. (d) | 48,300 | | 2,349,795 |
Franklin Resources, Inc. | 36,000 | | 4,287,960 |
Investors Financial Services Corp. | 72,700 | | 3,400,179 |
KKR Private Equity Investors, LP | 23,000 | | 540,500 |
KKR Private Equity Investors, LP Restricted Depositary Units (e) | 37,100 | | 871,850 |
Legg Mason, Inc. (d) | 15,400 | | 1,614,690 |
State Street Corp. | 83,500 | | 5,932,675 |
| | 21,103,109 |
Diversified Capital Markets - 1.1% |
UBS AG (NY Shares) | 68,800 | | 4,335,088 |
Investment Banking & Brokerage - 11.1% |
Charles Schwab Corp. | 176,000 | | 3,329,920 |
E*TRADE Financial Corp. | 219,800 | | 5,358,724 |
Lazard Ltd. Class A | 75,100 | | 3,812,076 |
Merrill Lynch & Co., Inc. | 157,700 | | 14,754,412 |
Morgan Stanley | 160,900 | | 13,320,911 |
Nomura Holdings, Inc. | 176,800 | | 3,604,952 |
optionsXpress Holdings, Inc. | 34,800 | | 826,500 |
| | 45,007,495 |
TOTAL CAPITAL MARKETS | | 70,445,692 |
COMMERCIAL BANKS - 18.0% |
Diversified Banks - 13.7% |
Banco Bilbao Vizcaya Argentaria SA | 171,700 | | 4,306,236 |
ICICI Bank Ltd. sponsored ADR | 47,900 | | 2,114,785 |
Kookmin Bank sponsored ADR | 29,900 | | 2,377,947 |
Mizrahi Tefahot Bank Ltd. | 96,900 | | 662,137 |
U.S. Bancorp, Delaware | 186,600 | | 6,642,960 |
Unicredito Italiano Spa | 636,600 | | 5,890,960 |
Wachovia Corp. | 290,198 | | 16,396,187 |
Wells Fargo & Co. | 473,300 | | 17,000,936 |
| | 55,392,148 |
Regional Banks - 4.3% |
Cathay General Bancorp | 62,612 | | 2,170,132 |
Center Financial Corp., California | 57,600 | | 1,354,176 |
Colonial Bancgroup, Inc. | 82,000 | | 2,012,280 |
Commerce Bancorp, Inc., New Jersey | 32,000 | | 1,080,960 |
Nara Bancorp, Inc. | 36,359 | | 713,727 |
PNC Financial Services Group, Inc. | 83,800 | | 6,181,926 |
SVB Financial Group (a) | 50,378 | | 2,350,134 |
Wintrust Financial Corp. | 3,000 | | 137,370 |
Zions Bancorp | 15,500 | | 1,314,710 |
| | 17,315,415 |
TOTAL COMMERCIAL BANKS | | 72,707,563 |
|
| Shares | | Value (Note 1) |
CONSUMER FINANCE - 3.9% |
Consumer Finance - 3.9% |
American Express Co. | 148,400 | | $ 8,639,848 |
Capital One Financial Corp. (d) | 52,230 | | 4,199,292 |
Dollar Financial Corp. (a) | 94,562 | | 3,028,821 |
| | 15,867,961 |
DIVERSIFIED FINANCIAL SERVICES - 13.7% |
Other Diversifed Financial Services - 12.6% |
Bank of America Corp. | 374,172 | | 19,673,964 |
Citigroup, Inc. | 192,569 | | 10,616,329 |
JPMorgan Chase & Co. | 401,194 | | 20,432,810 |
| | 50,723,103 |
Specialized Finance - 1.1% |
CBOT Holdings, Inc. Class A (a) | 8,700 | | 1,468,560 |
The NASDAQ Stock Market, Inc. (a) | 85,300 | | 2,907,024 |
| | 4,375,584 |
TOTAL DIVERSIFIED FINANCIAL SERVICES | | 55,098,687 |
HOUSEHOLD DURABLES - 0.7% |
Homebuilding - 0.7% |
D.R. Horton, Inc. | 92,700 | | 2,693,862 |
INSURANCE - 31.8% |
Insurance Brokers - 0.8% |
National Financial Partners Corp. | 49,200 | | 2,415,720 |
Willis Group Holdings Ltd. | 20,740 | | 847,436 |
| | 3,263,156 |
Life & Health Insurance - 4.8% |
AFLAC, Inc. | 94,300 | | 4,489,623 |
MetLife, Inc. (d) | 144,500 | | 8,976,340 |
Prudential Financial, Inc. | 64,400 | | 5,739,972 |
| | 19,205,935 |
Multi-Line Insurance - 10.5% |
American International Group, Inc. | 518,860 | | 35,515,966 |
Hartford Financial Services Group, Inc. | 73,900 | | 7,013,849 |
| | 42,529,815 |
Property & Casualty Insurance - 8.4% |
ACE Ltd. | 194,000 | | 11,209,320 |
Allied World Assurance Co. Holdings Ltd. | 24,600 | | 1,047,960 |
Aspen Insurance Holdings Ltd. | 99,300 | | 2,544,066 |
Axis Capital Holdings Ltd. | 83,700 | | 2,757,915 |
MBIA, Inc. | 50,800 | | 3,648,964 |
Old Republic International Corp. | 102,900 | | 2,294,670 |
The St. Paul Travelers Companies, Inc. | 175,000 | | 8,898,750 |
XL Capital Ltd. Class A | 22,800 | | 1,573,200 |
| | 33,974,845 |
Reinsurance - 7.3% |
Endurance Specialty Holdings Ltd. | 340,570 | | 11,579,380 |
Everest Re Group Ltd. | 24,000 | | 2,246,400 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
INSURANCE - CONTINUED |
Reinsurance - continued |
IPC Holdings Ltd. | 63,500 | | $ 1,870,075 |
Max Re Capital Ltd. | 118,862 | | 2,852,688 |
Montpelier Re Holdings Ltd. | 30,900 | | 538,587 |
PartnerRe Ltd. | 14,500 | | 986,000 |
Platinum Underwriters Holdings Ltd. | 313,700 | | 9,363,945 |
| | 29,437,075 |
TOTAL INSURANCE | | 128,410,826 |
REAL ESTATE INVESTMENT TRUSTS - 7.7% |
Mortgage REITs - 0.3% |
Annaly Capital Management, Inc. | 84,100 | | 1,158,898 |
Residential REITs - 3.2% |
Equity Lifestyle Properties, Inc. | 43,900 | | 2,424,597 |
Equity Residential (SBI) | 145,800 | | 8,205,624 |
United Dominion Realty Trust, Inc. (SBI) | 69,600 | | 2,282,184 |
| | 12,912,405 |
Retail REITs - 4.2% |
CBL & Associates Properties, Inc. | 24,292 | | 1,140,024 |
Developers Diversified Realty Corp. | 83,800 | | 5,624,656 |
General Growth Properties, Inc. | 119,700 | | 7,363,944 |
Simon Property Group, Inc. | 26,100 | | 2,985,579 |
| | 17,114,203 |
TOTAL REAL ESTATE INVESTMENT TRUSTS | | 31,185,506 |
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.1% |
Real Estate Management & Development - 1.1% |
Mitsubishi Estate Co. Ltd. | 152,000 | | 4,345,196 |
THRIFTS & MORTGAGE FINANCE - 5.5% |
Thrifts & Mortgage Finance - 5.5% |
Countrywide Financial Corp. | 131,773 | | 5,729,490 |
Fannie Mae | 158,035 | | 8,933,719 |
Hudson City Bancorp, Inc. | 208,575 | | 2,872,078 |
|
| Shares | | Value (Note 1) |
Radian Group, Inc. | 10,600 | | $ 638,332 |
Washington Mutual, Inc. | 93,800 | | 4,182,542 |
| | 22,356,161 |
TOTAL COMMON STOCKS (Cost $292,924,468) | 403,111,454 |
Money Market Funds - 3.7% |
| | | |
Fidelity Cash Central Fund, 5.35% (b) | 2,165,613 | | 2,165,613 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 13,060,535 | | 13,060,535 |
TOTAL MONEY MARKET FUNDS (Cost $15,226,148) | 15,226,148 |
TOTAL INVESTMENT PORTFOLIO - 103.5% (Cost $308,150,616) | | 418,337,602 |
NET OTHER ASSETS - (3.5)% | | (14,305,684) |
NET ASSETS - 100% | $ 404,031,918 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $871,850 or 0.2% of net assets. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 56,493 |
Fidelity Securities Lending Cash Central Fund | 31,572 |
Total | $ 88,065 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 80.1% |
Bermuda | 9.9% |
Cayman Islands | 2.8% |
Japan | 2.0% |
Italy | 1.4% |
Switzerland | 1.1% |
Spain | 1.1% |
Others (individually less than 1%) | 1.6% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Financial Services Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $12,863,296) - See accompanying schedule: Unaffiliated issuers (cost $292,924,468) | $ 403,111,454 | |
Fidelity Central Funds (cost $15,226,148) | 15,226,148 | |
Total Investments (cost $308,150,616) | | $ 418,337,602 |
Receivable for investments sold | | 2,875,913 |
Receivable for fund shares sold | | 532,678 |
Dividends receivable | | 344,990 |
Interest receivable | | 6,779 |
Prepaid expenses | | 1,960 |
Other receivables | | 12,670 |
Total assets | | 422,112,592 |
| | |
Liabilities | | |
Payable for investments purchased | $ 2,539,717 | |
Payable for fund shares redeemed | 1,841,072 | |
Accrued management fee | 190,063 | |
Distribution fees payable | 213,090 | |
Other affiliated payables | 117,755 | |
Other payables and accrued expenses | 118,442 | |
Collateral on securities loaned, at value | 13,060,535 | |
Total liabilities | | 18,080,674 |
| | |
Net Assets | | $ 404,031,918 |
Net Assets consist of: | | |
Paid in capital | | $ 290,275,771 |
Undistributed net investment income | | 203,086 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 3,366,288 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 110,186,773 |
Net Assets | | $ 404,031,918 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($107,554,984 ÷ 4,720,792 shares) | | $ 22.78 |
| | |
Maximum offering price per share (100/94.25 of $22.78) | | $ 24.17 |
Class T:
Net Asset Value and redemption price per share ($115,940,120 ÷ 5,101,121 shares) | | $ 22.73 |
| | |
Maximum offering price per share (100/96.50 of $22.73) | | $ 23.55 |
Class B:
Net Asset Value and offering price per share ($100,978,316 ÷ 4,540,460 shares)A | | $ 22.24 |
| | |
Class C:
Net Asset Value and offering price per share ($67,501,339 ÷ 3,041,592 shares)A | | $ 22.19 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($12,057,159 ÷ 522,542 shares) | | $ 23.07 |
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.
Financial Services
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
Investment Income | | |
Dividends | | $ 4,372,274 |
Interest | | 24 |
Income from Fidelity Central Funds | | 88,065 |
Total income | | 4,460,363 |
| | |
Expenses | | |
Management fee | $ 1,129,655 | |
Transfer agent fees | 631,320 | |
Distribution fees | 1,290,622 | |
Accounting and security lending fees | 83,997 | |
Custodian fees and expenses | 12,329 | |
Independent trustees' compensation | 678 | |
Registration fees | 38,522 | |
Audit | 26,297 | |
Legal | 4,801 | |
Miscellaneous | 93,002 | |
Total expenses before reductions | 3,311,223 | |
Expense reductions | (18,147) | 3,293,076 |
Net investment income (loss) | | 1,167,287 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers (net of foreign taxes of $42,189) | 31,692,806 | |
Foreign currency transactions | 48,730 | |
Total net realized gain (loss) | | 31,741,536 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 16,129,692 | |
Assets and liabilities in foreign currencies | 159 | |
Total change in net unrealized appreciation (depreciation) | | 16,129,851 |
Net gain (loss) | | 47,871,387 |
Net increase (decrease) in net assets resulting from operations | | $ 49,038,674 |
Statement of Changes in Net Assets
| Six months ended
January 31, 2007
(Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 1,167,287 | $ 1,896,820 |
Net realized gain (loss) | 31,741,536 | 35,867,755 |
Change in net unrealized appreciation (depreciation) | 16,129,851 | 1,112,137 |
Net increase (decrease) in net assets resulting from operations | 49,038,674 | 38,876,712 |
Distributions to shareholders from net investment income | (1,993,514) | (1,881,748) |
Distributions to shareholders from net realized gain | (54,831,273) | (29,223,665) |
Total distributions | (56,824,787) | (31,105,413) |
Share transactions - net increase (decrease) | 25,104,749 | (47,322,942) |
Redemption fees | 1,077 | 8,919 |
Total increase (decrease) in net assets | 17,319,713 | (39,542,724) |
| | |
Net Assets | | |
Beginning of period | 386,712,205 | 426,254,929 |
End of period (including undistributed net investment income of $203,086 and undistributed net investment income of $1,145,387, respectively) | $ 404,031,918 | $ 386,712,205 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 23.34 | $ 23.01 | $ 22.17 | $ 19.98 | $ 17.83 | $ 20.45 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .11 | .20 | .19 | .14 | .16 | .12 |
Net realized and unrealized gain (loss) | 2.80 | 2.02 | 2.48 | 2.20 | 2.07 | (2.60) |
Total from investment operations | 2.91 | 2.22 | 2.67 | 2.34 | 2.23 | (2.48) |
Distributions from net investment income | (.22) | (.26) | (.07) | (.15) | (.08) | (.14) |
Distributions from net realized gain | (3.25) | (1.63) | (1.76) | - | - | - |
Total distributions | (3.47) J | (1.89) | (1.83) | (.15) | (.08) | (.14) |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 22.78 | $ 23.34 | $ 23.01 | $ 22.17 | $ 19.98 | $ 17.83 |
Total Return B, C, D | 13.30% | 10.32% | 12.60% | 11.76% | 12.57% | (12.16)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.27% A | 1.25% | 1.26% | 1.27% | 1.31% | 1.27% |
Expenses net of fee waivers, if any | 1.27% A | 1.25% | 1.26% | 1.27% | 1.31% | 1.27% |
Expenses net of all reductions | 1.26% A | 1.23% | 1.23% | 1.25% | 1.27% | 1.23% |
Net investment income (loss) | .96% A | .87% | .88% | .63% | .89% | .60% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 107,555 | $ 85,356 | $ 68,012 | $ 58,222 | $ 57,255 | $ 60,475 |
Portfolio turnover rate G | 62% A | 33% | 61% | 74% | 60% | 125% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. J Total distributions of $3.47 per share is comprised of distributions from net investment income of $.223 and distributions from net realized gain of $3.250 per share. |
Financial Highlights - Class T
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 23.26 | $ 22.87 | $ 22.07 | $ 19.90 | $ 17.77 | $ 20.38 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .08 | .15 | .14 | .09 | .12 | .07 |
Net realized and unrealized gain (loss) | 2.80 | 2.02 | 2.47 | 2.19 | 2.07 | (2.59) |
Total from investment operations | 2.88 | 2.17 | 2.61 | 2.28 | 2.19 | (2.52) |
Distributions from net investment income | (.16) | (.15) | (.05) | (.11) | (.06) | (.09) |
Distributions from net realized gain | (3.25) | (1.63) | (1.76) | - | - | - |
Total distributions | (3.41) J | (1.78) | (1.81) | (.11) | (.06) | (.09) |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 22.73 | $ 23.26 | $ 22.87 | $ 22.07 | $ 19.90 | $ 17.77 |
Total Return B, C, D | 13.16% | 10.11% | 12.37% | 11.49% | 12.37% | (12.39)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.50% A | 1.47% | 1.48% | 1.50% | 1.53% | 1.49% |
Expenses net of fee waivers, if any | 1.50% A | 1.47% | 1.48% | 1.50% | 1.53% | 1.49% |
Expenses net of all reductions | 1.50% A | 1.46% | 1.46% | 1.48% | 1.49% | 1.45% |
Net investment income (loss) | .73% A | .65% | .66% | .41% | .67% | .38% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 115,940 | $ 113,344 | $ 128,388 | $ 144,887 | $ 157,238 | $ 169,429 |
Portfolio turnover rate G | 62% A | 33% | 61% | 74% | 60% | 125% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. J Total distributions of $3.41 per share is comprised of distributions from net investment income of $.156 and distributions from net realized gain of $3.250 per share. |
See accompanying notes which are an integral part of the financial statements.
Financial Services
Financial Highlights - Class B
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.75 | $ 22.33 | $ 21.65 | $ 19.53 | $ 17.50 | $ 20.08 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .02 | .03 | .03 | (.02) | .03 | (.03) |
Net realized and unrealized gain (loss) | 2.73 | 1.97 | 2.41 | 2.16 | 2.03 | (2.55) |
Total from investment operations | 2.75 | 2.00 | 2.44 | 2.14 | 2.06 | (2.58) |
Distributions from net investment income | (.02) | (.01) | - | (.02) | (.03) | - |
Distributions from net realized gain | (3.25) | (1.57) | (1.76) | - | - | - |
Total distributions | (3.26) J | (1.58) | (1.76) | (.02) | (.03) | - |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 22.24 | $ 22.75 | $ 22.33 | $ 21.65 | $ 19.53 | $ 17.50 |
Total Return B, C, D | 12.85% | 9.52% | 11.78% | 10.96% | 11.80% | (12.85)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.03% A | 1.99% | 2.00% | 2.02% | 2.03% | 2.01% |
Expenses net of fee waivers, if any | 2.03% A | 1.99% | 2.00% | 2.02% | 2.03% | 2.01% |
Expenses net of all reductions | 2.02% A | 1.98% | 1.98% | 2.00% | 1.99% | 1.97% |
Net investment income (loss) | .21% A | .13% | .14% | (.11)% | .17% | (.14)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 100,978 | $ 113,652 | $ 145,046 | $ 179,873 | $ 193,373 | $ 206,460 |
Portfolio turnover rate G | 62% A | 33% | 61% | 74% | 60% | 125% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. J Total distributions of $3.26 per share is comprised of distributions from net investment income of $.015 and distributions from net realized gain of $3.247 per share. |
Financial Highlights - Class C
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.74 | $ 22.34 | $ 21.65 | $ 19.53 | $ 17.49 | $ 20.05 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .03 | .04 | .04 | (.01) | .04 | (.02) |
Net realized and unrealized gain (loss) | 2.72 | 1.98 | 2.42 | 2.15 | 2.03 | (2.54) |
Total from investment operations | 2.75 | 2.02 | 2.46 | 2.14 | 2.07 | (2.56) |
Distributions from net investment income | (.05) | (.02) | (.01) | (.02) | (.03) | - |
Distributions from net realized gain | (3.25) | (1.60) | (1.76) | - | - | - |
Total distributions | (3.30) J | (1.62) | (1.77) | (.02) | (.03) | - |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 22.19 | $ 22.74 | $ 22.34 | $ 21.65 | $ 19.53 | $ 17.49 |
Total Return B, C, D | 12.85% | 9.58% | 11.88% | 10.96% | 11.86% | (12.77)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.98% A | 1.94% | 1.95% | 1.97% | 1.99% | 1.96% |
Expenses net of fee waivers, if any | 1.98% A | 1.94% | 1.95% | 1.97% | 1.99% | 1.96% |
Expenses net of all reductions | 1.97% A | 1.93% | 1.92% | 1.95% | 1.95% | 1.92% |
Net investment income (loss) | .26% A | .18% | .19% | (.06)% | .22% | (.09)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 67,501 | $ 62,469 | $ 72,181 | $ 86,199 | $ 97,434 | $ 107,899 |
Portfolio turnover rate G | 62% A | 33% | 61% | 74% | 60% | 125% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. J Total distributions of $3.30 per share is comprised of distributions from net investment income of $.049 and distributions from net realized gain of $3.250 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 23.63 | $ 23.29 | $ 22.37 | $ 20.17 | $ 17.95 | $ 20.59 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .15 | .29 | .29 | .23 | .24 | .19 |
Net realized and unrealized gain (loss) | 2.84 | 2.05 | 2.50 | 2.21 | 2.09 | (2.62) |
Total from investment operations | 2.99 | 2.34 | 2.79 | 2.44 | 2.33 | (2.43) |
Distributions from net investment income | (.30) | (.37) | (.11) | (.24) | (.11) | (.21) |
Distributions from net realized gain | (3.25) | (1.63) | (1.76) | - | - | - |
Total distributions | (3.55) I | (2.00) | (1.87) | (.24) | (.11) | (.21) |
Redemption fees added to paid in capital D, H | - | - | - | - | - | - |
Net asset value, end of period | $ 23.07 | $ 23.63 | $ 23.29 | $ 22.37 | $ 20.17 | $ 17.95 |
Total Return B, C | 13.48% | 10.78% | 13.06% | 12.18% | 13.07% | (11.84)% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | .92% A | .86% | .86% | .88% | .88% | .89% |
Expenses net of fee waivers, if any | .92% A | .86% | .86% | .88% | .88% | .89% |
Expenses net of all reductions | .91% A | .85% | .84% | .85% | .84% | .85% |
Net investment income (loss) | 1.32% A | 1.26% | 1.28% | 1.03% | 1.32% | .98% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 12,057 | $ 11,892 | $ 12,629 | $ 13,008 | $ 14,539 | $ 15,283 |
Portfolio turnover rate F | 62% A | 33% | 61% | 74% | 60% | 125% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. H Amount represents less than $.01 per share. I Total distributions of $3.55 per share is comprised of distributions from net investment income of $.298 and distributions from net realized gain of $3.250 per share. |
See accompanying notes which are an integral part of the financial statements.
Financial Services
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Financial Services Fund (the Fund) is a fund of Fidelity Advisor Series VII (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 B, Class C and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile. The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), partnerships, losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 110,688,632 |
Unrealized depreciation | (1,440,525) |
Net unrealized appreciation (depreciation) | $ 109,248,107 |
Cost for federal income tax purposes | $ 309,089,495 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Financial Services
3. Purchases and Sales of Investments.
Purchases and sales of securities other than short-term securities, aggregated $122,694,769 and $151,706,895, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 119,429 | $ 2,412 |
Class T | .25% | .25% | 293,342 | - |
Class B | .75% | .25% | 547,312 | 410,484 |
Class C | .75% | .25% | 330,539 | 12,312 |
| | | $ 1,290,622 | $ 425,208 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 16,384 |
Class T | 6,437 |
Class B * | 60,824 |
Class C * | 1,425 |
| $ 85,070 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets * |
Class A | $ 157,232 | .33 |
Class T | 181,398 | .31 |
Class B | 184,673 | .34 |
Class C | 94,237 | .29 |
Institutional Class | 13,780 | .22 |
| $ 631,320 | |
* Annualized
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds, are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 Fidelity Management & Research Company, (FMR).
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $793 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $501 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $31,572.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $10,829 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction |
Class A | $ 735 |
Class B | 342 |
| $ 1,077 |
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Financial Services
8. Other - continued
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
From net investment income | | |
Class A | $ 867,687 | $ 793,007 |
Class T | 765,113 | 784,601 |
Class B | 69,445 | 62,350 |
Class C | 139,125 | 47,101 |
Institutional Class | 152,144 | 194,689 |
Total | $ 1,993,514 | $ 1,881,748 |
From net realized gain | | |
Class A | $ 12,753,073 | $ 4,952,004 |
Class T | 15,966,936 | 8,720,889 |
Class B | 15,271,397 | 9,718,109 |
Class C | 9,173,088 | 4,968,829 |
Institutional Class | 1,666,779 | 863,834 |
Total | $ 54,831,273 | $ 29,223,665 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 | Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 1,034,429 | 1,351,439 | $ 23,827,036 | $ 31,220,975 |
Reinvestment of distributions | 548,320 | 234,688 | 12,292,029 | 5,118,429 |
Shares redeemed | (518,334) | (885,268) | (11,978,767) | (20,266,228) |
Net increase (decrease) | 1,064,415 | 700,859 | $ 24,140,298 | $ 16,073,176 |
Class T | | | | |
Shares sold | 267,234 | 426,844 | $ 6,172,253 | $ 9,717,059 |
Reinvestment of distributions | 703,948 | 409,216 | 15,751,005 | 8,897,438 |
Shares redeemed | (743,356) | (1,576,453) | (17,061,554) | (35,989,546) |
Net increase (decrease) | 227,826 | (740,393) | $ 4,861,704 | $ (17,375,049) |
Class B | | | | |
Shares sold | 182,662 | 302,265 | $ 4,097,312 | $ 6,677,115 |
Reinvestment of distributions | 609,690 | 394,522 | 13,365,246 | 8,409,188 |
Shares redeemed | (1,248,114) | (2,197,220) | (28,166,207) | (49,213,763) |
Net increase (decrease) | (455,762) | (1,500,433) | $ (10,703,649) | $ (34,127,460) |
Class C | | | | |
Shares sold | 219,156 | 241,582 | $ 4,920,037 | $ 5,385,733 |
Reinvestment of distributions | 345,073 | 190,165 | 7,545,484 | 4,051,037 |
Shares redeemed | (270,316) | (915,599) | (6,076,004) | (20,422,653) |
Net increase (decrease) | 293,913 | (483,852) | $ 6,389,517 | $ (10,985,883) |
Institutional Class | | | | |
Shares sold | 57,592 | 67,105 | $ 1,347,454 | $ 1,572,188 |
Reinvestment of distributions | 56,949 | 34,641 | 1,292,278 | 762,982 |
Shares redeemed | (95,206) | (140,689) | (2,222,853) | (3,242,896) |
Net increase (decrease) | 19,335 | (38,943) | $ 416,879 | $ (907,726) |
Financial Services
Advisor Health Care Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period *
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,087.80 | $ 6.79 |
Hypothetical A | $ 1,000.00 | $ 1,018.70 | $ 6.56 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,086.40 | $ 8.10 |
Hypothetical A | $ 1,000.00 | $ 1,017.44 | $ 7.83 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,083.70 | $ 10.92 |
Hypothetical A | $ 1,000.00 | $ 1,014.72 | $ 10.56 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,084.00 | $ 10.45 |
Hypothetical A | $ 1,000.00 | $ 1,015.17 | $ 10.11 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,089.90 | $ 4.85 |
Hypothetical A | $ 1,000.00 | $ 1,020.57 | $ 4.69 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.29% |
Class T | 1.54% |
Class B | 2.08% |
Class C | 1.99% |
Institutional Class | .92% |
Semiannual Report
Advisor Health Care Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Johnson & Johnson | 10.9 | 7.7 |
Merck & Co., Inc. | 5.8 | 5.4 |
Brookdale Senior Living, Inc. | 5.5 | 1.7 |
Healthways, Inc. | 4.9 | 0.5 |
Allergan, Inc. | 4.2 | 2.6 |
Cerner Corp. | 3.8 | 0.1 |
C.R. Bard, Inc. | 3.8 | 0.7 |
Pfizer, Inc. | 3.3 | 7.8 |
UnitedHealth Group, Inc. | 3.1 | 3.8 |
Amgen, Inc. | 2.7 | 4.3 |
| 48.0 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Pharmaceuticals | 30.3% | |
| Health Care Providers & Services | 23.7% | |
| Health Care Equipment & Supplies | 18.9% | |
| Biotechnology | 11.7% | |
| Health Care Technology | 5.0% | |
| All Others * | 10.4% | |
|
As of July 31, 2006 |
| Pharmaceuticals | 37.4% | |
| Health Care Providers & Services | 25.9% | |
| Health Care Equipment & Supplies | 15.9% | |
| Biotechnology | 14.4% | |
| Life Sciences Tools & Services | 3.3% | |
| All Others * | 3.1% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Health Care
Advisor Health Care Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 100.2% |
| Shares | | Value (Note 1) |
BIOTECHNOLOGY - 11.7% |
Biotechnology - 11.7% |
Advanced Cell Technology, Inc. (a) | 200,600 | | $ 156,468 |
Alexion Pharmaceuticals, Inc. (a) | 3,400 | | 141,338 |
Alnylam Pharmaceuticals, Inc. (a) | 133,400 | | 2,825,412 |
Amgen, Inc. (a) | 271,900 | | 19,133,603 |
Amylin Pharmaceuticals, Inc. (a)(d) | 144,500 | | 5,603,710 |
Celgene Corp. (a) | 275,700 | | 14,799,576 |
deCODE genetics, Inc. (a) | 470,662 | | 1,727,330 |
Genentech, Inc. (a) | 98,200 | | 8,579,734 |
Gilead Sciences, Inc. (a) | 206,300 | | 13,269,216 |
GTx, Inc. (a) | 147,400 | | 2,741,640 |
Human Genome Sciences, Inc. (a) | 57,800 | | 680,884 |
Isis Pharmaceuticals, Inc. (a) | 60,000 | | 623,400 |
MannKind Corp. (a) | 25,100 | | 415,656 |
Medarex, Inc. (a) | 101,500 | | 1,367,205 |
Omrix Biopharmaceuticals, Inc. (a) | 143,155 | | 4,878,722 |
PDL BioPharma, Inc. (a) | 69,800 | | 1,431,598 |
Senomyx, Inc. (a) | 46,500 | | 679,830 |
Transition Therapeutics, Inc. (a) | 327,000 | | 500,255 |
Trubion Pharmaceuticals, Inc. | 65,852 | | 1,372,356 |
Vertex Pharmaceuticals, Inc. (a) | 70,000 | | 2,474,500 |
| | 83,402,433 |
CHEMICALS - 1.9% |
Diversified Chemicals - 0.3% |
Bayer AG | 37,700 | | 2,231,086 |
Fertilizers & Agricultural Chemicals - 1.6% |
Fertilizantes Fosfatados SA (PN) | 71,400 | | 1,220,898 |
Monsanto Co. | 139,800 | | 7,701,582 |
Potash Corp. of Saskatchewan, Inc. | 14,900 | | 2,324,847 |
| | 11,247,327 |
TOTAL CHEMICALS | | 13,478,413 |
COMMERCIAL SERVICES & SUPPLIES - 0.4% |
Diversified Commercial & Professional Services - 0.4% |
Healthcare Services Group, Inc. | 105,409 | | 3,048,428 |
DIVERSIFIED CONSUMER SERVICES - 0.4% |
Specialized Consumer Services - 0.4% |
Service Corp. International | 116,300 | | 1,238,595 |
Weight Watchers International, Inc. | 29,800 | | 1,610,094 |
| | 2,848,689 |
FOOD PRODUCTS - 1.6% |
Agricultural Products - 0.6% |
Biomar Holdings AS | 45,900 | | 2,226,519 |
Nutreco Holding NV | 33,500 | | 2,307,549 |
| | 4,534,068 |
Packaged Foods & Meats - 1.0% |
Cermaq ASA | 105,800 | | 1,712,399 |
Groupe Danone | 9,300 | | 1,432,721 |
|
| Shares | | Value (Note 1) |
Koninklijke Numico NV | 34,900 | | $ 1,851,317 |
PAN Fish ASA (a) | 1,710,000 | | 1,830,504 |
| | 6,826,941 |
TOTAL FOOD PRODUCTS | | 11,361,009 |
HEALTH CARE EQUIPMENT & SUPPLIES - 18.9% |
Health Care Equipment - 15.0% |
Advanced Medical Optics, Inc. (a) | 119,800 | | 4,402,650 |
ArthroCare Corp. (a) | 58,600 | | 2,162,340 |
Aspect Medical Systems, Inc. (a) | 97,500 | | 1,623,375 |
Baxter International, Inc. | 282,330 | | 14,020,508 |
Becton, Dickinson & Co. | 227,300 | | 17,488,462 |
Biosite, Inc. (a)(d) | 104,668 | | 5,639,512 |
C.R. Bard, Inc. | 325,079 | | 26,825,519 |
Cholestech Corp. (a) | 94,700 | | 1,593,801 |
Cochlear Ltd. | 40,200 | | 1,762,104 |
DexCom, Inc. (a)(d) | 37,814 | | 336,545 |
Electro-Optical Sciences, Inc. (a)(e) | 400,123 | | 2,016,620 |
Electro-Optical Sciences, Inc. warrants 11/2/11 (a)(e) | 60,018 | | 154,469 |
Imaging Dynamics Co. Ltd. (a) | 265,100 | | 574,541 |
Intuitive Surgical, Inc. (a) | 23,288 | | 2,291,772 |
Kyphon, Inc. (a) | 73,000 | | 3,415,670 |
Meridian Bioscience, Inc. | 30,200 | | 895,430 |
NeuroMetrix, Inc. (a) | 64,400 | | 856,520 |
Northstar Neuroscience, Inc. | 171,400 | | 2,272,764 |
Respironics, Inc. (a) | 76,800 | | 3,271,680 |
Restore Medical, Inc. | 5,900 | | 22,715 |
Sirona Dental Systems, Inc. | 27,535 | | 1,179,049 |
Stereotaxis, Inc. (a) | 313,590 | | 3,223,705 |
The Spectranetics Corp. (a) | 244,200 | | 2,598,288 |
Thermogenesis Corp. (a) | 2,148,534 | | 8,637,107 |
| | 107,265,146 |
Health Care Supplies - 3.9% |
Alcon, Inc. | 67,600 | | 7,960,576 |
Cooper Companies, Inc. | 205,243 | | 9,790,091 |
DJO, Inc. (a) | 58,241 | | 2,411,177 |
Gen-Probe, Inc. (a) | 22,300 | | 1,153,356 |
Inverness Medical Innovations, Inc. (a) | 107,444 | | 4,428,842 |
Inverness Medical Innovations, Inc. (a)(e) | 14,543 | | 599,462 |
Merit Medical Systems, Inc. (a) | 115,922 | | 1,826,931 |
| | 28,170,435 |
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | | 135,435,581 |
HEALTH CARE PROVIDERS & SERVICES - 23.7% |
Health Care Distributors & Services - 2.6% |
Cardinal Health, Inc. | 138,100 | | 9,863,102 |
Henry Schein, Inc. (a) | 3,800 | | 192,926 |
McKesson Corp. | 155,300 | | 8,657,975 |
| | 18,714,003 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
HEALTH CARE PROVIDERS & SERVICES - CONTINUED |
Health Care Facilities - 7.2% |
Acibadem Saglik Hizmetleri AS | 64,830 | | $ 672,960 |
Brookdale Senior Living, Inc. (d) | 818,700 | | 39,297,600 |
Bumrungrad Hospital PCL (For. Reg.) | 1,413,400 | | 1,464,242 |
Capital Senior Living Corp. (a) | 286,900 | | 3,052,616 |
Community Health Systems, Inc. (a) | 59,800 | | 2,137,850 |
Emeritus Corp. (a) | 57,100 | | 1,553,691 |
Sun Healthcare Group, Inc. (a) | 72,300 | | 890,736 |
VCA Antech, Inc. (a) | 63,620 | | 2,138,904 |
| | 51,208,599 |
Health Care Services - 9.3% |
Caremark Rx, Inc. | 189,100 | | 11,584,266 |
Diagnosticos da America SA (a) | 63,500 | | 1,270,867 |
Emergency Medical Services Corp. Class A (a) | 52,900 | | 1,375,400 |
Express Scripts, Inc. (a) | 31,400 | | 2,182,928 |
HAPC, Inc. unit | 215,800 | | 1,359,540 |
Health Grades, Inc. (a) | 413,083 | | 2,271,957 |
Healthways, Inc. (a) | 769,316 | | 34,934,640 |
HMS Holdings Corp. (a) | 114,900 | | 2,238,252 |
Medco Health Solutions, Inc. (a) | 133,800 | | 7,922,298 |
Nighthawk Radiology Holdings, Inc. | 42,310 | | 1,066,635 |
| | 66,206,783 |
Managed Health Care - 4.6% |
Health Net, Inc. (a) | 51,500 | | 2,508,565 |
Humana, Inc. (a) | 65,900 | | 3,657,450 |
UnitedHealth Group, Inc. | 417,909 | | 21,839,924 |
WellPoint, Inc. (a) | 64,700 | | 5,071,186 |
| | 33,077,125 |
TOTAL HEALTH CARE PROVIDERS & SERVICES | | 169,206,510 |
HEALTH CARE TECHNOLOGY - 5.0% |
Health Care Technology - 5.0% |
Allscripts Healthcare Solutions, Inc. (a) | 52,200 | | 1,597,320 |
Cerner Corp. (a) | 600,400 | | 26,975,972 |
Eclipsys Corp. (a) | 68,867 | | 1,349,793 |
IMS Health, Inc. | 53,400 | | 1,541,124 |
Vital Images, Inc. (a) | 64,400 | | 2,160,620 |
WebMD Health Corp. Class A (a) | 42,289 | | 2,086,962 |
| | 35,711,791 |
HOTELS, RESTAURANTS & LEISURE - 0.7% |
Leisure Facilities - 0.7% |
Life Time Fitness, Inc. (a) | 34,200 | | 1,853,640 |
Town Sports International Holdings, Inc. | 153,706 | | 3,028,008 |
| | 4,881,648 |
LEISURE EQUIPMENT & PRODUCTS - 0.4% |
Leisure Products - 0.4% |
Cybex International, Inc. (a) | 456,997 | | 2,824,241 |
|
| Shares | | Value (Note 1) |
LIFE SCIENCES TOOLS & SERVICES - 4.8% |
Life Sciences Tools & Services - 4.8% |
Advanced Magnetics, Inc. (a) | 120,707 | | $ 7,354,678 |
Affymetrix, Inc. (a) | 75,916 | | 1,894,863 |
Charles River Laboratories International, Inc. (a) | 69,300 | | 3,118,500 |
Covance, Inc. (a) | 84,200 | | 5,190,930 |
Exelixis, Inc. (a) | 361,197 | | 3,539,731 |
Illumina, Inc. (a) | 76,272 | | 3,115,711 |
Millipore Corp. (a) | 62,870 | | 4,305,338 |
Pharmaceutical Product Development, Inc. | 28,700 | | 990,150 |
QIAGEN NV (a) | 259,600 | | 4,483,292 |
| | 33,993,193 |
PHARMACEUTICALS - 30.3% |
Pharmaceuticals - 30.3% |
Adams Respiratory Therapeutics, Inc. (a) | 96,800 | | 4,341,480 |
Allergan, Inc. | 258,250 | | 30,140,358 |
Atherogenics, Inc. (a)(d) | 8,900 | | 105,020 |
Barr Pharmaceuticals, Inc. (a) | 78,800 | | 4,217,376 |
BioMimetic Therapeutics, Inc. | 331,162 | | 5,099,895 |
Cadence Pharmaceuticals, Inc. | 17,505 | | 214,086 |
Cipla Ltd. | 142,584 | | 796,698 |
Elan Corp. PLC sponsored ADR (a) | 75,600 | | 941,220 |
Endo Pharmaceuticals Holdings, Inc. (a) | 93,500 | | 2,872,320 |
Inyx, Inc. (a) | 1,235,400 | | 2,717,880 |
Javelin Pharmaceuticals, Inc. (a) | 42,900 | | 220,935 |
Johnson & Johnson | 1,160,658 | | 77,531,952 |
Merck & Co., Inc. | 917,700 | | 41,067,075 |
Pfizer, Inc. | 898,920 | | 23,587,661 |
Roche Holding AG (participation certificate) | 11,696 | | 2,197,673 |
Shire PLC sponsored ADR | 35,500 | | 2,253,540 |
Wyeth | 346,220 | | 17,106,730 |
Xenoport, Inc. (a) | 58,400 | | 1,392,256 |
| | 216,804,155 |
SOFTWARE - 0.2% |
Systems Software - 0.2% |
Quality Systems, Inc. | 36,648 | | 1,554,975 |
TEXTILES, APPAREL & LUXURY GOODS - 0.2% |
Apparel, Accessories & Luxury Goods - 0.2% |
Under Armour, Inc. Class A (sub. vtg.) (a) | 30,700 | | 1,559,560 |
TOTAL COMMON STOCKS (Cost $596,505,664) | 716,110,626 |
Nonconvertible Preferred Stocks - 0.0% |
| | | |
LIFE SCIENCES TOOLS & SERVICES - 0.0% |
Life Sciences Tools & Services - 0.0% |
GeneProt, Inc. Series A (a)(e)
(Cost $232,840) | 43,000 | | 0 |
Money Market Funds - 0.8% |
| Shares | | Value (Note 1) |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c)
(Cost $5,597,151) | 5,597,151 | | $ 5,597,151 |
Cash Equivalents - 0.0% |
| Maturity Amount | | |
Investments in repurchase agreements in a joint trading account at 5.24%, dated 1/31/07 due 2/1/07 (Collateralized by U.S. Treasury Obligations) #
(Cost $39,000) | $ 39,006 | | 39,000 |
TOTAL INVESTMENT PORTFOLIO - 101.0% (Cost $602,374,655) | | 721,746,777 |
NET OTHER ASSETS - (1.0)% | | (6,947,610) |
NET ASSETS - 100% | $ 714,799,167 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $2,770,551 or 0.4% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Electro-Optical Sciences, Inc. | 11/1/06 | $ 2,280,701 |
Electro-Optical Sciences, Inc. warrants 11/2/11 | 11/1/06 | $ 6 |
GeneProt, Inc. Series A | 7/7/00 | $ 232,840 |
Inverness Medical Innovations, Inc. | 2/8/06 | $ 354,995 |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty | Value |
$39,000 due 2/01/07 at 5.24% |
BNP Paribas Securities Corp. | $ 10,038 |
Merrill Lynch Government Securities, Inc. | 16,910 |
Merrill Lynch, Pierce, Fenner & Smith, Inc. | 12,052 |
| $ 39,000 |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 81,794 |
Fidelity Securities Lending Cash Central Fund | 103,042 |
Total | $ 184,836 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Health Care Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $5,485,516 and repurchase agreements of $39,000) - See accompanying schedule: Unaffiliated issuers (cost $596,777,504) | $ 716,149,626 | |
Fidelity Central Funds (cost $5,597,151) | 5,597,151 | |
Total Investments (cost $602,374,655) | | $ 721,746,777 |
Cash | | 358,227 |
Receivable for investments sold | | 1,983,339 |
Receivable for fund shares sold | | 894,304 |
Dividends receivable | | 99,827 |
Interest receivable | | 7,709 |
Prepaid expenses | | 3,305 |
Other receivables | | 9,931 |
Total assets | | 725,103,419 |
| | |
Liabilities | | |
Payable for investments purchased | $ 744,680 | |
Payable for fund shares redeemed | 2,808,406 | |
Accrued management fee | 336,074 | |
Distribution fees payable | 356,715 | |
Other affiliated payables | 230,787 | |
Other payables and accrued expenses | 230,439 | |
Collateral on securities loaned, at value | 5,597,151 | |
Total liabilities | | 10,304,252 |
| | |
Net Assets | | $ 714,799,167 |
Net Assets consist of: | | |
Paid in capital | | $ 577,606,772 |
Accumulated net investment loss | | (1,721,868) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 19,543,377 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 119,370,886 |
Net Assets | | $ 714,799,167 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price
Class A: Net Asset Value and redemption price per share ($223,516,009 ÷ 9,737,510 shares) | | $ 22.95 |
| | |
Maximum offering price per share (100/94.25 of $22.95) | | $ 24.35 |
Class T:
Net Asset Value and redemption price per share ($207,333,540 ÷ 9,226,623 shares) | | $ 22.47 |
| | |
Maximum offering price per share (100/96.50 of $22.47) | | $ 23.28 |
Class B:
Net Asset Value and offering price per share ($150,433,557 ÷ 7,020,912 shares)A | | $ 21.43 |
| | |
Class C:
Net Asset Value and offering price per share ($114,697,400 ÷ 5,354,709 shares)A | | $ 21.42 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($18,818,661 ÷ 796,065 shares) | | $ 23.64 |
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.
Health Care
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 4,054,990 |
Interest | | 327 |
Income from Fidelity Central Funds | | 184,836 |
Total income | | 4,240,153 |
| | |
Expenses | | |
Management fee | $ 2,060,552 | |
Transfer agent fees | 1,292,553 | |
Distribution fees | 2,218,653 | |
Accounting and security lending fees | 136,942 | |
Custodian fees and expenses | 25,923 | |
Independent trustees' compensation | 1,254 | |
Registration fees | 46,409 | |
Audit | 24,493 | |
Legal | 8,830 | |
Miscellaneous | 200,951 | |
Total expenses before reductions | 6,016,560 | |
Expense reductions | (54,866) | 5,961,694 |
Net investment income (loss) | | (1,721,541) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 47,135,146 | |
Foreign currency transactions | (10,771) | |
Total net realized gain (loss) | | 47,124,375 |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of increase in deferred foreign taxes of $1,360) | 14,859,050 | |
Assets and liabilities in foreign currencies | 115 | |
Total change in net unrealized appreciation (depreciation) | | 14,859,165 |
Net gain (loss) | | 61,983,540 |
Net increase (decrease) in net assets resulting from operations | | $ 60,261,999 |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (1,721,541) | $ (6,125,419) |
Net realized gain (loss) | 47,124,375 | 99,186,502 |
Change in net unrealized appreciation (depreciation) | 14,859,165 | (66,787,109) |
Net increase (decrease) in net assets resulting from operations | 60,261,999 | 26,273,974 |
Distributions to shareholders from net realized gain | (83,314,180) | (1,408,688) |
Share transactions - net increase (decrease) | 3,677,075 | (90,540,183) |
Redemption fees | 13,249 | 29,238 |
Total increase (decrease) in net assets | (19,361,857) | (65,645,659) |
| | |
Net Assets | | |
Beginning of period | 734,161,024 | 799,806,683 |
End of period (including accumulated net investment loss of $1,721,868 and accumulated net investment loss of
$327, respectively) | $ 714,799,167 | $ 734,161,024 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 23.77 | $ 22.94 | $ 18.91 | $ 18.29 | $ 16.51 | $ 20.41 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | (.09) | (.05) | (.05) | - I | (.04) |
Net realized and unrealized gain (loss) | 1.94 | .96 | 4.08 | .67 | 1.78 | (3.86) |
Total from investment operations | 1.93 | .87 | 4.03 | .62 | 1.78 | (3.90) |
Distributions from net realized gain | (2.75) | (.04) | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | - I |
Net asset value, end of period | $ 22.95 | $ 23.77 | $ 22.94 | $ 18.91 | $ 18.29 | $ 16.51 |
Total Return B, C, D | 8.78% | 3.79% | 21.31% | 3.39% | 10.78% | (19.11)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.29% A | 1.25% | 1.28% | 1.32% | 1.34% | 1.29% |
Expenses net of fee waivers, if any | 1.29% A | 1.25% | 1.28% | 1.32% | 1.34% | 1.29% |
Expenses net of all reductions | 1.27% A | 1.21% | 1.26% | 1.29% | 1.27% | 1.24% |
Net investment income (loss) | (.11)% A | (.38)% | (.22)% | (.26)% | (.01)% | (.23)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 223,516 | $ 199,221 | $ 139,158 | $ 104,258 | $ 108,692 | $ 103,292 |
Portfolio turnover rate G | 141% A | 99% | 71% | 60% | 120% | 167% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 23.26 | $ 22.50 | $ 18.60 | $ 18.03 | $ 16.31 | $ 20.22 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.15) | (.09) | (.09) | (.04) | (.09) |
Net realized and unrealized gain (loss) | 1.90 | .95 | 3.99 | .66 | 1.76 | (3.82) |
Total from investment operations | 1.86 | .80 | 3.90 | .57 | 1.72 | (3.91) |
Distributions from net realized gain | (2.65) | (.04) | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | - I |
Net asset value, end of period | $ 22.47 | $ 23.26 | $ 22.50 | $ 18.60 | $ 18.03 | $ 16.31 |
Total Return B, C, D | 8.64% | 3.55% | 20.97% | 3.16% | 10.55% | (19.34)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.54% A | 1.50% | 1.53% | 1.56% | 1.59% | 1.52% |
Expenses net of fee waivers, if any | 1.54% A | 1.50% | 1.53% | 1.56% | 1.59% | 1.52% |
Expenses net of all reductions | 1.53% A | 1.47% | 1.51% | 1.53% | 1.51% | 1.47% |
Net investment income (loss) | (.37)% A | (.63)% | (.47)% | (.51)% | (.26)% | (.46)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 207,334 | $ 218,280 | $ 243,353 | $ 243,176 | $ 264,115 | $ 274,243 |
Portfolio turnover rate G | 141% A | 99% | 71% | 60% | 120% | 167% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Health Care
Financial Highlights - Class B
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.17 | $ 21.55 | $ 17.91 | $ 17.45 | $ 15.86 | $ 19.76 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.10) | (.25) | (.19) | (.18) | (.12) | (.18) |
Net realized and unrealized gain (loss) | 1.83 | .91 | 3.83 | .64 | 1.71 | (3.72) |
Total from investment operations | 1.73 | .66 | 3.64 | .46 | 1.59 | (3.90) |
Distributions from net realized gain | (2.47) | (.04) | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | - I |
Net asset value, end of period | $ 21.43 | $ 22.17 | $ 21.55 | $ 17.91 | $ 17.45 | $ 15.86 |
Total Return B, C, D | 8.37% | 3.06% | 20.32% | 2.64% | 10.03% | (19.74)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.08% A | 2.01% | 2.04% | 2.06% | 2.05% | 2.02% |
Expenses net of fee waivers, if any | 2.08% A | 2.01% | 2.04% | 2.06% | 2.05% | 2.02% |
Expenses net of all reductions | 2.06% A | 1.98% | 2.01% | 2.03% | 1.98% | 1.98% |
Net investment income (loss) | (.90)% A | (1.14)% | (.98)% | (1.01)% | (.73)% | (.97)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 150,434 | $ 180,364 | $ 266,319 | $ 285,299 | $ 317,906 | $ 334,056 |
Portfolio turnover rate G | 141% A | 99% | 71% | 60% | 120% | 167% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.24 | $ 21.61 | $ 17.94 | $ 17.47 | $ 15.87 | $ 19.76 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.09) | (.24) | (.17) | (.17) | (.11) | (.17) |
Net realized and unrealized gain (loss) | 1.82 | .91 | 3.84 | .64 | 1.71 | (3.72) |
Total from investment operations | 1.73 | .67 | 3.67 | .47 | 1.60 | (3.89) |
Distributions from net realized gain | (2.55) | (.04) | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | - I |
Net asset value, end of period | $ 21.42 | $ 22.24 | $ 21.61 | $ 17.94 | $ 17.47 | $ 15.87 |
Total Return B, C, D | 8.40% | 3.10% | 20.46% | 2.69% | 10.08% | (19.69)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.99% A | 1.94% | 1.97% | 2.00% | 2.00% | 1.97% |
Expenses net of fee waivers, if any | 1.99% A | 1.94% | 1.97% | 2.00% | 2.00% | 1.97% |
Expenses net of all reductions | 1.97% A | 1.91% | 1.94% | 1.97% | 1.92% | 1.93% |
Net investment income (loss) | (.81)% A | (1.07)% | (.91)% | (.95)% | (.67)% | (.92)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 114,697 | $ 115,644 | $ 131,277 | $ 130,184 | $ 150,576 | $ 160,877 |
Portfolio turnover rate G | 141% A | 99% | 71% | 60% | 120% | 167% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns for periods of less than one year are not annualized. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 24.43 | $ 23.48 | $ 19.28 | $ 18.58 | $ 16.70 | $ 20.58 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .03 | - H | .04 | .03 | .06 | .02 |
Net realized and unrealized gain (loss) | 2.00 | .99 | 4.16 | .67 | 1.82 | (3.90) |
Total from investment operations | 2.03 | .99 | 4.20 | .70 | 1.88 | (3.88) |
Distributions from net realized gain | (2.82) | (.04) | - | - | - | - |
Redemption fees added to paid in capital D | - H | - H | - H | - H | - H | - H |
Net asset value, end of period | $ 23.64 | $ 24.43 | $ 23.48 | $ 19.28 | $ 18.58 | $ 16.70 |
Total Return B, C | 8.99% | 4.21% | 21.78% | 3.77% | 11.26% | (18.85)% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | .92% A | .86% | .88% | .91% | .96% | .95% |
Expenses net of fee waivers, if any | .92% A | .86% | .88% | .91% | .96% | .95% |
Expenses net of all reductions | .91% A | .83% | .85% | .88% | .88% | .90% |
Net investment income (loss) | .25% A | .01% | .18% | .14% | .37% | .11% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 18,819 | $ 20,652 | $ 19,698 | $ 20,358 | $ 23,364 | $ 35,923 |
Portfolio turnover rate F | 141% A | 99% | 71% | 60% | 120% | 167% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. H Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Health Care
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Health Care Fund (the Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C, and Initial Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles. In addition, the Fund will claim a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, deferred trustees compensation, net operating losses, capital loss carryforwards, losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 127,824,979 |
Unrealized depreciation | (9,409,320) |
Net unrealized appreciation (depreciation) | $ 118,415,659 |
Cost for federal income tax purposes | $ 603,331,118 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Health Care
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $513,951,656 and $591,103,107, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 263,996 | $ 8,370 |
Class T | .25% | .25% | 540,510 | - |
Class B | .75% | .25% | 832,669 | 624,502 |
Class C | .75% | .25% | 581,478 | 33,103 |
| | | $ 2,218,653 | $ 665,975 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 27,372 |
Class T | 13,917 |
Class B * | 132,467 |
Class C * | 3,353 |
| $ 177,109 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets |
Class A | $ 377,030 | .36 * |
Class T | 387,933 | .36 * |
Class B | 327,140 | .39 * |
Class C | 175,769 | .30 * |
Institutional Class | 24,681 | .24 * |
| $ 1,292,553 | |
* Annualized
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds, are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $1,413 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $924 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $103,042.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $33,626 for the period. In addition, through arrangements with the each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction |
Class A | $ 7,476 |
Class B | 458 |
Class C | 1,175 |
Institutional Class | 302 |
| $ 9,411 |
Health Care
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
From net realized gain | | |
Class A | $ 23,887,125 | $ 268,383 |
Class T | 24,697,592 | 418,518 |
Class B | 18,914,304 | 451,789 |
Class C | 13,346,145 | 237,307 |
Institutional Class | 2,469,014 | 32,691 |
Total | $ 83,314,180 | $ 1,408,688 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2007 | Year ended
July 31,
2006 | Six months ended January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 1,815,883 | 4,246,771 | $ 41,619,493 | $ 100,545,647 |
Reinvestment of distributions | 919,326 | 9,593 | 20,489,369 | 231,281 |
Shares redeemed | (1,378,400) | (1,943,098) | (31,655,848) | (45,790,984) |
Net increase (decrease) | 1,356,809 | 2,313,266 | $ 30,453,014 | $ 54,985,944 |
Class T | | | | |
Shares sold | 473,439 | 1,483,213 | $ 10,650,342 | $ 34,397,018 |
Reinvestment of distributions | 1,064,993 | 16,686 | 23,268,178 | 394,126 |
Shares redeemed | (1,697,501) | (2,931,043) | (38,079,373) | (67,817,881) |
Net increase (decrease) | (159,069) | (1,431,144) | $ (4,160,853) | $ (33,026,737) |
Class B | | | | |
Shares sold | 280,930 | 602,620 | $ 6,008,304 | $ 13,347,616 |
Reinvestment of distributions | 800,070 | 17,559 | 16,714,747 | 396,669 |
Shares redeemed | (2,196,722) | (4,838,970) | (47,192,854) | (107,126,893) |
Net increase (decrease) | (1,115,722) | (4,218,791) | $ (24,469,803) | $ (93,382,608) |
Class C | | | | |
Shares sold | 321,464 | 622,433 | $ 6,853,737 | $ 13,817,015 |
Reinvestment of distributions | 508,368 | 8,336 | 10,615,090 | 188,806 |
Shares redeemed | (675,366) | (1,506,077) | (14,461,594) | (33,350,524) |
Net increase (decrease) | 154,466 | (875,308) | $ 3,007,233 | $ (19,344,703) |
Institutional Class | | | | |
Shares sold | 159,206 | 197,168 | $ 3,798,838 | $ 4,832,048 |
Reinvestment of distributions | 77,688 | 990 | 1,779,821 | 24,473 |
Shares redeemed | (286,274) | (191,717) | (6,731,175) | (4,628,600) |
Net increase (decrease) | (49,380) | 6,441 | $ (1,152,516) | $ 227,921 |
Health Care
Advisor Industrials Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,130.10 | $ 6.76 |
HypotheticalA | $ 1,000.00 | $ 1,018.85 | $ 6.41 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,128.70 | $ 8.05 |
HypotheticalA | $ 1,000.00 | $ 1,017.64 | $ 7.63 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,125.80 | $ 11.04 |
HypotheticalA | $ 1,000.00 | $ 1,014.82 | $ 10.46 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,126.20 | $ 10.66 |
HypotheticalA | $ 1,000.00 | $ 1,015.17 | $ 10.11 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,132.00 | $ 5.05 |
HypotheticalA | $ 1,000.00 | $ 1,020.47 | $ 4.79 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.26% |
Class T | 1.50% |
Class B | 2.06% |
Class C | 1.99% |
Institutional Class | .94% |
Semiannual Report
Advisor Industrials Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
General Electric Co. | 20.0 | 8.1 |
United Technologies Corp. | 7.8 | 4.2 |
Honeywell International, Inc. | 5.6 | 3.2 |
Tyco International Ltd. | 5.0 | 3.0 |
Danaher Corp. | 3.5 | 0.9 |
United Parcel Service, Inc. Class B | 3.2 | 1.5 |
Emerson Electric Co. | 3.1 | 1.7 |
Burlington Northern Santa Fe Corp. | 2.8 | 1.1 |
Illinois Tool Works, Inc. | 2.4 | 2.4 |
Caterpillar, Inc. | 2.3 | 2.2 |
| 55.7 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Industrial Conglomerates | 28.8% | |
| Aerospace & Defense | 18.6% | |
| Machinery | 13.9% | |
| Road & Rail | 8.6% | |
| Electrical Equipment | 6.6% | |
| All Others* | 23.5% | |
|
As of July 31, 2006 |
| Aerospace & Defense | 16.4% | |
| Chemicals | 15.6% | |
| Industrial Conglomerates | 15.5% | |
| Machinery | 11.4% | |
| Road & Rail | 6.0% | |
| All Others* | 35.1% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Industrials
Advisor Industrials Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.3% |
| Shares | | Value (Note 1) |
AEROSPACE & DEFENSE - 18.6% |
Aerospace & Defense - 18.6% |
DRS Technologies, Inc. | 28,700 | | $ 1,589,980 |
General Dynamics Corp. | 80,900 | | 6,322,335 |
Goodrich Corp. | 40,100 | | 1,965,702 |
Honeywell International, Inc. | 376,700 | | 17,211,423 |
Raytheon Co. | 124,900 | | 6,482,310 |
United Technologies Corp. | 356,500 | | 24,249,130 |
| | 57,820,880 |
AIR FREIGHT & LOGISTICS - 5.4% |
Air Freight & Logistics - 5.4% |
C.H. Robinson Worldwide, Inc. | 65,300 | | 3,464,165 |
Hub Group, Inc. Class A | 51,072 | | 1,525,010 |
United Parcel Service, Inc. Class B | 136,900 | | 9,895,132 |
UTI Worldwide, Inc. | 57,060 | | 1,734,624 |
| | 16,618,931 |
AIRLINES - 1.4% |
Airlines - 1.4% |
AirTran Holdings, Inc. (a) | 100,100 | | 1,108,107 |
UAL Corp. (a) | 43,100 | | 1,861,920 |
US Airways Group, Inc. (a) | 25,300 | | 1,416,294 |
| | 4,386,321 |
AUTO COMPONENTS - 0.4% |
Auto Parts & Equipment - 0.4% |
Johnson Controls, Inc. | 12,300 | | 1,137,258 |
AUTOMOBILES - 0.5% |
Automobile Manufacturers - 0.5% |
Renault SA | 12,500 | | 1,546,914 |
BUILDING PRODUCTS - 2.3% |
Building Products - 2.3% |
American Standard Companies, Inc. | 66,300 | | 3,274,557 |
Masco Corp. | 123,500 | | 3,950,765 |
| | 7,225,322 |
CHEMICALS - 0.5% |
Industrial Gases - 0.5% |
Airgas, Inc. | 37,000 | | 1,539,940 |
COMMERCIAL SERVICES & SUPPLIES - 3.4% |
Diversified Commercial & Professional Services - 1.1% |
Cintas Corp. | 48,500 | | 1,995,775 |
The Brink's Co. | 20,800 | | 1,292,720 |
| | 3,288,495 |
|
| Shares | | Value (Note 1) |
Environmental & Facility Services - 2.3% |
Allied Waste Industries, Inc. | 157,600 | | $ 2,015,704 |
Waste Management, Inc. | 137,700 | | 5,229,846 |
| | 7,245,550 |
TOTAL COMMERCIAL SERVICES & SUPPLIES | | 10,534,045 |
COMMUNICATIONS EQUIPMENT - 0.4% |
Communications Equipment - 0.4% |
Harris Corp. | 24,800 | | 1,260,336 |
CONSTRUCTION & ENGINEERING - 4.9% |
Construction & Engineering - 4.9% |
Chicago Bridge & Iron Co. NV (NY Shares) | 41,300 | | 1,227,436 |
Fluor Corp. | 41,900 | | 3,460,940 |
Foster Wheeler Ltd. (a) | 70,800 | | 3,785,676 |
Jacobs Engineering Group, Inc. (a) | 30,500 | | 2,761,775 |
Shaw Group, Inc. (a) | 119,600 | | 4,037,696 |
| | 15,273,523 |
ELECTRICAL EQUIPMENT - 6.6% |
Electrical Components & Equipment - 5.1% |
AMETEK, Inc. | 47,500 | | 1,646,350 |
Cooper Industries Ltd. Class A | 50,200 | | 4,587,778 |
Emerson Electric Co. | 209,700 | | 9,430,209 |
| | 15,664,337 |
Heavy Electrical Equipment - 1.5% |
ABB Ltd. sponsored ADR | 261,400 | | 4,655,534 |
TOTAL ELECTRICAL EQUIPMENT | | 20,319,871 |
INDUSTRIAL CONGLOMERATES - 28.8% |
Industrial Conglomerates - 28.8% |
3M Co. | 93,760 | | 6,966,368 |
General Electric Co. | 1,721,900 | | 62,074,495 |
Textron, Inc. | 51,100 | | 4,760,987 |
Tyco International Ltd. | 489,900 | | 15,618,012 |
| | 89,419,862 |
MACHINERY - 13.9% |
Construction & Farm Machinery & Heavy Trucks - 4.0% |
Caterpillar, Inc. | 113,200 | | 7,252,724 |
Deere & Co. | 52,000 | | 5,214,560 |
| | 12,467,284 |
Industrial Machinery - 9.9% |
Danaher Corp. | 147,100 | | 10,894,226 |
Dover Corp. | 105,200 | | 5,217,920 |
Illinois Tool Works, Inc. (d) | 146,200 | | 7,454,738 |
ITT Corp. | 81,900 | | 4,885,335 |
SPX Corp. | 34,200 | | 2,400,498 |
| | 30,852,717 |
TOTAL MACHINERY | | 43,320,001 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
MARINE - 0.5% |
Marine - 0.5% |
Kirby Corp. (a) | 44,900 | | $ 1,594,399 |
METALS & MINING - 1.5% |
Aluminum - 0.4% |
Alcoa, Inc. | 39,800 | | 1,285,540 |
Steel - 1.1% |
Carpenter Technology Corp. | 9,800 | | 1,147,580 |
Reliance Steel & Aluminum Co. | 56,200 | | 2,340,168 |
| | 3,487,748 |
TOTAL METALS & MINING | | 4,773,288 |
OIL, GAS & CONSUMABLE FUELS - 0.5% |
Coal & Consumable Fuels - 0.5% |
Peabody Energy Corp. | 40,100 | | 1,637,283 |
ROAD & RAIL - 8.6% |
Railroads - 5.9% |
Burlington Northern Santa Fe Corp. | 107,000 | | 8,598,520 |
CSX Corp. | 103,900 | | 3,822,481 |
Union Pacific Corp. | 60,000 | | 6,060,000 |
| | 18,481,001 |
Trucking - 2.7% |
Con-way, Inc. | 22,800 | | 1,134,072 |
Knight Transportation, Inc. | 44,000 | | 827,200 |
Laidlaw International, Inc. | 51,900 | | 1,541,949 |
Landstar System, Inc. | 83,726 | | 3,540,773 |
Old Dominion Freight Lines, Inc. (a) | 47,476 | | 1,318,883 |
| | 8,362,877 |
TOTAL ROAD & RAIL | | 26,843,878 |
|
| Shares | | Value (Note 1) |
TRADING COMPANIES & DISTRIBUTORS - 1.1% |
Trading Companies & Distributors - 1.1% |
UAP Holding Corp. | 61,329 | | $ 1,536,291 |
WESCO International, Inc. (a) | 31,600 | | 1,918,752 |
| | 3,455,043 |
TOTAL COMMON STOCKS (Cost $278,851,184) | 308,707,095 |
Money Market Funds - 3.7% |
| | | |
Fidelity Cash Central Fund, 5.35% (b) | 3,988,828 | | 3,988,828 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 7,410,750 | | 7,410,750 |
TOTAL MONEY MARKET FUNDS (Cost $11,399,578) | 11,399,578 |
TOTAL INVESTMENT PORTFOLIO - 103.0% (Cost $290,250,762) | | 320,106,673 |
NET OTHER ASSETS - (3.0)% | | (9,283,911) |
NET ASSETS - 100% | $ 310,822,762 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 175,613 |
Fidelity Securities Lending Cash Central Fund | 28,624 |
Total | $ 204,237 |
See accompanying notes which are an integral part of the financial statements.
Industrials
Advisor Industials Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $7,373,154) - See accompanying schedule: Unaffiliated issuers (cost $278,851,184) | $ 308,707,095 | |
Fidelity Central Funds (cost $11,399,578) | 11,399,578 | |
Total Investments (cost $290,250,762) | | $ 320,106,673 |
Receivable for investments sold | | 8,042,460 |
Receivable for fund shares sold | | 1,050,895 |
Dividends receivable | | 165,213 |
Interest receivable | | 45,038 |
Prepaid expenses | | 1,139 |
Other receivables | | 6,014 |
Total assets | | 329,417,432 |
| | |
Liabilities | | |
Payable for investments purchased | $ 10,264,765 | |
Payable for fund shares redeemed | 488,256 | |
Accrued management fee | 142,477 | |
Distribution fees payable | 131,419 | |
Other affiliated payables | 82,263 | |
Other payables and accrued expenses | 74,740 | |
Collateral on securities loaned, at value | 7,410,750 | |
Total liabilities | | 18,594,670 |
| | |
Net Assets | | $ 310,822,762 |
Net Assets consist of: | | |
Paid in capital | | $ 275,352,128 |
Distributions in excess of net investment income | | (153,561) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 5,768,204 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 29,855,991 |
Net Assets | | $ 310,822,762 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption
price per share ($133,969,003 ÷
5,819,066 shares) | | $ 23.02 |
| | |
Maximum offering price per share (100/94.25 of $23.02) | | $ 24.42 |
Class T:
Net Asset Value and redemption price per share ($65,716,596 ÷ 2,887,229 shares) | | $ 22.76 |
| | |
Maximum offering price per share (100/96.50 of $22.76) | | $ 23.59 |
Class B:
Net Asset Value and offering price per share ($42,131,786 ÷ 1,920,883 shares)A | | $ 21.93 |
| | |
Class C:
Net Asset Value and offering price per share ($52,122,298 ÷ 2,370,291 shares)A | | $ 21.99 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($16,883,079 ÷ 712,985 shares) | | $ 23.68 |
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.
Semiannual Report
Advisor Industrials Fund
Financial Statements - continued
Statement of Operations
Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 2,193,842 |
Interest | | 20 |
Income from Fidelity Central Funds | | 204,237 |
Total income | | 2,398,099 |
| | |
Expenses | | |
Management fee | $ 791,569 | |
Transfer agent fees | 426,303 | |
Distribution fees | 737,718 | |
Accounting and security lending fees | 59,472 | |
Custodian fees and expenses | 6,787 | |
Independent trustees' compensation | 459 | |
Registration fees | 48,783 | |
Audit | 22,275 | |
Legal | 3,043 | |
Miscellaneous | 51,032 | |
Total expenses before reductions | 2,147,441 | |
Expense reductions | (8,815) | 2,138,626 |
Net investment income (loss) | | 259,473 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 13,078,278 | |
Foreign currency transactions | (3,663) | |
Total net realized gain (loss) | | 13,074,615 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 20,644,343 | |
Assets and liabilities in foreign currencies | (33) | |
Total change in net unrealized appreciation (depreciation) | | 20,644,310 |
Net gain (loss) | | 33,718,925 |
Net increase (decrease) in net assets resulting from operations | | $ 33,978,398 |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 259,473 | $ 67,497 |
Net realized gain (loss) | 13,074,615 | 16,800,474 |
Change in net unrealized appreciation (depreciation) | 20,644,310 | (9,655,014) |
Net increase (decrease) in net assets resulting from operations | 33,978,398 | 7,212,957 |
Distributions to shareholders from net investment income | (473,351) | - |
Distributions to shareholders from net realized gain | (21,383,101) | (7,122,799) |
Total distributions | (21,856,452) | (7,122,799) |
Share transactions - net increase (decrease) | 51,009,288 | 109,957,564 |
Redemption fees | 10,831 | 25,597 |
Total increase (decrease) in net assets | 63,142,065 | 110,073,319 |
| | |
Net Assets | | |
Beginning of period | 247,680,697 | 137,607,378 |
End of period (including distributions in excess of net investment income of $153,561 and undistributed net investment income of $65,095, respectively) | $ 310,822,762 | $ 247,680,697 |
See accompanying notes which are an integral part of the financial statements.
Industrials
Financial Highlights - Class A
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.16 | $ 21.53 | $ 18.10 | $ 14.15 | $ 12.75 | $ 15.15 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .05 | .08 | .02 | (.02) | .06 | (.04) |
Net realized and unrealized gain (loss) | 2.68 | 1.63 | 4.35 | 3.96 | 1.36 | (2.37) |
Total from investment operations | 2.73 | 1.71 | 4.37 | 3.94 | 1.42 | (2.41) |
Distributions from net investment income | (.06) | - | - | - | (.02) | - |
Distributions from net realized gain | (1.81) | (1.08) | (.94) | - | - | - |
Total distributions | (1.87) | (1.08) | (.94) | - | (.02) | - |
Redemption fees added to paid in capital E | - I | - I | - I | .01 | - I | .01 |
Net asset value, end of period | $ 23.02 | $ 22.16 | $ 21.53 | $ 18.10 | $ 14.15 | $ 12.75 |
Total Return B, C, D | 13.01% | 8.40% | 25.04% | 27.92% | 11.16% | (15.84)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.26% A | 1.26% | 1.34% | 1.65% | 1.99% | 1.83% |
Expenses net of fee waivers, if any | 1.26% A | 1.26% | 1.34% | 1.50% | 1.53% | 1.50% |
Expenses net of all reductions | 1.25% A | 1.24% | 1.29% | 1.47% | 1.46% | 1.49% |
Net investment income (loss) | .46% A | .34% | .09% | (.12)% | .46% | (.25)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 133,969 | $ 99,255 | $ 40,264 | $ 12,612 | $ 4,272 | $ 3,160 |
Portfolio turnover rate G | 151% A | 94% | 116% | 106% | 149% | 45% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.86 | $ 21.27 | $ 17.90 | $ 14.02 | $ 12.66 | $ 15.09 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .02 | .02 | (.03) | (.06) | .03 | (.07) |
Net realized and unrealized gain (loss) | 2.65 | 1.61 | 4.31 | 3.93 | 1.34 | (2.36) |
Total from investment operations | 2.67 | 1.63 | 4.28 | 3.87 | 1.37 | (2.43) |
Distributions from net investment income | (.03) | - | - | - | (.01) | - |
Distributions from net realized gain | (1.74) | (1.04) | (.91) | - | - | - |
Total distributions | (1.77) | (1.04) | (.91) | - | (.01) | - |
Redemption fees added to paid in capital E | - I | - I | - I | .01 | - I | - I |
Net asset value, end of period | $ 22.76 | $ 21.86 | $ 21.27 | $ 17.90 | $ 14.02 | $ 12.66 |
Total Return B, C, D | 12.87% | 8.13% | 24.78% | 27.67% | 10.84% | (16.10)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.50% A | 1.49% | 1.57% | 1.90% | 2.25% | 2.07% |
Expenses net of fee waivers, if any | 1.50% A | 1.49% | 1.57% | 1.75% | 1.78% | 1.75% |
Expenses net of all reductions | 1.50% A | 1.47% | 1.52% | 1.72% | 1.71% | 1.74% |
Net investment income (loss) | .21% A | .11% | (.14)% | (.36)% | .22% | (.50)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 65,717 | $ 55,936 | $ 40,126 | $ 13,089 | $ 5,493 | $ 6,216 |
Portfolio turnover rate G | 151% A | 94% | 116% | 106% | 149% | 45% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.02 | $ 20.55 | $ 17.27 | $ 13.61 | $ 12.33 | $ 14.77 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.09) | (.13) | (.14) | (.03) | (.14) |
Net realized and unrealized gain (loss) | 2.56 | 1.55 | 4.17 | 3.79 | 1.31 | (2.30) |
Total from investment operations | 2.52 | 1.46 | 4.04 | 3.65 | 1.28 | (2.44) |
Distributions from net realized gain | (1.61) | (.99) | (.76) | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | .01 | - I | - I |
Net asset value, end of period | $ 21.93 | $ 21.02 | $ 20.55 | $ 17.27 | $ 13.61 | $ 12.33 |
Total Return B, C, D | 12.58% | 7.54% | 24.12% | 26.89% | 10.38% | (16.52)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.06% A | 2.04% | 2.11% | 2.37% | 2.68% | 2.58% |
Expenses net of fee waivers, if any | 2.06% A | 2.04% | 2.11% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 2.06% A | 2.02% | 2.07% | 2.22% | 2.18% | 2.24% |
Net investment income (loss) | (.35)% A | (.44)% | (.68)% | (.87)% | (.26)% | (1.00)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 42,132 | $ 37,082 | $ 32,242 | $ 14,722 | $ 9,005 | $ 9,008 |
Portfolio turnover rate G | 151% A | 94% | 116% | 106% | 149% | 45% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. DTotal returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. FFees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.16 | $ 20.68 | $ 17.36 | $ 13.67 | $ 12.39 | $ 14.84 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.03) | (.08) | (.12) | (.14) | (.03) | (.14) |
Net realized and unrealized gain (loss) | 2.56 | 1.56 | 4.19 | 3.82 | 1.31 | (2.31) |
Total from investment operations | 2.53 | 1.48 | 4.07 | 3.68 | 1.28 | (2.45) |
Distributions from net realized gain | (1.70) | (1.00) | (.75) | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | .01 | - I | - I |
Net asset value, end of period | $ 21.99 | $ 21.16 | $ 20.68 | $ 17.36 | $ 13.67 | $ 12.39 |
Total Return B, C, D | 12.62% | 7.59% | 24.16% | 26.99% | 10.33% | (16.51)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.99% A | 1.99% | 2.07% | 2.28% | 2.57% | 2.49% |
Expenses net of fee waivers, if any | 1.99% A | 1.99% | 2.07% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 1.98% A | 1.97% | 2.02% | 2.22% | 2.18% | 2.24% |
Net investment income (loss) | (.27)% A | (.38)% | (.64)% | (.87)% | (.26)% | (1.00)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 52,122 | $ 42,363 | $ 20,595 | $ 9,507 | $ 5,307 | $ 5,143 |
Portfolio turnover rate G | 151% A | 94% | 116% | 106% | 149% | 45% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. ECalculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. HExpense 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 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Industrials
Financial Highlights - Institutional Class
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.77 | $ 22.06 | $ 18.48 | $ 14.41 | $ 12.96 | $ 15.37 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .09 | .16 | .07 | .02 | .09 | - H |
Net realized and unrealized gain (loss) | 2.76 | 1.66 | 4.46 | 4.04 | 1.39 | (2.41) |
Total from investment operations | 2.85 | 1.82 | 4.53 | 4.06 | 1.48 | (2.41) |
Distributions from net investment income | (.13) | - | - | - | (.03) | - |
Distributions from net realized gain | (1.81) | (1.11) | (.95) | - | - | - |
Total distributions | (1.94) | (1.11) | (.95) | - | (.03) | - |
Redemption fees added to paid in capital D | - H | - H | - H | .01 | - H | - H |
Net asset value, end of period | $ 23.68 | $ 22.77 | $ 22.06 | $ 18.48 | $ 14.41 | $ 12.96 |
Total Return B, C | 13.20% | 8.73% | 25.41% | 28.24% | 11.46% | (15.68)% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | .94% A | .91% | 1.06% | 1.38% | 1.55% | 1.45% |
Expenses net of fee waivers, if any | .94% A | .91% | 1.06% | 1.25% | 1.25% | 1.25% |
Expenses net of all reductions | .94% A | .89% | 1.01% | 1.22% | 1.18% | 1.24% |
Net investment income (loss) | .77% A | .69% | .37% | .13% | .74% | - |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 16,883 | $ 13,043 | $ 4,379 | $ 1,490 | $ 1,156 | $ 2,104 |
Portfolio turnover rate F | 151% A | 94% | 116% | 106% | 149% | 45% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. H Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Industrials Fund (the Fund) (formerly Fidelity Advisor Cyclical Industries Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Industrials
1. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, deferred trustees compensation and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 31,295,276 |
Unrealized depreciation | (1,647,808) |
Net unrealized appreciation (depreciation) | $ 29,647,468 |
Cost for federal income tax purposes | $ 290,459,205 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $234,290,850 and $207,030,064, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 148,259 | $ 10,906 |
Class T | .25% | .25% | 152,140 | - |
Class B | .75% | .25% | 197,521 | 148,141 |
Class C | .75% | .25% | 239,798 | 117,758 |
| | | $ 737,718 | $ 276,805 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 101,951 |
Class T | 10,775 |
Class B* | 28,264 |
Class C* | 10,927 |
| $ 151,917 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets* |
Class A | $ 179,315 | .30 |
Class T | 91,647 | .30 |
Class B | 70,984 | .36 |
Class C | 67,509 | .28 |
Institutional Class | 16,848 | .24 |
| $ 426,303 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity
Industrials
4. Fees and Other Transactions with Affiliates - continued
Investments in Fidelity Central Funds - continued
Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds, are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $427 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $342 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $28,624.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $5,511 for the period.
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached. In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
8. Other - continued
Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
From net investment income | | |
Class A | $ 317,175 | $ - |
Class T | 81,457 | - |
Institutional Class | 74,719 | - |
Total | $ 473,351 | $ - |
From net realized gain | | |
Class A | $ 9,177,798 | $ 2,209,329 |
Class T | 4,598,155 | 1,993,493 |
Class B | 2,897,402 | 1,595,001 |
Class C | 3,662,967 | 1,032,683 |
Institutional Class | 1,046,779 | 292,293 |
Total | $ 21,383,101 | $ 7,122,799 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 | Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 1,920,652 | 3,250,873 | $ 42,974,577 | $ 73,798,607 |
Reinvestment of distributions | 397,118 | 97,417 | 8,609,345 | 1,982,904 |
Shares redeemed | (978,604) | (738,421) | (21,902,306) | (16,310,331) |
Net increase (decrease) | 1,339,166 | 2,609,869 | $ 29,681,616 | $ 59,471,180 |
Class T | | | | |
Shares sold | 475,045 | 1,053,819 | $ 10,515,129 | $ 23,194,479 |
Reinvestment of distributions | 204,708 | 95,171 | 4,388,653 | 1,914,595 |
Shares redeemed | (351,820) | (476,485) | (7,780,165) | (10,217,427) |
Net increase (decrease) | 327,933 | 672,505 | $ 7,123,617 | $ 14,891,647 |
Class B | | | | |
Shares sold | 300,700 | 691,509 | $ 6,395,896 | $ 14,823,678 |
Reinvestment of distributions | 118,628 | 68,369 | 2,452,560 | 1,329,447 |
Shares redeemed | (262,370) | (564,827) | (5,574,578) | (11,906,215) |
Net increase (decrease) | 156,958 | 195,051 | $ 3,273,878 | $ 4,246,910 |
Class C | | | | |
Shares sold | 493,387 | 1,219,100 | $ 10,482,771 | $ 26,650,232 |
Reinvestment of distributions | 135,825 | 42,653 | 2,814,175 | 834,597 |
Shares redeemed | (260,986) | (255,670) | (5,584,993) | (5,350,637) |
Net increase (decrease) | 368,226 | 1,006,083 | $ 7,711,953 | $ 22,134,192 |
Institutional Class | | | | |
Shares sold | 300,184 | 685,802 | $ 6,915,410 | $ 16,202,741 |
Reinvestment of distributions | 33,033 | 7,337 | 737,185 | 152,999 |
Shares redeemed | (193,154) | (318,752) | (4,434,371) | (7,142,105) |
Net increase (decrease) | 140,063 | 374,387 | $ 3,218,224 | $ 9,213,635 |
Industrials
Advisor Technology Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,177.70 | $ 7.52* * |
HypotheticalA | $ 1,000.00 | $ 1,018.30 | $ 6.97* * |
Class T | | | |
Actual | $ 1,000.00 | $ 1,176.00 | $ 8.83* * |
HypotheticalA | $ 1,000.00 | $ 1,017.09 | $ 8.19* * |
Class B | | | |
Actual | $ 1,000.00 | $ 1,173.40 | $ 11.56* * |
HypotheticalA | $ 1,000.00 | $ 1,014.57 | $ 10.71* * |
Class C | | | |
Actual | $ 1,000.00 | $ 1,173.30 | $ 11.61* * |
HypotheticalA | $ 1,000.00 | $ 1,014.52 | $ 10.76* * |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,180.50 | $ 5.50* * |
HypotheticalA | $ 1,000.00 | $ 1,020.16 | $ 5.09* * |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.37%* * |
Class T | 1.61%* * |
Class B | 2.11%* * |
Class C | 2.12%* * |
Institutional Class | 1.00%* * |
Semiannual Report
Advisor Technology Fund
Shareholder Expense Example - continued
* * If fees, effective January 1, 2007, had been in effect during the entire period, the annualized expense ratio and the expenses paid in the actual and hypothetical examples above would have been as follows:
| Annualized
Expense Ratio | Expenses
Paid |
Class A | 1.27% | |
Actual | | $ 6.97 |
Hypothetical A | | $ 6.46 |
Class T | 1.51% | |
Actual | | $ 8.28 |
Hypothetical A | | $ 7.68 |
Class B | 2.01% | |
Actual | | $ 11.01 |
Hypothetical A | | $ 10.21 |
Class C | 2.02% | |
Actual | | $ 11.07 |
Hypothetical A | | $ 10.26 |
Institutional Class | .99% | |
Actual | | $ 5.44 |
Hypothetical A | | $ 5.04 |
A 5% return per year before expenses
Technology
Advisor Technology Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Apple, Inc. | 5.4 | 4.9 |
Research In Motion Ltd. | 5.4 | 0.3 |
QUALCOMM, Inc. | 4.8 | 5.8 |
Google, Inc. Class A (sub. vtg.) | 4.6 | 2.0 |
Marvell Technology Group Ltd. | 4.1 | 1.5 |
Intel Corp. | 3.4 | 3.1 |
Cisco Systems, Inc. | 3.3 | 0.0 |
SanDisk Corp. | 3.1 | 0.0 |
Broadcom Corp. Class A | 2.4 | 2.9 |
F5 Networks, Inc. | 2.0 | 2.5 |
| 38.5 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Communications Equipment | 30.1% | |
| Semiconductors & Semiconductor Equipment | 25.6% | |
| Computers & Peripherals | 14.1% | |
| Software | 12.5% | |
| Internet Software & Services | 8.4% | |
| All Others * | 9.3% | |
|
As of July 31, 2006 |
| Communications Equipment | 33.9% | |
| Semiconductors & Semiconductor Equipment | 26.1% | |
| Computers & Peripherals | 13.7% | |
| Software | 8.8% | |
| Electronic Equipment & Instruments | 6.7% | |
| All Others * | 10.8% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Semiannual Report
Advisor Technology Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 98.8% |
| Shares | | Value (Note 1) |
COMMERCIAL SERVICES & SUPPLIES - 1.4% |
Diversified Commercial & Professional Services - 1.3% |
Equifax, Inc. | 10,300 | | $ 427,759 |
Tele Atlas NV (a) | 455,356 | | 9,406,789 |
| | 9,834,548 |
Human Resource & Employment Services - 0.1% |
Kenexa Corp. (a) | 20,400 | | 744,600 |
TOTAL COMMERCIAL SERVICES & SUPPLIES | | 10,579,148 |
COMMUNICATIONS EQUIPMENT - 29.9% |
Communications Equipment - 29.9% |
Acme Packet, Inc. (d) | 168,700 | | 2,678,956 |
ADC Telecommunications, Inc. (a) | 57,764 | | 932,311 |
Adtran, Inc. | 67,400 | | 1,493,584 |
ADVA AG Optical Networking (a) | 339,882 | | 3,712,216 |
Alcatel-Lucent SA sponsored ADR | 227,200 | | 2,953,600 |
AudioCodes Ltd. (a) | 731,750 | | 7,244,325 |
Bookham, Inc. (a) | 604,488 | | 1,753,015 |
Ciena Corp. (a) | 117,279 | | 3,294,367 |
Cisco Systems, Inc. (a) | 969,700 | | 25,784,323 |
Comtech Group, Inc. (a)(d) | 492,619 | | 8,108,509 |
Comverse Technology, Inc. (a) | 742,100 | | 14,359,635 |
Corning, Inc. (a) | 466,000 | | 9,711,440 |
ECI Telecom Ltd. (a) | 317,618 | | 2,706,105 |
F5 Networks, Inc. (a) | 215,900 | | 15,423,896 |
Finisar Corp. (a)(d) | 1,285,571 | | 4,165,250 |
Foundry Networks, Inc. (a) | 103,500 | | 1,497,645 |
Foxconn International Holdings Ltd. (a) | 130,000 | | 388,793 |
JDS Uniphase Corp. (a) | 46,362 | | 824,316 |
Juniper Networks, Inc. (a) | 787,646 | | 14,272,146 |
Mogem Co. Ltd. | 309,043 | | 4,556,185 |
Motorola, Inc. | 223,400 | | 4,434,490 |
Nortel Networks Corp. (a) | 71,900 | | 1,929,799 |
Optium Corp. | 42,400 | | 1,012,936 |
OZ Optics Ltd. unit (e) | 68,000 | | 1,003,000 |
Powerwave Technologies, Inc. (a) | 1,033,000 | | 6,032,720 |
QUALCOMM, Inc. | 1,002,500 | | 37,754,150 |
Research In Motion Ltd. (a) | 329,070 | | 42,048,565 |
Riverbed Technology, Inc. (d) | 46,400 | | 1,419,840 |
Sonus Networks, Inc. (a) | 1,035,800 | | 7,499,192 |
Tekelec (a) | 264,900 | | 4,079,460 |
| | 233,074,769 |
COMPUTERS & PERIPHERALS - 14.1% |
Computer Hardware - 9.2% |
Apple, Inc. (a) | 492,800 | | 42,247,744 |
Concurrent Computer Corp. (a) | 2,208,064 | | 3,312,096 |
Hewlett-Packard Co. | 216,400 | | 9,365,792 |
NCR Corp. (a) | 148,500 | | 7,037,415 |
Sun Microsystems, Inc. (a) | 1,496,100 | | 9,934,104 |
| | 71,897,151 |
|
| Shares | | Value (Note 1) |
Computer Storage & Peripherals - 4.9% |
Brocade Communications Systems, Inc. (a) | 4,200 | | $ 36,036 |
EMC Corp. (a) | 738,400 | | 10,330,216 |
Network Appliance, Inc. (a) | 42,500 | | 1,598,000 |
QLogic Corp. (a) | 96,400 | | 1,764,120 |
Rackable Systems, Inc. (a) | 11,800 | | 225,380 |
SanDisk Corp. (a) | 601,800 | | 24,192,360 |
| | 38,146,112 |
TOTAL COMPUTERS & PERIPHERALS | | 110,043,263 |
ELECTRICAL EQUIPMENT - 0.6% |
Electrical Components & Equipment - 0.6% |
Evergreen Solar, Inc. (a)(d) | 403,997 | | 3,389,535 |
Q-Cells AG | 1,200 | | 62,092 |
Suntech Power Holdings Co. Ltd. sponsored ADR (a) | 35,400 | | 1,302,720 |
| | 4,754,347 |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 2.3% |
Electronic Equipment & Instruments - 0.1% |
Cognex Corp. | 13,600 | | 296,752 |
Electronic Manufacturing Services - 1.6% |
Hon Hai Precision Industry Co. Ltd. (Foxconn) | 284,453 | | 1,943,752 |
Jabil Circuit, Inc. | 423,500 | | 10,159,765 |
Trimble Navigation Ltd. (a) | 11,200 | | 633,696 |
| | 12,737,213 |
Technology Distributors - 0.6% |
Arrow Electronics, Inc. (a) | 22,800 | | 803,700 |
Avnet, Inc. (a) | 45,200 | | 1,403,460 |
Wolfson Microelectronics PLC (a) | 417,700 | | 2,297,893 |
| | 4,505,053 |
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS | | 17,539,018 |
HOUSEHOLD DURABLES - 0.6% |
Consumer Electronics - 0.6% |
Garmin Ltd. | 98,300 | | 4,936,626 |
Household Appliances - 0.0% |
iRobot Corp. (a) | 1,400 | | 25,578 |
TOTAL HOUSEHOLD DURABLES | | 4,962,204 |
INTERNET & CATALOG RETAIL - 0.1% |
Internet Retail - 0.1% |
Gmarket, Inc. sponsored ADR | 1,400 | | 29,960 |
GSI Commerce, Inc. (a) | 68,301 | | 1,112,623 |
| | 1,142,583 |
INTERNET SOFTWARE & SERVICES - 8.4% |
Internet Software & Services - 8.4% |
Akamai Technologies, Inc. (a) | 3,700 | | 207,866 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
INTERNET SOFTWARE & SERVICES - CONTINUED |
Internet Software & Services - continued |
Ariba, Inc. (a) | 43,500 | | $ 404,550 |
Baidu.com, Inc. sponsored ADR (a)(d) | 27,200 | | 3,398,368 |
DivX, Inc. (d) | 57,900 | | 1,226,322 |
Google, Inc. Class A (sub. vtg.) (a) | 70,850 | | 35,517,105 |
Liquidity Services, Inc. | 67,900 | | 1,356,642 |
Marchex, Inc. Class B | 225,200 | | 2,740,684 |
Openwave Systems, Inc. (a) | 784,093 | | 6,915,700 |
RADVision Ltd. (a) | 81,329 | | 1,588,355 |
WebSideStory, Inc. (a) | 444,795 | | 6,365,016 |
Yahoo!, Inc. (a) | 205,200 | | 5,809,212 |
| | 65,529,820 |
IT SERVICES - 2.3% |
Data Processing & Outsourced Services - 1.2% |
The Western Union Co. | 394,300 | | 8,808,662 |
IT Consulting & Other Services - 1.1% |
Cognizant Technology Solutions Corp. Class A (a) | 39,200 | | 3,343,368 |
Infosys Technologies Ltd. sponsored ADR | 17,100 | | 991,800 |
Isilon Systems, Inc. | 1,000 | | 23,090 |
RightNow Technologies, Inc. (a) | 230,148 | | 3,309,528 |
Satyam Computer Services Ltd. sponsored ADR | 49,000 | | 1,140,720 |
| | 8,808,506 |
TOTAL IT SERVICES | | 17,617,168 |
MEDIA - 0.5% |
Advertising - 0.5% |
Focus Media Holding Ltd. ADR (a) | 46,500 | | 3,843,690 |
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.2% |
Real Estate Management & Development - 0.2% |
Move, Inc. | 295,625 | | 1,868,350 |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 25.6% |
Semiconductor Equipment - 4.3% |
Applied Materials, Inc. | 209,200 | | 3,709,116 |
ASML Holding NV (NY Shares) (a) | 239,800 | | 6,119,696 |
Axcelis Technologies, Inc. (a) | 149,500 | | 962,780 |
Credence Systems Corp. (a) | 261,900 | | 1,275,453 |
EMCORE Corp. (a)(d) | 222,198 | | 906,568 |
Entegris, Inc. (a) | 264,245 | | 2,835,349 |
FormFactor, Inc. (a) | 66,600 | | 2,707,290 |
ICOS Vision Systems NV (a) | 9,100 | | 382,382 |
KLA-Tencor Corp. | 41,700 | | 2,052,891 |
Lam Research Corp. (a) | 59,500 | | 2,725,695 |
LTX Corp. (a) | 409,700 | | 2,163,216 |
Rudolph Technologies, Inc. (a) | 42,920 | | 670,840 |
Tessera Technologies, Inc. (a) | 84,700 | | 3,238,928 |
|
| Shares | | Value (Note 1) |
Varian Semiconductor Equipment Associates, Inc. (a) | 35,550 | | $ 1,462,883 |
Verigy Ltd. | 127,380 | | 2,334,875 |
| | 33,547,962 |
Semiconductors - 21.3% |
Advanced Micro Devices, Inc. (a) | 283,236 | | 4,404,320 |
Altera Corp. (a) | 41,400 | | 830,070 |
AMIS Holdings, Inc. (a) | 201,200 | | 2,080,408 |
Applied Micro Circuits Corp. (a) | 890,800 | | 3,064,352 |
Atheros Communications, Inc. (a) | 138,700 | | 3,295,512 |
Atmel Corp. (a) | 273,300 | | 1,634,334 |
Broadcom Corp. Class A (a) | 579,122 | | 18,485,574 |
Chartered Semiconductor Manufacturing Ltd. (a) | 1,569,000 | | 1,410,531 |
Conexant Systems, Inc. (a) | 371,300 | | 690,618 |
Cypress Semiconductor Corp. (a) | 358,500 | | 6,614,325 |
Himax Technologies, Inc. sponsored ADR | 262,600 | | 1,341,886 |
Hittite Microwave Corp. (a) | 80,600 | | 2,803,268 |
Ikanos Communications, Inc. (a) | 102,953 | | 833,919 |
Integrated Device Technology, Inc. (a) | 180,400 | | 2,729,452 |
Intel Corp. | 1,256,800 | | 26,342,528 |
Intersil Corp. Class A | 210,600 | | 4,961,736 |
LSI Logic Corp. (a) | 841,000 | | 7,905,400 |
Marvell Technology Group Ltd. (a) | 1,748,900 | | 31,987,381 |
Maxim Integrated Products, Inc. | 131,200 | | 4,040,960 |
Microtune, Inc. (a) | 556,540 | | 2,793,831 |
Mindspeed Technologies, Inc. (a)(d) | 764,746 | | 1,506,550 |
Monolithic Power Systems, Inc. (a) | 133,100 | | 1,638,461 |
MoSys, Inc. (a)(d) | 32,100 | | 265,146 |
National Semiconductor Corp. | 379,700 | | 8,782,461 |
Netlogic Microsystems, Inc. (a) | 21,500 | | 513,420 |
NVIDIA Corp. (a) | 45,200 | | 1,385,380 |
Pericom Semiconductor Corp. (a) | 37,400 | | 372,878 |
PixArt Imaging, Inc. | 201,000 | | 2,820,239 |
PLX Technology, Inc. (a) | 45,400 | | 461,264 |
PMC-Sierra, Inc. (a) | 135,900 | | 856,170 |
Saifun Semiconductors Ltd. (a) | 140,000 | | 1,953,000 |
Semtech Corp. (a) | 90,100 | | 1,234,370 |
Silicon Motion Technology Corp. sponsored ADR (a) | 39,100 | | 720,613 |
SiRF Technology Holdings, Inc. (a)(d) | 81,800 | | 2,401,648 |
Spansion, Inc. Class A (a)(d) | 269,700 | | 3,460,251 |
STATS ChipPAC Ltd. sponsored ADR (a) | 645,700 | | 5,398,052 |
Vimicro International Corp. sponsored ADR (a) | 402,800 | | 3,814,516 |
Volterra Semiconductor Corp. (a) | 22,900 | | 301,822 |
| | 166,136,646 |
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | | 199,684,608 |
SOFTWARE - 12.5% |
Application Software - 9.1% |
Adobe Systems, Inc. (a) | 340,200 | | 13,223,574 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
SOFTWARE - CONTINUED |
Application Software - continued |
Ansys, Inc. (a) | 119,300 | | $ 5,951,877 |
BEA Systems, Inc. (a) | 122,700 | | 1,512,891 |
Hyperion Solutions Corp. (a) | 33,100 | | 1,397,482 |
Informatica Corp. (a) | 847,750 | | 10,647,740 |
Intuit, Inc. (a) | 269,600 | | 8,478,920 |
NAVTEQ Corp. (a) | 111,856 | | 3,968,651 |
Opsware, Inc. (a) | 959,383 | | 7,675,064 |
Salesforce.com, Inc. (a) | 277,200 | | 12,149,676 |
Ulticom, Inc. (a) | 702,426 | | 6,005,742 |
| | 71,011,617 |
Home Entertainment Software - 0.1% |
THQ, Inc. (a) | 37,900 | | 1,148,370 |
Systems Software - 3.3% |
Allot Communications Ltd. | 21,200 | | 220,904 |
Double-Take Software, Inc. | 177,100 | | 2,238,544 |
Oracle Corp. (a) | 547,200 | | 9,389,952 |
Red Hat, Inc. (a) | 237,000 | | 5,387,010 |
Sandvine Corp. (U.K.) | 1,635,600 | | 3,342,087 |
Sandvine Corp. (a) | 2,163,300 | | 4,412,647 |
Wind River Systems, Inc. (a) | 53,131 | | 527,060 |
| | 25,518,204 |
TOTAL SOFTWARE | | 97,678,191 |
SPECIALTY RETAIL - 0.3% |
Computer & Electronics Retail - 0.3% |
Gamestop Corp. Class B (a) | 37,400 | | 1,999,404 |
TOTAL COMMON STOCKS (Cost $798,924,951) | 770,316,563 |
Convertible Preferred Stocks - 0.0% |
| | | |
COMMUNICATIONS EQUIPMENT - 0.0% |
Communications Equipment - 0.0% |
Chorum Technologies, Inc. Series E (a)(e)
(Cost $258,032) | 17,200 | | 0 |
Convertible Bonds - 0.2% |
| Principal Amount | | |
COMMUNICATIONS EQUIPMENT - 0.2% |
Communications Equipment - 0.2% |
Ciena Corp. 0.25% 5/1/13
(Cost $1,270,000) | $ 1,270,000 | | 1,175,893 |
Money Market Funds - 2.8% |
| Shares | | Value (Note 1) |
Fidelity Cash Central Fund, 5.35% (b) | 3,325,275 | | $ 3,325,275 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 18,680,522 | | 18,680,522 |
TOTAL MONEY MARKET FUNDS (Cost $22,005,797) | 22,005,797 |
TOTAL INVESTMENT PORTFOLIO - 101.8% (Cost $822,458,780) | | 793,498,253 |
NET OTHER ASSETS - (1.8)% | | (13,837,211) |
NET ASSETS - 100% | $ 779,661,042 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $1,003,000 or 0.1% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Chorum Technologies, Inc. Series E | 9/19/00 | $ 258,032 |
OZ Optics Ltd. unit | 8/18/00 | $ 1,003,680 |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 199,885 |
Fidelity Securities Lending Cash Central Fund | 196,508 |
Total | $ 396,393 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 78.9% |
Canada | 6.8% |
Bermuda | 4.1% |
Netherlands | 2.0% |
Israel | 1.7% |
Cayman Islands | 1.7% |
Singapore | 1.2% |
Others (individually less than 1%) | 3.6% |
| 100.0% |
Income Tax Information |
At July 31, 2006, the fund had a capital loss carryforward of approximately $1,516,738,814 of which $1,016,932,031 and $499,806,783 will expire on July 31, 2010 and 2011, respectively. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Technology Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $19,305,125) - See accompanying schedule: Unaffiliated issuers (cost $800,452,983) | $ 771,492,456 | |
Fidelity Central Funds (cost $22,005,797) | 22,005,797 | |
Total Investments (cost $822,458,780) | | $ 793,498,253 |
Cash | | 1,518 |
Receivable for investments sold | | 19,782,211 |
Receivable for fund shares sold | | 3,279,041 |
Dividends receivable | | 26,694 |
Interest receivable | | 23,226 |
Prepaid expenses | | 3,393 |
Other receivables | | 56,524 |
Total assets | | 816,670,860 |
| | |
Liabilities | | |
Payable for investments purchased | $ 11,928,962 | |
Payable for fund shares redeemed | 4,997,192 | |
Accrued management fee | 372,543 | |
Distribution fees payable | 378,607 | |
Other affiliated payables | 284,971 | |
Other payables and accrued expenses | 367,021 | |
Collateral on securities loaned, at value | 18,680,522 | |
Total liabilities | | 37,009,818 |
| | |
Net Assets | | $ 779,661,042 |
Net Assets consist of: | | |
Paid in capital | | $ 2,291,140,582 |
Accumulated net investment loss | | (5,206,848) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (1,477,311,827) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (28,960,865) |
Net Assets | | $ 779,661,042 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($257,397,811 ÷ 14,019,400 shares) | | $ 18.36 |
| | |
Maximum offering price per share (100/94.25 of $18.36) | | $ 19.48 |
Class T:
Net Asset Value and redemption price per share ($268,186,851 ÷ 14,920,993 shares) | | $ 17.97 |
| | |
Maximum offering price per share (100/96.50 of $17.97) | | $ 18.62 |
Class B:
Net Asset Value and offering price per share ($151,662,925 ÷ 8,856,986 shares)A | | $ 17.12 |
| | |
Class C:
Net Asset Value and offering price per share ($88,538,302 ÷ 5,147,378 shares)A | | $ 17.20 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($13,875,153 ÷ 731,582 shares) | | $ 18.97 |
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.
Technology
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
Investment Income | | |
Dividends | | $ 1,083,900 |
Interest | | 3,334 |
Income from Fidelity Central Funds (including $196,508 from security lending) | | 396,393 |
Total income | | 1,483,627 |
| | |
Expenses | | |
Management fee | $ 2,233,399 | |
Transfer agent fees | 1,564,924 | |
Distribution fees | 2,356,808 | |
Accounting and security lending fees | 147,172 | |
Custodian fees and expenses | 43,233 | |
Independent trustees' compensation | 1,340 | |
Registration fees | 45,841 | |
Audit | 25,749 | |
Legal | 9,709 | |
Interest | 5,581 | |
Miscellaneous | 332,946 | |
Total expenses before reductions | 6,766,702 | |
Expense reductions | (76,700) | 6,690,002 |
Net investment income (loss) | | (5,206,375) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 48,110,678 | |
Foreign currency transactions | (9,134) | |
Total net realized gain (loss) | | 48,101,544 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 83,451,984 | |
Assets and liabilities in foreign currencies | (889) | |
Total change in net unrealized appreciation (depreciation) | | 83,451,095 |
Net gain (loss) | | 131,552,639 |
Net increase (decrease) in net assets resulting from operations | | $ 126,346,264 |
Statement of Changes in Net Assets
| Six months ended
January 31, 2007
(Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (5,206,375) | $ (11,357,485) |
Net realized gain (loss) | 48,101,544 | 133,807,053 |
Change in net unrealized appreciation (depreciation) | 83,451,095 | (146,818,598) |
Net increase (decrease) in net assets resulting from operations | 126,346,264 | (24,369,030) |
Share transactions - net increase (decrease) | (84,024,150) | (128,197,659) |
Redemption fees | 12,388 | 46,191 |
Total increase (decrease) in net assets | 42,334,502 | (152,520,498) |
| | |
Net Assets | | |
Beginning of period | 737,326,540 | 889,847,038 |
End of period (including accumulated net investment loss of $5,206,848 and accumulated net investment loss of $473, respectively) | $ 779,661,042 | $ 737,326,540 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 15.59 | $ 16.16 | $ 13.98 | $ 13.36 | $ 10.03 | $ 17.76 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.09) | (.15) | .02 H | (.17) | (.11) | (.15) |
Net realized and unrealized gain (loss) | 2.86 | (.42) | 2.24 | .79 | 3.44 | (7.58) |
Total from investment operations | 2.77 | (.57) | 2.26 | .62 | 3.33 | (7.73) |
Distributions from net investment income | - | - | (.08) | - | - | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 18.36 | $ 15.59 | $ 16.16 | $ 13.98 | $ 13.36 | $ 10.03 |
Total Return B, C, D | 17.77% | (3.53)% | 16.20% | 4.64% | 33.20% | (43.52)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.37% A | 1.30% | 1.37% | 1.44% | 1.70% | 1.53% |
Expenses net of fee waivers, if any | 1.37% A | 1.30% | 1.37% | 1.44% | 1.59% | 1.51% |
Expenses net of all reductions | 1.35% A | 1.20% | 1.26% | 1.35% | 1.38% | 1.43% |
Net investment income (loss) | (.98)% A | (.88)% | .12% H | (1.10)% | (1.03)% | (1.07)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 257,398 | $ 189,054 | $ 144,970 | $ 123,389 | $ 123,604 | $ 101,649 |
Portfolio turnover rate G | 221% A | 258% | 180% | 105% | 140% | 164% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.14 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.87)%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 15.28 | $ 15.88 | $ 13.76 | $ 13.17 | $ 9.91 | $ 17.59 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.11) | (.19) | (.02) H | (.19) | (.14) | (.18) |
Net realized and unrealized gain (loss) | 2.80 | (.41) | 2.21 | .78 | 3.40 | (7.50) |
Total from investment operations | 2.69 | (.60) | 2.19 | .59 | 3.26 | (7.68) |
Distributions from net investment income | - | - | (.07) | - | - | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 17.97 | $ 15.28 | $ 15.88 | $ 13.76 | $ 13.17 | $ 9.91 |
Total Return B, C, D | 17.60% | (3.78)% | 15.94% | 4.48% | 32.90% | (43.66)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.61% A | 1.55% | 1.60% | 1.62% | 1.85% | 1.70% |
Expenses net of fee waivers, if any | 1.61% A | 1.55% | 1.60% | 1.62% | 1.83% | 1.70% |
Expenses net of all reductions | 1.60% A | 1.44% | 1.48% | 1.53% | 1.63% | 1.62% |
Net investment income (loss) | (1.22)% A | (1.13)% | (.11)% H | (1.28)% | (1.28)% | (1.26)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 268,187 | $ 260,966 | $ 315,930 | $ 363,399 | $ 367,257 | $ 302,657 |
Portfolio turnover rate G | 221% A | 258% | 180% | 105% | 140% | 164% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.14 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.10)%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Technology
Financial Highlights - Class B
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 14.59 | $ 15.24 | $ 13.25 | $ 12.76 | $ 9.64 | $ 17.21 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.14) | (.27) | (.09) H | (.27) | (.17) | (.25) |
Net realized and unrealized gain (loss) | 2.67 | (.38) | 2.12 | .76 | 3.29 | (7.32) |
Total from investment operations | 2.53 | (.65) | 2.03 | .49 | 3.12 | (7.57) |
Distributions from net investment income | - | - | (.04) | - | - | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 17.12 | $ 14.59 | $ 15.24 | $ 13.25 | $ 12.76 | $ 9.64 |
Total Return B, C, D | 17.34% | (4.27)% | 15.33% | 3.84% | 32.37% | (43.99)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.11% A | 2.05% | 2.13% | 2.21% | 2.38% | 2.28% |
Expenses net of fee waivers, if any | 2.11% A | 2.05% | 2.13% | 2.21% | 2.25% | 2.25% |
Expenses net of all reductions | 2.09% A | 1.94% | 2.02% | 2.12% | 2.05% | 2.18% |
Net investment income (loss) | (1.72)% A | (1.63)% | (.65)% H | (1.87)% | (1.69)% | (1.81)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 151,663 | $ 192,790 | $ 309,020 | $ 355,927 | $ 391,832 | $ 337,976 |
Portfolio turnover rate G | 221% A | 258% | 180% | 105% | 140% | 164% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.14 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.64)%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended
January, 31 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 14.66 | $ 15.31 | $ 13.31 | $ 12.80 | $ 9.67 | $ 17.25 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.14) | (.27) | (.08) H | (.26) | (.17) | (.24) |
Net realized and unrealized gain (loss) | 2.68 | (.38) | 2.12 | .77 | 3.30 | (7.34) |
Total from investment operations | 2.54 | (.65) | 2.04 | .51 | 3.13 | (7.58) |
Distributions from net investment income | - | - | (.04) | - | - | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 17.20 | $ 14.66 | $ 15.31 | $ 13.31 | $ 12.80 | $ 9.67 |
Total Return B, C, D | 17.33% | (4.25)% | 15.34% | 3.98% | 32.37% | (43.94)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.12% A | 2.05% | 2.10% | 2.13% | 2.28% | 2.18% |
Expenses net of fee waivers, if any | 2.12% A | 2.05% | 2.10% | 2.13% | 2.25% | 2.18% |
Expenses net of all reductions | 2.10% A | 1.94% | 1.99% | 2.04% | 2.05% | 2.11% |
Net investment income (loss) | (1.72)% A | (1.63)% | (.61)% H | (1.79)% | (1.69)% | (1.74)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 88,538 | $ 82,835 | $ 108,287 | $ 125,926 | $ 139,654 | $ 123,034 |
Portfolio turnover rate G | 221% A | 258% | 180% | 105% | 140% | 164% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.14 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.60)%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.07 | $ 16.60 | $ 14.32 | $ 13.61 | $ 10.15 | $ 17.90 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | (.06) | (.09) | .09 G | (.09) | (.05) | (.08) |
Net realized and unrealized gain (loss) | 2.96 | (.44) | 2.30 | .80 | 3.51 | (7.67) |
Total from investment operations | 2.90 | (.53) | 2.39 | .71 | 3.46 | (7.75) |
Distributions from net investment income | - | - | (.11) | - | - | - |
Redemption fees added to paid in capital D | - I | - I | - I | - I | - I | - I |
Net asset value, end of period | $ 18.97 | $ 16.07 | $ 16.60 | $ 14.32 | $ 13.61 | $ 10.15 |
Total Return B, C | 18.05% | (3.19)% | 16.73% | 5.22% | 34.09% | (43.30)% |
Ratios to Average Net Assets E, H | | | | | | |
Expenses before reductions | 1.00% A | .90% | .92% | .93% | .99% | 1.00% |
Expenses net of fee waivers, if any | 1.00% A | .90% | .92% | .93% | .99% | 1.00% |
Expenses net of all reductions | .98% A | .80% | .81% | .84% | .79% | .92% |
Net investment income (loss) | (.60)% A | (.49)% | .57% G | (.59)% | (.43)% | (.56)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 13,875 | $ 11,681 | $ 11,640 | $ 10,984 | $ 11,511 | $ 10,495 |
Portfolio turnover rate F | 221% A | 258% | 180% | 105% | 140% | 164% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Investment income per share reflects a special dividend which amounted to $.14 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.42)%. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Technology
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Technology Fund (the Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned,
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, net operating losses, capital loss carryforwards, losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 47,065,146 |
Unrealized depreciation | (82,202,081) |
Net unrealized appreciation (depreciation) | $ (35,136,935) |
Cost for federal income tax purposes | $ 828,635,188 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Technology
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $865,640,188 and $967,173,852, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 283,538 | $ 16,108 |
Class T | .25% | .25% | 691,552 | - |
Class B | .75% | .25% | 934,298 | 700,724 |
Class C | .75% | .25% | 447,420 | 22,465 |
| | | $ 2,356,808 | $ 739,297 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 16,745 |
Class T | 15,431 |
Class B * | 117,344 |
Class C * | 4,670 |
| $ 154,190 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets * |
Class A | $ 455,940 | .40 |
Class T | 546,292 | .40 |
Class B | 367,341 | .39 |
Class C | 177,724 | .40 |
Institutional Class | 17,627 | .28 |
| $ 1,564,924 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $27,674 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Daily Loan Balance | Weighted Average Interest Rate | Interest
Expense |
Borrower | $ 7,449,200 | 5.39% | $ 5,581 |
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $988 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $57,089 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction |
Class A | $ 3,673 |
Class B | 902 |
Class C | 1,900 |
| $ 6,475 |
Technology
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2007 | Year ended
July 31,
2006 | Six months ended January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 4,131,811 | 5,933,920 | $ 73,714,542 | $ 105,071,198 |
Shares redeemed | (2,242,294) | (2,775,104) | (39,576,816) | (47,788,058) |
Net increase (decrease) | 1,889,517 | 3,158,816 | $ 34,137,726 | $ 57,283,140 |
Class T | | | | |
Shares sold | 1,109,833 | 3,384,477 | $ 19,307,285 | $ 58,748,287 |
Shares redeemed | (3,271,161) | (6,198,789) | (56,578,797) | (105,287,546) |
Net increase (decrease) | (2,161,328) | (2,814,312) | $ (37,271,512) | $ (46,539,259) |
Class B | | | | |
Shares sold | 193,098 | 539,586 | $ 3,227,111 | $ 8,903,373 |
Shares redeemed | (4,549,098) | (7,601,103) | (75,933,601) | (125,479,671) |
Net increase (decrease) | (4,356,000) | (7,061,517) | $ (72,706,490) | $ (116,576,298) |
Class C | | | | |
Shares sold | 330,360 | 570,438 | $ 5,510,992 | $ 9,501,649 |
Shares redeemed | (834,754) | (1,991,739) | (13,835,922) | (32,610,461) |
Net increase (decrease) | (504,394) | (1,421,301) | $ (8,324,930) | $ (23,108,812) |
Institutional Class | | | | |
Shares sold | 132,866 | 258,108 | $ 2,471,258 | $ 4,843,216 |
Shares redeemed | (128,159) | (232,556) | (2,330,202) | (4,099,646) |
Net increase (decrease) | 4,707 | 25,552 | $ 141,056 | $ 743,570 |
Semiannual Report
Advisor Utilities Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006 to
January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,139.50 | $ 7.33** |
HypotheticalA | $ 1,000.00 | $ 1,018.35 | $ 6.92** |
Class T | | | |
Actual | $ 1,000.00 | $ 1,136.90 | $ 8.89** |
HypotheticalA | $ 1,000.00 | $ 1,016.89 | $ 8.39** |
Class B | | | |
Actual | $ 1,000.00 | $ 1,134.60 | $ 11.46** |
HypotheticalA | $ 1,000.00 | $ 1,014.47 | $ 10.82** |
Class C | | | |
Actual | $ 1,000.00 | $ 1,135.00 | $ 11.03** |
HypotheticalA | $ 1,000.00 | $ 1,014.87 | $ 10.41** |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,141.20 | $ 5.24** |
HypotheticalA | $ 1,000.00 | $ 1,020.32 | $ 4.94** |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.36%** |
Class T | 1.65%** |
Class B | 2.13%** |
Class C | 2.05%** |
Institutional Class | .97%** |
Utilities
* * If fees, effective January 1, 2007, had been in effect during the entire period, the annualized expense ratios and the expenses paid in the actual and hypothetical examples above would have been as follows:
| Annualized
Expense Ratio | Expenses
Paid |
Class A | 1.26% | |
Actual | | $ 6.80 |
Hypothetical A | | $ 6.41 |
Class T | 1.55% | |
Actual | | $ 8.35 |
Hypothetical A | | $ 7.88 |
Class B | 2.03% | |
Actual | | $ 10.92 |
Hypothetical A | | $ 10.31 |
Class C | 2.01% | |
Actual | | $ 10.82 |
Hypothetical A | | $ 10.21 |
Institutional Class | .95% | |
Actual | | $ 5.13 |
Hypothetical A | | $ 4.84 |
A 5% return per year before expenses
Semiannual Report
Advisor Utilities Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Constellation Energy Group, Inc. | 6.4 | 0.0 |
Entergy Corp. | 6.1 | 3.2 |
Exelon Corp. | 5.3 | 4.5 |
AES Corp. | 5.3 | 3.1 |
Sempra Energy | 5.2 | 1.3 |
Public Service Enterprise Group, Inc. | 5.0 | 1.9 |
Duke Energy Corp. | 4.8 | 2.3 |
TXU Corp. | 4.5 | 3.3 |
FPL Group, Inc. | 4.4 | 3.6 |
American Electric Power Co., Inc. | 4.1 | 0.0 |
| 51.1 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Electric Utilities | 45.7% | |
| Multi-utilities | 24.2% | |
| Independent Power Producers & Energy Traders | 19.1% | |
| Gas Utilities | 4.0% | |
| Oil, Gas &
Consumable Fuels | 3.9% | |
| All Others* | 3.1% | |
|
As of July 31, 2006 |
| Diversified Telecommunication Services | 50.5% | |
| Electric Utilities | 17.7% | |
| Wireless Telecommunication Services | 10.9% | |
| Independent Power Producers & Energy Traders | 9.0% | |
| Multi-utilities | 8.5% | |
| All Others* | 3.4% | |
* Includes short-term investments and net other assets. |
Utilities
Advisor Utilities Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.5% |
| Shares | | Value (Note 1) |
CHEMICALS - 0.3% |
Specialty Chemicals - 0.3% |
Zoltek Companies, Inc. (a)(d) | 24,500 | | $ 654,640 |
ELECTRIC UTILITIES - 45.7% |
Electric Utilities - 45.7% |
Allegheny Energy, Inc. (a) | 105,800 | | 4,921,816 |
American Electric Power Co., Inc. | 222,900 | | 9,702,837 |
DPL, Inc. | 141,100 | | 4,046,748 |
Duke Energy Corp. | 570,800 | | 11,239,052 |
Edison International | 110,700 | | 4,979,286 |
Entergy Corp. | 154,100 | | 14,308,185 |
Exelon Corp. (d) | 207,500 | | 12,447,925 |
FirstEnergy Corp. | 133,600 | | 7,926,488 |
FPL Group, Inc. | 183,200 | | 10,378,280 |
ITC Holdings Corp. | 14,000 | | 609,000 |
Northeast Utilities | 210,700 | | 5,825,855 |
Pepco Holdings, Inc. | 119,000 | | 3,044,020 |
PPL Corp. | 195,400 | | 6,956,240 |
Progress Energy, Inc. | 97,500 | | 4,635,150 |
Reliant Energy, Inc. (a) | 123,000 | | 1,830,240 |
Sierra Pacific Resources (a) | 273,800 | | 4,660,076 |
| | 107,511,198 |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.3% |
Electronic Equipment & Instruments - 0.3% |
Itron, Inc. (a) | 11,200 | | 645,568 |
GAS UTILITIES - 4.0% |
Gas Utilities - 4.0% |
Equitable Resources, Inc. (d) | 56,600 | | 2,447,950 |
ONEOK, Inc. | 45,100 | | 1,935,241 |
Questar Corp. | 34,100 | | 2,768,920 |
Southern Union Co. | 80,600 | | 2,241,486 |
| | 9,393,597 |
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 19.1% |
Independent Power Producers & Energy Traders - 19.1% |
AES Corp. (a) | 593,700 | | 12,343,023 |
Constellation Energy Group, Inc. | 208,300 | | 15,112,165 |
Dynegy, Inc. Class A (a) | 65,200 | | 459,660 |
International Power PLC | 165,500 | | 1,171,411 |
NRG Energy, Inc. (d) | 85,700 | | 5,136,001 |
TXU Corp. | 196,200 | | 10,610,496 |
| | 44,832,756 |
MULTI-UTILITIES - 24.2% |
Multi-Utilities - 24.2% |
Alliant Energy Corp. | 47,300 | | 1,719,355 |
Ameren Corp. | 31,400 | | 1,667,654 |
CenterPoint Energy, Inc. (d) | 216,100 | | 3,729,886 |
|
| Shares | | Value (Note 1) |
CMS Energy Corp. (a) | 226,690 | | $ 3,783,456 |
DTE Energy Co. | 61,100 | | 2,833,207 |
MDU Resources Group, Inc. | 92,600 | | 2,393,710 |
PG&E Corp. (d) | 142,000 | | 6,628,560 |
Public Service Enterprise Group, Inc. | 176,600 | | 11,837,498 |
Puget Energy, Inc. | 93,500 | | 2,296,360 |
Sempra Energy | 211,500 | | 12,135,870 |
Wisconsin Energy Corp. | 148,900 | | 6,932,784 |
WPS Resources Corp. | 17,100 | | 907,155 |
| | 56,865,495 |
OIL, GAS & CONSUMABLE FUELS - 3.9% |
Coal & Consumable Fuels - 0.7% |
Cameco Corp. | 47,200 | | 1,797,981 |
Oil & Gas Storage & Transport - 3.2% |
Spectra Energy Corp. | 285,400 | | 7,454,648 |
TOTAL OIL, GAS & CONSUMABLE FUELS | | 9,252,629 |
TOTAL COMMON STOCKS (Cost $210,656,222) | 229,155,883 |
Money Market Funds - 11.0% |
| | | |
Fidelity Cash Central Fund, 5.35% (b) | 6,663,835 | | 6,663,835 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 19,271,088 | | 19,271,088 |
TOTAL MONEY MARKET FUNDS (Cost $25,934,923) | | 25,934,923 |
TOTAL INVESTMENT PORTFOLIO - 108.5% (Cost $236,591,145) | | 255,090,806 |
NET OTHER ASSETS - (8.5)% | | (19,953,221) |
NET ASSETS - 100% | $ 235,137,585 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 119,768 |
Fidelity Securities Lending Cash Central Fund | 16,106 |
Total | $ 135,874 |
Income Tax Information |
At July 31, 2006, the fund had a capital loss carryforward of approximately $289,540,228 of which $135,127,696 and $154,412,532 will expire on July 31, 2010 and 2011, respectively. |
See accompanying notes which are an integral part of the financial statements.
Utilities
Advisor Utilities Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $18,937,940) - See accompanying schedule: Unaffiliated issuers (cost $210,656,222) | $ 229,155,883 | |
Fidelity Central Funds (cost $25,934,923) | 25,934,923 | |
Total Investments (cost $236,591,145) | | $ 255,090,806 |
Cash | | 16,433 |
Receivable for fund shares sold | | 788,172 |
Dividends receivable | | 113,202 |
Interest receivable | | 17,904 |
Prepaid expenses | | 864 |
Other receivables | | 4,866 |
Total assets | | 256,032,247 |
| | |
Liabilities | | |
Payable for fund shares redeemed | $ 1,218,466 | |
Accrued management fee | 114,653 | |
Distribution fees payable | 121,740 | |
Other affiliated payables | 79,920 | |
Other payables and accrued expenses | 88,795 | |
Collateral on securities loaned, at value | 19,271,088 | |
Total liabilities | | 20,894,662 |
| | |
Net Assets | | $ 235,137,585 |
Net Assets consist of: | | |
Paid in capital | | $ 476,090,131 |
Distributions in excess of net investment income | | (199,059) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (259,253,148) |
Net unrealized appreciation (depreciation) on investments | | 18,499,661 |
Net Assets | | $ 235,137,585 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption
price per share ($66,165,228 ÷
3,420,172 shares) | | $ 19.35 |
| | |
Maximum offering price per share (100/94.25 of $19.35) | | $ 20.53 |
Class T:
Net Asset Value and redemption price per share ($61,834,621 ÷ 3,196,766 shares) | | $ 19.34 |
| | |
Maximum offering price per share (100/96.50 of $19.34) | | $ 20.04 |
Class B:
Net Asset Value and offering price per share ($58,522,795 ÷ 3,064,293 shares)A | | $ 19.10 |
| | |
Class C:
Net Asset Value and offering price per share ($39,463,795 ÷ 2,068,849 shares)A | | $ 19.08 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($9,151,146 ÷ 468,944 shares) | | $ 19.51 |
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.
Semiannual Report
Advisor Utilities Fund
Financial Statements - continued
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 2,169,669 |
Interest | | 53 |
Income from Fidelity Central Funds | | 135,874 |
Total income | | 2,305,596 |
| | |
Expenses | | |
Management fee | $ 625,486 | |
Transfer agent fees | 424,978 | |
Distribution fees | 721,071 | |
Accounting and security lending fees | 47,072 | |
Custodian fees and expenses | 5,878 | |
Independent trustees' compensation | 364 | |
Registration fees | 35,670 | |
Audit | 22,165 | |
Legal | 2,483 | |
Miscellaneous | 65,341 | |
Total expenses before reductions | 1,950,508 | |
Expense reductions | (3,718) | 1,946,790 |
Net investment income (loss) | | 358,806 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 33,282,013 | |
Foreign currency transactions | 254 | |
Total net realized gain (loss) | | 33,282,267 |
Change in net unrealized appreciation (depreciation) on investment securities | | (5,601,786) |
Net gain (loss) | | 27,680,481 |
Net increase (decrease) in net assets resulting from operations | | $ 28,039,287 |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 358,806 | $ 1,994,007 |
Net realized gain (loss) | 33,282,267 | 26,815,933 |
Change in net unrealized appreciation (depreciation) | (5,601,786) | (2,675,823) |
Net increase (decrease) in net assets resulting from operations | 28,039,287 | 26,134,117 |
Distributions to shareholders from net investment income | (1,795,352) | (1,886,398) |
Share transactions - net increase (decrease) | 10,901,733 | (30,269,037) |
Redemption fees | 4,291 | 5,377 |
Total increase (decrease) in net assets | 37,149,959 | (6,015,941) |
| | |
Net Assets | | |
Beginning of period | 197,987,626 | 204,003,567 |
End of period (including distributions in excess of net investment income of $199,059 and undistributed net investment income of $1,237,487, respectively) | $ 235,137,585 | $ 197,987,626 |
See accompanying notes which are an integral part of the financial statements.
Utilities
Financial Highlights - Class A
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 17.20 | $ 15.17 | $ 12.09 | $ 10.37 | $ 8.74 | $ 15.18 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .07 | .24 | .28 H | .10 | .13 | .10 |
Net realized and unrealized gain (loss) | 2.31 | 2.06 | 3.01 | 1.72 | 1.69 | (6.54) |
Total from investment operations | 2.38 | 2.30 | 3.29 | 1.82 | 1.82 | (6.44) |
Distributions from net investment income | (.23) | (.27) | (.21) | (.10) | (.19) | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 19.35 | $ 17.20 | $ 15.17 | $ 12.09 | $ 10.37 | $ 8.74 |
Total Return B, C, D | 13.95% | 15.38% | 27.48% | 17.67% | 21.22% | (42.42)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.36% A | 1.34% | 1.39% | 1.51% | 1.67% | 1.45% |
Expenses net of fee waivers, if any | 1.36% A | 1.34% | 1.39% | 1.50% | 1.58% | 1.45% |
Expenses net of all reductions | 1.36% A | 1.32% | 1.36% | 1.45% | 1.47% | 1.36% |
Net investment income (loss) | .72% A | 1.51% | 2.03% H | .87% | 1.46% | .79% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 66,165 | $ 40,599 | $ 29,150 | $ 21,987 | $ 21,761 | $ 22,377 |
Portfolio turnover rate G | 190% A | 64% | 44% | 38% | 81% | 116% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.09 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 1.39%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 17.18 | $ 15.10 | $ 12.04 | $ 10.33 | $ 8.68 | $ 15.11 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .04 | .19 | .24 H | .07 | .11 | .07 |
Net realized and unrealized gain (loss) | 2.30 | 2.08 | 2.99 | 1.72 | 1.68 | (6.50) |
Total from investment operations | 2.34 | 2.27 | 3.23 | 1.79 | 1.79 | (6.43) |
Distributions from net investment income | (.18) | (.19) | (.17) | (.08) | (.14) | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | -J |
Net asset value, end of period | $ 19.34 | $ 17.18 | $ 15.10 | $ 12.04 | $ 10.33 | $ 8.68 |
Total Return B, C, D | 13.69% | 15.20% | 27.03% | 17.42% | 20.91% | (42.55)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.65% A | 1.60% | 1.67% | 1.79% | 1.94% | 1.71% |
Expenses net of fee waivers, if any | 1.65% A | 1.60% | 1.67% | 1.75% | 1.83% | 1.71% |
Expenses net of all reductions | 1.64% A | 1.58% | 1.64% | 1.70% | 1.72% | 1.62% |
Net investment income (loss) | .44% A | 1.25% | 1.76% H | .62% | 1.21% | .53% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 61,835 | $ 52,128 | $ 55,683 | $ 53,255 | $ 55,510 | $ 59,306 |
Portfolio turnover rate G | 190% A | 64% | 44% | 38% | 81% | 116% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. FFees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.09 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 1.12%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.90 | $ 14.83 | $ 11.82 | $ 10.15 | $ 8.49 | $ 14.85 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - J | .12 | .17 H | .01 | .07 | .01 |
Net realized and unrealized gain (loss) | 2.27 | 2.03 | 2.95 | 1.69 | 1.65 | (6.37) |
Total from investment operations | 2.27 | 2.15 | 3.12 | 1.70 | 1.72 | (6.36) |
Distributions from net investment income | (.07) | (.08) | (.11) | (.03) | (.06) | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 19.10 | $ 16.90 | $ 14.83 | $ 11.82 | $ 10.15 | $ 8.49 |
Total Return B, C, D | 13.46% | 14.57% | 26.51% | 16.79% | 20.37% | (42.83)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.13% A | 2.09% | 2.14% | 2.25% | 2.32% | 2.20% |
Expenses net of fee waivers, if any | 2.13% A | 2.09% | 2.14% | 2.25% | 2.25% | 2.20% |
Expenses net of all reductions | 2.13% A | 2.06% | 2.11% | 2.20% | 2.13% | 2.11% |
Net investment income (loss) | (.05)% A | .76% | 1.28% H | .12% | .79% | .04% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 58,523 | $ 65,959 | $ 82,577 | $ 84,742 | $ 87,868 | $ 91,517 |
Portfolio turnover rate G | 190% A | 64% | 44% | 38% | 81% | 116% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.09 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been .64%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.91 | $ 14.84 | $ 11.84 | $ 10.16 | $ 8.50 | $ 14.85 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - J | .13 | .18 H | .02 | .07 | .02 |
Net realized and unrealized gain (loss) | 2.27 | 2.04 | 2.94 | 1.70 | 1.65 | (6.37) |
Total from investment operations | 2.27 | 2.17 | 3.12 | 1.72 | 1.72 | (6.35) |
Distributions from net investment income | (.10) | (.10) | (.12) | (.04) | (.06) | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 19.08 | $ 16.91 | $ 14.84 | $ 11.84 | $ 10.16 | $ 8.50 |
Total Return B, C, D | 13.50% | 14.72% | 26.48% | 16.98% | 20.35% | (42.76)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.05% A | 2.02% | 2.07% | 2.17% | 2.23% | 2.11% |
Expenses net of fee waivers, if any | 2.05% A | 2.02% | 2.07% | 2.17% | 2.23% | 2.11% |
Expenses net of all reductions | 2.05% A | 2.00% | 2.04% | 2.12% | 2.12% | 2.02% |
Net investment income (loss) | .04% A | .83% | 1.36% H | .21% | .80% | .13% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 39,464 | $ 32,823 | $ 34,827 | $ 35,038 | $ 37,530 | $ 41,496 |
Portfolio turnover rate G | 190% A | 64% | 44% | 38% | 81% | 116% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.09 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been .72%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Utilities
Financial Highlights - Institutional Class
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 17.38 | $ 15.31 | $ 12.20 | $ 10.47 | $ 8.86 | $ 15.31 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .10 | .30 | .33 G | .15 | .18 | .16 |
Net realized and unrealized gain (loss) | 2.33 | 2.10 | 3.03 | 1.73 | 1.71 | (6.61) |
Total from investment operations | 2.43 | 2.40 | 3.36 | 1.88 | 1.89 | (6.45) |
Distributions from net investment income | (.30) | (.33) | (.25) | (.15) | (.28) | - |
Redemption fees added to paid in capital D | - I | - I | - I | - I | - I | - I |
Net asset value, end of period | $ 19.51 | $ 17.38 | $ 15.31 | $ 12.20 | $ 10.47 | $ 8.86 |
Total Return B, C | 14.12% | 15.95% | 27.88% | 18.14% | 21.94% | (42.13)% |
Ratios to Average Net Assets E, H | | | | | | |
Expenses before reductions | .97% A | .94% | .99% | 1.09% | 1.06% | .96% |
Expenses net of fee waivers, if any | .97% A | .94% | .99% | 1.09% | 1.06% | .96% |
Expenses net of all reductions | .97% A | .92% | .96% | 1.04% | .94% | .87% |
Net investment income (loss) | 1.12% A | 1.91% | 2.44% G | 1.29% | 1.98% | 1.28% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 9,151 | $ 6,479 | $ 1,766 | $ 2,254 | $ 2,891 | $ 2,939 |
Portfolio turnover rate F | 190% A | 64% | 44% | 38% | 81% | 116% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Investment income per share reflects a special dividend which amounted to $.09 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 1.80%. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Utilities Fund (the Fund) (formerly Fidelity Advisor Telecommunications & Utilities Growth Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return
Utilities
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 20,609,499 |
Unrealized depreciation | (2,125,772) |
Net unrealized appreciation (depreciation) | $ 18,483,727 |
Cost for federal income tax purposes | $ 236,607,079 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $218,051,304 and $207,868,689, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | .00% | .25% | $ 67,361 | $ 1,215 |
Class T | .25% | .25% | 146,214 | - |
Class B | .75% | .25% | 320,379 | 240,284 |
Class C | .75% | .25% | 187,117 | 19,666 |
| | | $ 721,071 | $ 261,165 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 24,834 |
Class T | 6,106 |
Class B* | 31,398 |
Class C* | 1,071 |
| $ 63,409 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets* |
Class A | $ 103,320 | .39 |
Class T | 122,006 | .42 |
Class B | 129,851 | .41 |
Class C | 60,019 | .32 |
Institutional Class | 9,782 | .24 |
| $ 424,978 | |
* Annualized
Utilities
4. Fees and Other Transactions with Affiliates - continued
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds, are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 Fidelity Management & Research Company, FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $313 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $270 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $16,106.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $3,718 for the period.
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
8. Other - continued
desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
From net investment income | | |
Class A | $ 644,013 | $ 515,686 |
Class T | 560,452 | 679,149 |
Class B | 253,850 | 428,719 |
Class C | 209,021 | 227,882 |
Institutional Class | 128,016 | 34,962 |
Total | $ 1,795,352 | $ 1,886,398 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 | Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 1,401,594 | 1,157,742 | $ 25,754,707 | $ 18,299,828 |
Reinvestment of distributions | 31,700 | 29,809 | 573,106 | 453,431 |
Shares redeemed | (372,908) | (749,911) | (6,912,091) | (11,656,126) |
Net increase (decrease) | 1,060,386 | 437,640 | $ 19,415,722 | $ 7,097,133 |
Class T | | | | |
Shares sold | 521,573 | 427,549 | $ 9,505,197 | $ 6,679,626 |
Reinvestment of distributions | 29,414 | 41,716 | 530,972 | 634,275 |
Shares redeemed | (389,234) | (1,121,239) | (7,181,677) | (17,325,224) |
Net increase (decrease) | 161,753 | (651,974) | $ 2,854,492 | $ (10,011,323) |
Class B | | | | |
Shares sold | 230,176 | 164,555 | $ 4,139,686 | $ 2,522,243 |
Reinvestment of distributions | 12,603 | 24,747 | 221,272 | 371,052 |
Shares redeemed | (1,081,495) | (1,855,539) | (19,688,803) | (28,512,346) |
Net increase (decrease) | (838,716) | (1,666,237) | $ (15,327,845) | $ (25,619,051) |
Class C | | | | |
Shares sold | 416,690 | 246,869 | $ 7,488,235 | $ 3,819,729 |
Reinvestment of distributions | 8,956 | 11,397 | 157,448 | 170,983 |
Shares redeemed | (298,255) | (663,040) | (5,449,188) | (10,076,221) |
Net increase (decrease) | 127,391 | (404,774) | $ 2,196,495 | $ (6,085,509) |
Institutional Class | | | | |
Shares sold | 147,287 | 292,241 | $ 2,723,884 | $ 4,893,596 |
Reinvestment of distributions | 2,016 | 1,223 | 36,805 | 18,745 |
Shares redeemed | (53,075) | (36,084) | (997,820) | (562,628) |
Net increase (decrease) | 96,228 | 257,380 | $ 1,762,869 | $ 4,349,713 |
Utilities
Proxy Voting Results
A special meeting of each fund's shareholders was held on September 28, 2006 and September 30, 2006. The results of votes taken among shareholders on the proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.
PROPOSAL 1 |
To elect a Board of Trustees. A, C |
| # of
Votes | % of
Votes |
Dennis J. Dirks |
Affirmative | 2,206,930,035.62 | 96.925 |
Withheld | 70,013,151.28 | 3.075 |
TOTAL | 2,276,943,186.90 | 100.000 |
Albert R. Gamper, Jr. |
Affirmative | 2,206,929,647.55 | 96.925 |
Withheld | 70,013,539.35 | 3.075 |
TOTAL | 2,276,943,186.90 | 100.000 |
Robert M. Gates |
Affirmative | 2,205,212,761.55 | 96.850 |
Withheld | 71,730,425.35 | 3.150 |
TOTAL | 2,276,943,186.90 | 100.000 |
George H. Heilmeier |
Affirmative | 2,204,247,730.70 | 96.807 |
Withheld | 72,695,456.20 | 3.193 |
TOTAL | 2,276,943,186.90 | 100.000 |
Edward C. Johnson 3d |
Affirmative | 2,203,739,123.67 | 96.785 |
Withheld | 73,204,063.23 | 3.215 |
TOTAL | 2,276,943,186.90 | 100.000 |
Stephen P. Jonas |
Affirmative | 2,207,154,045.47 | 96.935 |
Withheld | 69,789,141.43 | 3.065 |
TOTAL | 2,276,943,186.90 | 100.000 |
James H. KeyesB |
Affirmative | 2,205,258,024.08 | 96.852 |
Withheld | 71,685,162.82 | 3.148 |
TOTAL | 2,276,943,186.90 | 100.000 |
Marie L. Knowles |
Affirmative | 2,205,892,060.16 | 96.880 |
Withheld | 71,051,126.74 | 3.120 |
TOTAL | 2,276,943,186.90 | 100.000 |
Ned C. Lautenbach |
Affirmative | 2,205,297,807.97 | 96.853 |
Withheld | 71,645,378.93 | 3.147 |
TOTAL | 2,276,943,186.90 | 100.000 |
William O. McCoy |
Affirmative | 2,204,396,505.93 | 96.814 |
Withheld | 72,546,680.97 | 3.186 |
TOTAL | 2,276,943,186.90 | 100.000 |
| # of
Votes | % of
Votes |
Robert L. Reynolds |
Affirmative | 2,206,981,118.77 | 96.927 |
Withheld | 69,962,068.13 | 3.073 |
TOTAL | 2,276,943,186.90 | 100.000 |
Cornelia M. Small |
Affirmative | 2,206,379,820.44 | 96.901 |
Withheld | 70,563,366.46 | 3.099 |
TOTAL | 2,276,943,186.90 | 100.000 |
William S. Stavropoulos |
Affirmative | 2,205,403,278.90 | 96.858 |
Withheld | 71,539,908.00 | 3.142 |
TOTAL | 2,276,943,186.90 | 100.000 |
Kenneth L. Wolfe |
Affirmative | 2,205,707,840.10 | 96.871 |
Withheld | 71,235,346.80 | 3.129 |
TOTAL | 2,276,943,186.90 | 100.000 |
PROPOSAL 2A |
To modify the fundamental "invests primarily" policy (the investment policy concerning the fund's primary investments) of Fidelity Advisor Consumer Discretionary Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 25,052,022.13 | 70.939 |
Against | 1,507,700.50 | 4.269 |
Abstain | 2,181,277.38 | 6.177 |
Broker Non-Votes | 6,573,990.16 | 18.615 |
TOTAL | 35,314,990.17 | 100.000 |
PROPOSAL 2B |
To modify the fundamental concentration policy of Fidelity Advisor Consumer Discretionary Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 24,468,395.75 | 69.286 |
Against | 1,941,580.95 | 5.498 |
Abstain | 2,331,023.31 | 6.601 |
Broker Non-Votes | 6,573,990.16 | 18.615 |
TOTAL | 35,314,990.17 | 100.000 |
PROPOSAL 3A |
To modify the fundamental "invests primarily" policy (the investment policy concerning the fund's primary investments) of Fidelity Advisor Industrials Fund.C |
| # of
Votes | % of
Votes |
Affirmative | 103,262,001.88 | 67.400 |
Against | 4,354,979.52 | 2.842 |
Abstain | 6,913,004.08 | 4.513 |
Broker Non-Votes | 38,678,502.70 | 25.246 |
TOTAL | 153,208,488.18 | 100.000 |
PROPOSAL 3B |
To modify the fundamental concentration policy of Fidelity Advisor Industrials Fund.C |
| # of
Votes | % of
Votes |
Affirmative | 103,063,141.29 | 67.270 |
Against | 4,478,980.28 | 2.923 |
Abstain | 6,987,863.91 | 4.561 |
Broker Non-Votes | 38,678,502.70 | 25.246 |
TOTAL | 153,208,488.18 | 100.000 |
PROPOSAL 4A |
To modify the fundamental concentration policy of Fidelity Advisor Utilities Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 78,803,170.56 | 70.172 |
Against | 3,577,908.42 | 3.186 |
Abstain | 6.541,369.10 | 5.825 |
Broker Non-Votes | 23,378,154.01 | 20.817 |
TOTAL | 112,300,602.09 | 100.000 |
PROPOSAL 5A |
To modify the fundamental "invests primarily" policy (the investment policy concerning the fund's primary investments) of Fidelity Advisor Communications Equipment Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 5,159,022.72 | 69.946 |
Against | 285,575.04 | 3.872 |
Abstain | 443,398.62 | 6.011 |
Broker Non-Votes | 1,487,692.54 | 20.170 |
TOTAL | 7,375,688.92 | 100.000 |
PROPOSAL 5B |
To modify the fundamental concentration policy of Fidelity Advisor Communications Equipment Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 5,159,987.88 | 69.959 |
Against | 295,440.44 | 4.006 |
Abstain | 432,568.06 | 5.864 |
Broker Non-Votes | 1,487,692.54 | 20.170 |
TOTAL | 7,375,688.92 | 100.000 |
PROPOSAL 6A |
To modify the fundamental investment objective of Fidelity Advisor Energy Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 335,212,227.18 | 68.272 |
Against | 23,151,143.88 | 4.716 |
Abstain | 28,129,279.36 | 5.728 |
Broker Non-Votes | 104,499,231.10 | 21.283 |
TOTAL | 490,991,881.52 | 100.000 |
PROPOSAL 6B |
To modify the fundamental investment policy of Fidelity Advisor Energy Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 338,904,300.69 | 69.024 |
Against | 21,528,314.89 | 4.385 |
Abstain | 26,060,034.84 | 5.307 |
Broker Non-Votes | 104,499,231.10 | 21.283 |
TOTAL | 490,991,881.52 | 100.000 |
PROPOSAL 6C |
To modify the fundamental concentration policy of Fidelity Advisor Energy Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 334,458,778.33 | 68.119 |
Against | 22,220,293.16 | 4.526 |
Abstain | 29,813,578.93 | 6.072 |
Broker Non-Votes | 104,499,231.10 | 21.283 |
TOTAL | 490,991,881.52 | 100.000 |
A Denotes trust-wide proposal and voting results. B Effective on or about January 1, 2007. C The special meeting of shareholders reconvened on September 30, 2006 with respect to this proposal. D The special meeting of shareholders reconvened on September 28, 2006 with respect to this proposal. |
Semiannual Report
Semiannual Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research (U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment Advisors
Fidelity International Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodians
JPMorgan Chase Bank
New York, NY
Brown Brothers Harriman & Co. (dagger)
Boston, MA
State Street Bank and Trust (dagger)(dagger)
Quincy, MA
* Custodian for Fidelity Advisor Energy Fund only.
(dagger)(dagger) Custodian for Fidelity Advisor Biotechnology Fund, Fidelity Advisor
Communications Equipment Fund, and Fidelity Advisor Electronics Fund only.
AFOC-USAN-0307
1.789279.104
Fidelity Advisor
Focus Funds®
Institutional Class
Biotechnology
Communications Equipment (formerly Developing Communications)
Consumer Discretionary (formerly Consumer Industries)
Electronics
Energy (formerly Natural Resources)
Financial Services
Health Care
Industrials (formerly Cyclical Industries)
Technology
Utilities (formerly Telecommunications
& Utilities Growth)
Semiannual Report
January 31, 2007
(2_fidelity_logos) (Registered_Trademark)
Contents
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at 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 Corp. or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the funds. This report is not authorized for distribution to prospective investors in the funds 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 quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.advisor.fidelity.com.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the funds nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(Photograph of Edward C. Johnson 3d.)
Dear Shareholder:
We have seen consistently strong performance from stocks and bonds of late, and some relief in energy prices, but the housing market slowdown bears watching for how it might affect the consumer. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies
indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Advisor Biotechnology Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,101.30 | $ 7.41 |
HypotheticalA | $ 1,000.00 | $ 1,018.15 | $ 7.12 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,099.90 | $ 8.73 |
HypotheticalA | $ 1,000.00 | $ 1,016.89 | $ 8.39 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,098.20 | $ 11.37 |
HypotheticalA | $ 1,000.00 | $ 1,014.37 | $ 10.92 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,098.20 | $ 11.37 |
HypotheticalA | $ 1,000.00 | $ 1,014.37 | $ 10.92 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,104.20 | $ 6.10 |
HypotheticalA | $ 1,000.00 | $ 1,019.41 | $ 5.85 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.40% |
Class T | 1.65% |
Class B | 2.15% |
Class C | 2.15% |
Institutional Class | 1.15% |
Semiannual Report
Advisor Biotechnology Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Amgen, Inc. | 13.0 | 5.5 |
Genentech, Inc. | 12.5 | 6.4 |
Gilead Sciences, Inc. | 11.0 | 6.2 |
Biogen Idec, Inc. | 6.8 | 6.8 |
Cephalon, Inc. | 4.4 | 4.4 |
Celgene Corp. | 4.2 | 7.9 |
Genzyme Corp. | 4.1 | 5.8 |
MedImmune, Inc. | 4.0 | 3.2 |
Vertex Pharmaceuticals, Inc. | 3.0 | 3.1 |
Alexion Pharmaceuticals, Inc. | 2.8 | 2.4 |
| 65.8 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
 | Biotechnology | 88.5% | |
 | Pharmaceuticals | 7.4% | |
 | Life Sciences Tools & Services | 2.7% | |
 | Health Care Equipment & Supplies | 1.4% | |
 | Health Care Providers & Services | 0.1% | |
| All Others* | (0.1)%(dagger) | |
(dagger) Short-term investments and net other assets are not included in the pie chart. |
|
As of July 31, 2006 |
| Biotechnology | 76.6% | |
| Life Sciences Tools & Services | 11.0% | |
| Pharmaceuticals | 9.9% | |
 | Health Care Equipment & Supplies | 2.2% | |
| Health Care Providers & Services | 0.2% | |
 | All Others* | 0.1% | |
* Includes short-term investments and net other assets. |
Biotechnology
Advisor Biotechnology Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 100.1% |
| Shares | | Value (Note 1) |
BIOTECHNOLOGY - 88.5% |
Biotechnology - 88.5% |
Acadia Pharmaceuticals, Inc. (a) | 21,800 | | $ 156,088 |
Acorda Therapeutics, Inc. | 5,600 | | 96,824 |
Affymax, Inc. (a) | 1,500 | | 55,260 |
Alexion Pharmaceuticals, Inc. (a) | 40,200 | | 1,671,114 |
Alkermes, Inc. (a) | 41,640 | | 621,269 |
Alnylam Pharmaceuticals, Inc. (a) | 10,000 | | 211,800 |
Altus Pharmaceuticals, Inc. | 6,212 | | 113,183 |
Amgen, Inc. (a) | 111,310 | | 7,832,882 |
Amylin Pharmaceuticals, Inc. (a) | 35,002 | | 1,357,378 |
Arena Pharmaceuticals, Inc. (a) | 10,800 | | 137,916 |
ARIAD Pharmaceuticals, Inc. (a) | 26,053 | | 133,391 |
Biogen Idec, Inc. (a) | 84,834 | | 4,100,876 |
BioMarin Pharmaceutical, Inc. (a) | 6,624 | | 125,459 |
Celgene Corp. (a) | 46,808 | | 2,512,653 |
Cephalon, Inc. (a) | 36,399 | | 2,635,652 |
Combinatorx, Inc. (a) | 12,700 | | 106,172 |
Cubist Pharmaceuticals, Inc. (a) | 12,500 | | 230,000 |
CV Therapeutics, Inc. (a) | 13,400 | | 180,766 |
Cytos Biotechnology AG (a) | 636 | | 70,312 |
Emergent BioSolutions, Inc. | 15,710 | | 237,064 |
Encysive Pharmaceuticals, Inc. (a) | 13,200 | | 44,220 |
Genentech, Inc. (a) | 86,800 | | 7,583,716 |
Genomic Health, Inc. (a) | 7,900 | | 180,278 |
Genzyme Corp. (a) | 37,520 | | 2,466,190 |
Gilead Sciences, Inc. (a) | 103,300 | | 6,644,256 |
GTx, Inc. (a) | 9,400 | | 174,840 |
Human Genome Sciences, Inc. (a) | 90,230 | | 1,062,909 |
Infinity Pharmaceuticals, Inc. (a) | 1,899 | | 27,668 |
Isis Pharmaceuticals, Inc. (a) | 31,900 | | 331,441 |
Ligand Pharmaceuticals, Inc. Class B (a) | 10,400 | | 135,096 |
MannKind Corp. (a) | 23,300 | | 385,848 |
Martek Biosciences (a) | 8,000 | | 186,480 |
Medarex, Inc. (a) | 64,285 | | 865,919 |
MedImmune, Inc. (a) | 70,000 | | 2,426,200 |
Momenta Pharmaceuticals, Inc. (a) | 11,308 | | 218,131 |
Myriad Genetics, Inc. (a) | 20,044 | | 716,373 |
Neurocrine Biosciences, Inc. (a) | 17,365 | | 242,763 |
Novacea, Inc. | 4,500 | | 31,365 |
OSI Pharmaceuticals, Inc. (a) | 43,500 | | 1,479,870 |
PDL BioPharma, Inc. (a) | 51,500 | | 1,056,265 |
Pharmion Corp. (a) | 17,600 | | 560,560 |
Regeneron Pharmaceuticals, Inc. (a) | 22,499 | | 447,505 |
Savient Pharmaceuticals, Inc. (a) | 19,094 | | 285,073 |
Theravance, Inc. (a) | 19,000 | | 652,080 |
Trubion Pharmaceuticals, Inc. | 4,700 | | 97,948 |
United Therapeutics Corp. (a) | 7,703 | | 412,881 |
Vanda Pharmaceuticals, Inc. | 4,300 | | 128,441 |
Vertex Pharmaceuticals, Inc. (a) | 51,700 | | 1,827,595 |
|
| Shares | | Value (Note 1) |
ViaCell, Inc. (a) | 500 | | $ 2,790 |
Zymogenetics, Inc. (a) | 13,500 | | 215,325 |
| | 53,476,085 |
HEALTH CARE EQUIPMENT & SUPPLIES - 1.4% |
Health Care Equipment - 1.0% |
Clinical Data, Inc. (a) | 2,459 | | 45,885 |
IntraLase Corp. (a) | 300 | | 7,380 |
Quidel Corp. (a) | 39,800 | | 540,882 |
| | 594,147 |
Health Care Supplies - 0.4% |
Gen-Probe, Inc. (a) | 4,723 | | 244,274 |
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | | 838,421 |
HEALTH CARE PROVIDERS & SERVICES - 0.1% |
Health Care Services - 0.1% |
Oracle Healthcare Acquisition Corp. unit | 9,600 | | 83,040 |
LIFE SCIENCES TOOLS & SERVICES - 2.7% |
Life Sciences Tools & Services - 2.7% |
Advanced Magnetics, Inc. (a) | 1,000 | | 60,930 |
Applera Corp. - Celera Genomics Group (a) | 39,700 | | 629,642 |
Exelixis, Inc. (a) | 39,500 | | 387,100 |
QIAGEN NV (a) | 31,800 | | 549,186 |
| | 1,626,858 |
PHARMACEUTICALS - 7.4% |
Pharmaceuticals - 7.4% |
Akorn, Inc. (a) | 19,800 | | 121,374 |
Cardiome Pharma Corp. (a) | 2,600 | | 29,692 |
Catalyst Pharmaceutical Partners, Inc. | 10,200 | | 65,280 |
Cypress Bioscience, Inc. (a) | 19,200 | | 158,592 |
Elan Corp. PLC sponsored ADR (a) | 66,500 | | 827,925 |
New River Pharmaceuticals, Inc. (a) | 27,078 | | 1,513,660 |
Pozen, Inc. (a) | 2,000 | | 33,820 |
Sepracor, Inc. (a) | 25,096 | | 1,431,978 |
Somaxon Pharmaceuticals, Inc. (a) | 2,200 | | 29,238 |
Xenoport, Inc. (a) | 11,600 | | 276,544 |
| | 4,488,103 |
TOTAL COMMON STOCKS (Cost $55,179,377) | 60,512,507 |
Money Market Funds - 0.4% |
| Shares | | Value (Note 1) |
Fidelity Cash Central Fund, 5.35% (b)
(Cost $242,169) | 242,169 | | $ 242,169 |
TOTAL INVESTMENT PORTFOLIO - 100.5% (Cost $55,421,546) | | 60,754,676 |
NET OTHER ASSETS - (0.5)% | | (300,592) |
NET ASSETS - 100% | $ 60,454,084 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 16,203 |
Fidelity Securities Lending Cash Central Fund | 24,633 |
Total | $ 40,836 |
Income Tax Information |
At July 31, 2006, the fund had a capital loss carryforward of approximately $6,990,407 all of which will expire on July 31, 2011. |
See accompanying notes which are an integral part of the financial statements.
Biotechnology
Advisor Biotechnology Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $55,179,377) | $ 60,512,507 | |
Fidelity Central Funds (cost $242,169) | 242,169 | |
Total Investments (cost $55,421,546) | | $ 60,754,676 |
Receivable for investments sold | | 273,493 |
Receivable for fund shares sold | | 102,648 |
Interest receivable | | 1,996 |
Prepaid expenses | | 258 |
Other receivables | | 4,886 |
Total assets | | 61,137,957 |
| | |
Liabilities | | |
Payable for investments purchased | $ 282,922 | |
Payable for fund shares redeemed | 268,666 | |
Accrued management fee | 30,822 | |
Distribution fees payable | 34,424 | |
Other affiliated payables | 21,175 | |
Other payables and accrued expenses | 45,864 | |
Total liabilities | | 683,873 |
| | |
Net Assets | | $ 60,454,084 |
Net Assets consist of: | | |
Paid in capital | | $ 57,381,415 |
Accumulated net investment loss | | (502,295) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (1,758,166) |
Net unrealized appreciation (depreciation) on investments | | 5,333,130 |
Net Assets | | $ 60,454,084 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption price per share ($14,381,708 ÷ 1,917,263 shares) | | $ 7.50 |
| | |
Maximum offering price per share (100/94.25 of $7.50) | | $ 7.96 |
Class T:
Net Asset Value and redemption price per share ($15,063,224 ÷ 2,039,733 shares) | | $ 7.38 |
| | |
Maximum offering price per share (100/96.50 of $7.38) | | $ 7.65 |
Class B:
Net Asset Value and offering price per share ($15,215,157 ÷ 2,125,677 shares)A | | $ 7.16 |
| | |
Class C:
Net Asset Value and offering price per share ($14,572,421 ÷ 2,035,380 shares)A | | $ 7.16 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($1,221,574 ÷ 160,114 shares) | | $ 7.63 |
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.
Semiannual Report
Advisor Biotechnology Fund
Financial Statements - continued
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 2,116 |
Interest | | 53 |
Income from Fidelity Central Funds (including $24,633 from security lending) | | 40,836 |
Total income | | 43,005 |
| | |
Expenses | | |
Management fee | $ 168,407 | |
Transfer agent fees | 121,479 | |
Distribution fees | 203,364 | |
Accounting and security lending fees | 13,822 | |
Custodian fees and expenses | 5,956 | |
Independent trustees' compensation | 100 | |
Registration fees | 40,158 | |
Audit | 22,061 | |
Legal | 837 | |
Miscellaneous | 21,020 | |
Total expenses before reductions | 597,204 | |
Expense reductions | (51,904) | 545,300 |
Net investment income (loss) | | (502,295) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 6,225,855 | |
Foreign currency transactions | (10) | |
Total net realized gain (loss) | | 6,225,845 |
Change in net unrealized appreciation (depreciation) on investment securities | | (60,069) |
Net gain (loss) | | 6,165,776 |
Net increase (decrease) in net assets resulting from operations | | $ 5,663,481 |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (502,295) | $ (1,015,236) |
Net realized gain (loss) | 6,225,845 | 1,447,883 |
Change in net unrealized appreciation (depreciation) | (60,069) | (1,063,236) |
Net increase (decrease) in net assets resulting from operations | 5,663,481 | (630,589) |
Share transactions - net increase (decrease) | (1,549,589) | 1,061,142 |
Redemption fees | 534 | 8,381 |
Total increase (decrease) in net assets | 4,114,426 | 438,934 |
| | |
Net Assets | | |
Beginning of period | 56,339,658 | 55,900,724 |
End of period (including accumulated net investment loss of $502,295 and $0, respectively) | $ 60,454,084 | $ 56,339,658 |
See accompanying notes which are an integral part of the financial statements.
Biotechnology
Financial Highlights - Class A
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.81 | $ 6.80 | $ 6.00 | $ 5.94 | $ 4.39 | $ 7.09 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.09) | (.08) H | (.09) | (.05) | (.07) |
Net realized and unrealized gain (loss) | .74 | .10 | .88 | .15 | 1.60 | (2.64) |
Total from investment operations | .69 | .01 | .80 | .06 | 1.55 | (2.71) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | .01 |
Net asset value, end of period | $ 7.50 | $ 6.81 | $ 6.80 | $ 6.00 | $ 5.94 | $ 4.39 |
Total Return B,C,D | 10.13% | .15% | 13.33% | 1.01% | 35.31% | (38.08)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.57% A | 1.48% | 1.56% | 1.68% | 2.04% | 1.99% |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.45% | 1.50% | 1.50% | 1.50% |
Expenses net of all reductions | 1.40% A | 1.37% | 1.43% | 1.48% | 1.47% | 1.46% |
Net investment income (loss) | (1.25)% A | (1.29)% | (1.36)% H | (1.38)% | (1.11)% | (1.19)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 14,382 | $ 12,539 | $ 11,022 | $ 10,197 | $ 7,718 | $ 4,657 |
Portfolio turnover rate G | 106% A | 62% | 30% | 50% | 71% | 113% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.0004 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.37)%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.71 | $ 6.72 | $ 5.95 | $ 5.90 | $ 4.37 | $ 7.07 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.11) | (.10) H | (.10) | (.06) | (.09) |
Net realized and unrealized gain (loss) | .72 | .10 | .87 | .15 | 1.59 | (2.62) |
Total from investment operations | .67 | (.01) | .77 | .05 | 1.53 | (2.71) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | .01 |
Net asset value, end of period | $ 7.38 | $ 6.71 | $ 6.72 | $ 5.95 | $ 5.90 | $ 4.37 |
Total Return B,C,D | 9.99% | (.15)% | 12.94% | .85% | 35.01% | (38.19)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.89% A | 1.79% | 1.93% | 2.10% | 2.39% | 2.27% |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.70% | 1.75% | 1.75% | 1.75% |
Expenses net of all reductions | 1.65% A | 1.62% | 1.68% | 1.73% | 1.72% | 1.72% |
Net investment income (loss) | (1.50)% A | (1.54)% | (1.61)% H | (1.63)% | (1.36)% | (1.45)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 15,063 | $ 13,808 | $ 14,177 | $ 13,367 | $ 10,281 | $ 6,861 |
Portfolio turnover rate G | 106% A | 62% | 30% | 50% | 71% | 113% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.0004 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.61)%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.52 | $ 6.56 | $ 5.84 | $ 5.82 | $ 4.33 | $ 7.05 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.07) | (.14) | (.13) H | (.13) | (.09) | (.12) |
Net realized and unrealized gain (loss) | .71 | .10 | .85 | .15 | 1.58 | (2.61) |
Total from investment operations | .64 | (.04) | .72 | .02 | 1.49 | (2.73) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | .01 |
Net asset value, end of period | $ 7.16 | $ 6.52 | $ 6.56 | $ 5.84 | $ 5.82 | $ 4.33 |
Total Return B,C,D | 9.82% | (.61)% | 12.33% | .34% | 34.41% | (38.58)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 2.31% A | 2.23% | 2.33% | 2.46% | 2.78% | 2.74% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.19% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.12% | 2.18% | 2.22% | 2.22% | 2.22% |
Net investment income (loss) | (2.00)% A | (2.04)% | (2.11)% H | (2.12)% | (1.86)% | (1.95)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 15,215 | $ 14,938 | $ 16,921 | $ 16,819 | $ 15,154 | $ 10,218 |
Portfolio turnover rate G | 106% A | 62% | 30% | 50% | 71% | 113% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.0004 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (2.11)%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.52 | $ 6.57 | $ 5.84 | $ 5.82 | $ 4.33 | $ 7.05 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.07) | (.14) | (.13) H | (.13) | (.09) | (.12) |
Net realized and unrealized gain (loss) | .71 | .09 | .86 | .15 | 1.58 | (2.61) |
Total from investment operations | .64 | (.05) | .73 | .02 | 1.49 | (2.73) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | .01 |
Net asset value, end of period | $ 7.16 | $ 6.52 | $ 6.57 | $ 5.84 | $ 5.82 | $ 4.33 |
Total Return B,C,D | 9.82% | (.76)% | 12.50% | .34% | 34.41% | (38.58)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 2.27% A | 2.17% | 2.24% | 2.31% | 2.58% | 2.57% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.19% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.12% | 2.18% | 2.23% | 2.22% | 2.22% |
Net investment income (loss) | (2.00)% A | (2.04)% | (2.11)% H | (2.13)% | (1.86)% | (1.95)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 14,572 | $ 13,787 | $ 12,538 | $ 13,215 | $ 10,493 | $ 8,204 |
Portfolio turnover rate G | 106% A | 62% | 30% | 50% | 71% | 113% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.0004 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (2.11)%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Biotechnology
Financial Highlights - Institutional Class
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.91 | $ 6.89 | $ 6.06 | $ 5.97 | $ 4.40 | $ 7.09 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | (.04) | (.07) | (.06) G | (.06) | (.04) | (.06) |
Net realized and unrealized gain (loss) | .76 | .09 | .89 | .15 | 1.61 | (2.64) |
Total from investment operations | .72 | .02 | .83 | .09 | 1.57 | (2.70) |
Redemption fees added to paid in capital D | - I | - I | - I | - I | - I | .01 |
Net asset value, end of period | $ 7.63 | $ 6.91 | $ 6.89 | $ 6.06 | $ 5.97 | $ 4.40 |
Total Return B,C | 10.42% | .29% | 13.70% | 1.51% | 35.68% | (37.94)% |
Ratios to Average Net Assets E,H | | | | | | |
Expenses before reductions | 1.16% A | 1.05% | 1.10% | 1.16% | 1.37% | 1.41% |
Expenses net of fee waivers, if any | 1.15% A | 1.05% | 1.10% | 1.16% | 1.25% | 1.25% |
Expenses net of all reductions | 1.15% A | 1.03% | 1.09% | 1.14% | 1.22% | 1.22% |
Net investment income (loss) | (1.00)% A | (.94)% | (1.02)% G | (1.04)% | (.86)% | (.94)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,222 | $ 1,268 | $ 1,243 | $ 1,146 | $ 1,153 | $ 857 |
Portfolio turnover rate F | 106% A | 62% | 30% | 50% | 71% | 113% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Investment income per share reflects a special dividend which amounted to $.0004 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.02)%. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Biotechnology Fund (the Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available,
are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Biotechnology
1. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 7,897,813 |
Unrealized depreciation | (3,392,840) |
Net unrealized appreciation (depreciation) | $ 4,504,973 |
Cost for federal income tax purposes | $ 56,249,703 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $31,332,854 and $33,249,699, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | .00% | .25% | $ 17,345 | $ 709 |
Class T | .25% | .25% | 36,916 | - |
Class B | .75% | .25% | 77,438 | 58,079 |
Class C | .75% | .25% | 71,665 | 15,976 |
| | | $ 203,364 | $ 74,764 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 7,774 |
Class T | 4,607 |
Class B* | 21,614 |
Class C* | 2,300 |
| $ 36,295 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets* |
Class A | $ 28,147 | .41 |
Class T | 35,126 | .48 |
Class B | 30,984 | .40 |
Class C | 25,602 | .36 |
Institutional Class | 1,620 | .25 |
| $ 121,479 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds, are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
Biotechnology
4. Fees and Other Transactions with Affiliates - continued
Investments in Fidelity Central Funds - continued
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 Fidelity Management & Research Company, FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $161 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $74 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds.
7. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense
Limitations | Reimbursement
from adviser |
Class A | 1.40% | $ 11,679 |
Class T | 1.65% | 17,659 |
Class B | 2.15% | 12,579 |
Class C | 2.15% | 8,601 |
Institutional Class | 1.15% | 75 |
| | $ 50,593 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $1,311 for the period.
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
8. Other - continued
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 | Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 381,291 | 802,915 | $ 2,745,225 | $ 5,733,744 |
Shares redeemed | (305,892) | (581,094) | (2,256,107) | (4,036,446) |
Net increase (decrease) | 75,399 | 221,821 | $ 489,118 | $ 1,697,298 |
Class T | | | | |
Shares sold | 258,991 | 587,840 | $ 1,862,572 | $ 4,097,337 |
Shares redeemed | (276,896) | (638,853) | (2,000,033) | (4,417,619) |
Net increase (decrease) | (17,905) | (51,013) | $ (137,461) | $ (320,282) |
Class B | | | | |
Shares sold | 167,375 | 419,648 | $ 1,142,065 | $ 2,840,429 |
Shares redeemed | (332,781) | (706,101) | (2,328,723) | (4,753,466) |
Net increase (decrease) | (165,406) | (286,453) | $ (1,186,658) | $ (1,913,037) |
Class C | | | | |
Shares sold | 191,419 | 744,203 | $ 1,344,429 | $ 5,179,930 |
Shares redeemed | (270,075) | (539,467) | (1,881,167) | (3,621,319) |
Net increase (decrease) | (78,656) | 204,736 | $ (536,738) | $ 1,558,611 |
Institutional Class | | | | |
Shares sold | 8,890 | 94,904 | $ 66,068 | $ 686,802 |
Shares redeemed | (32,127) | (92,008) | (243,918) | (648,250) |
Net increase (decrease) | (23,237) | 2,896 | $ (177,850) | $ 38,552 |
Biotechnology
Advisor Communications Equipment Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period *
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,146.80 | $ 7.58 |
Hypothetical A | $ 1,000.00 | $ 1,018.15 | $ 7.12 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,146.00 | $ 8.93 |
Hypothetical A | $ 1,000.00 | $ 1,016.89 | $ 8.39 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,143.10 | $ 11.61 |
Hypothetical A | $ 1,000.00 | $ 1,014.37 | $ 10.92 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,143.10 | $ 11.61 |
Hypothetical A | $ 1,000.00 | $ 1,014.37 | $ 10.92 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,150.20 | $ 6.23 |
Hypothetical A | $ 1,000.00 | $ 1,019.41 | $ 5.85 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.40% |
Class T | 1.65% |
Class B | 2.15% |
Class C | 2.15% |
Institutional Class | 1.15% |
Semiannual Report
Advisor Communications Equipment Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
QUALCOMM, Inc. | 20.0 | 7.8 |
Cisco Systems, Inc. | 10.2 | 0.0 |
Comverse Technology, Inc. | 7.7 | 5.5 |
Research In Motion Ltd. | 6.2 | 1.8 |
Motorola, Inc. | 4.5 | 7.0 |
Corning, Inc. | 4.2 | 8.4 |
Powerwave Technologies, Inc. | 3.9 | 0.9 |
F5 Networks, Inc. | 3.6 | 2.3 |
Juniper Networks, Inc. | 3.5 | 2.4 |
Sonus Networks, Inc. | 2.4 | 1.0 |
| 66.2 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Communications Equipment | 80.5% | |
 | Semiconductors & Semiconductor Equipment | 6.3% | |
 | Software | 4.0% | |
| Internet Software & Services | 2.4% | |
 | Wireless Telecommunication Services | 2.2% | |
| All Others * | 4.6% | |
|
As of July 31, 2006 |
| Communications Equipment | 62.3% | |
| Semiconductors & Semiconductor Equipment | 12.1% | |
| Wireless Telecommunication Services | 8.2% | |
| Internet Software & Services | 5.3% | |
| Computers & Peripherals | 3.3% | |
| All Others * | 8.8% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Communications Equipment
Advisor Communications Equipment Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.1% |
| Shares | | Value (Note 1) |
COMMERCIAL SERVICES & SUPPLIES - 1.1% |
Diversified Commercial & Professional Services - 1.1% |
Tele Atlas NV (a) | 5,400 | | $ 111,554 |
COMMUNICATIONS EQUIPMENT - 80.3% |
Communications Equipment - 80.3% |
3Com Corp. (a) | 7,700 | | 30,030 |
Acme Packet, Inc. | 100 | | 1,588 |
ADC Telecommunications, Inc. (a) | 3,900 | | 62,946 |
Adtran, Inc. | 3,183 | | 70,535 |
ADVA AG Optical Networking (a) | 7,013 | | 76,596 |
Alcatel-Lucent SA sponsored ADR | 8,803 | | 114,439 |
Alvarion Ltd. (a) | 3,200 | | 20,768 |
AudioCodes Ltd. (a) | 20,800 | | 205,920 |
Avanex Corp. (a) | 11,600 | | 24,708 |
Bookham, Inc. (a) | 18,772 | | 54,439 |
Ceragon Networks Ltd. (a) | 100 | | 598 |
Ciena Corp. (a) | 5,707 | | 160,310 |
Cisco Systems, Inc. (a) | 40,000 | | 1,063,600 |
Comtech Group, Inc. (a) | 7,601 | | 125,112 |
Comverse Technology, Inc. (a) | 41,606 | | 805,076 |
Corning, Inc. (a) | 21,200 | | 441,808 |
ECI Telecom Ltd. (a) | 5,700 | | 48,564 |
F5 Networks, Inc. (a) | 5,200 | | 371,488 |
Foundry Networks, Inc. (a) | 9,000 | | 130,230 |
Foxconn International Holdings Ltd. (a) | 2,000 | | 5,981 |
Ixia (a) | 2,963 | | 28,000 |
JDS Uniphase Corp. (a) | 4,600 | | 81,788 |
Juniper Networks, Inc. (a) | 20,150 | | 365,118 |
Motorola, Inc. | 23,500 | | 466,475 |
Nortel Networks Corp. (a) | 2,000 | | 53,680 |
Orckit Communications Ltd. (a) | 3,800 | | 37,259 |
Powerwave Technologies, Inc. (a) | 70,600 | | 412,304 |
QUALCOMM, Inc. | 55,300 | | 2,082,599 |
Research In Motion Ltd. (a) | 5,040 | | 644,011 |
Riverstone Networks, Inc. (a) | 30,300 | | 0 |
Sonus Networks, Inc. (a) | 35,304 | | 255,601 |
Symmetricom, Inc. (a) | 8,145 | | 69,558 |
Tekelec (a) | 4,600 | | 70,840 |
Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 22 | | 875 |
| | 8,382,844 |
COMPUTERS & PERIPHERALS - 1.4% |
Computer Hardware - 1.2% |
Compal Electronics, Inc. | 5,670 | | 5,123 |
Concurrent Computer Corp. (a) | 77,917 | | 116,876 |
NEC Corp. sponsored ADR | 90 | | 455 |
| | 122,454 |
Computer Storage & Peripherals - 0.2% |
SanDisk Corp. (a) | 610 | | 24,522 |
TOTAL COMPUTERS & PERIPHERALS | | 146,976 |
|
| Shares | | Value (Note 1) |
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.4% |
Alternative Carriers - 0.4% |
Level 3 Communications, Inc. (a) | 5,900 | | $ 36,639 |
ELECTRICAL EQUIPMENT - 0.1% |
Electrical Components & Equipment - 0.1% |
Energy Conversion Devices, Inc. (a) | 300 | | 10,335 |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.9% |
Electronic Equipment & Instruments - 0.6% |
Chi Mei Optoelectronics Corp. | 7,911 | | 7,712 |
HannStar Display Corp. (a) | 58,000 | | 10,128 |
Nippon Electric Glass Co. Ltd. | 2,000 | | 47,728 |
| | 65,568 |
Electronic Manufacturing Services - 0.3% |
Molex, Inc. | 500 | | 14,695 |
Trimble Navigation Ltd. (a) | 300 | | 16,974 |
| | 31,669 |
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS | | 97,237 |
INTERNET SOFTWARE & SERVICES - 2.4% |
Internet Software & Services - 2.4% |
aQuantive, Inc. (a) | 1,000 | | 26,800 |
Openwave Systems, Inc. (a) | 18,107 | | 159,704 |
RADVision Ltd. (a) | 3,150 | | 61,520 |
| | 248,024 |
MEDIA - 0.0% |
Publishing - 0.0% |
Gemstar-TV Guide International, Inc. (a) | 104 | | 420 |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 6.3% |
Semiconductor Equipment - 0.2% |
EMCORE Corp. (a) | 5,800 | | 23,664 |
Semiconductors - 6.1% |
Actel Corp. (a) | 451 | | 8,055 |
Advanced Analogic Technologies, Inc. (a) | 6,000 | | 34,020 |
AMIS Holdings, Inc. (a) | 5,900 | | 61,006 |
Applied Micro Circuits Corp. (a) | 11,032 | | 37,950 |
Conexant Systems, Inc. (a) | 12,800 | | 23,808 |
Cree, Inc. (a) | 1,100 | | 16,918 |
CSR PLC (a) | 2,000 | | 26,760 |
Exar Corp. (a) | 143 | | 1,873 |
Intersil Corp. Class A | 2,000 | | 47,120 |
Marvell Technology Group Ltd. (a) | 1,200 | | 21,948 |
Microsemi Corp. (a) | 449 | | 8,172 |
Microtune, Inc. (a) | 6,800 | | 34,136 |
Mindspeed Technologies, Inc. (a) | 12,509 | | 24,643 |
MIPS Technologies, Inc. (a) | 1,398 | | 11,631 |
Netlogic Microsystems, Inc. (a) | 1,400 | | 33,432 |
Pericom Semiconductor Corp. (a) | 1,700 | | 16,949 |
Pixelplus Co. Ltd. sponsored ADR (a) | 3,600 | | 5,796 |
PLX Technology, Inc. (a) | 1,400 | | 14,224 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - CONTINUED |
Semiconductors - continued |
Sigma Designs, Inc. (a) | 2,473 | | $ 59,871 |
Silicon Motion Technology Corp. sponsored ADR (a) | 1,800 | | 33,174 |
Silicon On Insulator Technologies SA (SOITEC) (a) | 2,100 | | 61,638 |
Silicon Storage Technology, Inc. (a) | 1,200 | | 5,976 |
SiRF Technology Holdings, Inc. (a) | 200 | | 5,872 |
Skyworks Solutions, Inc. (a) | 4,100 | | 26,937 |
Transmeta Corp. (a) | 5,800 | | 5,336 |
Vimicro International Corp. sponsored ADR (a) | 700 | | 6,629 |
| | 633,874 |
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | | 657,538 |
SOFTWARE - 4.0% |
Application Software - 2.2% |
NAVTEQ Corp. (a) | 2,100 | | 74,508 |
Ulticom, Inc. (a) | 18,198 | | 155,593 |
| | 230,101 |
Home Entertainment Software - 0.3% |
Ubisoft Entertainment SA (a) | 800 | | 32,167 |
Systems Software - 1.5% |
Allot Communications Ltd. | 300 | | 3,126 |
Sandvine Corp. (U.K.) | 58,300 | | 119,127 |
Wind River Systems, Inc. (a) | 2,800 | | 27,776 |
| | 150,029 |
TOTAL SOFTWARE | | 412,297 |
WIRELESS TELECOMMUNICATION SERVICES - 2.2% |
Wireless Telecommunication Services - 2.2% |
Harris Stratex Networks, Inc. (a) | 3,075 | | 67,589 |
MTN Group Ltd. | 3,800 | | 45,619 |
|
| Shares | | Value (Note 1) |
NII Holdings, Inc. (a) | 300 | | $ 22,140 |
Philippine Long Distance Telephone Co. sponsored ADR | 900 | | 47,358 |
Vimpel Communications sponsored ADR (a) | 600 | | 51,258 |
| | 233,964 |
TOTAL COMMON STOCKS (Cost $11,309,267) | 10,337,828 |
Convertible Bonds - 0.2% |
| Principal Amount | | |
COMMUNICATIONS EQUIPMENT - 0.2% |
Communications Equipment - 0.2% |
Ciena Corp. 0.25% 5/1/13
(Cost $20,000) | $ 20,000 | | 18,518 |
Money Market Funds - 1.0% |
| Shares | | |
Fidelity Cash Central Fund, 5.35% (b)
(Cost $108,380) | 108,380 | | 108,380 |
TOTAL INVESTMENT PORTFOLIO - 100.3% (Cost $11,437,647) | | 10,464,726 |
NET OTHER ASSETS - (0.3)% | | (29,505) |
NET ASSETS - 100% | $ 10,435,221 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 4,455 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 81.6% |
Canada | 7.9% |
Israel | 3.6% |
France | 2.0% |
Netherlands | 1.1% |
Others (individually less than 1%) | 3.8% |
| 100.0% |
Income Tax Information |
At July 31, 2006, the fund had a capital loss carryforward of approximately $359,916 all of which will expire on July 31, 2013. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Communications Equipment Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $11,329,267) | $ 10,356,346 | |
Fidelity Central Funds (cost $108,380) | 108,380 | |
Total Investments (cost $11,437,647) | | $ 10,464,726 |
Receivable for investments sold | | 95,465 |
Receivable for fund shares sold | | 2,265 |
Interest receivable | | 627 |
Prepaid expenses | | 52 |
Receivable from investment adviser for expense reductions | | 4,458 |
Other receivables | | 3,965 |
Total assets | | 10,571,558 |
| | |
Liabilities | | |
Payable for fund shares redeemed | $ 93,334 | |
Accrued management fee | 5,028 | |
Distribution fees payable | 5,568 | |
Other affiliated payables | 3,941 | |
Other payables and accrued expenses | 28,466 | |
Total liabilities | | 136,337 |
| | |
Net Assets | | $ 10,435,221 |
Net Assets consist of: | | |
Paid in capital | | $ 11,714,821 |
Accumulated net investment loss | | (78,766) |
Accumulated undistributed net realized gain (loss) on investments | | (227,913) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (972,921) |
Net Assets | | $ 10,435,221 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price
Class A: Net Asset Value and redemption price per share ($2,771,360 ÷ 331,330 shares) | | $ 8.36 |
| | |
Maximum offering price per share (100/94.25 of $8.36) | | $ 8.87 |
Class T:
Net Asset Value and redemption price per share ($3,099,462 ÷ 376,101 shares) | | $ 8.24 |
| | |
Maximum offering price per share (100/96.50 of $8.24) | | $ 8.54 |
Class B:
Net Asset Value and offering price per share ($2,239,424 ÷ 280,162 shares)A | | $ 7.99 |
| | |
Class C:
Net Asset Value and offering price per share ($2,047,368 ÷ 256,223 shares)A | | $ 7.99 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($277,607 ÷ 32,676 shares) | | $ 8.50 |
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.
Communications Equipment
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 13,296 |
Interest | | 123 |
Income from Fidelity Central Funds | | 4,455 |
Total income | | 17,874 |
| | |
Expenses | | |
Management fee | $ 30,968 | |
Transfer agent fees | 23,591 | |
Distribution fees | 33,716 | |
Accounting fees and expenses | 2,245 | |
Custodian fees and expenses | 3,231 | |
Independent trustees' compensation | 19 | |
Registration fees | 43,555 | |
Audit | 22,626 | |
Legal | 296 | |
Miscellaneous | 4,597 | |
Total expenses before reductions | 164,844 | |
Expense reductions | (68,204) | 96,640 |
Net investment income (loss) | | (78,766) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | | 299,026 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 1,293,253 | |
Assets and liabilities in foreign currencies | 5 | |
Total change in net unrealized appreciation (depreciation) | | 1,293,258 |
Net gain (loss) | | 1,592,284 |
Net increase (decrease) in net assets resulting from operations | | $ 1,513,518 |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (78,766) | $ (181,630) |
Net realized gain (loss) | 299,026 | 2,011,059 |
Change in net unrealized appreciation (depreciation) | 1,293,258 | (2,915,095) |
Net increase (decrease) in net assets resulting from operations | 1,513,518 | (1,085,666) |
Share transactions - net increase (decrease) | (1,708,705) | 1,243,705 |
Redemption fees | 149 | 3,257 |
Total increase (decrease) in net assets | (195,038) | 161,296 |
| | |
Net Assets | | |
Beginning of period | 10,630,259 | 10,468,963 |
End of period (including accumulated net investment loss of $78,766 and $0, respectively) | $ 10,435,221 | $ 10,630,259 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.29 | $ 7.70 | $ 6.53 | $ 5.57 | $ 3.96 | $ 8.40 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.09) | (.07) | (.09) | (.04) | (.05) |
Net realized and unrealized gain (loss) | 1.11 | (.32) | 1.24 | 1.01 | 1.65 | (4.40) |
Total from investment operations | 1.07 | (.41) | 1.17 | .92 | 1.61 | (4.45) |
Redemption fees added to paid in capital E | - I | - I | - I | .04 | - I | .01 |
Net asset value, end of period | $ 8.36 | $ 7.29 | $ 7.70 | $ 6.53 | $ 5.57 | $ 3.96 |
Total Return B, C, D | 14.68% | (5.32)% | 17.92% | 17.24% | 40.66% | (52.86)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.61% A | 2.13% | 2.32% | 2.38% | 6.13% | 4.97% |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.45% | 1.50% | 1.50% | 1.50% |
Expenses net of all reductions | 1.40% A | 1.32% | 1.28% | 1.35% | 1.36% | 1.40% |
Net investment income (loss) | (1.07)% A | (1.05)% | (.92)% | (1.18)% | (.82)% | (.85)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 2,771 | $ 3,145 | $ 2,406 | $ 3,480 | $ 970 | $ 371 |
Portfolio turnover rate G | 104% A | 174% | 250% | 306% | 167% | 305% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.19 | $ 7.61 | $ 6.48 | $ 5.54 | $ 3.95 | $ 8.40 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.11) | (.08) | (.10) | (.05) | (.07) |
Net realized and unrealized gain (loss) | 1.10 | (.31) | 1.21 | 1.00 | 1.64 | (4.39) |
Total from investment operations | 1.05 | (.42) | 1.13 | .90 | 1.59 | (4.46) |
Redemption fees added to paid in capital E | - I | - I | - I | .04 | - I | .01 |
Net asset value, end of period | $ 8.24 | $ 7.19 | $ 7.61 | $ 6.48 | $ 5.54 | $ 3.95 |
Total Return B, C, D | 14.60% | (5.52)% | 17.44% | 16.97% | 40.25% | (52.98)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.97% A | 2.51% | 2.78% | 3.06% | 6.82% | 5.36% |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.71% | 1.75% | 1.75% | 1.75% |
Expenses net of all reductions | 1.64% A | 1.57% | 1.54% | 1.60% | 1.61% | 1.64% |
Net investment income (loss) | (1.32)% A | (1.30)% | (1.18)% | (1.43)% | (1.07)% | (1.10)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 3,099 | $ 2,932 | $ 3,034 | $ 3,250 | $ 1,723 | $ 775 |
Portfolio turnover rate G | 104% A | 174% | 250% | 306% | 167% | 305% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Communications Equipment
Financial Highlights - Class B
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 | $ 3.92 | $ 8.37 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.07) | (.14) | (.12) | (.13) | (.07) | (.10) |
Net realized and unrealized gain (loss) | 1.07 | (.31) | 1.20 | .98 | 1.62 | (4.36) |
Total from investment operations | 1.00 | (.45) | 1.08 | .85 | 1.55 | (4.46) |
Redemption fees added to paid in capital E | - I | - I | - I | .04 | - I | .01 |
Net asset value, end of period | $ 7.99 | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 | $ 3.92 |
Total Return B, C, D | 14.31% | (6.05)% | 16.98% | 16.27% | 39.54% | (53.17)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 3.38% A | 2.94% | 3.14% | 3.48% | 6.88% | 5.62% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.20% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.07% | 2.04% | 2.11% | 2.11% | 2.14% |
Net investment income (loss) | (1.82)% A | (1.80)% | (1.68)% | (1.93)% | (1.56)% | (1.60)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 2,239 | $ 2,406 | $ 2,864 | $ 2,998 | $ 1,846 | $ 1,162 |
Portfolio turnover rate G | 104% A | 174% | 250% | 306% | 167% | 305% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 | $ 3.92 | $ 8.37 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.07) | (.15) | (.12) | (.14) | (.07) | (.10) |
Net realized and unrealized gain (loss) | 1.07 | (.30) | 1.20 | .99 | 1.62 | (4.36) |
Total from investment operations | 1.00 | (.45) | 1.08 | .85 | 1.55 | (4.46) |
Redemption fees added to paid in capital E | - I | - I | - I | .04 | - I | .01 |
Net asset value, end of period | $ 7.99 | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 | $ 3.92 |
Total Return B, C, D | 14.31% | (6.05)% | 16.98% | 16.27% | 39.54% | (53.17)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 3.34% A | 2.86% | 3.07% | 3.19% | 6.81% | 5.49% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.19% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 2.14% A | 2.07% | 2.02% | 2.10% | 2.11% | 2.14% |
Net investment income (loss) | (1.82)% A | (1.81)% | (1.66)% | (1.93)% | (1.57)% | (1.60)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 2,047 | $ 1,768 | $ 1,846 | $ 3,180 | $ 1,009 | $ 667 |
Portfolio turnover rate G | 104% A | 174% | 250% | 306% | 167% | 305% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.39 | $ 7.79 | $ 6.60 | $ 5.61 | $ 3.98 | $ 8.42 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | (.03) | (.07) | (.05) | (.07) | (.03) | (.04) |
Net realized and unrealized gain (loss) | 1.14 | (.33) | 1.24 | 1.02 | 1.66 | (4.41) |
Total from investment operations | 1.11 | (.40) | 1.19 | .95 | 1.63 | (4.45) |
Redemption fees added to paid in capital D | - H | - H | - H | .04 | - H | .01 |
Net asset value, end of period | $ 8.50 | $ 7.39 | $ 7.79 | $ 6.60 | $ 5.61 | $ 3.98 |
Total Return B, C | 15.02% | (5.13)% | 18.03% | 17.65% | 40.95% | (52.73)% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | 2.17% A | 1.70% | 1.85% | 1.55% | 5.34% | 4.24% |
Expenses net of fee waivers, if any | 1.15% A | 1.15% | 1.18% | 1.25% | 1.25% | 1.25% |
Expenses net of all reductions | 1.15% A | 1.07% | 1.01% | 1.11% | 1.11% | 1.14% |
Net investment income (loss) | (.82)% A | (.80)% | (.65)% | (.93)% | (.57)% | (.60)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 278 | $ 379 | $ 319 | $ 607 | $ 154 | $ 100 |
Portfolio turnover rate F | 104% A | 174% | 250% | 306% | 167% | 305% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. H Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Communications Equipment
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Communications Equipment Fund (the Fund) (formerly Fidelity Advisor Developing Communications Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, net operating losses, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 601,167 |
Unrealized depreciation | (1,702,267) |
Net unrealized appreciation (depreciation) | $ (1,101,100) |
Cost for federal income tax purposes | $ 11,565,826 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Communications Equipment
3. Purchases and Sales of Investments.
Purchases and sales of securities other than short-term securities, aggregated $5,590,515 and $7,391,780, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 3,874 | $ 77 |
Class T | .25% | .25% | 7,784 | - |
Class B | .75% | .25% | 12,231 | 9,174 |
Class C | .75% | .25% | 9,827 | 2,688 |
| | | $ 33,716 | $ 11,939 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained
by FDC |
Class A | $ 1,423 |
Class T | 802 |
Class B * | 2,251 |
Class C * | 138 |
| $ 4,614 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets * |
Class A | $ 6,320 | .41 |
Class T | 8,011 | .52 |
Class B | 5,055 | .41 |
Class C | 3,783 | .38 |
Institutional Class | 422 | .23 |
| $ 23,591 | |
* Annualized
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for the month.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds, are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $335 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $14 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense
Limitations | Reimbursement
from adviser |
Class A | 1.40% | $ 18,689 |
Class T | 1.65% | 20,585 |
Class B | 2.15% | 14,967 |
Class C | 2.15% | 11,772 |
Institutional Class | 1.15% | 1,871 |
| | $ 67,884 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $131 for the period.
7. 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.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
Communications Equipment
7. Other - continued
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
8. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2007 | Year ended
July 31,
2006 | Six months ended January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 48,311 | 258,256 | $ 393,156 | $ 2,231,744 |
Shares redeemed | (148,427) | (139,347) | (1,215,893) | (1,139,179) |
Net increase (decrease) | (100,116) | 118,909 | $ (822,737) | $ 1,092,565 |
Class T | | | | |
Shares sold | 41,603 | 114,159 | $ 335,452 | $ 950,677 |
Shares redeemed | (73,149) | (104,980) | (590,334) | (831,470) |
Net increase (decrease) | (31,546) | 9,179 | $ (254,882) | $ 119,207 |
Class B | | | | |
Shares sold | 11,078 | 69,205 | $ 85,659 | $ 569,934 |
Shares redeemed | (75,026) | (109,978) | (591,208) | (860,340) |
Net increase (decrease) | (63,948) | (40,773) | $ (505,549) | $ (290,406) |
Class C | | | | |
Shares sold | 46,418 | 307,489 | $ 368,649 | $ 2,475,377 |
Shares redeemed | (43,165) | (302,626) | (335,642) | (2,257,686) |
Net increase (decrease) | 3,253 | 4,863 | $ 33,007 | $ 217,691 |
Institutional Class | | | | |
Shares sold | 738 | 30,494 | $ 6,215 | $ 275,027 |
Shares redeemed | (19,256) | (20,224) | (164,759) | (170,379) |
Net increase (decrease) | (18,518) | 10,270 | $ (158,544) | $ 104,648 |
Semiannual Report
Advisor Consumer Discretionary Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,168.70 | $ 7.65 |
HypotheticalA | $ 1,000.00 | $ 1,018.15 | $ 7.12 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,167.60 | $ 9.01 |
HypotheticalA | $ 1,000.00 | $ 1,016.89 | $ 8.39 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,164.60 | $ 11.73 |
HypotheticalA | $ 1,000.00 | $ 1,014.37 | $ 10.92 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,165.10 | $ 11.73 |
HypotheticalA | $ 1,000.00 | $ 1,014.37 | $ 10.92 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,170.90 | $ 6.29 |
HypotheticalA | $ 1,000.00 | $ 1,019.41 | $ 5.85 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.40% |
Class T | 1.65% |
Class B | 2.15% |
Class C | 2.15% |
Institutional Class | 1.15% |
Consumer Discretionary
Advisor Consumer Discretionary Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
News Corp. Class A | 6.3 | 2.1 |
Federated Department Stores, Inc. | 6.0 | 5.0 |
Comcast Corp. Class A | 6.0 | 0.0 |
Time Warner, Inc. | 5.9 | 0.0 |
Target Corp. | 3.3 | 1.7 |
Saks, Inc. | 3.0 | 1.0 |
McDonald's Corp. | 3.0 | 0.0 |
McGraw-Hill Companies, Inc. | 2.8 | 1.1 |
JCPenney Co., Inc. | 2.7 | 1.7 |
TJX Companies, Inc. | 2.6 | 0.8 |
| 41.6 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Media | 25.9% | |
| Multiline Retail | 19.0% | |
| Specialty Retail | 19.0% | |
| Hotels, Restaurants & Leisure | 13.6% | |
| Textiles, Apparel & Luxury Goods | 10.5% | |
| All Others* | 12.0% | |
|
As of July 31, 2006 |
| Food Products | 13.0% | |
| Beverages | 12.9% | |
| Food & Staples Retailing | 12.7% | |
| Specialty Retail | 12.2% | |
| Multiline Retail | 10.6% | |
| All Others* | 38.6% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Semiannual Report
Advisor Consumer Discretionary Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 100.0% |
| Shares | | Value (Note 1) |
AUTOMOBILES - 1.2% |
Automobile Manufacturers - 1.2% |
Renault SA | 2,600 | | $ 321,758 |
Toyota Motor Corp. sponsored ADR | 3,400 | | 448,052 |
| | 769,810 |
COMPUTERS & PERIPHERALS - 2.0% |
Computer Hardware - 2.0% |
Apple, Inc. (a) | 1,600 | | 137,168 |
Hewlett-Packard Co. | 25,800 | | 1,116,624 |
| | 1,253,792 |
DIVERSIFIED CONSUMER SERVICES - 1.7% |
Specialized Consumer Services - 1.7% |
Sotheby's Class A (ltd. vtg.) | 28,700 | | 1,064,196 |
DIVERSIFIED FINANCIAL SERVICES - 1.7% |
Specialized Finance - 1.7% |
Moody's Corp. | 14,800 | | 1,059,088 |
FOOD & STAPLES RETAILING - 1.0% |
Food Retail - 1.0% |
Tesco PLC | 20,583 | | 169,041 |
Tesco PLC Sponsored ADR | 18,700 | | 465,630 |
| | 634,671 |
HOTELS, RESTAURANTS & LEISURE - 13.6% |
Casinos & Gaming - 5.3% |
Ameristar Casinos, Inc. | 12,200 | | 372,344 |
Boyd Gaming Corp. | 12,400 | | 589,868 |
International Game Technology | 19,600 | | 851,816 |
Las Vegas Sands Corp. (a) | 5,000 | | 520,350 |
Penn National Gaming, Inc. (a) | 12,700 | | 556,514 |
Wynn Resorts Ltd. | 3,800 | | 424,612 |
| | 3,315,504 |
Hotels, Resorts & Cruise Lines - 2.1% |
Accor SA | 8,600 | | 712,880 |
Marriott International, Inc. Class A | 12,000 | | 577,680 |
| | 1,290,560 |
Restaurants - 6.2% |
McDonald's Corp. | 41,900 | | 1,858,265 |
Starbucks Corp. (a) | 20,600 | | 719,764 |
Tim Hortons, Inc. | 6,265 | | 194,215 |
Wendy's International, Inc. | 33,800 | | 1,147,848 |
| | 3,920,092 |
TOTAL HOTELS, RESTAURANTS & LEISURE | | 8,526,156 |
HOUSEHOLD DURABLES - 1.5% |
Homebuilding - 1.0% |
D.R. Horton, Inc. | 7,700 | | 223,762 |
|
| Shares | | Value (Note 1) |
Ryland Group, Inc. | 2,400 | | $ 134,832 |
Toll Brothers, Inc. (a) | 8,600 | | 290,938 |
| | 649,532 |
Household Appliances - 0.5% |
Whirlpool Corp. | 3,200 | | 292,576 |
TOTAL HOUSEHOLD DURABLES | | 942,108 |
INTERNET & CATALOG RETAIL - 0.4% |
Internet Retail - 0.4% |
Blue Nile, Inc. (a) | 7,600 | | 281,276 |
INTERNET SOFTWARE & SERVICES - 1.4% |
Internet Software & Services - 1.4% |
Google, Inc. Class A (sub. vtg.) (a) | 1,700 | | 852,210 |
MEDIA - 25.9% |
Broadcasting & Cable TV - 7.4% |
Comcast Corp. Class A (a) | 84,900 | | 3,762,768 |
Grupo Televisa SA de CV (CPO) sponsored ADR | 25,900 | | 763,014 |
Liberty Media Holding Corp. - Capital Series A (a) | 1,400 | | 143,220 |
| | 4,669,002 |
Movies & Entertainment - 14.0% |
News Corp.: | | | |
Class A | 170,884 | | 3,973,053 |
Class B | 6,100 | | 149,145 |
Regal Entertainment Group Class A | 6,800 | | 153,000 |
The Walt Disney Co. | 15,900 | | 559,203 |
Time Warner, Inc. | 169,700 | | 3,711,339 |
Viacom, Inc. Class B (non-vtg.) (a) | 5,300 | | 215,551 |
| | 8,761,291 |
Publishing - 4.5% |
McGraw-Hill Companies, Inc. | 26,500 | | 1,777,620 |
R.H. Donnelley Corp. | 16,100 | | 1,071,938 |
| | 2,849,558 |
TOTAL MEDIA | | 16,279,851 |
MULTILINE RETAIL - 19.0% |
Department Stores - 15.0% |
Federated Department Stores, Inc. | 90,900 | | 3,771,441 |
JCPenney Co., Inc. | 20,600 | | 1,673,544 |
Nordstrom, Inc. | 23,600 | | 1,314,756 |
Saks, Inc. | 102,200 | | 1,917,272 |
Sears Holdings Corp. (a) | 4,300 | | 759,595 |
| | 9,436,608 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
MULTILINE RETAIL - CONTINUED |
General Merchandise Stores - 4.0% |
Family Dollar Stores, Inc. | 13,700 | | $ 443,880 |
Target Corp. | 33,300 | | 2,043,288 |
| | 2,487,168 |
TOTAL MULTILINE RETAIL | | 11,923,776 |
PERSONAL PRODUCTS - 1.1% |
Personal Products - 1.1% |
Bare Escentuals, Inc. | 18,300 | | 667,767 |
SPECIALTY RETAIL - 19.0% |
Apparel Retail - 11.0% |
Abercrombie & Fitch Co. Class A | 6,700 | | 532,918 |
Aeropostale, Inc. (a) | 8,500 | | 305,490 |
American Eagle Outfitters, Inc. | 21,400 | | 692,932 |
Casual Male Retail Group, Inc. (a)(d) | 19,900 | | 248,352 |
Charlotte Russe Holding, Inc. (a) | 7,050 | | 215,378 |
Gap, Inc. | 16,700 | | 320,139 |
Gymboree Corp. (a) | 26,800 | | 1,160,172 |
Limited Brands, Inc. | 32,700 | | 913,638 |
Ross Stores, Inc. | 8,700 | | 281,793 |
TJX Companies, Inc. | 54,748 | | 1,618,898 |
Urban Outfitters, Inc. (a) | 6,000 | | 146,400 |
Zumiez, Inc. (a) | 13,600 | | 447,440 |
| | 6,883,550 |
Computer & Electronics Retail - 2.0% |
Best Buy Co., Inc. | 6,450 | | 325,080 |
Circuit City Stores, Inc. | 7,000 | | 142,870 |
RadioShack Corp. (d) | 34,500 | | 762,450 |
| | 1,230,400 |
Home Improvement Retail - 2.3% |
Home Depot, Inc. | 22,600 | | 920,724 |
Lowe's Companies, Inc. | 16,200 | | 546,102 |
| | 1,466,826 |
Specialty Stores - 3.7% |
OfficeMax, Inc. | 8,800 | | 424,952 |
PETsMART, Inc. | 5,600 | | 171,024 |
Staples, Inc. | 55,338 | | 1,423,293 |
Tiffany & Co., Inc. | 8,400 | | 329,784 |
| | 2,349,053 |
TOTAL SPECIALTY RETAIL | | 11,929,829 |
TEXTILES, APPAREL & LUXURY GOODS - 10.5% |
Apparel, Accessories & Luxury Goods - 5.7% |
Coach, Inc. (a) | 30,200 | | 1,384,972 |
|
| Shares | | Value (Note 1) |
Phillips-Van Heusen Corp. | 13,000 | | $ 716,950 |
Polo Ralph Lauren Corp. Class A | 18,100 | | 1,485,105 |
| | 3,587,027 |
Footwear - 4.8% |
Crocs, Inc. | 13,202 | | 664,589 |
Deckers Outdoor Corp. (a) | 16,900 | | 985,439 |
Iconix Brand Group, Inc. (a) | 22,800 | | 453,948 |
NIKE, Inc. Class B | 2,500 | | 247,025 |
Skechers U.S.A., Inc. Class A (sub.vtg.) (a) | 17,700 | | 627,288 |
| | 2,978,289 |
TOTAL TEXTILES, APPAREL & LUXURY GOODS | | 6,565,316 |
TOTAL COMMON STOCKS (Cost $53,685,508) | 62,749,846 |
Money Market Funds - 2.6% |
| | | |
Fidelity Cash Central Fund, 5.35% (b) | 601,647 | | 601,647 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 1,007,250 | | 1,007,250 |
TOTAL MONEY MARKET FUNDS (Cost $1,608,897) | | 1,608,897 |
TOTAL INVESTMENT PORTFOLIO - 102.6% (Cost $55,294,405) | | 64,358,743 |
NET OTHER ASSETS - (2.6)% | | (1,634,263) |
NET ASSETS - 100% | $ 62,724,480 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 38,785 |
Fidelity Securities Lending Cash Central Fund | 2,679 |
Total | $ 41,464 |
See accompanying notes which are an integral part of the financial statements.
Consumer Discretionary
Advisor Consumer Discretionary Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $988,520) - See accompanying schedule: Unaffiliated issuers (cost $53,685,508) | $ 62,749,846 | |
Fidelity Central Funds (cost $1,608,897) | 1,608,897 | |
Total Investments (cost $55,294,405) | | $ 64,358,743 |
Receivable for investments sold | | 333,996 |
Receivable for fund shares sold | | 103,356 |
Dividends receivable | | 7,196 |
Interest receivable | | 3,313 |
Prepaid expenses | | 247 |
Other receivables | | 1,222 |
Total assets | | 64,808,073 |
| | |
Liabilities | | |
Payable to custodian bank | $ 17,118 | |
Payable for investments purchased | 822,283 | |
Payable for fund shares redeemed | 113,507 | |
Accrued management fee | 32,110 | |
Distribution fees payable | 29,666 | |
Other affiliated payables | 20,152 | |
Other payables and accrued expenses | 41,507 | |
Collateral on securities loaned, at value | 1,007,250 | |
Total liabilities | | 2,083,593 |
| | |
Net Assets | | $ 62,724,480 |
Net Assets consist of: | | |
Paid in capital | | $ 52,682,302 |
Undistributed net investment income | | 12,366 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 965,436 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 9,064,376 |
Net Assets | | $ 62,724,480 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption
price per share ($21,864,849 ÷ 1,314,540 shares) | | $ 16.63 |
| | |
Maximum offering price per share (100/94.25 of $16.63) | | $ 17.64 |
Class T:
Net Asset Value and redemption price per share ($15,682,641 ÷ 967,422 shares) | | $ 16.21 |
| | |
Maximum offering price per share (100/96.50 of $16.21) | | $ 16.80 |
Class B:
Net Asset Value and offering price per share ($14,183,863 ÷ 927,153 shares)A | | $ 15.30 |
| | |
Class C:
Net Asset Value and offering price per share ($9,147,503 ÷ 596,743 shares)A | | $ 15.33 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($1,845,624 ÷ 107,636 shares) | | $ 17.15 |
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.
Semiannual Report
Advisor Consumer Discretionary Fund
Financial Statements - continued
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 305,468 |
Special dividends | | 258,300 |
Interest | | 85 |
Income from Fidelity Central Funds | | 41,464 |
Total income | | 605,317 |
| | |
Expenses | | |
Management fee | $ 163,305 | |
Transfer agent fees | 108,194 | |
Distribution fees | 172,560 | |
Accounting and security lending fees | 12,073 | |
Custodian fees and expenses | 9,596 | |
Independent trustees' compensation | 97 | |
Registration fees | 33,735 | |
Audit | 21,870 | |
Legal | 818 | |
Miscellaneous | 15,791 | |
Total expenses before reductions | 538,039 | |
Expense reductions | (38,379) | 499,660 |
Net investment income (loss) | | 105,657 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 3,964,589 | |
Foreign currency transactions | 689 | |
Total net realized gain (loss) | | 3,965,278 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 4,757,668 | |
Assets and liabilities in foreign currencies | (65) | |
Total change in net unrealized appreciation (depreciation) | | 4,757,603 |
Net gain (loss) | | 8,722,881 |
Net increase (decrease) in net assets resulting from operations | | $ 8,828,538 |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 105,657 | $ (348,612) |
Net realized gain (loss) | 3,965,278 | 6,032,685 |
Change in net unrealized appreciation (depreciation) | 4,757,603 | (6,266,158) |
Net increase (decrease) in net assets resulting from operations | 8,828,538 | (582,085) |
Distributions to shareholders from net investment income | (93,271) | - |
Distributions to shareholders from net realized gain | (7,903,621) | (441,481) |
Total distributions | (7,996,892) | (441,481) |
Share transactions - net increase (decrease) | 8,297,621 | (8,793,822) |
Redemption fees | 548 | 4,458 |
Total increase (decrease) in net assets | 9,129,815 | (9,812,930) |
| | |
Net Assets | | |
Beginning of period | 53,594,665 | 63,407,595 |
End of period (including undistributed net investment income of $12,366 and accumulated net investment loss of $20, respectively) | $ 62,724,480 | $ 53,594,665 |
See accompanying notes which are an integral part of the financial statements.
Consumer Discretionary
Financial Highlights - Class A
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.39 | $ 16.62 | $ 14.51 | $ 13.71 | $ 12.71 | $ 15.20 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .06 H | (.04) | (.07) | (.07) | (.04) | (.05) |
Net realized and unrealized gain (loss) | 2.53 | (.07) | 2.71 | .87 | 1.04 | (2.09) |
Total from investment operations | 2.59 | (.11) | 2.64 | .80 | 1.00 | (2.14) |
Distributions from net investment income | (.05) | - | - | - | - | - |
Distributions from net realized gain | (2.30) | (.12) | (.53) | - | - | (.35) |
Total distributions | (2.35) | (.12) | (.53) | - | - | (.35) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 16.63 | $ 16.39 | $ 16.62 | $ 14.51 | $ 13.71 | $ 12.71 |
Total Return B,C,D | 16.87% | (.69)% | 18.85% | 5.84% | 7.87% | (14.30)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.50% A | 1.42% | 1.47% | 1.55% | 1.70% | 1.69% |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.44% | 1.50% | 1.53% | 1.50% |
Expenses net of all reductions | 1.39% A | 1.39% | 1.42% | 1.45% | 1.48% | 1.47% |
Net investment income (loss) | .70% A,H | (.23)% | (.45)% | (.50)% | (.33)% | (.36)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 21,865 | $ 16,935 | $ 17,887 | $ 11,856 | $ 9,101 | $ 7,209 |
Portfolio turnover rate G | 210% A | 81% | 66% | 152% | 88% | 136% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.07 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.19)%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.03 | $ 16.29 | $ 14.27 | $ 13.51 | $ 12.57 | $ 15.06 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .04 H,J | (.07) | (.11) | (.11) | (.07) | (.09) |
Net realized and unrealized gain (loss) | 2.47 | (.07) | 2.66 | .87 | 1.01 | (2.05) |
Total from investment operations | 2.51 | (.14) | 2.55 | .76 | .94 | (2.14) |
Distributions from net investment income | (.03) | - | - | - | - | - |
Distributions from net realized gain | (2.30) | (.12) | (.53) | - | - | (.35) |
Total distributions | (2.33) | (.12) | (.53) | - | - | (.35) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 16.21 | $ 16.03 | $ 16.29 | $ 14.27 | $ 13.51 | $ 12.57 |
Total Return B,C,D | 16.76% | (.89)% | 18.52% | 5.63% | 7.48% | (14.44)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.78% A | 1.69% | 1.75% | 1.81% | 1.87% | 1.89% |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.69% | 1.75% | 1.78% | 1.75% |
Expenses net of all reductions | 1.60% A | 1.62% | 1.67% | 1.70% | 1.73% | 1.72% |
Net investment income (loss) | .49% A,H | (.46)% | (.70)% | (.74)% | (.58)% | (.61)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 15,683 | $ 14,267 | $ 16,782 | $ 15,555 | $ 13,693 | $ 12,132 |
Portfolio turnover rate G | 210% A | 81% | 66% | 152% | 88% | 136% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.07 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.40)%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 15.26 | $ 15.60 | $ 13.75 | $ 13.08 | $ 12.22 | $ 14.73 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - H,J | (.15) | (.17) | (.18) | (.13) | (.15) |
Net realized and unrealized gain (loss) | 2.34 | (.07) | 2.55 | .85 | .99 | (2.01) |
Total from investment operations | 2.34 | (.22) | 2.38 | .67 | .86 | (2.16) |
Distributions from net realized gain | (2.30) | (.12) | (.53) | - | - | (.35) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 15.30 | $ 15.26 | $ 15.60 | $ 13.75 | $ 13.08 | $ 12.22 |
Total Return B,C,D | 16.46% | (1.45)% | 17.97% | 5.12% | 7.04% | (14.91)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 2.29% A | 2.19% | 2.24% | 2.29% | 2.37% | 2.39% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.19% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 2.14% A | 2.14% | 2.16% | 2.20% | 2.19% | 2.22% |
Net investment income (loss) | (.05)% A,H | (.98)% | (1.20)% | (1.25)% | (1.05)% | (1.11)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 14,184 | $ 14,088 | $ 18,862 | $ 17,302 | $ 15,944 | $ 13,807 |
Portfolio turnover rate G | 210% A | 81% | 66% | 152% | 88% | 136% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.07 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.94)%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 15.28 | $ 15.62 | $ 13.77 | $ 13.10 | $ 12.24 | $ 14.75 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - H,J | (.15) I | (.17) | (.18) | (.13) | (.15) |
Net realized and unrealized gain (loss) | 2.35 | (.07) | 2.55 | .85 | .99 | (2.01) |
Total from investment operations | 2.35 | (.22) | 2.38 | .67 | .86 | (2.16) |
Distributions from net realized gain | (2.30) | (.12) | (.53) | - | - | (.35) |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 15.33 | $ 15.28 | $ 15.62 | $ 13.77 | $ 13.10 | $ 12.24 |
Total Return B,C,D | 16.51% | (1.45)% | 17.94% | 5.11% | 7.03% | (14.89)% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 2.22% A | 2.12% | 2.17% | 2.24% | 2.33% | 2.35% |
Expenses net of fee waivers, if any | 2.15% A | 2.12% | 2.17% | 2.24% | 2.25% | 2.25% |
Expenses net of all reductions | 2.14% A | 2.12% | 2.14% | 2.19% | 2.19% | 2.22% |
Net investment income (loss) | (.05)% A,H | (.95)% | (1.18)% | (1.24)% | (1.05)% | (1.11)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 9,148 | $ 7,160 | $ 8,505 | $ 6,992 | $ 6,759 | $ 5,391 |
Portfolio turnover rate G | 210% A | 81% | 66% | 152% | 88% | 136% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.07 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.94)%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Consumer Discretionary
Financial Highlights - Institutional Class
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.82 | $ 17.01 | $ 14.81 | $ 13.95 | $ 12.91 | $ 15.38 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .08 G | - I | (.03) | (.04) | (.01) | (.02) |
Net realized and unrealized gain (loss) | 2.61 | (.07) | 2.76 | .90 | 1.05 | (2.10) |
Total from investment operations | 2.69 | (.07) | 2.73 | .86 | 1.04 | (2.12) |
Distributions from net investment income | (.06) | - | - | - | - | - |
Distributions from net realized gain | (2.30) | (.12) | (.53) | - | - | (.35) |
Total distributions | (2.36) | (.12) | (.53) | - | - | (.35) |
Redemption fees added to paid in capital D | - I | - I | - I | - I | - I | - I |
Net asset value, end of period | $ 17.15 | $ 16.82 | $ 17.01 | $ 14.81 | $ 13.95 | $ 12.91 |
Total Return B,C | 17.09% | (.44)% | 19.08% | 6.16% | 8.06% | (14.00)% |
Ratios to Average Net Assets E,H | | | | | | |
Expenses before reductions | 1.24% A | 1.18% | 1.26% | 1.34% | 1.49% | 1.39% |
Expenses net of fee waivers, if any | 1.15% A | 1.15% | 1.20% | 1.25% | 1.25% | 1.25% |
Expenses net of all reductions | 1.14% A | 1.14% | 1.17% | 1.20% | 1.19% | 1.22% |
Net investment income (loss) | .95% A,G | .02% | (.21)% | (.25)% | (.05)% | (.11)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,846 | $ 1,144 | $ 1,371 | $ 907 | $ 766 | $ 1,215 |
Portfolio turnover rate F | 210% A | 81% | 66% | 152% | 88% | 136% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Investment income per share reflects a special dividend which amounted to $.07 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been .05%. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Consumer Discretionary Fund (the Fund) (formerly Fidelity Advisor Consumer Industries Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Large, non-recurring dividends recognized by the Fund are presented separately on the Statement of Operations as "Special Dividends" and the impact of these dividends is presented in the Financial Highlights. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable
Consumer Discretionary
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles. In addition, the Fund will claim a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due foreign currency transactions, deferred trustees compensation, net operating losses and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 9,239,889 |
Unrealized depreciation | (217,326) |
Net unrealized appreciation (depreciation) | $ 9,022,563 |
Cost for federal income tax purposes | $ 55,336,180 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $62,273,542 and $59,579,316, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 24,103 | $ 582 |
Class T | .25% | .25% | 37,792 | - |
Class B | .75% | .25% | 71,966 | 53,975 |
Class C | .75% | .25% | 38,699 | 5,087 |
| | | $ 172,560 | $ 59,644 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 11,678 |
Class T | 2,790 |
Class B* | 18,460 |
Class C* | 276 |
| $ 33,204 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets* |
Class A | $ 34,271 | .36 |
Class T | 29,958 | .40 |
Class B | 28,647 | .40 |
Class C | 12,798 | .33 |
Institutional Class | 2,520 | .36 |
| $ 108,194 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity
Consumer Discretionary
4. Fees and Other Transactions with Affiliates - continued
Investments in Fidelity Central Funds - continued
Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $105 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $72 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $2,679.
7. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense
Limitations | Reimbursement
from adviser |
Class A | 1.40% | $ 8,992 |
Class T | 1.65% | 10,341 |
Class B | 2.15% | 10,004 |
Class C | 2.15% | 2,729 |
Institutional Class | 1.15% | 647 |
| | $ 32,713 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $1,834 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction |
Class T | $ 2,936 |
Semiannual Report
Consumer Discretionary
Notes to Financial Statements (Unaudited) - continued
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
From net investment income | | |
Class A | $ 58,655 | $ - |
Class T | 28,339 | - |
Class C | 505 | - |
Institutional Class | 5,772 | - |
Total | $ 93,271 | $ - |
From net realized gain | | |
Class A | $ 2,496,661 | $ 129,938 |
Class T | 2,054,841 | 112,178 |
Class B | 2,079,901 | 130,928 |
Class C | 1,100,034 | 59,730 |
Institutional Class | 172,184 | 8,707 |
Total | $ 7,903,621 | $ 441,481 |
Consumer Discretionary
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2007 | Year ended
July 31,
2006 | Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 308,566 | 426,479 | $ 5,104,820 | $ 7,019,654 |
Reinvestment of distributions | 141,655 | 7,092 | 2,265,923 | 116,631 |
Shares redeemed | (169,142) | (476,405) | (2,816,885) | (7,879,209) |
Net increase (decrease) | 281,079 | (42,834) | $ 4,553,858 | $ (742,924) |
Class T | | | | |
Shares sold | 84,540 | 183,824 | $ 1,365,298 | $ 2,956,227 |
Reinvestment of distributions | 122,934 | 6,480 | 1,916,483 | 104,320 |
Shares redeemed | (130,228) | (330,058) | (2,126,905) | (5,310,774) |
Net increase (decrease) | 77,246 | (139,754) | $ 1,154,876 | $ (2,250,227) |
Class B | | | | |
Shares sold | 49,559 | 124,427 | $ 758,683 | $ 1,901,339 |
Reinvestment of distributions | 122,770 | 7,467 | 1,810,224 | 114,882 |
Shares redeemed | (168,640) | (417,847) | (2,581,295) | (6,443,082) |
Net increase (decrease) | 3,689 | (285,953) | $ (12,388) | $ (4,426,861) |
Class C | | | | |
Shares sold | 140,358 | 103,187 | $ 2,156,617 | $ 1,601,293 |
Reinvestment of distributions | 59,891 | 3,123 | 884,992 | 48,106 |
Shares redeemed | (71,977) | (182,363) | (1,101,295) | (2,814,524) |
Net increase (decrease) | 128,272 | (76,053) | $ 1,940,314 | $ (1,165,125) |
Institutional Class | | | | |
Shares sold | 40,078 | 14,460 | $ 671,899 | $ 246,044 |
Reinvestment of distributions | 8,916 | 433 | 146,867 | 7,305 |
Shares redeemed | (9,383) | (27,416) | (157,805) | (462,034) |
Net increase (decrease) | 39,611 | (12,523) | $ 660,961 | $ (208,685) |
Semiannual Report
Advisor Electronics Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006 to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,136.90 | $ 7.54 |
HypotheticalA | $ 1,000.00 | $ 1,018.15 | $ 7.12 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,135.80 | $ 8.88 |
HypotheticalA | $ 1,000.00 | $ 1,016.89 | $ 8.39 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,131.00 | $ 11.55 |
HypotheticalA | $ 1,000.00 | $ 1,014.37 | $ 10.92 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,132.60 | $ 11.56 |
HypotheticalA | $ 1,000.00 | $ 1,014.32 | $ 10.92 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,138.50 | $ 6.20 |
HypotheticalA | $ 1,000.00 | $ 1,019.41 | $ 5.85 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.40% |
Class T | 1.65% |
Class B | 2.15% |
Class C | 2.15% |
Institutional Class | 1.15% |
Electronics
Advisor Electronics Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Intel Corp. | 7.2 | 5.8 |
Arrow Electronics, Inc. | 6.9 | 5.5 |
KLA-Tencor Corp. | 6.4 | 6.8 |
Applied Materials, Inc. | 5.8 | 0.0 |
Maxim Integrated Products, Inc. | 5.0 | 5.0 |
Marvell Technology Group Ltd. | 4.8 | 4.8 |
Altera Corp. | 4.6 | 4.2 |
National Semiconductor Corp. | 4.5 | 4.5 |
Lam Research Corp. | 4.5 | 4.1 |
Xilinx, Inc. | 4.0 | 3.6 |
| 53.7 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Semiconductors & Semiconductor Equipment | 78.8% | |
 | Electronic Equipment & Instruments | 15.0% | |
| All Others* | 6.2% | |
|
As of July 31, 2006 |
| Semiconductors & Semiconductor Equipment | 79.1% | |
| Electronic Equipment & Instruments | 14.7% | |
| Communications Equipment | 2.8% | |
| Electrical Equipment | 2.1% | |
| All Others* | 1.3% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Semiannual Report
Advisor Electronics Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 93.8% |
| Shares | | Value (Note 1) |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 15.0% |
Electronic Manufacturing Services - 4.2% |
Hon Hai Precision Industry Co. Ltd. (Foxconn) | 100,000 | | $ 683,330 |
Jabil Circuit, Inc. | 25,000 | | 599,750 |
| | 1,283,080 |
Technology Distributors - 10.8% |
Arrow Electronics, Inc. (a) | 60,000 | | 2,115,000 |
Avnet, Inc. (a) | 30,000 | | 931,500 |
Wolfson Microelectronics PLC (a) | 50,000 | | 275,065 |
| | 3,321,565 |
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS | | 4,604,645 |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 78.8% |
Semiconductor Equipment - 20.0% |
Applied Materials, Inc. | 100,000 | | 1,773,000 |
Cohu, Inc. | 20,000 | | 400,000 |
KLA-Tencor Corp. | 39,990 | | 1,968,708 |
Lam Research Corp. (a) | 30,030 | | 1,375,674 |
Varian Semiconductor Equipment Associates, Inc. (a) | 15,000 | | 617,250 |
| | 6,134,632 |
Semiconductors - 58.8% |
Altera Corp. (a) | 70,000 | | 1,403,500 |
Analog Devices, Inc. | 29,950 | | 980,863 |
Atheros Communications, Inc. (a) | 5,000 | | 118,800 |
Broadcom Corp. Class A (a) | 30,000 | | 957,600 |
CSR PLC (a) | 50,000 | | 668,997 |
Holtek Semiconductor, Inc. | 201,990 | | 382,178 |
Intel Corp. | 104,990 | | 2,200,590 |
Linear Technology Corp. | 20,000 | | 619,000 |
LSI Logic Corp. (a) | 75,000 | | 705,000 |
Marvell Technology Group Ltd. (a) | 80,000 | | 1,463,200 |
Maxim Integrated Products, Inc. | 50,000 | | 1,540,000 |
National Semiconductor Corp. | 60,020 | | 1,388,263 |
ON Semiconductor Corp. (a) | 50,000 | | 418,000 |
Saifun Semiconductors Ltd. (a) | 9,900 | | 138,105 |
Siliconware Precision Industries Co. Ltd. sponsored ADR (d) | 100,012 | | 877,105 |
|
| Shares | | Value (Note 1) |
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR | 79,999 | | $ 872,789 |
Texas Instruments, Inc. | 35,000 | | 1,091,650 |
Vimicro International Corp. sponsored ADR (a) | 73,000 | | 691,310 |
Volterra Semiconductor Corp. (a) | 25,000 | | 329,500 |
Xilinx, Inc. | 50,000 | | 1,215,000 |
| | 18,061,450 |
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | | 24,196,082 |
TOTAL COMMON STOCKS (Cost $29,861,146) | 28,800,727 |
Money Market Funds - 10.1% |
| | | |
Fidelity Cash Central Fund, 5.35% (b) | 2,350,595 | | 2,350,595 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 739,800 | | 739,800 |
TOTAL MONEY MARKET FUNDS (Cost $3,090,395) | | 3,090,395 |
TOTAL INVESTMENT PORTFOLIO - 103.9% (Cost $32,951,541) | | 31,891,122 |
NET OTHER ASSETS - (3.9)% | | (1,192,285) |
NET ASSETS - 100% | $ 30,698,837 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 28,505 |
Fidelity Securities Lending Cash Central Fund | 10,893 |
Total | $ 39,398 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 80.4% |
Taiwan | 9.1% |
Bermuda | 4.8% |
United Kingdom | 3.1% |
Cayman Islands | 2.2% |
Others (individually less than 1%) | 0.4% |
| 100.0% |
Income Tax Information |
At July 31, 2006, the fund had a capital loss carryforward of approximately $11,946,726 of which $3,573,707, $5,827,947, $2,265,871 and $279,201 will expire on July 31, 2010, 2011, 2012 and 2013, respectively. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Electronics Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $720,894) - See accompanying schedule: Unaffiliated issuers (cost $29,861,146) | $ 28,800,727 | |
Fidelity Central Funds (cost $3,090,395) | 3,090,395 | |
Total Investments (cost $32,951,541) | | $ 31,891,122 |
Foreign currency held at value (cost $1) | | 1 |
Receivable for fund shares sold | | 8,172 |
Dividends receivable | | 4,582 |
Interest receivable | | 6,846 |
Prepaid expenses | | 144 |
Receivable from investment adviser for expense reductions | | 1,464 |
Other receivables | | 4,008 |
Total assets | | 31,916,339 |
| | |
Liabilities | | |
Payable for investments purchased | $ 277,179 | |
Payable for fund shares redeemed | 127,343 | |
Accrued management fee | 14,167 | |
Distribution fees payable | 15,862 | |
Other affiliated payables | 10,482 | |
Other payables and accrued expenses | 32,669 | |
Collateral on securities loaned, at value | 739,800 | |
Total liabilities | | 1,217,502 |
| | |
Net Assets | | $ 30,698,837 |
Net Assets consist of: | | |
Paid in capital | | $ 42,417,935 |
Accumulated net investment loss | | (112,402) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (10,546,277) |
Net unrealized appreciation (depreciation) on investments | | (1,060,419) |
Net Assets | | $ 30,698,837 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption
price per share ($7,869,924 ÷ 938,302 shares) | | $ 8.39 |
| | |
Maximum offering price per share (100/94.25 of $8.39) | | $ 8.90 |
Class T:
Net Asset Value and redemption price per share ($8,621,507 ÷ 1,041,672 shares) | | $ 8.28 |
| | |
Maximum offering price per share (100/96.50 of $8.28) | | $ 8.58 |
Class B:
Net Asset Value and offering price per share ($5,049,032 ÷ 628,571 shares)A | | $ 8.03 |
| | |
Class C:
Net Asset Value and offering price per share ($8,324,449 ÷ 1,037,298 shares)A | | $ 8.03 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($833,925 ÷ 97,575 shares) | | $ 8.55 |
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.
Electronics
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 119,106 |
Interest | | 7 |
Income from Fidelity Central Funds (including $10,893 from security lending) | | 39,398 |
Total income | | 158,511 |
| | |
Expenses | | |
Management fee | $ 86,565 | |
Transfer agent fees | 60,723 | |
Distribution fees | 96,644 | |
Accounting and security lending fees | 7,230 | |
Custodian fees and expenses | 3,359 | |
Independent trustees' compensation | 53 | |
Registration fees | 40,236 | |
Audit | 22,828 | |
Legal | 551 | |
Miscellaneous | 11,772 | |
Total expenses before reductions | 329,961 | |
Expense reductions | (59,048) | 270,913 |
Net investment income (loss) | | (112,402) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 1,603,377 | |
Foreign currency transactions | (1,206) | |
Total net realized gain (loss) | | 1,602,171 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 2,406,859 | |
Assets and liabilities in foreign currencies | (74) | |
Total change in net unrealized appreciation (depreciation) | | 2,406,785 |
Net gain (loss) | | 4,008,956 |
Net increase (decrease) in net assets resulting from operations | | $ 3,896,554 |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (112,402) | $ (355,473) |
Net realized gain (loss) | 1,602,171 | 3,613,218 |
Change in net unrealized appreciation (depreciation) | 2,406,785 | (6,280,048) |
Net increase (decrease) in net assets resulting from operations | 3,896,554 | (3,022,303) |
Share transactions - net increase (decrease) | (4,044,428) | (10,537,180) |
Redemption fees | 751 | 3,363 |
Total increase (decrease) in net assets | (147,123) | (13,556,120) |
| | |
Net Assets | | |
Beginning of period | 30,845,960 | 44,402,080 |
End of period (including accumulated net investment loss of $112,402 and $0, respectively) | $ 30,698,837 | $ 30,845,960 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.38 | $ 8.04 | $ 6.58 | $ 6.59 | $ 5.57 | $ 9.62 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | (.04) | (.07) | (.09) | (.06) | (.10) |
Net realized and unrealized gain (loss) | 1.02 | (.62) | 1.53 | .08 | 1.07 | (3.96) |
Total from investment operations | 1.01 | (.66) | 1.46 | (.01) | 1.01 | (4.06) |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .01 | .01 |
Net asset value, end of period | $ 8.39 | $ 7.38 | $ 8.04 | $ 6.58 | $ 6.59 | $ 5.57 |
Total Return B,C,D | 13.69% | (8.21)% | 22.19% | (.15)% | 18.31% | (42.10)% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.75% A | 1.50% | 1.59% | 1.55% | 1.89% | 1.68% |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.45% | 1.50% | 1.50% | 1.50% |
Expenses net of all reductions | 1.39% A | 1.36% | 1.38% | 1.48% | 1.46% | 1.49% |
Net investment income (loss) | (.36)% A | (.52)% | (.96)% | (1.15)% | (1.09)% | (1.14)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 7,870 | $ 7,916 | $ 11,397 | $ 8,374 | $ 8,116 | $ 4,912 |
Portfolio turnover rate G | 20% A | 95% | 128% | 84% | 66% | 58% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.29 | $ 7.96 | $ 6.53 | $ 6.56 | $ 5.55 | $ 9.62 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.02) | (.06) | (.08) | (.11) | (.07) | (.12) |
Net realized and unrealized gain (loss) | 1.01 | (.61) | 1.51 | .08 | 1.07 | (3.96) |
Total from investment operations | .99 | (.67) | 1.43 | (.03) | 1.00 | (4.08) |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .01 | .01 |
Net asset value, end of period | $ 8.28 | $ 7.29 | $ 7.96 | $ 6.53 | $ 6.56 | $ 5.55 |
Total Return B,C,D | 13.58% | (8.42)% | 21.90% | (.46)% | 18.20% | (42.31)% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 2.05% A | 1.82% | 1.89% | 1.83% | 2.14% | 1.91% |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.69% | 1.75% | 1.75% | 1.75% |
Expenses net of all reductions | 1.63% A | 1.61% | 1.61% | 1.72% | 1.71% | 1.74% |
Net investment income (loss) | (.60)% A | (.77)% | (1.20)% | (1.39)% | (1.33)% | (1.39)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 8,622 | $ 9,048 | $ 12,085 | $ 15,445 | $ 14,362 | $ 11,615 |
Portfolio turnover rate G | 20% A | 95% | 128% | 84% | 66% | 58% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Electronics
Financial Highlights - Class B
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.10 | $ 7.78 | $ 6.42 | $ 6.48 | $ 5.52 | $ 9.60 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.10) | (.12) | (.14) | (.10) | (.16) |
Net realized and unrealized gain (loss) | .97 | (.58) | 1.48 | .08 | 1.06 | (3.93) |
Total from investment operations | .93 | (.68) | 1.36 | (.06) | .96 | (4.09) |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | .01 |
Net asset value, end of period | $ 8.03 | $ 7.10 | $ 7.78 | $ 6.42 | $ 6.48 | $ 5.52 |
Total Return B,C,D | 13.10% | (8.74)% | 21.18% | (.93)% | 17.39% | (42.50)% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 2.51% A | 2.29% | 2.41% | 2.41% | 2.76% | 2.43% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.21% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 2.13% A | 2.11% | 2.13% | 2.23% | 2.21% | 2.24% |
Net investment income (loss) | (1.10)% A | (1.27)% | (1.72)% | (1.90)% | (1.83)% | (1.89)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 5,049 | $ 6,123 | $ 8,963 | $ 8,498 | $ 11,335 | $ 8,362 |
Portfolio turnover rate G | 20% A | 95% | 128% | 84% | 66% | 58% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.09 | $ 7.77 | $ 6.41 | $ 6.47 | $ 5.51 | $ 9.59 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.10) | (.11) | (.14) | (.10) | (.16) |
Net realized and unrealized gain (loss) | .98 | (.58) | 1.47 | .08 | 1.06 | (3.93) |
Total from investment operations | .94 | (.68) | 1.36 | (.06) | .96 | (4.09) |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | .01 |
Net asset value, end of period | $ 8.03 | $ 7.09 | $ 7.77 | $ 6.41 | $ 6.47 | $ 5.51 |
Total Return B,C,D | 13.26% | (8.75)% | 21.22% | (.93)% | 17.42% | (42.54)% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 2.51% A | 2.26% | 2.31% | 2.24% | 2.52% | 2.34% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.18% | 2.24% | 2.25% | 2.25% |
Expenses net of all reductions | 2.13% A | 2.11% | 2.11% | 2.21% | 2.21% | 2.24% |
Net investment income (loss) | (1.10)% A | (1.27)% | (1.69)% | (1.88)% | (1.83)% | (1.89)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 8,324 | $ 7,009 | $ 11,058 | $ 12,322 | $ 13,061 | $ 9,921 |
Portfolio turnover rate G | 20% A | 95% | 128% | 84% | 66% | 58% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.51 | $ 8.15 | $ 6.65 | $ 6.64 | $ 5.60 | $ 9.64 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | - H | (.02) | (.05) | (.06) | (.04) | (.08) |
Net realized and unrealized gain (loss) | 1.04 | (.62) | 1.55 | .07 | 1.07 | (3.97) |
Total from investment operations | 1.04 | (.64) | 1.50 | .01 | 1.03 | (4.05) |
Redemption fees added to paid in capital D | - H | - H | - H | - H | .01 | .01 |
Net asset value, end of period | $ 8.55 | $ 7.51 | $ 8.15 | $ 6.65 | $ 6.64 | $ 5.60 |
Total Return B,C | 13.85% | (7.85)% | 22.56% | .15% | 18.57% | (41.91)% |
Ratios to Average Net Assets E,G | | | | | | |
Expenses before reductions | 1.37% A | 1.11% | 1.16% | 1.12% | 1.46% | 1.31% |
Expenses net of fee waivers, if any | 1.15% A | 1.11% | 1.16% | 1.12% | 1.25% | 1.25% |
Expenses net of all reductions | 1.13% A | 1.07% | 1.08% | 1.09% | 1.21% | 1.24% |
Net investment income (loss) | (.10)% A | (.23)% | (.67)% | (.76)% | (.84)% | (.89)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 834 | $ 750 | $ 899 | $ 687 | $ 625 | $ 1,184 |
Portfolio turnover rate F | 20% A | 95% | 128% | 84% | 66% | 58% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. H Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Electronics
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Electronics Fund (the Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, net operating losses, capital loss carryforwards, losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 2,993,841 |
Unrealized depreciation | (4,255,959) |
Net unrealized appreciation (depreciation) | $ (1,262,118) |
Cost for federal income tax purposes | $ 33,153,240 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $3,042,688 and $8,703,233, respectively.
Electronics
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 10,098 | $ 56 |
Class T | .25% | .25% | 22,546 | - |
Class B | .75% | .25% | 28,687 | 21,517 |
Class C | .75% | .25% | 35,313 | 3,141 |
| | | $ 96,644 | $ 24,714 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1% to .50% 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 | $ 668 |
Class T | 1,176 |
Class B* | 11,781 |
Class C* | 705 |
| $ 14,330 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets* |
Class A | $ 15,387 | .38 |
Class T | 19,350 | .43 |
Class B | 11,211 | .39 |
Class C | 13,764 | .39 |
Institutional Class | 1,011 | .25 |
| $ 60,723 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $105 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $39 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds.
7. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense
Limitations | Reimbursement
from adviser |
Class A | 1.40% | $ 14,167 |
Class T | 1.65% | 18,227 |
Class B | 2.15% | 10,395 |
Class C | 2.15% | 12,814 |
Institutional Class | 1.15% | 910 |
| | $ 56,513 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $1,972 for the period.
Electronics
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2007 | Year ended
July 31,
2006 | Six months ended January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 112,919 | 435,594 | $ 918,655 | $ 3,620,302 |
Shares redeemed | (246,713) | (781,896) | (1,991,618) | (6,327,084) |
Net increase (decrease) | (133,794) | (346,302) | $ (1,072,963) | $ (2,706,782) |
Class T | | | | |
Shares sold | 54,692 | 251,455 | $ 444,186 | $ 2,041,805 |
Shares redeemed | (253,427) | (529,920) | (2,015,653) | (4,209,309) |
Net increase (decrease) | (198,735) | (278,465) | $ (1,571,467) | $ (2,167,504) |
Class B | | | | |
Shares sold | 19,029 | 89,856 | $ 149,855 | $ 712,048 |
Shares redeemed | (253,145) | (378,696) | (1,999,899) | (2,960,769) |
Net increase (decrease) | (234,116) | (288,840) | $ (1,850,044) | $ (2,248,721) |
Class C | | | | |
Shares sold | 289,104 | 184,474 | $ 2,348,289 | $ 1,462,697 |
Shares redeemed | (240,411) | (618,382) | (1,879,722) | (4,840,037) |
Net increase (decrease) | 48,693 | (433,908) | $ 468,567 | $ (3,377,340) |
Institutional Class | | | | |
Shares sold | 10,991 | 66,399 | $ 91,055 | $ 577,320 |
Shares redeemed | (13,210) | (76,867) | (109,576) | (614,153) |
Net increase (decrease) | (2,219) | (10,468) | $ (18,521) | $ (36,833) |
Semiannual Report
Advisor Energy Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,000.50 | $ 6.25 |
Hypothetical A | $ 1,000.00 | $ 1,018.95 | $ 6.31 |
Class T | | | |
Actual | $ 1,000.00 | $ 999.50 | $ 7.26 |
Hypothetical A | $ 1,000.00 | $ 1,017.95 | $ 7.32 |
Class B | | | |
Actual | $ 1,000.00 | $ 996.90 | $ 10.07 |
Hypothetical A | $ 1,000.00 | $ 1,015.12 | $ 10.16 |
Class C | | | |
Actual | $ 1,000.00 | $ 997.10 | $ 9.82 |
Hypothetical A | $ 1,000.00 | $ 1,015.38 | $ 9.91 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,002.10 | $ 4.64 |
Hypothetical A | $ 1,000.00 | $ 1,020.57 | $ 4.69 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.24% |
Class T | 1.44% |
Class B | 2.00% |
Class C | 1.95% |
Institutional Class | .92% |
Energy
Advisor Energy Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Exxon Mobil Corp. | 7.7 | 2.8 |
Valero Energy Corp. | 7.6 | 4.0 |
Chevron Corp. | 7.6 | 2.4 |
ConocoPhillips | 6.9 | 4.0 |
Noble Corp. | 5.9 | 2.6 |
Schlumberger Ltd. (NY Shares) | 5.7 | 4.7 |
Baker Hughes, Inc. | 4.8 | 1.7 |
Range Resources Corp. | 3.8 | 2.1 |
Ultra Petroleum Corp. | 3.6 | 2.1 |
National Oilwell Varco, Inc. | 3.3 | 3.5 |
| 56.9 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Oil, Gas & Consumable Fuels | 60.0% | |
| Energy Equipment & Services | 35.4% | |
| Electrical Equipment | 1.5% | |
| Machinery | 1.3% | |
| Construction & Engineering | 0.9% | |
| All Others * | 0.9% | |
|
As of July 31, 2006 |
| Oil, Gas & Consumable Fuels | 42.6% | |
| Energy Equipment & Services | 29.6% | |
| Metals & Mining | 15.0% | |
| Machinery | 2.1% | |
| Chemicals | 1.9% | |
| All Others * | 8.8% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Semiannual Report
Advisor Energy Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.1% |
| Shares | | Value (Note 1) |
CONSTRUCTION & ENGINEERING - 0.9% |
Construction & Engineering - 0.9% |
Chicago Bridge & Iron Co. NV (NY Shares) | 20,400 | | $ 606,288 |
Fluor Corp. | 17,300 | | 1,428,980 |
Jacobs Engineering Group, Inc. (a) | 57,500 | | 5,206,625 |
| | 7,241,893 |
ELECTRICAL EQUIPMENT - 1.5% |
Electrical Components & Equipment - 0.0% |
Suntech Power Holdings Co. Ltd. sponsored ADR (a) | 9,400 | | 345,920 |
Heavy Electrical Equipment - 1.5% |
Suzlon Energy Ltd. | 11,296 | | 292,817 |
Vestas Wind Systems AS (a) | 244,600 | | 10,796,144 |
| | 11,088,961 |
TOTAL ELECTRICAL EQUIPMENT | | 11,434,881 |
ENERGY EQUIPMENT & SERVICES - 35.4% |
Oil & Gas Drilling - 16.0% |
Diamond Offshore Drilling, Inc. (d) | 266,100 | | 22,469,484 |
GlobalSantaFe Corp. | 422,400 | | 24,503,424 |
Noble Corp. | 597,800 | | 44,805,110 |
Pride International, Inc. (a) | 611,800 | | 17,625,958 |
Transocean, Inc. (a) | 148,500 | | 11,489,445 |
| | 120,893,421 |
Oil & Gas Equipment & Services - 19.4% |
Baker Hughes, Inc. | 528,850 | | 36,506,516 |
Halliburton Co. | 566,400 | | 16,731,456 |
National Oilwell Varco, Inc. (a) | 416,132 | | 25,234,244 |
Oceaneering International, Inc. (a) | 52,200 | | 2,060,334 |
Schlumberger Ltd. (NY Shares) | 684,800 | | 43,477,952 |
Smith International, Inc. | 239,500 | | 9,503,360 |
Superior Energy Services, Inc. (a) | 227,400 | | 6,894,768 |
W-H Energy Services, Inc. (a) | 74,400 | | 3,376,272 |
Weatherford International Ltd. (a) | 79,600 | | 3,214,248 |
| | 146,999,150 |
TOTAL ENERGY EQUIPMENT & SERVICES | | 267,892,571 |
|
| Shares | | Value (Note 1) |
MACHINERY - 1.3% |
Construction & Farm Machinery & Heavy Trucks - 1.3% |
Bucyrus International, Inc. Class A | 65,290 | | $ 3,030,109 |
Joy Global, Inc. | 147,050 | | 6,833,414 |
| | 9,863,523 |
OIL, GAS & CONSUMABLE FUELS - 60.0% |
Coal & Consumable Fuels - 4.0% |
Arch Coal, Inc. | 235,900 | | 7,010,948 |
CONSOL Energy, Inc. | 313,900 | | 10,807,577 |
Foundation Coal Holdings, Inc. | 49,800 | | 1,657,344 |
Peabody Energy Corp. | 269,000 | | 10,983,270 |
| | 30,459,139 |
Integrated Oil & Gas - 24.6% |
Chevron Corp. | 786,036 | | 57,286,304 |
ConocoPhillips | 792,438 | | 52,625,808 |
Exxon Mobil Corp. | 783,060 | | 58,024,745 |
Hess Corp. | 116,600 | | 6,295,234 |
Occidental Petroleum Corp. | 255,500 | | 11,844,980 |
| | 186,077,071 |
Oil & Gas Exploration & Production - 22.7% |
Aurora Oil & Gas Corp. (a) | 310,900 | | 854,975 |
Cabot Oil & Gas Corp. | 257,100 | | 16,675,506 |
Chesapeake Energy Corp. (d) | 666,000 | | 19,720,260 |
Energy Partners Ltd. (a) | 71,800 | | 1,555,188 |
EOG Resources, Inc. | 333,200 | | 23,034,116 |
Forest Oil Corp. (a) | 24,200 | | 772,464 |
Mariner Energy, Inc. (a) | 34,210 | | 687,963 |
Newfield Exploration Co. (a) | 54,700 | | 2,341,707 |
Noble Energy, Inc. | 15,300 | | 817,173 |
Petrohawk Energy Corp. (a) | 315,900 | | 3,645,486 |
Plains Exploration & Production Co. (a) | 290,000 | | 13,989,600 |
Quicksilver Resources, Inc. (a) | 239,550 | | 9,500,553 |
Range Resources Corp. | 930,227 | | 28,548,667 |
Ultra Petroleum Corp. (a) | 523,000 | | 27,300,600 |
XTO Energy, Inc. | 451,400 | | 22,782,158 |
| | 172,226,416 |
Oil & Gas Refining & Marketing - 8.4% |
Petroplus Holdings AG | 9,810 | | 627,051 |
Sunoco, Inc. | 66,400 | | 4,191,832 |
Tesoro Corp. | 7,400 | | 609,686 |
Valero Energy Corp. | 1,064,448 | | 57,778,237 |
| | 63,206,806 |
Oil & Gas Storage & Transport - 0.3% |
Williams Companies, Inc. | 73,600 | | 1,986,464 |
TOTAL OIL, GAS & CONSUMABLE FUELS | | 453,955,896 |
TOTAL COMMON STOCKS (Cost $597,280,852) | 750,388,764 |
Money Market Funds - 4.5% |
| Shares | | Value (Note 1) |
Fidelity Cash Central Fund, 5.35% (b) | 7,418,939 | | $ 7,418,939 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 26,627,000 | | 26,627,000 |
TOTAL MONEY MARKET FUNDS (Cost $34,045,939) | 34,045,939 |
TOTAL INVESTMENT PORTFOLIO - 103.6% (Cost $631,326,791) | | 784,434,703 |
NET OTHER ASSETS - (3.6)% | | (27,311,752) |
NET ASSETS - 100% | $ 757,122,951 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 190,600 |
Fidelity Securities Lending Cash Central Fund | 17,821 |
Total | $ 208,421 |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 79.9% |
Cayman Islands | 9.2% |
Netherlands Antilles | 5.7% |
Canada | 3.6% |
Denmark | 1.4% |
Others (individually less than 1%) | 0.2% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Energy Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $26,323,468) - See accompanying schedule: Unaffiliated issuers (cost $597,280,852) | $ 750,388,764 | |
Fidelity Central Funds (cost $34,045,939) | 34,045,939 | |
Total Investments (cost $631,326,791) | | $ 784,434,703 |
Receivable for investments sold | | 1,339,300 |
Receivable for fund shares sold | | 907,734 |
Dividends receivable | | 3,453 |
Interest receivable | | 16,419 |
Prepaid expenses | | 4,204 |
Other receivables | | 24,554 |
Total assets | | 786,730,367 |
| | |
Liabilities | | |
Payable for fund shares redeemed | $ 1,930,680 | |
Accrued management fee | 341,800 | |
Distribution fees payable | 345,021 | |
Other affiliated payables | 204,340 | |
Other payables and accrued expenses | 158,575 | |
Collateral on securities loaned, at value | 26,627,000 | |
Total liabilities | | 29,607,416 |
| | |
Net Assets | | $ 757,122,951 |
Net Assets consist of: | | |
Paid in capital | | $ 599,894,673 |
Accumulated net investment loss | | (1,789,095) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 5,909,461 |
Net unrealized appreciation (depreciation) on investments | | 153,107,912 |
Net Assets | | $ 757,122,951 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price
Class A: Net Asset Value and redemption price per share ($202,250,269 ÷ 5,111,120 shares) | | $ 39.57 |
| | |
Maximum offering price per share (100/94.25 of $39.57) | | $ 41.98 |
Class T:
Net Asset Value and redemption price per share ($325,334,638 ÷ 8,050,103 shares) | | $ 40.41 |
| | |
Maximum offering price per share (100/96.50 of $40.41) | | $ 41.88 |
Class B:
Net Asset Value and offering price per share ($107,847,856 ÷ 2,810,705 shares) A | | $ 38.37 |
| | |
Class C:
Net Asset Value and offering price per share ($107,470,085 ÷ 2,786,859 shares) A | | $ 38.56 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($14,220,103 ÷ 349,778 shares) | | $ 40.65 |
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.
Energy
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 3,823,541 |
Interest | | 6,775 |
Income from Fidelity Central Funds | | 208,421 |
Total income | | 4,038,737 |
| | |
Expenses | | |
Management fee | $ 2,150,252 | |
Transfer agent fees | 1,116,823 | |
Distribution fees | 2,184,211 | |
Accounting and security lending fees | 140,942 | |
Custodian fees and expenses | 19,264 | |
Independent trustees' compensation | 1,319 | |
Registration fees | 86,610 | |
Audit | 24,164 | |
Legal | 11,519 | |
Interest | 1,122 | |
Miscellaneous | 132,868 | |
Total expenses before reductions | 5,869,094 | |
Expense reductions | (34,587) | 5,834,507 |
Net investment income (loss) | | (1,795,770) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 34,884,308 | |
Foreign currency transactions | (21,232) | |
Total net realized gain (loss) | | 34,863,076 |
Change in net unrealized appreciation (depreciation) on:
Investment securities | (40,688,043) | |
Assets and liabilities in foreign currencies | (1,108) | |
Total change in net unrealized appreciation (depreciation) | | (40,689,151) |
Net gain (loss) | | (5,826,075) |
Net increase (decrease) in net assets resulting from operations | | $ (7,621,845) |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (1,795,770) | $ (2,855,811) |
Net realized gain (loss) | 34,863,076 | 151,070,040 |
Change in net unrealized appreciation (depreciation) | (40,689,151) | 36,149,130 |
Net increase (decrease) in net assets resulting from operations | (7,621,845) | 184,363,359 |
Distributions to shareholders from net realized gain | (117,272,323) | (96,405,578) |
Share transactions - net increase (decrease) | 39,376,374 | 199,114,450 |
Redemption fees | 27,495 | 111,350 |
Total increase (decrease) in net assets | (85,490,299) | 287,183,581 |
| | |
Net Assets | | |
Beginning of period | 842,613,250 | 555,429,669 |
End of period (including accumulated net investment loss of $1,789,095 and undistributed net investment income of $6,675, respectively) | $ 757,122,951 | $ 842,613,250 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 46.39 | $ 40.93 | $ 29.12 | $ 21.65 | $ 20.33 | $ 26.42 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.03) | (.04) | .06 | .07 | .13 | .15 |
Net realized and unrealized gain (loss) | (.28) | 12.30 | 12.21 | 7.50 | 1.30 | (4.36) |
Total from investment operations | (.31) | 12.26 | 12.27 | 7.57 | 1.43 | (4.21) |
Distributions from net investment income | - | - | (.06) | (.10) | (.11) | (.18) |
Distributions from net realized gain | (6.51) | (6.81) | (.41) | - | - | (1.70) |
Total distributions | (6.51) | (6.81) | (.47) | (.10) | (.11) | (1.88) |
Redemption fees added to paid in capital E | - I | .01 | .01 | - I | - I | - I |
Net asset value, end of period | $ 39.57 | $ 46.39 | $ 40.93 | $ 29.12 | $ 21.65 | $ 20.33 |
Total Return B, C, D | .05% | 32.90% | 42.69% | 35.08% | 7.07% | (16.92)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.24% A | 1.21% | 1.25% | 1.30% | 1.36% | 1.28% |
Expenses net of fee waivers, if any | 1.24% A | 1.21% | 1.25% | 1.30% | 1.36% | 1.28% |
Expenses net of all reductions | 1.23% A | 1.17% | 1.19% | 1.29% | 1.32% | 1.24% |
Net investment income (loss) | (.17)% A | (.09)% | .19% | .28% | .63% | .64% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 202,250 | $ 204,391 | $ 90,342 | $ 44,315 | $ 21,798 | $ 21,993 |
Portfolio turnover rate G | 105% A | 139% | 125% | 40% | 41% | 85% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 47.18 | $ 41.46 | $ 29.52 | $ 21.97 | $ 20.61 | $ 26.73 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.08) | (.13) | - I | .03 | .10 | .11 |
Net realized and unrealized gain (loss) | (.27) | 12.49 | 12.37 | 7.60 | 1.32 | (4.42) |
Total from investment operations | (.35) | 12.36 | 12.37 | 7.63 | 1.42 | (4.31) |
Distributions from net investment income | - | - | (.03) | (.08) | (.06) | (.11) |
Distributions from net realized gain | (6.42) | (6.65) | (.41) | - | - | (1.70) |
Total distributions | (6.42) | (6.65) | (.44) | (.08) | (.06) | (1.81) |
Redemption fees added to paid in capital E | - I | .01 | .01 | - I | - I | - I |
Net asset value, end of period | $ 40.41 | $ 47.18 | $ 41.46 | $ 29.52 | $ 21.97 | $ 20.61 |
Total Return B, C, D | (.05)% | 32.60% | 42.41% | 34.82% | 6.91% | (17.07)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.44% A | 1.42% | 1.44% | 1.48% | 1.50% | 1.45% |
Expenses net of fee waivers, if any | 1.44% A | 1.42% | 1.44% | 1.48% | 1.50% | 1.45% |
Expenses net of all reductions | 1.43% A | 1.38% | 1.39% | 1.47% | 1.47% | 1.41% |
Net investment income (loss) | (.37)% A | (.29)% | (.01)% | .10% | .48% | .47% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 325,335 | $ 362,272 | $ 280,820 | $ 201,187 | $ 155,249 | $ 174,670 |
Portfolio turnover rate G | 105% A | 139% | 125% | 40% | 41% | 85% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Energy
Financial Highlights - Class B
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 45.10 | $ 39.89 | $ 28.54 | $ 21.28 | $ 20.02 | $ 26.04 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.18) | (.35) | (.18) | (.11) | (.01) | (.02) |
Net realized and unrealized gain (loss) | (.26) | 11.98 | 11.93 | 7.37 | 1.27 | (4.29) |
Total from investment operations | (.44) | 11.63 | 11.75 | 7.26 | 1.26 | (4.31) |
Distributions from net investment income | - | - | - | - | - | (.01) |
Distributions from net realized gain | (6.29) | (6.43) | (.41) | - | - | (1.70) |
Total distributions | (6.29) | (6.43) | (.41) | - | - | (1.71) |
Redemption fees added to paid in capital E | - I | .01 | .01 | - I | - I | - I |
Net asset value, end of period | $ 38.37 | $ 45.10 | $ 39.89 | $ 28.54 | $ 21.28 | $ 20.02 |
Total Return B, C, D | (.31)% | 31.86% | 41.66% | 34.12% | 6.29% | (17.51)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.00% A | 1.96% | 1.98% | 2.02% | 2.06% | 2.00% |
Expenses net of fee waivers, if any | 2.00% A | 1.96% | 1.98% | 2.02% | 2.06% | 2.00% |
Expenses net of all reductions | 2.00% A | 1.92% | 1.93% | 2.01% | 2.02% | 1.95% |
Net investment income (loss) | (.94)% A | (.84)% | (.55)% | (.44)% | (.07)% | (.07)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 107,848 | $ 130,973 | $ 102,003 | $ 68,347 | $ 50,833 | $ 58,656 |
Portfolio turnover rate G | 105% A | 139% | 125% | 40% | 41% | 85% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 45.33 | $ 40.10 | $ 28.68 | $ 21.38 | $ 20.10 | $ 26.15 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.17) | (.34) | (.17) | (.10) | - I | (.01) |
Net realized and unrealized gain (loss) | (.27) | 12.06 | 11.99 | 7.40 | 1.28 | (4.32) |
Total from investment operations | (.44) | 11.72 | 11.82 | 7.30 | 1.28 | (4.33) |
Distributions from net investment income | - | - | - | - | - | (.02) |
Distributions from net realized gain | (6.33) | (6.50) | (.41) | - | - | (1.70) |
Total distributions | (6.33) | (6.50) | (.41) | - | - | (1.72) |
Redemption fees added to paid in capital E | - I | .01 | .01 | - I | - I | - I |
Net asset value, end of period | $ 38.56 | $ 45.33 | $ 40.10 | $ 28.68 | $ 21.38 | $ 20.10 |
Total Return B, C, D | (.29)% | 31.96% | 41.70% | 34.14% | 6.37% | (17.52)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.95% A | 1.92% | 1.94% | 1.99% | 2.01% | 1.96% |
Expenses net of fee waivers, if any | 1.95% A | 1.92% | 1.94% | 1.99% | 2.01% | 1.96% |
Expenses net of all reductions | 1.94% A | 1.88% | 1.89% | 1.97% | 1.97% | 1.92% |
Net investment income (loss) | (.89)% A | (.79)% | (.51)% | (.41)% | (.02)% | (.03)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 107,470 | $ 125,424 | $ 72,832 | $ 37,206 | $ 22,044 | $ 24,201 |
Portfolio turnover rate G | 105% A | 139% | 125% | 40% | 41% | 85% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 47.48 | $ 41.76 | $ 29.64 | $ 22.03 | $ 20.67 | $ 26.82 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .03 | .12 | .19 | .18 | .22 | .23 |
Net realized and unrealized gain (loss) | (.28) | 12.56 | 12.44 | 7.62 | 1.32 | (4.43) |
Total from investment operations | (.25) | 12.68 | 12.63 | 7.80 | 1.54 | (4.20) |
Distributions from net investment income | - | - | (.11) | (.19) | (.18) | (.25) |
Distributions from net realized gain | (6.58) | (6.97) | (.41) | - | - | (1.70) |
Total distributions | (6.58) | (6.97) | (.52) | (.19) | (.18) | (1.95) |
Redemption fees added to paid in capital D | - H | .01 | .01 | - H | - H | - H |
Net asset value, end of period | $ 40.65 | $ 47.48 | $ 41.76 | $ 29.64 | $ 22.03 | $ 20.67 |
Total Return B, C | .21% | 33.35% | 43.21% | 35.60% | 7.51% | (16.64)% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | .92% A | .87% | .89% | .90% | .95% | .93% |
Expenses net of fee waivers, if any | .92% A | .87% | .89% | .90% | .95% | .93% |
Expenses net of all reductions | .91% A | .83% | .84% | .89% | .91% | .89% |
Net investment income (loss) | .15% A | .26% | .54% | .68% | 1.04% | .99% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 14,220 | $ 19,553 | $ 9,433 | $ 4,206 | $ 2,652 | $ 4,938 |
Portfolio turnover rate F | 105% A | 139% | 125% | 40% | 41% | 85% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. H Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Energy
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Energy Fund (the Fund) (formerly Fidelity Advisor Natural Resources Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile. The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles. In addition, the Fund will claim a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), partnerships (including allocations from Fidelity Central Funds) and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 157,236,071 |
Unrealized depreciation | (6,030,952) |
Net unrealized appreciation (depreciation) | $ 151,205,119 |
Cost for federal income tax purposes | $ 633,229,584 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Energy
3. Purchases and Sales of Investments.
Purchases and sales of securities other than short-term securities, aggregated $406,120,655 and $486,899,255, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 245,121 | $ 8,834 |
Class T | .25% | .25% | 814,564 | 1,370 |
Class B | .75% | .25% | 571,866 | 428,899 |
Class C | .75% | .25% | 552,660 | 154,979 |
| | | $ 2,184,211 | $ 594,082 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 94,963 |
Class T | 28,623 |
Class B * | 111,139 |
Class C * | 24,391 |
| $ 259,116 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets * |
Class A | $ 311,611 | .32 |
Class T | 438,543 | .27 |
Class B | 190,960 | .33 |
Class C | 155,873 | .28 |
Institutional Class | 19,836 | .25 |
| $ 1,116,823 | |
* Annualized
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 Fidelity Management & Research Company, (FMR).
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $613 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Daily Loan Balance | Weighted Average Interest Rate | Interest Expense |
Borrower | $ 7,517,000 | 5.37% | $ 1,122 |
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $984 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $17,821.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $20,089 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $2,749. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction |
Class C | $ 281 |
Energy
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
From net investment income | | |
Class A | $ - | $ - |
Class T | - | - |
Total | $ - | $ - |
From net realized gain | | |
Class A | $ 30,376,126 | $ 17,953,640 |
Class T | 48,658,778 | 46,191,250 |
Class B | 18,098,259 | 17,304,417 |
Class C | 17,464,702 | 12,815,774 |
Institutional Class | 2,674,458 | 2,140,497 |
Total | $ 117,272,323 | $ 96,405,578 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2007 | Year ended
July 31,
2006 | Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 1,142,068 | 2,831,331 | $ 46,219,051 | $ 124,673,619 |
Reinvestment of distributions | 718,214 | 400,806 | 27,808,290 | 16,449,083 |
Shares redeemed | (1,155,165) | (1,033,179) | (44,741,532) | (44,849,856) |
Net increase (decrease) | 705,117 | 2,198,958 | $ 29,285,809 | $ 96,272,846 |
Class T | | | | |
Shares sold | 645,945 | 1,987,040 | $ 26,301,118 | $ 88,233,274 |
Reinvestment of distributions | 1,161,030 | 1,036,774 | 45,909,811 | 43,334,106 |
Shares redeemed | (1,435,509) | (2,118,138) | (58,077,198) | (92,809,287) |
Net increase (decrease) | 371,466 | 905,676 | $ 14,133,731 | $ 38,758,093 |
Class B | | | | |
Shares sold | 249,628 | 1,013,249 | $ 9,804,368 | $ 43,295,228 |
Reinvestment of distributions | 414,176 | 367,313 | 15,589,025 | 14,743,317 |
Shares redeemed | (756,851) | (1,034,052) | (28,553,880) | (43,654,702) |
Net increase (decrease) | (93,047) | 346,510 | $ (3,160,487) | $ 14,383,843 |
Class C | | | | |
Shares sold | 425,312 | 1,465,945 | $ 16,629,905 | $ 63,632,906 |
Reinvestment of distributions | 385,211 | 261,691 | 14,569,023 | 10,551,203 |
Shares redeemed | (790,345) | (777,152) | (29,706,769) | (32,787,487) |
Net increase (decrease) | 20,178 | 950,484 | $ 1,492,159 | $ 41,396,622 |
Institutional Class | | | | |
Shares sold | 74,229 | 261,912 | $ 3,111,532 | $ 11,683,224 |
Reinvestment of distributions | 39,397 | 24,127 | 1,561,516 | 1,012,348 |
Shares redeemed | (175,665) | (100,080) | (7,047,886) | (4,392,526) |
Net increase (decrease) | (62,039) | 185,959 | $ (2,374,838) | $ 8,303,046 |
Energy
Advisor Financial Services Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,133.00 | $ 6.83 |
HypotheticalA | $ 1,000.00 | $ 1,018.80 | $ 6.46 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,131.60 | $ 8.06 |
HypotheticalA | $ 1,000.00 | $ 1,017.64 | $ 7.63 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,128.50 | $ 10.89 |
HypotheticalA | $ 1,000.00 | $ 1,014.97 | $ 10.31 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,128.50 | $ 10.62 |
HypotheticalA | $ 1,000.00 | $ 1,015.22 | $ 10.06 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,134.80 | $ 4.95 |
HypotheticalA | $ 1,000.00 | $ 1,020.57 | $ 4.69 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.27% |
Class T | 1.50% |
Class B | 2.03% |
Class C | 1.98% |
Institutional Class | .92% |
Semiannual Report
Advisor Financial Services Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
American International Group, Inc. | 8.8 | 8.5 |
JPMorgan Chase & Co. | 5.1 | 5.5 |
Bank of America Corp. | 4.9 | 6.6 |
Wells Fargo & Co. | 4.2 | 3.7 |
Wachovia Corp. | 4.1 | 4.2 |
Merrill Lynch & Co., Inc. | 3.7 | 2.9 |
Morgan Stanley | 3.3 | 1.8 |
Endurance Specialty Holdings Ltd. | 2.9 | 2.7 |
ACE Ltd. | 2.8 | 2.6 |
Citigroup, Inc. | 2.6 | 1.5 |
| 42.4 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Insurance | 31.8% | |
| Commercial Banks | 18.0% | |
| Capital Markets | 17.4% | |
| Diversified Financial Services | 13.7% | |
| Real Estate Investment Trusts | 7.7% | |
| All Others* | 11.4% | |
|
As of July 31, 2006 |
| Insurance | 29.2% | |
| Commercial Banks | 18.9% | |
| Capital Markets | 18.0% | |
| Diversified Financial Services | 16.2% | |
| Thrifts & Mortgage Finance | 7.9% | |
| All Others* | 9.8% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Financial Services
Advisor Financial Services Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.8% |
| Shares | | Value (Note 1) |
CAPITAL MARKETS - 17.4% |
Asset Management & Custody Banks - 5.2% |
Affiliated Managers Group, Inc. (a)(d) | 18,900 | | $ 2,105,460 |
American Capital Strategies Ltd. (d) | 48,300 | | 2,349,795 |
Franklin Resources, Inc. | 36,000 | | 4,287,960 |
Investors Financial Services Corp. | 72,700 | | 3,400,179 |
KKR Private Equity Investors, LP | 23,000 | | 540,500 |
KKR Private Equity Investors, LP Restricted Depositary Units (e) | 37,100 | | 871,850 |
Legg Mason, Inc. (d) | 15,400 | | 1,614,690 |
State Street Corp. | 83,500 | | 5,932,675 |
| | 21,103,109 |
Diversified Capital Markets - 1.1% |
UBS AG (NY Shares) | 68,800 | | 4,335,088 |
Investment Banking & Brokerage - 11.1% |
Charles Schwab Corp. | 176,000 | | 3,329,920 |
E*TRADE Financial Corp. | 219,800 | | 5,358,724 |
Lazard Ltd. Class A | 75,100 | | 3,812,076 |
Merrill Lynch & Co., Inc. | 157,700 | | 14,754,412 |
Morgan Stanley | 160,900 | | 13,320,911 |
Nomura Holdings, Inc. | 176,800 | | 3,604,952 |
optionsXpress Holdings, Inc. | 34,800 | | 826,500 |
| | 45,007,495 |
TOTAL CAPITAL MARKETS | | 70,445,692 |
COMMERCIAL BANKS - 18.0% |
Diversified Banks - 13.7% |
Banco Bilbao Vizcaya Argentaria SA | 171,700 | | 4,306,236 |
ICICI Bank Ltd. sponsored ADR | 47,900 | | 2,114,785 |
Kookmin Bank sponsored ADR | 29,900 | | 2,377,947 |
Mizrahi Tefahot Bank Ltd. | 96,900 | | 662,137 |
U.S. Bancorp, Delaware | 186,600 | | 6,642,960 |
Unicredito Italiano Spa | 636,600 | | 5,890,960 |
Wachovia Corp. | 290,198 | | 16,396,187 |
Wells Fargo & Co. | 473,300 | | 17,000,936 |
| | 55,392,148 |
Regional Banks - 4.3% |
Cathay General Bancorp | 62,612 | | 2,170,132 |
Center Financial Corp., California | 57,600 | | 1,354,176 |
Colonial Bancgroup, Inc. | 82,000 | | 2,012,280 |
Commerce Bancorp, Inc., New Jersey | 32,000 | | 1,080,960 |
Nara Bancorp, Inc. | 36,359 | | 713,727 |
PNC Financial Services Group, Inc. | 83,800 | | 6,181,926 |
SVB Financial Group (a) | 50,378 | | 2,350,134 |
Wintrust Financial Corp. | 3,000 | | 137,370 |
Zions Bancorp | 15,500 | | 1,314,710 |
| | 17,315,415 |
TOTAL COMMERCIAL BANKS | | 72,707,563 |
|
| Shares | | Value (Note 1) |
CONSUMER FINANCE - 3.9% |
Consumer Finance - 3.9% |
American Express Co. | 148,400 | | $ 8,639,848 |
Capital One Financial Corp. (d) | 52,230 | | 4,199,292 |
Dollar Financial Corp. (a) | 94,562 | | 3,028,821 |
| | 15,867,961 |
DIVERSIFIED FINANCIAL SERVICES - 13.7% |
Other Diversifed Financial Services - 12.6% |
Bank of America Corp. | 374,172 | | 19,673,964 |
Citigroup, Inc. | 192,569 | | 10,616,329 |
JPMorgan Chase & Co. | 401,194 | | 20,432,810 |
| | 50,723,103 |
Specialized Finance - 1.1% |
CBOT Holdings, Inc. Class A (a) | 8,700 | | 1,468,560 |
The NASDAQ Stock Market, Inc. (a) | 85,300 | | 2,907,024 |
| | 4,375,584 |
TOTAL DIVERSIFIED FINANCIAL SERVICES | | 55,098,687 |
HOUSEHOLD DURABLES - 0.7% |
Homebuilding - 0.7% |
D.R. Horton, Inc. | 92,700 | | 2,693,862 |
INSURANCE - 31.8% |
Insurance Brokers - 0.8% |
National Financial Partners Corp. | 49,200 | | 2,415,720 |
Willis Group Holdings Ltd. | 20,740 | | 847,436 |
| | 3,263,156 |
Life & Health Insurance - 4.8% |
AFLAC, Inc. | 94,300 | | 4,489,623 |
MetLife, Inc. (d) | 144,500 | | 8,976,340 |
Prudential Financial, Inc. | 64,400 | | 5,739,972 |
| | 19,205,935 |
Multi-Line Insurance - 10.5% |
American International Group, Inc. | 518,860 | | 35,515,966 |
Hartford Financial Services Group, Inc. | 73,900 | | 7,013,849 |
| | 42,529,815 |
Property & Casualty Insurance - 8.4% |
ACE Ltd. | 194,000 | | 11,209,320 |
Allied World Assurance Co. Holdings Ltd. | 24,600 | | 1,047,960 |
Aspen Insurance Holdings Ltd. | 99,300 | | 2,544,066 |
Axis Capital Holdings Ltd. | 83,700 | | 2,757,915 |
MBIA, Inc. | 50,800 | | 3,648,964 |
Old Republic International Corp. | 102,900 | | 2,294,670 |
The St. Paul Travelers Companies, Inc. | 175,000 | | 8,898,750 |
XL Capital Ltd. Class A | 22,800 | | 1,573,200 |
| | 33,974,845 |
Reinsurance - 7.3% |
Endurance Specialty Holdings Ltd. | 340,570 | | 11,579,380 |
Everest Re Group Ltd. | 24,000 | | 2,246,400 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
INSURANCE - CONTINUED |
Reinsurance - continued |
IPC Holdings Ltd. | 63,500 | | $ 1,870,075 |
Max Re Capital Ltd. | 118,862 | | 2,852,688 |
Montpelier Re Holdings Ltd. | 30,900 | | 538,587 |
PartnerRe Ltd. | 14,500 | | 986,000 |
Platinum Underwriters Holdings Ltd. | 313,700 | | 9,363,945 |
| | 29,437,075 |
TOTAL INSURANCE | | 128,410,826 |
REAL ESTATE INVESTMENT TRUSTS - 7.7% |
Mortgage REITs - 0.3% |
Annaly Capital Management, Inc. | 84,100 | | 1,158,898 |
Residential REITs - 3.2% |
Equity Lifestyle Properties, Inc. | 43,900 | | 2,424,597 |
Equity Residential (SBI) | 145,800 | | 8,205,624 |
United Dominion Realty Trust, Inc. (SBI) | 69,600 | | 2,282,184 |
| | 12,912,405 |
Retail REITs - 4.2% |
CBL & Associates Properties, Inc. | 24,292 | | 1,140,024 |
Developers Diversified Realty Corp. | 83,800 | | 5,624,656 |
General Growth Properties, Inc. | 119,700 | | 7,363,944 |
Simon Property Group, Inc. | 26,100 | | 2,985,579 |
| | 17,114,203 |
TOTAL REAL ESTATE INVESTMENT TRUSTS | | 31,185,506 |
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.1% |
Real Estate Management & Development - 1.1% |
Mitsubishi Estate Co. Ltd. | 152,000 | | 4,345,196 |
THRIFTS & MORTGAGE FINANCE - 5.5% |
Thrifts & Mortgage Finance - 5.5% |
Countrywide Financial Corp. | 131,773 | | 5,729,490 |
Fannie Mae | 158,035 | | 8,933,719 |
Hudson City Bancorp, Inc. | 208,575 | | 2,872,078 |
|
| Shares | | Value (Note 1) |
Radian Group, Inc. | 10,600 | | $ 638,332 |
Washington Mutual, Inc. | 93,800 | | 4,182,542 |
| | 22,356,161 |
TOTAL COMMON STOCKS (Cost $292,924,468) | 403,111,454 |
Money Market Funds - 3.7% |
| | | |
Fidelity Cash Central Fund, 5.35% (b) | 2,165,613 | | 2,165,613 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 13,060,535 | | 13,060,535 |
TOTAL MONEY MARKET FUNDS (Cost $15,226,148) | 15,226,148 |
TOTAL INVESTMENT PORTFOLIO - 103.5% (Cost $308,150,616) | | 418,337,602 |
NET OTHER ASSETS - (3.5)% | | (14,305,684) |
NET ASSETS - 100% | $ 404,031,918 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $871,850 or 0.2% of net assets. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 56,493 |
Fidelity Securities Lending Cash Central Fund | 31,572 |
Total | $ 88,065 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 80.1% |
Bermuda | 9.9% |
Cayman Islands | 2.8% |
Japan | 2.0% |
Italy | 1.4% |
Switzerland | 1.1% |
Spain | 1.1% |
Others (individually less than 1%) | 1.6% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Financial Services Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $12,863,296) - See accompanying schedule: Unaffiliated issuers (cost $292,924,468) | $ 403,111,454 | |
Fidelity Central Funds (cost $15,226,148) | 15,226,148 | |
Total Investments (cost $308,150,616) | | $ 418,337,602 |
Receivable for investments sold | | 2,875,913 |
Receivable for fund shares sold | | 532,678 |
Dividends receivable | | 344,990 |
Interest receivable | | 6,779 |
Prepaid expenses | | 1,960 |
Other receivables | | 12,670 |
Total assets | | 422,112,592 |
| | |
Liabilities | | |
Payable for investments purchased | $ 2,539,717 | |
Payable for fund shares redeemed | 1,841,072 | |
Accrued management fee | 190,063 | |
Distribution fees payable | 213,090 | |
Other affiliated payables | 117,755 | |
Other payables and accrued expenses | 118,442 | |
Collateral on securities loaned, at value | 13,060,535 | |
Total liabilities | | 18,080,674 |
| | |
Net Assets | | $ 404,031,918 |
Net Assets consist of: | | |
Paid in capital | | $ 290,275,771 |
Undistributed net investment income | | 203,086 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 3,366,288 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 110,186,773 |
Net Assets | | $ 404,031,918 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($107,554,984 ÷ 4,720,792 shares) | | $ 22.78 |
| | |
Maximum offering price per share (100/94.25 of $22.78) | | $ 24.17 |
Class T:
Net Asset Value and redemption price per share ($115,940,120 ÷ 5,101,121 shares) | | $ 22.73 |
| | |
Maximum offering price per share (100/96.50 of $22.73) | | $ 23.55 |
Class B:
Net Asset Value and offering price per share ($100,978,316 ÷ 4,540,460 shares)A | | $ 22.24 |
| | |
Class C:
Net Asset Value and offering price per share ($67,501,339 ÷ 3,041,592 shares)A | | $ 22.19 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($12,057,159 ÷ 522,542 shares) | | $ 23.07 |
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.
Financial Services
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
Investment Income | | |
Dividends | | $ 4,372,274 |
Interest | | 24 |
Income from Fidelity Central Funds | | 88,065 |
Total income | | 4,460,363 |
| | |
Expenses | | |
Management fee | $ 1,129,655 | |
Transfer agent fees | 631,320 | |
Distribution fees | 1,290,622 | |
Accounting and security lending fees | 83,997 | |
Custodian fees and expenses | 12,329 | |
Independent trustees' compensation | 678 | |
Registration fees | 38,522 | |
Audit | 26,297 | |
Legal | 4,801 | |
Miscellaneous | 93,002 | |
Total expenses before reductions | 3,311,223 | |
Expense reductions | (18,147) | 3,293,076 |
Net investment income (loss) | | 1,167,287 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers (net of foreign taxes of $42,189) | 31,692,806 | |
Foreign currency transactions | 48,730 | |
Total net realized gain (loss) | | 31,741,536 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 16,129,692 | |
Assets and liabilities in foreign currencies | 159 | |
Total change in net unrealized appreciation (depreciation) | | 16,129,851 |
Net gain (loss) | | 47,871,387 |
Net increase (decrease) in net assets resulting from operations | | $ 49,038,674 |
Statement of Changes in Net Assets
| Six months ended
January 31, 2007
(Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 1,167,287 | $ 1,896,820 |
Net realized gain (loss) | 31,741,536 | 35,867,755 |
Change in net unrealized appreciation (depreciation) | 16,129,851 | 1,112,137 |
Net increase (decrease) in net assets resulting from operations | 49,038,674 | 38,876,712 |
Distributions to shareholders from net investment income | (1,993,514) | (1,881,748) |
Distributions to shareholders from net realized gain | (54,831,273) | (29,223,665) |
Total distributions | (56,824,787) | (31,105,413) |
Share transactions - net increase (decrease) | 25,104,749 | (47,322,942) |
Redemption fees | 1,077 | 8,919 |
Total increase (decrease) in net assets | 17,319,713 | (39,542,724) |
| | |
Net Assets | | |
Beginning of period | 386,712,205 | 426,254,929 |
End of period (including undistributed net investment income of $203,086 and undistributed net investment income of $1,145,387, respectively) | $ 404,031,918 | $ 386,712,205 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 23.34 | $ 23.01 | $ 22.17 | $ 19.98 | $ 17.83 | $ 20.45 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .11 | .20 | .19 | .14 | .16 | .12 |
Net realized and unrealized gain (loss) | 2.80 | 2.02 | 2.48 | 2.20 | 2.07 | (2.60) |
Total from investment operations | 2.91 | 2.22 | 2.67 | 2.34 | 2.23 | (2.48) |
Distributions from net investment income | (.22) | (.26) | (.07) | (.15) | (.08) | (.14) |
Distributions from net realized gain | (3.25) | (1.63) | (1.76) | - | - | - |
Total distributions | (3.47) J | (1.89) | (1.83) | (.15) | (.08) | (.14) |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 22.78 | $ 23.34 | $ 23.01 | $ 22.17 | $ 19.98 | $ 17.83 |
Total Return B, C, D | 13.30% | 10.32% | 12.60% | 11.76% | 12.57% | (12.16)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.27% A | 1.25% | 1.26% | 1.27% | 1.31% | 1.27% |
Expenses net of fee waivers, if any | 1.27% A | 1.25% | 1.26% | 1.27% | 1.31% | 1.27% |
Expenses net of all reductions | 1.26% A | 1.23% | 1.23% | 1.25% | 1.27% | 1.23% |
Net investment income (loss) | .96% A | .87% | .88% | .63% | .89% | .60% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 107,555 | $ 85,356 | $ 68,012 | $ 58,222 | $ 57,255 | $ 60,475 |
Portfolio turnover rate G | 62% A | 33% | 61% | 74% | 60% | 125% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. J Total distributions of $3.47 per share is comprised of distributions from net investment income of $.223 and distributions from net realized gain of $3.250 per share. |
Financial Highlights - Class T
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 23.26 | $ 22.87 | $ 22.07 | $ 19.90 | $ 17.77 | $ 20.38 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .08 | .15 | .14 | .09 | .12 | .07 |
Net realized and unrealized gain (loss) | 2.80 | 2.02 | 2.47 | 2.19 | 2.07 | (2.59) |
Total from investment operations | 2.88 | 2.17 | 2.61 | 2.28 | 2.19 | (2.52) |
Distributions from net investment income | (.16) | (.15) | (.05) | (.11) | (.06) | (.09) |
Distributions from net realized gain | (3.25) | (1.63) | (1.76) | - | - | - |
Total distributions | (3.41) J | (1.78) | (1.81) | (.11) | (.06) | (.09) |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 22.73 | $ 23.26 | $ 22.87 | $ 22.07 | $ 19.90 | $ 17.77 |
Total Return B, C, D | 13.16% | 10.11% | 12.37% | 11.49% | 12.37% | (12.39)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.50% A | 1.47% | 1.48% | 1.50% | 1.53% | 1.49% |
Expenses net of fee waivers, if any | 1.50% A | 1.47% | 1.48% | 1.50% | 1.53% | 1.49% |
Expenses net of all reductions | 1.50% A | 1.46% | 1.46% | 1.48% | 1.49% | 1.45% |
Net investment income (loss) | .73% A | .65% | .66% | .41% | .67% | .38% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 115,940 | $ 113,344 | $ 128,388 | $ 144,887 | $ 157,238 | $ 169,429 |
Portfolio turnover rate G | 62% A | 33% | 61% | 74% | 60% | 125% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. J Total distributions of $3.41 per share is comprised of distributions from net investment income of $.156 and distributions from net realized gain of $3.250 per share. |
See accompanying notes which are an integral part of the financial statements.
Financial Services
Financial Highlights - Class B
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.75 | $ 22.33 | $ 21.65 | $ 19.53 | $ 17.50 | $ 20.08 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .02 | .03 | .03 | (.02) | .03 | (.03) |
Net realized and unrealized gain (loss) | 2.73 | 1.97 | 2.41 | 2.16 | 2.03 | (2.55) |
Total from investment operations | 2.75 | 2.00 | 2.44 | 2.14 | 2.06 | (2.58) |
Distributions from net investment income | (.02) | (.01) | - | (.02) | (.03) | - |
Distributions from net realized gain | (3.25) | (1.57) | (1.76) | - | - | - |
Total distributions | (3.26) J | (1.58) | (1.76) | (.02) | (.03) | - |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 22.24 | $ 22.75 | $ 22.33 | $ 21.65 | $ 19.53 | $ 17.50 |
Total Return B, C, D | 12.85% | 9.52% | 11.78% | 10.96% | 11.80% | (12.85)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.03% A | 1.99% | 2.00% | 2.02% | 2.03% | 2.01% |
Expenses net of fee waivers, if any | 2.03% A | 1.99% | 2.00% | 2.02% | 2.03% | 2.01% |
Expenses net of all reductions | 2.02% A | 1.98% | 1.98% | 2.00% | 1.99% | 1.97% |
Net investment income (loss) | .21% A | .13% | .14% | (.11)% | .17% | (.14)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 100,978 | $ 113,652 | $ 145,046 | $ 179,873 | $ 193,373 | $ 206,460 |
Portfolio turnover rate G | 62% A | 33% | 61% | 74% | 60% | 125% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. J Total distributions of $3.26 per share is comprised of distributions from net investment income of $.015 and distributions from net realized gain of $3.247 per share. |
Financial Highlights - Class C
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.74 | $ 22.34 | $ 21.65 | $ 19.53 | $ 17.49 | $ 20.05 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .03 | .04 | .04 | (.01) | .04 | (.02) |
Net realized and unrealized gain (loss) | 2.72 | 1.98 | 2.42 | 2.15 | 2.03 | (2.54) |
Total from investment operations | 2.75 | 2.02 | 2.46 | 2.14 | 2.07 | (2.56) |
Distributions from net investment income | (.05) | (.02) | (.01) | (.02) | (.03) | - |
Distributions from net realized gain | (3.25) | (1.60) | (1.76) | - | - | - |
Total distributions | (3.30) J | (1.62) | (1.77) | (.02) | (.03) | - |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 22.19 | $ 22.74 | $ 22.34 | $ 21.65 | $ 19.53 | $ 17.49 |
Total Return B, C, D | 12.85% | 9.58% | 11.88% | 10.96% | 11.86% | (12.77)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.98% A | 1.94% | 1.95% | 1.97% | 1.99% | 1.96% |
Expenses net of fee waivers, if any | 1.98% A | 1.94% | 1.95% | 1.97% | 1.99% | 1.96% |
Expenses net of all reductions | 1.97% A | 1.93% | 1.92% | 1.95% | 1.95% | 1.92% |
Net investment income (loss) | .26% A | .18% | .19% | (.06)% | .22% | (.09)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 67,501 | $ 62,469 | $ 72,181 | $ 86,199 | $ 97,434 | $ 107,899 |
Portfolio turnover rate G | 62% A | 33% | 61% | 74% | 60% | 125% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. J Total distributions of $3.30 per share is comprised of distributions from net investment income of $.049 and distributions from net realized gain of $3.250 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 23.63 | $ 23.29 | $ 22.37 | $ 20.17 | $ 17.95 | $ 20.59 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .15 | .29 | .29 | .23 | .24 | .19 |
Net realized and unrealized gain (loss) | 2.84 | 2.05 | 2.50 | 2.21 | 2.09 | (2.62) |
Total from investment operations | 2.99 | 2.34 | 2.79 | 2.44 | 2.33 | (2.43) |
Distributions from net investment income | (.30) | (.37) | (.11) | (.24) | (.11) | (.21) |
Distributions from net realized gain | (3.25) | (1.63) | (1.76) | - | - | - |
Total distributions | (3.55) I | (2.00) | (1.87) | (.24) | (.11) | (.21) |
Redemption fees added to paid in capital D, H | - | - | - | - | - | - |
Net asset value, end of period | $ 23.07 | $ 23.63 | $ 23.29 | $ 22.37 | $ 20.17 | $ 17.95 |
Total Return B, C | 13.48% | 10.78% | 13.06% | 12.18% | 13.07% | (11.84)% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | .92% A | .86% | .86% | .88% | .88% | .89% |
Expenses net of fee waivers, if any | .92% A | .86% | .86% | .88% | .88% | .89% |
Expenses net of all reductions | .91% A | .85% | .84% | .85% | .84% | .85% |
Net investment income (loss) | 1.32% A | 1.26% | 1.28% | 1.03% | 1.32% | .98% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 12,057 | $ 11,892 | $ 12,629 | $ 13,008 | $ 14,539 | $ 15,283 |
Portfolio turnover rate F | 62% A | 33% | 61% | 74% | 60% | 125% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. H Amount represents less than $.01 per share. I Total distributions of $3.55 per share is comprised of distributions from net investment income of $.298 and distributions from net realized gain of $3.250 per share. |
See accompanying notes which are an integral part of the financial statements.
Financial Services
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Financial Services Fund (the Fund) is a fund of Fidelity Advisor Series VII (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 B, Class C and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile. The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), partnerships, losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 110,688,632 |
Unrealized depreciation | (1,440,525) |
Net unrealized appreciation (depreciation) | $ 109,248,107 |
Cost for federal income tax purposes | $ 309,089,495 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Financial Services
3. Purchases and Sales of Investments.
Purchases and sales of securities other than short-term securities, aggregated $122,694,769 and $151,706,895, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 119,429 | $ 2,412 |
Class T | .25% | .25% | 293,342 | - |
Class B | .75% | .25% | 547,312 | 410,484 |
Class C | .75% | .25% | 330,539 | 12,312 |
| | | $ 1,290,622 | $ 425,208 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 16,384 |
Class T | 6,437 |
Class B * | 60,824 |
Class C * | 1,425 |
| $ 85,070 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets * |
Class A | $ 157,232 | .33 |
Class T | 181,398 | .31 |
Class B | 184,673 | .34 |
Class C | 94,237 | .29 |
Institutional Class | 13,780 | .22 |
| $ 631,320 | |
* Annualized
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds, are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 Fidelity Management & Research Company, (FMR).
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $793 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $501 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $31,572.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $10,829 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction |
Class A | $ 735 |
Class B | 342 |
| $ 1,077 |
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Financial Services
8. Other - continued
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
From net investment income | | |
Class A | $ 867,687 | $ 793,007 |
Class T | 765,113 | 784,601 |
Class B | 69,445 | 62,350 |
Class C | 139,125 | 47,101 |
Institutional Class | 152,144 | 194,689 |
Total | $ 1,993,514 | $ 1,881,748 |
From net realized gain | | |
Class A | $ 12,753,073 | $ 4,952,004 |
Class T | 15,966,936 | 8,720,889 |
Class B | 15,271,397 | 9,718,109 |
Class C | 9,173,088 | 4,968,829 |
Institutional Class | 1,666,779 | 863,834 |
Total | $ 54,831,273 | $ 29,223,665 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 | Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 1,034,429 | 1,351,439 | $ 23,827,036 | $ 31,220,975 |
Reinvestment of distributions | 548,320 | 234,688 | 12,292,029 | 5,118,429 |
Shares redeemed | (518,334) | (885,268) | (11,978,767) | (20,266,228) |
Net increase (decrease) | 1,064,415 | 700,859 | $ 24,140,298 | $ 16,073,176 |
Class T | | | | |
Shares sold | 267,234 | 426,844 | $ 6,172,253 | $ 9,717,059 |
Reinvestment of distributions | 703,948 | 409,216 | 15,751,005 | 8,897,438 |
Shares redeemed | (743,356) | (1,576,453) | (17,061,554) | (35,989,546) |
Net increase (decrease) | 227,826 | (740,393) | $ 4,861,704 | $ (17,375,049) |
Class B | | | | |
Shares sold | 182,662 | 302,265 | $ 4,097,312 | $ 6,677,115 |
Reinvestment of distributions | 609,690 | 394,522 | 13,365,246 | 8,409,188 |
Shares redeemed | (1,248,114) | (2,197,220) | (28,166,207) | (49,213,763) |
Net increase (decrease) | (455,762) | (1,500,433) | $ (10,703,649) | $ (34,127,460) |
Class C | | | | |
Shares sold | 219,156 | 241,582 | $ 4,920,037 | $ 5,385,733 |
Reinvestment of distributions | 345,073 | 190,165 | 7,545,484 | 4,051,037 |
Shares redeemed | (270,316) | (915,599) | (6,076,004) | (20,422,653) |
Net increase (decrease) | 293,913 | (483,852) | $ 6,389,517 | $ (10,985,883) |
Institutional Class | | | | |
Shares sold | 57,592 | 67,105 | $ 1,347,454 | $ 1,572,188 |
Reinvestment of distributions | 56,949 | 34,641 | 1,292,278 | 762,982 |
Shares redeemed | (95,206) | (140,689) | (2,222,853) | (3,242,896) |
Net increase (decrease) | 19,335 | (38,943) | $ 416,879 | $ (907,726) |
Financial Services
Advisor Health Care Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period *
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,087.80 | $ 6.79 |
Hypothetical A | $ 1,000.00 | $ 1,018.70 | $ 6.56 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,086.40 | $ 8.10 |
Hypothetical A | $ 1,000.00 | $ 1,017.44 | $ 7.83 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,083.70 | $ 10.92 |
Hypothetical A | $ 1,000.00 | $ 1,014.72 | $ 10.56 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,084.00 | $ 10.45 |
Hypothetical A | $ 1,000.00 | $ 1,015.17 | $ 10.11 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,089.90 | $ 4.85 |
Hypothetical A | $ 1,000.00 | $ 1,020.57 | $ 4.69 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.29% |
Class T | 1.54% |
Class B | 2.08% |
Class C | 1.99% |
Institutional Class | .92% |
Semiannual Report
Advisor Health Care Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Johnson & Johnson | 10.9 | 7.7 |
Merck & Co., Inc. | 5.8 | 5.4 |
Brookdale Senior Living, Inc. | 5.5 | 1.7 |
Healthways, Inc. | 4.9 | 0.5 |
Allergan, Inc. | 4.2 | 2.6 |
Cerner Corp. | 3.8 | 0.1 |
C.R. Bard, Inc. | 3.8 | 0.7 |
Pfizer, Inc. | 3.3 | 7.8 |
UnitedHealth Group, Inc. | 3.1 | 3.8 |
Amgen, Inc. | 2.7 | 4.3 |
| 48.0 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Pharmaceuticals | 30.3% | |
| Health Care Providers & Services | 23.7% | |
| Health Care Equipment & Supplies | 18.9% | |
| Biotechnology | 11.7% | |
| Health Care Technology | 5.0% | |
| All Others * | 10.4% | |
|
As of July 31, 2006 |
| Pharmaceuticals | 37.4% | |
| Health Care Providers & Services | 25.9% | |
| Health Care Equipment & Supplies | 15.9% | |
| Biotechnology | 14.4% | |
| Life Sciences Tools & Services | 3.3% | |
| All Others * | 3.1% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Health Care
Advisor Health Care Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 100.2% |
| Shares | | Value (Note 1) |
BIOTECHNOLOGY - 11.7% |
Biotechnology - 11.7% |
Advanced Cell Technology, Inc. (a) | 200,600 | | $ 156,468 |
Alexion Pharmaceuticals, Inc. (a) | 3,400 | | 141,338 |
Alnylam Pharmaceuticals, Inc. (a) | 133,400 | | 2,825,412 |
Amgen, Inc. (a) | 271,900 | | 19,133,603 |
Amylin Pharmaceuticals, Inc. (a)(d) | 144,500 | | 5,603,710 |
Celgene Corp. (a) | 275,700 | | 14,799,576 |
deCODE genetics, Inc. (a) | 470,662 | | 1,727,330 |
Genentech, Inc. (a) | 98,200 | | 8,579,734 |
Gilead Sciences, Inc. (a) | 206,300 | | 13,269,216 |
GTx, Inc. (a) | 147,400 | | 2,741,640 |
Human Genome Sciences, Inc. (a) | 57,800 | | 680,884 |
Isis Pharmaceuticals, Inc. (a) | 60,000 | | 623,400 |
MannKind Corp. (a) | 25,100 | | 415,656 |
Medarex, Inc. (a) | 101,500 | | 1,367,205 |
Omrix Biopharmaceuticals, Inc. (a) | 143,155 | | 4,878,722 |
PDL BioPharma, Inc. (a) | 69,800 | | 1,431,598 |
Senomyx, Inc. (a) | 46,500 | | 679,830 |
Transition Therapeutics, Inc. (a) | 327,000 | | 500,255 |
Trubion Pharmaceuticals, Inc. | 65,852 | | 1,372,356 |
Vertex Pharmaceuticals, Inc. (a) | 70,000 | | 2,474,500 |
| | 83,402,433 |
CHEMICALS - 1.9% |
Diversified Chemicals - 0.3% |
Bayer AG | 37,700 | | 2,231,086 |
Fertilizers & Agricultural Chemicals - 1.6% |
Fertilizantes Fosfatados SA (PN) | 71,400 | | 1,220,898 |
Monsanto Co. | 139,800 | | 7,701,582 |
Potash Corp. of Saskatchewan, Inc. | 14,900 | | 2,324,847 |
| | 11,247,327 |
TOTAL CHEMICALS | | 13,478,413 |
COMMERCIAL SERVICES & SUPPLIES - 0.4% |
Diversified Commercial & Professional Services - 0.4% |
Healthcare Services Group, Inc. | 105,409 | | 3,048,428 |
DIVERSIFIED CONSUMER SERVICES - 0.4% |
Specialized Consumer Services - 0.4% |
Service Corp. International | 116,300 | | 1,238,595 |
Weight Watchers International, Inc. | 29,800 | | 1,610,094 |
| | 2,848,689 |
FOOD PRODUCTS - 1.6% |
Agricultural Products - 0.6% |
Biomar Holdings AS | 45,900 | | 2,226,519 |
Nutreco Holding NV | 33,500 | | 2,307,549 |
| | 4,534,068 |
Packaged Foods & Meats - 1.0% |
Cermaq ASA | 105,800 | | 1,712,399 |
Groupe Danone | 9,300 | | 1,432,721 |
|
| Shares | | Value (Note 1) |
Koninklijke Numico NV | 34,900 | | $ 1,851,317 |
PAN Fish ASA (a) | 1,710,000 | | 1,830,504 |
| | 6,826,941 |
TOTAL FOOD PRODUCTS | | 11,361,009 |
HEALTH CARE EQUIPMENT & SUPPLIES - 18.9% |
Health Care Equipment - 15.0% |
Advanced Medical Optics, Inc. (a) | 119,800 | | 4,402,650 |
ArthroCare Corp. (a) | 58,600 | | 2,162,340 |
Aspect Medical Systems, Inc. (a) | 97,500 | | 1,623,375 |
Baxter International, Inc. | 282,330 | | 14,020,508 |
Becton, Dickinson & Co. | 227,300 | | 17,488,462 |
Biosite, Inc. (a)(d) | 104,668 | | 5,639,512 |
C.R. Bard, Inc. | 325,079 | | 26,825,519 |
Cholestech Corp. (a) | 94,700 | | 1,593,801 |
Cochlear Ltd. | 40,200 | | 1,762,104 |
DexCom, Inc. (a)(d) | 37,814 | | 336,545 |
Electro-Optical Sciences, Inc. (a)(e) | 400,123 | | 2,016,620 |
Electro-Optical Sciences, Inc. warrants 11/2/11 (a)(e) | 60,018 | | 154,469 |
Imaging Dynamics Co. Ltd. (a) | 265,100 | | 574,541 |
Intuitive Surgical, Inc. (a) | 23,288 | | 2,291,772 |
Kyphon, Inc. (a) | 73,000 | | 3,415,670 |
Meridian Bioscience, Inc. | 30,200 | | 895,430 |
NeuroMetrix, Inc. (a) | 64,400 | | 856,520 |
Northstar Neuroscience, Inc. | 171,400 | | 2,272,764 |
Respironics, Inc. (a) | 76,800 | | 3,271,680 |
Restore Medical, Inc. | 5,900 | | 22,715 |
Sirona Dental Systems, Inc. | 27,535 | | 1,179,049 |
Stereotaxis, Inc. (a) | 313,590 | | 3,223,705 |
The Spectranetics Corp. (a) | 244,200 | | 2,598,288 |
Thermogenesis Corp. (a) | 2,148,534 | | 8,637,107 |
| | 107,265,146 |
Health Care Supplies - 3.9% |
Alcon, Inc. | 67,600 | | 7,960,576 |
Cooper Companies, Inc. | 205,243 | | 9,790,091 |
DJO, Inc. (a) | 58,241 | | 2,411,177 |
Gen-Probe, Inc. (a) | 22,300 | | 1,153,356 |
Inverness Medical Innovations, Inc. (a) | 107,444 | | 4,428,842 |
Inverness Medical Innovations, Inc. (a)(e) | 14,543 | | 599,462 |
Merit Medical Systems, Inc. (a) | 115,922 | | 1,826,931 |
| | 28,170,435 |
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | | 135,435,581 |
HEALTH CARE PROVIDERS & SERVICES - 23.7% |
Health Care Distributors & Services - 2.6% |
Cardinal Health, Inc. | 138,100 | | 9,863,102 |
Henry Schein, Inc. (a) | 3,800 | | 192,926 |
McKesson Corp. | 155,300 | | 8,657,975 |
| | 18,714,003 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
HEALTH CARE PROVIDERS & SERVICES - CONTINUED |
Health Care Facilities - 7.2% |
Acibadem Saglik Hizmetleri AS | 64,830 | | $ 672,960 |
Brookdale Senior Living, Inc. (d) | 818,700 | | 39,297,600 |
Bumrungrad Hospital PCL (For. Reg.) | 1,413,400 | | 1,464,242 |
Capital Senior Living Corp. (a) | 286,900 | | 3,052,616 |
Community Health Systems, Inc. (a) | 59,800 | | 2,137,850 |
Emeritus Corp. (a) | 57,100 | | 1,553,691 |
Sun Healthcare Group, Inc. (a) | 72,300 | | 890,736 |
VCA Antech, Inc. (a) | 63,620 | | 2,138,904 |
| | 51,208,599 |
Health Care Services - 9.3% |
Caremark Rx, Inc. | 189,100 | | 11,584,266 |
Diagnosticos da America SA (a) | 63,500 | | 1,270,867 |
Emergency Medical Services Corp. Class A (a) | 52,900 | | 1,375,400 |
Express Scripts, Inc. (a) | 31,400 | | 2,182,928 |
HAPC, Inc. unit | 215,800 | | 1,359,540 |
Health Grades, Inc. (a) | 413,083 | | 2,271,957 |
Healthways, Inc. (a) | 769,316 | | 34,934,640 |
HMS Holdings Corp. (a) | 114,900 | | 2,238,252 |
Medco Health Solutions, Inc. (a) | 133,800 | | 7,922,298 |
Nighthawk Radiology Holdings, Inc. | 42,310 | | 1,066,635 |
| | 66,206,783 |
Managed Health Care - 4.6% |
Health Net, Inc. (a) | 51,500 | | 2,508,565 |
Humana, Inc. (a) | 65,900 | | 3,657,450 |
UnitedHealth Group, Inc. | 417,909 | | 21,839,924 |
WellPoint, Inc. (a) | 64,700 | | 5,071,186 |
| | 33,077,125 |
TOTAL HEALTH CARE PROVIDERS & SERVICES | | 169,206,510 |
HEALTH CARE TECHNOLOGY - 5.0% |
Health Care Technology - 5.0% |
Allscripts Healthcare Solutions, Inc. (a) | 52,200 | | 1,597,320 |
Cerner Corp. (a) | 600,400 | | 26,975,972 |
Eclipsys Corp. (a) | 68,867 | | 1,349,793 |
IMS Health, Inc. | 53,400 | | 1,541,124 |
Vital Images, Inc. (a) | 64,400 | | 2,160,620 |
WebMD Health Corp. Class A (a) | 42,289 | | 2,086,962 |
| | 35,711,791 |
HOTELS, RESTAURANTS & LEISURE - 0.7% |
Leisure Facilities - 0.7% |
Life Time Fitness, Inc. (a) | 34,200 | | 1,853,640 |
Town Sports International Holdings, Inc. | 153,706 | | 3,028,008 |
| | 4,881,648 |
LEISURE EQUIPMENT & PRODUCTS - 0.4% |
Leisure Products - 0.4% |
Cybex International, Inc. (a) | 456,997 | | 2,824,241 |
|
| Shares | | Value (Note 1) |
LIFE SCIENCES TOOLS & SERVICES - 4.8% |
Life Sciences Tools & Services - 4.8% |
Advanced Magnetics, Inc. (a) | 120,707 | | $ 7,354,678 |
Affymetrix, Inc. (a) | 75,916 | | 1,894,863 |
Charles River Laboratories International, Inc. (a) | 69,300 | | 3,118,500 |
Covance, Inc. (a) | 84,200 | | 5,190,930 |
Exelixis, Inc. (a) | 361,197 | | 3,539,731 |
Illumina, Inc. (a) | 76,272 | | 3,115,711 |
Millipore Corp. (a) | 62,870 | | 4,305,338 |
Pharmaceutical Product Development, Inc. | 28,700 | | 990,150 |
QIAGEN NV (a) | 259,600 | | 4,483,292 |
| | 33,993,193 |
PHARMACEUTICALS - 30.3% |
Pharmaceuticals - 30.3% |
Adams Respiratory Therapeutics, Inc. (a) | 96,800 | | 4,341,480 |
Allergan, Inc. | 258,250 | | 30,140,358 |
Atherogenics, Inc. (a)(d) | 8,900 | | 105,020 |
Barr Pharmaceuticals, Inc. (a) | 78,800 | | 4,217,376 |
BioMimetic Therapeutics, Inc. | 331,162 | | 5,099,895 |
Cadence Pharmaceuticals, Inc. | 17,505 | | 214,086 |
Cipla Ltd. | 142,584 | | 796,698 |
Elan Corp. PLC sponsored ADR (a) | 75,600 | | 941,220 |
Endo Pharmaceuticals Holdings, Inc. (a) | 93,500 | | 2,872,320 |
Inyx, Inc. (a) | 1,235,400 | | 2,717,880 |
Javelin Pharmaceuticals, Inc. (a) | 42,900 | | 220,935 |
Johnson & Johnson | 1,160,658 | | 77,531,952 |
Merck & Co., Inc. | 917,700 | | 41,067,075 |
Pfizer, Inc. | 898,920 | | 23,587,661 |
Roche Holding AG (participation certificate) | 11,696 | | 2,197,673 |
Shire PLC sponsored ADR | 35,500 | | 2,253,540 |
Wyeth | 346,220 | | 17,106,730 |
Xenoport, Inc. (a) | 58,400 | | 1,392,256 |
| | 216,804,155 |
SOFTWARE - 0.2% |
Systems Software - 0.2% |
Quality Systems, Inc. | 36,648 | | 1,554,975 |
TEXTILES, APPAREL & LUXURY GOODS - 0.2% |
Apparel, Accessories & Luxury Goods - 0.2% |
Under Armour, Inc. Class A (sub. vtg.) (a) | 30,700 | | 1,559,560 |
TOTAL COMMON STOCKS (Cost $596,505,664) | 716,110,626 |
Nonconvertible Preferred Stocks - 0.0% |
| | | |
LIFE SCIENCES TOOLS & SERVICES - 0.0% |
Life Sciences Tools & Services - 0.0% |
GeneProt, Inc. Series A (a)(e)
(Cost $232,840) | 43,000 | | 0 |
Money Market Funds - 0.8% |
| Shares | | Value (Note 1) |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c)
(Cost $5,597,151) | 5,597,151 | | $ 5,597,151 |
Cash Equivalents - 0.0% |
| Maturity Amount | | |
Investments in repurchase agreements in a joint trading account at 5.24%, dated 1/31/07 due 2/1/07 (Collateralized by U.S. Treasury Obligations) #
(Cost $39,000) | $ 39,006 | | 39,000 |
TOTAL INVESTMENT PORTFOLIO - 101.0% (Cost $602,374,655) | | 721,746,777 |
NET OTHER ASSETS - (1.0)% | | (6,947,610) |
NET ASSETS - 100% | $ 714,799,167 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $2,770,551 or 0.4% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Electro-Optical Sciences, Inc. | 11/1/06 | $ 2,280,701 |
Electro-Optical Sciences, Inc. warrants 11/2/11 | 11/1/06 | $ 6 |
GeneProt, Inc. Series A | 7/7/00 | $ 232,840 |
Inverness Medical Innovations, Inc. | 2/8/06 | $ 354,995 |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty | Value |
$39,000 due 2/01/07 at 5.24% |
BNP Paribas Securities Corp. | $ 10,038 |
Merrill Lynch Government Securities, Inc. | 16,910 |
Merrill Lynch, Pierce, Fenner & Smith, Inc. | 12,052 |
| $ 39,000 |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 81,794 |
Fidelity Securities Lending Cash Central Fund | 103,042 |
Total | $ 184,836 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Health Care Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $5,485,516 and repurchase agreements of $39,000) - See accompanying schedule: Unaffiliated issuers (cost $596,777,504) | $ 716,149,626 | |
Fidelity Central Funds (cost $5,597,151) | 5,597,151 | |
Total Investments (cost $602,374,655) | | $ 721,746,777 |
Cash | | 358,227 |
Receivable for investments sold | | 1,983,339 |
Receivable for fund shares sold | | 894,304 |
Dividends receivable | | 99,827 |
Interest receivable | | 7,709 |
Prepaid expenses | | 3,305 |
Other receivables | | 9,931 |
Total assets | | 725,103,419 |
| | |
Liabilities | | |
Payable for investments purchased | $ 744,680 | |
Payable for fund shares redeemed | 2,808,406 | |
Accrued management fee | 336,074 | |
Distribution fees payable | 356,715 | |
Other affiliated payables | 230,787 | |
Other payables and accrued expenses | 230,439 | |
Collateral on securities loaned, at value | 5,597,151 | |
Total liabilities | | 10,304,252 |
| | |
Net Assets | | $ 714,799,167 |
Net Assets consist of: | | |
Paid in capital | | $ 577,606,772 |
Accumulated net investment loss | | (1,721,868) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 19,543,377 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 119,370,886 |
Net Assets | | $ 714,799,167 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price
Class A: Net Asset Value and redemption price per share ($223,516,009 ÷ 9,737,510 shares) | | $ 22.95 |
| | |
Maximum offering price per share (100/94.25 of $22.95) | | $ 24.35 |
Class T:
Net Asset Value and redemption price per share ($207,333,540 ÷ 9,226,623 shares) | | $ 22.47 |
| | |
Maximum offering price per share (100/96.50 of $22.47) | | $ 23.28 |
Class B:
Net Asset Value and offering price per share ($150,433,557 ÷ 7,020,912 shares)A | | $ 21.43 |
| | |
Class C:
Net Asset Value and offering price per share ($114,697,400 ÷ 5,354,709 shares)A | | $ 21.42 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($18,818,661 ÷ 796,065 shares) | | $ 23.64 |
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.
Health Care
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 4,054,990 |
Interest | | 327 |
Income from Fidelity Central Funds | | 184,836 |
Total income | | 4,240,153 |
| | |
Expenses | | |
Management fee | $ 2,060,552 | |
Transfer agent fees | 1,292,553 | |
Distribution fees | 2,218,653 | |
Accounting and security lending fees | 136,942 | |
Custodian fees and expenses | 25,923 | |
Independent trustees' compensation | 1,254 | |
Registration fees | 46,409 | |
Audit | 24,493 | |
Legal | 8,830 | |
Miscellaneous | 200,951 | |
Total expenses before reductions | 6,016,560 | |
Expense reductions | (54,866) | 5,961,694 |
Net investment income (loss) | | (1,721,541) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 47,135,146 | |
Foreign currency transactions | (10,771) | |
Total net realized gain (loss) | | 47,124,375 |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of increase in deferred foreign taxes of $1,360) | 14,859,050 | |
Assets and liabilities in foreign currencies | 115 | |
Total change in net unrealized appreciation (depreciation) | | 14,859,165 |
Net gain (loss) | | 61,983,540 |
Net increase (decrease) in net assets resulting from operations | | $ 60,261,999 |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (1,721,541) | $ (6,125,419) |
Net realized gain (loss) | 47,124,375 | 99,186,502 |
Change in net unrealized appreciation (depreciation) | 14,859,165 | (66,787,109) |
Net increase (decrease) in net assets resulting from operations | 60,261,999 | 26,273,974 |
Distributions to shareholders from net realized gain | (83,314,180) | (1,408,688) |
Share transactions - net increase (decrease) | 3,677,075 | (90,540,183) |
Redemption fees | 13,249 | 29,238 |
Total increase (decrease) in net assets | (19,361,857) | (65,645,659) |
| | |
Net Assets | | |
Beginning of period | 734,161,024 | 799,806,683 |
End of period (including accumulated net investment loss of $1,721,868 and accumulated net investment loss of
$327, respectively) | $ 714,799,167 | $ 734,161,024 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 23.77 | $ 22.94 | $ 18.91 | $ 18.29 | $ 16.51 | $ 20.41 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | (.09) | (.05) | (.05) | - I | (.04) |
Net realized and unrealized gain (loss) | 1.94 | .96 | 4.08 | .67 | 1.78 | (3.86) |
Total from investment operations | 1.93 | .87 | 4.03 | .62 | 1.78 | (3.90) |
Distributions from net realized gain | (2.75) | (.04) | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | - I |
Net asset value, end of period | $ 22.95 | $ 23.77 | $ 22.94 | $ 18.91 | $ 18.29 | $ 16.51 |
Total Return B, C, D | 8.78% | 3.79% | 21.31% | 3.39% | 10.78% | (19.11)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.29% A | 1.25% | 1.28% | 1.32% | 1.34% | 1.29% |
Expenses net of fee waivers, if any | 1.29% A | 1.25% | 1.28% | 1.32% | 1.34% | 1.29% |
Expenses net of all reductions | 1.27% A | 1.21% | 1.26% | 1.29% | 1.27% | 1.24% |
Net investment income (loss) | (.11)% A | (.38)% | (.22)% | (.26)% | (.01)% | (.23)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 223,516 | $ 199,221 | $ 139,158 | $ 104,258 | $ 108,692 | $ 103,292 |
Portfolio turnover rate G | 141% A | 99% | 71% | 60% | 120% | 167% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 23.26 | $ 22.50 | $ 18.60 | $ 18.03 | $ 16.31 | $ 20.22 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.15) | (.09) | (.09) | (.04) | (.09) |
Net realized and unrealized gain (loss) | 1.90 | .95 | 3.99 | .66 | 1.76 | (3.82) |
Total from investment operations | 1.86 | .80 | 3.90 | .57 | 1.72 | (3.91) |
Distributions from net realized gain | (2.65) | (.04) | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | - I |
Net asset value, end of period | $ 22.47 | $ 23.26 | $ 22.50 | $ 18.60 | $ 18.03 | $ 16.31 |
Total Return B, C, D | 8.64% | 3.55% | 20.97% | 3.16% | 10.55% | (19.34)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.54% A | 1.50% | 1.53% | 1.56% | 1.59% | 1.52% |
Expenses net of fee waivers, if any | 1.54% A | 1.50% | 1.53% | 1.56% | 1.59% | 1.52% |
Expenses net of all reductions | 1.53% A | 1.47% | 1.51% | 1.53% | 1.51% | 1.47% |
Net investment income (loss) | (.37)% A | (.63)% | (.47)% | (.51)% | (.26)% | (.46)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 207,334 | $ 218,280 | $ 243,353 | $ 243,176 | $ 264,115 | $ 274,243 |
Portfolio turnover rate G | 141% A | 99% | 71% | 60% | 120% | 167% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Health Care
Financial Highlights - Class B
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.17 | $ 21.55 | $ 17.91 | $ 17.45 | $ 15.86 | $ 19.76 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.10) | (.25) | (.19) | (.18) | (.12) | (.18) |
Net realized and unrealized gain (loss) | 1.83 | .91 | 3.83 | .64 | 1.71 | (3.72) |
Total from investment operations | 1.73 | .66 | 3.64 | .46 | 1.59 | (3.90) |
Distributions from net realized gain | (2.47) | (.04) | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | - I |
Net asset value, end of period | $ 21.43 | $ 22.17 | $ 21.55 | $ 17.91 | $ 17.45 | $ 15.86 |
Total Return B, C, D | 8.37% | 3.06% | 20.32% | 2.64% | 10.03% | (19.74)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.08% A | 2.01% | 2.04% | 2.06% | 2.05% | 2.02% |
Expenses net of fee waivers, if any | 2.08% A | 2.01% | 2.04% | 2.06% | 2.05% | 2.02% |
Expenses net of all reductions | 2.06% A | 1.98% | 2.01% | 2.03% | 1.98% | 1.98% |
Net investment income (loss) | (.90)% A | (1.14)% | (.98)% | (1.01)% | (.73)% | (.97)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 150,434 | $ 180,364 | $ 266,319 | $ 285,299 | $ 317,906 | $ 334,056 |
Portfolio turnover rate G | 141% A | 99% | 71% | 60% | 120% | 167% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.24 | $ 21.61 | $ 17.94 | $ 17.47 | $ 15.87 | $ 19.76 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.09) | (.24) | (.17) | (.17) | (.11) | (.17) |
Net realized and unrealized gain (loss) | 1.82 | .91 | 3.84 | .64 | 1.71 | (3.72) |
Total from investment operations | 1.73 | .67 | 3.67 | .47 | 1.60 | (3.89) |
Distributions from net realized gain | (2.55) | (.04) | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | - I |
Net asset value, end of period | $ 21.42 | $ 22.24 | $ 21.61 | $ 17.94 | $ 17.47 | $ 15.87 |
Total Return B, C, D | 8.40% | 3.10% | 20.46% | 2.69% | 10.08% | (19.69)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.99% A | 1.94% | 1.97% | 2.00% | 2.00% | 1.97% |
Expenses net of fee waivers, if any | 1.99% A | 1.94% | 1.97% | 2.00% | 2.00% | 1.97% |
Expenses net of all reductions | 1.97% A | 1.91% | 1.94% | 1.97% | 1.92% | 1.93% |
Net investment income (loss) | (.81)% A | (1.07)% | (.91)% | (.95)% | (.67)% | (.92)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 114,697 | $ 115,644 | $ 131,277 | $ 130,184 | $ 150,576 | $ 160,877 |
Portfolio turnover rate G | 141% A | 99% | 71% | 60% | 120% | 167% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns for periods of less than one year are not annualized. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 24.43 | $ 23.48 | $ 19.28 | $ 18.58 | $ 16.70 | $ 20.58 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .03 | - H | .04 | .03 | .06 | .02 |
Net realized and unrealized gain (loss) | 2.00 | .99 | 4.16 | .67 | 1.82 | (3.90) |
Total from investment operations | 2.03 | .99 | 4.20 | .70 | 1.88 | (3.88) |
Distributions from net realized gain | (2.82) | (.04) | - | - | - | - |
Redemption fees added to paid in capital D | - H | - H | - H | - H | - H | - H |
Net asset value, end of period | $ 23.64 | $ 24.43 | $ 23.48 | $ 19.28 | $ 18.58 | $ 16.70 |
Total Return B, C | 8.99% | 4.21% | 21.78% | 3.77% | 11.26% | (18.85)% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | .92% A | .86% | .88% | .91% | .96% | .95% |
Expenses net of fee waivers, if any | .92% A | .86% | .88% | .91% | .96% | .95% |
Expenses net of all reductions | .91% A | .83% | .85% | .88% | .88% | .90% |
Net investment income (loss) | .25% A | .01% | .18% | .14% | .37% | .11% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 18,819 | $ 20,652 | $ 19,698 | $ 20,358 | $ 23,364 | $ 35,923 |
Portfolio turnover rate F | 141% A | 99% | 71% | 60% | 120% | 167% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. H Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Health Care
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Health Care Fund (the Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C, and Initial Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles. In addition, the Fund will claim a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, deferred trustees compensation, net operating losses, capital loss carryforwards, losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 127,824,979 |
Unrealized depreciation | (9,409,320) |
Net unrealized appreciation (depreciation) | $ 118,415,659 |
Cost for federal income tax purposes | $ 603,331,118 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Health Care
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $513,951,656 and $591,103,107, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 263,996 | $ 8,370 |
Class T | .25% | .25% | 540,510 | - |
Class B | .75% | .25% | 832,669 | 624,502 |
Class C | .75% | .25% | 581,478 | 33,103 |
| | | $ 2,218,653 | $ 665,975 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 27,372 |
Class T | 13,917 |
Class B * | 132,467 |
Class C * | 3,353 |
| $ 177,109 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets |
Class A | $ 377,030 | .36 * |
Class T | 387,933 | .36 * |
Class B | 327,140 | .39 * |
Class C | 175,769 | .30 * |
Institutional Class | 24,681 | .24 * |
| $ 1,292,553 | |
* Annualized
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds, are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $1,413 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $924 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $103,042.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $33,626 for the period. In addition, through arrangements with the each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction |
Class A | $ 7,476 |
Class B | 458 |
Class C | 1,175 |
Institutional Class | 302 |
| $ 9,411 |
Health Care
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
From net realized gain | | |
Class A | $ 23,887,125 | $ 268,383 |
Class T | 24,697,592 | 418,518 |
Class B | 18,914,304 | 451,789 |
Class C | 13,346,145 | 237,307 |
Institutional Class | 2,469,014 | 32,691 |
Total | $ 83,314,180 | $ 1,408,688 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2007 | Year ended
July 31,
2006 | Six months ended January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 1,815,883 | 4,246,771 | $ 41,619,493 | $ 100,545,647 |
Reinvestment of distributions | 919,326 | 9,593 | 20,489,369 | 231,281 |
Shares redeemed | (1,378,400) | (1,943,098) | (31,655,848) | (45,790,984) |
Net increase (decrease) | 1,356,809 | 2,313,266 | $ 30,453,014 | $ 54,985,944 |
Class T | | | | |
Shares sold | 473,439 | 1,483,213 | $ 10,650,342 | $ 34,397,018 |
Reinvestment of distributions | 1,064,993 | 16,686 | 23,268,178 | 394,126 |
Shares redeemed | (1,697,501) | (2,931,043) | (38,079,373) | (67,817,881) |
Net increase (decrease) | (159,069) | (1,431,144) | $ (4,160,853) | $ (33,026,737) |
Class B | | | | |
Shares sold | 280,930 | 602,620 | $ 6,008,304 | $ 13,347,616 |
Reinvestment of distributions | 800,070 | 17,559 | 16,714,747 | 396,669 |
Shares redeemed | (2,196,722) | (4,838,970) | (47,192,854) | (107,126,893) |
Net increase (decrease) | (1,115,722) | (4,218,791) | $ (24,469,803) | $ (93,382,608) |
Class C | | | | |
Shares sold | 321,464 | 622,433 | $ 6,853,737 | $ 13,817,015 |
Reinvestment of distributions | 508,368 | 8,336 | 10,615,090 | 188,806 |
Shares redeemed | (675,366) | (1,506,077) | (14,461,594) | (33,350,524) |
Net increase (decrease) | 154,466 | (875,308) | $ 3,007,233 | $ (19,344,703) |
Institutional Class | | | | |
Shares sold | 159,206 | 197,168 | $ 3,798,838 | $ 4,832,048 |
Reinvestment of distributions | 77,688 | 990 | 1,779,821 | 24,473 |
Shares redeemed | (286,274) | (191,717) | (6,731,175) | (4,628,600) |
Net increase (decrease) | (49,380) | 6,441 | $ (1,152,516) | $ 227,921 |
Health Care
Advisor Industrials Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,130.10 | $ 6.76 |
HypotheticalA | $ 1,000.00 | $ 1,018.85 | $ 6.41 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,128.70 | $ 8.05 |
HypotheticalA | $ 1,000.00 | $ 1,017.64 | $ 7.63 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,125.80 | $ 11.04 |
HypotheticalA | $ 1,000.00 | $ 1,014.82 | $ 10.46 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,126.20 | $ 10.66 |
HypotheticalA | $ 1,000.00 | $ 1,015.17 | $ 10.11 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,132.00 | $ 5.05 |
HypotheticalA | $ 1,000.00 | $ 1,020.47 | $ 4.79 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.26% |
Class T | 1.50% |
Class B | 2.06% |
Class C | 1.99% |
Institutional Class | .94% |
Semiannual Report
Advisor Industrials Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
General Electric Co. | 20.0 | 8.1 |
United Technologies Corp. | 7.8 | 4.2 |
Honeywell International, Inc. | 5.6 | 3.2 |
Tyco International Ltd. | 5.0 | 3.0 |
Danaher Corp. | 3.5 | 0.9 |
United Parcel Service, Inc. Class B | 3.2 | 1.5 |
Emerson Electric Co. | 3.1 | 1.7 |
Burlington Northern Santa Fe Corp. | 2.8 | 1.1 |
Illinois Tool Works, Inc. | 2.4 | 2.4 |
Caterpillar, Inc. | 2.3 | 2.2 |
| 55.7 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Industrial Conglomerates | 28.8% | |
| Aerospace & Defense | 18.6% | |
| Machinery | 13.9% | |
| Road & Rail | 8.6% | |
| Electrical Equipment | 6.6% | |
| All Others* | 23.5% | |
|
As of July 31, 2006 |
| Aerospace & Defense | 16.4% | |
| Chemicals | 15.6% | |
| Industrial Conglomerates | 15.5% | |
| Machinery | 11.4% | |
| Road & Rail | 6.0% | |
| All Others* | 35.1% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Industrials
Advisor Industrials Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.3% |
| Shares | | Value (Note 1) |
AEROSPACE & DEFENSE - 18.6% |
Aerospace & Defense - 18.6% |
DRS Technologies, Inc. | 28,700 | | $ 1,589,980 |
General Dynamics Corp. | 80,900 | | 6,322,335 |
Goodrich Corp. | 40,100 | | 1,965,702 |
Honeywell International, Inc. | 376,700 | | 17,211,423 |
Raytheon Co. | 124,900 | | 6,482,310 |
United Technologies Corp. | 356,500 | | 24,249,130 |
| | 57,820,880 |
AIR FREIGHT & LOGISTICS - 5.4% |
Air Freight & Logistics - 5.4% |
C.H. Robinson Worldwide, Inc. | 65,300 | | 3,464,165 |
Hub Group, Inc. Class A | 51,072 | | 1,525,010 |
United Parcel Service, Inc. Class B | 136,900 | | 9,895,132 |
UTI Worldwide, Inc. | 57,060 | | 1,734,624 |
| | 16,618,931 |
AIRLINES - 1.4% |
Airlines - 1.4% |
AirTran Holdings, Inc. (a) | 100,100 | | 1,108,107 |
UAL Corp. (a) | 43,100 | | 1,861,920 |
US Airways Group, Inc. (a) | 25,300 | | 1,416,294 |
| | 4,386,321 |
AUTO COMPONENTS - 0.4% |
Auto Parts & Equipment - 0.4% |
Johnson Controls, Inc. | 12,300 | | 1,137,258 |
AUTOMOBILES - 0.5% |
Automobile Manufacturers - 0.5% |
Renault SA | 12,500 | | 1,546,914 |
BUILDING PRODUCTS - 2.3% |
Building Products - 2.3% |
American Standard Companies, Inc. | 66,300 | | 3,274,557 |
Masco Corp. | 123,500 | | 3,950,765 |
| | 7,225,322 |
CHEMICALS - 0.5% |
Industrial Gases - 0.5% |
Airgas, Inc. | 37,000 | | 1,539,940 |
COMMERCIAL SERVICES & SUPPLIES - 3.4% |
Diversified Commercial & Professional Services - 1.1% |
Cintas Corp. | 48,500 | | 1,995,775 |
The Brink's Co. | 20,800 | | 1,292,720 |
| | 3,288,495 |
|
| Shares | | Value (Note 1) |
Environmental & Facility Services - 2.3% |
Allied Waste Industries, Inc. | 157,600 | | $ 2,015,704 |
Waste Management, Inc. | 137,700 | | 5,229,846 |
| | 7,245,550 |
TOTAL COMMERCIAL SERVICES & SUPPLIES | | 10,534,045 |
COMMUNICATIONS EQUIPMENT - 0.4% |
Communications Equipment - 0.4% |
Harris Corp. | 24,800 | | 1,260,336 |
CONSTRUCTION & ENGINEERING - 4.9% |
Construction & Engineering - 4.9% |
Chicago Bridge & Iron Co. NV (NY Shares) | 41,300 | | 1,227,436 |
Fluor Corp. | 41,900 | | 3,460,940 |
Foster Wheeler Ltd. (a) | 70,800 | | 3,785,676 |
Jacobs Engineering Group, Inc. (a) | 30,500 | | 2,761,775 |
Shaw Group, Inc. (a) | 119,600 | | 4,037,696 |
| | 15,273,523 |
ELECTRICAL EQUIPMENT - 6.6% |
Electrical Components & Equipment - 5.1% |
AMETEK, Inc. | 47,500 | | 1,646,350 |
Cooper Industries Ltd. Class A | 50,200 | | 4,587,778 |
Emerson Electric Co. | 209,700 | | 9,430,209 |
| | 15,664,337 |
Heavy Electrical Equipment - 1.5% |
ABB Ltd. sponsored ADR | 261,400 | | 4,655,534 |
TOTAL ELECTRICAL EQUIPMENT | | 20,319,871 |
INDUSTRIAL CONGLOMERATES - 28.8% |
Industrial Conglomerates - 28.8% |
3M Co. | 93,760 | | 6,966,368 |
General Electric Co. | 1,721,900 | | 62,074,495 |
Textron, Inc. | 51,100 | | 4,760,987 |
Tyco International Ltd. | 489,900 | | 15,618,012 |
| | 89,419,862 |
MACHINERY - 13.9% |
Construction & Farm Machinery & Heavy Trucks - 4.0% |
Caterpillar, Inc. | 113,200 | | 7,252,724 |
Deere & Co. | 52,000 | | 5,214,560 |
| | 12,467,284 |
Industrial Machinery - 9.9% |
Danaher Corp. | 147,100 | | 10,894,226 |
Dover Corp. | 105,200 | | 5,217,920 |
Illinois Tool Works, Inc. (d) | 146,200 | | 7,454,738 |
ITT Corp. | 81,900 | | 4,885,335 |
SPX Corp. | 34,200 | | 2,400,498 |
| | 30,852,717 |
TOTAL MACHINERY | | 43,320,001 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
MARINE - 0.5% |
Marine - 0.5% |
Kirby Corp. (a) | 44,900 | | $ 1,594,399 |
METALS & MINING - 1.5% |
Aluminum - 0.4% |
Alcoa, Inc. | 39,800 | | 1,285,540 |
Steel - 1.1% |
Carpenter Technology Corp. | 9,800 | | 1,147,580 |
Reliance Steel & Aluminum Co. | 56,200 | | 2,340,168 |
| | 3,487,748 |
TOTAL METALS & MINING | | 4,773,288 |
OIL, GAS & CONSUMABLE FUELS - 0.5% |
Coal & Consumable Fuels - 0.5% |
Peabody Energy Corp. | 40,100 | | 1,637,283 |
ROAD & RAIL - 8.6% |
Railroads - 5.9% |
Burlington Northern Santa Fe Corp. | 107,000 | | 8,598,520 |
CSX Corp. | 103,900 | | 3,822,481 |
Union Pacific Corp. | 60,000 | | 6,060,000 |
| | 18,481,001 |
Trucking - 2.7% |
Con-way, Inc. | 22,800 | | 1,134,072 |
Knight Transportation, Inc. | 44,000 | | 827,200 |
Laidlaw International, Inc. | 51,900 | | 1,541,949 |
Landstar System, Inc. | 83,726 | | 3,540,773 |
Old Dominion Freight Lines, Inc. (a) | 47,476 | | 1,318,883 |
| | 8,362,877 |
TOTAL ROAD & RAIL | | 26,843,878 |
|
| Shares | | Value (Note 1) |
TRADING COMPANIES & DISTRIBUTORS - 1.1% |
Trading Companies & Distributors - 1.1% |
UAP Holding Corp. | 61,329 | | $ 1,536,291 |
WESCO International, Inc. (a) | 31,600 | | 1,918,752 |
| | 3,455,043 |
TOTAL COMMON STOCKS (Cost $278,851,184) | 308,707,095 |
Money Market Funds - 3.7% |
| | | |
Fidelity Cash Central Fund, 5.35% (b) | 3,988,828 | | 3,988,828 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 7,410,750 | | 7,410,750 |
TOTAL MONEY MARKET FUNDS (Cost $11,399,578) | 11,399,578 |
TOTAL INVESTMENT PORTFOLIO - 103.0% (Cost $290,250,762) | | 320,106,673 |
NET OTHER ASSETS - (3.0)% | | (9,283,911) |
NET ASSETS - 100% | $ 310,822,762 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 175,613 |
Fidelity Securities Lending Cash Central Fund | 28,624 |
Total | $ 204,237 |
See accompanying notes which are an integral part of the financial statements.
Industrials
Advisor Industials Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $7,373,154) - See accompanying schedule: Unaffiliated issuers (cost $278,851,184) | $ 308,707,095 | |
Fidelity Central Funds (cost $11,399,578) | 11,399,578 | |
Total Investments (cost $290,250,762) | | $ 320,106,673 |
Receivable for investments sold | | 8,042,460 |
Receivable for fund shares sold | | 1,050,895 |
Dividends receivable | | 165,213 |
Interest receivable | | 45,038 |
Prepaid expenses | | 1,139 |
Other receivables | | 6,014 |
Total assets | | 329,417,432 |
| | |
Liabilities | | |
Payable for investments purchased | $ 10,264,765 | |
Payable for fund shares redeemed | 488,256 | |
Accrued management fee | 142,477 | |
Distribution fees payable | 131,419 | |
Other affiliated payables | 82,263 | |
Other payables and accrued expenses | 74,740 | |
Collateral on securities loaned, at value | 7,410,750 | |
Total liabilities | | 18,594,670 |
| | |
Net Assets | | $ 310,822,762 |
Net Assets consist of: | | |
Paid in capital | | $ 275,352,128 |
Distributions in excess of net investment income | | (153,561) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 5,768,204 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 29,855,991 |
Net Assets | | $ 310,822,762 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption
price per share ($133,969,003 ÷
5,819,066 shares) | | $ 23.02 |
| | |
Maximum offering price per share (100/94.25 of $23.02) | | $ 24.42 |
Class T:
Net Asset Value and redemption price per share ($65,716,596 ÷ 2,887,229 shares) | | $ 22.76 |
| | |
Maximum offering price per share (100/96.50 of $22.76) | | $ 23.59 |
Class B:
Net Asset Value and offering price per share ($42,131,786 ÷ 1,920,883 shares)A | | $ 21.93 |
| | |
Class C:
Net Asset Value and offering price per share ($52,122,298 ÷ 2,370,291 shares)A | | $ 21.99 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($16,883,079 ÷ 712,985 shares) | | $ 23.68 |
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.
Semiannual Report
Advisor Industrials Fund
Financial Statements - continued
Statement of Operations
Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 2,193,842 |
Interest | | 20 |
Income from Fidelity Central Funds | | 204,237 |
Total income | | 2,398,099 |
| | |
Expenses | | |
Management fee | $ 791,569 | |
Transfer agent fees | 426,303 | |
Distribution fees | 737,718 | |
Accounting and security lending fees | 59,472 | |
Custodian fees and expenses | 6,787 | |
Independent trustees' compensation | 459 | |
Registration fees | 48,783 | |
Audit | 22,275 | |
Legal | 3,043 | |
Miscellaneous | 51,032 | |
Total expenses before reductions | 2,147,441 | |
Expense reductions | (8,815) | 2,138,626 |
Net investment income (loss) | | 259,473 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 13,078,278 | |
Foreign currency transactions | (3,663) | |
Total net realized gain (loss) | | 13,074,615 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 20,644,343 | |
Assets and liabilities in foreign currencies | (33) | |
Total change in net unrealized appreciation (depreciation) | | 20,644,310 |
Net gain (loss) | | 33,718,925 |
Net increase (decrease) in net assets resulting from operations | | $ 33,978,398 |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 259,473 | $ 67,497 |
Net realized gain (loss) | 13,074,615 | 16,800,474 |
Change in net unrealized appreciation (depreciation) | 20,644,310 | (9,655,014) |
Net increase (decrease) in net assets resulting from operations | 33,978,398 | 7,212,957 |
Distributions to shareholders from net investment income | (473,351) | - |
Distributions to shareholders from net realized gain | (21,383,101) | (7,122,799) |
Total distributions | (21,856,452) | (7,122,799) |
Share transactions - net increase (decrease) | 51,009,288 | 109,957,564 |
Redemption fees | 10,831 | 25,597 |
Total increase (decrease) in net assets | 63,142,065 | 110,073,319 |
| | |
Net Assets | | |
Beginning of period | 247,680,697 | 137,607,378 |
End of period (including distributions in excess of net investment income of $153,561 and undistributed net investment income of $65,095, respectively) | $ 310,822,762 | $ 247,680,697 |
See accompanying notes which are an integral part of the financial statements.
Industrials
Financial Highlights - Class A
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.16 | $ 21.53 | $ 18.10 | $ 14.15 | $ 12.75 | $ 15.15 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .05 | .08 | .02 | (.02) | .06 | (.04) |
Net realized and unrealized gain (loss) | 2.68 | 1.63 | 4.35 | 3.96 | 1.36 | (2.37) |
Total from investment operations | 2.73 | 1.71 | 4.37 | 3.94 | 1.42 | (2.41) |
Distributions from net investment income | (.06) | - | - | - | (.02) | - |
Distributions from net realized gain | (1.81) | (1.08) | (.94) | - | - | - |
Total distributions | (1.87) | (1.08) | (.94) | - | (.02) | - |
Redemption fees added to paid in capital E | - I | - I | - I | .01 | - I | .01 |
Net asset value, end of period | $ 23.02 | $ 22.16 | $ 21.53 | $ 18.10 | $ 14.15 | $ 12.75 |
Total Return B, C, D | 13.01% | 8.40% | 25.04% | 27.92% | 11.16% | (15.84)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.26% A | 1.26% | 1.34% | 1.65% | 1.99% | 1.83% |
Expenses net of fee waivers, if any | 1.26% A | 1.26% | 1.34% | 1.50% | 1.53% | 1.50% |
Expenses net of all reductions | 1.25% A | 1.24% | 1.29% | 1.47% | 1.46% | 1.49% |
Net investment income (loss) | .46% A | .34% | .09% | (.12)% | .46% | (.25)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 133,969 | $ 99,255 | $ 40,264 | $ 12,612 | $ 4,272 | $ 3,160 |
Portfolio turnover rate G | 151% A | 94% | 116% | 106% | 149% | 45% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.86 | $ 21.27 | $ 17.90 | $ 14.02 | $ 12.66 | $ 15.09 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .02 | .02 | (.03) | (.06) | .03 | (.07) |
Net realized and unrealized gain (loss) | 2.65 | 1.61 | 4.31 | 3.93 | 1.34 | (2.36) |
Total from investment operations | 2.67 | 1.63 | 4.28 | 3.87 | 1.37 | (2.43) |
Distributions from net investment income | (.03) | - | - | - | (.01) | - |
Distributions from net realized gain | (1.74) | (1.04) | (.91) | - | - | - |
Total distributions | (1.77) | (1.04) | (.91) | - | (.01) | - |
Redemption fees added to paid in capital E | - I | - I | - I | .01 | - I | - I |
Net asset value, end of period | $ 22.76 | $ 21.86 | $ 21.27 | $ 17.90 | $ 14.02 | $ 12.66 |
Total Return B, C, D | 12.87% | 8.13% | 24.78% | 27.67% | 10.84% | (16.10)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.50% A | 1.49% | 1.57% | 1.90% | 2.25% | 2.07% |
Expenses net of fee waivers, if any | 1.50% A | 1.49% | 1.57% | 1.75% | 1.78% | 1.75% |
Expenses net of all reductions | 1.50% A | 1.47% | 1.52% | 1.72% | 1.71% | 1.74% |
Net investment income (loss) | .21% A | .11% | (.14)% | (.36)% | .22% | (.50)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 65,717 | $ 55,936 | $ 40,126 | $ 13,089 | $ 5,493 | $ 6,216 |
Portfolio turnover rate G | 151% A | 94% | 116% | 106% | 149% | 45% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.02 | $ 20.55 | $ 17.27 | $ 13.61 | $ 12.33 | $ 14.77 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.09) | (.13) | (.14) | (.03) | (.14) |
Net realized and unrealized gain (loss) | 2.56 | 1.55 | 4.17 | 3.79 | 1.31 | (2.30) |
Total from investment operations | 2.52 | 1.46 | 4.04 | 3.65 | 1.28 | (2.44) |
Distributions from net realized gain | (1.61) | (.99) | (.76) | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | .01 | - I | - I |
Net asset value, end of period | $ 21.93 | $ 21.02 | $ 20.55 | $ 17.27 | $ 13.61 | $ 12.33 |
Total Return B, C, D | 12.58% | 7.54% | 24.12% | 26.89% | 10.38% | (16.52)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.06% A | 2.04% | 2.11% | 2.37% | 2.68% | 2.58% |
Expenses net of fee waivers, if any | 2.06% A | 2.04% | 2.11% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 2.06% A | 2.02% | 2.07% | 2.22% | 2.18% | 2.24% |
Net investment income (loss) | (.35)% A | (.44)% | (.68)% | (.87)% | (.26)% | (1.00)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 42,132 | $ 37,082 | $ 32,242 | $ 14,722 | $ 9,005 | $ 9,008 |
Portfolio turnover rate G | 151% A | 94% | 116% | 106% | 149% | 45% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. DTotal returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. FFees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.16 | $ 20.68 | $ 17.36 | $ 13.67 | $ 12.39 | $ 14.84 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.03) | (.08) | (.12) | (.14) | (.03) | (.14) |
Net realized and unrealized gain (loss) | 2.56 | 1.56 | 4.19 | 3.82 | 1.31 | (2.31) |
Total from investment operations | 2.53 | 1.48 | 4.07 | 3.68 | 1.28 | (2.45) |
Distributions from net realized gain | (1.70) | (1.00) | (.75) | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | .01 | - I | - I |
Net asset value, end of period | $ 21.99 | $ 21.16 | $ 20.68 | $ 17.36 | $ 13.67 | $ 12.39 |
Total Return B, C, D | 12.62% | 7.59% | 24.16% | 26.99% | 10.33% | (16.51)% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.99% A | 1.99% | 2.07% | 2.28% | 2.57% | 2.49% |
Expenses net of fee waivers, if any | 1.99% A | 1.99% | 2.07% | 2.25% | 2.25% | 2.25% |
Expenses net of all reductions | 1.98% A | 1.97% | 2.02% | 2.22% | 2.18% | 2.24% |
Net investment income (loss) | (.27)% A | (.38)% | (.64)% | (.87)% | (.26)% | (1.00)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 52,122 | $ 42,363 | $ 20,595 | $ 9,507 | $ 5,307 | $ 5,143 |
Portfolio turnover rate G | 151% A | 94% | 116% | 106% | 149% | 45% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. ECalculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. HExpense 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 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Industrials
Financial Highlights - Institutional Class
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.77 | $ 22.06 | $ 18.48 | $ 14.41 | $ 12.96 | $ 15.37 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .09 | .16 | .07 | .02 | .09 | - H |
Net realized and unrealized gain (loss) | 2.76 | 1.66 | 4.46 | 4.04 | 1.39 | (2.41) |
Total from investment operations | 2.85 | 1.82 | 4.53 | 4.06 | 1.48 | (2.41) |
Distributions from net investment income | (.13) | - | - | - | (.03) | - |
Distributions from net realized gain | (1.81) | (1.11) | (.95) | - | - | - |
Total distributions | (1.94) | (1.11) | (.95) | - | (.03) | - |
Redemption fees added to paid in capital D | - H | - H | - H | .01 | - H | - H |
Net asset value, end of period | $ 23.68 | $ 22.77 | $ 22.06 | $ 18.48 | $ 14.41 | $ 12.96 |
Total Return B, C | 13.20% | 8.73% | 25.41% | 28.24% | 11.46% | (15.68)% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | .94% A | .91% | 1.06% | 1.38% | 1.55% | 1.45% |
Expenses net of fee waivers, if any | .94% A | .91% | 1.06% | 1.25% | 1.25% | 1.25% |
Expenses net of all reductions | .94% A | .89% | 1.01% | 1.22% | 1.18% | 1.24% |
Net investment income (loss) | .77% A | .69% | .37% | .13% | .74% | - |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 16,883 | $ 13,043 | $ 4,379 | $ 1,490 | $ 1,156 | $ 2,104 |
Portfolio turnover rate F | 151% A | 94% | 116% | 106% | 149% | 45% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. H Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Industrials Fund (the Fund) (formerly Fidelity Advisor Cyclical Industries Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Industrials
1. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, deferred trustees compensation and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 31,295,276 |
Unrealized depreciation | (1,647,808) |
Net unrealized appreciation (depreciation) | $ 29,647,468 |
Cost for federal income tax purposes | $ 290,459,205 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $234,290,850 and $207,030,064, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 148,259 | $ 10,906 |
Class T | .25% | .25% | 152,140 | - |
Class B | .75% | .25% | 197,521 | 148,141 |
Class C | .75% | .25% | 239,798 | 117,758 |
| | | $ 737,718 | $ 276,805 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 101,951 |
Class T | 10,775 |
Class B* | 28,264 |
Class C* | 10,927 |
| $ 151,917 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets* |
Class A | $ 179,315 | .30 |
Class T | 91,647 | .30 |
Class B | 70,984 | .36 |
Class C | 67,509 | .28 |
Institutional Class | 16,848 | .24 |
| $ 426,303 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity
Industrials
4. Fees and Other Transactions with Affiliates - continued
Investments in Fidelity Central Funds - continued
Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds, are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $427 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $342 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $28,624.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $5,511 for the period.
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached. In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
8. Other - continued
Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
From net investment income | | |
Class A | $ 317,175 | $ - |
Class T | 81,457 | - |
Institutional Class | 74,719 | - |
Total | $ 473,351 | $ - |
From net realized gain | | |
Class A | $ 9,177,798 | $ 2,209,329 |
Class T | 4,598,155 | 1,993,493 |
Class B | 2,897,402 | 1,595,001 |
Class C | 3,662,967 | 1,032,683 |
Institutional Class | 1,046,779 | 292,293 |
Total | $ 21,383,101 | $ 7,122,799 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 | Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 1,920,652 | 3,250,873 | $ 42,974,577 | $ 73,798,607 |
Reinvestment of distributions | 397,118 | 97,417 | 8,609,345 | 1,982,904 |
Shares redeemed | (978,604) | (738,421) | (21,902,306) | (16,310,331) |
Net increase (decrease) | 1,339,166 | 2,609,869 | $ 29,681,616 | $ 59,471,180 |
Class T | | | | |
Shares sold | 475,045 | 1,053,819 | $ 10,515,129 | $ 23,194,479 |
Reinvestment of distributions | 204,708 | 95,171 | 4,388,653 | 1,914,595 |
Shares redeemed | (351,820) | (476,485) | (7,780,165) | (10,217,427) |
Net increase (decrease) | 327,933 | 672,505 | $ 7,123,617 | $ 14,891,647 |
Class B | | | | |
Shares sold | 300,700 | 691,509 | $ 6,395,896 | $ 14,823,678 |
Reinvestment of distributions | 118,628 | 68,369 | 2,452,560 | 1,329,447 |
Shares redeemed | (262,370) | (564,827) | (5,574,578) | (11,906,215) |
Net increase (decrease) | 156,958 | 195,051 | $ 3,273,878 | $ 4,246,910 |
Class C | | | | |
Shares sold | 493,387 | 1,219,100 | $ 10,482,771 | $ 26,650,232 |
Reinvestment of distributions | 135,825 | 42,653 | 2,814,175 | 834,597 |
Shares redeemed | (260,986) | (255,670) | (5,584,993) | (5,350,637) |
Net increase (decrease) | 368,226 | 1,006,083 | $ 7,711,953 | $ 22,134,192 |
Institutional Class | | | | |
Shares sold | 300,184 | 685,802 | $ 6,915,410 | $ 16,202,741 |
Reinvestment of distributions | 33,033 | 7,337 | 737,185 | 152,999 |
Shares redeemed | (193,154) | (318,752) | (4,434,371) | (7,142,105) |
Net increase (decrease) | 140,063 | 374,387 | $ 3,218,224 | $ 9,213,635 |
Industrials
Advisor Technology Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,177.70 | $ 7.52* * |
HypotheticalA | $ 1,000.00 | $ 1,018.30 | $ 6.97* * |
Class T | | | |
Actual | $ 1,000.00 | $ 1,176.00 | $ 8.83* * |
HypotheticalA | $ 1,000.00 | $ 1,017.09 | $ 8.19* * |
Class B | | | |
Actual | $ 1,000.00 | $ 1,173.40 | $ 11.56* * |
HypotheticalA | $ 1,000.00 | $ 1,014.57 | $ 10.71* * |
Class C | | | |
Actual | $ 1,000.00 | $ 1,173.30 | $ 11.61* * |
HypotheticalA | $ 1,000.00 | $ 1,014.52 | $ 10.76* * |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,180.50 | $ 5.50* * |
HypotheticalA | $ 1,000.00 | $ 1,020.16 | $ 5.09* * |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.37%* * |
Class T | 1.61%* * |
Class B | 2.11%* * |
Class C | 2.12%* * |
Institutional Class | 1.00%* * |
Semiannual Report
Advisor Technology Fund
Shareholder Expense Example - continued
* * If fees, effective January 1, 2007, had been in effect during the entire period, the annualized expense ratio and the expenses paid in the actual and hypothetical examples above would have been as follows:
| Annualized
Expense Ratio | Expenses
Paid |
Class A | 1.27% | |
Actual | | $ 6.97 |
Hypothetical A | | $ 6.46 |
Class T | 1.51% | |
Actual | | $ 8.28 |
Hypothetical A | | $ 7.68 |
Class B | 2.01% | |
Actual | | $ 11.01 |
Hypothetical A | | $ 10.21 |
Class C | 2.02% | |
Actual | | $ 11.07 |
Hypothetical A | | $ 10.26 |
Institutional Class | .99% | |
Actual | | $ 5.44 |
Hypothetical A | | $ 5.04 |
A 5% return per year before expenses
Technology
Advisor Technology Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Apple, Inc. | 5.4 | 4.9 |
Research In Motion Ltd. | 5.4 | 0.3 |
QUALCOMM, Inc. | 4.8 | 5.8 |
Google, Inc. Class A (sub. vtg.) | 4.6 | 2.0 |
Marvell Technology Group Ltd. | 4.1 | 1.5 |
Intel Corp. | 3.4 | 3.1 |
Cisco Systems, Inc. | 3.3 | 0.0 |
SanDisk Corp. | 3.1 | 0.0 |
Broadcom Corp. Class A | 2.4 | 2.9 |
F5 Networks, Inc. | 2.0 | 2.5 |
| 38.5 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Communications Equipment | 30.1% | |
| Semiconductors & Semiconductor Equipment | 25.6% | |
| Computers & Peripherals | 14.1% | |
| Software | 12.5% | |
| Internet Software & Services | 8.4% | |
| All Others * | 9.3% | |
|
As of July 31, 2006 |
| Communications Equipment | 33.9% | |
| Semiconductors & Semiconductor Equipment | 26.1% | |
| Computers & Peripherals | 13.7% | |
| Software | 8.8% | |
| Electronic Equipment & Instruments | 6.7% | |
| All Others * | 10.8% | |
* Includes short-term investments and net other assets. |
Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. |
Semiannual Report
Advisor Technology Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 98.8% |
| Shares | | Value (Note 1) |
COMMERCIAL SERVICES & SUPPLIES - 1.4% |
Diversified Commercial & Professional Services - 1.3% |
Equifax, Inc. | 10,300 | | $ 427,759 |
Tele Atlas NV (a) | 455,356 | | 9,406,789 |
| | 9,834,548 |
Human Resource & Employment Services - 0.1% |
Kenexa Corp. (a) | 20,400 | | 744,600 |
TOTAL COMMERCIAL SERVICES & SUPPLIES | | 10,579,148 |
COMMUNICATIONS EQUIPMENT - 29.9% |
Communications Equipment - 29.9% |
Acme Packet, Inc. (d) | 168,700 | | 2,678,956 |
ADC Telecommunications, Inc. (a) | 57,764 | | 932,311 |
Adtran, Inc. | 67,400 | | 1,493,584 |
ADVA AG Optical Networking (a) | 339,882 | | 3,712,216 |
Alcatel-Lucent SA sponsored ADR | 227,200 | | 2,953,600 |
AudioCodes Ltd. (a) | 731,750 | | 7,244,325 |
Bookham, Inc. (a) | 604,488 | | 1,753,015 |
Ciena Corp. (a) | 117,279 | | 3,294,367 |
Cisco Systems, Inc. (a) | 969,700 | | 25,784,323 |
Comtech Group, Inc. (a)(d) | 492,619 | | 8,108,509 |
Comverse Technology, Inc. (a) | 742,100 | | 14,359,635 |
Corning, Inc. (a) | 466,000 | | 9,711,440 |
ECI Telecom Ltd. (a) | 317,618 | | 2,706,105 |
F5 Networks, Inc. (a) | 215,900 | | 15,423,896 |
Finisar Corp. (a)(d) | 1,285,571 | | 4,165,250 |
Foundry Networks, Inc. (a) | 103,500 | | 1,497,645 |
Foxconn International Holdings Ltd. (a) | 130,000 | | 388,793 |
JDS Uniphase Corp. (a) | 46,362 | | 824,316 |
Juniper Networks, Inc. (a) | 787,646 | | 14,272,146 |
Mogem Co. Ltd. | 309,043 | | 4,556,185 |
Motorola, Inc. | 223,400 | | 4,434,490 |
Nortel Networks Corp. (a) | 71,900 | | 1,929,799 |
Optium Corp. | 42,400 | | 1,012,936 |
OZ Optics Ltd. unit (e) | 68,000 | | 1,003,000 |
Powerwave Technologies, Inc. (a) | 1,033,000 | | 6,032,720 |
QUALCOMM, Inc. | 1,002,500 | | 37,754,150 |
Research In Motion Ltd. (a) | 329,070 | | 42,048,565 |
Riverbed Technology, Inc. (d) | 46,400 | | 1,419,840 |
Sonus Networks, Inc. (a) | 1,035,800 | | 7,499,192 |
Tekelec (a) | 264,900 | | 4,079,460 |
| | 233,074,769 |
COMPUTERS & PERIPHERALS - 14.1% |
Computer Hardware - 9.2% |
Apple, Inc. (a) | 492,800 | | 42,247,744 |
Concurrent Computer Corp. (a) | 2,208,064 | | 3,312,096 |
Hewlett-Packard Co. | 216,400 | | 9,365,792 |
NCR Corp. (a) | 148,500 | | 7,037,415 |
Sun Microsystems, Inc. (a) | 1,496,100 | | 9,934,104 |
| | 71,897,151 |
|
| Shares | | Value (Note 1) |
Computer Storage & Peripherals - 4.9% |
Brocade Communications Systems, Inc. (a) | 4,200 | | $ 36,036 |
EMC Corp. (a) | 738,400 | | 10,330,216 |
Network Appliance, Inc. (a) | 42,500 | | 1,598,000 |
QLogic Corp. (a) | 96,400 | | 1,764,120 |
Rackable Systems, Inc. (a) | 11,800 | | 225,380 |
SanDisk Corp. (a) | 601,800 | | 24,192,360 |
| | 38,146,112 |
TOTAL COMPUTERS & PERIPHERALS | | 110,043,263 |
ELECTRICAL EQUIPMENT - 0.6% |
Electrical Components & Equipment - 0.6% |
Evergreen Solar, Inc. (a)(d) | 403,997 | | 3,389,535 |
Q-Cells AG | 1,200 | | 62,092 |
Suntech Power Holdings Co. Ltd. sponsored ADR (a) | 35,400 | | 1,302,720 |
| | 4,754,347 |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 2.3% |
Electronic Equipment & Instruments - 0.1% |
Cognex Corp. | 13,600 | | 296,752 |
Electronic Manufacturing Services - 1.6% |
Hon Hai Precision Industry Co. Ltd. (Foxconn) | 284,453 | | 1,943,752 |
Jabil Circuit, Inc. | 423,500 | | 10,159,765 |
Trimble Navigation Ltd. (a) | 11,200 | | 633,696 |
| | 12,737,213 |
Technology Distributors - 0.6% |
Arrow Electronics, Inc. (a) | 22,800 | | 803,700 |
Avnet, Inc. (a) | 45,200 | | 1,403,460 |
Wolfson Microelectronics PLC (a) | 417,700 | | 2,297,893 |
| | 4,505,053 |
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS | | 17,539,018 |
HOUSEHOLD DURABLES - 0.6% |
Consumer Electronics - 0.6% |
Garmin Ltd. | 98,300 | | 4,936,626 |
Household Appliances - 0.0% |
iRobot Corp. (a) | 1,400 | | 25,578 |
TOTAL HOUSEHOLD DURABLES | | 4,962,204 |
INTERNET & CATALOG RETAIL - 0.1% |
Internet Retail - 0.1% |
Gmarket, Inc. sponsored ADR | 1,400 | | 29,960 |
GSI Commerce, Inc. (a) | 68,301 | | 1,112,623 |
| | 1,142,583 |
INTERNET SOFTWARE & SERVICES - 8.4% |
Internet Software & Services - 8.4% |
Akamai Technologies, Inc. (a) | 3,700 | | 207,866 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
INTERNET SOFTWARE & SERVICES - CONTINUED |
Internet Software & Services - continued |
Ariba, Inc. (a) | 43,500 | | $ 404,550 |
Baidu.com, Inc. sponsored ADR (a)(d) | 27,200 | | 3,398,368 |
DivX, Inc. (d) | 57,900 | | 1,226,322 |
Google, Inc. Class A (sub. vtg.) (a) | 70,850 | | 35,517,105 |
Liquidity Services, Inc. | 67,900 | | 1,356,642 |
Marchex, Inc. Class B | 225,200 | | 2,740,684 |
Openwave Systems, Inc. (a) | 784,093 | | 6,915,700 |
RADVision Ltd. (a) | 81,329 | | 1,588,355 |
WebSideStory, Inc. (a) | 444,795 | | 6,365,016 |
Yahoo!, Inc. (a) | 205,200 | | 5,809,212 |
| | 65,529,820 |
IT SERVICES - 2.3% |
Data Processing & Outsourced Services - 1.2% |
The Western Union Co. | 394,300 | | 8,808,662 |
IT Consulting & Other Services - 1.1% |
Cognizant Technology Solutions Corp. Class A (a) | 39,200 | | 3,343,368 |
Infosys Technologies Ltd. sponsored ADR | 17,100 | | 991,800 |
Isilon Systems, Inc. | 1,000 | | 23,090 |
RightNow Technologies, Inc. (a) | 230,148 | | 3,309,528 |
Satyam Computer Services Ltd. sponsored ADR | 49,000 | | 1,140,720 |
| | 8,808,506 |
TOTAL IT SERVICES | | 17,617,168 |
MEDIA - 0.5% |
Advertising - 0.5% |
Focus Media Holding Ltd. ADR (a) | 46,500 | | 3,843,690 |
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.2% |
Real Estate Management & Development - 0.2% |
Move, Inc. | 295,625 | | 1,868,350 |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 25.6% |
Semiconductor Equipment - 4.3% |
Applied Materials, Inc. | 209,200 | | 3,709,116 |
ASML Holding NV (NY Shares) (a) | 239,800 | | 6,119,696 |
Axcelis Technologies, Inc. (a) | 149,500 | | 962,780 |
Credence Systems Corp. (a) | 261,900 | | 1,275,453 |
EMCORE Corp. (a)(d) | 222,198 | | 906,568 |
Entegris, Inc. (a) | 264,245 | | 2,835,349 |
FormFactor, Inc. (a) | 66,600 | | 2,707,290 |
ICOS Vision Systems NV (a) | 9,100 | | 382,382 |
KLA-Tencor Corp. | 41,700 | | 2,052,891 |
Lam Research Corp. (a) | 59,500 | | 2,725,695 |
LTX Corp. (a) | 409,700 | | 2,163,216 |
Rudolph Technologies, Inc. (a) | 42,920 | | 670,840 |
Tessera Technologies, Inc. (a) | 84,700 | | 3,238,928 |
|
| Shares | | Value (Note 1) |
Varian Semiconductor Equipment Associates, Inc. (a) | 35,550 | | $ 1,462,883 |
Verigy Ltd. | 127,380 | | 2,334,875 |
| | 33,547,962 |
Semiconductors - 21.3% |
Advanced Micro Devices, Inc. (a) | 283,236 | | 4,404,320 |
Altera Corp. (a) | 41,400 | | 830,070 |
AMIS Holdings, Inc. (a) | 201,200 | | 2,080,408 |
Applied Micro Circuits Corp. (a) | 890,800 | | 3,064,352 |
Atheros Communications, Inc. (a) | 138,700 | | 3,295,512 |
Atmel Corp. (a) | 273,300 | | 1,634,334 |
Broadcom Corp. Class A (a) | 579,122 | | 18,485,574 |
Chartered Semiconductor Manufacturing Ltd. (a) | 1,569,000 | | 1,410,531 |
Conexant Systems, Inc. (a) | 371,300 | | 690,618 |
Cypress Semiconductor Corp. (a) | 358,500 | | 6,614,325 |
Himax Technologies, Inc. sponsored ADR | 262,600 | | 1,341,886 |
Hittite Microwave Corp. (a) | 80,600 | | 2,803,268 |
Ikanos Communications, Inc. (a) | 102,953 | | 833,919 |
Integrated Device Technology, Inc. (a) | 180,400 | | 2,729,452 |
Intel Corp. | 1,256,800 | | 26,342,528 |
Intersil Corp. Class A | 210,600 | | 4,961,736 |
LSI Logic Corp. (a) | 841,000 | | 7,905,400 |
Marvell Technology Group Ltd. (a) | 1,748,900 | | 31,987,381 |
Maxim Integrated Products, Inc. | 131,200 | | 4,040,960 |
Microtune, Inc. (a) | 556,540 | | 2,793,831 |
Mindspeed Technologies, Inc. (a)(d) | 764,746 | | 1,506,550 |
Monolithic Power Systems, Inc. (a) | 133,100 | | 1,638,461 |
MoSys, Inc. (a)(d) | 32,100 | | 265,146 |
National Semiconductor Corp. | 379,700 | | 8,782,461 |
Netlogic Microsystems, Inc. (a) | 21,500 | | 513,420 |
NVIDIA Corp. (a) | 45,200 | | 1,385,380 |
Pericom Semiconductor Corp. (a) | 37,400 | | 372,878 |
PixArt Imaging, Inc. | 201,000 | | 2,820,239 |
PLX Technology, Inc. (a) | 45,400 | | 461,264 |
PMC-Sierra, Inc. (a) | 135,900 | | 856,170 |
Saifun Semiconductors Ltd. (a) | 140,000 | | 1,953,000 |
Semtech Corp. (a) | 90,100 | | 1,234,370 |
Silicon Motion Technology Corp. sponsored ADR (a) | 39,100 | | 720,613 |
SiRF Technology Holdings, Inc. (a)(d) | 81,800 | | 2,401,648 |
Spansion, Inc. Class A (a)(d) | 269,700 | | 3,460,251 |
STATS ChipPAC Ltd. sponsored ADR (a) | 645,700 | | 5,398,052 |
Vimicro International Corp. sponsored ADR (a) | 402,800 | | 3,814,516 |
Volterra Semiconductor Corp. (a) | 22,900 | | 301,822 |
| | 166,136,646 |
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | | 199,684,608 |
SOFTWARE - 12.5% |
Application Software - 9.1% |
Adobe Systems, Inc. (a) | 340,200 | | 13,223,574 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
SOFTWARE - CONTINUED |
Application Software - continued |
Ansys, Inc. (a) | 119,300 | | $ 5,951,877 |
BEA Systems, Inc. (a) | 122,700 | | 1,512,891 |
Hyperion Solutions Corp. (a) | 33,100 | | 1,397,482 |
Informatica Corp. (a) | 847,750 | | 10,647,740 |
Intuit, Inc. (a) | 269,600 | | 8,478,920 |
NAVTEQ Corp. (a) | 111,856 | | 3,968,651 |
Opsware, Inc. (a) | 959,383 | | 7,675,064 |
Salesforce.com, Inc. (a) | 277,200 | | 12,149,676 |
Ulticom, Inc. (a) | 702,426 | | 6,005,742 |
| | 71,011,617 |
Home Entertainment Software - 0.1% |
THQ, Inc. (a) | 37,900 | | 1,148,370 |
Systems Software - 3.3% |
Allot Communications Ltd. | 21,200 | | 220,904 |
Double-Take Software, Inc. | 177,100 | | 2,238,544 |
Oracle Corp. (a) | 547,200 | | 9,389,952 |
Red Hat, Inc. (a) | 237,000 | | 5,387,010 |
Sandvine Corp. (U.K.) | 1,635,600 | | 3,342,087 |
Sandvine Corp. (a) | 2,163,300 | | 4,412,647 |
Wind River Systems, Inc. (a) | 53,131 | | 527,060 |
| | 25,518,204 |
TOTAL SOFTWARE | | 97,678,191 |
SPECIALTY RETAIL - 0.3% |
Computer & Electronics Retail - 0.3% |
Gamestop Corp. Class B (a) | 37,400 | | 1,999,404 |
TOTAL COMMON STOCKS (Cost $798,924,951) | 770,316,563 |
Convertible Preferred Stocks - 0.0% |
| | | |
COMMUNICATIONS EQUIPMENT - 0.0% |
Communications Equipment - 0.0% |
Chorum Technologies, Inc. Series E (a)(e)
(Cost $258,032) | 17,200 | | 0 |
Convertible Bonds - 0.2% |
| Principal Amount | | |
COMMUNICATIONS EQUIPMENT - 0.2% |
Communications Equipment - 0.2% |
Ciena Corp. 0.25% 5/1/13
(Cost $1,270,000) | $ 1,270,000 | | 1,175,893 |
Money Market Funds - 2.8% |
| Shares | | Value (Note 1) |
Fidelity Cash Central Fund, 5.35% (b) | 3,325,275 | | $ 3,325,275 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 18,680,522 | | 18,680,522 |
TOTAL MONEY MARKET FUNDS (Cost $22,005,797) | 22,005,797 |
TOTAL INVESTMENT PORTFOLIO - 101.8% (Cost $822,458,780) | | 793,498,253 |
NET OTHER ASSETS - (1.8)% | | (13,837,211) |
NET ASSETS - 100% | $ 779,661,042 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $1,003,000 or 0.1% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Chorum Technologies, Inc. Series E | 9/19/00 | $ 258,032 |
OZ Optics Ltd. unit | 8/18/00 | $ 1,003,680 |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 199,885 |
Fidelity Securities Lending Cash Central Fund | 196,508 |
Total | $ 396,393 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 78.9% |
Canada | 6.8% |
Bermuda | 4.1% |
Netherlands | 2.0% |
Israel | 1.7% |
Cayman Islands | 1.7% |
Singapore | 1.2% |
Others (individually less than 1%) | 3.6% |
| 100.0% |
Income Tax Information |
At July 31, 2006, the fund had a capital loss carryforward of approximately $1,516,738,814 of which $1,016,932,031 and $499,806,783 will expire on July 31, 2010 and 2011, respectively. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Technology Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $19,305,125) - See accompanying schedule: Unaffiliated issuers (cost $800,452,983) | $ 771,492,456 | |
Fidelity Central Funds (cost $22,005,797) | 22,005,797 | |
Total Investments (cost $822,458,780) | | $ 793,498,253 |
Cash | | 1,518 |
Receivable for investments sold | | 19,782,211 |
Receivable for fund shares sold | | 3,279,041 |
Dividends receivable | | 26,694 |
Interest receivable | | 23,226 |
Prepaid expenses | | 3,393 |
Other receivables | | 56,524 |
Total assets | | 816,670,860 |
| | |
Liabilities | | |
Payable for investments purchased | $ 11,928,962 | |
Payable for fund shares redeemed | 4,997,192 | |
Accrued management fee | 372,543 | |
Distribution fees payable | 378,607 | |
Other affiliated payables | 284,971 | |
Other payables and accrued expenses | 367,021 | |
Collateral on securities loaned, at value | 18,680,522 | |
Total liabilities | | 37,009,818 |
| | |
Net Assets | | $ 779,661,042 |
Net Assets consist of: | | |
Paid in capital | | $ 2,291,140,582 |
Accumulated net investment loss | | (5,206,848) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (1,477,311,827) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (28,960,865) |
Net Assets | | $ 779,661,042 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($257,397,811 ÷ 14,019,400 shares) | | $ 18.36 |
| | |
Maximum offering price per share (100/94.25 of $18.36) | | $ 19.48 |
Class T:
Net Asset Value and redemption price per share ($268,186,851 ÷ 14,920,993 shares) | | $ 17.97 |
| | |
Maximum offering price per share (100/96.50 of $17.97) | | $ 18.62 |
Class B:
Net Asset Value and offering price per share ($151,662,925 ÷ 8,856,986 shares)A | | $ 17.12 |
| | |
Class C:
Net Asset Value and offering price per share ($88,538,302 ÷ 5,147,378 shares)A | | $ 17.20 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($13,875,153 ÷ 731,582 shares) | | $ 18.97 |
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.
Technology
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
Investment Income | | |
Dividends | | $ 1,083,900 |
Interest | | 3,334 |
Income from Fidelity Central Funds (including $196,508 from security lending) | | 396,393 |
Total income | | 1,483,627 |
| | |
Expenses | | |
Management fee | $ 2,233,399 | |
Transfer agent fees | 1,564,924 | |
Distribution fees | 2,356,808 | |
Accounting and security lending fees | 147,172 | |
Custodian fees and expenses | 43,233 | |
Independent trustees' compensation | 1,340 | |
Registration fees | 45,841 | |
Audit | 25,749 | |
Legal | 9,709 | |
Interest | 5,581 | |
Miscellaneous | 332,946 | |
Total expenses before reductions | 6,766,702 | |
Expense reductions | (76,700) | 6,690,002 |
Net investment income (loss) | | (5,206,375) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 48,110,678 | |
Foreign currency transactions | (9,134) | |
Total net realized gain (loss) | | 48,101,544 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 83,451,984 | |
Assets and liabilities in foreign currencies | (889) | |
Total change in net unrealized appreciation (depreciation) | | 83,451,095 |
Net gain (loss) | | 131,552,639 |
Net increase (decrease) in net assets resulting from operations | | $ 126,346,264 |
Statement of Changes in Net Assets
| Six months ended
January 31, 2007
(Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (5,206,375) | $ (11,357,485) |
Net realized gain (loss) | 48,101,544 | 133,807,053 |
Change in net unrealized appreciation (depreciation) | 83,451,095 | (146,818,598) |
Net increase (decrease) in net assets resulting from operations | 126,346,264 | (24,369,030) |
Share transactions - net increase (decrease) | (84,024,150) | (128,197,659) |
Redemption fees | 12,388 | 46,191 |
Total increase (decrease) in net assets | 42,334,502 | (152,520,498) |
| | |
Net Assets | | |
Beginning of period | 737,326,540 | 889,847,038 |
End of period (including accumulated net investment loss of $5,206,848 and accumulated net investment loss of $473, respectively) | $ 779,661,042 | $ 737,326,540 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 15.59 | $ 16.16 | $ 13.98 | $ 13.36 | $ 10.03 | $ 17.76 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.09) | (.15) | .02 H | (.17) | (.11) | (.15) |
Net realized and unrealized gain (loss) | 2.86 | (.42) | 2.24 | .79 | 3.44 | (7.58) |
Total from investment operations | 2.77 | (.57) | 2.26 | .62 | 3.33 | (7.73) |
Distributions from net investment income | - | - | (.08) | - | - | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 18.36 | $ 15.59 | $ 16.16 | $ 13.98 | $ 13.36 | $ 10.03 |
Total Return B, C, D | 17.77% | (3.53)% | 16.20% | 4.64% | 33.20% | (43.52)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.37% A | 1.30% | 1.37% | 1.44% | 1.70% | 1.53% |
Expenses net of fee waivers, if any | 1.37% A | 1.30% | 1.37% | 1.44% | 1.59% | 1.51% |
Expenses net of all reductions | 1.35% A | 1.20% | 1.26% | 1.35% | 1.38% | 1.43% |
Net investment income (loss) | (.98)% A | (.88)% | .12% H | (1.10)% | (1.03)% | (1.07)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 257,398 | $ 189,054 | $ 144,970 | $ 123,389 | $ 123,604 | $ 101,649 |
Portfolio turnover rate G | 221% A | 258% | 180% | 105% | 140% | 164% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.14 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.87)%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 15.28 | $ 15.88 | $ 13.76 | $ 13.17 | $ 9.91 | $ 17.59 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.11) | (.19) | (.02) H | (.19) | (.14) | (.18) |
Net realized and unrealized gain (loss) | 2.80 | (.41) | 2.21 | .78 | 3.40 | (7.50) |
Total from investment operations | 2.69 | (.60) | 2.19 | .59 | 3.26 | (7.68) |
Distributions from net investment income | - | - | (.07) | - | - | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 17.97 | $ 15.28 | $ 15.88 | $ 13.76 | $ 13.17 | $ 9.91 |
Total Return B, C, D | 17.60% | (3.78)% | 15.94% | 4.48% | 32.90% | (43.66)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.61% A | 1.55% | 1.60% | 1.62% | 1.85% | 1.70% |
Expenses net of fee waivers, if any | 1.61% A | 1.55% | 1.60% | 1.62% | 1.83% | 1.70% |
Expenses net of all reductions | 1.60% A | 1.44% | 1.48% | 1.53% | 1.63% | 1.62% |
Net investment income (loss) | (1.22)% A | (1.13)% | (.11)% H | (1.28)% | (1.28)% | (1.26)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 268,187 | $ 260,966 | $ 315,930 | $ 363,399 | $ 367,257 | $ 302,657 |
Portfolio turnover rate G | 221% A | 258% | 180% | 105% | 140% | 164% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.14 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.10)%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Technology
Financial Highlights - Class B
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 14.59 | $ 15.24 | $ 13.25 | $ 12.76 | $ 9.64 | $ 17.21 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.14) | (.27) | (.09) H | (.27) | (.17) | (.25) |
Net realized and unrealized gain (loss) | 2.67 | (.38) | 2.12 | .76 | 3.29 | (7.32) |
Total from investment operations | 2.53 | (.65) | 2.03 | .49 | 3.12 | (7.57) |
Distributions from net investment income | - | - | (.04) | - | - | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 17.12 | $ 14.59 | $ 15.24 | $ 13.25 | $ 12.76 | $ 9.64 |
Total Return B, C, D | 17.34% | (4.27)% | 15.33% | 3.84% | 32.37% | (43.99)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.11% A | 2.05% | 2.13% | 2.21% | 2.38% | 2.28% |
Expenses net of fee waivers, if any | 2.11% A | 2.05% | 2.13% | 2.21% | 2.25% | 2.25% |
Expenses net of all reductions | 2.09% A | 1.94% | 2.02% | 2.12% | 2.05% | 2.18% |
Net investment income (loss) | (1.72)% A | (1.63)% | (.65)% H | (1.87)% | (1.69)% | (1.81)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 151,663 | $ 192,790 | $ 309,020 | $ 355,927 | $ 391,832 | $ 337,976 |
Portfolio turnover rate G | 221% A | 258% | 180% | 105% | 140% | 164% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.14 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.64)%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended
January, 31 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 14.66 | $ 15.31 | $ 13.31 | $ 12.80 | $ 9.67 | $ 17.25 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.14) | (.27) | (.08) H | (.26) | (.17) | (.24) |
Net realized and unrealized gain (loss) | 2.68 | (.38) | 2.12 | .77 | 3.30 | (7.34) |
Total from investment operations | 2.54 | (.65) | 2.04 | .51 | 3.13 | (7.58) |
Distributions from net investment income | - | - | (.04) | - | - | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 17.20 | $ 14.66 | $ 15.31 | $ 13.31 | $ 12.80 | $ 9.67 |
Total Return B, C, D | 17.33% | (4.25)% | 15.34% | 3.98% | 32.37% | (43.94)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.12% A | 2.05% | 2.10% | 2.13% | 2.28% | 2.18% |
Expenses net of fee waivers, if any | 2.12% A | 2.05% | 2.10% | 2.13% | 2.25% | 2.18% |
Expenses net of all reductions | 2.10% A | 1.94% | 1.99% | 2.04% | 2.05% | 2.11% |
Net investment income (loss) | (1.72)% A | (1.63)% | (.61)% H | (1.79)% | (1.69)% | (1.74)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 88,538 | $ 82,835 | $ 108,287 | $ 125,926 | $ 139,654 | $ 123,034 |
Portfolio turnover rate G | 221% A | 258% | 180% | 105% | 140% | 164% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.14 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (1.60)%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.07 | $ 16.60 | $ 14.32 | $ 13.61 | $ 10.15 | $ 17.90 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | (.06) | (.09) | .09 G | (.09) | (.05) | (.08) |
Net realized and unrealized gain (loss) | 2.96 | (.44) | 2.30 | .80 | 3.51 | (7.67) |
Total from investment operations | 2.90 | (.53) | 2.39 | .71 | 3.46 | (7.75) |
Distributions from net investment income | - | - | (.11) | - | - | - |
Redemption fees added to paid in capital D | - I | - I | - I | - I | - I | - I |
Net asset value, end of period | $ 18.97 | $ 16.07 | $ 16.60 | $ 14.32 | $ 13.61 | $ 10.15 |
Total Return B, C | 18.05% | (3.19)% | 16.73% | 5.22% | 34.09% | (43.30)% |
Ratios to Average Net Assets E, H | | | | | | |
Expenses before reductions | 1.00% A | .90% | .92% | .93% | .99% | 1.00% |
Expenses net of fee waivers, if any | 1.00% A | .90% | .92% | .93% | .99% | 1.00% |
Expenses net of all reductions | .98% A | .80% | .81% | .84% | .79% | .92% |
Net investment income (loss) | (.60)% A | (.49)% | .57% G | (.59)% | (.43)% | (.56)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 13,875 | $ 11,681 | $ 11,640 | $ 10,984 | $ 11,511 | $ 10,495 |
Portfolio turnover rate F | 221% A | 258% | 180% | 105% | 140% | 164% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Investment income per share reflects a special dividend which amounted to $.14 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.42)%. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Technology
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Technology Fund (the Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned,
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, net operating losses, capital loss carryforwards, losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 47,065,146 |
Unrealized depreciation | (82,202,081) |
Net unrealized appreciation (depreciation) | $ (35,136,935) |
Cost for federal income tax purposes | $ 828,635,188 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Technology
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $865,640,188 and $967,173,852, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 283,538 | $ 16,108 |
Class T | .25% | .25% | 691,552 | - |
Class B | .75% | .25% | 934,298 | 700,724 |
Class C | .75% | .25% | 447,420 | 22,465 |
| | | $ 2,356,808 | $ 739,297 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 16,745 |
Class T | 15,431 |
Class B * | 117,344 |
Class C * | 4,670 |
| $ 154,190 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets * |
Class A | $ 455,940 | .40 |
Class T | 546,292 | .40 |
Class B | 367,341 | .39 |
Class C | 177,724 | .40 |
Institutional Class | 17,627 | .28 |
| $ 1,564,924 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $27,674 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Daily Loan Balance | Weighted Average Interest Rate | Interest
Expense |
Borrower | $ 7,449,200 | 5.39% | $ 5,581 |
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $988 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $57,089 for the period. In addition, through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction |
Class A | $ 3,673 |
Class B | 902 |
Class C | 1,900 |
| $ 6,475 |
Technology
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2007 | Year ended
July 31,
2006 | Six months ended January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 4,131,811 | 5,933,920 | $ 73,714,542 | $ 105,071,198 |
Shares redeemed | (2,242,294) | (2,775,104) | (39,576,816) | (47,788,058) |
Net increase (decrease) | 1,889,517 | 3,158,816 | $ 34,137,726 | $ 57,283,140 |
Class T | | | | |
Shares sold | 1,109,833 | 3,384,477 | $ 19,307,285 | $ 58,748,287 |
Shares redeemed | (3,271,161) | (6,198,789) | (56,578,797) | (105,287,546) |
Net increase (decrease) | (2,161,328) | (2,814,312) | $ (37,271,512) | $ (46,539,259) |
Class B | | | | |
Shares sold | 193,098 | 539,586 | $ 3,227,111 | $ 8,903,373 |
Shares redeemed | (4,549,098) | (7,601,103) | (75,933,601) | (125,479,671) |
Net increase (decrease) | (4,356,000) | (7,061,517) | $ (72,706,490) | $ (116,576,298) |
Class C | | | | |
Shares sold | 330,360 | 570,438 | $ 5,510,992 | $ 9,501,649 |
Shares redeemed | (834,754) | (1,991,739) | (13,835,922) | (32,610,461) |
Net increase (decrease) | (504,394) | (1,421,301) | $ (8,324,930) | $ (23,108,812) |
Institutional Class | | | | |
Shares sold | 132,866 | 258,108 | $ 2,471,258 | $ 4,843,216 |
Shares redeemed | (128,159) | (232,556) | (2,330,202) | (4,099,646) |
Net increase (decrease) | 4,707 | 25,552 | $ 141,056 | $ 743,570 |
Semiannual Report
Advisor Utilities Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006 to
January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,139.50 | $ 7.33** |
HypotheticalA | $ 1,000.00 | $ 1,018.35 | $ 6.92** |
Class T | | | |
Actual | $ 1,000.00 | $ 1,136.90 | $ 8.89** |
HypotheticalA | $ 1,000.00 | $ 1,016.89 | $ 8.39** |
Class B | | | |
Actual | $ 1,000.00 | $ 1,134.60 | $ 11.46** |
HypotheticalA | $ 1,000.00 | $ 1,014.47 | $ 10.82** |
Class C | | | |
Actual | $ 1,000.00 | $ 1,135.00 | $ 11.03** |
HypotheticalA | $ 1,000.00 | $ 1,014.87 | $ 10.41** |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,141.20 | $ 5.24** |
HypotheticalA | $ 1,000.00 | $ 1,020.32 | $ 4.94** |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.36%** |
Class T | 1.65%** |
Class B | 2.13%** |
Class C | 2.05%** |
Institutional Class | .97%** |
Utilities
* * If fees, effective January 1, 2007, had been in effect during the entire period, the annualized expense ratios and the expenses paid in the actual and hypothetical examples above would have been as follows:
| Annualized
Expense Ratio | Expenses
Paid |
Class A | 1.26% | |
Actual | | $ 6.80 |
Hypothetical A | | $ 6.41 |
Class T | 1.55% | |
Actual | | $ 8.35 |
Hypothetical A | | $ 7.88 |
Class B | 2.03% | |
Actual | | $ 10.92 |
Hypothetical A | | $ 10.31 |
Class C | 2.01% | |
Actual | | $ 10.82 |
Hypothetical A | | $ 10.21 |
Institutional Class | .95% | |
Actual | | $ 5.13 |
Hypothetical A | | $ 4.84 |
A 5% return per year before expenses
Semiannual Report
Advisor Utilities Fund
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Constellation Energy Group, Inc. | 6.4 | 0.0 |
Entergy Corp. | 6.1 | 3.2 |
Exelon Corp. | 5.3 | 4.5 |
AES Corp. | 5.3 | 3.1 |
Sempra Energy | 5.2 | 1.3 |
Public Service Enterprise Group, Inc. | 5.0 | 1.9 |
Duke Energy Corp. | 4.8 | 2.3 |
TXU Corp. | 4.5 | 3.3 |
FPL Group, Inc. | 4.4 | 3.6 |
American Electric Power Co., Inc. | 4.1 | 0.0 |
| 51.1 | |
Top Industries (% of fund's net assets) |
As of January 31, 2007 |
| Electric Utilities | 45.7% | |
| Multi-utilities | 24.2% | |
| Independent Power Producers & Energy Traders | 19.1% | |
| Gas Utilities | 4.0% | |
| Oil, Gas &
Consumable Fuels | 3.9% | |
| All Others* | 3.1% | |
|
As of July 31, 2006 |
| Diversified Telecommunication Services | 50.5% | |
| Electric Utilities | 17.7% | |
| Wireless Telecommunication Services | 10.9% | |
| Independent Power Producers & Energy Traders | 9.0% | |
| Multi-utilities | 8.5% | |
| All Others* | 3.4% | |
* Includes short-term investments and net other assets. |
Utilities
Advisor Utilities Fund
Investments January 31, 2007 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.5% |
| Shares | | Value (Note 1) |
CHEMICALS - 0.3% |
Specialty Chemicals - 0.3% |
Zoltek Companies, Inc. (a)(d) | 24,500 | | $ 654,640 |
ELECTRIC UTILITIES - 45.7% |
Electric Utilities - 45.7% |
Allegheny Energy, Inc. (a) | 105,800 | | 4,921,816 |
American Electric Power Co., Inc. | 222,900 | | 9,702,837 |
DPL, Inc. | 141,100 | | 4,046,748 |
Duke Energy Corp. | 570,800 | | 11,239,052 |
Edison International | 110,700 | | 4,979,286 |
Entergy Corp. | 154,100 | | 14,308,185 |
Exelon Corp. (d) | 207,500 | | 12,447,925 |
FirstEnergy Corp. | 133,600 | | 7,926,488 |
FPL Group, Inc. | 183,200 | | 10,378,280 |
ITC Holdings Corp. | 14,000 | | 609,000 |
Northeast Utilities | 210,700 | | 5,825,855 |
Pepco Holdings, Inc. | 119,000 | | 3,044,020 |
PPL Corp. | 195,400 | | 6,956,240 |
Progress Energy, Inc. | 97,500 | | 4,635,150 |
Reliant Energy, Inc. (a) | 123,000 | | 1,830,240 |
Sierra Pacific Resources (a) | 273,800 | | 4,660,076 |
| | 107,511,198 |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.3% |
Electronic Equipment & Instruments - 0.3% |
Itron, Inc. (a) | 11,200 | | 645,568 |
GAS UTILITIES - 4.0% |
Gas Utilities - 4.0% |
Equitable Resources, Inc. (d) | 56,600 | | 2,447,950 |
ONEOK, Inc. | 45,100 | | 1,935,241 |
Questar Corp. | 34,100 | | 2,768,920 |
Southern Union Co. | 80,600 | | 2,241,486 |
| | 9,393,597 |
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 19.1% |
Independent Power Producers & Energy Traders - 19.1% |
AES Corp. (a) | 593,700 | | 12,343,023 |
Constellation Energy Group, Inc. | 208,300 | | 15,112,165 |
Dynegy, Inc. Class A (a) | 65,200 | | 459,660 |
International Power PLC | 165,500 | | 1,171,411 |
NRG Energy, Inc. (d) | 85,700 | | 5,136,001 |
TXU Corp. | 196,200 | | 10,610,496 |
| | 44,832,756 |
MULTI-UTILITIES - 24.2% |
Multi-Utilities - 24.2% |
Alliant Energy Corp. | 47,300 | | 1,719,355 |
Ameren Corp. | 31,400 | | 1,667,654 |
CenterPoint Energy, Inc. (d) | 216,100 | | 3,729,886 |
|
| Shares | | Value (Note 1) |
CMS Energy Corp. (a) | 226,690 | | $ 3,783,456 |
DTE Energy Co. | 61,100 | | 2,833,207 |
MDU Resources Group, Inc. | 92,600 | | 2,393,710 |
PG&E Corp. (d) | 142,000 | | 6,628,560 |
Public Service Enterprise Group, Inc. | 176,600 | | 11,837,498 |
Puget Energy, Inc. | 93,500 | | 2,296,360 |
Sempra Energy | 211,500 | | 12,135,870 |
Wisconsin Energy Corp. | 148,900 | | 6,932,784 |
WPS Resources Corp. | 17,100 | | 907,155 |
| | 56,865,495 |
OIL, GAS & CONSUMABLE FUELS - 3.9% |
Coal & Consumable Fuels - 0.7% |
Cameco Corp. | 47,200 | | 1,797,981 |
Oil & Gas Storage & Transport - 3.2% |
Spectra Energy Corp. | 285,400 | | 7,454,648 |
TOTAL OIL, GAS & CONSUMABLE FUELS | | 9,252,629 |
TOTAL COMMON STOCKS (Cost $210,656,222) | 229,155,883 |
Money Market Funds - 11.0% |
| | | |
Fidelity Cash Central Fund, 5.35% (b) | 6,663,835 | | 6,663,835 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 19,271,088 | | 19,271,088 |
TOTAL MONEY MARKET FUNDS (Cost $25,934,923) | | 25,934,923 |
TOTAL INVESTMENT PORTFOLIO - 108.5% (Cost $236,591,145) | | 255,090,806 |
NET OTHER ASSETS - (8.5)% | | (19,953,221) |
NET ASSETS - 100% | $ 235,137,585 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 119,768 |
Fidelity Securities Lending Cash Central Fund | 16,106 |
Total | $ 135,874 |
Income Tax Information |
At July 31, 2006, the fund had a capital loss carryforward of approximately $289,540,228 of which $135,127,696 and $154,412,532 will expire on July 31, 2010 and 2011, respectively. |
See accompanying notes which are an integral part of the financial statements.
Utilities
Advisor Utilities Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $18,937,940) - See accompanying schedule: Unaffiliated issuers (cost $210,656,222) | $ 229,155,883 | |
Fidelity Central Funds (cost $25,934,923) | 25,934,923 | |
Total Investments (cost $236,591,145) | | $ 255,090,806 |
Cash | | 16,433 |
Receivable for fund shares sold | | 788,172 |
Dividends receivable | | 113,202 |
Interest receivable | | 17,904 |
Prepaid expenses | | 864 |
Other receivables | | 4,866 |
Total assets | | 256,032,247 |
| | |
Liabilities | | |
Payable for fund shares redeemed | $ 1,218,466 | |
Accrued management fee | 114,653 | |
Distribution fees payable | 121,740 | |
Other affiliated payables | 79,920 | |
Other payables and accrued expenses | 88,795 | |
Collateral on securities loaned, at value | 19,271,088 | |
Total liabilities | | 20,894,662 |
| | |
Net Assets | | $ 235,137,585 |
Net Assets consist of: | | |
Paid in capital | | $ 476,090,131 |
Distributions in excess of net investment income | | (199,059) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (259,253,148) |
Net unrealized appreciation (depreciation) on investments | | 18,499,661 |
Net Assets | | $ 235,137,585 |
Statement of Assets and Liabilities - continued
| January 31, 2007 (Unaudited) |
Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption
price per share ($66,165,228 ÷
3,420,172 shares) | | $ 19.35 |
| | |
Maximum offering price per share (100/94.25 of $19.35) | | $ 20.53 |
Class T:
Net Asset Value and redemption price per share ($61,834,621 ÷ 3,196,766 shares) | | $ 19.34 |
| | |
Maximum offering price per share (100/96.50 of $19.34) | | $ 20.04 |
Class B:
Net Asset Value and offering price per share ($58,522,795 ÷ 3,064,293 shares)A | | $ 19.10 |
| | |
Class C:
Net Asset Value and offering price per share ($39,463,795 ÷ 2,068,849 shares)A | | $ 19.08 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($9,151,146 ÷ 468,944 shares) | | $ 19.51 |
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.
Semiannual Report
Advisor Utilities Fund
Financial Statements - continued
Statement of Operations
| Six months ended January 31, 2007 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 2,169,669 |
Interest | | 53 |
Income from Fidelity Central Funds | | 135,874 |
Total income | | 2,305,596 |
| | |
Expenses | | |
Management fee | $ 625,486 | |
Transfer agent fees | 424,978 | |
Distribution fees | 721,071 | |
Accounting and security lending fees | 47,072 | |
Custodian fees and expenses | 5,878 | |
Independent trustees' compensation | 364 | |
Registration fees | 35,670 | |
Audit | 22,165 | |
Legal | 2,483 | |
Miscellaneous | 65,341 | |
Total expenses before reductions | 1,950,508 | |
Expense reductions | (3,718) | 1,946,790 |
Net investment income (loss) | | 358,806 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 33,282,013 | |
Foreign currency transactions | 254 | |
Total net realized gain (loss) | | 33,282,267 |
Change in net unrealized appreciation (depreciation) on investment securities | | (5,601,786) |
Net gain (loss) | | 27,680,481 |
Net increase (decrease) in net assets resulting from operations | | $ 28,039,287 |
Statement of Changes in Net Assets
| Six months ended January 31, 2007 (Unaudited) | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 358,806 | $ 1,994,007 |
Net realized gain (loss) | 33,282,267 | 26,815,933 |
Change in net unrealized appreciation (depreciation) | (5,601,786) | (2,675,823) |
Net increase (decrease) in net assets resulting from operations | 28,039,287 | 26,134,117 |
Distributions to shareholders from net investment income | (1,795,352) | (1,886,398) |
Share transactions - net increase (decrease) | 10,901,733 | (30,269,037) |
Redemption fees | 4,291 | 5,377 |
Total increase (decrease) in net assets | 37,149,959 | (6,015,941) |
| | |
Net Assets | | |
Beginning of period | 197,987,626 | 204,003,567 |
End of period (including distributions in excess of net investment income of $199,059 and undistributed net investment income of $1,237,487, respectively) | $ 235,137,585 | $ 197,987,626 |
See accompanying notes which are an integral part of the financial statements.
Utilities
Financial Highlights - Class A
| Six months ended
January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 17.20 | $ 15.17 | $ 12.09 | $ 10.37 | $ 8.74 | $ 15.18 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .07 | .24 | .28 H | .10 | .13 | .10 |
Net realized and unrealized gain (loss) | 2.31 | 2.06 | 3.01 | 1.72 | 1.69 | (6.54) |
Total from investment operations | 2.38 | 2.30 | 3.29 | 1.82 | 1.82 | (6.44) |
Distributions from net investment income | (.23) | (.27) | (.21) | (.10) | (.19) | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 19.35 | $ 17.20 | $ 15.17 | $ 12.09 | $ 10.37 | $ 8.74 |
Total Return B, C, D | 13.95% | 15.38% | 27.48% | 17.67% | 21.22% | (42.42)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.36% A | 1.34% | 1.39% | 1.51% | 1.67% | 1.45% |
Expenses net of fee waivers, if any | 1.36% A | 1.34% | 1.39% | 1.50% | 1.58% | 1.45% |
Expenses net of all reductions | 1.36% A | 1.32% | 1.36% | 1.45% | 1.47% | 1.36% |
Net investment income (loss) | .72% A | 1.51% | 2.03% H | .87% | 1.46% | .79% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 66,165 | $ 40,599 | $ 29,150 | $ 21,987 | $ 21,761 | $ 22,377 |
Portfolio turnover rate G | 190% A | 64% | 44% | 38% | 81% | 116% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.09 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 1.39%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 17.18 | $ 15.10 | $ 12.04 | $ 10.33 | $ 8.68 | $ 15.11 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .04 | .19 | .24 H | .07 | .11 | .07 |
Net realized and unrealized gain (loss) | 2.30 | 2.08 | 2.99 | 1.72 | 1.68 | (6.50) |
Total from investment operations | 2.34 | 2.27 | 3.23 | 1.79 | 1.79 | (6.43) |
Distributions from net investment income | (.18) | (.19) | (.17) | (.08) | (.14) | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | -J |
Net asset value, end of period | $ 19.34 | $ 17.18 | $ 15.10 | $ 12.04 | $ 10.33 | $ 8.68 |
Total Return B, C, D | 13.69% | 15.20% | 27.03% | 17.42% | 20.91% | (42.55)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.65% A | 1.60% | 1.67% | 1.79% | 1.94% | 1.71% |
Expenses net of fee waivers, if any | 1.65% A | 1.60% | 1.67% | 1.75% | 1.83% | 1.71% |
Expenses net of all reductions | 1.64% A | 1.58% | 1.64% | 1.70% | 1.72% | 1.62% |
Net investment income (loss) | .44% A | 1.25% | 1.76% H | .62% | 1.21% | .53% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 61,835 | $ 52,128 | $ 55,683 | $ 53,255 | $ 55,510 | $ 59,306 |
Portfolio turnover rate G | 190% A | 64% | 44% | 38% | 81% | 116% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. FFees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.09 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 1.12%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.90 | $ 14.83 | $ 11.82 | $ 10.15 | $ 8.49 | $ 14.85 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - J | .12 | .17 H | .01 | .07 | .01 |
Net realized and unrealized gain (loss) | 2.27 | 2.03 | 2.95 | 1.69 | 1.65 | (6.37) |
Total from investment operations | 2.27 | 2.15 | 3.12 | 1.70 | 1.72 | (6.36) |
Distributions from net investment income | (.07) | (.08) | (.11) | (.03) | (.06) | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 19.10 | $ 16.90 | $ 14.83 | $ 11.82 | $ 10.15 | $ 8.49 |
Total Return B, C, D | 13.46% | 14.57% | 26.51% | 16.79% | 20.37% | (42.83)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.13% A | 2.09% | 2.14% | 2.25% | 2.32% | 2.20% |
Expenses net of fee waivers, if any | 2.13% A | 2.09% | 2.14% | 2.25% | 2.25% | 2.20% |
Expenses net of all reductions | 2.13% A | 2.06% | 2.11% | 2.20% | 2.13% | 2.11% |
Net investment income (loss) | (.05)% A | .76% | 1.28% H | .12% | .79% | .04% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 58,523 | $ 65,959 | $ 82,577 | $ 84,742 | $ 87,868 | $ 91,517 |
Portfolio turnover rate G | 190% A | 64% | 44% | 38% | 81% | 116% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.09 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been .64%. I 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 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. J Amount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.91 | $ 14.84 | $ 11.84 | $ 10.16 | $ 8.50 | $ 14.85 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - J | .13 | .18 H | .02 | .07 | .02 |
Net realized and unrealized gain (loss) | 2.27 | 2.04 | 2.94 | 1.70 | 1.65 | (6.37) |
Total from investment operations | 2.27 | 2.17 | 3.12 | 1.72 | 1.72 | (6.35) |
Distributions from net investment income | (.10) | (.10) | (.12) | (.04) | (.06) | - |
Redemption fees added to paid in capital E | - J | - J | - J | - J | - J | - J |
Net asset value, end of period | $ 19.08 | $ 16.91 | $ 14.84 | $ 11.84 | $ 10.16 | $ 8.50 |
Total Return B, C, D | 13.50% | 14.72% | 26.48% | 16.98% | 20.35% | (42.76)% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.05% A | 2.02% | 2.07% | 2.17% | 2.23% | 2.11% |
Expenses net of fee waivers, if any | 2.05% A | 2.02% | 2.07% | 2.17% | 2.23% | 2.11% |
Expenses net of all reductions | 2.05% A | 2.00% | 2.04% | 2.12% | 2.12% | 2.02% |
Net investment income (loss) | .04% A | .83% | 1.36% H | .21% | .80% | .13% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 39,464 | $ 32,823 | $ 34,827 | $ 35,038 | $ 37,530 | $ 41,496 |
Portfolio turnover rate G | 190% A | 64% | 44% | 38% | 81% | 116% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Investment income per share reflects a special dividend which amounted to $.09 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been .72%. I 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 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. J Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Utilities
Financial Highlights - Institutional Class
| Six months ended January 31, 2007 | Years ended July 31, |
| (Unaudited) | 2006 | 2005 | 2004 | 2003 | 2002 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 17.38 | $ 15.31 | $ 12.20 | $ 10.47 | $ 8.86 | $ 15.31 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .10 | .30 | .33 G | .15 | .18 | .16 |
Net realized and unrealized gain (loss) | 2.33 | 2.10 | 3.03 | 1.73 | 1.71 | (6.61) |
Total from investment operations | 2.43 | 2.40 | 3.36 | 1.88 | 1.89 | (6.45) |
Distributions from net investment income | (.30) | (.33) | (.25) | (.15) | (.28) | - |
Redemption fees added to paid in capital D | - I | - I | - I | - I | - I | - I |
Net asset value, end of period | $ 19.51 | $ 17.38 | $ 15.31 | $ 12.20 | $ 10.47 | $ 8.86 |
Total Return B, C | 14.12% | 15.95% | 27.88% | 18.14% | 21.94% | (42.13)% |
Ratios to Average Net Assets E, H | | | | | | |
Expenses before reductions | .97% A | .94% | .99% | 1.09% | 1.06% | .96% |
Expenses net of fee waivers, if any | .97% A | .94% | .99% | 1.09% | 1.06% | .96% |
Expenses net of all reductions | .97% A | .92% | .96% | 1.04% | .94% | .87% |
Net investment income (loss) | 1.12% A | 1.91% | 2.44% G | 1.29% | 1.98% | 1.28% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 9,151 | $ 6,479 | $ 1,766 | $ 2,254 | $ 2,891 | $ 2,939 |
Portfolio turnover rate F | 190% A | 64% | 44% | 38% | 81% | 116% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G Investment income per share reflects a special dividend which amounted to $.09 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 1.80%. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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. I Amount represents less than $.01 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2007 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Utilities Fund (the Fund) (formerly Fidelity Advisor Telecommunications & Utilities Growth Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return
Utilities
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 20,609,499 |
Unrealized depreciation | (2,125,772) |
Net unrealized appreciation (depreciation) | $ 18,483,727 |
Cost for federal income tax purposes | $ 236,607,079 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. Prior to October 1, 2006, shares held in the Fund less than 60 days were subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $218,051,304 and $207,868,689, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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 a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | .00% | .25% | $ 67,361 | $ 1,215 |
Class T | .25% | .25% | 146,214 | - |
Class B | .75% | .25% | 320,379 | 240,284 |
Class C | .75% | .25% | 187,117 | 19,666 |
| | | $ 721,071 | $ 261,165 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% 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 | $ 24,834 |
Class T | 6,106 |
Class B* | 31,398 |
Class C* | 1,071 |
| $ 63,409 |
* 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.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets* |
Class A | $ 103,320 | .39 |
Class T | 122,006 | .42 |
Class B | 129,851 | .41 |
Class C | 60,019 | .32 |
Institutional Class | 9,782 | .24 |
| $ 424,978 | |
* Annualized
Utilities
4. Fees and Other Transactions with Affiliates - continued
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds, are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 Fidelity Management & Research Company, FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $313 for the period.
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $270 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $16,106.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $3,718 for the period.
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
8. Other - continued
desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
From net investment income | | |
Class A | $ 644,013 | $ 515,686 |
Class T | 560,452 | 679,149 |
Class B | 253,850 | 428,719 |
Class C | 209,021 | 227,882 |
Institutional Class | 128,016 | 34,962 |
Total | $ 1,795,352 | $ 1,886,398 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 | Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 1,401,594 | 1,157,742 | $ 25,754,707 | $ 18,299,828 |
Reinvestment of distributions | 31,700 | 29,809 | 573,106 | 453,431 |
Shares redeemed | (372,908) | (749,911) | (6,912,091) | (11,656,126) |
Net increase (decrease) | 1,060,386 | 437,640 | $ 19,415,722 | $ 7,097,133 |
Class T | | | | |
Shares sold | 521,573 | 427,549 | $ 9,505,197 | $ 6,679,626 |
Reinvestment of distributions | 29,414 | 41,716 | 530,972 | 634,275 |
Shares redeemed | (389,234) | (1,121,239) | (7,181,677) | (17,325,224) |
Net increase (decrease) | 161,753 | (651,974) | $ 2,854,492 | $ (10,011,323) |
Class B | | | | |
Shares sold | 230,176 | 164,555 | $ 4,139,686 | $ 2,522,243 |
Reinvestment of distributions | 12,603 | 24,747 | 221,272 | 371,052 |
Shares redeemed | (1,081,495) | (1,855,539) | (19,688,803) | (28,512,346) |
Net increase (decrease) | (838,716) | (1,666,237) | $ (15,327,845) | $ (25,619,051) |
Class C | | | | |
Shares sold | 416,690 | 246,869 | $ 7,488,235 | $ 3,819,729 |
Reinvestment of distributions | 8,956 | 11,397 | 157,448 | 170,983 |
Shares redeemed | (298,255) | (663,040) | (5,449,188) | (10,076,221) |
Net increase (decrease) | 127,391 | (404,774) | $ 2,196,495 | $ (6,085,509) |
Institutional Class | | | | |
Shares sold | 147,287 | 292,241 | $ 2,723,884 | $ 4,893,596 |
Reinvestment of distributions | 2,016 | 1,223 | 36,805 | 18,745 |
Shares redeemed | (53,075) | (36,084) | (997,820) | (562,628) |
Net increase (decrease) | 96,228 | 257,380 | $ 1,762,869 | $ 4,349,713 |
Utilities
Proxy Voting Results
A special meeting of each fund's shareholders was held on September 28, 2006 and September 30, 2006. The results of votes taken among shareholders on the proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.
PROPOSAL 1 |
To elect a Board of Trustees. A, C |
| # of
Votes | % of
Votes |
Dennis J. Dirks |
Affirmative | 2,206,930,035.62 | 96.925 |
Withheld | 70,013,151.28 | 3.075 |
TOTAL | 2,276,943,186.90 | 100.000 |
Albert R. Gamper, Jr. |
Affirmative | 2,206,929,647.55 | 96.925 |
Withheld | 70,013,539.35 | 3.075 |
TOTAL | 2,276,943,186.90 | 100.000 |
Robert M. Gates |
Affirmative | 2,205,212,761.55 | 96.850 |
Withheld | 71,730,425.35 | 3.150 |
TOTAL | 2,276,943,186.90 | 100.000 |
George H. Heilmeier |
Affirmative | 2,204,247,730.70 | 96.807 |
Withheld | 72,695,456.20 | 3.193 |
TOTAL | 2,276,943,186.90 | 100.000 |
Edward C. Johnson 3d |
Affirmative | 2,203,739,123.67 | 96.785 |
Withheld | 73,204,063.23 | 3.215 |
TOTAL | 2,276,943,186.90 | 100.000 |
Stephen P. Jonas |
Affirmative | 2,207,154,045.47 | 96.935 |
Withheld | 69,789,141.43 | 3.065 |
TOTAL | 2,276,943,186.90 | 100.000 |
James H. KeyesB |
Affirmative | 2,205,258,024.08 | 96.852 |
Withheld | 71,685,162.82 | 3.148 |
TOTAL | 2,276,943,186.90 | 100.000 |
Marie L. Knowles |
Affirmative | 2,205,892,060.16 | 96.880 |
Withheld | 71,051,126.74 | 3.120 |
TOTAL | 2,276,943,186.90 | 100.000 |
Ned C. Lautenbach |
Affirmative | 2,205,297,807.97 | 96.853 |
Withheld | 71,645,378.93 | 3.147 |
TOTAL | 2,276,943,186.90 | 100.000 |
William O. McCoy |
Affirmative | 2,204,396,505.93 | 96.814 |
Withheld | 72,546,680.97 | 3.186 |
TOTAL | 2,276,943,186.90 | 100.000 |
| # of
Votes | % of
Votes |
Robert L. Reynolds |
Affirmative | 2,206,981,118.77 | 96.927 |
Withheld | 69,962,068.13 | 3.073 |
TOTAL | 2,276,943,186.90 | 100.000 |
Cornelia M. Small |
Affirmative | 2,206,379,820.44 | 96.901 |
Withheld | 70,563,366.46 | 3.099 |
TOTAL | 2,276,943,186.90 | 100.000 |
William S. Stavropoulos |
Affirmative | 2,205,403,278.90 | 96.858 |
Withheld | 71,539,908.00 | 3.142 |
TOTAL | 2,276,943,186.90 | 100.000 |
Kenneth L. Wolfe |
Affirmative | 2,205,707,840.10 | 96.871 |
Withheld | 71,235,346.80 | 3.129 |
TOTAL | 2,276,943,186.90 | 100.000 |
PROPOSAL 2A |
To modify the fundamental "invests primarily" policy (the investment policy concerning the fund's primary investments) of Fidelity Advisor Consumer Discretionary Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 25,052,022.13 | 70.939 |
Against | 1,507,700.50 | 4.269 |
Abstain | 2,181,277.38 | 6.177 |
Broker Non-Votes | 6,573,990.16 | 18.615 |
TOTAL | 35,314,990.17 | 100.000 |
PROPOSAL 2B |
To modify the fundamental concentration policy of Fidelity Advisor Consumer Discretionary Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 24,468,395.75 | 69.286 |
Against | 1,941,580.95 | 5.498 |
Abstain | 2,331,023.31 | 6.601 |
Broker Non-Votes | 6,573,990.16 | 18.615 |
TOTAL | 35,314,990.17 | 100.000 |
PROPOSAL 3A |
To modify the fundamental "invests primarily" policy (the investment policy concerning the fund's primary investments) of Fidelity Advisor Industrials Fund.C |
| # of
Votes | % of
Votes |
Affirmative | 103,262,001.88 | 67.400 |
Against | 4,354,979.52 | 2.842 |
Abstain | 6,913,004.08 | 4.513 |
Broker Non-Votes | 38,678,502.70 | 25.246 |
TOTAL | 153,208,488.18 | 100.000 |
PROPOSAL 3B |
To modify the fundamental concentration policy of Fidelity Advisor Industrials Fund.C |
| # of
Votes | % of
Votes |
Affirmative | 103,063,141.29 | 67.270 |
Against | 4,478,980.28 | 2.923 |
Abstain | 6,987,863.91 | 4.561 |
Broker Non-Votes | 38,678,502.70 | 25.246 |
TOTAL | 153,208,488.18 | 100.000 |
PROPOSAL 4A |
To modify the fundamental concentration policy of Fidelity Advisor Utilities Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 78,803,170.56 | 70.172 |
Against | 3,577,908.42 | 3.186 |
Abstain | 6.541,369.10 | 5.825 |
Broker Non-Votes | 23,378,154.01 | 20.817 |
TOTAL | 112,300,602.09 | 100.000 |
PROPOSAL 5A |
To modify the fundamental "invests primarily" policy (the investment policy concerning the fund's primary investments) of Fidelity Advisor Communications Equipment Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 5,159,022.72 | 69.946 |
Against | 285,575.04 | 3.872 |
Abstain | 443,398.62 | 6.011 |
Broker Non-Votes | 1,487,692.54 | 20.170 |
TOTAL | 7,375,688.92 | 100.000 |
PROPOSAL 5B |
To modify the fundamental concentration policy of Fidelity Advisor Communications Equipment Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 5,159,987.88 | 69.959 |
Against | 295,440.44 | 4.006 |
Abstain | 432,568.06 | 5.864 |
Broker Non-Votes | 1,487,692.54 | 20.170 |
TOTAL | 7,375,688.92 | 100.000 |
PROPOSAL 6A |
To modify the fundamental investment objective of Fidelity Advisor Energy Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 335,212,227.18 | 68.272 |
Against | 23,151,143.88 | 4.716 |
Abstain | 28,129,279.36 | 5.728 |
Broker Non-Votes | 104,499,231.10 | 21.283 |
TOTAL | 490,991,881.52 | 100.000 |
PROPOSAL 6B |
To modify the fundamental investment policy of Fidelity Advisor Energy Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 338,904,300.69 | 69.024 |
Against | 21,528,314.89 | 4.385 |
Abstain | 26,060,034.84 | 5.307 |
Broker Non-Votes | 104,499,231.10 | 21.283 |
TOTAL | 490,991,881.52 | 100.000 |
PROPOSAL 6C |
To modify the fundamental concentration policy of Fidelity Advisor Energy Fund.D |
| # of
Votes | % of
Votes |
Affirmative | 334,458,778.33 | 68.119 |
Against | 22,220,293.16 | 4.526 |
Abstain | 29,813,578.93 | 6.072 |
Broker Non-Votes | 104,499,231.10 | 21.283 |
TOTAL | 490,991,881.52 | 100.000 |
A Denotes trust-wide proposal and voting results. B Effective on or about January 1, 2007. C The special meeting of shareholders reconvened on September 30, 2006 with respect to this proposal. D The special meeting of shareholders reconvened on September 28, 2006 with respect to this proposal. |
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research (U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
Fidelity International Investment Advisors
Fidelity International Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodians
JPMorgan Chase Bank
New York, NY
Brown Brothers Harriman & Co. (dagger)
Boston, MA
State Street Bank and Trust (dagger)(dagger)
Quincy, MA
* Custodian for Fidelity Advisor Energy Fund only.
(dagger)(dagger) Custodian for Fidelity Advisor Biotechnology Fund, Fidelity Advisor
Communications Equipment Fund, and Fidelity Advisor Electronics Fund only.
AFOCI-USAN-0307
1.789280.104
(Fidelity Investment logo)(registered trademark)
Fidelity® Advisor
Real Estate
Fund - Class A, Class T, Class B
and Class C
Semiannual Report
January 31, 2007
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | <Click Here> | Ned Johnson's message to shareholders. |
Shareholder Expense Example | <Click Here> | An example of shareholder expenses. |
Investment Changes | <Click Here> | A summary of major shifts in the fund's investments over the past six months. |
Investments | <Click Here> | A complete list of the fund's investments with their market values. |
Financial Statements | <Click Here> | Statements of assets and liabilities, operations, and changes in net assets,
as well as financial highlights. |
Notes | <Click Here> | Notes to financial statements. |
Report of Independent Registered Public Accounting Firm | <Click Here> | |
Proxy Voting Results | <Click Here> | |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at 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 Corp. or an affiliated company.
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 quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.advisor.fidelity.com.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
We have seen consistently strong performance from stocks and bonds of late, and some relief in energy prices, but the housing market slowdown bears watching for how it might affect the consumer. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, 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 (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,251.60 | $ 7.09 |
Hypothetical A | $ 1,000.00 | $ 1,018.90 | $ 6.36 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,250.50 | $ 8.51 |
Hypothetical A | $ 1,000.00 | $ 1,017.64 | $ 7.63 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,246.90 | $ 11.33 |
Hypothetical A | $ 1,000.00 | $ 1,015.12 | $ 10.16 |
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,246.90 | $ 11.33 |
Hypothetical A | $ 1,000.00 | $ 1,015.12 | $ 10.16 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,253.30 | $ 5.68 |
Hypothetical A | $ 1,000.00 | $ 1,020.16 | $ 5.09 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.25% |
Class T | 1.50% |
Class B | 2.00% |
Class C | 2.00% |
Institutional Class | 1.00% |
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Equity Residential (SBI) | 7.2 | 7.4 |
Equity Office Properties Trust | 6.9 | 5.5 |
General Growth Properties, Inc. | 6.0 | 5.9 |
Public Storage, Inc. | 5.6 | 3.0 |
Vornado Realty Trust | 5.2 | 4.0 |
Simon Property Group, Inc. | 5.0 | 5.3 |
Duke Realty LP | 4.7 | 4.3 |
ProLogis Trust | 4.6 | 6.4 |
Host Hotels & Resorts, Inc. | 4.5 | 5.5 |
Boston Properties, Inc. | 3.6 | 4.2 |
| 53.3 | |
Top Five REIT Sectors as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
REITs - Office Buildings | 23.0 | 22.7 |
REITs - Apartments | 17.9 | 16.6 |
REITs - Industrial Buildings | 16.5 | 13.7 |
REITs - Malls | 14.5 | 14.8 |
REITs - Shopping Centers | 11.7 | 13.6 |
Asset Allocation (% of fund's net assets) |
As of January 31, 2007 * | As of July 31, 2006 ** |
 | Stocks 98.5% | | | Stocks 97.1% | |
 | Short-Term
Investments and
Net Other Assets 1.5% | | | Short-Term
Investments and
Net Other Assets 2.9% | |
* Foreign investments | 1.6% | | ** Foreign investments | 0.0% | |
Semiannual Report
Investments January 31, 2007
Showing Percentage of Net Assets
Common Stocks - 98.5% |
| Shares | | Value (Note 1) |
COMMERCIAL SERVICES & SUPPLIES - 0.5% |
Diversified Commercial & Professional Services - 0.5% |
The Geo Group, Inc. (a) | 46,850 | | $ 2,052,967 |
HEALTH CARE PROVIDERS & SERVICES - 1.0% |
Health Care Facilities - 1.0% |
Brookdale Senior Living, Inc. | 61,000 | | 2,928,000 |
Capital Senior Living Corp. (a) | 49,727 | | 529,095 |
Sun Healthcare Group, Inc. (a) | 37,500 | | 462,000 |
TOTAL HEALTH CARE FACILITIES | | 3,919,095 |
HOTELS, RESTAURANTS & LEISURE - 3.2% |
Hotels, Resorts & Cruise Lines - 3.2% |
Gaylord Entertainment Co. (a) | 6,800 | | 375,768 |
Hilton Hotels Corp. | 42,100 | | 1,489,919 |
Starwood Hotels & Resorts Worldwide, Inc. | 168,900 | | 10,569,762 |
TOTAL HOTELS, RESORTS & CRUISE LINES | | 12,435,449 |
REAL ESTATE INVESTMENT TRUSTS - 92.2% |
REITs - Apartments - 17.9% |
AvalonBay Communities, Inc. | 68,100 | | 10,103,316 |
BRE Properties, Inc. Class A | 115,400 | | 8,009,914 |
Equity Residential (SBI) | 497,100 | | 27,976,787 |
GMH Communities Trust | 179,979 | | 1,765,594 |
Home Properties of New York, Inc. | 125,500 | | 8,068,395 |
United Dominion Realty Trust, Inc. (SBI) | 419,600 | | 13,758,684 |
TOTAL REITS - APARTMENTS | | 69,682,690 |
REITs - Factory Outlets - 2.0% |
Tanger Factory Outlet Centers, Inc. | 193,500 | | 7,856,100 |
REITs - Hotels - 4.5% |
Host Hotels & Resorts, Inc. (d) | 666,594 | | 17,644,743 |
REITs - Industrial Buildings - 16.5% |
AMB Property Corp. (SBI) | 14,400 | | 876,240 |
DCT Industrial Trust, Inc. | 450,200 | | 5,321,364 |
Duke Realty LP | 415,110 | | 18,314,653 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
REAL ESTATE INVESTMENT TRUSTS - CONTINUED |
REITs - Industrial Buildings - continued |
ProLogis Trust | 278,623 | | $ 18,110,495 |
Public Storage, Inc. | 199,418 | | 21,688,702 |
TOTAL REITS - INDUSTRIAL BUILDINGS | | 64,311,454 |
REITs - Malls - 14.5% |
CBL & Associates Properties, Inc. | 222,907 | | 10,461,026 |
General Growth Properties, Inc. | 383,099 | | 23,568,250 |
Simon Property Group, Inc. | 170,000 | | 19,446,300 |
Taubman Centers, Inc. | 54,000 | | 3,146,580 |
TOTAL REITS - MALLS | | 56,622,156 |
REITs - Management/Investment - 1.9% |
Equity Lifestyle Properties, Inc. | 48,900 | | 2,700,747 |
Mission West Properties, Inc. | 124,100 | | 1,585,998 |
Washington (REIT) (SBI) (d) | 68,800 | | 2,941,200 |
TOTAL REITS - MANAGEMENT/INVESTMENT | | 7,227,945 |
REITs - Mortgage - 0.2% |
HomeBanc Mortgage Corp., Georgia | 210,200 | | 695,762 |
REITs - Office Buildings - 23.0% |
Alexandria Real Estate Equities, Inc. (d) | 115,600 | | 12,526,416 |
American Financial Realty Trust (SBI) | 285,600 | | 3,193,008 |
Boston Properties, Inc. (d) | 111,900 | | 14,109,471 |
Corporate Office Properties Trust (SBI) | 201,300 | | 10,725,264 |
Douglas Emmett, Inc. | 133,800 | | 3,660,768 |
Equity Office Properties Trust | 481,400 | | 26,741,770 |
Kilroy Realty Corp. | 33,900 | | 2,943,876 |
SL Green Realty Corp. | 72,400 | | 10,612,392 |
Sovran Self Storage, Inc. | 82,702 | | 4,962,120 |
TOTAL REITS - OFFICE BUILDINGS | | 89,475,085 |
REITs - Shopping Centers - 11.7% |
Developers Diversified Realty Corp. | 98,100 | | 6,584,472 |
Inland Real Estate Corp. (d) | 225,800 | | 4,565,676 |
Kimco Realty Corp. | 192,990 | | 9,572,304 |
Kite Realty Group Trust | 55,600 | | 1,084,200 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
REAL ESTATE INVESTMENT TRUSTS - CONTINUED |
REITs - Shopping Centers - continued |
Vornado Realty Trust | 165,350 | | $ 20,230,573 |
Weingarten Realty Investors (SBI) | 67,900 | | 3,361,729 |
TOTAL REITS - SHOPPING CENTERS | | 45,398,954 |
TOTAL REAL ESTATE INVESTMENT TRUSTS | | 358,914,889 |
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.6% |
Real Estate Management & Development - 1.6% |
Brookfield Properties Corp. | 114,200 | | 5,314,869 |
GAGFAH SA | 26,600 | | 796,003 |
HFF, Inc. (a) | 9,400 | | 175,780 |
TOTAL REAL ESTATE MANAGEMENT & DEVELOPMENT | | 6,286,652 |
TOTAL COMMON STOCKS (Cost $275,456,514) | 383,609,052 |
Money Market Funds - 4.5% |
| | | |
Fidelity Cash Central Fund, 5.35% (b) | 10,028,754 | | 10,028,754 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 7,469,675 | | 7,469,675 |
TOTAL MONEY MARKET FUNDS (Cost $17,498,429) | 17,498,429 |
TOTAL INVESTMENT PORTFOLIO - 103.0% (Cost $292,954,943) | | 401,107,481 |
NET OTHER ASSETS - (3.0)% | | (11,788,898) |
NET ASSETS - 100% | $ 389,318,583 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 236,184 |
Fidelity Securities Lending Cash Central Fund | 8,590 |
Total | $ 244,774 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $7,434,250) - See accompanying schedule: Unaffiliated issuers (cost $275,456,514) | $ 383,609,052 | |
Fidelity Central Funds (cost $17,498,429) | 17,498,429 | |
Total Investments (cost $292,954,943) | | $ 401,107,481 |
Foreign currency held at value (cost $13) | | 13 |
Receivable for investments sold | | 4,984,890 |
Receivable for fund shares sold | | 1,785,737 |
Dividends receivable | | 249,352 |
Interest receivable | | 34,113 |
Prepaid expenses | | 1,107 |
Other receivables | | 1,259 |
Total assets | | 408,163,952 |
| | |
Liabilities | | |
Payable to custodian bank | $ 135,894 | |
Payable for investments purchased | 9,947,295 | |
Payable for fund shares redeemed | 771,252 | |
Accrued management fee | 175,965 | |
Distribution fees payable | 152,709 | |
Other affiliated payables | 97,673 | |
Other payables and accrued expenses | 94,906 | |
Collateral on securities loaned, at value | 7,469,675 | |
Total liabilities | | 18,845,369 |
| | |
Net Assets | | $ 389,318,583 |
Net Assets consist of: | | |
Paid in capital | | $ 269,706,520 |
Distributions in excess of net investment income | | (107,114) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 11,566,639 |
Net unrealized appreciation (depreciation) on investments | | 108,152,538 |
Net Assets | | $ 389,318,583 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
| January 31, 2007 |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($142,593,071 ÷ 6,061,554 shares) | | $ 23.52 |
| | |
Maximum offering price per share (100/94.25 of $23.52) | | $ 24.95 |
Class T:
Net Asset Value and redemption price per share ($138,591,356 ÷ 5,892,729 shares) | | $ 23.52 |
| | |
Maximum offering price per share (100/96.50 of $23.52) | | $ 24.37 |
Class B:
Net Asset Value and offering price per share ($37,170,197 ÷ 1,587,343 shares)A | | $ 23.42 |
| | |
Class C:
Net Asset Value and offering price per share ($58,365,355 ÷ 2,492,471 shares)A | | $ 23.42 |
| | |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($12,598,604 ÷ 532,599 shares) | | $ 23.65 |
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.
Semiannual Report
Statement of Operations
| Six months ended January 31, 2007 |
| | |
Investment Income | | |
Dividends | | $ 3,298,892 |
Interest | | 11 |
Income from Fidelity Central Funds | | 244,774 |
Total income | | 3,543,677 |
| | |
Expenses | | |
Management fee | $ 854,678 | |
Transfer agent fees | 496,280 | |
Distribution fees | 793,869 | |
Accounting and security lending fees | 63,097 | |
Custodian fees and expenses | 8,415 | |
Independent trustees' compensation | 478 | |
Registration fees | 63,773 | |
Audit | 44,370 | |
Legal | 9,199 | |
Miscellaneous | 48,726 | |
Total expenses before reductions | 2,382,885 | |
Expense reductions | (91,442) | 2,291,443 |
Net investment income (loss) | | 1,252,234 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 17,786,439 | |
Foreign currency transactions | 540 | |
Total net realized gain (loss) | | 17,786,979 |
Change in net unrealized appreciation (depreciation) on investment securities | | 50,856,588 |
Net gain (loss) | | 68,643,567 |
Net increase (decrease) in net assets resulting from operations | | $ 69,895,801 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 1,252,234 | $ 2,590,321 |
Net realized gain (loss) | 17,786,979 | 18,564,557 |
Change in net unrealized appreciation (depreciation) | 50,856,588 | 13,773,537 |
Net increase (decrease) in net assets resulting
from operations | 69,895,801 | 34,928,415 |
Distributions to shareholders from net investment income | (1,881,250) | (2,073,129) |
Distributions to shareholders from net realized gain | (20,008,712) | (8,286,409) |
Total distributions | (21,889,962) | (10,359,538) |
Share transactions - net increase (decrease) | 93,870,152 | 43,551,731 |
Total increase (decrease) in net assets | 141,875,991 | 68,120,608 |
| | |
Net Assets | | |
Beginning of period | 247,442,592 | 179,321,984 |
End of period (including distributions in excess of net investment income of $107,114 and undistributed net investment income of $521,902, respectively) | $ 389,318,583 | $ 247,442,592 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, | Years ended July 31, |
| 2007 | 2006 | 2005 | 2004 | 2003 H |
Selected Per-Share Data | | | | | |
Net asset value,
beginning of period | $ 20.34 | $ 18.23 | $ 13.22 | $ 11.33 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .12 | .29 | .31 | .27 | .21 |
Net realized and unrealized gain (loss) | 4.74 | 2.85 | 5.52 | 2.03 | 1.28 |
Total from investment operations | 4.86 | 3.14 | 5.83 | 2.30 | 1.49 |
Distributions from net investment income | (.18) | (.23) | (.29) | (.30) | (.16) |
Distributions from net realized gain | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions | (1.68) | (1.03) | (.82) | (.41) | (.16) |
Net asset value, end of period | $ 23.52 | $ 20.34 | $ 18.23 | $ 13.22 | $ 11.33 |
Total Return B, C, D | 25.16% | 18.32% | 45.48% | 20.59% | 15.13% |
Ratios to Average Net Assets F, I | | | | | |
Expenses before reductions | 1.30% A | 1.29% | 1.31% | 1.54% | 2.98% A |
Expenses net of fee waivers,
if any | 1.25% A | 1.25% | 1.28% | 1.54% | 1.75% A |
Expenses net of all reductions | 1.24% A | 1.24% | 1.25% | 1.52% | 1.72% A |
Net investment income (loss) | 1.10% A | 1.59% | 1.98% | 2.10% | 2.35% A |
Supplemental Data | | | | | |
Net assets, end of period (000 omitted) | $ 142,593 | $ 85,000 | $ 53,097 | $ 22,273 | $ 3,993 |
Portfolio turnover rate G | 60% A | 65% | 62% | 52% | 47% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period September 12, 2002 (commencement of operations) to July 31, 2003.
I 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 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.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
| Six months ended
January 31, | Years ended July 31, |
| 2007 | 2006 | 2005 | 2004 | 2003 H |
Selected Per-Share Data | | | | | |
Net asset value,
beginning of period | $ 20.31 | $ 18.23 | $ 13.21 | $ 11.32 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .09 | .24 | .26 | .23 | .18 |
Net realized and unrealized gain (loss) | 4.75 | 2.84 | 5.53 | 2.02 | 1.29 |
Total from investment operations | 4.84 | 3.08 | 5.79 | 2.25 | 1.47 |
Distributions from net investment income | (.13) | (.20) | (.24) | (.25) | (.15) |
Distributions from net realized gain | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions | (1.63) | (1.00) | (.77) | (.36) | (.15) |
Net asset value, end of period | $ 23.52 | $ 20.31 | $ 18.23 | $ 13.21 | $ 11.32 |
Total Return B, C, D | 25.05% | 17.98% | 45.12% | 20.12% | 14.91% |
Ratios to Average Net Assets F, I | | | | | |
Expenses before reductions | 1.54% A | 1.55% | 1.61% | 1.86% | 3.32% A |
Expenses net of fee waivers,
if any | 1.50% A | 1.50% | 1.57% | 1.85% | 2.00% A |
Expenses net of all reductions | 1.49% A | 1.49% | 1.54% | 1.83% | 1.97% A |
Net investment income (loss) | .85% A | 1.34% | 1.70% | 1.80% | 2.10% A |
Supplemental Data | | | | | |
Net assets, end of period (000 omitted) | $ 138,591 | $ 91,224 | $ 66,303 | $ 26,037 | $ 9,049 |
Portfolio turnover rate G | 60% A | 65% | 62% | 52% | 47% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period September 12, 2002 (commencement of operations) to July 31, 2003.
I 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 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.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
| Six months ended
January 31, | Years ended July 31, |
| 2007 | 2006 | 2005 | 2004 | 2003 H |
Selected Per-Share Data | | | | | |
Net asset value,
beginning of period | $ 20.19 | $ 18.16 | $ 13.18 | $ 11.29 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .04 | .15 | .18 | .16 | .14 |
Net realized and unrealized gain (loss) | 4.72 | 2.83 | 5.50 | 2.04 | 1.28 |
Total from investment operations | 4.76 | 2.98 | 5.68 | 2.20 | 1.42 |
Distributions from net investment income | (.05) | (.15) | (.17) | (.20) | (.13) |
Distributions from net realized gain | (1.48) | (.80) | (.53) | (.11) | - |
Total distributions | (1.53) | (.95) | (.70) | (.31) | (.13) |
Net asset value, end of period | $ 23.42 | $ 20.19 | $ 18.16 | $ 13.18 | $ 11.29 |
Total Return B, C, D | 24.69% | 17.42% | 44.31% | 19.67% | 14.38% |
Ratios to Average Net Assets F, I | | | | | |
Expenses before reductions | 2.08% A | 2.05% | 2.10% | 2.33% | 3.82% A |
Expenses net of fee waivers,
if any | 2.00% A | 2.00% | 2.07% | 2.33% | 2.50% A |
Expenses net of all reductions | 1.99% A | 1.98% | 2.03% | 2.31% | 2.47% A |
Net investment income (loss) | .35% A | .84% | 1.20% | 1.31% | 1.60% A |
Supplemental Data | | | | | |
Net assets, end of period (000 omitted) | $ 37,170 | $ 27,397 | $ 26,349 | $ 12,910 | $ 5,061 |
Portfolio turnover rate G | 60% A | 65% | 62% | 52% | 47% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period September 12, 2002 (commencement of operations) to July 31, 2003.
I 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 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.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
| Six months ended
January 31, | Years ended July 31, |
| 2007 | 2006 | 2005 | 2004 | 2003 H |
Selected Per-Share Data | | | | | |
Net asset value,
beginning of period | $ 20.21 | $ 18.17 | $ 13.18 | $ 11.29 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .04 | .15 | .19 | .17 | .14 |
Net realized and unrealized gain (loss) | 4.72 | 2.84 | 5.50 | 2.03 | 1.28 |
Total from investment operations | 4.76 | 2.99 | 5.69 | 2.20 | 1.42 |
Distributions from net investment income | (.05) | (.15) | (.17) | (.20) | (.13) |
Distributions from net realized gain | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions | (1.55) | (.95) | (.70) | (.31) | (.13) |
Net asset value, end of period | $ 23.42 | $ 20.21 | $ 18.17 | $ 13.18 | $ 11.29 |
Total Return B, C, D | 24.69% | 17.46% | 44.38% | 19.67% | 14.38% |
Ratios to Average Net Assets F, I | | | | | |
Expenses before reductions | 2.06% A | 2.05% | 2.09% | 2.29% | 3.76% A |
Expenses net of fee waivers,
if any | 2.00% A | 2.00% | 2.05% | 2.29% | 2.50% A |
Expenses net of all reductions | 1.99% A | 1.98% | 2.02% | 2.27% | 2.47% A |
Net investment income (loss) | .35% A | .84% | 1.22% | 1.35% | 1.60% A |
Supplemental Data | | | | | |
Net assets, end of period (000 omitted) | $ 58,365 | $ 36,669 | $ 29,410 | $ 13,671 | $ 5,059 |
Portfolio turnover rate G | 60% A | 65% | 62% | 52% | 47% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period September 12, 2002 (commencement of operations) to July 31, 2003.
I 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 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.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended
January 31, | Years ended July 31, |
| 2007 | 2006 | 2005 | 2004 | 2003 G |
Selected Per-Share Data | | | | | |
Net asset value,
beginning of period | $ 20.47 | $ 18.33 | $ 13.28 | $ 11.35 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) D | .15 | .35 | .36 | .32 | .23 |
Net realized and unrealized gain (loss) | 4.77 | 2.85 | 5.56 | 2.04 | 1.28 |
Total from investment operations | 4.92 | 3.20 | 5.92 | 2.36 | 1.51 |
Distributions from net investment income | (.24) | (.26) | (.34) | (.32) | (.16) |
Distributions from net realized gain | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions B, C | (1.74) | (1.06) | (.87) | (.43) | (.16) |
Net asset value, end of period | $ 23.65 | $ 20.47 | $ 18.33 | $ 13.28 | $ 11.35 |
Total Return | 25.33% | 18.61% | 46.05% | 21.11% | 15.33% |
Ratios to Average Net Assets E, H | | | | | |
Expenses before reductions | 1.01% A | .94% | .91% | 1.12% | 2.68% A |
Expenses net of fee waivers,
if any | 1.00% A | .94% | .91% | 1.12% | 1.50% A |
Expenses net of all reductions | .99% A | .92% | .88% | 1.10% | 1.47% A |
Net investment income (loss) | 1.35% A | 1.90% | 2.35% | 2.53% | 2.60% A |
Supplemental Data | | | | | |
Net assets, end of period (000 omitted) | $ 12,599 | $ 7,152 | $ 4,162 | $ 2,478 | $ 1,225 |
Portfolio turnover rate F | 60% A | 65% | 62% | 52% | 47% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period September 12, 2002 (commencement of operations) to July 31, 2003.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2007
1. Significant Accounting Policies.
Fidelity Advisor Real Estate Fund (the Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
Semiannual Report
1. Significant Accounting Policies - continued
Security Valuation - continued
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of
Semiannual Report
Notes to Financial Statements - continued
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC) and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 109,592,944 | |
Unrealized depreciation | (1,615,132) | |
Net unrealized appreciation (depreciation) | $ 107,977,812 | |
Cost for federal income tax purposes | $ 293,129,669 | |
Semiannual Report
1. Significant Accounting Policies - continued
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $167,002,042 and $89,965,265, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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%
Semiannual Report
Notes to Financial Statements - continued
4. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
of the Fund's average net assets and a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .57% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 134,855 | $ 10,344 |
Class T | .25% | .25% | 270,080 | 1,404 |
Class B | .75% | .25% | 157,335 | 118,002 |
Class C | .75% | .25% | 231,599 | 51,518 |
| | | $ 793,869 | $ 181,268 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares (.25% prior to February 24, 2006) 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 | $ 88,067 |
Class T | 19,100 |
Class B* | 24,069 |
Class C* | 2,290 |
| $ 133,526 |
* 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.
Semiannual Report
4. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets* |
Class A | $ 175,255 | .33 |
Class T | 172,983 | .32 |
Class B | 56,419 | .36 |
Class C | 77,667 | .34 |
Institutional Class | 13,956 | .29 |
| $ 496,280 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $1,971 for the period.
Semiannual Report
Notes to Financial Statements - continued
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $357 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $8,590.
7. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
Semiannual Report
7. Expense Reductions - continued
The following classes were in reimbursement during the period:
| Expense
Limitations | Reimbursement
from adviser |
| | |
Class A | 1.25% | $ 26,974 |
Class T | 1.50% | 25,631 |
Class B | 2.00% | 13,786 |
Class C | 2.00% | 14,682 |
Institutional Class | 1.00% | 555 |
| | $ 81,628 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $2,318 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $3,213. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction | |
Class A | $ 755 | |
Institutional Class | 38 | |
| $ 793 | |
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations
Semiannual Report
Notes to Financial Statements - continued
8. Other - continued
in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
From net investment income | | |
Class A | $ 910,998 | $ 741,719 |
Class T | 671,344 | 796,426 |
Class B | 73,434 | 226,838 |
Class C | 121,381 | 250,448 |
Institutional Class | 104,093 | 57,698 |
Total | $ 1,881,250 | $ 2,073,129 |
From net realized gain | | |
Class A | $ 7,016,403 | $ 2,548,943 |
Class T | 7,245,888 | 3,068,411 |
Class B | 2,110,411 | 1,188,352 |
Class C | 3,021,143 | 1,299,203 |
Institutional Class | 614,867 | 181,500 |
Total | $ 20,008,712 | $ 8,286,409 |
Semiannual Report
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 | Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 2,087,413 | 2,262,157 | $ 44,996,050 | $ 41,503,690 |
Reinvestment of distributions | 360,749 | 181,664 | 7,512,907 | 3,138,257 |
Shares redeemed | (565,057) | (1,177,662) | (12,144,860) | (21,289,349) |
Net increase (decrease) | 1,883,105 | 1,266,159 | $ 40,364,097 | $ 23,352,598 |
Class T | | | | |
Shares sold | 1,800,856 | 2,143,039 | $ 39,064,987 | $ 39,115,936 |
Reinvestment of distributions | 366,026 | 214,228 | 7,615,228 | 3,700,674 |
Shares redeemed | (764,739) | (1,504,010) | (16,223,717) | (27,210,343) |
Net increase (decrease) | 1,402,143 | 853,257 | $ 30,456,498 | $ 15,606,267 |
Class B | | | | |
Shares sold | 337,065 | 398,999 | $ 7,208,462 | $ 7,246,734 |
Reinvestment of distributions | 95,389 | 73,796 | 1,975,221 | 1,270,470 |
Shares redeemed | (202,317) | (566,868) | (4,303,749) | (10,197,671) |
Net increase (decrease) | 230,137 | (94,073) | $ 4,879,934 | $ (1,680,467) |
Class C | | | | |
Shares sold | 725,843 | 763,395 | $ 15,362,273 | $ 14,132,910 |
Reinvestment of distributions | 135,201 | 80,957 | 2,802,391 | 1,394,942 |
Shares redeemed | (183,313) | (647,908) | (3,893,476) | (11,656,661) |
Net increase (decrease) | 677,731 | 196,444 | $ 14,271,188 | $ 3,871,191 |
Institutional Class | | | | |
Shares sold | 217,290 | 225,212 | $ 4,672,811 | $ 4,253,663 |
Reinvestment of distributions | 30,516 | 12,056 | 638,836 | 209,183 |
Shares redeemed | (64,528) | (115,041) | (1,413,212) | (2,060,704) |
Net increase (decrease) | 183,278 | 122,227 | $ 3,898,435 | $ 2,402,142 |
Semiannual Report
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Advisor Series VII and Shareholders of Fidelity Advisor Real Estate Fund:
We have audited the accompanying statement of assets and liabilities of Fidelity Advisor Real Estate Fund (the Fund), a fund of Fidelity Advisor Series VII, including the schedule of investments as of January 31, 2007, and the related statement of operations for the six months then ended, the statements of changes in net assets for the six months then ended and for the year ended July 31, 2006, and the financial highlights for the six months ended January 31, 2007, and each of the four years in the period ended July 31, 2006. 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 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 January 31, 2007, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Advisor Real Estate Fund as of January 31, 2007, the results of its operations for the six months then ended, the changes in its net assets for the six months then ended and for the year ended July 31, 2006, and the financial highlights for the six months ended January 31, 2007, and each of the four years in the period ended July 31, 2006, in conformity with accounting principles generally accepted in the United States of America.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
March 21, 2007
Semiannual Report
Proxy Voting Results
A special meeting of the fund's shareholders was held on September 30, 2006. The results of votes taken among shareholders on the proposal before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.
PROPOSAL 1 |
To elect a Board of Trustees. A |
| # of
Votes | % of
Votes |
Dennis J. Dirks |
Affirmative | 2,206,930,035.62 | 96.925 |
Withheld | 70,013,151.28 | 3.075 |
TOTAL | 2,276,943,186.90 | 100.000 |
Albert R. Gamper, Jr. |
Affirmative | 2,206,929,647.55 | 96.925 |
Withheld | 70,013,539.35 | 3.075 |
TOTAL | 2,276,943,186.90 | 100.000 |
Robert M. Gates |
Affirmative | 2,205,212,761.55 | 96.850 |
Withheld | 71,730,425.35 | 3.150 |
TOTAL | 2,276,943,186.90 | 100.000 |
George H. Heilmeier |
Affirmative | 2,204,247,730.70 | 96.807 |
Withheld | 72,695,456.20 | 3.193 |
TOTAL | 2,276,943,186.90 | 100.000 |
Edward C. Johnson 3d |
Affirmative | 2,203,739,123.67 | 96.785 |
Withheld | 73,204,063.23 | 3.215 |
TOTAL | 2,276,943,186.90 | 100.000 |
Stephen P. Jonas |
Affirmative | 2,207,154,045.47 | 96.935 |
Withheld | 69,789,141.43 | 3.065 |
TOTAL | 2,276,943,186.90 | 100.000 |
James H. KeyesB |
Affirmative | 2,205,258,024.08 | 96.852 |
Withheld | 71,685,162.82 | 3.148 |
TOTAL | 2,276,943,186.90 | 100.000 |
| # of
Votes | % of
Votes |
Marie L. Knowles |
Affirmative | 2,205,892,060.16 | 96.880 |
Withheld | 71,051,126.74 | 3.120 |
TOTAL | 2,276,943,186.90 | 100.000 |
Ned C. Lautenbach |
Affirmative | 2,205,297,807.97 | 96.853 |
Withheld | 71,645,378.93 | 3.147 |
TOTAL | 2,276,943,186.90 | 100.000 |
William O. McCoy |
Affirmative | 2,204,396,505.93 | 96.814 |
Withheld | 72,546,680.97 | 3.186 |
TOTAL | 2,276,943,186.90 | 100.000 |
Robert L. Reynolds |
Affirmative | 2,206,981,118.77 | 96.927 |
Withheld | 69,962,068.13 | 3.073 |
TOTAL | 2,276,943,186.90 | 100.000 |
Cornelia M. Small |
Affirmative | 2,206,379,820.44 | 96.901 |
Withheld | 70,563,366.46 | 3.099 |
TOTAL | 2,276,943,186.90 | 100.000 |
William S. Stavropoulos |
Affirmative | 2,205,403,278.90 | 96.858 |
Withheld | 71,539,908.00 | 3.142 |
TOTAL | 2,276,943,186.90 | 100.000 |
Kenneth L. Wolfe |
Affirmative | 2,205,707,840.10 | 96.871 |
Withheld | 71,235,346.80 | 3.129 |
TOTAL | 2,276,943,186.90 | 100.000 |
A Denotes trust-wide proposal and voting results. B Effective on or about January 1, 2007. |
Semiannual Report
Semiannual Report
Semiannual Report
Semiannual Report
Semiannual Report
Semiannual Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company (formerly Fidelity Management &
Research (Far East) Inc.)
Fidelity International Investment Advisors
Fidelity International Investment Advisors (U.K.) Limited
Fidelity Investments Japan Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
Mellon Bank, N.A.
Pittsburgh, PA
ARE-USAN-0307
1.789730.104
(Fidelity Investment logo)(registered trademark)
(Fidelity Investment logo)(registered trademark)
Fidelity ® Advisor
Real Estate
Fund - Institutional Class
Semiannual Report
January 31, 2007
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | <Click Here> | Ned Johnson's message to shareholders. |
Shareholder Expense Example | <Click Here> | An example of shareholder expenses. |
Investment Changes | <Click Here> | A summary of major shifts in the fund's investments over the past six months. |
Investments | <Click Here> | A complete list of the fund's investments with their market values. |
Financial Statements | <Click Here> | Statements of assets and liabilities, operations, and changes in net assets,
as well as financial highlights. |
Notes | <Click Here> | Notes to financial statements. |
Report of Independent Registered Public Accounting Firm | <Click Here> | |
Proxy Voting Results | <Click Here> | |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at 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 Corp. or an affiliated company.
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 quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.advisor.fidelity.com.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
We have seen consistently strong performance from stocks and bonds of late, and some relief in energy prices, but the housing market slowdown bears watching for how it might affect the consumer. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, 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 (August 1, 2006 to January 31, 2007).
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.
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.
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.
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,251.60 | $ 7.09 |
Hypothetical A | $ 1,000.00 | $ 1,018.90 | $ 6.36 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,250.50 | $ 8.51 |
Hypothetical A | $ 1,000.00 | $ 1,017.64 | $ 7.63 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,246.90 | $ 11.33 |
Hypothetical A | $ 1,000.00 | $ 1,015.12 | $ 10.16 |
| Beginning
Account Value
August 1, 2006 | Ending
Account Value
January 31, 2007 | Expenses Paid
During Period*
August 1, 2006
to January 31, 2007 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,246.90 | $ 11.33 |
Hypothetical A | $ 1,000.00 | $ 1,015.12 | $ 10.16 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,253.30 | $ 5.68 |
Hypothetical A | $ 1,000.00 | $ 1,020.16 | $ 5.09 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.25% |
Class T | 1.50% |
Class B | 2.00% |
Class C | 2.00% |
Institutional Class | 1.00% |
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Equity Residential (SBI) | 7.2 | 7.4 |
Equity Office Properties Trust | 6.9 | 5.5 |
General Growth Properties, Inc. | 6.0 | 5.9 |
Public Storage, Inc. | 5.6 | 3.0 |
Vornado Realty Trust | 5.2 | 4.0 |
Simon Property Group, Inc. | 5.0 | 5.3 |
Duke Realty LP | 4.7 | 4.3 |
ProLogis Trust | 4.6 | 6.4 |
Host Hotels & Resorts, Inc. | 4.5 | 5.5 |
Boston Properties, Inc. | 3.6 | 4.2 |
| 53.3 | |
Top Five REIT Sectors as of January 31, 2007 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
REITs - Office Buildings | 23.0 | 22.7 |
REITs - Apartments | 17.9 | 16.6 |
REITs - Industrial Buildings | 16.5 | 13.7 |
REITs - Malls | 14.5 | 14.8 |
REITs - Shopping Centers | 11.7 | 13.6 |
Asset Allocation (% of fund's net assets) |
As of January 31, 2007 * | As of July 31, 2006 ** |
| Stocks 98.5% | | | Stocks 97.1% | |
| Short-Term
Investments and
Net Other Assets 1.5% | | | Short-Term
Investments and
Net Other Assets 2.9% | |
* Foreign investments | 1.6% | | ** Foreign investments | 0.0% | |
Semiannual Report
Investments January 31, 2007
Showing Percentage of Net Assets
Common Stocks - 98.5% |
| Shares | | Value (Note 1) |
COMMERCIAL SERVICES & SUPPLIES - 0.5% |
Diversified Commercial & Professional Services - 0.5% |
The Geo Group, Inc. (a) | 46,850 | | $ 2,052,967 |
HEALTH CARE PROVIDERS & SERVICES - 1.0% |
Health Care Facilities - 1.0% |
Brookdale Senior Living, Inc. | 61,000 | | 2,928,000 |
Capital Senior Living Corp. (a) | 49,727 | | 529,095 |
Sun Healthcare Group, Inc. (a) | 37,500 | | 462,000 |
TOTAL HEALTH CARE FACILITIES | | 3,919,095 |
HOTELS, RESTAURANTS & LEISURE - 3.2% |
Hotels, Resorts & Cruise Lines - 3.2% |
Gaylord Entertainment Co. (a) | 6,800 | | 375,768 |
Hilton Hotels Corp. | 42,100 | | 1,489,919 |
Starwood Hotels & Resorts Worldwide, Inc. | 168,900 | | 10,569,762 |
TOTAL HOTELS, RESORTS & CRUISE LINES | | 12,435,449 |
REAL ESTATE INVESTMENT TRUSTS - 92.2% |
REITs - Apartments - 17.9% |
AvalonBay Communities, Inc. | 68,100 | | 10,103,316 |
BRE Properties, Inc. Class A | 115,400 | | 8,009,914 |
Equity Residential (SBI) | 497,100 | | 27,976,787 |
GMH Communities Trust | 179,979 | | 1,765,594 |
Home Properties of New York, Inc. | 125,500 | | 8,068,395 |
United Dominion Realty Trust, Inc. (SBI) | 419,600 | | 13,758,684 |
TOTAL REITS - APARTMENTS | | 69,682,690 |
REITs - Factory Outlets - 2.0% |
Tanger Factory Outlet Centers, Inc. | 193,500 | | 7,856,100 |
REITs - Hotels - 4.5% |
Host Hotels & Resorts, Inc. (d) | 666,594 | | 17,644,743 |
REITs - Industrial Buildings - 16.5% |
AMB Property Corp. (SBI) | 14,400 | | 876,240 |
DCT Industrial Trust, Inc. | 450,200 | | 5,321,364 |
Duke Realty LP | 415,110 | | 18,314,653 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
REAL ESTATE INVESTMENT TRUSTS - CONTINUED |
REITs - Industrial Buildings - continued |
ProLogis Trust | 278,623 | | $ 18,110,495 |
Public Storage, Inc. | 199,418 | | 21,688,702 |
TOTAL REITS - INDUSTRIAL BUILDINGS | | 64,311,454 |
REITs - Malls - 14.5% |
CBL & Associates Properties, Inc. | 222,907 | | 10,461,026 |
General Growth Properties, Inc. | 383,099 | | 23,568,250 |
Simon Property Group, Inc. | 170,000 | | 19,446,300 |
Taubman Centers, Inc. | 54,000 | | 3,146,580 |
TOTAL REITS - MALLS | | 56,622,156 |
REITs - Management/Investment - 1.9% |
Equity Lifestyle Properties, Inc. | 48,900 | | 2,700,747 |
Mission West Properties, Inc. | 124,100 | | 1,585,998 |
Washington (REIT) (SBI) (d) | 68,800 | | 2,941,200 |
TOTAL REITS - MANAGEMENT/INVESTMENT | | 7,227,945 |
REITs - Mortgage - 0.2% |
HomeBanc Mortgage Corp., Georgia | 210,200 | | 695,762 |
REITs - Office Buildings - 23.0% |
Alexandria Real Estate Equities, Inc. (d) | 115,600 | | 12,526,416 |
American Financial Realty Trust (SBI) | 285,600 | | 3,193,008 |
Boston Properties, Inc. (d) | 111,900 | | 14,109,471 |
Corporate Office Properties Trust (SBI) | 201,300 | | 10,725,264 |
Douglas Emmett, Inc. | 133,800 | | 3,660,768 |
Equity Office Properties Trust | 481,400 | | 26,741,770 |
Kilroy Realty Corp. | 33,900 | | 2,943,876 |
SL Green Realty Corp. | 72,400 | | 10,612,392 |
Sovran Self Storage, Inc. | 82,702 | | 4,962,120 |
TOTAL REITS - OFFICE BUILDINGS | | 89,475,085 |
REITs - Shopping Centers - 11.7% |
Developers Diversified Realty Corp. | 98,100 | | 6,584,472 |
Inland Real Estate Corp. (d) | 225,800 | | 4,565,676 |
Kimco Realty Corp. | 192,990 | | 9,572,304 |
Kite Realty Group Trust | 55,600 | | 1,084,200 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
REAL ESTATE INVESTMENT TRUSTS - CONTINUED |
REITs - Shopping Centers - continued |
Vornado Realty Trust | 165,350 | | $ 20,230,573 |
Weingarten Realty Investors (SBI) | 67,900 | | 3,361,729 |
TOTAL REITS - SHOPPING CENTERS | | 45,398,954 |
TOTAL REAL ESTATE INVESTMENT TRUSTS | | 358,914,889 |
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.6% |
Real Estate Management & Development - 1.6% |
Brookfield Properties Corp. | 114,200 | | 5,314,869 |
GAGFAH SA | 26,600 | | 796,003 |
HFF, Inc. (a) | 9,400 | | 175,780 |
TOTAL REAL ESTATE MANAGEMENT & DEVELOPMENT | | 6,286,652 |
TOTAL COMMON STOCKS (Cost $275,456,514) | 383,609,052 |
Money Market Funds - 4.5% |
| | | |
Fidelity Cash Central Fund, 5.35% (b) | 10,028,754 | | 10,028,754 |
Fidelity Securities Lending Cash Central Fund, 5.34% (b)(c) | 7,469,675 | | 7,469,675 |
TOTAL MONEY MARKET FUNDS (Cost $17,498,429) | 17,498,429 |
TOTAL INVESTMENT PORTFOLIO - 103.0% (Cost $292,954,943) | | 401,107,481 |
NET OTHER ASSETS - (3.0)% | | (11,788,898) |
NET ASSETS - 100% | $ 389,318,583 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is 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. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 236,184 |
Fidelity Securities Lending Cash Central Fund | 8,590 |
Total | $ 244,774 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
| January 31, 2007 |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $7,434,250) - See accompanying schedule: Unaffiliated issuers (cost $275,456,514) | $ 383,609,052 | |
Fidelity Central Funds (cost $17,498,429) | 17,498,429 | |
Total Investments (cost $292,954,943) | | $ 401,107,481 |
Foreign currency held at value (cost $13) | | 13 |
Receivable for investments sold | | 4,984,890 |
Receivable for fund shares sold | | 1,785,737 |
Dividends receivable | | 249,352 |
Interest receivable | | 34,113 |
Prepaid expenses | | 1,107 |
Other receivables | | 1,259 |
Total assets | | 408,163,952 |
| | |
Liabilities | | |
Payable to custodian bank | $ 135,894 | |
Payable for investments purchased | 9,947,295 | |
Payable for fund shares redeemed | 771,252 | |
Accrued management fee | 175,965 | |
Distribution fees payable | 152,709 | |
Other affiliated payables | 97,673 | |
Other payables and accrued expenses | 94,906 | |
Collateral on securities loaned, at value | 7,469,675 | |
Total liabilities | | 18,845,369 |
| | |
Net Assets | | $ 389,318,583 |
Net Assets consist of: | | |
Paid in capital | | $ 269,706,520 |
Distributions in excess of net investment income | | (107,114) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 11,566,639 |
Net unrealized appreciation (depreciation) on investments | | 108,152,538 |
Net Assets | | $ 389,318,583 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
| January 31, 2007 |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($142,593,071 ÷ 6,061,554 shares) | | $ 23.52 |
| | |
Maximum offering price per share (100/94.25 of $23.52) | | $ 24.95 |
Class T:
Net Asset Value and redemption price per share ($138,591,356 ÷ 5,892,729 shares) | | $ 23.52 |
| | |
Maximum offering price per share (100/96.50 of $23.52) | | $ 24.37 |
Class B:
Net Asset Value and offering price per share ($37,170,197 ÷ 1,587,343 shares)A | | $ 23.42 |
| | |
Class C:
Net Asset Value and offering price per share ($58,365,355 ÷ 2,492,471 shares)A | | $ 23.42 |
| | |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($12,598,604 ÷ 532,599 shares) | | $ 23.65 |
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.
Semiannual Report
Statement of Operations
| Six months ended January 31, 2007 |
| | |
Investment Income | | |
Dividends | | $ 3,298,892 |
Interest | | 11 |
Income from Fidelity Central Funds | | 244,774 |
Total income | | 3,543,677 |
| | |
Expenses | | |
Management fee | $ 854,678 | |
Transfer agent fees | 496,280 | |
Distribution fees | 793,869 | |
Accounting and security lending fees | 63,097 | |
Custodian fees and expenses | 8,415 | |
Independent trustees' compensation | 478 | |
Registration fees | 63,773 | |
Audit | 44,370 | |
Legal | 9,199 | |
Miscellaneous | 48,726 | |
Total expenses before reductions | 2,382,885 | |
Expense reductions | (91,442) | 2,291,443 |
Net investment income (loss) | | 1,252,234 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 17,786,439 | |
Foreign currency transactions | 540 | |
Total net realized gain (loss) | | 17,786,979 |
Change in net unrealized appreciation (depreciation) on investment securities | | 50,856,588 |
Net gain (loss) | | 68,643,567 |
Net increase (decrease) in net assets resulting from operations | | $ 69,895,801 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 1,252,234 | $ 2,590,321 |
Net realized gain (loss) | 17,786,979 | 18,564,557 |
Change in net unrealized appreciation (depreciation) | 50,856,588 | 13,773,537 |
Net increase (decrease) in net assets resulting
from operations | 69,895,801 | 34,928,415 |
Distributions to shareholders from net investment income | (1,881,250) | (2,073,129) |
Distributions to shareholders from net realized gain | (20,008,712) | (8,286,409) |
Total distributions | (21,889,962) | (10,359,538) |
Share transactions - net increase (decrease) | 93,870,152 | 43,551,731 |
Total increase (decrease) in net assets | 141,875,991 | 68,120,608 |
| | |
Net Assets | | |
Beginning of period | 247,442,592 | 179,321,984 |
End of period (including distributions in excess of net investment income of $107,114 and undistributed net investment income of $521,902, respectively) | $ 389,318,583 | $ 247,442,592 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, | Years ended July 31, |
| 2007 | 2006 | 2005 | 2004 | 2003 H |
Selected Per-Share Data | | | | | |
Net asset value,
beginning of period | $ 20.34 | $ 18.23 | $ 13.22 | $ 11.33 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .12 | .29 | .31 | .27 | .21 |
Net realized and unrealized gain (loss) | 4.74 | 2.85 | 5.52 | 2.03 | 1.28 |
Total from investment operations | 4.86 | 3.14 | 5.83 | 2.30 | 1.49 |
Distributions from net investment income | (.18) | (.23) | (.29) | (.30) | (.16) |
Distributions from net realized gain | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions | (1.68) | (1.03) | (.82) | (.41) | (.16) |
Net asset value, end of period | $ 23.52 | $ 20.34 | $ 18.23 | $ 13.22 | $ 11.33 |
Total Return B, C, D | 25.16% | 18.32% | 45.48% | 20.59% | 15.13% |
Ratios to Average Net Assets F, I | | | | | |
Expenses before reductions | 1.30% A | 1.29% | 1.31% | 1.54% | 2.98% A |
Expenses net of fee waivers,
if any | 1.25% A | 1.25% | 1.28% | 1.54% | 1.75% A |
Expenses net of all reductions | 1.24% A | 1.24% | 1.25% | 1.52% | 1.72% A |
Net investment income (loss) | 1.10% A | 1.59% | 1.98% | 2.10% | 2.35% A |
Supplemental Data | | | | | |
Net assets, end of period (000 omitted) | $ 142,593 | $ 85,000 | $ 53,097 | $ 22,273 | $ 3,993 |
Portfolio turnover rate G | 60% A | 65% | 62% | 52% | 47% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period September 12, 2002 (commencement of operations) to July 31, 2003.
I 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 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.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
| Six months ended
January 31, | Years ended July 31, |
| 2007 | 2006 | 2005 | 2004 | 2003 H |
Selected Per-Share Data | | | | | |
Net asset value,
beginning of period | $ 20.31 | $ 18.23 | $ 13.21 | $ 11.32 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .09 | .24 | .26 | .23 | .18 |
Net realized and unrealized gain (loss) | 4.75 | 2.84 | 5.53 | 2.02 | 1.29 |
Total from investment operations | 4.84 | 3.08 | 5.79 | 2.25 | 1.47 |
Distributions from net investment income | (.13) | (.20) | (.24) | (.25) | (.15) |
Distributions from net realized gain | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions | (1.63) | (1.00) | (.77) | (.36) | (.15) |
Net asset value, end of period | $ 23.52 | $ 20.31 | $ 18.23 | $ 13.21 | $ 11.32 |
Total Return B, C, D | 25.05% | 17.98% | 45.12% | 20.12% | 14.91% |
Ratios to Average Net Assets F, I | | | | | |
Expenses before reductions | 1.54% A | 1.55% | 1.61% | 1.86% | 3.32% A |
Expenses net of fee waivers,
if any | 1.50% A | 1.50% | 1.57% | 1.85% | 2.00% A |
Expenses net of all reductions | 1.49% A | 1.49% | 1.54% | 1.83% | 1.97% A |
Net investment income (loss) | .85% A | 1.34% | 1.70% | 1.80% | 2.10% A |
Supplemental Data | | | | | |
Net assets, end of period (000 omitted) | $ 138,591 | $ 91,224 | $ 66,303 | $ 26,037 | $ 9,049 |
Portfolio turnover rate G | 60% A | 65% | 62% | 52% | 47% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period September 12, 2002 (commencement of operations) to July 31, 2003.
I 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 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.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
| Six months ended
January 31, | Years ended July 31, |
| 2007 | 2006 | 2005 | 2004 | 2003 H |
Selected Per-Share Data | | | | | |
Net asset value,
beginning of period | $ 20.19 | $ 18.16 | $ 13.18 | $ 11.29 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .04 | .15 | .18 | .16 | .14 |
Net realized and unrealized gain (loss) | 4.72 | 2.83 | 5.50 | 2.04 | 1.28 |
Total from investment operations | 4.76 | 2.98 | 5.68 | 2.20 | 1.42 |
Distributions from net investment income | (.05) | (.15) | (.17) | (.20) | (.13) |
Distributions from net realized gain | (1.48) | (.80) | (.53) | (.11) | - |
Total distributions | (1.53) | (.95) | (.70) | (.31) | (.13) |
Net asset value, end of period | $ 23.42 | $ 20.19 | $ 18.16 | $ 13.18 | $ 11.29 |
Total Return B, C, D | 24.69% | 17.42% | 44.31% | 19.67% | 14.38% |
Ratios to Average Net Assets F, I | | | | | |
Expenses before reductions | 2.08% A | 2.05% | 2.10% | 2.33% | 3.82% A |
Expenses net of fee waivers,
if any | 2.00% A | 2.00% | 2.07% | 2.33% | 2.50% A |
Expenses net of all reductions | 1.99% A | 1.98% | 2.03% | 2.31% | 2.47% A |
Net investment income (loss) | .35% A | .84% | 1.20% | 1.31% | 1.60% A |
Supplemental Data | | | | | |
Net assets, end of period (000 omitted) | $ 37,170 | $ 27,397 | $ 26,349 | $ 12,910 | $ 5,061 |
Portfolio turnover rate G | 60% A | 65% | 62% | 52% | 47% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period September 12, 2002 (commencement of operations) to July 31, 2003.
I 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 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.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
| Six months ended
January 31, | Years ended July 31, |
| 2007 | 2006 | 2005 | 2004 | 2003 H |
Selected Per-Share Data | | | | | |
Net asset value,
beginning of period | $ 20.21 | $ 18.17 | $ 13.18 | $ 11.29 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) E | .04 | .15 | .19 | .17 | .14 |
Net realized and unrealized gain (loss) | 4.72 | 2.84 | 5.50 | 2.03 | 1.28 |
Total from investment operations | 4.76 | 2.99 | 5.69 | 2.20 | 1.42 |
Distributions from net investment income | (.05) | (.15) | (.17) | (.20) | (.13) |
Distributions from net realized gain | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions | (1.55) | (.95) | (.70) | (.31) | (.13) |
Net asset value, end of period | $ 23.42 | $ 20.21 | $ 18.17 | $ 13.18 | $ 11.29 |
Total Return B, C, D | 24.69% | 17.46% | 44.38% | 19.67% | 14.38% |
Ratios to Average Net Assets F, I | | | | | |
Expenses before reductions | 2.06% A | 2.05% | 2.09% | 2.29% | 3.76% A |
Expenses net of fee waivers,
if any | 2.00% A | 2.00% | 2.05% | 2.29% | 2.50% A |
Expenses net of all reductions | 1.99% A | 1.98% | 2.02% | 2.27% | 2.47% A |
Net investment income (loss) | .35% A | .84% | 1.22% | 1.35% | 1.60% A |
Supplemental Data | | | | | |
Net assets, end of period (000 omitted) | $ 58,365 | $ 36,669 | $ 29,410 | $ 13,671 | $ 5,059 |
Portfolio turnover rate G | 60% A | 65% | 62% | 52% | 47% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period September 12, 2002 (commencement of operations) to July 31, 2003.
I 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 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.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended
January 31, | Years ended July 31, |
| 2007 | 2006 | 2005 | 2004 | 2003 G |
Selected Per-Share Data | | | | | |
Net asset value,
beginning of period | $ 20.47 | $ 18.33 | $ 13.28 | $ 11.35 | $ 10.00 |
Income from Investment Operations | | | | | |
Net investment income (loss) D | .15 | .35 | .36 | .32 | .23 |
Net realized and unrealized gain (loss) | 4.77 | 2.85 | 5.56 | 2.04 | 1.28 |
Total from investment operations | 4.92 | 3.20 | 5.92 | 2.36 | 1.51 |
Distributions from net investment income | (.24) | (.26) | (.34) | (.32) | (.16) |
Distributions from net realized gain | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions B, C | (1.74) | (1.06) | (.87) | (.43) | (.16) |
Net asset value, end of period | $ 23.65 | $ 20.47 | $ 18.33 | $ 13.28 | $ 11.35 |
Total Return | 25.33% | 18.61% | 46.05% | 21.11% | 15.33% |
Ratios to Average Net Assets E, H | | | | | |
Expenses before reductions | 1.01% A | .94% | .91% | 1.12% | 2.68% A |
Expenses net of fee waivers,
if any | 1.00% A | .94% | .91% | 1.12% | 1.50% A |
Expenses net of all reductions | .99% A | .92% | .88% | 1.10% | 1.47% A |
Net investment income (loss) | 1.35% A | 1.90% | 2.35% | 2.53% | 2.60% A |
Supplemental Data | | | | | |
Net assets, end of period (000 omitted) | $ 12,599 | $ 7,152 | $ 4,162 | $ 2,478 | $ 1,225 |
Portfolio turnover rate F | 60% A | 65% | 62% | 52% | 47% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period September 12, 2002 (commencement of operations) to July 31, 2003.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or 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.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2007
1. Significant Accounting Policies.
Fidelity Advisor Real Estate Fund (the Fund) is a non-diversified fund of Fidelity Advisor Series VII (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 B, Class C, and Institutional Class 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. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated 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 also differ by class.
The Fund may invest in Fidelity Central Funds which are open-end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund, which are also consistently followed by the Fidelity Central Funds:
Security Valuation. Investments are valued and net asset value (NAV) per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
Semiannual Report
1. Significant Accounting Policies - continued
Security Valuation - continued
When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. For example, when developments occur between the close of a market and the close of the NYSE that may materially affect the value of some or all of the securities, or when trading in a security is halted, those securities may be fair valued. Factors used in the determination of fair value may include monitoring news to identify significant market or security specific events such as changes in the value of U.S. securities markets, reviewing developments in foreign markets and evaluating the performance of ADRs, futures contracts and exchange-traded funds. Because the Fund's utilization of fair value pricing depends on market activity, the frequency with which fair value pricing is used cannot be predicted and may be utilized to a significant extent. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. 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 rate 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 for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of
Semiannual Report
Notes to Financial Statements - continued
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and income distributions from the Fidelity Central Funds are accrued as earned, with any income distributions receivable as of period end included in Interest Receivable on the Statement of Assets and Liabilities. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. 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 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 generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC) and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 109,592,944 | |
Unrealized depreciation | (1,615,132) | |
Net unrealized appreciation (depreciation) | $ 107,977,812 | |
Cost for federal income tax purposes | $ 293,129,669 | |
Semiannual Report
1. Significant Accounting Policies - continued
New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund's net assets, results of operations and financial statement disclosures.
In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $167,002,042 and $89,965,265, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR 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%
Semiannual Report
Notes to Financial Statements - continued
4. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
of the Fund's average net assets and a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .57% of the Fund's average net assets.
Distribution and Service Plan. 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 FMR, 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 and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .25% | $ 134,855 | $ 10,344 |
Class T | .25% | .25% | 270,080 | 1,404 |
Class B | .75% | .25% | 157,335 | 118,002 |
Class C | .75% | .25% | 231,599 | 51,518 |
| | | $ 793,869 | $ 181,268 |
Sales Load. FDC receives 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. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares (.25% prior to February 24, 2006) 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 | $ 88,067 |
Class T | 19,100 |
Class B* | 24,069 |
Class C* | 2,290 |
| $ 133,526 |
* 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.
Semiannual Report
4. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets* |
Class A | $ 175,255 | .33 |
Class T | 172,983 | .32 |
Class B | 56,419 | .36 |
Class C | 77,667 | .34 |
Institutional Class | 13,956 | .29 |
| $ 496,280 | |
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Investments in Fidelity Central Funds. The Fund may invest in Fidelity Central Funds. The Fund's Schedule of Investments lists each of the Fidelity Central Funds 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. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the EDGAR Database on the SEC's web site, www.sec.gov, or upon request.
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 FMR.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $1,971 for the period.
Semiannual Report
Notes to Financial Statements - continued
5. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 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 $357 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $8,590.
7. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
Semiannual Report
7. Expense Reductions - continued
The following classes were in reimbursement during the period:
| Expense
Limitations | Reimbursement
from adviser |
| | |
Class A | 1.25% | $ 26,974 |
Class T | 1.50% | 25,631 |
Class B | 2.00% | 13,786 |
Class C | 2.00% | 14,682 |
Institutional Class | 1.00% | 555 |
| | $ 81,628 |
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $2,318 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $3,213. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction | |
Class A | $ 755 | |
Institutional Class | 38 | |
| $ 793 | |
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, the Fund's transfer agent, Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of Fidelity Management & Research Company, notified the Fund that the fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. Management has determined that this did not have a material impact to the Fund's reported net assets or results of operations
Semiannual Report
Notes to Financial Statements - continued
8. Other - continued
in the accompanying financial statements. FIIOC will cause the books and records of the Fund to reflect a conversion of the relevant Class B shares to Class A and is in the process of determining the impact to affected shareholder accounts for purposes of its remediation.
The United States Securities and Exchange Commission ("SEC") is conducting an investigation of FMR (covering the years 2002 to 2004) arising from gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during that period. FMR is in discussions with the SEC staff regarding the possible resolution of the matter, but as of period-end no final resolution has been reached.
In December 2006, the Independent Trustees completed their own investigation of the matter with the assistance of independent counsel. The Independent Trustees and FMR agree that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and is worthy of redress. Accordingly, the Independent Trustees have requested and FMR has agreed to pay $42 million to Fidelity mutual funds, plus interest to be determined at the time that payment is made. A method of allocating this payment among the funds has not yet been determined. The total payment to the Fund is not anticipated to have a material impact on the Fund's net assets. In addition, FMR reimbursed related legal expenses which are recorded in the accompanying Statement of Operations as an expense reduction.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
From net investment income | | |
Class A | $ 910,998 | $ 741,719 |
Class T | 671,344 | 796,426 |
Class B | 73,434 | 226,838 |
Class C | 121,381 | 250,448 |
Institutional Class | 104,093 | 57,698 |
Total | $ 1,881,250 | $ 2,073,129 |
From net realized gain | | |
Class A | $ 7,016,403 | $ 2,548,943 |
Class T | 7,245,888 | 3,068,411 |
Class B | 2,110,411 | 1,188,352 |
Class C | 3,021,143 | 1,299,203 |
Institutional Class | 614,867 | 181,500 |
Total | $ 20,008,712 | $ 8,286,409 |
Semiannual Report
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2007 | Year ended
July 31,
2006 | Six months ended
January 31,
2007 | Year ended
July 31,
2006 |
Class A | | | | |
Shares sold | 2,087,413 | 2,262,157 | $ 44,996,050 | $ 41,503,690 |
Reinvestment of distributions | 360,749 | 181,664 | 7,512,907 | 3,138,257 |
Shares redeemed | (565,057) | (1,177,662) | (12,144,860) | (21,289,349) |
Net increase (decrease) | 1,883,105 | 1,266,159 | $ 40,364,097 | $ 23,352,598 |
Class T | | | | |
Shares sold | 1,800,856 | 2,143,039 | $ 39,064,987 | $ 39,115,936 |
Reinvestment of distributions | 366,026 | 214,228 | 7,615,228 | 3,700,674 |
Shares redeemed | (764,739) | (1,504,010) | (16,223,717) | (27,210,343) |
Net increase (decrease) | 1,402,143 | 853,257 | $ 30,456,498 | $ 15,606,267 |
Class B | | | | |
Shares sold | 337,065 | 398,999 | $ 7,208,462 | $ 7,246,734 |
Reinvestment of distributions | 95,389 | 73,796 | 1,975,221 | 1,270,470 |
Shares redeemed | (202,317) | (566,868) | (4,303,749) | (10,197,671) |
Net increase (decrease) | 230,137 | (94,073) | $ 4,879,934 | $ (1,680,467) |
Class C | | | | |
Shares sold | 725,843 | 763,395 | $ 15,362,273 | $ 14,132,910 |
Reinvestment of distributions | 135,201 | 80,957 | 2,802,391 | 1,394,942 |
Shares redeemed | (183,313) | (647,908) | (3,893,476) | (11,656,661) |
Net increase (decrease) | 677,731 | 196,444 | $ 14,271,188 | $ 3,871,191 |
Institutional Class | | | | |
Shares sold | 217,290 | 225,212 | $ 4,672,811 | $ 4,253,663 |
Reinvestment of distributions | 30,516 | 12,056 | 638,836 | 209,183 |
Shares redeemed | (64,528) | (115,041) | (1,413,212) | (2,060,704) |
Net increase (decrease) | 183,278 | 122,227 | $ 3,898,435 | $ 2,402,142 |
Semiannual Report
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Advisor Series VII and Shareholders of Fidelity Advisor Real Estate Fund:
We have audited the accompanying statement of assets and liabilities of Fidelity Advisor Real Estate Fund (the Fund), a fund of Fidelity Advisor Series VII, including the schedule of investments as of January 31, 2007, and the related statement of operations for the six months then ended, the statements of changes in net assets for the six months then ended and for the year ended July 31, 2006, and the financial highlights for the six months ended January 31, 2007, and each of the four years in the period ended July 31, 2006. 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 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 January 31, 2007, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Advisor Real Estate Fund as of January 31, 2007, the results of its operations for the six months then ended, the changes in its net assets for the six months then ended and for the year ended July 31, 2006, and the financial highlights for the six months ended January 31, 2007, and each of the four years in the period ended July 31, 2006, in conformity with accounting principles generally accepted in the United States of America.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
March 21, 2007
Semiannual Report
Proxy Voting Results
A special meeting of the fund's shareholders was held on September 30, 2006. The results of votes taken among shareholders on the proposal before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.
PROPOSAL 1 |
To elect a Board of Trustees. A |
| # of
Votes | % of
Votes |
Dennis J. Dirks |
Affirmative | 2,206,930,035.62 | 96.925 |
Withheld | 70,013,151.28 | 3.075 |
TOTAL | 2,276,943,186.90 | 100.000 |
Albert R. Gamper, Jr. |
Affirmative | 2,206,929,647.55 | 96.925 |
Withheld | 70,013,539.35 | 3.075 |
TOTAL | 2,276,943,186.90 | 100.000 |
Robert M. Gates |
Affirmative | 2,205,212,761.55 | 96.850 |
Withheld | 71,730,425.35 | 3.150 |
TOTAL | 2,276,943,186.90 | 100.000 |
George H. Heilmeier |
Affirmative | 2,204,247,730.70 | 96.807 |
Withheld | 72,695,456.20 | 3.193 |
TOTAL | 2,276,943,186.90 | 100.000 |
Edward C. Johnson 3d |
Affirmative | 2,203,739,123.67 | 96.785 |
Withheld | 73,204,063.23 | 3.215 |
TOTAL | 2,276,943,186.90 | 100.000 |
Stephen P. Jonas |
Affirmative | 2,207,154,045.47 | 96.935 |
Withheld | 69,789,141.43 | 3.065 |
TOTAL | 2,276,943,186.90 | 100.000 |
James H. KeyesB |
Affirmative | 2,205,258,024.08 | 96.852 |
Withheld | 71,685,162.82 | 3.148 |
TOTAL | 2,276,943,186.90 | 100.000 |
| # of
Votes | % of
Votes |
Marie L. Knowles |
Affirmative | 2,205,892,060.16 | 96.880 |
Withheld | 71,051,126.74 | 3.120 |
TOTAL | 2,276,943,186.90 | 100.000 |
Ned C. Lautenbach |
Affirmative | 2,205,297,807.97 | 96.853 |
Withheld | 71,645,378.93 | 3.147 |
TOTAL | 2,276,943,186.90 | 100.000 |
William O. McCoy |
Affirmative | 2,204,396,505.93 | 96.814 |
Withheld | 72,546,680.97 | 3.186 |
TOTAL | 2,276,943,186.90 | 100.000 |
Robert L. Reynolds |
Affirmative | 2,206,981,118.77 | 96.927 |
Withheld | 69,962,068.13 | 3.073 |
TOTAL | 2,276,943,186.90 | 100.000 |
Cornelia M. Small |
Affirmative | 2,206,379,820.44 | 96.901 |
Withheld | 70,563,366.46 | 3.099 |
TOTAL | 2,276,943,186.90 | 100.000 |
William S. Stavropoulos |
Affirmative | 2,205,403,278.90 | 96.858 |
Withheld | 71,539,908.00 | 3.142 |
TOTAL | 2,276,943,186.90 | 100.000 |
Kenneth L. Wolfe |
Affirmative | 2,205,707,840.10 | 96.871 |
Withheld | 71,235,346.80 | 3.129 |
TOTAL | 2,276,943,186.90 | 100.000 |
A Denotes trust-wide proposal and voting results. B Effective on or about January 1, 2007. |
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
(formerly Fidelity Management &
Research (Far East) Inc.)
Fidelity International Investment Advisors
Fidelity International Investment Advisors
(U.K.) Limited
Fidelity Investments Japan Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
Mellon Bank, N.A.
Pittsburgh, PA
AREI-USAN-0307
1.789731.104
(Fidelity Investment logo)(registered trademark)
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the Fidelity Advisor Series VII's Board of Trustees.
Item 11. Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Fidelity Advisor Series VII's (the "Trust") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the Trust's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.
Item 12. Exhibits
(a) | (1) | Not applicable. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(a) | (3) | Not applicable. |
(b) | | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Advisor Series VII
By: | /s/Kimberley Monasterio |
| Kimberley Monasterio |
| President and Treasurer |
| |
Date: | March 22, 2007 |
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/Kimberley Monasterio |
| Kimberley Monasterio |
| President and Treasurer |
| |
Date: | March 22, 2007 |
By: | /s/Joseph B. Hollis |
| Joseph B. Hollis |
| Chief Financial Officer |
| |
Date: | March 22, 2007 |
