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, 2008 |
Item 1. Reports to Stockholders
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Focus Funds®
Class A, Class T, Class B and Class C
Biotechnology
Communications Equipment
Consumer Discretionary
Electronics
Energy
Financial Services
Health Care
Industrials
Technology
Utilities
Semiannual Report
January 31, 2008
(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 http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(Photograph of Edward C. Johnson 3d.)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but 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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,021.40 | $ 7.11 |
HypotheticalA | $ 1,000.00 | $ 1,018.10 | $ 7.10 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,020.30 | $ 8.38 |
HypotheticalA | $ 1,000.00 | $ 1,016.84 | $ 8.36 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,016.50 | $ 10.90 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,018.10 | $ 10.91 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,023.90 | $ 5.55 |
HypotheticalA | $ 1,000.00 | $ 1,019.66 | $ 5.53 |
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 184/366 (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 | 1.09% |
Semiannual Report
Advisor Biotechnology Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Genentech, Inc. | 10.9 | 6.0 |
Gilead Sciences, Inc. | 8.9 | 6.5 |
Biogen Idec, Inc. | 7.2 | 7.2 |
Celgene Corp. | 6.9 | 6.3 |
Cephalon, Inc. | 4.6 | 5.0 |
Alexion Pharmaceuticals, Inc. | 4.0 | 5.0 |
BioMarin Pharmaceutical, Inc. | 3.7 | 0.0 |
Elan Corp. PLC sponsored ADR | 3.4 | 2.4 |
United Therapeutics Corp. | 3.4 | 1.0 |
Auxilium Pharmaceuticals, Inc. | 3.2 | 1.5 |
| 56.2 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
 | Biotechnology | 80.8% | |
 | Pharmaceuticals | 14.2% | |
 | Life Sciences Tools
& Services | 2.8% | |
 | Health Care Equipment & Supplies | 1.8% | |
 | Health Care Providers
& Services | 0.2% | |
 | All Others* | 0.2% | |
|
As of July 31, 2007 |
| Biotechnology | 85.6% | |
| Pharmaceuticals | 9.3% | |
| Life Sciences Tools
& Services | 3.0% | |
| Health Care Equipment & Supplies | 2.2% | |
| Health Care Providers
& Services | 0.2% | |
| All Others | (0.3)% (dagger) | |
* Includes short-term investments and net other assets. |
(dagger) Short-term investments and net other assets are not included in the pie chart. |
Biotechnology
Advisor Biotechnology Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.8% |
| Shares | | Value |
BIOTECHNOLOGY - 80.8% |
Biotechnology - 80.8% |
Acadia Pharmaceuticals, Inc. (a) | 31,774 | | $ 376,840 |
Acorda Therapeutics, Inc. (a) | 4,754 | | 120,561 |
Affymax, Inc. | 8,100 | | 162,486 |
Alexion Pharmaceuticals, Inc. (a) | 30,626 | | 2,000,490 |
Alkermes, Inc. (a) | 23,500 | | 313,020 |
Alnylam Pharmaceuticals, Inc. (a) | 8,500 | | 255,340 |
Amgen, Inc. (a) | 4,206 | | 195,958 |
Amylin Pharmaceuticals, Inc. (a) | 38,708 | | 1,147,692 |
Antigenics, Inc. unit (a)(c) | 452,000 | | 1,468,583 |
Arena Pharmaceuticals, Inc. (a) | 8,400 | | 60,816 |
Biogen Idec, Inc. (a) | 59,348 | | 3,617,261 |
BioMarin Pharmaceutical, Inc. (a) | 49,889 | | 1,848,886 |
Celgene Corp. (a) | 61,825 | | 3,469,001 |
Cephalon, Inc. (a) | 35,099 | | 2,303,547 |
Cepheid, Inc. (a) | 9,300 | | 284,022 |
Cougar Biotechnology, Inc. (a) | 13,800 | | 412,733 |
Cubist Pharmaceuticals, Inc. (a) | 9,915 | | 168,456 |
Dendreon Corp. (a) | 12,600 | | 77,994 |
Enzon Pharmaceuticals, Inc. (a) | 6,100 | | 51,057 |
Genentech, Inc. (a) | 78,311 | | 5,496,648 |
Genzyme Corp. (a) | 19,122 | | 1,494,002 |
Gilead Sciences, Inc. (a) | 98,960 | | 4,521,482 |
GTx, Inc. (a) | 10,700 | | 118,663 |
Halozyme Therapeutics, Inc. (a) | 6,310 | | 34,768 |
Human Genome Sciences, Inc. (a) | 21,777 | | 121,516 |
ImClone Systems, Inc. (a) | 9,800 | | 426,006 |
Incyte Corp. (a) | 34,395 | | 412,052 |
Indevus Pharmaceuticals, Inc. (a) | 26,057 | | 165,983 |
Isis Pharmaceuticals, Inc. (a) | 28,300 | | 441,480 |
LifeCell Corp. (a) | 3,500 | | 138,285 |
Ligand Pharmaceuticals, Inc. Class B | 10,400 | | 43,264 |
MannKind Corp. (a) | 17,108 | | 135,153 |
Martek Biosciences (a) | 4,300 | | 122,550 |
Medarex, Inc. (a) | 8,134 | | 81,259 |
Millennium Pharmaceuticals, Inc. (a) | 60,319 | | 915,039 |
Myriad Genetics, Inc. (a) | 14,605 | | 628,161 |
Neurochem, Inc. (a) | 1,300 | | 2,228 |
Omrix Biopharmaceuticals, Inc. (a) | 3,200 | | 74,432 |
ONYX Pharmaceuticals, Inc. (a) | 11,494 | | 546,310 |
OREXIGEN Therapeutics, Inc. | 11,126 | | 117,379 |
OSI Pharmaceuticals, Inc. (a) | 12,600 | | 502,488 |
PDL BioPharma, Inc. (a) | 34,500 | | 515,085 |
Pharmion Corp. (a) | 9,900 | | 682,605 |
Poniard Pharmaceuticals, Inc. (a) | 8,500 | | 44,370 |
Progenics Pharmaceuticals, Inc. (a) | 6,800 | | 111,112 |
Regeneron Pharmaceuticals, Inc. (a) | 18,391 | | 372,969 |
Rigel Pharmaceuticals, Inc. (a) | 10,035 | | 276,264 |
Sangamo Biosciences, Inc. (a) | 12,798 | | 146,537 |
Savient Pharmaceuticals, Inc. (a) | 14,505 | | 280,672 |
|
| Shares | | Value |
Theratechnologies, Inc. (a) | 6,300 | | $ 57,755 |
Theravance, Inc. (a) | 9,365 | | 184,771 |
United Therapeutics Corp. (a) | 20,203 | | 1,696,648 |
Vanda Pharmaceuticals, Inc. (a) | 63,239 | | 270,031 |
Vertex Pharmaceuticals, Inc. (a) | 60,400 | | 1,229,744 |
Zymogenetics, Inc. (a) | 12,795 | | 129,102 |
| | 40,871,556 |
HEALTH CARE EQUIPMENT & SUPPLIES - 1.8% |
Health Care Equipment - 1.8% |
Alsius Corp. (a) | 15,600 | | 55,848 |
Clinical Data, Inc. (a) | 6,747 | | 141,485 |
Quidel Corp. (a) | 43,600 | | 687,572 |
TomoTherapy, Inc. | 200 | | 2,962 |
| | 887,867 |
HEALTH CARE PROVIDERS & SERVICES - 0.2% |
Health Care Services - 0.2% |
Oracle Healthcare Acquisition Corp. unit (a) | 11,000 | | 89,760 |
LIFE SCIENCES TOOLS & SERVICES - 2.8% |
Life Sciences Tools & Services - 2.8% |
AMAG Pharmaceuticals, Inc. | 3,615 | | 186,389 |
Applera Corp. - Celera Genomics Group (a) | 14,100 | | 216,012 |
Exelixis, Inc. (a) | 41,700 | | 305,244 |
Medivation, Inc. (a) | 1,359 | | 21,744 |
QIAGEN NV (a) | 34,555 | | 704,922 |
| | 1,434,311 |
PHARMACEUTICALS - 14.2% |
Pharmaceuticals - 14.2% |
Akorn, Inc. (a) | 131,279 | | 984,593 |
Auxilium Pharmaceuticals, Inc. (a) | 47,658 | | 1,629,904 |
Biodel, Inc. | 69,770 | | 1,243,999 |
Catalyst Pharmaceutical Partners, Inc. (a) | 22,041 | | 74,499 |
Elan Corp. PLC sponsored ADR (a) | 67,400 | | 1,712,634 |
Jazz Pharmaceuticals, Inc. | 6,900 | | 90,390 |
Sepracor, Inc. (a) | 11,996 | | 338,767 |
ULURU, Inc. (a) | 2,100 | | 4,914 |
XenoPort, Inc. (a) | 18,000 | | 1,104,480 |
| | 7,184,180 |
TOTAL COMMON STOCKS (Cost $47,253,494) | 50,467,674 |
Money Market Funds - 1.2% |
| Shares | | Value |
Fidelity Cash Central Fund, 3.79% (b)
(Cost $570,865) | 570,865 | | $ 570,865 |
TOTAL INVESTMENT PORTFOLIO - 101.0% (Cost $47,824,359) | | 51,038,539 |
NET OTHER ASSETS - (1.0)% | | (481,230) |
NET ASSETS - 100% | $ 50,557,309 |
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) 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 $1,468,583 or 2.9% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Antigenics, Inc. unit | 1/9/08 | $ 1,356,000 |
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 | $ 6,939 |
Fidelity Securities Lending Cash Central Fund | 5,335 |
Total | $ 12,274 |
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, 2008 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $47,253,494) | $ 50,467,674 | |
Fidelity Central Funds (cost $570,865) | 570,865 | |
Total Investments (cost $47,824,359) | | $ 51,038,539 |
Receivable for investments sold | | 1,061,773 |
Receivable for fund shares sold | | 56,096 |
Distributions receivable from Fidelity Central Funds | | 592 |
Prepaid expenses | | 163 |
Other receivables | | 123 |
Total assets | | 52,157,286 |
| | |
Liabilities | | |
Payable for investments purchased | $ 1,396,075 | |
Payable for fund shares redeemed | 108,582 | |
Accrued management fee | 27,878 | |
Distribution fees payable | 28,294 | |
Other affiliated payables | 15,154 | |
Other payables and accrued expenses | 23,994 | |
Total liabilities | | 1,599,977 |
| | |
Net Assets | | $ 50,557,309 |
Net Assets consist of: | | |
Paid in capital | | $ 51,602,322 |
Accumulated net investment loss | | (478,923) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (3,780,270) |
Net unrealized appreciation (depreciation) on investments | | 3,214,180 |
Net Assets | | $ 50,557,309 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($13,238,927 ÷ 1,923,338 shares) | | $ 6.88 |
| | |
Maximum offering price per share (100/94.25 of $6.88) | | $ 7.30 |
Class T:
Net Asset Value and redemption price per share ($13,320,899 ÷ 1,973,076 shares) | | $ 6.75 |
| | |
Maximum offering price per share (100/96.50 of $6.75) | | $ 6.99 |
Class B:
Net Asset Value and offering price per share ($11,465,945 ÷ 1,765,637 shares) A | | $ 6.49 |
| | |
Class C:
Net Asset Value and offering price per share ($11,458,337 ÷ 1,764,098 shares)A | | $ 6.50 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($1,073,201 ÷ 152,540 shares) | | $ 7.04 |
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, 2008 (Unaudited) |
| | |
Investment Income | | |
Interest | | $ 87 |
Income from Fidelity Central Funds (including $5,335 from security lending) | | 12,274 |
Total income | | 12,361 |
| | |
Expenses | | |
Management fee | $ 151,327 | |
Transfer agent fees | 88,591 | |
Distribution fees | 178,921 | |
Accounting and security lending fees | 11,670 | |
Custodian fees and expenses | 5,990 | |
Independent trustees' compensation | 111 | |
Registration fees | 38,256 | |
Audit | 22,375 | |
Legal | 152 | |
Miscellaneous | 218 | |
Total expenses before reductions | 497,611 | |
Expense reductions | (6,327) | 491,284 |
Net investment income (loss) | | (478,923) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (828,422) | |
Foreign currency transactions | 287 | |
Total net realized gain (loss) | | (828,135) |
Change in net unrealized appreciation (depreciation) on investment securities | | 2,303,055 |
Net gain (loss) | | 1,474,920 |
Net increase (decrease) in net assets resulting from operations | | $ 995,997 |
Statement of Changes in Net Assets
| Six months ended
January 31, 2008
(Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (478,923) | $ (966,220) |
Net realized gain (loss) | (828,135) | 8,930,811 |
Change in net unrealized appreciation (depreciation) | 2,303,055 | (4,482,074) |
Net increase (decrease) in net assets resulting from operations | 995,997 | 3,482,517 |
Distributions to shareholders from net realized gain | (3,898,929) | - |
Share transactions - net increase (decrease) | 1,910,148 | (8,274,098) |
Redemption fees | 888 | 1,128 |
Total increase (decrease) in net assets | (991,896) | (4,790,453) |
| | |
Net Assets | | |
Beginning of period | 51,549,205 | 56,339,658 |
End of period (including accumulated net investment loss of $478,923 and $0, respectively) | $ 50,557,309 | $ 51,549,205 |
See accompanying notes which are an integral part of the financial statements.
Biotechnology
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.23 | $ 6.81 | $ 6.80 | $ 6.00 | $ 5.94 | $ 4.39 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.09) | (.09) | (.08) H | (.09) | (.05) |
Net realized and unrealized gain (loss) | .23 | .51 | .10 | .88 | .15 | 1.60 |
Total from investment operations | .18 | .42 | .01 | .80 | .06 | 1.55 |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Distributions from net realized gain | (.53) | - | - | - | - | - |
Net asset value, end of period | $ 6.88 | $ 7.23 | $ 6.81 | $ 6.80 | $ 6.00 | $ 5.94 |
Total Return B, C, D | 2.14% | 6.17% | .15% | 13.33% | 1.01% | 35.31% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.40% A | 1.42% | 1.48% | 1.56% | 1.68% | 2.04% |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.40% | 1.45% | 1.50% | 1.50% |
Expenses net of all reductions | 1.40% A | 1.40% | 1.37% | 1.43% | 1.48% | 1.47% |
Net investment income (loss) | (1.35)% A | (1.25)% | (1.29)% | (1.36)% H | (1.38)% | (1.11)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 13,239 | $ 13,081 | $ 12,539 | $ 11,022 | $ 10,197 | $ 7,718 |
Portfolio turnover rate G | 143% A | 120% | 62% | 30% | 50% | 71% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.11 | $ 6.71 | $ 6.72 | $ 5.95 | $ 5.90 | $ 4.37 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.06) | (.11) | (.11) | (.10) H | (.10) | (.06) |
Net realized and unrealized gain (loss) | .23 | .51 | .10 | .87 | .15 | 1.59 |
Total from investment operations | .17 | .40 | (.01) | .77 | .05 | 1.53 |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Distributions from net realized gain | (.53) | - | - | - | - | - |
Net asset value, end of period | $ 6.75 | $ 7.11 | $ 6.71 | $ 6.72 | $ 5.95 | $ 5.90 |
Total Return B, C, D | 2.03% | 5.96% | (.15)% | 12.94% | .85% | 35.01% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.74% A | 1.75% | 1.79% | 1.93% | 2.10% | 2.39% |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.65% | 1.70% | 1.75% | 1.75% |
Expenses net of all reductions | 1.65% A | 1.65% | 1.62% | 1.68% | 1.73% | 1.72% |
Net investment income (loss) | (1.61)% A | (1.49)% | (1.54)% | (1.61)% H | (1.63)% | (1.36)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 13,321 | $ 13,008 | $ 13,808 | $ 14,177 | $ 13,367 | $ 10,281 |
Portfolio turnover rate G | 143% A | 120% | 62% | 30% | 50% | 71% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.88 | $ 6.52 | $ 6.56 | $ 5.84 | $ 5.82 | $ 4.33 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.07) | (.14) | (.14) | (.13) H | (.13) | (.09) |
Net realized and unrealized gain (loss) | .21 | .50 | .10 | .85 | .15 | 1.58 |
Total from investment operations | .14 | .36 | (.04) | .72 | .02 | 1.49 |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Distributions from net realized gain | (.53) | - | - | - | - | - |
Net asset value, end of period | $ 6.49 | $ 6.88 | $ 6.52 | $ 6.56 | $ 5.84 | $ 5.82 |
Total Return B, C, D | 1.65% | 5.52% | (.61)% | 12.33% | .34% | 34.41% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.15% A | 2.17% | 2.23% | 2.33% | 2.46% | 2.78% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.19% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.15% | 2.12% | 2.18% | 2.22% | 2.22% |
Net investment income (loss) | (2.10)% A | (1.99)% | (2.04)% | (2.11)% H | (2.12)% | (1.86)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 11,466 | $ 12,656 | $ 14,938 | $ 16,921 | $ 16,819 | $ 15,154 |
Portfolio turnover rate G | 143% A | 120% | 62% | 30% | 50% | 71% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.88 | $ 6.52 | $ 6.57 | $ 5.84 | $ 5.82 | $ 4.33 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.07) | (.14) | (.14) | (.13) H | (.13) | (.09) |
Net realized and unrealized gain (loss) | .22 | .50 | .09 | .86 | .15 | 1.58 |
Total from investment operations | .15 | .36 | (.05) | .73 | .02 | 1.49 |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Distributions from net realized gain | (.53) | - | - | - | - | - |
Net asset value, end of period | $ 6.50 | $ 6.88 | $ 6.52 | $ 6.57 | $ 5.84 | $ 5.82 |
Total Return B, C, D | 1.81% | 5.52% | (.76)% | 12.50% | .34% | 34.41% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.15% A | 2.16% | 2.17% | 2.24% | 2.31% | 2.58% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.19% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.15% | 2.12% | 2.18% | 2.23% | 2.22% |
Net investment income (loss) | (2.11)% A | (1.99)% | (2.04)% | (2.11)% H | (2.13)% | (1.86)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 11,458 | $ 11,813 | $ 13,787 | $ 12,538 | $ 13,215 | $ 10,493 |
Portfolio turnover rate G | 143% A | 120% | 62% | 30% | 50% | 71% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.37 | $ 6.91 | $ 6.89 | $ 6.06 | $ 5.97 | $ 4.40 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | (.04) | (.07) | (.07) | (.06) G | (.06) | (.04) |
Net realized and unrealized gain (loss) | .24 | .53 | .09 | .89 | .15 | 1.61 |
Total from investment operations | .20 | .46 | .02 | .83 | .09 | 1.57 |
Redemption fees added to paid in capital D, I | - | - | - | - | - | - |
Distributions from net realized gain | (.53) | - | - | - | - | - |
Net asset value, end of period | $ 7.04 | $ 7.37 | $ 6.91 | $ 6.89 | $ 6.06 | $ 5.97 |
Total Return B, C | 2.39% | 6.66% | .29% | 13.70% | 1.51% | 35.68% |
Ratios to Average Net Assets E, H | | | | | | |
Expenses before reductions | 1.09% A | 1.06% | 1.05% | 1.10% | 1.16% | 1.37% |
Expenses net of fee waivers, if any | 1.09% A | 1.06% | 1.05% | 1.10% | 1.16% | 1.25% |
Expenses net of all reductions | 1.09% A | 1.06% | 1.03% | 1.09% | 1.14% | 1.22% |
Net investment income (loss) | (1.04)% A | (.91)% | (.94)% | (1.02)% G | (1.04)% | (.86)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,073 | $ 991 | $ 1,268 | $ 1,243 | $ 1,146 | $ 1,153 |
Portfolio turnover rate F | 143% A | 120% | 62% | 30% | 50% | 71% |
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, 2008 (Unaudited)
1. Organization.
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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
Biotechnology
3. Significant Accounting Policies - continued
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. Interest income and distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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, 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 | $ 7,184,827 | |
Unrealized depreciation | (4,337,216) | |
Net unrealized appreciation (depreciation) | $ 2,847,611 | |
Cost for federal income tax purposes | $ 48,190,928 | |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to 0.75% 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 Pronouncement. 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.
4. 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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $38,560,673 and $41,250,005, respectively.
6. 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% | $ 17,186 | $ 216 |
Class T | .25% | .25% | 34,778 | - |
Class B | .75% | .25% | 65,067 | 48,971 |
Class C | .75% | .25% | 61,890 | 8,269 |
| | | $ 178,921 | $ 57,456 |
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 | $ 4,220 |
Class T | 3,918 |
Class B* | 13,577 |
Class C* | 969 |
| $ 22,684 |
* 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 | $ 20,890 | .30 |
Class T | 27,448 | .39 |
Class B | 19,783 | .30 |
Class C | 18,878 | .31 |
Institutional Class | 1,592 | .24 |
| $ 88,591 | |
* 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.
Biotechnology
6. Fees and Other Transactions with Affiliates - continued
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 $1,023 for the period.
7. 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.
8. 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.
9. 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 T | 1.65% | $ 6,204 |
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 $123 for the period.
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $6,156.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
From net realized gain | | |
Class A | $ 958,767 | $ - |
Class T | 975,567 | - |
Class B | 968,071 | - |
Class C | 911,566 | - |
Institutional Class | 84,958 | - |
Total | $ 3,898,929 | $ - |
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 | Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 297,112 | 654,030 | $ 2,195,566 | $ 4,756,477 |
Reinvestment of distributions | 116,475 | - | 854,207 | - |
Shares redeemed | (298,354) | (687,789) | (2,203,206) | (5,067,147) |
Net increase (decrease) | 115,233 | (33,759) | $ 846,567 | $ (310,670) |
Class T | | | | |
Shares sold | 268,451 | 413,953 | $ 1,960,575 | $ 2,989,158 |
Reinvestment of distributions | 133,154 | - | 959,166 | - |
Shares redeemed | (257,075) | (643,045) | (1,884,963) | (4,647,999) |
Net increase (decrease) | 144,530 | (229,092) | $ 1,034,778 | $ (1,658,841) |
Class B | | | | |
Shares sold | 95,815 | 235,936 | $ 673,854 | $ 1,623,598 |
Reinvestment of distributions | 123,818 | - | 860,151 | - |
Shares redeemed | (294,189) | (686,826) | (2,039,831) | (4,815,046) |
Net increase (decrease) | (74,556) | (450,890) | $ (505,826) | $ (3,191,448) |
Class C | | | | |
Shares sold | 196,131 | 294,514 | $ 1,396,524 | $ 2,075,073 |
Reinvestment of distributions | 110,151 | - | 765,068 | - |
Shares redeemed | (259,392) | (691,341) | (1,807,430) | (4,822,276) |
Net increase (decrease) | 46,890 | (396,827) | $ 354,162 | $ (2,747,203) |
Institutional Class | | | | |
Shares sold | 111,194 | 40,455 | $ 858,271 | $ 308,779 |
Reinvestment of distributions | 6,538 | - | 48,898 | - |
Shares redeemed | (99,564) | (89,434) | (726,702) | (674,715) |
Net increase (decrease) | 18,168 | (48,979) | $ 180,467 | $ (365,936) |
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 852.80 | $ 6.52 |
HypotheticalA | $ 1,000.00 | $ 1,018.10 | $ 7.10 |
Class T | | | |
Actual | $ 1,000.00 | $ 851.50 | $ 7.68 |
HypotheticalA | $ 1,000.00 | $ 1,016.84 | $ 8.36 |
Class B | | | |
Actual | $ 1,000.00 | $ 849.70 | $ 10.00 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Class C | | | |
Actual | $ 1,000.00 | $ 849.70 | $ 10.00 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 853.10 | $ 5.36 |
HypotheticalA | $ 1,000.00 | $ 1,019.36 | $ 5.84 |
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 184/366 (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, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Cisco Systems, Inc. | 15.4 | 6.6 |
Research In Motion Ltd. | 10.1 | 10.2 |
Comverse Technology, Inc. | 6.9 | 4.7 |
QUALCOMM, Inc. | 6.6 | 19.6 |
Corning, Inc. | 6.5 | 4.8 |
High Tech Computer Corp. | 4.7 | 0.0 |
Juniper Networks, Inc. | 4.1 | 5.8 |
Powerwave Technologies, Inc. | 3.5 | 4.4 |
F5 Networks, Inc. | 2.9 | 4.2 |
Sandvine Corp. (U.K.) | 2.8 | 3.0 |
| 63.5 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Communications Equipment | 72.9% | |
| Software | 6.1% | |
| Semiconductors & Semiconductor Equipment | 5.9% | |
| Computers & Peripherals | 5.1% | |
| Household Durables | 2.4% | |
| All Others* | 7.6% | |
|
As of July 31, 2007 |
| Communications Equipment | 79.6% | |
| Software | 6.9% | |
| Semiconductors & Semiconductor Equipment | 6.2% | |
| Computers & Peripherals | 1.6% | |
| Household Durables | 1.5% | |
| All Others* | 4.2% | |
* Includes short-term investments and net other assets. |
Communications Equipment
Advisor Communications Equipment Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 93.8% |
| Shares | | Value |
COMMUNICATIONS EQUIPMENT - 72.7% |
Communications Equipment - 72.7% |
Acme Packet, Inc. (a) | 100 | | $ 962 |
ADC Telecommunications, Inc. (a) | 12,200 | | 180,438 |
Adtran, Inc. | 3,083 | | 64,157 |
ADVA AG Optical Networking (a) | 7,013 | | 24,062 |
Airvana, Inc. | 6,808 | | 35,606 |
Aruba Networks, Inc. | 100 | | 946 |
AudioCodes Ltd. (a) | 20,500 | | 96,145 |
Avanex Corp. (a) | 11,600 | | 11,020 |
Ceragon Networks Ltd. (a) | 100 | | 909 |
Cisco Systems, Inc. (a) | 47,669 | | 1,167,889 |
Comtech Group, Inc. (a) | 15,601 | | 167,867 |
Comverse Technology, Inc. (a) | 31,906 | | 521,663 |
Corning, Inc. | 20,600 | | 495,842 |
F5 Networks, Inc. (a) | 9,300 | | 218,829 |
Finisar Corp. (a) | 2,800 | | 4,480 |
Foundry Networks, Inc. (a) | 5,400 | | 74,520 |
Foxconn International Holdings Ltd. (a) | 2,000 | | 3,299 |
Harris Stratex Networks, Inc. Class A (a) | 15,495 | | 168,741 |
Infinera Corp. | 1,300 | | 13,247 |
Ixia (a) | 2,963 | | 21,926 |
Juniper Networks, Inc. (a) | 11,450 | | 310,868 |
Opnext, Inc. | 500 | | 2,580 |
Orckit Communications Ltd. (a) | 3,800 | | 28,500 |
Powerwave Technologies, Inc. (a) | 69,500 | | 264,100 |
QUALCOMM, Inc. | 11,800 | | 500,556 |
Research In Motion Ltd. (a) | 8,120 | | 762,306 |
Riverbed Technology, Inc. (a) | 2,300 | | 51,405 |
Sonus Networks, Inc. (a) | 34,204 | | 139,894 |
Starent Networks Corp. | 11,000 | | 135,960 |
Symmetricom, Inc. (a) | 8,145 | | 35,594 |
| | 5,504,311 |
COMPUTERS & PERIPHERALS - 5.1% |
Computer Hardware - 4.9% |
Compal Electronics, Inc. | 5,698 | | 4,905 |
Concurrent Computer Corp. (a) | 11,340 | | 9,526 |
High Tech Computer Corp. | 19,000 | | 358,183 |
NEC Corp. sponsored ADR | 90 | | 369 |
| | 372,983 |
Computer Storage & Peripherals - 0.2% |
SanDisk Corp. (a) | 610 | | 15,525 |
TOTAL COMPUTERS & PERIPHERALS | | 388,508 |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.2% |
Electronic Equipment & Instruments - 1.0% |
Chi Mei Optoelectronics Corp. | 8,227 | | 9,699 |
|
| Shares | | Value |
HannStar Display Corp. (a) | 48,024 | | $ 18,040 |
Nippon Electric Glass Co. Ltd. | 3,000 | | 44,889 |
| | 72,628 |
Electronic Manufacturing Services - 0.2% |
Trimble Navigation Ltd. (a) | 600 | | 15,870 |
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS | | 88,498 |
HOUSEHOLD DURABLES - 2.4% |
Consumer Electronics - 2.4% |
Tele Atlas NV (a) | 4,700 | | 185,227 |
INTERNET SOFTWARE & SERVICES - 0.4% |
Internet Software & Services - 0.4% |
RADVision Ltd. (a) | 3,050 | | 30,653 |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 5.9% |
Semiconductor Equipment - 0.8% |
EMCORE Corp. (a) | 4,600 | | 62,882 |
Semiconductors - 5.1% |
Actel Corp. (a) | 451 | | 5,371 |
AMIS Holdings, Inc. (a) | 5,900 | | 43,129 |
Applied Micro Circuits Corp. (a) | 2,758 | | 22,147 |
Broadcom Corp. Class A (a) | 1,300 | | 28,704 |
Conexant Systems, Inc. (a) | 12,800 | | 8,832 |
Cree, Inc. (a) | 1,100 | | 32,505 |
CSR PLC (a) | 2,000 | | 21,226 |
Exar Corp. (a) | 143 | | 1,174 |
Hittite Microwave Corp. (a) | 600 | | 23,892 |
Marvell Technology Group Ltd. (a) | 5,900 | | 70,033 |
Microsemi Corp. (a) | 449 | | 10,201 |
Mindspeed Technologies, Inc. (a) | 12,509 | | 10,220 |
MIPS Technologies, Inc. (a) | 1,398 | | 6,221 |
Pericom Semiconductor Corp. (a) | 1,700 | | 23,052 |
Pixelplus Co. Ltd. sponsored ADR (a) | 3,600 | | 2,160 |
PLX Technology, Inc. (a) | 1,400 | | 9,828 |
PMC-Sierra, Inc. (a) | 3,100 | | 14,539 |
Silicon Motion Technology Corp. sponsored ADR (a) | 1,800 | | 27,720 |
Silicon Storage Technology, Inc. (a) | 1,200 | | 3,408 |
Soitec SA (a) | 2,100 | | 18,530 |
Transmeta Corp. (a) | 290 | | 3,903 |
| | 386,795 |
TOTAL SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT | | 449,677 |
SOFTWARE - 6.1% |
Application Software - 2.3% |
Smith Micro Software, Inc. (a) | 6,700 | | 50,451 |
Taleo Corp. Class A (a) | 100 | | 2,113 |
Ulticom, Inc. (a) | 17,598 | | 125,826 |
| | 178,390 |
Common Stocks - continued |
| Shares | | Value |
SOFTWARE - CONTINUED |
Home Entertainment Software - 1.0% |
Ubisoft Entertainment SA (a) | 800 | | $ 72,722 |
Systems Software - 2.8% |
Allot Communications Ltd. (a) | 300 | | 1,191 |
Sandvine Corp. (U.K.) (a) | 56,400 | | 207,839 |
| | 209,030 |
TOTAL SOFTWARE | | 460,142 |
TOTAL COMMON STOCKS (Cost $8,040,016) | 7,107,016 |
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 | | 17,888 |
Money Market Funds - 6.4% |
| Shares | | |
Fidelity Cash Central Fund, 3.79% (b)
(Cost $481,822) | 481,822 | | 481,822 |
TOTAL INVESTMENT PORTFOLIO - 100.4% (Cost $8,541,838) | | 7,606,726 |
NET OTHER ASSETS - (0.4)% | | (31,948) |
NET ASSETS - 100% | $ 7,574,778 |
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 | $ 3,719 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 73.7% |
Canada | 12.9% |
Taiwan | 5.6% |
Netherlands | 2.4% |
Israel | 2.1% |
France | 1.2% |
Others (individually less than 1%) | 2.1% |
| 100.0% |
Income Tax Information |
The fund intends to elect to defer to its fiscal year ending July 31, 2008 approximately $221,739 of losses recognized during the period November 1, 2006 to July 31, 2007. |
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, 2008 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $8,060,016) | $ 7,124,904 | |
Fidelity Central Funds (cost $481,822) | 481,822 | |
Total Investments (cost $8,541,838) | | $ 7,606,726 |
Receivable for investments sold | | 27,415 |
Dividends receivable | | 190 |
Interest receivable | | 12 |
Distributions receivable from Fidelity Central Funds | | 352 |
Prepaid expenses | | 32 |
Receivable from investment adviser for expense reductions | | 3,262 |
Other receivables | | 219 |
Total assets | | 7,638,208 |
| | |
Liabilities | | |
Payable for fund shares redeemed | $ 29,334 | |
Accrued management fee | 3,619 | |
Distribution fees payable | 3,964 | |
Other affiliated payables | 2,546 | |
Other payables and accrued expenses | 23,967 | |
Total liabilities | | 63,430 |
| | |
Net Assets | | $ 7,574,778 |
Net Assets consist of: | | |
Paid in capital | | $ 8,938,953 |
Accumulated net investment loss | | (73,133) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (355,930) |
Net unrealized appreciation (depreciation) on investments | | (935,112) |
Net Assets | | $ 7,574,778 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($2,139,712 ÷ 268,285 shares) | | $ 7.98 |
| | |
Maximum offering price per share (100/94.25 of $7.98) | | $ 8.47 |
Class T:
Net Asset Value and redemption price per share ($2,183,189 ÷ 278,588 shares) | | $ 7.84 |
| | |
Maximum offering price per share (100/96.50 of $7.84) | | $ 8.12 |
Class B:
Net Asset Value and offering price per share ($1,669,961 ÷ 220,930 shares) A | | $ 7.56 |
| | |
Class C:
Net Asset Value and offering price per share ($1,314,984 ÷ 174,040 shares)A | | $ 7.56 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($266,932 ÷ 32,862 shares) | | $ 8.12 |
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, 2008 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 10,279 |
Interest | | 81 |
Income from Fidelity Central Funds | | 3,719 |
Total income | | 14,079 |
| | |
Expenses | | |
Management fee | $ 27,592 | |
Transfer agent fees | 17,923 | |
Distribution fees | 30,052 | |
Accounting fees and expenses | 1,928 | |
Custodian fees and expenses | 1,286 | |
Independent trustees' compensation | 21 | |
Registration fees | 37,741 | |
Audit | 22,979 | |
Legal | 36 | |
Miscellaneous | 43 | |
Total expenses before reductions | 139,601 | |
Expense reductions | (52,389) | 87,212 |
Net investment income (loss) | | (73,133) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (15,903) | |
Foreign currency transactions | (38) | |
Total net realized gain (loss) | | (15,941) |
Change in net unrealized appreciation (depreciation) on investment securities | | (1,282,930) |
Net gain (loss) | | (1,298,871) |
Net increase (decrease) in net assets resulting from operations | | $ (1,372,004) |
Statement of Changes in Net Assets
| Six months ended
January 31, 2008
(Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (73,133) | $ (146,568) |
Net realized gain (loss) | (15,941) | 337,365 |
Change in net unrealized appreciation (depreciation) | (1,282,930) | 2,613,997 |
Net increase (decrease) in net assets resulting from operations | (1,372,004) | 2,804,794 |
Distributions to shareholders from net realized gain | (150,546) | - |
Share transactions - net increase (decrease) | (1,292,974) | (3,045,289) |
Redemption fees | 346 | 192 |
Total increase (decrease) in net assets | (2,815,178) | (240,303) |
| | |
Net Assets | | |
Beginning of period | 10,389,956 | 10,630,259 |
End of period (including accumulated net investment loss of $73,133 and $0, respectively) | $ 7,574,778 | $ 10,389,956 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 9.49 | $ 7.29 | $ 7.70 | $ 6.53 | $ 5.57 | $ 3.96 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.09) | (.09) | (.07) | (.09) | (.04) |
Net realized and unrealized gain (loss) | (1.32) | 2.29 | (.32) | 1.24 | 1.01 | 1.65 |
Total from investment operations | (1.37) | 2.20 | (.41) | 1.17 | .92 | 1.61 |
Distributions from net realized gain | (.14) | - | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .04 | - I |
Net asset value, end of period | $ 7.98 | $ 9.49 | $ 7.29 | $ 7.70 | $ 6.53 | $ 5.57 |
Total Return B, C, D | (14.72)% | 30.18% | (5.32)% | 17.92% | 17.24% | 40.66% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.43% A | 2.24% | 2.13% | 2.32% | 2.38% | 6.13% |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.40% | 1.45% | 1.50% | 1.50% |
Expenses net of all reductions | 1.40% A | 1.40% | 1.32% | 1.28% | 1.35% | 1.36% |
Net investment income (loss) | (1.11)% A | (1.00)% | (1.05)% | (.92)% | (1.18)% | (.82)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 2,140 | $ 2,825 | $ 3,145 | $ 2,406 | $ 3,480 | $ 970 |
Portfolio turnover rate G | 48% A | 58% | 174% | 250% | 306% | 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 9.34 | $ 7.19 | $ 7.61 | $ 6.48 | $ 5.54 | $ 3.95 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.06) | (.11) | (.11) | (.08) | (.10) | (.05) |
Net realized and unrealized gain (loss) | (1.30) | 2.26 | (.31) | 1.21 | 1.00 | 1.64 |
Total from investment operations | (1.36) | 2.15 | (.42) | 1.13 | .90 | 1.59 |
Distributions from net realized gain | (.14) | - | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .04 | - I |
Net asset value, end of period | $ 7.84 | $ 9.34 | $ 7.19 | $ 7.61 | $ 6.48 | $ 5.54 |
Total Return B, C, D | (14.85)% | 29.90% | (5.52)% | 17.44% | 16.97% | 40.25% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.79% A | 2.57% | 2.51% | 2.78% | 3.06% | 6.82% |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.65% | 1.71% | 1.75% | 1.75% |
Expenses net of all reductions | 1.65% A | 1.64% | 1.57% | 1.54% | 1.60% | 1.61% |
Net investment income (loss) | (1.37)% A | (1.25)% | (1.30)% | (1.18)% | (1.43)% | (1.07)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 2,183 | $ 3,271 | $ 2,932 | $ 3,034 | $ 3,250 | $ 1,723 |
Portfolio turnover rate G | 48% A | 58% | 174% | 250% | 306% | 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.
Communications Equipment
Financial Highlights - Class B
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 9.03 | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 | $ 3.92 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.08) | (.14) | (.14) | (.12) | (.13) | (.07) |
Net realized and unrealized gain (loss) | (1.25) | 2.18 | (.31) | 1.20 | .98 | 1.62 |
Total from investment operations | (1.33) | 2.04 | (.45) | 1.08 | .85 | 1.55 |
Distributions from net realized gain | (.14) | - | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .04 | - I |
Net asset value, end of period | $ 7.56 | $ 9.03 | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 |
Total Return B, C, D | (15.03)% | 29.18% | (6.05)% | 16.98% | 16.27% | 39.54% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 3.16% A | 3.00% | 2.94% | 3.14% | 3.48% | 6.88% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.20% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.15% | 2.07% | 2.04% | 2.11% | 2.11% |
Net investment income (loss) | (1.87)% A | (1.75)% | (1.80)% | (1.68)% | (1.93)% | (1.56)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,670 | $ 2,225 | $ 2,406 | $ 2,864 | $ 2,998 | $ 1,846 |
Portfolio turnover rate G | 48% A | 58% | 174% | 250% | 306% | 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. IAmount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended
Janaury 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 9.03 | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 | $ 3.92 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.08) | (.14) | (.15) | (.12) | (.14) | (.07) |
Net realized and unrealized gain (loss) | (1.25) | 2.18 | (.30) | 1.20 | .99 | 1.62 |
Total from investment operations | (1.33) | 2.04 | (.45) | 1.08 | .85 | 1.55 |
Distributions from net realized gain | (.14) | - | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .04 | - I |
Net asset value, end of period | $ 7.56 | $ 9.03 | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 |
Total Return B, C, D | (15.03)% | 29.18% | (6.05)% | 16.98% | 16.27% | 39.54% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 3.16% A | 2.98% | 2.86% | 3.07% | 3.19% | 6.81% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.19% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.15% | 2.07% | 2.02% | 2.10% | 2.11% |
Net investment income (loss) | (1.87)% A | (1.75)% | (1.81)% | (1.66)% | (1.93)% | (1.57)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,315 | $ 1,745 | $ 1,768 | $ 1,846 | $ 3,180 | $ 1,009 |
Portfolio turnover rate G | 48% A | 58% | 174% | 250% | 306% | 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. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended
Janary 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 9.65 | $ 7.39 | $ 7.79 | $ 6.60 | $ 5.61 | $ 3.98 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | (.04) | (.07) | (.07) | (.05) | (.07) | (.03) |
Net realized and unrealized gain (loss) | (1.35) | 2.33 | (.33) | 1.24 | 1.02 | 1.66 |
Total from investment operations | (1.39) | 2.26 | (.40) | 1.19 | .95 | 1.63 |
Distributions from net realized gain | (.14) | - | - | - | - | - |
Redemption fees added to paid in capital D | - H | - H | - H | - H | .04 | - H |
Net asset value, end of period | $ 8.12 | $ 9.65 | $ 7.39 | $ 7.79 | $ 6.60 | $ 5.61 |
Total Return B, C | (14.69)% | 30.58% | (5.13)% | 18.03% | 17.65% | 40.95% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | 2.09% A | 1.87% | 1.70% | 1.85% | 1.55% | 5.34% |
Expenses net of fee waivers, if any | 1.15% A | 1.15% | 1.15% | 1.18% | 1.25% | 1.25% |
Expenses net of all reductions | 1.15% A | 1.15% | 1.07% | 1.01% | 1.11% | 1.11% |
Net investment income (loss) | (.86)% A | (.75)% | (.80)% | (.65)% | (.93)% | (.57)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 267 | $ 324 | $ 379 | $ 319 | $ 607 | $ 154 |
Portfolio turnover rate F | 48% A | 58% | 174% | 250% | 306% | 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.
Communications Equipment
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
1. Organization.
Fidelity Advisor Communications Equipment 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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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 available 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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Foreign Currency - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year, the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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 and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 853,521 | |
Unrealized depreciation | (1,872,636) | |
Net unrealized appreciation (depreciation) | $ (1,019,115) | |
Cost for federal income tax purposes | $ 8,625,841 | |
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. 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 Pronouncement. 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.
Communications Equipment
4. 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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $2,335,732 and $4,143,167, respectively.
6. 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% | $ 3,414 | $ 17 |
Class T | .25% | .25% | 7,662 | - |
Class B | .75% | .25% | 10,527 | 7,895 |
Class C | .75% | .25% | 8,449 | 1,114 |
| | | $ 30,052 | $ 9,026 |
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 | $ 883 |
Class T | 1,045 |
Class B* | 1,164 |
Class C* | 206 |
| $ 3,298 |
* 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
Notes to Financial Statements (Unaudited) - continued
6. 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 | $ 4,501 | .33 |
Class T | 6,779 | .44 |
Class B | 3,452 | .33 |
Class C | 2,769 | .33 |
Institutional Class | 422 | .26 |
| $ 17,923 | |
* Annualized
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.
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 $168 for the period.
7. 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.
8. 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% | $ 13,982 |
Class T | 1.65% | 17,439 |
Class B | 2.15% | 10,666 |
Class C | 2.15% | 8,552 |
Institutional Class | 1.15% | 1,532 |
| | $ 52,171 |
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 $218 for the period.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Communications Equipment
9. Other - continued
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $4,027.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 |
From net realized gain | |
Class A | $ 39,064 |
Class T | 47,716 |
Class B | 32,890 |
Class C | 26,349 |
Institutional Class | 4,527 |
Total | $ 150,546 |
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 | Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 55,145 | 81,005 | $ 532,808 | $ 690,457 |
Reinvestment of distributions | 4,001 | - | 38,211 | - |
Shares redeemed | (88,520) | (214,792) | (812,836) | (1,810,328) |
Net increase (decrease) | (29,374) | (133,787) | $ (241,817) | $ (1,119,871) |
Class T | | | | |
Shares sold | 29,008 | 82,403 | $ 266,761 | $ 704,729 |
Reinvestment of distributions | 5,010 | - | 47,041 | - |
Shares redeemed | (105,727) | (139,753) | (978,230) | (1,173,589) |
Net increase (decrease) | (71,709) | (57,350) | $ (664,428) | $ (468,860) |
Class B | | | | |
Shares sold | 13,811 | 24,084 | $ 122,159 | $ 199,321 |
Reinvestment of distributions | 3,437 | - | 31,211 | - |
Shares redeemed | (42,635) | (121,877) | (377,724) | (1,002,926) |
Net increase (decrease) | (25,387) | (97,793) | $ (224,354) | $ (803,605) |
Class C | | | | |
Shares sold | 25,047 | 60,107 | $ 227,235 | $ 487,807 |
Reinvestment of distributions | 2,609 | - | 23,659 | - |
Shares redeemed | (46,830) | (119,863) | (408,582) | (990,194) |
Net increase (decrease) | (19,174) | (59,756) | $ (157,688) | $ (502,387) |
Institutional Class | | | | |
Shares sold | 3,195 | 1,716 | $ 30,324 | $ 15,290 |
Reinvestment of distributions | 356 | - | 3,461 | - |
Shares redeemed | (4,219) | (19,380) | (38,472) | (165,856) |
Net increase (decrease) | (668) | (17,664) | $ (4,687) | $ (150,566) |
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 900.10 | $ 6.50 |
HypotheticalA | $ 1,000.00 | $ 1,018.30 | $ 6.90 |
Class T | | | |
Actual | $ 1,000.00 | $ 899.50 | $ 7.69 |
HypotheticalA | $ 1,000.00 | $ 1,017.04 | $ 8.16 |
Class B | | | |
Actual | $ 1,000.00 | $ 896.80 | $ 10.06 |
HypotheticalA | $ 1,000.00 | $ 1,014.53 | $ 10.68 |
Class C | | | |
Actual | $ 1,000.00 | $ 897.00 | $ 10.06 |
HypotheticalA | $ 1,000.00 | $ 1,014.53 | $ 10.68 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 901.10 | $ 5.30 |
HypotheticalA | $ 1,000.00 | $ 1,019.56 | $ 5.63 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.36% |
Class T | 1.61% |
Class B | 2.11% |
Class C | 2.11% |
Institutional Class | 1.11% |
Consumer Discretionary
Advisor Consumer Discretionary Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Target Corp. | 6.3 | 5.5 |
Time Warner, Inc. | 5.7 | 6.1 |
McDonald's Corp. | 5.1 | 5.0 |
Home Depot, Inc. | 4.4 | 6.3 |
Lowe's Companies, Inc. | 3.9 | 1.5 |
Comcast Corp. Class A | 3.3 | 4.5 |
Staples, Inc. | 3.2 | 3.2 |
Johnson Controls, Inc. | 2.8 | 1.7 |
News Corp. Class A | 2.7 | 3.2 |
The Walt Disney Co. | 2.6 | 1.2 |
| 40.0 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Media | 27.3% | |
| Specialty Retail | 24.8% | |
| Hotels, Restaurants & Leisure | 14.0% | |
| Multiline Retail | 8.3% | |
| Food & Staples Retailing | 4.7% | |
| All Others* | 20.9% | |
|
As of July 31, 2007 |
| Media | 27.2% | |
| Specialty Retail | 20.8% | |
| Hotels, Restaurants & Leisure | 16.0% | |
| Multiline Retail | 12.5% | |
| Textiles, Apparel & Luxury Goods | 6.4% | |
| All Others* | 17.1% | |
* Includes short-term investments and net other assets. |
Semiannual Report
Advisor Consumer Discretionary Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 100.2% |
| Shares | | Value |
AUTO COMPONENTS - 2.8% |
Auto Parts & Equipment - 2.8% |
Johnson Controls, Inc. | 31,200 | | $ 1,103,544 |
AUTOMOBILES - 1.3% |
Automobile Manufacturers - 0.7% |
Renault SA | 1,000 | | 114,156 |
Toyota Motor Corp. sponsored ADR | 1,500 | | 162,825 |
| | 276,981 |
Motorcycle Manufacturers - 0.6% |
Harley-Davidson, Inc. | 6,400 | | 259,712 |
TOTAL AUTOMOBILES | | 536,693 |
DISTRIBUTORS - 0.5% |
Distributors - 0.5% |
Li & Fung Ltd. | 58,000 | | 215,712 |
DIVERSIFIED CONSUMER SERVICES - 2.8% |
Education Services - 2.4% |
Apollo Group, Inc. Class A (non-vtg.) (a) | 8,900 | | 709,686 |
Career Education Corp. (a) | 3,100 | | 67,394 |
Princeton Review, Inc. (a) | 5,429 | | 42,835 |
Strayer Education, Inc. | 900 | | 155,322 |
| | 975,237 |
Specialized Consumer Services - 0.4% |
Sotheby's Class A (ltd. vtg.) | 4,700 | | 146,029 |
TOTAL DIVERSIFIED CONSUMER SERVICES | | 1,121,266 |
FOOD & STAPLES RETAILING - 4.7% |
Drug Retail - 2.2% |
CVS Caremark Corp. | 22,600 | | 882,982 |
Food Distributors - 0.6% |
Sysco Corp. | 7,200 | | 209,160 |
Food Retail - 0.9% |
Susser Holdings Corp. (a) | 15,283 | | 360,679 |
Hypermarkets & Super Centers - 1.0% |
Costco Wholesale Corp. (d) | 6,000 | | 407,640 |
TOTAL FOOD & STAPLES RETAILING | | 1,860,461 |
HOTELS, RESTAURANTS & LEISURE - 14.0% |
Casinos & Gaming - 4.0% |
International Game Technology | 21,600 | | 921,672 |
Las Vegas Sands Corp. (a) | 4,000 | | 350,680 |
Penn National Gaming, Inc. (a) | 1,900 | | 99,085 |
Wynn Resorts Ltd. | 1,800 | | 206,964 |
| | 1,578,401 |
Hotels, Resorts & Cruise Lines - 2.9% |
Carnival Corp. unit | 15,800 | | 702,942 |
Royal Caribbean Cruises Ltd. | 11,400 | | 459,192 |
| | 1,162,134 |
|
| Shares | | Value |
Restaurants - 7.1% |
Burger King Holdings, Inc. | 4,000 | | $ 105,400 |
Darden Restaurants, Inc. | 3,600 | | 101,952 |
McDonald's Corp. | 38,300 | | 2,050,965 |
Sonic Corp. (a)(d) | 9,600 | | 212,928 |
Starbucks Corp. (a) | 20,200 | | 381,982 |
| | 2,853,227 |
TOTAL HOTELS, RESTAURANTS & LEISURE | | 5,593,762 |
HOUSEHOLD DURABLES - 1.0% |
Household Appliances - 1.0% |
The Stanley Works | 2,100 | | 107,856 |
Whirlpool Corp. | 3,400 | | 289,374 |
| | 397,230 |
INTERNET & CATALOG RETAIL - 3.8% |
Catalog Retail - 1.1% |
Liberty Media Corp. - Interactive Series A (a) | 27,800 | | 442,298 |
Internet Retail - 2.7% |
Amazon.com, Inc. (a) | 6,700 | | 520,590 |
Blue Nile, Inc. (a)(d) | 10,100 | | 558,025 |
| | 1,078,615 |
TOTAL INTERNET & CATALOG RETAIL | | 1,520,913 |
INTERNET SOFTWARE & SERVICES - 2.0% |
Internet Software & Services - 2.0% |
Google, Inc. Class A (sub. vtg.) (a) | 1,000 | | 564,300 |
LoopNet, Inc. (a)(d) | 15,300 | | 215,883 |
| | 780,183 |
LEISURE EQUIPMENT & PRODUCTS - 1.4% |
Leisure Products - 1.1% |
Mattel, Inc. | 20,900 | | 439,109 |
Photographic Products - 0.3% |
Eastman Kodak Co. | 7,000 | | 139,510 |
TOTAL LEISURE EQUIPMENT & PRODUCTS | | 578,619 |
MEDIA - 27.3% |
Advertising - 3.3% |
National CineMedia, Inc. | 14,800 | | 337,292 |
Omnicom Group, Inc. | 21,900 | | 993,603 |
| | 1,330,895 |
Broadcasting & Cable TV - 7.4% |
Clear Channel Communications, Inc. | 10,000 | | 307,100 |
Comcast Corp. Class A (a) | 72,550 | | 1,317,508 |
Grupo Televisa SA de CV (CPO) sponsored ADR | 25,500 | | 568,395 |
The DIRECTV Group, Inc. (a) | 26,400 | | 596,112 |
Time Warner Cable, Inc. (a)(d) | 7,000 | | 176,120 |
| | 2,965,235 |
Common Stocks - continued |
| Shares | | Value |
MEDIA - CONTINUED |
Movies & Entertainment - 14.4% |
Cinemark Holdings, Inc. | 6,600 | | $ 94,380 |
Live Nation, Inc. (a) | 16,733 | | 182,390 |
News Corp.: | | | |
Class A | 56,984 | | 1,076,998 |
Class B | 4,600 | | 89,424 |
Regal Entertainment Group Class A (d) | 54,400 | | 1,008,576 |
The Walt Disney Co. | 34,000 | | 1,017,620 |
Time Warner, Inc. | 145,400 | | 2,288,596 |
| | 5,757,984 |
Publishing - 2.2% |
McGraw-Hill Companies, Inc. | 20,400 | | 872,304 |
TOTAL MEDIA | | 10,926,418 |
MULTILINE RETAIL - 8.3% |
Department Stores - 2.0% |
Kohl's Corp. (a) | 7,600 | | 346,864 |
Nordstrom, Inc. (d) | 11,500 | | 447,350 |
| | 794,214 |
General Merchandise Stores - 6.3% |
Lojas Americanas SA (PN) | 150 | | 1,142 |
Target Corp. | 45,200 | | 2,512,213 |
| | 2,513,355 |
TOTAL MULTILINE RETAIL | | 3,307,569 |
PERSONAL PRODUCTS - 0.5% |
Personal Products - 0.5% |
Bare Escentuals, Inc. (a)(d) | 8,900 | | 212,176 |
SOFTWARE - 0.3% |
Home Entertainment Software - 0.3% |
Activision, Inc. (a) | 4,900 | | 126,763 |
SPECIALTY RETAIL - 24.8% |
Apparel Retail - 5.9% |
Abercrombie & Fitch Co. Class A | 5,000 | | 398,450 |
American Eagle Outfitters, Inc. | 4,800 | | 110,544 |
Casual Male Retail Group, Inc. (a) | 21,600 | | 104,976 |
Citi Trends, Inc. (a) | 8,599 | | 117,548 |
Collective Brands, Inc. (a)(d) | 13,700 | | 241,394 |
Ross Stores, Inc. | 11,500 | | 335,225 |
TJX Companies, Inc. | 18,448 | | 582,219 |
Tween Brands, Inc. (a)(d) | 9,100 | | 291,473 |
Urban Outfitters, Inc. (a) | 6,600 | | 191,400 |
| | 2,373,229 |
|
| Shares | | Value |
Automotive Retail - 1.6% |
Advance Auto Parts, Inc. | 15,400 | | $ 549,472 |
Penske Auto Group, Inc. | 5,700 | | 103,512 |
| | 652,984 |
Computer & Electronics Retail - 0.7% |
Gamestop Corp. Class A (a) | 5,700 | | 294,861 |
Home Improvement Retail - 9.1% |
Home Depot, Inc. | 57,867 | | 1,774,781 |
Lowe's Companies, Inc. | 58,900 | | 1,557,316 |
Sherwin-Williams Co. (d) | 5,500 | | 314,655 |
| | 3,646,752 |
Homefurnishing Retail - 1.4% |
Williams-Sonoma, Inc. (d) | 20,300 | | 545,664 |
Specialty Stores - 6.1% |
Jo-Ann Stores, Inc. (a) | 900 | | 11,403 |
PetSmart, Inc. | 35,400 | | 809,598 |
Staples, Inc. | 52,638 | | 1,260,154 |
Tiffany & Co., Inc. (d) | 8,600 | | 343,140 |
| | 2,424,295 |
TOTAL SPECIALTY RETAIL | | 9,937,785 |
TEXTILES, APPAREL & LUXURY GOODS - 4.7% |
Apparel, Accessories & Luxury Goods - 2.7% |
Burberry Group PLC | 17,647 | | 153,945 |
Coach, Inc. (a) | 22,700 | | 727,535 |
G-III Apparel Group Ltd. (a) | 12,700 | | 169,799 |
Lululemon Athletica, Inc. | 700 | | 23,723 |
| | 1,075,002 |
Footwear - 2.0% |
Deckers Outdoor Corp. (a) | 2,648 | | 321,044 |
Iconix Brand Group, Inc. (a) | 18,600 | | 386,694 |
K-Swiss, Inc. Class A | 4,900 | | 88,984 |
| | 796,722 |
TOTAL TEXTILES, APPAREL & LUXURY GOODS | | 1,871,724 |
TOTAL COMMON STOCKS (Cost $41,924,687) | 40,090,818 |
Money Market Funds - 11.2% |
| Shares | | Value |
Fidelity Cash Central Fund, 3.79% (b) | 176,746 | | $ 176,746 |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 4,332,625 | | 4,332,625 |
TOTAL MONEY MARKET FUNDS (Cost $4,509,371) | 4,509,371 |
TOTAL INVESTMENT PORTFOLIO - 111.4% (Cost $46,434,058) | | 44,600,189 |
NET OTHER ASSETS - (11.4)% | | (4,577,249) |
NET ASSETS - 100% | $ 40,022,940 |
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 | $ 7,446 |
Fidelity Securities Lending Cash Central Fund | 17,748 |
Total | $ 25,194 |
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, 2008 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $4,365,004) - See accompanying schedule: Unaffiliated issuers (cost $41,924,687) | $ 40,090,818 | |
Fidelity Central Funds (cost $4,509,371) | 4,509,371 | |
Total Investments (cost $46,434,058) | | $ 44,600,189 |
Receivable for investments sold | | 673,987 |
Receivable for fund shares sold | | 40,626 |
Dividends receivable | | 10,505 |
Distributions receivable from Fidelity Central Funds | | 3,734 |
Prepaid expenses | | 149 |
Other receivables | | 8,916 |
Total assets | | 45,338,106 |
| | |
Liabilities | | |
Payable for investments purchased | $ 787,190 | |
Payable for fund shares redeemed | 122,318 | |
Accrued management fee | 18,123 | |
Distribution fees payable | 18,243 | |
Other affiliated payables | 12,523 | |
Other payables and accrued expenses | 24,144 | |
Collateral on securities loaned, at value | 4,332,625 | |
Total liabilities | | 5,315,166 |
| | |
Net Assets | | $ 40,022,940 |
Net Assets consist of: | | |
Paid in capital | | $ 42,846,085 |
Accumulated net investment loss | | (40,823) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (948,507) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (1,833,815) |
Net Assets | | $ 40,022,940 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($15,084,149 ÷ 1,156,612 shares) | | $ 13.04 |
| | |
Maximum offering price per share (100/94.25 of $13.04) | | $ 13.84 |
Class T:
Net Asset Value and redemption price per share ($11,303,678 ÷ 892,357 shares) | | $ 12.67 |
| | |
Maximum offering price per share (100/96.50 of $12.67) | | $ 13.13 |
Class B:
Net Asset Value and offering price per share ($7,495,512 ÷ 631,467 shares) A | | $ 11.87 |
| | |
Class C:
Net Asset Value and offering price per share ($5,427,104 ÷ 456,544 shares) A | | $ 11.89 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($712,497 ÷ 52,718 shares) | | $ 13.52 |
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, 2008 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 339,924 |
Income from Fidelity Central Funds | | 25,194 |
Total income | | 365,118 |
| | |
Expenses | | |
Management fee | $ 134,766 | |
Transfer agent fees | 74,450 | |
Distribution fees | 137,228 | |
Accounting and security lending fees | 10,200 | |
Custodian fees and expenses | 4,058 | |
Independent trustees' compensation | 106 | |
Registration fees | 23,959 | |
Audit | 22,591 | |
Legal | 171 | |
Miscellaneous | 212 | |
Total expenses before reductions | 407,741 | |
Expense reductions | (1,812) | 405,929 |
Net investment income (loss) | | (40,811) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (563,405) | |
Foreign currency transactions | (234) | |
Total net realized gain (loss) | | (563,639) |
Change in net unrealized appreciation (depreciation) on investment securities | | (4,441,180) |
Net gain (loss) | | (5,004,819) |
Net increase (decrease) in net assets resulting from operations | | $ (5,045,630) |
Statement of Changes in Net Assets
| Six months ended
January 31, 2008
(Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (40,811) | $ (126,710) |
Net realized gain (loss) | (563,639) | 8,083,666 |
Change in net unrealized appreciation (depreciation) | (4,441,180) | (1,699,408) |
Net increase (decrease) in net assets resulting from operations | (5,045,630) | 6,257,548 |
Distributions to shareholders from net investment income | - | (93,265) |
Distributions to shareholders from net realized gain | (4,774,704) | (7,904,219) |
Total distributions | (4,774,704) | (7,997,484) |
Share transactions - net increase (decrease) | (5,169,792) | 3,157,156 |
Redemption fees | 286 | 895 |
Total increase (decrease) in net assets | (14,989,840) | 1,418,115 |
| | |
Net Assets | | |
Beginning of period | 55,012,780 | 53,594,665 |
End of period (including accumulated net investment loss of $40,823 and accumulated net investment loss of $12, respectively) | $ 40,022,940 | $ 55,012,780 |
See accompanying notes which are an integral part of the financial statements.
Consumer Discretionary
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 15.89 | $ 16.39 | $ 16.62 | $ 14.51 | $ 13.71 | $ 12.71 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .01 | .02 H | (.04) | (.07) | (.07) | (.04) |
Net realized and unrealized gain (loss) | (1.45) | 1.83 | (.07) | 2.71 | .87 | 1.04 |
Total from investment operations | (1.44) | 1.85 | (.11) | 2.64 | .80 | 1.00 |
Distributions from net investment income | - | (.05) | - | - | - | - |
Distributions from net realized gain | (1.41) | (2.30) | (.12) | (.53) | - | - |
Total distributions | (1.41) | (2.35) | (.12) | (.53) | - | - |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Net asset value, end of period | $ 13.04 | $ 15.89 | $ 16.39 | $ 16.62 | $ 14.51 | $ 13.71 |
Total Return B, C, D | (9.99)% | 11.67% | (.69)% | 18.85% | 5.84% | 7.87% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.36% A | 1.42% | 1.42% | 1.47% | 1.55% | 1.70% |
Expenses net of fee waivers, if any | 1.36% A | 1.40% | 1.40% | 1.44% | 1.50% | 1.53% |
Expenses net of all reductions | 1.36% A | 1.39% | 1.39% | 1.42% | 1.45% | 1.48% |
Net investment income (loss) | .14% A | .11% H | (.23)% | (.45)% | (.50)% | (.33)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 15,084 | $ 19,708 | $ 16,935 | $ 17,887 | $ 11,856 | $ 9,101 |
Portfolio turnover rate G | 76% A | 164% | 81% | 66% | 152% | 88% |
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 (.32)%. 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 15.47 | $ 16.03 | $ 16.29 | $ 14.27 | $ 13.51 | $ 12.57 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | (.02) H | (.07) | (.11) | (.11) | (.07) |
Net realized and unrealized gain (loss) | (1.40) | 1.79 | (.07) | 2.66 | .87 | 1.01 |
Total from investment operations | (1.41) | 1.77 | (.14) | 2.55 | .76 | .94 |
Distributions from net investment income | - | (.03) | - | - | - | - |
Distributions from net realized gain | (1.39) | (2.30) | (.12) | (.53) | - | - |
Total distributions | (1.39) | (2.33) | (.12) | (.53) | - | - |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Net asset value, end of period | $ 12.67 | $ 15.47 | $ 16.03 | $ 16.29 | $ 14.27 | $ 13.51 |
Total Return B, C, D | (10.05)% | 11.43% | (.89)% | 18.52% | 5.63% | 7.48% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.61% A | 1.69% | 1.69% | 1.75% | 1.81% | 1.87% |
Expenses net of fee waivers, if any | 1.61% A | 1.65% | 1.65% | 1.69% | 1.75% | 1.78% |
Expenses net of all reductions | 1.58% A | 1.61% | 1.62% | 1.67% | 1.70% | 1.73% |
Net investment income (loss) | (.08)% A | (.10)% H | (.46)% | (.70)% | (.74)% | (.58)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 11,304 | $ 14,787 | $ 14,267 | $ 16,782 | $ 15,555 | $ 13,693 |
Portfolio turnover rate G | 76% A | 164% | 81% | 66% | 152% | 88% |
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 (.53)%. 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 ende
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 14.56 | $ 15.26 | $ 15.60 | $ 13.75 | $ 13.08 | $ 12.22 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.10) H | (.15) | (.17) | (.18) | (.13) |
Net realized and unrealized gain (loss) | (1.32) | 1.70 | (.07) | 2.55 | .85 | .99 |
Total from investment operations | (1.36) | 1.60 | (.22) | 2.38 | .67 | .86 |
Distributions from net realized gain | (1.33) | (2.30) | (.12) | (.53) | - | - |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Net asset value, end of period | $ 11.87 | $ 14.56 | $ 15.26 | $ 15.60 | $ 13.75 | $ 13.08 |
Total Return B, C, D | (10.32)% | 10.82% | (1.45)% | 17.97% | 5.12% | 7.04% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.11% A | 2.20% | 2.19% | 2.24% | 2.29% | 2.37% |
Expenses net of fee waivers, if any | 2.11% A | 2.15% | 2.15% | 2.19% | 2.25% | 2.25% |
Expenses net of all reductions | 2.11% A | 2.15% | 2.14% | 2.16% | 2.20% | 2.19% |
Net investment income (loss) | (.61)% A | (.64)% H | (.98)% | (1.20)% | (1.25)% | (1.05)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 7,496 | $ 11,081 | $ 14,088 | $ 18,862 | $ 17,302 | $ 15,944 |
Portfolio turnover rate G | 76% A | 164% | 81% | 66% | 152% | 88% |
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. 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 (1.07)%. 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 14.59 | $ 15.28 | $ 15.62 | $ 13.77 | $ 13.10 | $ 12.24 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.10) H | (.15) | (.17) | (.18) | (.13) |
Net realized and unrealized gain (loss) | (1.32) | 1.71 | (.07) | 2.55 | .85 | .99 |
Total from investment operations | (1.36) | 1.61 | (.22) | 2.38 | .67 | .86 |
Distributions from net realized gain | (1.34) | (2.30) | (.12) | (.53) | - | - |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Net asset value, end of period | $ 11.89 | $ 14.59 | $ 15.28 | $ 15.62 | $ 13.77 | $ 13.10 |
Total Return B, C, D | (10.30)% | 10.88% | (1.45)% | 17.94% | 5.11% | 7.03% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.11% A | 2.16% | 2.12% | 2.17% | 2.24% | 2.33% |
Expenses net of fee waivers, if any | 2.11% A | 2.15% | 2.12% | 2.17% | 2.24% | 2.25% |
Expenses net of all reductions | 2.11% A | 2.15% | 2.12% | 2.14% | 2.19% | 2.19% |
Net investment income (loss) | (.61)% A | (.64)% H | (.95)% | (1.18)% | (1.24)% | (1.05)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 5,427 | $ 8,051 | $ 7,160 | $ 8,505 | $ 6,992 | $ 6,759 |
Portfolio turnover rate G | 76% A | 164% | 81% | 66% | 152% | 88% |
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 (1.07)%. 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.41 | $ 16.82 | $ 17.01 | $ 14.81 | $ 13.95 | $ 12.91 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .03 | .06 G | - | (.03) | (.04) | (.01) |
Net realized and unrealized gain (loss) | (1.51) | 1.89 | (.07) | 2.76 | .90 | 1.05 |
Total from investment operations | (1.48) | 1.95 | (.07) | 2.73 | .86 | 1.04 |
Distributions from net investment income | - | (.06) | - | - | - | - |
Distributions from net realized gain | (1.41) | (2.30) | (.12) | (.53) | - | - |
Total distributions | (1.41) | (2.36) | (.12) | (.53) | - | - |
Redemption fees added to paid in capital D, I | - | - | - | - | - | - |
Net asset value, end of period | $ 13.52 | $ 16.41 | $ 16.82 | $ 17.01 | $ 14.81 | $ 13.95 |
Total Return B, C | (9.89)% | 12.04% | (.44)% | 19.08% | 6.16% | 8.06% |
Ratios to Average Net Assets E, H | | | | | | |
Expenses before reductions | 1.11% A | 1.15% | 1.18% | 1.26% | 1.34% | 1.49% |
Expenses net of fee waivers, if any | 1.11% A | 1.15% | 1.15% | 1.20% | 1.25% | 1.25% |
Expenses net of all reductions | 1.11% A | 1.14% | 1.14% | 1.17% | 1.20% | 1.19% |
Net investment income (loss) | .40% A | .36% G | .02% | (.21)% | (.25)% | (.05)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 712 | $ 1,385 | $ 1,144 | $ 1,371 | $ 907 | $ 766 |
Portfolio turnover rate F | 76% A | 164% | 81% | 66% | 152% | 88% |
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 (.07)%. 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, 2008 (Unaudited)
1. Organization.
Fidelity Advisor Consumer Discretionary 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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
Consumer Discretionary
3. Significant Accounting Policies - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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, 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 | $ 3,141,956 | |
Unrealized depreciation | (5,160,163) | |
Net unrealized appreciation (depreciation) | $ (2,018,207) | |
Cost for federal income tax purposes | $ 46,618,396 | |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to 0.75% 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 Pronouncement. 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.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $18,535,963 and $28,310,864, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
5. 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% | $ 22,037 | $ 451 |
Class T | .25% | .25% | 33,422 | - |
Class B | .75% | .25% | 46,887 | 35,174 |
Class C | .75% | .25% | 34,882 | 5,069 |
| | | $ 137,228 | $ 40,694 |
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 | $ 2,758 |
Class T | 1,553 |
Class B* | 10,851 |
Class C* | 268 |
| $ 15,430 |
* 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 | $ 27,173 | .31 |
Class T | 20,379 | .30 |
Class B | 14,428 | .31 |
Class C | 10,867 | .31 |
Institutional Class | 1,603 | .30 |
| $ 74,450 | |
* 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.
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 $1,024 for the period.
Consumer Discretionary
6. 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 $73 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. 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 $17,748.
8. 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 $86 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 T | $ 1,726 | |
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $12,226.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
From net investment income | | |
Class A | $ - | $ 58,649 |
Class T | - | 28,339 |
Class C | - | 505 |
Institutional Class | - | 5,772 |
Total | $ - | $ 93,265 |
From net realized gain | | |
Class A | $ 1,697,903 | $ 2,496,425 |
Class T | 1,304,169 | 2,054,841 |
Class B | 954,937 | 2,079,901 |
Class C | 712,751 | 1,100,868 |
Institutional Class | 104,944 | 172,184 |
Total | $ 4,774,704 | $ 7,904,219 |
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 | Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 129,022 | 540,609 | $ 1,814,946 | $ 8,973,622 |
Reinvestment of distributions | 104,669 | 141,640 | 1,531,841 | 2,265,680 |
Shares redeemed | (317,043) | (475,746) | (4,477,349) | (7,950,826) |
Net increase (decrease) | (83,352) | 206,503 | $ (1,130,562) | $ 3,288,476 |
Class T | | | | |
Shares sold | 56,361 | 188,336 | $ 793,238 | $ 3,060,088 |
Reinvestment of distributions | 84,915 | 122,934 | 1,207,897 | 1,916,483 |
Shares redeemed | (204,629) | (245,736) | (2,771,472) | (4,018,366) |
Net increase (decrease) | (63,353) | 65,534 | $ (770,337) | $ 958,205 |
Class B | | | | |
Shares sold | 14,584 | 83,325 | $ 191,577 | $ 1,279,468 |
Reinvestment of distributions | 65,209 | 122,770 | 871,754 | 1,810,224 |
Shares redeemed | (209,218) | (368,667) | (2,701,977) | (5,659,191) |
Net increase (decrease) | (129,425) | (162,572) | $ (1,638,646) | $ (2,569,499) |
Class C | | | | |
Shares sold | 24,048 | 183,143 | $ 312,213 | $ 2,817,553 |
Reinvestment of distributions | 37,921 | 59,948 | 507,490 | 885,827 |
Shares redeemed | (157,176) | (159,811) | (1,996,212) | (2,453,389) |
Net increase (decrease) | (95,207) | 83,280 | $ (1,176,509) | $ 1,249,991 |
Institutional Class | | | | |
Shares sold | 28,906 | 116,522 | $ 425,543 | $ 1,988,792 |
Reinvestment of distributions | 5,683 | 8,916 | 86,193 | 146,867 |
Shares redeemed | (66,288) | (109,046) | (965,474) | (1,905,676) |
Net increase (decrease) | (31,699) | 16,392 | $ (453,738) | $ 229,983 |
Consumer Discretionary
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 790.30 | $ 6.30 |
HypotheticalA | $ 1,000.00 | $ 1,018.10 | $ 7.10 |
Class T | | | |
Actual | $ 1,000.00 | $ 789.50 | $ 7.42 |
HypotheticalA | $ 1,000.00 | $ 1,016.84 | $ 8.36 |
Class B | | | |
Actual | $ 1,000.00 | $ 786.20 | $ 9.65 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Class C | | | |
Actual | $ 1,000.00 | $ 787.10 | $ 9.66 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 790.30 | $ 5.18 |
HypotheticalA | $ 1,000.00 | $ 1,019.36 | $ 5.84 |
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 184/366 (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 Electronics Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Intel Corp. | 19.9 | 18.8 |
Applied Materials, Inc. | 7.6 | 5.0 |
Texas Instruments, Inc. | 6.0 | 4.2 |
Broadcom Corp. Class A | 4.4 | 5.9 |
Marvell Technology Group Ltd. | 4.2 | 4.8 |
Xilinx, Inc. | 3.2 | 2.5 |
Microchip Technology, Inc. | 2.6 | 0.1 |
Varian Semiconductor Equipment Associates, Inc. | 2.2 | 1.4 |
National Semiconductor Corp. | 2.2 | 3.0 |
Altera Corp. | 2.1 | 2.4 |
| 54.4 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Semiconductors & Semiconductor Equipment | 77.8% | |
| Communications Equipment | 5.1% | |
| Computers & Peripherals | 4.0% | |
| Electrical Equipment | 3.6% | |
| Electronic Equipment & Instruments | 3.0% | |
| All Others* | 6.5% | |
|
As of July 31, 2007 |
| Semiconductors & Semiconductor Equipment | 85.2% | |
| Commercial Services & Supplies | 4.6% | |
| Electronic Equipment & Instruments | 3.6% | |
| Communications Equipment | 2.0% | |
| Chemicals | 1.3% | |
| All Others* | 3.3% | |
* Includes short-term investments and net other assets. |
Electronics
Advisor Electronics Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.3% |
| Shares | | Value |
CAPITAL MARKETS - 0.7% |
Asset Management & Custody Banks - 0.3% |
Harris & Harris Group, Inc. (a) | 8,452 | | $ 59,756 |
Diversified Capital Markets - 0.1% |
Indochina Capital Vietnam Holdings Ltd. | 3,100 | | 25,188 |
Investment Banking & Brokerage - 0.3% |
REXCAPITAL Financial Holdings Ltd. (a) | 375,000 | | 48,093 |
TOTAL CAPITAL MARKETS | | 133,037 |
CHEMICALS - 1.2% |
Specialty Chemicals - 1.2% |
Nanophase Technologies Corp. (a) | 25,200 | | 98,532 |
Nitto Denko Corp. | 800 | | 39,048 |
Tokuyama Corp. | 3,000 | | 21,414 |
Wacker Chemie AG | 400 | | 87,109 |
| | 246,103 |
COMMERCIAL SERVICES & SUPPLIES - 2.5% |
Diversified Commercial & Professional Services - 2.5% |
Arrowhead Research Corp. (a) | 6,800 | | 21,352 |
Arrowhead Research Corp. (a)(c) | 109,016 | | 342,310 |
Arrowhead Research Corp. warrants 5/21/17 (a)(c) | 64,879 | | 146,853 |
| | 510,515 |
COMMUNICATIONS EQUIPMENT - 5.1% |
Communications Equipment - 5.1% |
AAC Acoustic Technology Holdings, Inc. (a) | 34,000 | | 31,787 |
Alcatel-Lucent SA sponsored ADR | 8,700 | | 55,071 |
China Techfaith Wireless Communication Technology Ltd. sponsored ADR (a) | 14,703 | | 60,429 |
Cisco Systems, Inc. (a) | 8,600 | | 210,700 |
Foxconn International Holdings Ltd. (a) | 83,600 | | 137,878 |
Nokia Corp. sponsored ADR | 7,400 | | 273,430 |
QUALCOMM, Inc. | 5,100 | | 216,342 |
Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 2,300 | | 52,256 |
| | 1,037,893 |
COMPUTERS & PERIPHERALS - 4.0% |
Computer Hardware - 2.5% |
Apple, Inc. (a) | 1,200 | | 162,432 |
Hewlett-Packard Co. | 2,500 | | 109,375 |
High Tech Computer Corp. | 12,000 | | 226,221 |
| | 498,028 |
Computer Storage & Peripherals - 1.5% |
ASUSTeK Computer, Inc. | 51,243 | | 133,625 |
STEC, Inc. (a) | 8,500 | | 63,155 |
Synaptics, Inc. (a) | 4,000 | | 106,000 |
| | 302,780 |
TOTAL COMPUTERS & PERIPHERALS | | 800,808 |
|
| Shares | | Value |
ELECTRICAL EQUIPMENT - 3.6% |
Electrical Components & Equipment - 3.6% |
Evergreen Solar, Inc. (a) | 10,300 | | $ 125,557 |
First Solar, Inc. (a) | 1,000 | | 181,770 |
JA Solar Holdings Co. Ltd. ADR | 900 | | 45,747 |
Neo-Neon Holdings Ltd. | 68,700 | | 41,850 |
Q-Cells AG (a) | 1,000 | | 94,098 |
Renewable Energy Corp. AS (a) | 400 | | 10,457 |
SolarWorld AG | 2,500 | | 110,858 |
Suntech Power Holdings Co. Ltd. sponsored ADR (a) | 2,100 | | 114,933 |
| | 725,270 |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 3.0% |
Electronic Equipment & Instruments - 1.0% |
Cyntec Co. Ltd. | 6,000 | | 5,551 |
Ibiden Co. Ltd. | 200 | | 12,602 |
Motech Industries, Inc. | 9,850 | | 58,807 |
Nan Ya Printed Circuit Board Corp. | 10,000 | | 47,756 |
Nidec Corp. | 700 | | 45,885 |
Universal Display Corp. (a) | 1,100 | | 17,787 |
| | 188,388 |
Electronic Manufacturing Services - 1.5% |
Hon Hai Precision Industry Co. Ltd. (Foxconn) | 57,200 | | 307,035 |
Technology Distributors - 0.5% |
Arrow Electronics, Inc. (a) | 2,600 | | 88,972 |
Wolfson Microelectronics PLC (a) | 4,300 | | 13,561 |
| | 102,533 |
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS | | 597,956 |
MACHINERY - 0.1% |
Industrial Machinery - 0.1% |
NGK Insulators Ltd. | 1,000 | | 25,769 |
MEDIA - 0.1% |
Broadcasting & Cable TV - 0.1% |
JumpTV, Inc. | 18,000 | | 26,904 |
PHARMACEUTICALS - 0.0% |
Pharmaceuticals - 0.0% |
VODone Ltd. (a) | 22,000 | | 2,314 |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 77.8% |
Semiconductor Equipment - 16.3% |
Applied Materials, Inc. | 86,200 | | 1,544,704 |
ASML Holding NV (NY Shares) (a) | 5,200 | | 138,268 |
FormFactor, Inc. (a) | 5,650 | | 136,843 |
Global Unichip Corp. | 7,000 | | 31,857 |
Lam Research Corp. (a) | 8,600 | | 330,154 |
MEMC Electronic Materials, Inc. (a) | 5,200 | | 371,592 |
Tessera Technologies, Inc. (a) | 7,500 | | 293,775 |
Common Stocks - continued |
| Shares | | Value |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - CONTINUED |
Semiconductor Equipment - continued |
Topco Scientific Co. Ltd. | 12,840 | | $ 18,130 |
Varian Semiconductor Equipment Associates, Inc. (a) | 13,900 | | 447,719 |
| | 3,313,042 |
Semiconductors - 61.5% |
Advanced Micro Devices, Inc. (a) | 30,200 | | 230,728 |
Advanced Semiconductor Engineering, Inc. sponsored ADR | 37,681 | | 160,521 |
Altera Corp. | 25,900 | | 437,451 |
ARM Holdings PLC sponsored ADR | 39,200 | | 277,536 |
Atheros Communications, Inc. (a) | 5,000 | | 136,550 |
Broadcom Corp. Class A (a) | 40,500 | | 894,240 |
Cavium Networks, Inc. | 1,700 | | 32,487 |
Ceva, Inc. (a) | 1,500 | | 12,675 |
Diodes, Inc. (a) | 10,500 | | 243,075 |
Epistar Corp. | 26,153 | | 62,658 |
Global Mixed-mode Technology, Inc. | 13,500 | | 60,370 |
Himax Technologies, Inc. sponsored ADR | 16,800 | | 82,824 |
Hittite Microwave Corp. (a) | 4,400 | | 175,208 |
Infineon Technologies AG sponsored ADR (a) | 8,600 | | 88,064 |
Intel Corp. | 190,390 | | 4,036,267 |
Intersil Corp. Class A | 15,500 | | 356,965 |
Linear Technology Corp. | 1,900 | | 52,573 |
Marvell Technology Group Ltd. (a) | 72,400 | | 859,388 |
Maxim Integrated Products, Inc. | 10,400 | | 204,464 |
Microchip Technology, Inc. | 16,500 | | 526,515 |
Monolithic Power Systems, Inc. (a) | 2,600 | | 40,664 |
National Semiconductor Corp. | 24,220 | | 446,375 |
NVIDIA Corp. (a) | 12,200 | | 299,998 |
ON Semiconductor Corp. (a) | 15,100 | | 97,848 |
Richtek Technology Corp. | 18,550 | | 127,986 |
Silicon Laboratories, Inc. (a) | 7,000 | | 218,680 |
Soitec SA (a) | 1,300 | | 11,471 |
Spreadtrum Communications, Inc. ADR | 6,900 | | 65,550 |
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR | 24,300 | | 225,504 |
Texas Instruments, Inc. | 39,700 | | 1,227,921 |
TriQuint Semiconductor, Inc. (a) | 15,400 | | 72,996 |
|
| Shares | | Value |
Volterra Semiconductor Corp. (a) | 7,800 | | $ 71,604 |
Xilinx, Inc. | 29,500 | | 645,165 |
| | 12,482,321 |
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | | 15,795,363 |
SOFTWARE - 1.2% |
Home Entertainment Software - 1.2% |
Nintendo Co. Ltd. | 500 | | 247,000 |
TOTAL COMMON STOCKS (Cost $25,497,757) | 20,148,932 |
Money Market Funds - 0.7% |
| | | |
Fidelity Cash Central Fund, 3.79% (b)
(Cost $140,042) | 140,042 | | 140,042 |
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $25,637,799) | | 20,288,974 |
NET OTHER ASSETS - 0.0% | | 6,013 |
NET ASSETS - 100% | $ 20,294,987 |
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) 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 $489,163 or 2.4% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Arrowhead Research Corp. | 5/18/07 | $ 531,419 |
Arrowhead Research Corp. warrants 5/21/17 | 5/18/07 | 234,942 |
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 | $ 5,515 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 77.3% |
Taiwan | 7.3% |
Bermuda | 4.2% |
Cayman Islands | 2.5% |
Japan | 1.9% |
Germany | 1.8% |
United Kingdom | 1.5% |
Finland | 1.3% |
Others (individually less than 1%) | 2.2% |
| 100.0% |
Income Tax Information |
At July 31, 2007, the fund had a capital loss carryforward of approximately $7,319,181 of which $4,774,109, $2,265,871 and $279,201 will expire on July 31, 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, 2008 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $25,497,757) | $ 20,148,932 | |
Fidelity Central Funds (cost $140,042) | 140,042 | |
Total Investments (cost $25,637,799) | | $ 20,288,974 |
Foreign currency held at value (cost $4,889) | | 4,880 |
Receivable for investments sold | | 621,093 |
Receivable for fund shares sold | | 35,462 |
Dividends receivable | | 3,864 |
Distributions receivable from Fidelity Central Funds | | 952 |
Prepaid expenses | | 86 |
Receivable from investment adviser for expense reductions | | 3,592 |
Other receivables | | 534 |
Total assets | | 20,959,437 |
| | |
Liabilities | | |
Payable to custodian bank | $ 460,091 | |
Payable for investments purchased | 94,480 | |
Payable for fund shares redeemed | 59,502 | |
Accrued management fee | 9,859 | |
Distribution fees payable | 11,620 | |
Other affiliated payables | 7,074 | |
Other payables and accrued expenses | 21,824 | |
Total liabilities | | 664,450 |
| | |
Net Assets | | $ 20,294,987 |
Net Assets consist of: | | |
Paid in capital | | $ 35,004,514 |
Accumulated net investment loss | | (88,308) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (9,272,403) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (5,348,816) |
Net Assets | | $ 20,294,987 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($4,745,739 ÷ 659,094 shares) | | $ 7.20 |
| | |
Maximum offering price per share (100/94.25 of $7.20) | | $ 7.64 |
Class T:
Net Asset Value and redemption price per share ($5,740,809 ÷ 810,107 shares) | | $ 7.09 |
| | |
Maximum offering price per share (100/96.50 of $7.09) | | $ 7.35 |
Class B:
Net Asset Value and offering price per share ($3,077,824 ÷ 449,697 shares) A | | $ 6.84 |
| | |
Class C:
Net Asset Value and offering price per share ($6,199,389 ÷ 906,591 shares) A | | $ 6.84 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($531,226 ÷ 72,244 shares) | | $ 7.35 |
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, 2008 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 149,399 |
Interest | | 352 |
Income from Fidelity Central Funds | | 5,515 |
Total income | | 155,266 |
| | |
Expenses | | |
Management fee | $ 75,379 | |
Transfer agent fees | 44,631 | |
Distribution fees | 87,998 | |
Accounting fees and expenses | 5,267 | |
Custodian fees and expenses | 11,076 | |
Independent trustees' compensation | 58 | |
Registration fees | 38,178 | |
Audit | 23,131 | |
Legal | 84 | |
Miscellaneous | 119 | |
Total expenses before reductions | 285,921 | |
Expense reductions | (42,347) | 243,574 |
Net investment income (loss) | | (88,308) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (1,662,060) | |
Foreign currency transactions | (1,900) | |
Total net realized gain (loss) | | (1,663,960) |
Change in net unrealized appreciation (depreciation) on: Investment securities | (4,000,880) | |
Assets and liabilities in foreign currencies | 3 | |
Total change in net unrealized appreciation (depreciation) | | (4,000,877) |
Net gain (loss) | | (5,664,837) |
Net increase (decrease) in net assets resulting from operations | | $ (5,753,145) |
Statement of Changes in Net Assets
| Six months ended
January 31, 2008
(Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (88,308) | $ (226,545) |
Net realized gain (loss) | (1,663,960) | 4,562,227 |
Change in net unrealized appreciation (depreciation) | (4,000,877) | 2,119,265 |
Net increase (decrease) in net assets resulting from operations | (5,753,145) | 6,454,947 |
Share transactions - net increase (decrease) | (3,296,003) | (7,957,827) |
Redemption fees | 177 | 878 |
Total increase (decrease) in net assets | (9,048,971) | (1,502,002) |
| | |
Net Assets | | |
Beginning of period | 29,343,958 | 30,845,960 |
End of period (including accumulated net investment loss of $88,308 and $0, respectively) | $ 20,294,987 | $ 29,343,958 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 9.11 | $ 7.38 | $ 8.04 | $ 6.58 | $ 6.59 | $ 5.57 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | (.03) | (.04) | (.07) | (.09) | (.06) |
Net realized and unrealized gain (loss) | (1.90) | 1.76 | (.62) | 1.53 | .08 | 1.07 |
Total from investment operations | (1.91) | 1.73 | (.66) | 1.46 | (.01) | 1.01 |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | .01 |
Net asset value, end of period | $ 7.20 | $ 9.11 | $ 7.38 | $ 8.04 | $ 6.58 | $ 6.59 |
Total Return B, C, D | (20.97)% | 23.44% | (8.21)% | 22.19% | (.15)% | 18.31% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.69% A | 1.60% | 1.50% | 1.59% | 1.55% | 1.89% |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.40% | 1.45% | 1.50% | 1.50% |
Expenses net of all reductions | 1.40% A | 1.38% | 1.36% | 1.38% | 1.48% | 1.46% |
Net investment income (loss) | (.25)% A | (.35)% | (.52)% | (.96)% | (1.15)% | (1.09)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 4,746 | $ 7,551 | $ 7,916 | $ 11,397 | $ 8,374 | $ 8,116 |
Portfolio turnover rate G | 81% A | 97% | 95% | 128% | 84% | 66% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 8.98 | $ 7.29 | $ 7.96 | $ 6.53 | $ 6.56 | $ 5.55 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.02) | (.05) | (.06) | (.08) | (.11) | (.07) |
Net realized and unrealized gain (loss) | (1.87) | 1.74 | (.61) | 1.51 | .08 | 1.07 |
Total from investment operations | (1.89) | 1.69 | (.67) | 1.43 | (.03) | 1.00 |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | .01 |
Net asset value, end of period | $ 7.09 | $ 8.98 | $ 7.29 | $ 7.96 | $ 6.53 | $ 6.56 |
Total Return B, C, D | (21.05)% | 23.18% | (8.42)% | 21.90% | (.46)% | 18.20% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.99% A | 1.89% | 1.82% | 1.89% | 1.83% | 2.14% |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.65% | 1.69% | 1.75% | 1.75% |
Expenses net of all reductions | 1.65% A | 1.64% | 1.61% | 1.61% | 1.72% | 1.71% |
Net investment income (loss) | (.50)% A | (.60)% | (.77)% | (1.20)% | (1.39)% | (1.33)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 5,741 | $ 8,103 | $ 9,048 | $ 12,085 | $ 15,445 | $ 14,362 |
Portfolio turnover rate G | 81% A | 97% | 95% | 128% | 84% | 66% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 8.70 | $ 7.10 | $ 7.78 | $ 6.42 | $ 6.48 | $ 5.52 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.09) | (.10) | (.12) | (.14) | (.10) |
Net realized and unrealized gain (loss) | (1.82) | 1.69 | (.58) | 1.48 | .08 | 1.06 |
Total from investment operations | (1.86) | 1.60 | (.68) | 1.36 | (.06) | .96 |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 6.84 | $ 8.70 | $ 7.10 | $ 7.78 | $ 6.42 | $ 6.48 |
Total Return B, C, D | (21.38)% | 22.54% | (8.74)% | 21.18% | (.93)% | 17.39% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.44% A | 2.36% | 2.29% | 2.41% | 2.41% | 2.76% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.21% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.13% | 2.11% | 2.13% | 2.23% | 2.21% |
Net investment income (loss) | (1.00)% A | (1.10)% | (1.27)% | (1.72)% | (1.90)% | (1.83)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 3,078 | $ 4,572 | $ 6,123 | $ 8,963 | $ 8,498 | $ 11,335 |
Portfolio turnover rate G | 81% A | 97% | 95% | 128% | 84% | 66% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 8.69 | $ 7.09 | $ 7.77 | $ 6.41 | $ 6.47 | $ 5.51 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.09) | (.10) | (.11) | (.14) | (.10) |
Net realized and unrealized gain (loss) | (1.81) | 1.69 | (.58) | 1.47 | .08 | 1.06 |
Total from investment operations | (1.85) | 1.60 | (.68) | 1.36 | (.06) | .96 |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 6.84 | $ 8.69 | $ 7.09 | $ 7.77 | $ 6.41 | $ 6.47 |
Total Return B, C, D | (21.29)% | 22.57% | (8.75)% | 21.22% | (.93)% | 17.42% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.44% A | 2.34% | 2.26% | 2.31% | 2.24% | 2.52% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.18% | 2.24% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.13% | 2.11% | 2.11% | 2.21% | 2.21% |
Net investment income (loss) | (1.00)% A | (1.10)% | (1.27)% | (1.69)% | (1.88)% | (1.83)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 6,199 | $ 8,389 | $ 7,009 | $ 11,058 | $ 12,322 | $ 13,061 |
Portfolio turnover rate G | 81% A | 97% | 95% | 128% | 84% | 66% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 9.30 | $ 7.51 | $ 8.15 | $ 6.65 | $ 6.64 | $ 5.60 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | - H | (.01) | (.02) | (.05) | (.06) | (.04) |
Net realized and unrealized gain (loss) | (1.95) | 1.80 | (.62) | 1.55 | .07 | 1.07 |
Total from investment operations | (1.95) | 1.79 | (.64) | 1.50 | .01 | 1.03 |
Redemption fees added to paid in capital D | - H | - H | - H | - H | - H | .01 |
Net asset value, end of period | $ 7.35 | $ 9.30 | $ 7.51 | $ 8.15 | $ 6.65 | $ 6.64 |
Total Return B, C | (20.97)% | 23.83% | (7.85)% | 22.56% | .15% | 18.57% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | 1.43% A | 1.26% | 1.11% | 1.16% | 1.12% | 1.46% |
Expenses net of fee waivers, if any | 1.15% A | 1.15% | 1.11% | 1.16% | 1.12% | 1.25% |
Expenses net of all reductions | 1.14% A | 1.13% | 1.07% | 1.08% | 1.09% | 1.21% |
Net investment income (loss) | .00% A | (.10)% | (.23)% | (.67)% | (.76)% | (.84)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 531 | $ 730 | $ 750 | $ 899 | $ 687 | $ 625 |
Portfolio turnover rate F | 81% A | 97% | 95% | 128% | 84% | 66% |
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, 2008 (Unaudited)
1. Organization.
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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year, the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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, passive foreign investment companies (PFIC), 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 | $ 518,009 | |
Unrealized depreciation | (6,048,613) | |
Net unrealized appreciation (depreciation) | $ (5,530,604) | |
Cost for federal income tax purposes | $ 25,819,578 | |
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. 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 Pronouncement. 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.
4. 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.
Electronics
4. Operating Policies - continued
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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $10,925,310 and $14,447,757, respectively.
6. 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% | $ 8,374 | $ 158 |
Class T | .25% | .25% | 18,824 | 154 |
Class B | .75% | .25% | 20,930 | 15,702 |
Class C | .75% | .25% | 39,870 | 5,877 |
| | | $ 87,998 | $ 21,891 |
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 | $ 808 |
Class T | 866 |
Class B* | 2,512 |
Class C* | 88 |
| $ 4,274 |
* 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
Notes to Financial Statements (Unaudited) - continued
6. 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 | $ 10,582 | .32 |
Class T | 13,776 | .37 |
Class B | 6,639 | .32 |
Class C | 12,581 | .32 |
Institutional Class | 1,053 | .30 |
| $ 44,631 | |
* Annualized
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.
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 $436 for the period.
7. 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.
8. 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% | $ 9,768 |
Class T | 1.65% | 12,850 |
Class B | 2.15% | 6,097 |
Class C | 2.15% | 11,556 |
Institutional Class | 1.15% | 977 |
| | $ 41,248 |
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 $1,099 for the period.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Electronics
9. Other - continued
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $6,751.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 | Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 53,034 | 172,908 | $ 444,245 | $ 1,452,847 |
Shares redeemed | (222,366) | (416,578) | (1,889,622) | (3,518,739) |
Net increase (decrease) | (169,332) | (243,670) | $ (1,445,377) | $ (2,065,892) |
Class T | | | | |
Shares sold | 54,336 | 96,013 | $ 462,582 | $ 811,586 |
Shares redeemed | (146,266) | (434,383) | (1,206,300) | (3,616,000) |
Net increase (decrease) | (91,930) | (338,370) | $ (743,718) | $ (2,804,414) |
Class B | | | | |
Shares sold | 17,628 | 33,257 | $ 147,332 | $ 271,410 |
Shares redeemed | (93,686) | (370,189) | (750,422) | (3,005,497) |
Net increase (decrease) | (76,058) | (336,932) | $ (603,090) | $ (2,734,087) |
Class C | | | | |
Shares sold | 80,444 | 354,933 | $ 680,602 | $ 2,907,179 |
Shares redeemed | (139,333) | (378,058) | (1,136,751) | (3,063,507) |
Net increase (decrease) | (58,889) | (23,125) | $ (456,149) | $ (156,328) |
Institutional Class | | | | |
Shares sold | 6,197 | 23,807 | $ 59,675 | $ 203,253 |
Shares redeemed | (12,418) | (45,136) | (107,344) | (400,359) |
Net increase (decrease) | (6,221) | (21,329) | $ (47,669) | $ (197,106) |
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
|
Beginning
Account Value
August 1, 2007
|
Ending
Account Value
January 31, 2008
| Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,057.00 | $ 5.89 |
HypotheticalA | $ 1,000.00 | $ 1,019.41 | $ 5.79 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,056.00 | $ 6.98 |
HypotheticalA | $ 1,000.00 | $ 1,018.35 | $ 6.85 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,052.90 | $ 9.91 |
HypotheticalA | $ 1,000.00 | $ 1,015.48 | $ 9.73 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,053.30 | $ 9.60 |
HypotheticalA | $ 1,000.00 | $ 1,015.79 | $ 9.42 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,058.70 | $ 4.35 |
HypotheticalA | $ 1,000.00 | $ 1,020.91 | $ 4.27 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.14% |
Class T | 1.35% |
Class B | 1.92% |
Class C | 1.86% |
Institutional Class | .84% |
Energy
Advisor Energy Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Exxon Mobil Corp. | 14.0 | 15.1 |
Valero Energy Corp. | 6.6 | 6.9 |
National Oilwell Varco, Inc. | 5.9 | 5.6 |
Range Resources Corp. | 5.2 | 3.8 |
CONSOL Energy, Inc. | 4.6 | 1.1 |
Schlumberger Ltd. (NY Shares) | 4.3 | 7.4 |
Peabody Energy Corp. | 3.8 | 1.0 |
Ultra Petroleum Corp. | 3.6 | 3.2 |
Transocean, Inc. | 3.2 | 2.4 |
Cabot Oil & Gas Corp. | 2.9 | 2.6 |
| 54.1 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Oil, Gas & Consumable Fuels | 69.9% | |
| Energy Equipment & Services | 24.9% | |
| Electrical Equipment | 3.3% | |
| Construction & Engineering | 0.7% | |
| Chemicals | 0.5% | |
| All Others* | 0.7% | |
|
As of July 31, 2007 |
| Oil, Gas & Consumable Fuels | 63.4% | |
| Energy Equipment & Services | 32.2% | |
| Electrical Equipment | 1.5% | |
| Construction & Engineering | 1.0% | |
| Industrial Conglomerates | 0.4% | |
| All Others* | 1.5% | |
* Includes short-term investments and net other assets. |
Semiannual Report
Advisor Energy Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 100.0% |
| Shares | | Value |
CHEMICALS - 0.5% |
Specialty Chemicals - 0.5% |
Albemarle Corp. | 140,557 | | $ 5,096,597 |
COMMERCIAL SERVICES & SUPPLIES - 0.0% |
Environmental & Facility Services - 0.0% |
Fuel Tech, Inc. (a) | 16,062 | | 305,820 |
CONSTRUCTION & ENGINEERING - 0.7% |
Construction & Engineering - 0.7% |
Chicago Bridge & Iron Co. NV (NY Shares) | 20,400 | | 907,596 |
Jacobs Engineering Group, Inc. (a) | 86,800 | | 6,634,992 |
| | 7,542,588 |
ELECTRICAL EQUIPMENT - 3.3% |
Electrical Components & Equipment - 1.5% |
Evergreen Solar, Inc. (a) | 14,500 | | 176,755 |
First Solar, Inc. (a) | 5,100 | | 927,027 |
JA Solar Holdings Co. Ltd. ADR | 101,900 | | 5,179,577 |
Q-Cells AG (a) | 14,228 | | 1,338,828 |
Renewable Energy Corp. AS (a) | 57,200 | | 1,495,365 |
Sunpower Corp. Class A (a) | 64,500 | | 4,456,305 |
Suntech Power Holdings Co. Ltd. sponsored ADR (a) | 19,000 | | 1,039,870 |
| | 14,613,727 |
Heavy Electrical Equipment - 1.8% |
Suzlon Energy Ltd. | 351,540 | | 2,764,529 |
Vestas Wind Systems AS (a) | 160,600 | | 15,601,064 |
| | 18,365,593 |
TOTAL ELECTRICAL EQUIPMENT | | 32,979,320 |
ENERGY EQUIPMENT & SERVICES - 24.9% |
Oil & Gas Drilling - 8.1% |
Atwood Oceanics, Inc. (a) | 91,600 | | 7,611,044 |
Diamond Offshore Drilling, Inc. | 111,600 | | 12,602,988 |
Nabors Industries Ltd. (a) | 228,917 | | 6,231,121 |
Noble Corp. | 331,700 | | 14,518,509 |
Pride International, Inc. (a) | 269,700 | | 8,552,187 |
Transocean, Inc. (a) | 259,764 | | 31,847,066 |
| | 81,362,915 |
Oil & Gas Equipment & Services - 16.8% |
Baker Hughes, Inc. | 33 | | 2,143 |
Cameron International Corp. (a) | 121,400 | | 4,887,564 |
Compagnie Generale de Geophysique SA (a) | 17,541 | | 4,103,930 |
Emer International Group Ltd. (a) | 1,098,000 | | 421,038 |
Expro International Group PLC | 165,000 | | 3,060,053 |
Exterran Holdings, Inc. (a) | 71,675 | | 4,676,077 |
FMC Technologies, Inc. (a) | 152,600 | | 7,349,216 |
Fugro NV (Certificaten Van Aandelen) unit | 58,500 | | 4,010,372 |
NATCO Group, Inc. Class A (a) | 4,200 | | 192,276 |
|
| Shares | | Value |
National Oilwell Varco, Inc. (a) | 977,657 | | $ 58,884,281 |
Oceaneering International, Inc. (a) | 86,491 | | 4,980,152 |
Oil States International, Inc. (a) | 48,400 | | 1,696,904 |
Petroleum Geo-Services ASA | 188,400 | | 4,048,716 |
Saipem SpA | 117,900 | | 4,091,501 |
Schlumberger Ltd. (NY Shares) | 580,000 | | 43,766,800 |
Smith International, Inc. | 155,527 | | 8,431,119 |
Superior Energy Services, Inc. (a) | 177,000 | | 7,095,930 |
Weatherford International Ltd. (a) | 125,600 | | 7,763,336 |
| | 169,461,408 |
TOTAL ENERGY EQUIPMENT & SERVICES | | 250,824,323 |
GAS UTILITIES - 0.2% |
Gas Utilities - 0.2% |
Questar Corp. | 19,400 | | 987,654 |
Zhongyu Gas Holdings Ltd. (a) | 6,592,000 | | 997,577 |
| | 1,985,231 |
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 0.3% |
Independent Power Producers & Energy Traders - 0.3% |
AES Corp. (a) | 41,400 | | 789,912 |
Constellation Energy Group, Inc. | 11,500 | | 1,080,540 |
NRG Energy, Inc. (a) | 21,900 | | 845,121 |
| | 2,715,573 |
INDUSTRIAL CONGLOMERATES - 0.2% |
Industrial Conglomerates - 0.2% |
McDermott International, Inc. (a) | 40,900 | | 1,929,662 |
MULTI-UTILITIES - 0.0% |
Multi-Utilities - 0.0% |
Sempra Energy | 4 | | 224 |
OIL, GAS & CONSUMABLE FUELS - 69.9% |
Coal & Consumable Fuels - 10.4% |
Alpha Natural Resources, Inc. (a) | 9,600 | | 321,216 |
Arch Coal, Inc. | 224,785 | | 9,890,540 |
CONSOL Energy, Inc. | 628,659 | | 45,892,107 |
Foundation Coal Holdings, Inc. | 131,600 | | 6,882,680 |
International Coal Group, Inc. (a) | 33,600 | | 208,656 |
Massey Energy Co. | 88,900 | | 3,305,302 |
Natural Resource Partners LP | 4,700 | | 142,880 |
Peabody Energy Corp. | 703,157 | | 37,984,541 |
| | 104,627,922 |
Integrated Oil & Gas - 24.7% |
Chevron Corp. | 167,256 | | 14,133,132 |
ConocoPhillips | 350,694 | | 28,167,742 |
Exxon Mobil Corp. (d) | 1,631,298 | | 140,944,148 |
Hess Corp. | 158,800 | | 14,423,804 |
Marathon Oil Corp. | 298,700 | | 13,994,095 |
Occidental Petroleum Corp. | 254,900 | | 17,300,063 |
Common Stocks - continued |
| Shares | | Value |
OIL, GAS & CONSUMABLE FUELS - CONTINUED |
Integrated Oil & Gas - continued |
Petroleo Brasileiro SA - Petrobras sponsored ADR | 152,200 | | $ 16,915,508 |
Suncor Energy, Inc. | 28,700 | | 2,699,696 |
| | 248,578,188 |
Oil & Gas Exploration & Production - 23.4% |
American Oil & Gas, Inc. NV (a) | 84,003 | | 365,413 |
Apache Corp. | 46,200 | | 4,409,328 |
Aurora Oil & Gas Corp. (a) | 252,174 | | 277,391 |
Cabot Oil & Gas Corp. | 741,625 | | 28,693,471 |
Canadian Natural Resources Ltd. | 47,300 | | 3,026,389 |
Chesapeake Energy Corp. | 412,700 | | 15,364,821 |
Concho Resources, Inc. | 139,000 | | 2,821,700 |
EOG Resources, Inc. | 193,600 | | 16,940,000 |
EXCO Resources, Inc. (a) | 6,300 | | 94,437 |
Goodrich Petroleum Corp. (a) | 29,100 | | 579,381 |
Kodiak Oil & Gas Corp. (a) | 168,100 | | 347,967 |
Newfield Exploration Co. (a) | 21,800 | | 1,087,384 |
Noble Energy, Inc. (d) | 86,900 | | 6,307,202 |
OPTI Canada, Inc. (a) | 155,600 | | 2,566,070 |
Petrohawk Energy Corp. (a)(d) | 818,457 | | 12,890,698 |
Plains Exploration & Production Co. (a) | 8,400 | | 408,576 |
Quicksilver Resources, Inc. (a) | 307,150 | | 17,455,335 |
Range Resources Corp. | 999,427 | | 52,190,078 |
Southwestern Energy Co. (a) | 193,600 | | 10,824,176 |
Ultra Petroleum Corp. (a) | 526,700 | | 36,236,960 |
Vanguard Natural Resources LLC | 5,600 | | 91,000 |
XTO Energy, Inc. | 434,125 | | 22,548,453 |
| | 235,526,230 |
Oil & Gas Refining & Marketing - 9.3% |
Frontier Oil Corp. | 108,700 | | 3,833,849 |
Holly Corp. | 25,600 | | 1,239,552 |
Petroplus Holdings AG (a) | 29,887 | | 1,840,258 |
Sunoco, Inc. | 84,805 | | 5,274,871 |
Tesoro Corp. | 340,700 | | 13,304,335 |
|
| Shares | | Value |
Valero Energy Corp. | 1,125,581 | | $ 66,623,139 |
Western Refining, Inc. | 83,066 | | 1,773,459 |
| | 93,889,463 |
Oil & Gas Storage & Transport - 2.1% |
El Paso Pipeline Partners LP | 77,800 | | 1,841,526 |
Williams Companies, Inc. | 599,577 | | 19,168,477 |
| | 21,010,003 |
TOTAL OIL, GAS & CONSUMABLE FUELS | | 703,631,806 |
TOTAL COMMON STOCKS (Cost $724,547,466) | 1,007,011,144 |
Money Market Funds - 1.4% |
| | | |
Fidelity Cash Central Fund, 3.79% (b) | 2,363,810 | | 2,363,810 |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 11,233,700 | | 11,233,700 |
TOTAL MONEY MARKET FUNDS (Cost $13,597,510) | 13,597,510 |
TOTAL INVESTMENT PORTFOLIO - 101.4% (Cost $738,144,976) | 1,020,608,654 |
NET OTHER ASSETS - (1.4)% | (13,762,318) |
NET ASSETS - 100% | $ 1,006,846,336 |
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 | $ 157,854 |
Fidelity Securities Lending Cash Central Fund | 44,924 |
Total | $ 202,778 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 82.9% |
Canada | 4.5% |
Netherlands Antilles | 4.3% |
Cayman Islands | 2.1% |
Brazil | 1.7% |
Denmark | 1.5% |
Others (individually less than 1%) | 3.0% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Energy
Advisor Energy Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2008 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $11,155,070) - See accompanying schedule: Unaffiliated issuers (cost $724,547,466) | $ 1,007,011,144 | |
Fidelity Central Funds (cost $13,597,510) | 13,597,510 | |
Total Investments (cost $738,144,976) | | $ 1,020,608,654 |
Receivable for investments sold | | 10,271,949 |
Receivable for fund shares sold | | 2,192,697 |
Dividends receivable | | 145,022 |
Distributions receivable from Fidelity Central Funds | | 51,488 |
Prepaid expenses | | 6,712 |
Other receivables | | 9,137 |
Total assets | | 1,033,285,659 |
| | |
Liabilities | | |
Payable for investments purchased | $ 11,257,723 | |
Payable for fund shares redeemed | 2,628,220 | |
Accrued management fee | 484,663 | |
Distribution fees payable | 460,881 | |
Other affiliated payables | 250,933 | |
Other payables and accrued expenses | 123,203 | |
Collateral on securities loaned, at value | 11,233,700 | |
Total liabilities | | 26,439,323 |
| | |
Net Assets | | $ 1,006,846,336 |
Net Assets consist of: | | |
Paid in capital | | $ 709,878,333 |
Accumulated net investment loss | | (3,137,059) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 17,728,824 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 282,376,238 |
Net Assets | | $ 1,006,846,336 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($311,028,451 ÷ 6,531,136 shares) | | $ 47.62 |
| | |
Maximum offering price per share (100/94.25 of $47.62) | | $ 50.53 |
Class T:
Net Asset Value and redemption price per share ($394,467,625 ÷ 8,087,316 shares) | | $ 48.78 |
| | |
Maximum offering price per share (100/96.50 of $48.78) | | $ 50.55 |
Class B:
Net Asset Value and offering price per share ($106,804,099 ÷ 2,320,940 shares) A | | $ 46.02 |
| | |
Class C:
Net Asset Value and offering price per share ($145,163,496 ÷ 3,137,496 shares) A | | $ 46.27 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($49,382,665 ÷ 1,007,836 shares) | | $ 49.00 |
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 Energy Fund
Financial Statements - continued
Statement of Operations
| Six months ended January 31, 2008 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 3,784,076 |
Interest | | 1,824 |
Income from Fidelity Central Funds | | 202,778 |
Total income | | 3,988,678 |
| | |
Expenses | | |
Management fee | $ 2,800,914 | |
Transfer agent fees | 1,282,891 | |
Distribution fees | 2,729,963 | |
Accounting and security lending fees | 168,688 | |
Custodian fees and expenses | 30,470 | |
Independent trustees' compensation | 2,101 | |
Registration fees | 65,223 | |
Audit | 25,977 | |
Legal | 2,664 | |
Miscellaneous | 2,293 | |
Total expenses before reductions | 7,111,184 | |
Expense reductions | (11,737) | 7,099,447 |
Net investment income (loss) | | (3,110,769) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers (net of foreign taxes of $3,424) | 50,018,139 | |
Foreign currency transactions | 11,636 | |
Total net realized gain (loss) | | 50,029,775 |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of increase in deferred foreign taxes of $49,852) | (242,931) | |
Assets and liabilities in foreign currencies | 4 | |
Total change in net unrealized appreciation (depreciation) | | (242,927) |
Net gain (loss) | | 49,786,848 |
Net increase (decrease) in net assets resulting from operations | | $ 46,676,079 |
Statement of Changes in Net Assets
| Six months ended January 31, 2008 (Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (3,110,769) | $ (2,803,549) |
Net realized gain (loss) | 50,029,775 | 67,298,011 |
Change in net unrealized appreciation (depreciation) | (242,927) | 88,822,102 |
Net increase (decrease) in net assets resulting from operations | 46,676,079 | 153,316,564 |
Distributions to shareholders from net realized gain | (64,657,618) | (117,273,909) |
Share transactions - net increase (decrease) | 105,792,770 | 40,324,071 |
Redemption fees | 18,723 | 36,406 |
Total increase (decrease) in net assets | 87,829,954 | 76,403,132 |
| | |
Net Assets | | |
Beginning of period | 919,016,382 | 842,613,250 |
End of period (including accumulated net investment loss of $3,137,059 and accumulated net investment loss of $26,290, respectively) | $ 1,006,846,336 | $ 919,016,382 |
See accompanying notes which are an integral part of the financial statements.
Energy
Financial Highlights - Class A
| Six months ended January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 48.28 | $ 46.39 | $ 40.93 | $ 29.12 | $ 21.65 | $ 20.33 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.09) | (.02) H | (.04) | .06 | .07 | .13 |
Net realized and unrealized gain (loss) | 2.89 | 8.42 | 12.30 | 12.21 | 7.50 | 1.30 |
Total from investment operations | 2.80 | 8.40 | 12.26 | 12.27 | 7.57 | 1.43 |
Distributions from net investment income | - | - | - | (.06) | (.10) | (.11) |
Distributions from net realized gain | (3.46) | (6.51) | (6.81) | (.41) | - | - |
Total distributions | (3.46) | (6.51) | (6.81) | (.47) | (.10) | (.11) |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 | - J | - J |
Net asset value, end of period | $ 47.62 | $ 48.28 | $ 46.39 | $ 40.93 | $ 29.12 | $ 21.65 |
Total Return B, C, D | 5.70% | 22.08% | 32.90% | 42.69% | 35.08% | 7.07% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.14% A | 1.19% | 1.21% | 1.25% | 1.30% | 1.36% |
Expenses net of fee waivers, if any | 1.14% A | 1.19% | 1.21% | 1.25% | 1.30% | 1.36% |
Expenses net of all reductions | 1.13% A | 1.19% | 1.17% | 1.19% | 1.29% | 1.32% |
Net investment income (loss) | (.34)% A | (.05)% H | (.09)% | .19% | .28% | .63% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 311,028 | $ 268,108 | $ 204,391 | $ 90,342 | $ 44,315 | $ 21,798 |
Portfolio turnover rate G | 58% A | 80% | 139% | 125% | 40% | 41% |
A Annualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower had certain expenses not been reduced during the periods shown. DTotal 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. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HInvestment income per share reflects a special dividend which amounted to $.05 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.17)%. IExpense 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. JAmount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 49.26 | $ 47.18 | $ 41.46 | $ 29.52 | $ 21.97 | $ 20.61 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.14) | (.11) H | (.13) | - J | .03 | .10 |
Net realized and unrealized gain (loss) | 2.95 | 8.61 | 12.49 | 12.37 | 7.60 | 1.32 |
Total from investment operations | 2.81 | 8.50 | 12.36 | 12.37 | 7.63 | 1.42 |
Distributions from net investment income | - | - | - | (.03) | (.08) | (.06) |
Distributions from net realized gain | (3.29) | (6.42) | (6.65) | (.41) | - | - |
Total distributions | (3.29) | (6.42) | (6.65) | (.44) | (.08) | (.06) |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 | - J | - J |
Net asset value, end of period | $ 48.78 | $ 49.26 | $ 47.18 | $ 41.46 | $ 29.52 | $ 21.97 |
Total Return B, C, D | 5.60% | 21.84% | 32.60% | 42.41% | 34.82% | 6.91% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.35% A | 1.40% | 1.42% | 1.44% | 1.48% | 1.50% |
Expenses net of fee waivers, if any | 1.35% A | 1.40% | 1.42% | 1.44% | 1.48% | 1.50% |
Expenses net of all reductions | 1.35% A | 1.39% | 1.38% | 1.39% | 1.47% | 1.47% |
Net investment income (loss) | (.56)% A | (.26)% H | (.29)% | (.01)% | .10% | .48% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 394,468 | $ 382,222 | $ 362,272 | $ 280,820 | $ 201,187 | $ 155,249 |
Portfolio turnover rate G | 58% A | 80% | 139% | 125% | 40% | 41% |
A Annualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower had certain expenses not been reduced during the periods shown. DTotal returns do not include the effect of the sales charges. ECalculated 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. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HInvestment income per share reflects a special dividend which amounted to $.05 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.37)%. IExpense 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 46.64 | $ 45.10 | $ 39.89 | $ 28.54 | $ 21.28 | $ 20.02 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.27) | (.34) H | (.35) | (.18) | (.11) | (.01) |
Net realized and unrealized gain (loss) | 2.79 | 8.17 | 11.98 | 11.93 | 7.37 | 1.27 |
Total from investment operations | 2.52 | 7.83 | 11.63 | 11.75 | 7.26 | 1.26 |
Distributions from net realized gain | (3.14) | (6.29) | (6.43) | (.41) | - | - |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 | - J | - J |
Net asset value, end of period | $ 46.02 | $ 46.64 | $ 45.10 | $ 39.89 | $ 28.54 | $ 21.28 |
Total Return B, C, D | 5.29% | 21.18% | 31.86% | 41.66% | 34.12% | 6.29% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.92% A | 1.96% | 1.96% | 1.98% | 2.02% | 2.06% |
Expenses net of fee waivers, if any | 1.92% A | 1.96% | 1.96% | 1.98% | 2.02% | 2.06% |
Expenses net of all reductions | 1.92% A | 1.95% | 1.92% | 1.93% | 2.01% | 2.02% |
Net investment income (loss) | (1.12)% A | (.82)% H | (.84)% | (.55)% | (.44)% | (.07)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 106,804 | $ 116,487 | $ 130,973 | $ 102,003 | $ 68,347 | $ 50,833 |
Portfolio turnover rate G | 58% A | 80% | 139% | 125% | 40% | 41% |
A Annualized BTotal returns for periods of less than one year are not annualized. CTotal 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. ECalculated 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. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HInvestment income per share reflects a special dividend which amounted to $.05 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.93)%. IExpense 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 46.88 | $ 45.33 | $ 40.10 | $ 28.68 | $ 21.38 | $ 20.10 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.26) | (.32) H | (.34) | (.17) | (.10) | - J |
Net realized and unrealized gain (loss) | 2.81 | 8.20 | 12.06 | 11.99 | 7.40 | 1.28 |
Total from investment operations | 2.55 | 7.88 | 11.72 | 11.82 | 7.30 | 1.28 |
Distributions from net realized gain | (3.16) | (6.33) | (6.50) | (.41) | - | - |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 | - J | - J |
Net asset value, end of period | $ 46.27 | $ 46.88 | $ 45.33 | $ 40.10 | $ 28.68 | $ 21.38 |
Total Return B, C, D | 5.33% | 21.22% | 31.96% | 41.70% | 34.14% | 6.37% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.86% A | 1.91% | 1.92% | 1.94% | 1.99% | 2.01% |
Expenses net of fee waivers, if any | 1.86% A | 1.91% | 1.92% | 1.94% | 1.99% | 2.01% |
Expenses net of all reductions | 1.86% A | 1.91% | 1.88% | 1.89% | 1.97% | 1.97% |
Net investment income (loss) | (1.07)% A | (.77)% H | (.79)% | (.51)% | (.41)% | (.02)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 145,163 | $ 135,072 | $ 125,424 | $ 72,832 | $ 37,206 | $ 22,044 |
Portfolio turnover rate G | 58% A | 80% | 139% | 125% | 40% | 41% |
A Annualized BTotal returns for periods of less than one year are not annualized. CTotal 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. ECalculated 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. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HInvestment income per share reflects a special dividend which amounted to $.05 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.88)%. IExpense 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.
Energy
Financial Highlights - Institutional Class
| Six months ended January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 49.68 | $ 47.48 | $ 41.76 | $ 29.64 | $ 22.03 | $ 20.67 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | (.01) | .11 G | .12 | .19 | .18 | .22 |
Net realized and unrealized gain (loss) | 2.97 | 8.67 | 12.56 | 12.44 | 7.62 | 1.32 |
Total from investment operations | 2.96 | 8.78 | 12.68 | 12.63 | 7.80 | 1.54 |
Distributions from net investment income | - | - | - | (.11) | (.19) | (.18) |
Distributions from net realized gain | (3.64) | (6.58) | (6.97) | (.41) | - | - |
Total distributions | (3.64) | (6.58) | (6.97) | (.52) | (.19) | (.18) |
Redemption fees added to paid in capital D | - I | - I | .01 | .01 | - I | - I |
Net asset value, end of period | $ 49.00 | $ 49.68 | $ 47.48 | $ 41.76 | $ 29.64 | $ 22.03 |
Total Return B, C | 5.87% | 22.47% | 33.35% | 43.21% | 35.60% | 7.51% |
Ratios to Average Net Assets E, H | | | | | | |
Expenses before reductions | .84% A | .88% | .87% | .89% | .90% | .95% |
Expenses net of fee waivers, if any | .84% A | .88% | .87% | .89% | .90% | .95% |
Expenses net of all reductions | .84% A | .88% | .83% | .84% | .89% | .91% |
Net investment income (loss) | (.04)% A | .25% G | .26% | .54% | .68% | 1.04% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 49,383 | $ 17,127 | $ 19,553 | $ 9,433 | $ 4,206 | $ 2,652 |
Portfolio turnover rate F | 58% A | 80% | 139% | 125% | 40% | 41% |
A Annualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower had certain expenses not been reduced during the periods shown. DCalculated based on average shares outstanding during the period. EFees 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. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GInvestment income per share reflects a special dividend which amounted to $.05 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been .14%. 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. IAmount 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, 2008 (Unaudited)
1. Organization.
Fidelity Advisor Energy 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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
Energy
3. Significant Accounting Policies - continued
Foreign Currency - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the fund's fiscal year, the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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), partnerships, deferred trustee 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 | $ 304,097,397 | |
Unrealized depreciation | (23,381,955) | |
Net unrealized appreciation (depreciation) | $ 280,715,442 | |
Cost for federal income tax purposes | $ 739,893,212 | |
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. 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 Pronouncement. 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.
4. 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
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $335,785,515 and $289,987,608, respectively.
6. 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% | $ 381,463 | $ 19,304 |
Class T | .25% | .25% | 1,022,450 | 5,526 |
Class B | .75% | .25% | 582,915 | 437,185 |
Class C | .75% | .25% | 743,135 | 134,198 |
| | | $ 2,729,963 | $ 596,213 |
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 | $ 145,726 |
Class T | 36,843 |
Class B* | 73,078 |
Class C* | 12,584 |
| $ 268,231 |
* 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 | $ 410,688 | .27 |
Class T | 482,512 | .24 |
Class B | 176,942 | .30 |
Class C | 182,867 | .25 |
Institutional Class | 29,882 | .22 |
| $ 1,282,891 | |
* Annualized
Energy
6. 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.
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 $2,483 for the period.
7. 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 $1,243 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. 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 $44,924.
9. 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 $10,742 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 expense by $804. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction | |
Class C | $ 76 | |
Institutional Class | 115 | |
| $ 191 | |
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Other - continued
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $30,652.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
From net realized gain | | |
Class A | $ 20,341,404 | $ 30,378,115 |
Class T | 25,677,022 | 48,658,927 |
Class B | 7,474,589 | 18,097,588 |
Class C | 9,397,559 | 17,464,821 |
Institutional Class | 1,767,044 | 2,674,458 |
Total | $ 64,657,618 | $ 117,273,909 |
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2008 | Year ended
July 31,
2007 | Six months ended January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 1,512,057 | 2,409,415 | $ 75,995,988 | $ 103,800,389 |
Reinvestment of distributions | 375,188 | 718,262 | 18,473,319 | 27,810,279 |
Shares redeemed | (909,071) | (1,980,718) | (44,980,803) | (81,122,220) |
Net increase (decrease) | 978,174 | 1,146,959 | $ 49,488,504 | $ 50,488,448 |
Class T | | | | |
Shares sold | 810,145 | 1,250,444 | $ 41,639,032 | $ 54,473,563 |
Reinvestment of distributions | 478,809 | 1,161,034 | 24,106,914 | 45,909,961 |
Shares redeemed | (960,999) | (2,330,754) | (48,728,876) | (98,273,495) |
Net increase (decrease) | 327,955 | 80,724 | $ 17,017,070 | $ 2,110,029 |
Class B | | | | |
Shares sold | 234,189 | 451,905 | $ 11,343,777 | $ 18,746,589 |
Reinvestment of distributions | 135,516 | 414,158 | 6,434,106 | 15,588,355 |
Shares redeemed | (546,435) | (1,272,145) | (26,103,555) | (50,696,372) |
Net increase (decrease) | (176,730) | (406,082) | $ (8,325,672) | $ (16,361,428) |
Class C | | | | |
Shares sold | 456,064 | 863,338 | $ 22,265,737 | $ 36,256,164 |
Reinvestment of distributions | 161,800 | 385,215 | 7,736,807 | 14,569,142 |
Shares redeemed | (361,411) | (1,134,191) | (17,253,070) | (44,464,337) |
Net increase (decrease) | 256,453 | 114,362 | $ 12,749,474 | $ 6,360,969 |
Institutional Class | | | | |
Shares sold | 702,855 | 150,039 | $ 36,889,817 | $ 6,836,544 |
Reinvestment of distributions | 25,669 | 39,397 | 1,318,208 | 1,561,516 |
Shares redeemed | (65,439) | (256,502) | (3,344,631) | (10,672,007) |
Net increase (decrease) | 663,085 | (67,066) | $ 34,863,394 | $ (2,273,947) |
Energy
Advisor Financial Services
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 905.70 | $ 5.75 |
HypotheticalA | $ 1,000.00 | $ 1,019.10 | $ 6.09 |
Class T | | | |
Actual | $ 1,000.00 | $ 905.00 | $ 6.94 |
HypotheticalA | $ 1,000.00 | $ 1,017.85 | $ 7.35 |
Class B | | | |
Actual | $ 1,000.00 | $ 902.60 | $ 9.28 |
HypotheticalA | $ 1,000.00 | $ 1,015.38 | $ 9.83 |
Class C | | | |
Actual | $ 1,000.00 | $ 902.70 | $ 9.23 |
HypotheticalA | $ 1,000.00 | $ 1,015.43 | $ 9.78 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 907.10 | $ 4.41 |
HypotheticalA | $ 1,000.00 | $ 1,020.51 | $ 4.67 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.20% |
Class T | 1.45% |
Class B | 1.94% |
Class C | 1.93% |
Institutional Class | .92% |
Semiannual Report
Advisor Financial Services Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
JPMorgan Chase & Co. | 6.9 | 5.2 |
American International Group, Inc. | 6.5 | 6.0 |
Bank of America Corp. | 5.6 | 5.3 |
Citigroup, Inc. | 5.2 | 5.1 |
Wells Fargo & Co. | 4.8 | 5.2 |
ACE Ltd. | 2.9 | 3.6 |
Wachovia Corp. | 2.4 | 2.1 |
Everest Re Group Ltd. | 2.3 | 0.7 |
State Street Corp. | 2.1 | 2.4 |
Goldman Sachs Group, Inc. | 2.1 | 0.6 |
| 40.8 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Insurance | 27.0% | |
| Diversified Financial Services | 20.7% | |
| Capital Markets | 18.8% | |
| Commercial Banks | 12.8% | |
| Real Estate Investment Trusts | 5.6% | |
| All Others* | 15.1% | |
|
As of July 31, 2007 |
| Insurance | 31.6% | |
| Diversified Financial Services | 18.4% | |
| Capital Markets | 16.3% | |
| Commercial Banks | 13.4% | |
| Thrifts & Mortgage Finance | 8.9% | |
| All Others* | 11.4% | |
* Includes short-term investments and net other assets. |
Financial Services
Advisor Financial Services Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 95.9% |
| Shares | | Value |
CAPITAL MARKETS - 18.8% |
Asset Management & Custody Banks - 9.0% |
Bank of New York Mellon Corp. | 117,700 | | $ 5,488,351 |
EFG International | 49,110 | | 1,470,382 |
Fortress Investment Group LLC (d) | 43,500 | | 644,235 |
Franklin Resources, Inc. | 34,400 | | 3,585,512 |
GLG Partners, Inc. (a) | 60,800 | | 716,832 |
Janus Capital Group, Inc. | 53,800 | | 1,453,138 |
Julius Baer Holding AG | 18,539 | | 1,302,140 |
KKR Private Equity Investors, LP | 21,200 | | 355,100 |
KKR Private Equity Investors, LP Restricted Depositary Units (e) | 34,300 | | 574,525 |
Legg Mason, Inc. | 9,200 | | 662,400 |
State Street Corp. | 70,182 | | 5,763,346 |
T. Rowe Price Group, Inc. | 28,700 | | 1,451,933 |
The Blackstone Group LP | 43,400 | | 796,390 |
| | 24,264,284 |
Diversified Capital Markets - 0.5% |
UBS AG (NY Shares) | 33,500 | | 1,383,215 |
Investment Banking & Brokerage - 9.3% |
Bear Stearns Companies, Inc. (d) | 30,300 | | 2,736,090 |
Charles Schwab Corp. | 156,600 | | 3,492,180 |
Goldman Sachs Group, Inc. | 28,400 | | 5,701,868 |
Lazard Ltd. Class A | 20,800 | | 822,016 |
Lehman Brothers Holdings, Inc. | 81,700 | | 5,242,689 |
Merrill Lynch & Co., Inc. | 88,800 | | 5,008,320 |
MF Global Ltd. | 18,600 | | 558,930 |
Morgan Stanley | 33,600 | | 1,660,848 |
| | 25,222,941 |
TOTAL CAPITAL MARKETS | | 50,870,440 |
COMMERCIAL BANKS - 12.8% |
Diversified Banks - 9.4% |
ICICI Bank Ltd. sponsored ADR | 10,900 | | 662,284 |
U.S. Bancorp, Delaware | 156,800 | | 5,323,360 |
Wachovia Corp. | 170,598 | | 6,641,380 |
Wells Fargo & Co. | 378,100 | | 12,859,181 |
| | 25,486,205 |
Regional Banks - 3.4% |
Associated Banc-Corp. | 79,600 | | 2,243,128 |
Cathay General Bancorp | 184 | | 4,771 |
Colonial Bancgroup, Inc. (d) | 49,559 | | 778,076 |
KeyCorp | 35,800 | | 936,170 |
PNC Financial Services Group, Inc. | 75,300 | | 4,941,186 |
Wintrust Financial Corp. | 2,700 | | 102,708 |
| | 9,006,039 |
TOTAL COMMERCIAL BANKS | | 34,492,244 |
CONSUMER FINANCE - 4.4% |
Consumer Finance - 4.4% |
American Express Co. | 77,600 | | 3,827,232 |
|
| Shares | | Value |
Capital One Financial Corp. (d) | 90,630 | | $ 4,967,430 |
Discover Financial Services | 106,100 | | 1,856,750 |
Dollar Financial Corp. (a) | 43,262 | | 1,089,337 |
| | 11,740,749 |
DIVERSIFIED FINANCIAL SERVICES - 20.7% |
Other Diversifed Financial Services - 17.7% |
Bank of America Corp. (d) | 344,072 | | 15,259,593 |
Citigroup, Inc. | 496,269 | | 14,004,711 |
JPMorgan Chase & Co. | 390,794 | | 18,582,254 |
| | 47,846,558 |
Specialized Finance - 3.0% |
CME Group, Inc. | 7,025 | | 4,347,773 |
Deutsche Boerse AG | 15,700 | | 2,747,601 |
JSE Ltd. | 30,200 | | 281,754 |
MarketAxess Holdings, Inc. (a) | 85,600 | | 808,920 |
| | 8,186,048 |
TOTAL DIVERSIFIED FINANCIAL SERVICES | | 56,032,606 |
INSURANCE - 27.0% |
Insurance Brokers - 0.8% |
National Financial Partners Corp. (d) | 37,400 | | 1,350,140 |
Willis Group Holdings Ltd. | 19,140 | | 674,494 |
| | 2,024,634 |
Life & Health Insurance - 6.5% |
AFLAC, Inc. | 65,700 | | 4,029,381 |
MetLife, Inc. | 96,500 | | 5,690,605 |
Principal Financial Group, Inc. | 56,500 | | 3,367,965 |
Prudential Financial, Inc. | 53,900 | | 4,547,543 |
| | 17,635,494 |
Multi-Line Insurance - 8.4% |
American International Group, Inc. | 320,460 | | 17,676,574 |
Assurant, Inc. | 23,200 | | 1,505,448 |
Hartford Financial Services Group, Inc. | 44,000 | | 3,553,880 |
| | 22,735,902 |
Property & Casualty Insurance - 6.5% |
ACE Ltd. | 134,600 | | 7,852,564 |
AMBAC Financial Group, Inc. | 13,700 | | 160,564 |
Argo Group International Holdings, Ltd. (a) | 35,211 | | 1,438,017 |
Aspen Insurance Holdings Ltd. | 45,800 | | 1,292,476 |
Axis Capital Holdings Ltd. | 20,800 | | 832,832 |
First American Corp., California | 16,700 | | 727,285 |
LandAmerica Financial Group, Inc. | 3,800 | | 198,208 |
MBIA, Inc. (d) | 37,800 | | 585,900 |
The Travelers Companies, Inc. | 31,800 | | 1,529,580 |
United America Indemnity Ltd.
Class A (a) | 66,800 | | 1,370,068 |
XL Capital Ltd. Class A | 31,000 | | 1,395,000 |
| | 17,382,494 |
Common Stocks - continued |
| Shares | | Value |
INSURANCE - CONTINUED |
Reinsurance - 4.8% |
Everest Re Group Ltd. | 60,200 | | $ 6,121,738 |
IPC Holdings Ltd. | 45,866 | | 1,180,132 |
Max Capital Group Ltd. | 59,376 | | 1,685,685 |
Montpelier Re Holdings Ltd. | 17,900 | | 306,806 |
Platinum Underwriters Holdings Ltd. | 60,000 | | 2,025,000 |
RenaissanceRe Holdings Ltd. | 30,400 | | 1,732,496 |
| | 13,051,857 |
TOTAL INSURANCE | | 72,830,381 |
REAL ESTATE INVESTMENT TRUSTS - 5.6% |
Mortgage REITs - 1.7% |
Annaly Capital Management, Inc. | 164,100 | | 3,236,052 |
Chimera Investment Corp. | 62,000 | | 1,187,300 |
| | 4,423,352 |
Residential REITs - 1.1% |
Equity Lifestyle Properties, Inc. | 37,900 | | 1,655,093 |
UDR, Inc. | 61,500 | | 1,404,045 |
| | 3,059,138 |
Retail REITs - 2.8% |
CBL & Associates Properties, Inc. | 22,392 | | 595,179 |
Developers Diversified Realty Corp. | 68,900 | | 2,835,235 |
General Growth Properties, Inc. | 68,600 | | 2,505,272 |
Simon Property Group, Inc. | 19,000 | | 1,698,220 |
| | 7,633,906 |
TOTAL REAL ESTATE INVESTMENT TRUSTS | | 15,116,396 |
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.1% |
Real Estate Management & Development - 1.1% |
Mitsubishi Estate Co. Ltd. | 115,000 | | 3,049,939 |
THRIFTS & MORTGAGE FINANCE - 5.5% |
Thrifts & Mortgage Finance - 5.5% |
BankUnited Financial Corp. Class A (d) | 38,100 | | 225,933 |
Countrywide Financial Corp. | 139,899 | | 973,697 |
Fannie Mae | 135,535 | | 4,589,215 |
FirstFed Financial Corp. (a)(d) | 19,300 | | 809,635 |
Freddie Mac (d) | 137,500 | | 4,178,625 |
Hudson City Bancorp, Inc. | 143,275 | | 2,346,845 |
Radian Group, Inc. (d) | 46,000 | | 420,440 |
Washington Mutual, Inc. | 70,300 | | 1,400,376 |
| | 14,944,766 |
TOTAL COMMON STOCKS (Cost $227,945,727) | 259,077,521 |
Money Market Funds - 14.6% |
| Shares | | Value |
Fidelity Cash Central Fund, 3.79% (b) | 13,033,841 | | $ 13,033,841 |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 26,460,554 | | 26,460,554 |
TOTAL MONEY MARKET FUNDS (Cost $39,494,395) | 39,494,395 |
TOTAL INVESTMENT PORTFOLIO - 110.5% (Cost $267,440,122) | | 298,571,916 |
NET OTHER ASSETS - (10.5)% | | (28,257,860) |
NET ASSETS - 100% | $ 270,314,056 |
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 $574,525 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 | $ 125,087 |
Fidelity Securities Lending Cash Central Fund | 83,133 |
Total | $ 208,220 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 85.4% |
Bermuda | 6.9% |
Cayman Islands | 3.4% |
Switzerland | 1.6% |
Japan | 1.1% |
Germany | 1.0% |
Others (individually less than 1%) | 0.6% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Financial Services
Financial Statements
Statement of Assets and Liabilities
| January 31, 2008 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $27,241,075) - See accompanying schedule: Unaffiliated issuers (cost $227,945,727) | $ 259,077,521 | |
Fidelity Central Funds (cost $39,494,395) | 39,494,395 | |
Total Investments (cost $267,440,122) | | $ 298,571,916 |
Cash | | 430,634 |
Receivable for investments sold | | 47,863 |
Receivable for fund shares sold | | 1,993,731 |
Dividends receivable | | 286,580 |
Distributions receivable from Fidelity Central Funds | | 40,458 |
Prepaid expenses | | 2,682 |
Other receivables | | 68 |
Total assets | | 301,373,932 |
| | |
Liabilities | | |
Payable for investments purchased | $ 3,122,855 | |
Payable for fund shares redeemed | 1,133,820 | |
Accrued management fee | 120,749 | |
Distribution fees payable | 116,386 | |
Other affiliated payables | 80,424 | |
Other payables and accrued expenses | 25,088 | |
Collateral on securities loaned, at value | 26,460,554 | |
Total liabilities | | 31,059,876 |
| | |
Net Assets | | $ 270,314,056 |
Net Assets consist of: | | |
Paid in capital | | $ 243,018,503 |
Undistributed net investment income | | 139,464 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (3,976,057) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 31,132,146 |
Net Assets | | $ 270,314,056 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($105,449,672 ÷ 6,034,555 shares) | | $ 17.47 |
| | |
Maximum offering price per share (100/94.25 of $17.47) | | $ 18.54 |
Class T:
Net Asset Value and redemption price per share ($74,397,411 ÷ 4,263,588 shares) | | $ 17.45 |
| | |
Maximum offering price per share (100/96.50 of $17.45) | | $ 18.08 |
Class B:
Net Asset Value and offering price per share ($35,819,419 ÷ 2,093,307 shares)A | | $ 17.11 |
| | |
Class C:
Net Asset Value and offering price per share ($46,359,328 ÷ 2,725,578 shares)A | | $ 17.01 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($8,288,226 ÷ 467,901 shares) | | $ 17.71 |
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, 2008 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 3,992,260 |
Income from Fidelity Central Funds | | 208,220 |
Total income | | 4,200,480 |
| | |
Expenses | | |
Management fee | $ 845,980 | |
Transfer agent fees | 456,384 | |
Distribution fees | 849,506 | |
Accounting and security lending fees | 60,807 | |
Custodian fees and expenses | 8,437 | |
Independent trustees' compensation | 657 | |
Registration fees | 29,247 | |
Audit | 34,347 | |
Legal | 1,037 | |
Interest | 3,760 | |
Miscellaneous | 895 | |
Total expenses before reductions | 2,291,057 | |
Expense reductions | (2,143) | 2,288,914 |
Net investment income (loss) | | 1,911,566 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 544,476 | |
Foreign currency transactions | (3,082) | |
Total net realized gain (loss) | | 541,394 |
Change in net unrealized appreciation (depreciation) on: Investment securities | (31,953,920) | |
Assets and liabilities in foreign currencies | 3,877 | |
Total change in net unrealized appreciation (depreciation) | | (31,950,043) |
Net gain (loss) | | (31,408,649) |
Net increase (decrease) in net assets resulting from operations | | $ (29,497,083) |
Statement of Changes in Net Assets
| Six months ended January 31, 2008 (Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 1,911,566 | $ 2,504,527 |
Net realized gain (loss) | 541,394 | 49,174,884 |
Change in net unrealized appreciation (depreciation) | (31,950,043) | (30,974,733) |
Net increase (decrease) in net assets resulting from operations | (29,497,083) | 20,704,678 |
Distributions to shareholders from net investment income | (2,830,304) | (1,993,507) |
Distributions to shareholders from net realized gain | (22,361,824) | (54,831,267) |
Total distributions | (25,192,128) | (56,824,774) |
Share transactions - net increase (decrease) | (5,677,939) | (19,915,758) |
Redemption fees | 2,486 | 2,369 |
Total increase (decrease) in net assets | (60,364,664) | (56,033,485) |
| | |
Net Assets | | |
Beginning of period | 330,678,720 | 386,712,205 |
End of period (including undistributed net investment income of $139,464 and undistributed net investment income of $1,282,613, respectively) | $ 270,314,056 | $ 330,678,720 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.02 | $ 23.34 | $ 23.01 | $ 22.17 | $ 19.98 | $ 17.83 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .15 | .23 | .20 | .19 | .14 | .16 |
Net realized and unrealized gain (loss) | (1.97) | .92 | 2.02 | 2.48 | 2.20 | 2.07 |
Total from investment operations | (1.82) | 1.15 | 2.22 | 2.67 | 2.34 | 2.23 |
Distributions from net investment income | (.27) | (.22) | (.26) | (.07) | (.15) | (.08) |
Distributions from net realized gain | (1.46) | (3.25) | (1.63) | (1.76) | - | - |
Total distributions | (1.73) | (3.47) J | (1.89) | (1.83) | (.15) | (.08) |
Redemption fees added to paid in capital E,I | - | - | - | - | - | - |
Net asset value, end of period | $ 17.47 | $ 21.02 | $ 23.34 | $ 23.01 | $ 22.17 | $ 19.98 |
Total Return B,C,D | (9.43)% | 4.54% | 10.32% | 12.60% | 11.76% | 12.57% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.20% A | 1.23% | 1.25% | 1.26% | 1.27% | 1.31% |
Expenses net of fee waivers, if any | 1.20% A | 1.23% | 1.25% | 1.26% | 1.27% | 1.31% |
Expenses net of all reductions | 1.20% A | 1.22% | 1.23% | 1.23% | 1.25% | 1.27% |
Net investment income (loss) | 1.56% A | 1.01% | .87% | .88% | .63% | .89% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 105,450 | $ 106,722 | $ 85,356 | $ 68,012 | $ 58,222 | $ 57,255 |
Portfolio turnover rate G | 45% A | 53% | 33% | 61% | 74% | 60% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.94 | $ 23.26 | $ 22.87 | $ 22.07 | $ 19.90 | $ 17.77 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .13 | .18 | .15 | .14 | .09 | .12 |
Net realized and unrealized gain (loss) | (1.97) | .91 | 2.02 | 2.47 | 2.19 | 2.07 |
Total from investment operations | (1.84) | 1.09 | 2.17 | 2.61 | 2.28 | 2.19 |
Distributions from net investment income | (.19) | (.16) | (.15) | (.05) | (.11) | (.06) |
Distributions from net realized gain | (1.46) | (3.25) | (1.63) | (1.76) | - | - |
Total distributions | (1.65) | (3.41) J | (1.78) | (1.81) | (.11) | (.06) |
Redemption fees added to paid in capital E,I | - | - | - | - | - | - |
Net asset value, end of period | $ 17.45 | $ 20.94 | $ 23.26 | $ 22.87 | $ 22.07 | $ 19.90 |
Total Return B,C,D | (9.50)% | 4.25% | 10.11% | 12.37% | 11.49% | 12.37% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.45% A | 1.46% | 1.47% | 1.48% | 1.50% | 1.53% |
Expenses net of fee waivers, if any | 1.45% A | 1.46% | 1.47% | 1.48% | 1.50% | 1.53% |
Expenses net of all reductions | 1.45% A | 1.46% | 1.46% | 1.46% | 1.48% | 1.49% |
Net investment income (loss) | 1.31% A | .77% | .65% | .66% | .41% | .67% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 74,397 | $ 95,426 | $ 113,344 | $ 128,388 | $ 144,887 | $ 157,238 |
Portfolio turnover rate G | 45% A | 53% | 33% | 61% | 74% | 60% |
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. GAmount 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.44 | $ 22.75 | $ 22.33 | $ 21.65 | $ 19.53 | $ 17.50 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .08 | .06 | .03 | .03 | (.02) | .03 |
Net realized and unrealized gain (loss) | (1.93) | .89 | 1.97 | 2.41 | 2.16 | 2.03 |
Total from investment operations | (1.85) | .95 | 2.00 | 2.44 | 2.14 | 2.06 |
Distributions from net investment income | (.04) | (.02) | (.01) | - | (.02) | (.03) |
Distributions from net realized gain | (1.44) | (3.25) | (1.57) | (1.76) | - | - |
Total distributions | (1.48) | (3.26) J | (1.58) | (1.76) | (.02) | (.03) |
Redemption fees added to paid in capital E,I | - | - | - | - | - | - |
Net asset value, end of period | $ 17.11 | $ 20.44 | $ 22.75 | $ 22.33 | $ 21.65 | $ 19.53 |
Total Return B,C,D | (9.74)% | 3.71% | 9.52% | 11.78% | 10.96% | 11.80% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.94% A | 1.98% | 1.99% | 2.00% | 2.02% | 2.03% |
Expenses net of fee waivers, if any | 1.94% A | 1.98% | 1.99% | 2.00% | 2.02% | 2.03% |
Expenses net of all reductions | 1.94% A | 1.98% | 1.98% | 1.98% | 2.00% | 1.99% |
Net investment income (loss) | .82% A | .25% | .13% | .14% | (.11)% | .17% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 35,819 | $ 64,837 | $ 113,652 | $ 145,046 | $ 179,873 | $ 193,373 |
Portfolio turnover rate G | 45% A | 53% | 33% | 61% | 74% | 60% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.40 | $ 22.74 | $ 22.34 | $ 21.65 | $ 19.53 | $ 17.49 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .08 | .06 | .04 | .04 | (.01) | .04 |
Net realized and unrealized gain (loss) | (1.92) | .90 | 1.98 | 2.42 | 2.15 | 2.03 |
Total from investment operations | (1.84) | .96 | 2.02 | 2.46 | 2.14 | 2.07 |
Distributions from net investment income | (.09) | (.05) | (.02) | (.01) | (.02) | (.03) |
Distributions from net realized gain | (1.46) | (3.25) | (1.60) | (1.76) | - | - |
Total distributions | (1.55) | (3.30) J | (1.62) | (1.77) | (.02) | (.03) |
Redemption fees added to paid in capital E,I | - | - | - | - | - | - |
Net asset value, end of period | $ 17.01 | $ 20.40 | $ 22.74 | $ 22.34 | $ 21.65 | $ 19.53 |
Total Return B,C,D | (9.73)% | 3.75% | 9.58% | 11.88% | 10.96% | 11.86% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.93% A | 1.94% | 1.94% | 1.95% | 1.97% | 1.99% |
Expenses net of fee waivers, if any | 1.93% A | 1.94% | 1.94% | 1.95% | 1.97% | 1.99% |
Expenses net of all reductions | 1.93% A | 1.94% | 1.93% | 1.92% | 1.95% | 1.95% |
Net investment income (loss) | .83% A | .29% | .18% | .19% | (.06)% | .22% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 46,359 | $ 55,219 | $ 62,469 | $ 72,181 | $ 86,199 | $ 97,434 |
Portfolio turnover rate G | 45% A | 53% | 33% | 61% | 74% | 60% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.32 | $ 23.63 | $ 23.29 | $ 22.37 | $ 20.17 | $ 17.95 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .18 | .31 | .29 | .29 | .23 | .24 |
Net realized and unrealized gain (loss) | (2.00) | .93 | 2.05 | 2.50 | 2.21 | 2.09 |
Total from investment operations | (1.82) | 1.24 | 2.34 | 2.79 | 2.44 | 2.33 |
Distributions from net investment income | (.33) | (.30) | (.37) | (.11) | (.24) | (.11) |
Distributions from net realized gain | (1.46) | (3.25) | (1.63) | (1.76) | - | - |
Total distributions | (1.79) | (3.55) I | (2.00) | (1.87) | (.24) | (.11) |
Redemption fees added to paid in capital D,H | - | - | - | - | - | - |
Net asset value, end of period | $ 17.71 | $ 21.32 | $ 23.63 | $ 23.29 | $ 22.37 | $ 20.17 |
Total Return B,C | (9.29)% | 4.88% | 10.78% | 13.06% | 12.18% | 13.07% |
Ratios to Average Net Assets E,G | | | | | | |
Expenses before reductions | .92% A | .89% | .86% | .86% | .88% | .88% |
Expenses net of fee waivers, if any | .92% A | .89% | .86% | .86% | .88% | .88% |
Expenses net of all reductions | .92% A | .88% | .85% | .84% | .85% | .84% |
Net investment income (loss) | 1.83% A | 1.34% | 1.26% | 1.28% | 1.03% | 1.32% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 8,288 | $ 8,474 | $ 11,892 | $ 12,629 | $ 13,008 | $ 14,539 |
Portfolio turnover rate F | 45% A | 53% | 33% | 61% | 74% | 60% |
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, 2008 (Unaudited)
1. Organization.
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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Foreign Currency - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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, partnerships 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 | $ 55,032,943 | |
Unrealized depreciation | (25,253,295) | |
Net unrealized appreciation (depreciation) | $ 29,779,648 | |
Cost for federal income tax purposes | $ 268,792,268 | |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to 0.75% 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 Pronouncement. 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.
4. 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
Financial Services
4. Operating Policies - continued
Repurchase Agreements - continued
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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $68,317,770 and $101,998,250, respectively.
6. 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% | $ 133,243 | $ 3,369 |
Class T | .25% | .25% | 213,820 | 22 |
Class B | .75% | .25% | 250,158 | 187,618 |
Class C | .75% | .25% | 252,285 | 12,674 |
| | | $ 849,506 | $ 203,683 |
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 | $ 30,894 |
Class T | 5,847 |
Class B* | 30,271 |
Class C* | 2,756 |
| $ 69,768 |
* 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
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
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 | $ 161,225 | .30 |
Class T | 131,773 | .31 |
Class B | 74,997 | .30 |
Class C | 72,866 | .29 |
Institutional Class | 15,523 | .28 |
| $ 456,384 | |
* 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.
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 $364 for the period.
7. 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 $448 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. 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 $83,133.
9. 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 $1,079 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 | $ 1,064 | |
Financial Services
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $95,210.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
From net investment income | | |
Class A | $ 1,429,165 | $ 867,686 |
Class T | 833,715 | 765,107 |
Class B | 103,066 | 69,445 |
Class C | 241,331 | 139,125 |
Institutional Class | 223,027 | 152,144 |
Total | $ 2,830,304 | $ 1,993,507 |
From net realized gain | | |
Class A | $ 7,600,490 | $ 12,753,057 |
Class T | 6,343,916 | 15,966,933 |
Class B | 3,935,812 | 15,271,397 |
Class C | 3,829,721 | 9,173,101 |
Institutional Class | 651,885 | 1,666,779 |
Total | $ 22,361,824 | $ 54,831,267 |
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2008 | Year ended
July 31,
2007 | Six months ended January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 1,603,303 | 2,132,186 | $ 30,346,406 | $ 48,786,912 |
Reinvestment of distributions | 413,923 | 548,319 | 8,063,132 | 12,292,012 |
Shares redeemed | (1,059,708) | (1,259,845) | (20,286,911) | (28,919,491) |
Net increase (decrease) | 957,518 | 1,420,660 | $ 18,122,627 | $ 32,159,433 |
Class T | | | | |
Shares sold | 291,571 | 372,346 | $ 5,442,318 | $ 8,558,636 |
Reinvestment of distributions | 344,513 | 703,948 | 6,720,713 | 15,750,996 |
Shares redeemed | (928,699) | (1,393,386) | (18,082,298) | (31,851,718) |
Net increase (decrease) | (292,615) | (317,092) | $ (5,919,267) | $ (7,542,086) |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Share Transactions - continued
Transactions for each class of shares were as follows: - continued
| Shares | Dollars |
| Six months ended January 31,
2008 | Year ended
July 31,
2007 | Six months ended January 31,
2008 | Year ended
July 31,
2007 |
Class B | | | | |
Shares sold | 219,885 | 242,400 | $ 3,994,477 | $ 5,428,899 |
Reinvestment of distributions | 187,880 | 609,690 | 3,607,910 | 13,365,246 |
Shares redeemed | (1,486,247) | (2,676,523) | (28,262,637) | (59,803,637) |
Net increase (decrease) | (1,078,482) | (1,824,433) | $ (20,660,250) | $ (41,009,492) |
Class C | | | | |
Shares sold | 399,193 | 284,897 | $ 7,074,294 | $ 6,372,368 |
Reinvestment of distributions | 173,024 | 345,073 | 3,293,938 | 7,545,497 |
Shares redeemed | (553,303) | (670,985) | (10,367,496) | (14,937,683) |
Net increase (decrease) | 18,914 | (41,015) | $ 736 | $ (1,019,818) |
Institutional Class | | | | |
Shares sold | 884,822 | 75,332 | $ 17,189,299 | $ 1,755,195 |
Reinvestment of distributions | 36,137 | 56,949 | 687,993 | 1,292,278 |
Shares redeemed | (850,496) | (238,050) | (15,099,077) | (5,551,268) |
Net increase (decrease) | 70,463 | (105,769) | $ 2,778,215 | $ (2,503,795) |
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,003.40 | $ 5.99 |
HypotheticalA | $ 1,000.00 | $ 1,019.15 | $ 6.04 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,002.00 | $ 7.30 |
HypotheticalA | $ 1,000.00 | $ 1,017.85 | $ 7.35 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,000.00 | $ 9.70 |
HypotheticalA | $ 1,000.00 | $ 1,015.43 | $ 9.78 |
Class C | | | |
Actual | $ 1,000.00 | $ 999.70 | $ 9.65 |
HypotheticalA | $ 1,000.00 | $ 1,015.48 | $ 9.73 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,004.90 | $ 4.54 |
HypotheticalA | $ 1,000.00 | $ 1,020.61 | $ 4.57 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.19% |
Class T | 1.45% |
Class B | 1.93% |
Class C | 1.92% |
Institutional Class | .90% |
Semiannual Report
Advisor Health Care Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Merck & Co., Inc. | 6.2 | 7.6 |
UnitedHealth Group, Inc. | 4.8 | 4.2 |
Abbott Laboratories | 4.2 | 0.0 |
Wyeth | 3.1 | 1.7 |
Allergan, Inc. | 3.0 | 2.7 |
Thermo Fisher Scientific, Inc. | 2.9 | 2.3 |
Baxter International, Inc. | 2.7 | 1.0 |
Bristol-Myers Squibb Co. | 2.5 | 3.2 |
Becton, Dickinson & Co. | 2.5 | 3.1 |
Waters Corp. | 2.4 | 0.8 |
| 34.3 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Pharmaceuticals | 25.6% | |
| Health Care Equipment & Supplies | 20.3% | |
| Health Care Providers & Services | 19.9% | |
| Biotechnology | 13.6% | |
| Life Sciences Tools & Services | 11.3% | |
| All Others* | 9.3% | |
|
As of July 31, 2007 |
| Pharmaceuticals | 33.6% | |
| Health Care Providers & Services | 19.7% | |
| Health Care Equipment & Supplies | 15.5% | |
| Biotechnology | 11.3% | |
| Life Sciences Tools & Services | 9.8% | |
| All Others* | 10.1% | |
* Includes short-term investments and net other assets. |
Health Care
Advisor Health Care Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.3% |
| Shares | | Value |
BIOTECHNOLOGY - 13.6% |
Biotechnology - 13.6% |
3SBio, Inc. sponsored ADR | 49,675 | | $ 553,380 |
Acorda Therapeutics, Inc. (a) | 17,800 | | 451,408 |
Alexion Pharmaceuticals, Inc. (a)(d) | 17,900 | | 1,169,228 |
Alnylam Pharmaceuticals, Inc. (a) | 108,400 | | 3,256,336 |
Amgen, Inc. (a)(d) | 234,700 | | 10,934,673 |
Amylin Pharmaceuticals, Inc. (a) | 46,200 | | 1,369,830 |
Arena Pharmaceuticals, Inc. (a) | 36,600 | | 264,984 |
Biogen Idec, Inc. (a) | 174,025 | | 10,606,824 |
BioMarin Pharmaceutical, Inc. (a) | 125,100 | | 4,636,206 |
Cephalon, Inc. (a) | 21,900 | | 1,437,297 |
Cepheid, Inc. (a) | 22,900 | | 699,366 |
Cougar Biotechnology, Inc. (a) | 13,326 | | 398,581 |
CSL Ltd. | 162,253 | | 4,969,739 |
CytRx Corp. (a) | 163,200 | | 300,288 |
deCODE genetics, Inc. (a)(d) | 237,105 | | 815,641 |
Genentech, Inc. (a) | 111,987 | | 7,860,368 |
Genmab AS (a) | 5,600 | | 338,646 |
Genzyme Corp. (a) | 120,400 | | 9,406,852 |
Gilead Sciences, Inc. (a) | 228,592 | | 10,444,368 |
Grifols SA | 23,723 | | 579,670 |
GTx, Inc. (a)(d) | 107,417 | | 1,191,255 |
Idera Pharmaceuticals, Inc. (a)(d) | 9,100 | | 92,547 |
ImClone Systems, Inc. (a) | 54,100 | | 2,351,727 |
Indevus Pharmaceuticals, Inc. (a) | 58,900 | | 375,193 |
Isis Pharmaceuticals, Inc. (a) | 83,419 | | 1,301,336 |
MannKind Corp. (a) | 30,591 | | 241,669 |
Millennium Pharmaceuticals, Inc. (a) | 113,300 | | 1,718,761 |
Molecular Insight Pharmaceuticals, Inc. (d) | 80,400 | | 682,596 |
Myriad Genetics, Inc. (a) | 14,800 | | 636,548 |
Omrix Biopharmaceuticals, Inc. (a) | 2,500 | | 58,150 |
Orchid Cellmark, Inc. (a) | 46,000 | | 228,620 |
OREXIGEN Therapeutics, Inc. | 15,100 | | 159,305 |
PDL BioPharma, Inc. (a) | 6,900 | | 103,017 |
Pharmion Corp. (a) | 500 | | 34,475 |
Progenics Pharmaceuticals, Inc. (a)(d) | 41,599 | | 679,728 |
Theravance, Inc. (a) | 45,200 | | 891,796 |
United Therapeutics Corp. (a) | 3,700 | | 310,726 |
Vertex Pharmaceuticals, Inc. (a) | 75,261 | | 1,532,314 |
Zymogenetics, Inc. (a)(d) | 18,200 | | 183,638 |
| | 83,267,086 |
CHEMICALS - 1.3% |
Diversified Chemicals - 0.9% |
Bayer AG | 9,100 | | 746,200 |
Bayer AG sponsored ADR | 59,077 | | 4,844,314 |
| | 5,590,514 |
|
| Shares | | Value |
Fertilizers & Agricultural Chemicals - 0.4% |
Monsanto Co. | 10,300 | | $ 1,158,132 |
The Mosaic Co. (a) | 13,300 | | 1,210,433 |
| | 2,368,565 |
TOTAL CHEMICALS | | 7,959,079 |
DIVERSIFIED CONSUMER SERVICES - 0.1% |
Specialized Consumer Services - 0.1% |
Service Corp. International | 57,400 | | 690,522 |
FOOD & STAPLES RETAILING - 0.9% |
Drug Retail - 0.9% |
A&D Pharma Holdings NV (Reg. S) unit | 13,800 | | 297,539 |
China Nepstar Chain Drugstore Ltd. ADR | 17,400 | | 210,714 |
CVS Caremark Corp. | 132,100 | | 5,161,147 |
| | 5,669,400 |
FOOD PRODUCTS - 0.5% |
Agricultural Products - 0.5% |
Bunge Ltd. | 27,039 | | 3,203,310 |
HEALTH CARE EQUIPMENT & SUPPLIES - 20.3% |
Health Care Equipment - 16.6% |
American Medical Systems Holdings, Inc. (a)(d) | 183,300 | | 2,619,357 |
Aspect Medical Systems, Inc. (a)(d) | 237,900 | | 2,988,024 |
Baxter International, Inc. | 269,330 | | 16,359,104 |
Beckman Coulter, Inc. | 12,100 | | 804,650 |
Becton, Dickinson & Co. | 173,862 | | 15,044,279 |
Boston Scientific Corp. (a) | 249,200 | | 3,022,796 |
C.R. Bard, Inc. | 79,179 | | 7,646,316 |
China Medical Technologies, Inc. sponsored ADR | 6,700 | | 319,389 |
Covidien Ltd. | 230,932 | | 10,306,495 |
Electro-Optical Sciences, Inc. (a) | 243,923 | | 1,209,858 |
Electro-Optical Sciences, Inc.: | | | |
warrants 11/2/11 (a)(e) | 60,018 | | 127,076 |
warrants 8/2/12 (a)(e) | 16,500 | | 35,482 |
Gen-Probe, Inc. (a) | 63,500 | | 3,629,025 |
Golden Meditech Co. Ltd. | 5,240,000 | | 2,123,566 |
Hillenbrand Industries, Inc. | 18,200 | | 941,304 |
I-Flow Corp. (a)(d) | 174,884 | | 2,500,841 |
IDEXX Laboratories, Inc. (a) | 5,500 | | 310,035 |
Integra LifeSciences Holdings Corp. (a)(d) | 59,385 | | 2,470,416 |
Intuitive Surgical, Inc. (a) | 4,300 | | 1,092,200 |
Kinetic Concepts, Inc. (a) | 2,800 | | 139,384 |
Medtronic, Inc. | 73,200 | | 3,408,924 |
Mentor Corp. | 11,000 | | 380,820 |
Meridian Bioscience, Inc. | 17,300 | | 543,393 |
Mindray Medical International Ltd. sponsored ADR | 38,300 | | 1,306,030 |
NeuroMetrix, Inc. (a) | 64,400 | | 679,420 |
Orthofix International NV (a) | 7,700 | | 421,036 |
Common Stocks - continued |
| Shares | | Value |
HEALTH CARE EQUIPMENT & SUPPLIES - CONTINUED |
Health Care Equipment - continued |
Quidel Corp. (a) | 19,900 | | $ 313,823 |
Sirona Dental Systems, Inc. (a) | 8,935 | | 246,874 |
Smith & Nephew PLC | 259,900 | | 3,500,853 |
Smith & Nephew PLC sponsored ADR | 52,900 | | 3,562,815 |
St. Jude Medical, Inc. (a) | 142,300 | | 5,764,573 |
Stryker Corp. | 94,700 | | 6,342,059 |
Symmetry Medical, Inc. (a) | 40,846 | | 743,397 |
The Spectranetics Corp. (a) | 64,309 | | 802,576 |
ThermoGenesis Corp. (a) | 123,934 | | 220,603 |
| | 101,926,793 |
Health Care Supplies - 3.7% |
Alcon, Inc. | 33,391 | | 4,741,522 |
Cooper Companies, Inc. | 19,043 | | 749,913 |
Haemonetics Corp. (a) | 5,400 | | 323,136 |
Immucor, Inc. (a) | 36,300 | | 1,046,892 |
InfuSystems Holdings, Inc. (a) | 453,700 | | 1,837,485 |
InfuSystems Holdings, Inc. warrants 4/11/11 (a) | 83,700 | | 26,784 |
Inverness Medical Innovations, Inc. (a) | 281,744 | | 12,692,567 |
Shandong Weigao Group Medical Polymer Co. Ltd. (H Shares) | 700,000 | | 1,181,412 |
TranS1, Inc. | 3,700 | | 53,983 |
| | 22,653,694 |
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | | 124,580,487 |
HEALTH CARE PROVIDERS & SERVICES - 19.9% |
Health Care Distributors & Services - 4.1% |
Celesio AG | 900 | | 53,009 |
Henry Schein, Inc. (a) | 51,800 | | 3,011,134 |
McKesson Corp. | 227,300 | | 14,272,167 |
Profarma Distribuidora de Produtos Farmaceuticos SA (a) | 434,800 | | 7,415,577 |
United Drug PLC (Ireland) | 64,300 | | 373,078 |
| | 25,124,965 |
Health Care Facilities - 1.7% |
Acibadem Saglik Hizmetleri AS | 325,923 | | 2,294,547 |
Apollo Hospitals Enterprise Ltd. | 103,739 | | 1,311,263 |
Bumrungrad Hospital PCL (For. Reg.) | 130,700 | | 145,420 |
CVS Group plc | 200 | | 933 |
Emeritus Corp. (a) | 135,290 | | 2,996,674 |
Raffles Medical Group Ltd. | 56,000 | | 50,981 |
Sun Healthcare Group, Inc. (a) | 109,825 | | 1,892,285 |
Universal Health Services, Inc. Class B | 16,600 | | 782,358 |
VCA Antech, Inc. (a) | 30,520 | | 1,179,903 |
| | 10,654,364 |
Health Care Services - 4.5% |
athenahealth, Inc. | 500 | | 15,700 |
Diagnosticos da America SA | 318,500 | | 5,451,981 |
|
| Shares | | Value |
Emergency Medical Services Corp. Class A (a) | 100 | | $ 3,077 |
Express Scripts, Inc. (a) | 145,280 | | 9,804,947 |
Health Grades, Inc. (a) | 356,798 | | 2,048,021 |
Healthways, Inc. (a) | 13,033 | | 733,758 |
HMS Holdings Corp. (a) | 37,400 | | 1,181,840 |
Laboratory Corp. of America Holdings (a) | 15,000 | | 1,108,200 |
LHC Group, Inc. (a)(d) | 86,497 | | 1,994,621 |
Nighthawk Radiology Holdings, Inc. (a) | 291,681 | | 4,637,728 |
Omnicare, Inc. | 31,729 | | 702,480 |
Rural/Metro Corp. (a) | 13,331 | | 37,993 |
Virtual Radiologic Corp. | 4,400 | | 66,616 |
| | 27,786,962 |
Managed Health Care - 9.6% |
Health Net, Inc. (a) | 135,100 | | 6,280,799 |
Healthspring, Inc. (a) | 10,217 | | 211,390 |
Humana, Inc. (a) | 99,725 | | 8,007,918 |
Medial Saude SA (a) | 348,400 | | 4,000,955 |
Triple-S Management Corp. | 23,066 | | 438,485 |
UnitedHealth Group, Inc. | 576,509 | | 29,309,718 |
Universal American Financial Corp. (a) | 344,694 | | 7,214,445 |
Wellcare Health Plans, Inc. (a) | 20,300 | | 953,897 |
WellPoint, Inc. (a) | 26,000 | | 2,033,200 |
| | 58,450,807 |
TOTAL HEALTH CARE PROVIDERS & SERVICES | | 122,017,098 |
HEALTH CARE TECHNOLOGY - 2.0% |
Health Care Technology - 2.0% |
Allscripts Healthcare Solutions, Inc. (a) | 158,747 | | 2,354,218 |
Cerner Corp. (a) | 29,829 | | 1,563,040 |
Eclipsys Corp. (a) | 169,127 | | 4,353,329 |
HLTH Corp. (a) | 325,000 | | 3,636,750 |
MedAssets, Inc. | 18,100 | | 364,715 |
| | 12,272,052 |
INDUSTRIAL CONGLOMERATES - 0.1% |
Industrial Conglomerates - 0.1% |
Carlisle Companies, Inc. | 10,800 | | 359,640 |
INTERNET SOFTWARE & SERVICES - 0.3% |
Internet Software & Services - 0.3% |
WebMD Health Corp. Class A (a)(d) | 42,289 | | 1,563,001 |
LIFE SCIENCES TOOLS & SERVICES - 11.3% |
Life Sciences Tools & Services - 11.3% |
Affymetrix, Inc. (a) | 95,514 | | 1,916,011 |
AMAG Pharmaceuticals, Inc. | 56,801 | | 2,928,660 |
Applera Corp. - Applied Biosystems Group | 87,300 | | 2,752,569 |
Bruker BioSciences Corp. (a) | 314,210 | | 3,220,653 |
Charles River Laboratories International, Inc. (a) | 16,700 | | 1,037,070 |
Covance, Inc. (a) | 22,632 | | 1,882,077 |
Common Stocks - continued |
| Shares | | Value |
LIFE SCIENCES TOOLS & SERVICES - CONTINUED |
Life Sciences Tools & Services - continued |
Dishman Pharmaceuticals and Chemicals Ltd. | 139,579 | | $ 1,131,059 |
Divi's Laboratories Ltd. (a) | 14,168 | | 508,540 |
Exelixis, Inc. (a) | 75,713 | | 554,219 |
Illumina, Inc. (a) | 43,772 | | 2,788,276 |
Invitrogen Corp. (a) | 38,236 | | 3,275,678 |
Lonza Group AG | 6,935 | | 889,953 |
Luminex Corp. (a)(d) | 30,404 | | 455,148 |
Millipore Corp. (a) | 21,120 | | 1,481,568 |
PAREXEL International Corp. (a) | 7,200 | | 391,752 |
PerkinElmer, Inc. | 235,978 | | 5,873,492 |
Pharmaceutical Product Development, Inc. | 37,500 | | 1,626,000 |
QIAGEN NV (a) | 146,100 | | 2,980,440 |
Techne Corp. (a) | 10,135 | | 658,775 |
Thermo Fisher Scientific, Inc. (a)(d) | 347,225 | | 17,878,615 |
Third Wave Technologies, Inc. (a) | 36,700 | | 298,738 |
Waters Corp. (a) | 251,100 | | 14,425,695 |
Wuxi Pharmatech Cayman, Inc. Sponsored ADR | 5,900 | | 148,621 |
| | 69,103,609 |
MACHINERY - 0.5% |
Industrial Machinery - 0.5% |
Pall Corp. | 79,800 | | 2,943,822 |
PERSONAL PRODUCTS - 0.2% |
Personal Products - 0.2% |
Bare Escentuals, Inc. (a)(d) | 46,290 | | 1,103,554 |
PHARMACEUTICALS - 25.6% |
Pharmaceuticals - 25.6% |
Abbott Laboratories | 452,800 | | 25,492,640 |
Alembic Ltd. | 187,348 | | 303,343 |
Allergan, Inc. (d) | 273,939 | | 18,405,961 |
Barr Pharmaceuticals, Inc. (a) | 109,900 | | 5,735,681 |
Beijing Med-Pharm Corp. (a)(d) | 31,685 | | 265,837 |
Biodel, Inc. | 13,500 | | 240,705 |
BioForm Medical, Inc. | 8,600 | | 60,200 |
BioMimetic Therapeutics, Inc. (a) | 213,662 | | 3,177,154 |
Bristol-Myers Squibb Co. | 653,800 | | 15,161,622 |
China Shineway Pharmaceutical Group Ltd. | 1,830,000 | | 1,253,256 |
Eczacibasi ILAC Sanayi TAS (a) | 82,000 | | 278,500 |
Elan Corp. PLC sponsored ADR (a) | 78,100 | | 1,984,521 |
Jazz Pharmaceuticals, Inc. (d) | 58,691 | | 768,852 |
Johnson & Johnson | 100 | | 6,326 |
Merck & Co., Inc. | 814,800 | | 37,708,941 |
Nexmed, Inc. (a) | 401,447 | | 578,084 |
Novo Nordisk AS Series B sponsored ADR | 54,600 | | 3,426,150 |
Perrigo Co. | 40,800 | | 1,258,272 |
|
| Shares | | Value |
Schering-Plough Corp. | 591,400 | | $ 11,573,698 |
Shire PLC sponsored ADR | 77,300 | | 4,162,605 |
Simcere Pharmaceutical Group sponsored ADR | 26,750 | | 320,733 |
Sirtris Pharmaceuticals, Inc. | 47,200 | | 569,232 |
Stada Arzneimittel AG | 7,300 | | 459,616 |
Sun Pharmaceutical Industries Ltd. | 12,775 | | 368,420 |
Teva Pharmaceutical Industries Ltd. sponsored ADR | 26,900 | | 1,238,476 |
ULURU, Inc. (a) | 24,500 | | 57,330 |
Wyeth | 472,342 | | 18,799,212 |
XenoPort, Inc. (a)(d) | 56,000 | | 3,436,160 |
| | 157,091,527 |
SOFTWARE - 0.1% |
Application Software - 0.1% |
Nuance Communications, Inc. (a) | 35,800 | | 568,862 |
Systems Software - 0.0% |
Quality Systems, Inc. | 2,848 | | 86,551 |
TOTAL SOFTWARE | | 655,413 |
TEXTILES, APPAREL & LUXURY GOODS - 0.1% |
Footwear - 0.1% |
China Hongxing Sports Ltd. | 658,000 | | 285,582 |
WATER UTILITIES - 0.5% |
Water Utilities - 0.5% |
Companhia de Saneamento Basico do Estado de Sao Paulo (SABESP) sponsored ADR (d) | 77,900 | | 3,334,899 |
TOTAL COMMON STOCKS (Cost $541,619,183) | 596,100,081 |
Money Market Funds - 10.5% |
| | | |
Fidelity Cash Central Fund, 3.79% (b) | 13,816,583 | | 13,816,583 |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 50,366,933 | | 50,366,933 |
TOTAL MONEY MARKET FUNDS (Cost $64,183,516) | 64,183,516 |
TOTAL INVESTMENT PORTFOLIO - 107.8% (Cost $605,802,699) | | 660,283,597 |
NET OTHER ASSETS - (7.8)% | | (47,602,013) |
NET ASSETS - 100% | $ 612,681,584 |
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 $162,558 or 0.0% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Electro-Optical Sciences, Inc. warrants 11/2/11 | 11/1/06 | $ 6 |
Electro-Optical Sciences, Inc. warrants 8/2/12 | 8/1/07 | 17 |
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 | $ 234,508 |
Fidelity Securities Lending Cash Central Fund | 118,990 |
Total | $ 353,498 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 85.7% |
Brazil | 3.3% |
Bermuda | 2.2% |
United Kingdom | 1.9% |
Germany | 1.0% |
Others (individually less than 1%) | 5.9% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Health Care
Advisor Health Care Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2008 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $49,873,869) - See accompanying schedule: Unaffiliated issuers (cost $541,619,183) | $ 596,100,081 | |
Fidelity Central Funds (cost $64,183,516) | 64,183,516 | |
Total Investments (cost $605,802,699) | | $ 660,283,597 |
Cash | | 15,172 |
Foreign currency held at value (cost $38,117) | | 38,123 |
Receivable for investments sold | | 15,644,223 |
Receivable for fund shares sold | | 794,854 |
Dividends receivable | | 549,024 |
Distributions receivable from Fidelity Central Funds | | 42,040 |
Prepaid expenses | | 1,942 |
Other receivables | | 49,529 |
Total assets | | 677,418,504 |
| | |
Liabilities | | |
Payable for investments purchased | $ 11,974,485 | |
Payable for fund shares redeemed | 1,580,781 | |
Accrued management fee | 299,442 | |
Distribution fees payable | 289,445 | |
Other affiliated payables | 185,360 | |
Other payables and accrued expenses | 40,474 | |
Collateral on securities loaned, at value | 50,366,933 | |
Total liabilities | | 64,736,920 |
| | |
Net Assets | | $ 612,681,584 |
Net Assets consist of: | | |
Paid in capital | | $ 536,175,324 |
Accumulated net investment loss | | (1,509,141) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 23,512,955 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 54,502,446 |
Net Assets | | $ 612,681,584 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($237,211,078 ÷ 11,312,461 shares) | | $ 20.97 |
| | |
Maximum offering price per share (100/94.25 of $20.97) | | $ 22.25 |
Class T:
Net Asset Value and redemption price per share ($172,135,774 ÷ 8,396,957 shares) | | $ 20.50 |
| | |
Maximum offering price per share (100/96.50 of $20.50) | | $ 21.24 |
Class B:
Net Asset Value and offering price per share ($84,037,020 ÷ 4,310,295 shares)A | | $ 19.50 |
| | |
Class C:
Net Asset Value and offering price per share ($98,230,850 ÷ 5,050,369 shares)A | | $ 19.45 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($21,066,862 ÷ 973,207 shares) | | $ 21.65 |
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
Advisor Health Care Fund
Financial Statements - continued
Statement of Operations
| Six months ended January 31, 2008 (Unaudited) |
Investment Income | | |
Dividends | | $ 3,046,888 |
Interest | | 4,639 |
Income from Fidelity Central Funds | | 353,498 |
Total income | | 3,405,025 |
| | |
Expenses | | |
Management fee | $ 1,860,084 | |
Transfer agent fees | 1,001,712 | |
Distribution fees | 1,827,310 | |
Accounting and security lending fees | 123,836 | |
Custodian fees and expenses | 60,211 | |
Independent trustees' compensation | 1,375 | |
Registration fees | 38,282 | |
Audit | 30,974 | |
Legal | 2,030 | |
Interest | 960 | |
Miscellaneous | 2,750 | |
Total expenses before reductions | 4,949,524 | |
Expense reductions | (35,557) | 4,913,967 |
Net investment income (loss) | | (1,508,942) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers (net of foreign taxes of $41,064) | 38,921,983 | |
Foreign currency transactions | (12,146) | |
Total net realized gain (loss) | | 38,909,837 |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $70,753) | (33,621,860) | |
Assets and liabilities in foreign currencies | (10,277) | |
Total change in net unrealized appreciation (depreciation) | | (33,632,137) |
Net gain (loss) | | 5,277,700 |
Net increase (decrease) in net assets resulting from operations | | $ 3,768,758 |
Statement of Changes in Net Assets
| Six months ended
January 31, 2008
(Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (1,508,942) | $ (3,461,354) |
Net realized gain (loss) | 38,909,837 | 78,309,606 |
Change in net unrealized appreciation (depreciation) | (33,632,137) | (16,377,138) |
Net increase (decrease) in net assets resulting from operations | 3,768,758 | 58,471,114 |
Distributions to shareholders from net realized gain | (58,231,092) | (83,314,166) |
Share transactions - net increase (decrease) | 4,777,886 | (46,973,972) |
Redemption fees | 5,066 | 16,966 |
Total increase (decrease) in net assets | (49,679,382) | (71,800,058) |
| | |
Net Assets | | |
Beginning of period | 662,360,966 | 734,161,024 |
End of period (including accumulated net investment loss of $1,509,141 and accumulated net investment loss of $199, respectively) | $ 612,681,584 | $ 662,360,966 |
See accompanying notes which are an integral part of the financial statements.
Health Care
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.90 | $ 23.77 | $ 22.94 | $ 18.91 | $ 18.29 | $ 16.51 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.02) | (.03) | (.09) | (.05) | (.05) | - I |
Net realized and unrealized gain (loss) | .15 | 1.91 | .96 | 4.08 | .67 | 1.78 |
Total from investment operations | .13 | 1.88 | .87 | 4.03 | .62 | 1.78 |
Distributions from net realized gain | (2.06) | (2.75) | (.04) | - | - | - |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 20.97 | $ 22.90 | $ 23.77 | $ 22.94 | $ 18.91 | $ 18.29 |
Total Return B, C, D | .34% | 8.54% | 3.79% | 21.31% | 3.39% | 10.78% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.19% A | 1.22% | 1.25% | 1.28% | 1.32% | 1.34% |
Expenses net of fee waivers, if any | 1.19% A | 1.22% | 1.25% | 1.28% | 1.32% | 1.34% |
Expenses net of all reductions | 1.17% A | 1.21% | 1.21% | 1.26% | 1.29% | 1.27% |
Net investment income (loss) | (.15)% A | (.14)% | (.38)% | (.22)% | (.26)% | (.01)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 237,211 | $ 234,656 | $ 199,221 | $ 139,158 | $ 104,258 | $ 108,692 |
Portfolio turnover rate G | 118% A | 141% | 99% | 71% | 60% | 120% |
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 sales charges. 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. 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.39 | $ 23.26 | $ 22.50 | $ 18.60 | $ 18.03 | $ 16.31 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.09) | (.15) | (.09) | (.09) | (.04) |
Net realized and unrealized gain (loss) | .15 | 1.87 | .95 | 3.99 | .66 | 1.76 |
Total from investment operations | .10 | 1.78 | .80 | 3.90 | .57 | 1.72 |
Distributions from net realized gain | (1.99) | (2.65) | (.04) | - | - | - |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 20.50 | $ 22.39 | $ 23.26 | $ 22.50 | $ 18.60 | $ 18.03 |
Total Return B, C, D | .20% | 8.25% | 3.55% | 20.97% | 3.16% | 10.55% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.45% A | 1.48% | 1.50% | 1.53% | 1.56% | 1.59% |
Expenses net of fee waivers, if any | 1.45% A | 1.48% | 1.50% | 1.53% | 1.56% | 1.59% |
Expenses net of all reductions | 1.44% A | 1.47% | 1.47% | 1.51% | 1.53% | 1.51% |
Net investment income (loss) | (.42)% A | (.40)% | (.63)% | (.47)% | (.51)% | (.26)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 172,136 | $ 186,628 | $ 218,280 | $ 243,353 | $ 243,176 | $ 264,115 |
Portfolio turnover rate G | 118% A | 141% | 99% | 71% | 60% | 120% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.29 | $ 22.17 | $ 21.55 | $ 17.91 | $ 17.45 | $ 15.86 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.10) | (.20) | (.25) | (.19) | (.18) | (.12) |
Net realized and unrealized gain (loss) | .16 | 1.79 | .91 | 3.83 | .64 | 1.71 |
Total from investment operations | .06 | 1.59 | .66 | 3.64 | .46 | 1.59 |
Distributions from net realized gain | (1.85) | (2.47) | (.04) | - | - | - |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 19.50 | $ 21.29 | $ 22.17 | $ 21.55 | $ 17.91 | $ 17.45 |
Total Return B, C, D | 0.00% | 7.66% | 3.06% | 20.32% | 2.64% | 10.03% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.93% A | 1.99% | 2.01% | 2.04% | 2.06% | 2.05% |
Expenses net of fee waivers, if any | 1.93% A | 1.99% | 2.01% | 2.04% | 2.06% | 2.05% |
Expenses net of all reductions | 1.93% A | 1.98% | 1.98% | 2.01% | 2.03% | 1.98% |
Net investment income (loss) | (.91)% A | (.91)% | (1.14)% | (.98)% | (1.01)% | (.73)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 84,037 | $ 113,384 | $ 180,364 | $ 266,319 | $ 285,299 | $ 317,906 |
Portfolio turnover rate G | 118% A | 141% | 99% | 71% | 60% | 120% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.29 | $ 22.24 | $ 21.61 | $ 17.94 | $ 17.47 | $ 15.87 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.09) | (.19) | (.24) | (.17) | (.17) | (.11) |
Net realized and unrealized gain (loss) | .14 | 1.79 | .91 | 3.84 | .64 | 1.71 |
Total from investment operations | .05 | 1.60 | .67 | 3.67 | .47 | 1.60 |
Distributions from net realized gain | (1.89) | (2.55) | (.04) | - | - | - |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 19.45 | $ 21.29 | $ 22.24 | $ 21.61 | $ 17.94 | $ 17.47 |
Total Return B, C, D | (.03)% | 7.75% | 3.10% | 20.46% | 2.69% | 10.08% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.92% A | 1.94% | 1.94% | 1.97% | 2.00% | 2.00% |
Expenses net of fee waivers, if any | 1.92% A | 1.94% | 1.94% | 1.97% | 2.00% | 2.00% |
Expenses net of all reductions | 1.91% A | 1.93% | 1.91% | 1.94% | 1.97% | 1.92% |
Net investment income (loss) | (.89)% A | (.86)% | (1.07)% | (.91)% | (.95)% | (.67)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 98,231 | $ 105,519 | $ 115,644 | $ 131,277 | $ 130,184 | $ 150,576 |
Portfolio turnover rate G | 118% A | 141% | 99% | 71% | 60% | 120% |
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.
Health Care
Financial Highlights - Institutional Class
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 23.62 | $ 24.43 | $ 23.48 | $ 19.28 | $ 18.58 | $ 16.70 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .02 | .05 | - H | .04 | .03 | .06 |
Net realized and unrealized gain (loss) | .15 | 1.96 | .99 | 4.16 | .67 | 1.82 |
Total from investment operations | .17 | 2.01 | .99 | 4.20 | .70 | 1.88 |
Distributions from net realized gain | (2.14) | (2.82) | (.04) | - | - | - |
Redemption fees added to paid in capital D, H | - | - | - | - | - | - |
Net asset value, end of period | $ 21.65 | $ 23.62 | $ 24.43 | $ 23.48 | $ 19.28 | $ 18.58 |
Total Return B, C | .49% | 8.90% | 4.21% | 21.78% | 3.77% | 11.26% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | .90% A | .88% | .86% | .88% | .91% | .96% |
Expenses net of fee waivers, if any | .90% A | .88% | .86% | .88% | .91% | .96% |
Expenses net of all reductions | .89% A | .87% | .83% | .85% | .88% | .88% |
Net investment income (loss) | .13% A | .19% | .01% | .18% | .14% | .37% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 21,067 | $ 22,174 | $ 20,652 | $ 19,698 | $ 20,358 | $ 23,364 |
Portfolio turnover rate F | 118% A | 141% | 99% | 71% | 60% | 120% |
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, 2008 (Unaudited)
1. Organization.
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 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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
Health Care
3. Significant Accounting Policies - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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 | $ 91,230,100 | |
Unrealized depreciation | (38,954,537) | |
Net unrealized appreciation (depreciation) | $ 52,275,563 | |
Cost for federal income tax purposes | $ 608,008,034 | |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to 0.75% 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 Pronouncement. 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.
4. 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
4. Operating Policies - continued
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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $384,547,537 and $452,390,682, respectively.
6. 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% | $ 307,239 | $ 8,786 |
Class T | .25% | .25% | 470,300 | - |
Class B | .75% | .25% | 516,620 | 387,465 |
Class C | .75% | .25% | 533,151 | 24,235 |
| | | $ 1,827,310 | $ 420,486 |
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 | $ 19,771 |
Class T | 11,928 |
Class B* | 57,663 |
Class C* | 2,519 |
| $ 91,881 |
* 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.
Health Care
6. Fees and Sales of Investments - 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 | $ 369,694 | .30 |
Class T | 293,011 | .31 |
Class B | 155,668 | .30 |
Class C | 151,057 | .28 |
Institutional Class | 32,282 | .26 |
| $ 1,001,712 | |
* 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.
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 $3,572 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 | $ 6,555,000 | 5.27% | $ 960 |
7. 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 $902 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. 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 $118,990.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
9. 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 $21,906 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 $3,875. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction | |
Class A | $ 9,051 | |
Class C | 478 | |
Institutional Class | 247 | |
| $ 9,776 | |
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $196,360.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
From net realized gain | | |
Class A | $ 21,294,002 | $ 23,887,113 |
Class T | 16,323,384 | 24,697,844 |
Class B | 9,098,608 | 18,914,669 |
Class C | 9,241,641 | 13,345,526 |
Institutional Class | 2,273,457 | 2,469,014 |
Total | $ 58,231,092 | $ 83,314,166 |
Health Care
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 | Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 1,685,557 | 3,628,491 | $ 38,209,390 | $ 84,047,399 |
Reinvestment of distributions | 845,680 | 919,326 | 18,560,715 | 20,489,356 |
Shares redeemed | (1,467,885) | (2,679,409) | (33,397,421) | (62,216,884) |
Net increase (decrease) | 1,063,352 | 1,868,408 | $ 23,372,684 | $ 42,319,871 |
Class T | | | | |
Shares sold | 413,137 | 811,354 | $ 9,151,826 | $ 18,411,031 |
Reinvestment of distributions | 718,829 | 1,065,004 | 15,418,473 | 23,268,418 |
Shares redeemed | (1,072,172) | (2,924,887) | (23,791,317) | (66,315,193) |
Net increase (decrease) | 59,794 | (1,048,529) | $ 778,982 | $ (24,635,744) |
Class B | | | | |
Shares sold | 165,311 | 416,759 | $ 3,471,964 | $ 8,968,832 |
Reinvestment of distributions | 400,837 | 800,087 | 8,174,993 | 16,715,113 |
Shares redeemed | (1,581,038) | (4,028,295) | (33,392,311) | (87,078,801) |
Net increase (decrease) | (1,014,890) | (2,811,449) | $ (21,745,354) | $ (61,394,856) |
Class C | | | | |
Shares sold | 241,112 | 498,290 | $ 5,013,753 | $ 10,716,280 |
Reinvestment of distributions | 358,758 | 508,339 | 7,307,934 | 10,614,471 |
Shares redeemed | (506,780) | (1,249,593) | (10,704,480) | (26,990,765) |
Net increase (decrease) | 93,090 | (242,964) | $ 1,617,207 | $ (5,660,014) |
Institutional Class | | | | |
Shares sold | 294,078 | 415,448 | $ 6,933,940 | $ 10,086,881 |
Reinvestment of distributions | 64,316 | 77,688 | 1,455,613 | 1,779,821 |
Shares redeemed | (324,178) | (399,590) | (7,635,186) | (9,469,931) |
Net increase (decrease) | 34,216 | 93,546 | $ 754,367 | $ 2,396,771 |
Semiannual Report
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
|
Beginning
Account Value
August 1, 2007
|
Ending
Account Value
January 31, 2008
| Expenses Paid
During Period*
August 1, 2007 to
January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 961.50 | $ 5.72 |
HypotheticalA | $ 1,000.00 | $ 1,019.30 | $ 5.89 |
Class T | | | |
Actual | $ 1,000.00 | $ 960.50 | $ 6.95 |
HypotheticalA | $ 1,000.00 | $ 1,018.05 | $ 7.15 |
Class B | | | |
Actual | $ 1,000.00 | $ 957.70 | $ 9.60 |
HypotheticalA | $ 1,000.00 | $ 1,015.33 | $ 9.88 |
Class C | | | |
Actual | $ 1,000.00 | $ 957.90 | $ 9.35 |
HypotheticalA | $ 1,000.00 | $ 1,015.58 | $ 9.63 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 963.10 | $ 4.29 |
HypotheticalA | $ 1,000.00 | $ 1,020.76 | $ 4.42 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.16% |
Class T | 1.41% |
Class B | 1.95% |
Class C | 1.90% |
Institutional Class | .87% |
Industrials
Advisor Industrials Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
General Electric Co. | 9.1 | 9.8 |
United Technologies Corp. | 5.8 | 7.2 |
Honeywell International, Inc. | 5.0 | 4.0 |
Lockheed Martin Corp. | 3.7 | 2.3 |
Danaher Corp. | 2.8 | 2.6 |
Siemens AG sponsored ADR | 2.2 | 1.4 |
The Brink's Co. | 2.2 | 1.4 |
Raytheon Co. | 2.2 | 2.3 |
Johnson Controls, Inc. | 2.1 | 1.0 |
Illinois Tool Works, Inc. | 2.0 | 2.3 |
| 37.1 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Machinery | 20.7% | |
| Aerospace & Defense | 19.6% | |
| Industrial Conglomerates | 13.3% | |
| Commercial Services & Supplies | 11.3% | |
| Electrical Equipment | 9.2% | |
| All Others* | 25.9% | |
|
As of July 31, 2007 |
| Aerospace & Defense | 18.8% | |
| Machinery | 17.7% | |
| Industrial Conglomerates | 16.5% | |
| Road & Rail | 8.4% | |
| Electrical Equipment | 8.1% | |
| All Others* | 30.5% | |
* Includes short-term investments and net other assets. |
Semiannual Report
Advisor Industrials Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.9% |
| Shares | | Value |
AEROSPACE & DEFENSE - 19.6% |
Aerospace & Defense - 19.6% |
Honeywell International, Inc. | 309,400 | | $ 18,276,258 |
Lockheed Martin Corp. | 125,300 | | 13,522,376 |
Northrop Grumman Corp. | 47,900 | | 3,801,344 |
Raytheon Co. | 120,300 | | 7,836,342 |
The Boeing Co. | 83,700 | | 6,962,166 |
United Technologies Corp. | 286,300 | | 21,017,283 |
| | 71,415,769 |
AIR FREIGHT & LOGISTICS - 1.4% |
Air Freight & Logistics - 1.4% |
C.H. Robinson Worldwide, Inc. | 54,600 | | 3,032,484 |
FedEx Corp. | 23,700 | | 2,215,476 |
| | 5,247,960 |
AIRLINES - 1.5% |
Airlines - 1.5% |
Delta Air Lines, Inc. (a)(d) | 162,247 | | 2,730,617 |
UAL Corp. | 68,900 | | 2,614,755 |
| | 5,345,372 |
AUTO COMPONENTS - 2.8% |
Auto Parts & Equipment - 2.8% |
Johnson Controls, Inc. | 214,800 | | 7,597,476 |
WABCO Holdings, Inc. | 64,100 | | 2,582,589 |
| | 10,180,065 |
AUTOMOBILES - 1.6% |
Automobile Manufacturers - 1.6% |
DaimlerChrysler AG | 28,900 | | 2,260,847 |
Fiat SpA | 152,600 | | 3,571,144 |
| | 5,831,991 |
BUILDING PRODUCTS - 1.6% |
Building Products - 1.6% |
Masco Corp. (d) | 247,300 | | 5,670,589 |
CHEMICALS - 2.1% |
Specialty Chemicals - 2.1% |
Albemarle Corp. | 92,000 | | 3,335,920 |
Nalco Holding Co. | 156,800 | | 3,283,392 |
W.R. Grace & Co. (a) | 42,400 | | 959,088 |
| | 7,578,400 |
COMMERCIAL SERVICES & SUPPLIES - 11.3% |
Commercial Printing - 0.7% |
R.R. Donnelley & Sons Co. | 78,900 | | 2,752,821 |
Diversified Commercial & Professional Services - 4.1% |
Cintas Corp. | 42,000 | | 1,378,440 |
Corrections Corp. of America (a) | 99,000 | | 2,627,460 |
Equifax, Inc. | 82,900 | | 3,074,761 |
The Brink's Co. | 130,100 | | 7,887,963 |
| | 14,968,624 |
|
| Shares | | Value |
Environmental & Facility Services - 5.0% |
Allied Waste Industries, Inc. (a) | 592,900 | | $ 5,840,065 |
Fuel Tech, Inc. (a)(d) | 154,279 | | 2,937,472 |
Waste Connections, Inc. (a) | 104,800 | | 3,055,968 |
Waste Management, Inc. | 194,100 | | 6,296,604 |
| | 18,130,109 |
Human Resource & Employment Services - 1.1% |
Manpower, Inc. | 69,721 | | 3,922,503 |
Office Services & Supplies - 0.4% |
Avery Dennison Corp. | 27,900 | | 1,445,778 |
TOTAL COMMERCIAL SERVICES & SUPPLIES | | 41,219,835 |
CONSTRUCTION & ENGINEERING - 3.0% |
Construction & Engineering - 3.0% |
Chicago Bridge & Iron Co. NV
(NY Shares) | 81,500 | | 3,625,935 |
Quanta Services, Inc. (a) | 106,534 | | 2,335,225 |
Shaw Group, Inc. (a) | 91,150 | | 5,149,975 |
| | 11,111,135 |
ELECTRICAL EQUIPMENT - 9.2% |
Electrical Components & Equipment - 6.2% |
Acuity Brands, Inc. | 39,700 | | 1,806,747 |
AMETEK, Inc. | 43,100 | | 1,898,124 |
Cooper Industries Ltd. Class A | 111,200 | | 4,952,848 |
Emerson Electric Co. | 102,700 | | 5,221,268 |
First Solar, Inc. (a) | 14,400 | | 2,617,488 |
Nexans SA | 32,200 | | 3,558,958 |
SolarWorld AG | 21,100 | | 935,643 |
Sunpower Corp. Class A (a)(d) | 22,100 | | 1,526,889 |
| | 22,517,965 |
Heavy Electrical Equipment - 3.0% |
ABB Ltd. sponsored ADR | 136,900 | | 3,422,500 |
Alstom SA | 17,400 | | 3,514,308 |
Suzlon Energy Ltd. | 83,691 | | 658,150 |
Vestas Wind Systems AS (a) | 36,000 | | 3,497,125 |
| | 11,092,083 |
TOTAL ELECTRICAL EQUIPMENT | | 33,610,048 |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.2% |
Electronic Equipment & Instruments - 0.2% |
Itron, Inc. (a)(d) | 10,300 | | 848,720 |
HEALTH CARE PROVIDERS & SERVICES - 0.4% |
Health Care Distributors & Services - 0.4% |
Henry Schein, Inc. (a) | 28,200 | | 1,639,266 |
HEALTH CARE TECHNOLOGY - 0.2% |
Health Care Technology - 0.2% |
Cerner Corp. (a) | 14,100 | | 738,840 |
Common Stocks - continued |
| Shares | | Value |
INDUSTRIAL CONGLOMERATES - 13.3% |
Industrial Conglomerates - 13.3% |
General Electric Co. | 943,000 | | $ 33,391,631 |
Orkla ASA (A Shares) | 55,600 | | 736,233 |
Siemens AG sponsored ADR (d) | 63,035 | | 8,181,943 |
Tyco International Ltd. | 162,825 | | 6,408,792 |
| | 48,718,599 |
MACHINERY - 20.7% |
Construction & Farm Machinery & Heavy Trucks - 6.4% |
Bucyrus International, Inc. Class A | 41,400 | | 3,838,194 |
CNH Global NV | 36,300 | | 1,795,398 |
Cummins, Inc. | 113,832 | | 5,495,809 |
Navistar International Corp. (a) | 57,100 | | 2,821,636 |
Oshkosh Truck Co. | 99,608 | | 4,558,062 |
Terex Corp. (a) | 83,900 | | 4,929,964 |
| | 23,439,063 |
Industrial Machinery - 14.3% |
Danaher Corp. | 137,800 | | 10,259,210 |
Eaton Corp. | 67,200 | | 5,561,472 |
Flowserve Corp. | 58,600 | | 4,812,232 |
Illinois Tool Works, Inc. | 145,500 | | 7,333,200 |
Ingersoll-Rand Co. Ltd. Class A | 151,100 | | 5,971,472 |
ITT Corp. | 96,600 | | 5,740,938 |
Pall Corp. | 69,200 | | 2,552,788 |
SPX Corp. | 49,100 | | 4,939,460 |
Sulzer AG (Reg.) | 4,715 | | 4,985,924 |
| | 52,156,696 |
TOTAL MACHINERY | | 75,595,759 |
METALS & MINING - 0.5% |
Diversified Metals & Mining - 0.5% |
Titanium Metals Corp. (d) | 87,100 | | 1,893,554 |
ROAD & RAIL - 7.9% |
Railroads - 2.1% |
Norfolk Southern Corp. | 69,710 | | 3,791,527 |
Union Pacific Corp. | 32,400 | | 4,050,972 |
| | 7,842,499 |
Trucking - 5.8% |
Con-way, Inc. | 14,100 | | 686,529 |
Hertz Global Holdings, Inc. (a) | 196,900 | | 2,937,748 |
J.B. Hunt Transport Services, Inc. | 28,200 | | 877,020 |
Knight Transportation, Inc. | 114,800 | | 1,969,968 |
|
| Shares | | Value |
Landstar System, Inc. | 104,126 | | $ 5,209,424 |
Old Dominion Freight Lines, Inc. (a) | 118,136 | | 3,443,664 |
Ryder System, Inc. | 113,600 | | 5,914,016 |
| | 21,038,369 |
TOTAL ROAD & RAIL | | 28,880,868 |
TRADING COMPANIES & DISTRIBUTORS - 0.6% |
Trading Companies & Distributors - 0.6% |
Rush Enterprises, Inc. Class A (a) | 137,205 | | 2,302,300 |
TOTAL COMMON STOCKS (Cost $347,776,228) | 357,829,070 |
Nonconvertible Bonds - 0.0% |
| Principal Amount | | |
AIRLINES - 0.0% |
Airlines - 0.0% |
Delta Air Lines, Inc. 8.3% 12/15/29 (a)
(Cost $77,750) | $ 2,690,000 | | 134,500 |
Money Market Funds - 7.1% |
| Shares | | |
Fidelity Cash Central Fund, 3.79% (b) | 2,086,183 | | 2,086,183 |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 23,685,098 | | 23,685,098 |
TOTAL MONEY MARKET FUNDS (Cost $25,771,281) | 25,771,281 |
TOTAL INVESTMENT PORTFOLIO - 105.0% (Cost $373,625,259) | | 383,734,851 |
NET OTHER ASSETS - (5.0)% | | (18,418,491) |
NET ASSETS - 100% | $ 365,316,360 |
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 | $ 124,472 |
Fidelity Securities Lending Cash Central Fund | 81,014 |
Total | $ 205,486 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 84.0% |
Bermuda | 4.8% |
Germany | 3.1% |
Switzerland | 2.3% |
France | 2.0% |
Netherlands | 1.5% |
Italy | 1.0% |
Others (individually less than 1%) | 1.3% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Industrials
Advisor Industrials Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2008 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $23,605,335) - See accompanying schedule: Unaffiliated issuers (cost $347,853,978) | $ 357,963,570 | |
Fidelity Central Funds (cost $25,771,281) | 25,771,281 | |
Total Investments (cost $373,625,259) | | $ 383,734,851 |
Receivable for investments sold | | 14,288,607 |
Receivable for fund shares sold | | 1,478,143 |
Dividends receivable | | 292,899 |
Distributions receivable from Fidelity Central Funds | | 49,525 |
Prepaid expenses | | 1,124 |
Other receivables | | 1,565 |
Total assets | | 399,846,714 |
| | |
Liabilities | | |
Payable for investments purchased | $ 9,505,505 | |
Payable for fund shares redeemed | 897,847 | |
Accrued management fee | 168,869 | |
Distribution fees payable | 147,582 | |
Other affiliated payables | 97,696 | |
Other payables and accrued expenses | 27,757 | |
Collateral on securities loaned, at value | 23,685,098 | |
Total liabilities | | 34,530,354 |
| | |
Net Assets | | $ 365,316,360 |
Net Assets consist of: | | |
Paid in capital | | $ 351,876,540 |
Undistributed net investment income | | 181,241 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 3,147,913 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 10,110,666 |
Net Assets | | $ 365,316,360 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
Calculation of Maximum
Offering Price Class A:
Net Asset Value and redemption price per share ($169,386,955 ÷ 7,639,762 shares) | | $ 22.17 |
| | |
Maximum offering price per share (100/94.25 of $22.17) | | $ 23.52 |
Class T:
Net Asset Value and redemption price per share ($73,994,892 ÷ 3,379,089 shares) | | $ 21.90 |
| | |
Maximum offering price per share (100/96.50 of $21.90) | | $ 22.69 |
Class B:
Net Asset Value and offering price per share ($41,307,792 ÷ 1,965,751 shares)A | | $ 21.01 |
| | |
Class C:
Net Asset Value and offering price per share ($56,677,182 ÷ 2,691,003 shares)A | | $ 21.06 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($23,949,539 ÷ 1,046,234 shares) | | $ 22.89 |
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, 2008 (Unaudited) |
Investment Income | | |
Dividends | | $ 2,624,444 |
Interest | | 20 |
Income from Fidelity Central Funds | | 205,486 |
Total income | | 2,829,950 |
| | |
Expenses | | |
Management fee | $ 1,054,918 | |
Transfer agent fees | 507,231 | |
Distribution fees | 933,354 | |
Accounting and security lending fees | 75,483 | |
Custodian fees and expenses | 15,783 | |
Independent trustees' compensation | 763 | |
Registration fees | 41,110 | |
Audit | 23,089 | |
Legal | 969 | |
Miscellaneous | 1,172 | |
Total expenses before reductions | 2,653,872 | |
Expense reductions | (5,169) | 2,648,703 |
Net investment income (loss) | | 181,247 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers (net of foreign taxes of $46,578) | 13,485,583 | |
Foreign currency transactions | (18,296) | |
Total net realized gain (loss) | | 13,467,287 |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $60) | (30,335,998) | |
Assets and liabilities in foreign currencies | 1,074 | |
Total change in net unrealized appreciation (depreciation) | | (30,334,924) |
Net gain (loss) | | (16,867,637) |
Net increase (decrease) in net assets resulting from operations | | $ (16,686,390) |
Statement of Changes in Net Assets
| Six months ended January 31, 2008 (Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 181,247 | $ 348,138 |
Net realized gain (loss) | 13,467,287 | 35,388,071 |
Change in net unrealized appreciation (depreciation) | (30,334,924) | 31,233,909 |
Net increase (decrease) in net assets resulting from operations | (16,686,390) | 66,970,118 |
Distributions to shareholders from net investment income | - | (473,352) |
Distributions to shareholders from net realized gain | (36,229,639) | (21,383,547) |
Total distributions | (36,229,639) | (21,856,899) |
Share transactions - net increase (decrease) | 63,556,082 | 61,861,883 |
Redemption fees | 5,593 | 14,915 |
Total increase (decrease) in net assets | 10,645,646 | 106,990,017 |
| | |
Net Assets | | |
Beginning of period | 354,670,714 | 247,680,697 |
End of period (including undistributed net investment income of $181,241 and distributions in excess of net investment income of $6, respectively) | $ 365,316,360 | $ 354,670,714 |
See accompanying notes which are an integral part of the financial statements.
Industrials
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 25.49 | $ 22.16 | $ 21.53 | $ 18.10 | $ 14.15 | $ 12.75 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .04 | .09 | .08 | .02 | (.02) | .06 |
Net realized and unrealized gain (loss) | (.90) | 5.11 | 1.63 | 4.35 | 3.96 | 1.36 |
Total from investment operations | (.86) | 5.20 | 1.71 | 4.37 | 3.94 | 1.42 |
Distributions from net investment income | - | (.06) | - | - | - | (.02) |
Distributions from net realized gain | (2.46) | (1.81) | (1.08) | (.94) | - | - |
Total distributions | (2.46) | (1.87) | (1.08) | (.94) | - | (.02) |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .01 | - I |
Net asset value, end of period | $ 22.17 | $ 25.49 | $ 22.16 | $ 21.53 | $ 18.10 | $ 14.15 |
Total Return B,C,D | (3.85)% | 25.13% | 8.40% | 25.04% | 27.92% | 11.16% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.16% A | 1.21% | 1.26% | 1.34% | 1.65% | 1.99% |
Expenses net of fee waivers, if any | 1.16% A | 1.21% | 1.26% | 1.34% | 1.50% | 1.53% |
Expenses net of all reductions | 1.15% A | 1.21% | 1.24% | 1.29% | 1.47% | 1.46% |
Net investment income (loss) | .34% A | .38% | .34% | .09% | (.12)% | .46% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 169,387 | $ 157,451 | $ 99,255 | $ 40,264 | $ 12,612 | $ 4,272 |
Portfolio turnover rate G | 97% A | 130% | 94% | 116% | 106% | 149% |
A Annualized BTotal 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 25.17 | $ 21.86 | $ 21.27 | $ 17.90 | $ 14.02 | $ 12.66 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .01 | .03 | .02 | (.03) | (.06) | .03 |
Net realized and unrealized gain (loss) | (.88) | 5.05 | 1.61 | 4.31 | 3.93 | 1.34 |
Total from investment operations | (.87) | 5.08 | 1.63 | 4.28 | 3.87 | 1.37 |
Distributions from net investment income | - | (.03) | - | - | - | (.01) |
Distributions from net realized gain | (2.40) | (1.74) | (1.04) | (.91) | - | - |
Total distributions | (2.40) | (1.77) | (1.04) | (.91) | - | (.01) |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .01 | - I |
Net asset value, end of period | $ 21.90 | $ 25.17 | $ 21.86 | $ 21.27 | $ 17.90 | $ 14.02 |
Total Return B,C,D | (3.95)% | 24.82% | 8.13% | 24.78% | 27.67% | 10.84% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.41% A | 1.46% | 1.49% | 1.57% | 1.90% | 2.25% |
Expenses net of fee waivers, if any | 1.41% A | 1.46% | 1.49% | 1.57% | 1.75% | 1.78% |
Expenses net of all reductions | 1.41% A | 1.46% | 1.47% | 1.52% | 1.72% | 1.71% |
Net investment income (loss) | .09% A | .13% | .11% | (.14)% | (.36)% | .22% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 73,995 | $ 75,530 | $ 55,936 | $ 40,126 | $ 13,089 | $ 5,493 |
Portfolio turnover rate G | 97% A | 130% | 94% | 116% | 106% | 149% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 24.19 | $ 21.02 | $ 20.55 | $ 17.27 | $ 13.61 | $ 12.33 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.09) | (.09) | (.13) | (.14) | (.03) |
Net realized and unrealized gain (loss) | (.85) | 4.87 | 1.55 | 4.17 | 3.79 | 1.31 |
Total from investment operations | (.90) | 4.78 | 1.46 | 4.04 | 3.65 | 1.28 |
Distributions from net realized gain | (2.28) | (1.61) | (.99) | (.76) | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .01 | - I |
Net asset value, end of period | $ 21.01 | $ 24.19 | $ 21.02 | $ 20.55 | $ 17.27 | $ 13.61 |
Total Return B,C,D | (4.23)% | 24.18% | 7.54% | 24.12% | 26.89% | 10.38% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.95% A | 2.00% | 2.04% | 2.11% | 2.37% | 2.68% |
Expenses net of fee waivers, if any | 1.95% A | 2.00% | 2.04% | 2.11% | 2.25% | 2.25% |
Expenses net of all reductions | 1.95% A | 2.00% | 2.02% | 2.07% | 2.22% | 2.18% |
Net investment income (loss) | (.45)% A | (.41)% | (.44)% | (.68)% | (.87)% | (.26)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 41,308 | $ 44,330 | $ 37,082 | $ 32,242 | $ 14,722 | $ 9,005 |
Portfolio turnover rate G | 97% A | 130% | 94% | 116% | 106% | 149% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 24.26 | $ 21.16 | $ 20.68 | $ 17.36 | $ 13.67 | $ 12.39 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.08) | (.08) | (.12) | (.14) | (.03) |
Net realized and unrealized gain (loss) | (.85) | 4.88 | 1.56 | 4.19 | 3.82 | 1.31 |
Total from investment operations | (.90) | 4.80 | 1.48 | 4.07 | 3.68 | 1.28 |
Distributions from net realized gain | (2.30) | (1.70) | (1.00) | (.75) | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .01 | - I |
Net asset value, end of period | $ 21.06 | $ 24.26 | $ 21.16 | $ 20.68 | $ 17.36 | $ 13.67 |
Total Return B,C,D | (4.21)% | 24.25% | 7.59% | 24.16% | 26.99% | 10.33% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.90% A | 1.94% | 1.99% | 2.07% | 2.28% | 2.57% |
Expenses net of fee waivers, if any | 1.90% A | 1.94% | 1.99% | 2.07% | 2.25% | 2.25% |
Expenses net of all reductions | 1.90% A | 1.94% | 1.97% | 2.02% | 2.22% | 2.18% |
Net investment income (loss) | (.40)% A | (.35)% | (.38)% | (.64)% | (.87)% | (.26)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 56,677 | $ 57,862 | $ 42,363 | $ 20,595 | $ 9,507 | $ 5,307 |
Portfolio turnover rate G | 97% A | 130% | 94% | 116% | 106% | 149% |
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.
Industrials
Financial Highlights - Institutional Class
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 26.26 | $ 22.77 | $ 22.06 | $ 18.48 | $ 14.41 | $ 12.96 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .08 | .16 | .16 | .07 | .02 | .09 |
Net realized and unrealized gain (loss) | (.92) | 5.27 | 1.66 | 4.46 | 4.04 | 1.39 |
Total from investment operations | (.84) | 5.43 | 1.82 | 4.53 | 4.06 | 1.48 |
Distributions from net investment income | - | (.13) | - | - | - | (.03) |
Distributions from net realized gain | (2.53) | (1.81) | (1.11) | (.95) | - | - |
Total distributions | (2.53) | (1.94) | (1.11) | (.95) | - | (.03) |
Redemption fees added to paid in capital D | - H | - H | - H | - H | .01 | - H |
Net asset value, end of period | $ 22.89 | $ 26.26 | $ 22.77 | $ 22.06 | $ 18.48 | $ 14.41 |
Total Return B,C | (3.69)% | 25.53% | 8.73% | 25.41% | 28.24% | 11.46% |
Ratios to Average Net Assets E,G | | | | | | |
Expenses before reductions | .87% A | .92% | .91% | 1.06% | 1.38% | 1.55% |
Expenses net of fee waivers, if any | .87% A | .92% | .91% | 1.06% | 1.25% | 1.25% |
Expenses net of all reductions | .87% A | .91% | .89% | 1.01% | 1.22% | 1.18% |
Net investment income (loss) | .63% A | .67% | .69% | .37% | .13% | .74% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 23,950 | $ 19,498 | $ 13,043 | $ 4,379 | $ 1,490 | $ 1,156 |
Portfolio turnover rate F | 97% A | 130% | 94% | 116% | 106% | 149% |
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, 2008 (Unaudited)
1. Organization.
Fidelity Advisor Industrials 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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
Industrials
3. Significant Accounting Policies - continued
Foreign Currency - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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 | $ 35,705,110 | |
Unrealized depreciation | (26,279,893) | |
Net unrealized appreciation (depreciation) | $ 9,425,217 | |
Cost for federal income tax purposes | $ 374,309,634 | |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to 0.75% 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 Pronouncement. 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.
4. 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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies - continued
Repurchase Agreements - continued
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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $207,084,220 and $182,166,086, respectively.
6. 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% | $ 215,813 | $ 15,603 |
Class T | .25% | .25% | 192,692 | - |
Class B | .75% | .25% | 223,518 | 167,638 |
Class C | .75% | .25% | 301,331 | 68,454 |
| | | $ 933,354 | $ 251,695 |
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 | $ 104,635 |
Class T | 9,830 |
Class B* | 31,902 |
Class C* | 3,040 |
| $ 149,407 |
* 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 | $ 229,632 | .27 |
Class T | 103,125 | .27 |
Class B | 68,910 | .31 |
Class C | 77,767 | .26 |
Institutional Class | 27,797 | .23 |
| $ 507,231 | |
* Annualized
Industrials
6. 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.
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 $3,926 for the period.
7. 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 $477 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. 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 $81,014.
9. 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 $1,879 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 $2,789. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction | |
Class A | $ 501 | |
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $9,115.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Other - continued
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
From net investment income | | |
Class A | $ - | $ 317,175 |
Class T | - | 81,458 |
Institutional Class | - | 74,719 |
Total | $ - | $ 473,352 |
From net realized gain | | |
Class A | $ 16,681,958 | $ 9,177,798 |
Class T | 7,329,612 | 4,598,164 |
Class B | 4,260,086 | 2,897,402 |
Class C | 5,759,701 | 3,663,404 |
Institutional Class | 2,198,282 | 1,046,779 |
Total | $ 36,229,639 | $ 21,383,547 |
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2008 | Year ended
July 31,
2007 | Six months ended January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 1,900,071 | 3,210,590 | $ 46,285,461 | $ 74,239,252 |
Reinvestment of distributions | 645,527 | 397,118 | 15,366,127 | 8,609,345 |
Shares redeemed | (1,082,770) | (1,910,674) | (25,693,196) | (44,327,457) |
Net increase (decrease) | 1,462,828 | 1,697,034 | $ 35,958,392 | $ 38,521,140 |
Class T | | | | |
Shares sold | 460,530 | 851,649 | $ 11,015,906 | $ 19,483,528 |
Reinvestment of distributions | 292,360 | 204,709 | 6,876,189 | 4,388,662 |
Shares redeemed | (374,663) | (614,792) | (8,647,912) | (14,036,675) |
Net increase (decrease) | 378,227 | 441,566 | $ 9,244,183 | $ 9,835,515 |
Class B | | | | |
Shares sold | 227,618 | 490,419 | $ 5,245,486 | $ 10,776,085 |
Reinvestment of distributions | 159,890 | 118,628 | 3,612,025 | 2,452,560 |
Shares redeemed | (254,224) | (540,505) | (5,732,609) | (11,926,256) |
Net increase (decrease) | 133,284 | 68,542 | $ 3,124,902 | $ 1,302,389 |
Class C | | | | |
Shares sold | 499,024 | 809,623 | $ 11,520,936 | $ 17,844,285 |
Reinvestment of distributions | 198,290 | 135,846 | 4,489,227 | 2,814,613 |
Shares redeemed | (391,622) | (562,223) | (8,754,715) | (12,468,615) |
Net increase (decrease) | 305,692 | 383,246 | $ 7,255,448 | $ 8,190,283 |
Institutional Class | | | | |
Shares sold | 461,195 | 466,987 | $ 11,760,754 | $ 11,092,441 |
Reinvestment of distributions | 66,827 | 33,033 | 1,640,412 | 737,185 |
Shares redeemed | (224,211) | (330,519) | (5,428,009) | (7,817,070) |
Net increase (decrease) | 303,811 | 169,501 | $ 7,973,157 | $ 4,012,556 |
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 844.80 | $ 5.56 |
HypotheticalA | $ 1,000.00 | $ 1,019.10 | $ 6.09 |
Class T | | | |
Actual | $ 1,000.00 | $ 843.70 | $ 6.72 |
HypotheticalA | $ 1,000.00 | $ 1,017.85 | $ 7.35 |
Class B | | | |
Actual | $ 1,000.00 | $ 841.40 | $ 8.98 |
HypotheticalA | $ 1,000.00 | $ 1,015.38 | $ 9.83 |
Class C | | | |
Actual | $ 1,000.00 | $ 841.50 | $ 8.98 |
HypotheticalA | $ 1,000.00 | $ 1,015.38 | $ 9.83 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 845.70 | $ 4.22 |
HypotheticalA | $ 1,000.00 | $ 1,020.56 | $ 4.62 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.20% |
Class T | 1.45% |
Class B | 1.94% |
Class C | 1.94% |
Institutional Class | .91% |
Semiannual Report
Advisor Technology Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Cisco Systems, Inc. | 10.7 | 2.8 |
Nintendo Co. Ltd. | 7.5 | 1.4 |
Nokia Corp. sponsored ADR | 4.5 | 0.5 |
Google, Inc. Class A (sub. vtg.) | 3.5 | 5.9 |
Marvell Technology Group Ltd. | 3.1 | 5.1 |
Apple, Inc. | 3.0 | 4.3 |
High Tech Computer Corp. | 2.4 | 0.2 |
Mindray Medical International Ltd. sponsored ADR | 2.3 | 0.0 |
Research In Motion Ltd. | 2.0 | 2.5 |
Corning, Inc. | 2.0 | 0.9 |
| 41.0 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Communications Equipment | 30.0% | |
| Semiconductors & Semiconductor Equipment | 22.0% | |
| Software | 19.4% | |
| Computers & Peripherals | 8.6% | |
| Internet Software & Services | 6.6% | |
| All Others* | 13.4% | |
|
As of July 31, 2007 |
| Semiconductors & Semiconductor Equipment | 32.0% | |
| Communications Equipment | 24.9% | |
| Computers & Peripherals | 12.0% | |
| Internet Software & Services | 9.5% | |
| Software | 9.1% | |
| All Others* | 12.5% | |
* Includes short-term investments and net other assets. |
Technology
Advisor Technology Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.5% |
| Shares | | Value |
COMMERCIAL SERVICES & SUPPLIES - 0.5% |
Diversified Commercial & Professional Services - 0.5% |
China Security & Surveillance Technology, Inc. (a)(c) | 185,939 | | $ 2,941,555 |
COMMUNICATIONS EQUIPMENT - 29.8% |
Communications Equipment - 29.8% |
ADVA AG Optical Networking (a) | 442,449 | | 1,518,090 |
Airvana, Inc. | 223,413 | | 1,168,450 |
Arris Group, Inc. (a) | 88,400 | | 777,036 |
Aruba Networks, Inc. | 9,800 | | 92,708 |
AudioCodes Ltd. (a) | 557,550 | | 2,614,910 |
Balda AG (a)(c) | 111,500 | | 956,848 |
Cisco Systems, Inc. (a) | 2,779,100 | | 68,087,949 |
Comtech Group, Inc. (a) | 450,667 | | 4,849,177 |
Comverse Technology, Inc. (a) | 326,000 | | 5,330,100 |
Corning, Inc. (c) | 526,200 | | 12,665,634 |
Delta Networks, Inc. | 1,875,000 | | 541,042 |
F5 Networks, Inc. (a) | 123,600 | | 2,908,308 |
Finisar Corp. (a) | 1,025,471 | | 1,640,754 |
Foxconn International Holdings Ltd. (a) | 1,756,000 | | 2,896,096 |
Harris Stratex Networks, Inc. Class A (a) | 190,600 | | 2,075,634 |
Infinera Corp. | 111,700 | | 1,138,223 |
Juniper Networks, Inc. (a) | 257,846 | | 7,000,519 |
Mogem Co. Ltd. | 309,043 | | 1,052,681 |
Nokia Corp. sponsored ADR | 770,000 | | 28,451,500 |
Opnext, Inc. | 102,700 | | 529,932 |
Optium Corp. (a) | 158,400 | | 1,094,544 |
OZ Optics Ltd. unit (d) | 68,000 | | 821,100 |
Powerwave Technologies, Inc. (a) | 1,060,700 | | 4,030,660 |
QUALCOMM, Inc. | 156,500 | | 6,638,730 |
RADWARE Ltd. (a) | 79,000 | | 1,105,210 |
Research In Motion Ltd. (a) | 136,210 | | 12,787,396 |
Riverbed Technology, Inc. (a) | 73,800 | | 1,649,430 |
SIM Technology Group | 5,180,000 | | 856,972 |
Sonus Networks, Inc. (a)(c) | 2,178,200 | | 8,908,838 |
Starent Networks Corp. | 455,212 | | 5,626,420 |
| | 189,814,891 |
COMPUTERS & PERIPHERALS - 8.6% |
Computer Hardware - 6.2% |
3PAR, Inc. | 5,900 | | 46,787 |
Apple, Inc. (a) | 143,155 | | 19,377,461 |
Foxconn Technology Co. Ltd. | 78,000 | | 447,335 |
Hewlett-Packard Co. | 87,100 | | 3,810,625 |
High Tech Computer Corp. | 795,600 | | 14,998,429 |
Palm, Inc. | 170,500 | | 924,110 |
| | 39,604,747 |
Computer Storage & Peripherals - 2.4% |
ASUSTeK Computer, Inc. | 1,127,278 | | 2,939,569 |
Innolux Display Corp. | 639,171 | | 1,371,923 |
|
| Shares | | Value |
Netezza Corp. | 207,700 | | $ 2,035,460 |
Network Appliance, Inc. (a) | 116,500 | | 2,705,130 |
Synaptics, Inc. (a) | 238,800 | | 6,328,200 |
| | 15,380,282 |
TOTAL COMPUTERS & PERIPHERALS | | 54,985,029 |
DIVERSIFIED CONSUMER SERVICES - 1.4% |
Education Services - 1.4% |
New Oriental Education & Technology Group, Inc. sponsored ADR (a) | 155,000 | | 8,780,750 |
ELECTRICAL EQUIPMENT - 2.9% |
Electrical Components & Equipment - 2.9% |
First Solar, Inc. (a) | 29,800 | | 5,416,746 |
JA Solar Holdings Co. Ltd. ADR | 71,400 | | 3,629,262 |
Neo-Neon Holdings Ltd. | 4,976,000 | | 3,031,247 |
Q-Cells AG (a) | 1,200 | | 112,918 |
Seoul Semiconductor Co. Ltd. | 26,639 | | 396,544 |
Sunpower Corp. Class A (a) | 29,200 | | 2,017,428 |
Suntech Power Holdings Co. Ltd. sponsored ADR (a) | 68,200 | | 3,732,586 |
| | 18,336,731 |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 2.0% |
Electronic Equipment & Instruments - 0.5% |
Chi Mei Optoelectronics Corp. | 1,723,920 | | 2,032,377 |
Cyntec Co. Ltd. | 504,637 | | 466,868 |
ENE Technology, Inc. | 66,000 | | 151,700 |
TXC Corp. | 444,000 | | 575,904 |
| | 3,226,849 |
Technology Distributors - 1.5% |
Ingram Micro, Inc. Class A (a) | 119,400 | | 2,122,932 |
Mellanox Technologies Ltd. | 193,800 | | 3,067,854 |
Mingyuan Medicare Development Co. Ltd. (c) | 26,750,000 | | 4,151,037 |
| | 9,341,823 |
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS | | 12,568,672 |
HEALTH CARE EQUIPMENT & SUPPLIES - 2.6% |
Health Care Equipment - 2.5% |
Golden Meditech Co. Ltd. | 3,380,000 | | 1,369,781 |
Mindray Medical International Ltd. sponsored ADR | 437,900 | | 14,932,390 |
| | 16,302,171 |
Health Care Supplies - 0.1% |
Shandong Weigao Group Medical Polymer Co. Ltd. (H Shares) | 356,000 | | 600,832 |
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | | 16,903,003 |
HEALTH CARE PROVIDERS & SERVICES - 0.0% |
Health Care Services - 0.0% |
athenahealth, Inc. | 600 | | 18,840 |
Common Stocks - continued |
| Shares | | Value |
HOTELS, RESTAURANTS & LEISURE - 2.1% |
Hotels, Resorts & Cruise Lines - 2.1% |
Ctrip.com International Ltd. sponsored ADR | 177,100 | | $ 8,086,386 |
Home Inns & Hotels Management, Inc. ADR (a)(c) | 194,700 | | 5,449,653 |
| | 13,536,039 |
HOUSEHOLD DURABLES - 0.6% |
Consumer Electronics - 0.6% |
Harman International Industries, Inc. | 65,900 | | 3,068,963 |
TomTom Group BV (a) | 12,900 | | 712,100 |
| | 3,781,063 |
INTERNET SOFTWARE & SERVICES - 6.6% |
Internet Software & Services - 6.6% |
Akamai Technologies, Inc. (a) | 167,900 | | 5,070,580 |
Alibaba.com Ltd. | 738,000 | | 1,747,171 |
DealerTrack Holdings, Inc. (a) | 12,300 | | 331,608 |
Google, Inc. Class A (sub. vtg.) (a) | 39,750 | | 22,430,925 |
Greenfield Online, Inc. (a) | 89,700 | | 1,153,542 |
LivePerson, Inc. (a) | 454,600 | | 1,772,940 |
Omniture, Inc. (a) | 262,108 | | 6,479,310 |
Tencent Holdings Ltd. | 555,000 | | 3,277,706 |
| | 42,263,782 |
IT SERVICES - 0.8% |
Data Processing & Outsourced Services - 0.6% |
ExlService Holdings, Inc. (a)(c) | 88,900 | | 1,687,322 |
WNS Holdings Ltd. ADR (a) | 114,500 | | 1,993,445 |
| | 3,680,767 |
IT Consulting & Other Services - 0.2% |
RightNow Technologies, Inc. (a) | 170,648 | | 1,745,729 |
TOTAL IT SERVICES | | 5,426,496 |
MACHINERY - 0.2% |
Industrial Machinery - 0.2% |
Hi-P International Ltd. | 2,622,000 | | 767,911 |
Shin Zu Shing Co. Ltd. | 135,000 | | 595,031 |
| | 1,362,942 |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 22.0% |
Semiconductor Equipment - 6.6% |
Applied Materials, Inc. | 626,800 | | 11,232,256 |
ASML Holding NV (NY Shares) (a) | 185,300 | | 4,927,127 |
Cymer, Inc. (a) | 89,400 | | 2,414,694 |
Global Unichip Corp. | 362,807 | | 1,651,120 |
Lam Research Corp. (a) | 18,300 | | 702,537 |
LTX Corp. (a) | 400,965 | | 1,082,606 |
MEMC Electronic Materials, Inc. (a) | 22,300 | | 1,593,558 |
MEMSIC, Inc. | 75,700 | | 522,330 |
|
| Shares | | Value |
Tessera Technologies, Inc. (a)(c) | 197,300 | | $ 7,728,241 |
Varian Semiconductor Equipment Associates, Inc. (a) | 318,400 | | 10,255,664 |
| | 42,110,133 |
Semiconductors - 15.4% |
Advanced Analog Technology, Inc. | 554,500 | | 1,527,990 |
Advanced Micro Devices, Inc. (a)(c) | 357,236 | | 2,729,283 |
Advanced Semiconductor Engineering, Inc. sponsored ADR (c) | 373,000 | | 1,588,980 |
Amkor Technology, Inc. (a) | 215,600 | | 1,647,184 |
Anpec Electronics Corp. | 192,677 | | 363,482 |
Applied Micro Circuits Corp. (a) | 173,250 | | 1,391,198 |
Atheros Communications, Inc. (a) | 222,400 | | 6,073,744 |
AuthenTec, Inc. (c) | 154,900 | | 1,928,505 |
Bright Led Electronics Corp. | 170,000 | | 321,432 |
Broadcom Corp. Class A (a) | 344,122 | | 7,598,214 |
Cavium Networks, Inc. | 357,331 | | 6,828,595 |
Cypress Semiconductor Corp. (a) | 576,300 | | 12,246,375 |
Diodes, Inc. (a) | 29,100 | | 673,665 |
Elan Microelectronics Corp. | 195,000 | | 252,778 |
Epistar Corp. | 1,749,913 | | 4,192,502 |
Faraday Technology Corp. | 283,000 | | 441,519 |
Formosa Epitaxy, Inc. (a) | 1,120,000 | | 692,670 |
Global Mixed-mode Technology, Inc. | 400,900 | | 1,792,755 |
Hittite Microwave Corp. (a) | 63,600 | | 2,532,552 |
Intersil Corp. Class A | 27,100 | | 624,113 |
Marvell Technology Group Ltd. (a) | 1,668,800 | | 19,808,656 |
MediaTek, Inc. | 99,000 | | 986,202 |
Microchip Technology, Inc. | 84,200 | | 2,686,822 |
Mindspeed Technologies, Inc. (a) | 2,939,215 | | 2,401,339 |
MoSys, Inc. (a) | 32,100 | | 116,523 |
Omnivision Technologies, Inc. (a)(c) | 151,600 | | 2,146,656 |
PLX Technology, Inc. (a) | 45,400 | | 318,708 |
PMC-Sierra, Inc. (a) | 350,065 | | 1,641,805 |
Powertech Technology, Inc. | 547,000 | | 1,599,362 |
Richtek Technology Corp. | 512,850 | | 3,538,407 |
Silicon Laboratories, Inc. (a) | 46,400 | | 1,449,536 |
Siliconware Precision Industries Co. Ltd. sponsored ADR | 214,300 | | 1,658,682 |
Spreadtrum Communications, Inc. ADR (c) | 7,100 | | 67,450 |
Taiwan Semiconductor Co. Ltd. | 704,000 | | 617,686 |
Taiwan Semiconductor Manufacturing Co. Ltd. | 4,449 | | 8,335 |
Xilinx, Inc. | 173,900 | | 3,803,193 |
| | 98,296,898 |
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | | 140,407,031 |
SOFTWARE - 19.4% |
Application Software - 4.5% |
Ansys, Inc. (a) | 61,700 | | 2,153,947 |
BladeLogic, Inc. | 71,563 | | 1,175,780 |
Common Stocks - continued |
| Shares | | Value |
SOFTWARE - CONTINUED |
Application Software - continued |
Cadence Design Systems, Inc. (a) | 92,500 | | $ 938,875 |
Callidus Software, Inc. (a) | 499,298 | | 2,461,539 |
Concur Technologies, Inc. (a) | 137,000 | | 4,803,220 |
Global Digital Creations Holdings Ltd. (a) | 7,908,000 | | 1,288,006 |
Longtop Financial Technologies Ltd. ADR | 91,100 | | 1,662,575 |
Mentor Graphics Corp. (a) | 66,300 | | 546,975 |
Salesforce.com, Inc. (a) | 122,400 | | 6,399,072 |
Smith Micro Software, Inc. (a)(c) | 485,900 | | 3,658,827 |
SuccessFactors, Inc. | 5,200 | | 46,852 |
Synopsys, Inc. (a) | 52,500 | | 1,156,050 |
Ulticom, Inc. (a) | 359,426 | | 2,569,896 |
| | 28,861,614 |
Home Entertainment Software - 10.7% |
Activision, Inc. (a) | 275,100 | | 7,116,837 |
Nintendo Co. Ltd. | 97,200 | | 48,016,802 |
Nintendo Co. Ltd. ADR | 66,100 | | 4,081,675 |
Take-Two Interactive Software, Inc. (a) | 202,100 | | 3,322,524 |
THQ, Inc. (a) | 323,840 | | 5,832,358 |
| | 68,370,196 |
Systems Software - 4.2% |
Allot Communications Ltd. (a) | 100,000 | | 397,000 |
Microsoft Corp. | 101,900 | | 3,321,940 |
Moldflow Corp. (a) | 37,300 | | 487,138 |
Oracle Corp. (a) | 311,000 | | 6,391,050 |
Sandvine Corp. (a) | 1,239,900 | | 4,608,467 |
Sandvine Corp. (U.K.) (a) | 1,078,100 | | 3,972,903 |
VMware, Inc. Class A (c) | 128,600 | | 7,285,190 |
| | 26,463,688 |
TOTAL SOFTWARE | | 123,695,498 |
TOTAL COMMON STOCKS (Cost $790,523,404) | 634,822,322 |
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 | | 1,135,877 |
Money Market Funds - 3.9% |
| Shares | | |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c)
(Cost $24,956,475) | 24,956,475 | | 24,956,475 |
Cash Equivalents - 1.1% |
| Maturity Amount | | Value |
Investments in repurchase agreements in a joint trading account at 1.69%, dated 1/31/08 due 2/1/08 (Collateralized by U.S. Government Obligations) #
(Cost $6,794,000) | $ 6,794,319 | | $ 6,794,000 |
TOTAL INVESTMENT PORTFOLIO - 104.7% (Cost $823,543,879) | | 667,708,674 |
NET OTHER ASSETS - (4.7)% | | (29,866,978) |
NET ASSETS - 100% | $ 637,841,696 |
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) Security or a portion of the security is on loan at period end. |
(d) 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 $821,100 or 0.1% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
OZ Optics Ltd. unit | 8/18/00 | $ 1,003,680 |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty | Value |
$6,794,000 due 2/01/08 at 1.69% |
Banc of America Securities LLC | $ 1,483,191 |
Barclays Capital, Inc. | 2,139,076 |
ING Financial Markets LLC | 3,171,733 |
| $ 6,794,000 |
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 | $ 72,759 |
Fidelity Securities Lending Cash Central Fund | 302,719 |
Total | $ 375,478 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 60.2% |
Japan | 8.2% |
Cayman Islands | 7.8% |
Taiwan | 7.1% |
Finland | 4.5% |
Bermuda | 4.1% |
Canada | 3.4% |
China | 1.4% |
Israel | 1.2% |
Others (individually less than 1%) | 2.1% |
| 100.0% |
Income Tax Information |
At July 31, 2007, the fund had a capital loss carryforward of approximately $1,419,316,323 of which $919,509,540 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.
Technology
Advisor Technology Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2008 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $24,230,139 and repurchase agreements of $6,794,000) - See accompanying schedule: Unaffiliated issuers (cost $798,587,404) | $ 642,752,199 | |
Fidelity Central Funds (cost $24,956,475) | 24,956,475 | |
Total Investments (cost $823,543,879) | | $ 667,708,674 |
Cash | | 933 |
Receivable for investments sold | | 37,104,775 |
Receivable for fund shares sold | | 1,177,320 |
Dividends receivable | | 13,563 |
Interest receivable | | 785 |
Distributions receivable from Fidelity Central Funds | | 73,818 |
Prepaid expenses | | 2,456 |
Other receivables | | 73,660 |
Total assets | | 706,155,984 |
| | |
Liabilities | | |
Payable for investments purchased | $ 24,825,142 | |
Payable for fund shares redeemed | 2,139,876 | |
Accrued management fee | 316,046 | |
Distribution fees payable | 276,775 | |
Notes payable to affiliates | 15,532,000 | |
Other affiliated payables | 219,607 | |
Other payables and accrued expenses | 48,367 | |
Collateral on securities loaned, at value | 24,956,475 | |
Total liabilities | | 68,314,288 |
| | |
Net Assets | | $ 637,841,696 |
Net Assets consist of: | | |
Paid in capital | | $ 2,174,101,231 |
Accumulated net investment loss | | (4,124,505) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (1,376,300,032) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (155,834,998) |
Net Assets | | $ 637,841,696 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
Calculation of Maximum
Offering Price Class A:
Net Asset Value and redemption price per share ($268,850,599 ÷ 15,487,178 shares) | | $ 17.36 |
| | |
Maximum offering price per share (100/94.25 of $17.36) | | $ 18.42 |
Class T:
Net Asset Value and redemption price per share ($210,786,409 ÷ 12,435,352 shares) | | $ 16.95 |
| | |
Maximum offering price per share (100/96.50 of $16.95) | | $ 17.56 |
Class B:
Net Asset Value and offering price per share ($66,193,881 ÷ 4,118,866 shares)A | | $ 16.07 |
| | |
Class C:
Net Asset Value and offering price per share ($70,718,762 ÷ 4,381,106 shares)A | | $ 16.14 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($21,292,045 ÷ 1,183,963 shares) | | $ 17.98 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Technology Fund
Financial Statements - continued
Statement of Operations
| Six months ended January 31, 2008 (Unaudited) |
Investment Income | | |
Dividends | | $ 1,112,657 |
Interest | | 5,307 |
Income from Fidelity Central Funds (including $302,719 from security lending) | | 375,478 |
Total income | | 1,493,442 |
| | |
Expenses | | |
Management fee | $ 2,197,058 | |
Transfer agent fees | 1,222,234 | |
Distribution fees | 1,959,982 | |
Accounting and security lending fees | 141,022 | |
Custodian fees and expenses | 87,817 | |
Independent trustees' compensation | 1,638 | |
Registration fees | 35,782 | |
Audit | 34,427 | |
Legal | 3,076 | |
Interest | 8,072 | |
Miscellaneous | 3,025 | |
Total expenses before reductions | 5,694,133 | |
Expense reductions | (76,474) | 5,617,659 |
Net investment income (loss) | | (4,124,217) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 47,951,897 | |
Foreign currency transactions | (10,619) | |
Total net realized gain (loss) | | 47,941,278 |
Change in net unrealized appreciation (depreciation) on: Investment securities | (164,263,370) | |
Assets and liabilities in foreign currencies | (1,324) | |
Total change in net unrealized appreciation (depreciation) | | (164,264,694) |
Net gain (loss) | | (116,323,416) |
Net increase (decrease) in net assets resulting from operations | | $ (120,447,633) |
Statement of Changes in Net Assets
| Six months ended January 31, 2008 (Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (4,124,217) | $ (9,596,456) |
Net realized gain (loss) | 47,941,278 | 101,139,166 |
Change in net unrealized appreciation (depreciation) | (164,264,694) | 120,841,656 |
Net increase (decrease) in net assets resulting from operations | (120,447,633) | 212,384,366 |
Share transactions - net increase (decrease) | (21,914,211) | (169,547,974) |
Redemption fees | 20,193 | 20,415 |
Total increase (decrease) in net assets | (142,341,651) | 42,856,807 |
| | |
Net Assets | | |
Beginning of period | 780,183,347 | 737,326,540 |
End of period (including accumulated net investment loss of $4,124,505 and accumulated net investment loss
of $288, respectively) | $ 637,841,696 | $ 780,183,347 |
See accompanying notes which are an integral part of the financial statements.
Technology
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.55 | $ 15.59 | $ 16.16 | $ 13.98 | $ 13.36 | $ 10.03 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.08) | (.17) | (.15) | .02 H | (.17) | (.11) |
Net realized and unrealized gain (loss) | (3.11) | 5.13 | (.42) | 2.24 | .79 | 3.44 |
Total from investment operations | (3.19) | 4.96 | (.57) | 2.26 | .62 | 3.33 |
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 | $ 17.36 | $ 20.55 | $ 15.59 | $ 16.16 | $ 13.98 | $ 13.36 |
Total Return B,C,D | (15.52)% | 31.82% | (3.53)% | 16.20% | 4.64% | 33.20% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.20% A | 1.25% | 1.30% | 1.37% | 1.44% | 1.70% |
Expenses net of fee waivers, if any | 1.20% A | 1.25% | 1.30% | 1.37% | 1.44% | 1.59% |
Expenses net of all reductions | 1.17% A | 1.24% | 1.20% | 1.26% | 1.35% | 1.38% |
Net investment income (loss) | (.80)% A | (.91)% | (.88)% | .12% H | (1.10)% | (1.03)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 268,851 | $ 309,105 | $ 189,054 | $ 144,970 | $ 123,389 | $ 123,604 |
Portfolio turnover rate G | 236% A | 208% | 258% | 180% | 105% | 140% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.09 | $ 15.28 | $ 15.88 | $ 13.76 | $ 13.17 | $ 9.91 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.11) | (.21) | (.19) | (.02) H | (.19) | (.14) |
Net realized and unrealized gain (loss) | (3.03) | 5.02 | (.41) | 2.21 | .78 | 3.40 |
Total from investment operations | (3.14) | 4.81 | (.60) | 2.19 | .59 | 3.26 |
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 | $ 16.95 | $ 20.09 | $ 15.28 | $ 15.88 | $ 13.76 | $ 13.17 |
Total Return B,C,D | (15.63)% | 31.48% | (3.78)% | 15.94% | 4.48% | 32.90% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.45% A | 1.51% | 1.55% | 1.60% | 1.62% | 1.85% |
Expenses net of fee waivers, if any | 1.45% A | 1.51% | 1.55% | 1.60% | 1.62% | 1.83% |
Expenses net of all reductions | 1.43% A | 1.49% | 1.44% | 1.48% | 1.53% | 1.63% |
Net investment income (loss) | (1.05)% A | (1.16)% | (1.13)% | (.11)% H | (1.28)% | (1.28)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 210,786 | $ 260,339 | $ 260,966 | $ 315,930 | $ 363,399 | $ 367,257 |
Portfolio turnover rate G | 236% A | 208% | 258% | 180% | 105% | 140% |
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.
Semiannual Report
Financial Highlights - Class B
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 19.10 | $ 14.59 | $ 15.24 | $ 13.25 | $ 12.76 | $ 9.64 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.15) | (.28) | (.27) | (.09) H | (.27) | (.17) |
Net realized and unrealized gain (loss) | (2.88) | 4.79 | (.38) | 2.12 | .76 | 3.29 |
Total from investment operations | (3.03) | 4.51 | (.65) | 2.03 | .49 | 3.12 |
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 | $ 16.07 | $ 19.10 | $ 14.59 | $ 15.24 | $ 13.25 | $ 12.76 |
Total Return B,C,D | (15.86)% | 30.91% | (4.27)% | 15.33% | 3.84% | 32.37% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.94% A | 2.01% | 2.05% | 2.13% | 2.21% | 2.38% |
Expenses net of fee waivers, if any | 1.94% A | 2.01% | 2.05% | 2.13% | 2.21% | 2.25% |
Expenses net of all reductions | 1.92% A | 2.00% | 1.94% | 2.02% | 2.12% | 2.05% |
Net investment income (loss) | (1.55)% A | (1.67)% | (1.63)% | (.65)% H | (1.87)% | (1.69)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 66,194 | $ 102,655 | $ 192,790 | $ 309,020 | $ 355,927 | $ 391,832 |
Portfolio turnover rate G | 236% A | 208% | 258% | 180% | 105% | 140% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 19.18 | $ 14.66 | $ 15.31 | $ 13.31 | $ 12.80 | $ 9.67 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.15) | (.29) | (.27) | (.08) H | (.26) | (.17) |
Net realized and unrealized gain (loss) | (2.89) | 4.81 | (.38) | 2.12 | .77 | 3.30 |
Total from investment operations | (3.04) | 4.52 | (.65) | 2.04 | .51 | 3.13 |
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 | $ 16.14 | $ 19.18 | $ 14.66 | $ 15.31 | $ 13.31 | $ 12.80 |
Total Return B,C,D | (15.85)% | 30.83% | (4.25)% | 15.34% | 3.98% | 32.37% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.94% A | 2.01% | 2.05% | 2.10% | 2.13% | 2.28% |
Expenses net of fee waivers, if any | 1.94% A | 2.01% | 2.05% | 2.10% | 2.13% | 2.25% |
Expenses net of all reductions | 1.92% A | 1.99% | 1.94% | 1.99% | 2.04% | 2.05% |
Net investment income (loss) | (1.55)% A | (1.66)% | (1.63)% | (.61)% H | (1.79)% | (1.69)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 70,719 | $ 86,974 | $ 82,835 | $ 108,287 | $ 125,926 | $ 139,654 |
Portfolio turnover rate G | 236% A | 208% | 258% | 180% | 105% | 140% |
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.
Technology
Financial Highlights - Institutional Class
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.26 | $ 16.07 | $ 16.60 | $ 14.32 | $ 13.61 | $ 10.15 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | (.06) | (.11) | (.09) | .09 G | (.09) | (.05) |
Net realized and unrealized gain (loss) | (3.22) | 5.30 | (.44) | 2.30 | .80 | 3.51 |
Total from investment operations | (3.28) | 5.19 | (.53) | 2.39 | .71 | 3.46 |
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 | $ 17.98 | $ 21.26 | $ 16.07 | $ 16.60 | $ 14.32 | $ 13.61 |
Total Return B,C | (15.43)% | 32.30% | (3.19)% | 16.73% | 5.22% | 34.09% |
Ratios to Average Net Assets E,H | | | | | | |
Expenses before reductions | .91% A | .93% | .90% | .92% | .93% | .99% |
Expenses net of fee waivers, if any | .91% A | .93% | .90% | .92% | .93% | .99% |
Expenses net of all reductions | .89% A | .92% | .80% | .81% | .84% | .79% |
Net investment income (loss) | (.51)% A | (.59)% | (.49)% | .57% G | (.59)% | (.43)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 21,292 | $ 21,111 | $ 11,681 | $ 11,640 | $ 10,984 | $ 11,511 |
Portfolio turnover rate F | 236% A | 208% | 258% | 180% | 105% | 140% |
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.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
1. Organization.
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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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 available 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.
Technology
3. Significant Accounting Policies - continued
Foreign Currency - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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 | $ 22,276,055 | |
Unrealized depreciation | (181,623,293) | |
Net unrealized appreciation (depreciation) | $ (159,347,238) | |
Cost for federal income tax purposes | $ 827,055,912 | |
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. 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 Pronouncement. 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.
4. 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
4. Operating Policies - continued
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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $929,762,380 and $956,887,405, respectively.
6. 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% | $ 402,371 | $ 11,107 |
Class T | .25% | .25% | 652,410 | - |
Class B | .75% | .25% | 466,567 | 349,926 |
Class C | .75% | .25% | 438,634 | 25,327 |
| | | $ 1,959,982 | $ 386,360 |
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 | $ 39,935 |
Class T | 13,518 |
Class B* | 44,611 |
Class C* | 3,749 |
| $ 101,813 |
* 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 | $ 499,038 | .31 |
Class T | 407,933 | .31 |
Class B | 144,159 | .31 |
Class C | 135,850 | .31 |
Institutional Class | 35,254 | .28 |
| $ 1,222,234 | |
* Annualized
Technology
6. 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.
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 $23,783 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. Any open loans, including accrued interest, at period end are presented under the caption "Notes Payable to Affiliates" in the Fund's Statement of Assets and Liabilities. 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 | $ 7,130,000 | 4.53% | $ 8,072 |
7. 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 $1,044 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. 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.
9. 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 $68,011 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 | $ 6,307 | |
Class B | 502 | |
Class C | 1,238 | |
Institutional Class | 416 | |
| $ 8,463 | |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $258,686.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2008 | Year ended
July 31,
2007 | Six months ended January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 2,629,593 | 7,888,385 | $ 55,246,092 | $ 145,922,304 |
Shares redeemed | (2,182,096) | (4,978,587) | (44,675,478) | (92,460,573) |
Net increase (decrease) | 447,497 | 2,909,798 | $ 10,570,614 | $ 53,461,731 |
Class T | | | | |
Shares sold | 1,326,161 | 1,926,573 | $ 27,323,427 | $ 34,966,338 |
Shares redeemed | (1,846,396) | (6,053,307) | (37,111,253) | (109,073,221) |
Net increase (decrease) | (520,235) | (4,126,734) | $ (9,787,826) | $ (74,106,883) |
Class B | | | | |
Shares sold | 289,808 | 357,014 | $ 5,630,459 | $ 6,182,320 |
Shares redeemed | (1,546,226) | (8,194,716) | (30,083,371) | (140,978,328) |
Net increase (decrease) | (1,256,418) | (7,837,702) | $ (24,452,912) | $ (134,796,008) |
Class C | | | | |
Shares sold | 380,719 | 490,290 | $ 7,562,330 | $ 8,483,174 |
Shares redeemed | (533,581) | (1,608,094) | (10,172,311) | (27,833,773) |
Net increase (decrease) | (152,862) | (1,117,804) | $ (2,609,981) | $ (19,350,599) |
Institutional Class | | | | |
Shares sold | 407,388 | 640,632 | $ 8,867,277 | $ 12,507,491 |
Shares redeemed | (216,397) | (374,535) | (4,501,383) | (7,263,706) |
Net increase (decrease) | 190,991 | 266,097 | $ 4,365,894 | $ 5,243,785 |
Technology
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,043.70 | $ 6.11 |
HypotheticalA | $ 1,000.00 | $ 1,019.15 | $ 6.04 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,042.10 | $ 7.49 |
HypotheticalA | $ 1,000.00 | $ 1,017.80 | $ 7.41 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,039.70 | $ 9.95 |
HypotheticalA | $ 1,000.00 | $ 1,015.38 | $ 9.83 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,039.50 | $ 9.89 |
HypotheticalA | $ 1,000.00 | $ 1,015.43 | $ 9.78 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,045.50 | $ 4.52 |
HypotheticalA | $ 1,000.00 | $ 1,020.71 | $ 4.47 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.19% |
Class T | 1.46% |
Class B | 1.94% |
Class C | 1.93% |
Institutional Class | .88% |
Semiannual Report
Advisor Utilities Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
PPL Corp. | 9.3 | 5.2 |
Exelon Corp. | 8.8 | 8.1 |
Public Service Enterprise Group, Inc. | 7.6 | 5.3 |
Constellation Energy Group, Inc. | 6.0 | 5.8 |
FPL Group, Inc. | 5.3 | 3.8 |
Entergy Corp. | 5.2 | 5.0 |
AES Corp. | 4.9 | 5.4 |
Sempra Energy | 4.8 | 4.1 |
Allegheny Energy, Inc. | 4.1 | 1.6 |
Edison International | 4.1 | 1.2 |
| 60.1 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Electric Utilities | 50.4% | |
| Multi-utilities | 20.6% | |
| Independent Power Producers & Energy Traders | 15.9% | |
| Gas Utilities | 4.0% | |
| Water Utilities | 0.5% | |
| All Others* | 8.6% | |
|
As of July 31, 2007 |
| Electric Utilities | 42.4% | |
| Multi-utilities | 26.6% | |
| Independent Power Producers & Energy Traders | 26.0% | |
| Gas Utilities | 4.3% | |
| Water Utilities | 0.6% | |
| All Others* | 0.1% | |
* Includes short-term investments and net other assets. |
Utilities
Advisor Utilities Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 91.6% |
| Shares | | Value |
DIVERSIFIED FINANCIAL SERVICES - 0.2% |
Other Diversifed Financial Services - 0.2% |
Hicks Acquisition Co. I, Inc. unit | 52,100 | | $ 518,395 |
ELECTRIC UTILITIES - 50.4% |
Electric Utilities - 50.4% |
Allegheny Energy, Inc. | 207,700 | | 11,379,883 |
American Electric Power Co., Inc. | 247,900 | | 10,617,557 |
DPL, Inc. | 50,500 | | 1,401,880 |
Edison International | 217,300 | | 11,334,368 |
Entergy Corp. | 132,000 | | 14,279,760 |
Exelon Corp. | 317,100 | | 24,159,849 |
FirstEnergy Corp. | 141,700 | | 10,091,874 |
FPL Group, Inc. | 228,700 | | 14,746,576 |
Great Plains Energy, Inc. | 37,300 | | 1,039,924 |
ITC Holdings Corp. | 17,500 | | 924,700 |
Northeast Utilities | 70,100 | | 1,943,172 |
Pepco Holdings, Inc. | 193,700 | | 4,931,602 |
PPL Corp. | 527,600 | | 25,810,192 |
Reliant Energy, Inc. (a) | 190,800 | | 4,058,316 |
Sierra Pacific Resources | 97,600 | | 1,461,072 |
Westar Energy, Inc. | 47,900 | | 1,166,844 |
| | 139,347,569 |
GAS UTILITIES - 4.0% |
Gas Utilities - 4.0% |
Equitable Resources, Inc. | 51,500 | | 2,871,125 |
Questar Corp. | 72,100 | | 3,670,611 |
Southern Union Co. | 163,400 | | 4,441,212 |
| | 10,982,948 |
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 15.9% |
Independent Power Producers & Energy Traders - 15.9% |
AES Corp. (a) | 710,200 | | 13,550,616 |
Constellation Energy Group, Inc. | 177,400 | | 16,668,504 |
Dynegy, Inc. Class A (a) | 264,600 | | 1,857,492 |
Mirant Corp. (a) | 121,500 | | 4,476,060 |
NRG Energy, Inc. (a) | 191,800 | | 7,401,562 |
| | 43,954,234 |
|
| Shares | | Value |
MULTI-UTILITIES - 20.6% |
Multi-Utilities - 20.6% |
Ameren Corp. | 109,000 | | $ 4,884,290 |
CenterPoint Energy, Inc. | 190,700 | | 3,053,107 |
CMS Energy Corp. | 185,590 | | 2,908,195 |
Integrys Energy Group, Inc. | 32,100 | | 1,560,702 |
MDU Resources Group, Inc. | 71,100 | | 1,842,912 |
PNM Resources, Inc. | 37,500 | | 724,500 |
Public Service Enterprise Group, Inc. | 218,800 | | 21,004,800 |
Sempra Energy | 239,200 | | 13,371,280 |
Wisconsin Energy Corp. | 55,600 | | 2,531,468 |
Xcel Energy, Inc. | 239,500 | | 4,979,205 |
| | 56,860,459 |
WATER UTILITIES - 0.5% |
Water Utilities - 0.5% |
Aqua America, Inc. | 68,200 | | 1,359,226 |
TOTAL COMMON STOCKS (Cost $228,362,768) | 253,022,831 |
Money Market Funds - 6.9% |
| | | |
Fidelity Cash Central Fund, 3.79% (b)
(Cost $18,918,767) | 18,918,767 | | 18,918,767 |
TOTAL INVESTMENT PORTFOLIO - 98.5% (Cost $247,281,535) | | 271,941,598 |
NET OTHER ASSETS - 1.5% | | 4,130,489 |
NET ASSETS - 100% | $ 276,072,087 |
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 | $ 492,535 |
Fidelity Securities Lending Cash Central Fund | 24,852 |
Total | $ 517,387 |
Income Tax Information |
At July 31, 2007, the fund had a capital loss carryforward of approximately $248,189,753 of which $93,777,221 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, 2008 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $228,362,768) | $ 253,022,831 | |
Fidelity Central Funds (cost $18,918,767) | 18,918,767 | |
Total Investments (cost $247,281,535) | | $ 271,941,598 |
Receivable for investments sold | | 8,100,403 |
Receivable for fund shares sold | | 997,197 |
Dividends receivable | | 8,625 |
Distributions receivable from Fidelity Central Funds | | 66,654 |
Prepaid expenses | | 761 |
Other receivables | | 3 |
Total assets | | 281,115,241 |
| | |
Liabilities | | |
Payable for investments purchased | $ 3,674,813 | |
Payable for fund shares redeemed | 1,018,830 | |
Accrued management fee | 131,078 | |
Distribution fees payable | 116,407 | |
Other affiliated payables | 78,621 | |
Other payables and accrued expenses | 23,405 | |
Total liabilities | | 5,043,154 |
| | |
Net Assets | | $ 276,072,087 |
Net Assets consist of: | | |
Paid in capital | | $ 495,724,986 |
Distributions in excess of net investment income | | (691,086) |
Accumulated undistributed net realized gain (loss) on investments | | (243,621,876) |
Net unrealized appreciation (depreciation) on investments | | 24,660,063 |
Net Assets | | $ 276,072,087 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($113,214,151 ÷ 5,305,748 shares) | | $ 21.34 |
| | |
Maximum offering price per share (100/94.25 of $21.34) | | $ 22.64 |
Class T:
Net Asset Value and redemption price per share ($62,248,370 ÷ 2,915,247 shares) | | $ 21.35 |
| | |
Maximum offering price per share (100/96.50 of $21.35) | | $ 22.12 |
Class B:
Net Asset Value and offering price per share ($30,412,367 ÷ 1,438,646 shares) A | | $ 21.14 |
| | |
Class C:
Net Asset Value and offering price per share ($43,846,919 ÷ 2,082,774 shares) A | | $ 21.05 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($26,350,280 ÷ 1,222,386 shares) | | $ 21.56 |
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, 2008 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 2,445,053 |
Interest | | 3,280 |
Income from Fidelity Central Funds | | 517,387 |
Total income | | 2,965,720 |
| | |
Expenses | | |
Management fee | $ 750,010 | |
Transfer agent fees | 400,616 | |
Distribution fees | 707,094 | |
Accounting and security lending fees | 53,949 | |
Custodian fees and expenses | 6,684 | |
Independent trustees' compensation | 550 | |
Registration fees | 28,615 | |
Audit | 23,009 | |
Legal | 2,815 | |
Miscellaneous | 892 | |
Total expenses before reductions | 1,974,234 | |
Expense reductions | (1,424) | 1,972,810 |
Net investment income (loss) | | 992,910 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | | 4,666,340 |
Change in net unrealized appreciation (depreciation) on investment securities | | 2,945,765 |
Net gain (loss) | | 7,612,105 |
Net increase (decrease) in net assets resulting from operations | | $ 8,605,015 |
Statement of Changes in Net Assets
| Six months ended
January 31, 2008
(Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 992,910 | $ 1,715,800 |
Net realized gain (loss) | 4,666,340 | 44,242,815 |
Change in net unrealized appreciation (depreciation) | 2,945,765 | (2,387,149) |
Net increase (decrease) in net assets resulting from operations | 8,605,015 | 43,571,466 |
Distributions to shareholders from net investment income | (2,837,540) | (1,795,359) |
Share transactions - net increase (decrease) | 12,905,057 | 17,609,310 |
Redemption fees | 6,550 | 19,962 |
Total increase (decrease) in net assets | 18,679,082 | 59,405,379 |
| | |
Net Assets | | |
Beginning of period | 257,393,005 | 197,987,626 |
End of period (including distributions in excess of net investment income of $691,086 and undistributed net investment income of $1,153,544, respectively) | $ 276,072,087 | $ 257,393,005 |
See accompanying notes which are an integral part of the financial statements.
Utilities
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.74 | $ 17.20 | $ 15.17 | $ 12.09 | $ 10.37 | $ 8.74 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .11 | .21 | .24 | .28 H | .10 | .13 |
Net realized and unrealized gain (loss) | .81 | 3.56 | 2.06 | 3.01 | 1.72 | 1.69 |
Total from investment operations | .92 | 3.77 | 2.30 | 3.29 | 1.82 | 1.82 |
Distributions from net investment income | (.32) | (.23) | (.27) | (.21) | (.10) | (.19) |
Redemption fees added to paid in capital E,J | - | - | - | - | - | - |
Net asset value, end of period | $ 21.34 | $ 20.74 | $ 17.20 | $ 15.17 | $ 12.09 | $ 10.37 |
Total Return B,C,D | 4.37% | 22.14% | 15.38% | 27.48% | 17.67% | 21.22% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.19% A | 1.27% | 1.34% | 1.39% | 1.51% | 1.67% |
Expenses net of fee waivers, if any | 1.19% A | 1.27% | 1.34% | 1.39% | 1.50% | 1.58% |
Expenses net of all reductions | 1.19% A | 1.26% | 1.32% | 1.36% | 1.45% | 1.47% |
Net investment income (loss) | 1.01% A | 1.04% | 1.51% | 2.03% H | .87% | 1.46% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 113,214 | $ 94,842 | $ 40,599 | $ 29,150 | $ 21,987 | $ 21,761 |
Portfolio turnover rate G | 71% A | 118% | 64% | 44% | 38% | 81% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.71 | $ 17.18 | $ 15.10 | $ 12.04 | $ 10.33 | $ 8.68 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .08 | .15 | .19 | .24 H | .07 | .11 |
Net realized and unrealized gain (loss) | .80 | 3.56 | 2.08 | 2.99 | 1.72 | 1.68 |
Total from investment operations | .88 | 3.71 | 2.27 | 3.23 | 1.79 | 1.79 |
Distributions from net investment income | (.24) | (.18) | (.19) | (.17) | (.08) | (.14) |
Redemption fees added to paid in capital E,J | - | - | - | - | - | - |
Net asset value, end of period | $ 21.35 | $ 20.71 | $ 17.18 | $ 15.10 | $ 12.04 | $ 10.33 |
Total Return B,C,D | 4.21% | 21.74% | 15.20% | 27.03% | 17.42% | 20.91% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.46% A | 1.54% | 1.60% | 1.67% | 1.79% | 1.94% |
Expenses net of fee waivers, if any | 1.46% A | 1.54% | 1.60% | 1.67% | 1.75% | 1.83% |
Expenses net of all reductions | 1.46% A | 1.54% | 1.58% | 1.64% | 1.70% | 1.72% |
Net investment income (loss) | .74% A | .76% | 1.25% | 1.76% H | .62% | 1.21% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 62,248 | $ 62,592 | $ 52,128 | $ 55,683 | $ 53,255 | $ 55,510 |
Portfolio turnover rate G | 71% A | 118% | 64% | 44% | 38% | 81% |
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 1.12%. 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.40 | $ 16.90 | $ 14.83 | $ 11.82 | $ 10.15 | $ 8.49 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .03 | .05 | .12 | .17 H | .01 | .07 |
Net realized and unrealized gain (loss) | .79 | 3.52 | 2.03 | 2.95 | 1.69 | 1.65 |
Total from investment operations | .82 | 3.57 | 2.15 | 3.12 | 1.70 | 1.72 |
Distributions from net investment income | (.08) | (.07) | (.08) | (.11) | (.03) | (.06) |
Redemption fees added to paid in capital E,J | - | - | - | - | - | - |
Net asset value, end of period | $ 21.14 | $ 20.40 | $ 16.90 | $ 14.83 | $ 11.82 | $ 10.15 |
Total Return B,C,D | 3.97% | 21.18% | 14.57% | 26.51% | 16.79% | 20.37% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.94% A | 2.04% | 2.09% | 2.14% | 2.25% | 2.32% |
Expenses net of fee waivers, if any | 1.94% A | 2.04% | 2.09% | 2.14% | 2.25% | 2.25% |
Expenses net of all reductions | 1.94% A | 2.03% | 2.06% | 2.11% | 2.20% | 2.13% |
Net investment income (loss) | .26% A | .27% | .76% | 1.28% H | .12% | .79% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 30,412 | $ 43,845 | $ 65,959 | $ 82,577 | $ 84,742 | $ 87,868 |
Portfolio turnover rate G | 71% A | 118% | 64% | 44% | 38% | 81% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.38 | $ 16.91 | $ 14.84 | $ 11.84 | $ 10.16 | $ 8.50 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .03 | .06 | .13 | .18 H | .02 | .07 |
Net realized and unrealized gain (loss) | .78 | 3.51 | 2.04 | 2.94 | 1.70 | 1.65 |
Total from investment operations | .81 | 3.57 | 2.17 | 3.12 | 1.72 | 1.72 |
Distributions from net investment income | (.14) | (.10) | (.10) | (.12) | (.04) | (.06) |
Redemption fees added to paid in capital E,J | - | - | - | - | - | - |
Net asset value, end of period | $ 21.05 | $ 20.38 | $ 16.91 | $ 14.84 | $ 11.84 | $ 10.16 |
Total Return B,C,D | 3.95% | 21.23% | 14.72% | 26.48% | 16.98% | 20.35% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.93% A | 1.99% | 2.02% | 2.07% | 2.17% | 2.23% |
Expenses net of fee waivers, if any | 1.93% A | 1.99% | 2.02% | 2.07% | 2.17% | 2.23% |
Expenses net of all reductions | 1.93% A | 1.99% | 2.00% | 2.04% | 2.12% | 2.12% |
Net investment income (loss) | .27% A | .32% | .83% | 1.36% H | .21% | .80% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 43,847 | $ 43,292 | $ 32,823 | $ 34,827 | $ 35,038 | $ 37,530 |
Portfolio turnover rate G | 71% A | 118% | 64% | 44% | 38% | 81% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.95 | $ 17.38 | $ 15.31 | $ 12.20 | $ 10.47 | $ 8.86 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .15 | .29 | .30 | .33 G | .15 | .18 |
Net realized and unrealized gain (loss) | .82 | 3.58 | 2.10 | 3.03 | 1.73 | 1.71 |
Total from investment operations | .97 | 3.87 | 2.40 | 3.36 | 1.88 | 1.89 |
Distributions from net investment income | (.36) | (.30) | (.33) | (.25) | (.15) | (.28) |
Redemption fees added to paid in capital D,I | - | - | - | - | - | - |
Net asset value, end of period | $ 21.56 | $ 20.95 | $ 17.38 | $ 15.31 | $ 12.20 | $ 10.47 |
Total Return B,C | 4.55% | 22.54% | 15.95% | 27.88% | 18.14% | 21.94% |
Ratios to Average Net Assets E,H | | | | | | |
Expenses before reductions | .88% A | .92% | .94% | .99% | 1.09% | 1.06% |
Expenses net of fee waivers, if any | .88% A | .92% | .94% | .99% | 1.09% | 1.06% |
Expenses net of all reductions | .88% A | .92% | .92% | .96% | 1.04% | .94% |
Net investment income (loss) | 1.33% A | 1.39% | 1.91% | 2.44% G | 1.29% | 1.98% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 26,350 | $ 12,822 | $ 6,479 | $ 1,766 | $ 2,254 | $ 2,891 |
Portfolio turnover rate F | 71% A | 118% | 64% | 44% | 38% | 81% |
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, 2008 (Unaudited)
1. Organization.
Fidelity Advisor Utilities 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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
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
Utilities
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
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 distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.
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 | $ 33,299,816 | |
Unrealized depreciation | (8,655,687) | |
Net unrealized appreciation (depreciation) | $ 24,644,129 | |
Cost for federal income tax purposes | $ 247,297,469 | |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to 0.75% 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 Pronouncement. 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.
4. 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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $89,438,838 and $100,804,704, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. 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% | $ 133,603 | $ 5,799 |
Class T | .25% | .25% | 160,334 | - |
Class B | .75% | .25% | 189,082 | 141,811 |
Class C | .75% | .25% | 224,075 | 36,895 |
| | | $ 707,094 | $ 184,505 |
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 | $ 32,121 |
Class T | 7,661 |
Class B* | 23,607 |
Class C* | 6,672 |
| $ 70,061 |
* 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 | $ 159,364 | .30 |
Class T | 101,666 | .32 |
Class B | 57,046 | .30 |
Class C | 64,029 | .29 |
Institutional Class | 18,511 | .23 |
| $ 400,616 | |
* 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.
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.
Utilities
7. 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 $366 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. 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. Net income from lending portfolio securities during the period amounted to $24,852.
9. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $271 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 | $ 1,009 | |
Class C | 144 | |
| $ 1,153 | |
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $41,180.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
From net investment income | | |
Class A | $ 1,513,481 | $ 644,012 |
Class T | 697,661 | 560,438 |
Class B | 116,029 | 253,871 |
Class C | 289,509 | 209,022 |
Institutional Class | 220,860 | 128,016 |
Total | $ 2,837,540 | $ 1,795,359 |
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 | Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 1,652,512 | 3,629,587 | $ 37,072,261 | $ 74,211,808 |
Reinvestment of distributions | 60,065 | 31,700 | 1,341,195 | 573,106 |
Shares redeemed | (979,697) | (1,448,205) | (21,405,873) | (30,175,903) |
Net increase (decrease) | 732,880 | 2,213,082 | $ 17,007,583 | $ 44,609,011 |
Class T | | | | |
Shares sold | 359,873 | 1,035,618 | $ 8,067,431 | $ 20,689,420 |
Reinvestment of distributions | 29,500 | 29,413 | 659,941 | 530,959 |
Shares redeemed | (496,158) | (1,078,012) | (10,880,547) | (22,011,808) |
Net increase (decrease) | (106,785) | (12,981) | $ (2,153,175) | $ (791,429) |
Class B | | | | |
Shares sold | 173,786 | 496,053 | $ 3,855,870 | $ 9,866,415 |
Reinvestment of distributions | 4,528 | 12,604 | 103,786 | 221,292 |
Shares redeemed | (888,928) | (2,262,406) | (19,312,968) | (44,828,420) |
Net increase (decrease) | (710,614) | (1,753,749) | $ (15,353,312) | $ (34,740,713) |
Class C | | | | |
Shares sold | 270,248 | 1,008,161 | $ 5,979,450 | $ 20,364,886 |
Reinvestment of distributions | 10,061 | 8,956 | 223,730 | 157,448 |
Shares redeemed | (321,909) | (834,201) | (6,937,011) | (16,902,583) |
Net increase (decrease) | (41,600) | 182,916 | $ (733,831) | $ 3,619,751 |
Institutional Class | | | | |
Shares sold | 946,529 | 1,116,023 | $ 21,494,099 | $ 24,167,100 |
Reinvestment of distributions | 7,559 | 2,016 | 173,189 | 36,805 |
Shares redeemed | (343,634) | (878,823) | (7,529,496) | (19,291,215) |
Net increase (decrease) | 610,454 | 239,216 | $ 14,137,792 | $ 4,912,690 |
Utilities
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-0308
1.789279.105
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Focus Funds®
Institutional Class
Biotechnology
Communications Equipment
Consumer Discretionary
Electronics
Energy
Financial Services
Health Care
Industrials
Technology
Utilities
Semiannual Report
January 31, 2008
(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 http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(Photograph of Edward C. Johnson 3d.)
Dear Shareholder:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but 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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,021.40 | $ 7.11 |
HypotheticalA | $ 1,000.00 | $ 1,018.10 | $ 7.10 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,020.30 | $ 8.38 |
HypotheticalA | $ 1,000.00 | $ 1,016.84 | $ 8.36 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,016.50 | $ 10.90 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,018.10 | $ 10.91 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,023.90 | $ 5.55 |
HypotheticalA | $ 1,000.00 | $ 1,019.66 | $ 5.53 |
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 184/366 (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 | 1.09% |
Semiannual Report
Advisor Biotechnology Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Genentech, Inc. | 10.9 | 6.0 |
Gilead Sciences, Inc. | 8.9 | 6.5 |
Biogen Idec, Inc. | 7.2 | 7.2 |
Celgene Corp. | 6.9 | 6.3 |
Cephalon, Inc. | 4.6 | 5.0 |
Alexion Pharmaceuticals, Inc. | 4.0 | 5.0 |
BioMarin Pharmaceutical, Inc. | 3.7 | 0.0 |
Elan Corp. PLC sponsored ADR | 3.4 | 2.4 |
United Therapeutics Corp. | 3.4 | 1.0 |
Auxilium Pharmaceuticals, Inc. | 3.2 | 1.5 |
| 56.2 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
 | Biotechnology | 80.8% | |
 | Pharmaceuticals | 14.2% | |
 | Life Sciences Tools
& Services | 2.8% | |
 | Health Care Equipment & Supplies | 1.8% | |
 | Health Care Providers
& Services | 0.2% | |
 | All Others* | 0.2% | |
|
As of July 31, 2007 |
| Biotechnology | 85.6% | |
| Pharmaceuticals | 9.3% | |
| Life Sciences Tools
& Services | 3.0% | |
| Health Care Equipment & Supplies | 2.2% | |
| Health Care Providers
& Services | 0.2% | |
| All Others | (0.3)% (dagger) | |
* Includes short-term investments and net other assets. |
(dagger) Short-term investments and net other assets are not included in the pie chart. |
Biotechnology
Advisor Biotechnology Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.8% |
| Shares | | Value |
BIOTECHNOLOGY - 80.8% |
Biotechnology - 80.8% |
Acadia Pharmaceuticals, Inc. (a) | 31,774 | | $ 376,840 |
Acorda Therapeutics, Inc. (a) | 4,754 | | 120,561 |
Affymax, Inc. | 8,100 | | 162,486 |
Alexion Pharmaceuticals, Inc. (a) | 30,626 | | 2,000,490 |
Alkermes, Inc. (a) | 23,500 | | 313,020 |
Alnylam Pharmaceuticals, Inc. (a) | 8,500 | | 255,340 |
Amgen, Inc. (a) | 4,206 | | 195,958 |
Amylin Pharmaceuticals, Inc. (a) | 38,708 | | 1,147,692 |
Antigenics, Inc. unit (a)(c) | 452,000 | | 1,468,583 |
Arena Pharmaceuticals, Inc. (a) | 8,400 | | 60,816 |
Biogen Idec, Inc. (a) | 59,348 | | 3,617,261 |
BioMarin Pharmaceutical, Inc. (a) | 49,889 | | 1,848,886 |
Celgene Corp. (a) | 61,825 | | 3,469,001 |
Cephalon, Inc. (a) | 35,099 | | 2,303,547 |
Cepheid, Inc. (a) | 9,300 | | 284,022 |
Cougar Biotechnology, Inc. (a) | 13,800 | | 412,733 |
Cubist Pharmaceuticals, Inc. (a) | 9,915 | | 168,456 |
Dendreon Corp. (a) | 12,600 | | 77,994 |
Enzon Pharmaceuticals, Inc. (a) | 6,100 | | 51,057 |
Genentech, Inc. (a) | 78,311 | | 5,496,648 |
Genzyme Corp. (a) | 19,122 | | 1,494,002 |
Gilead Sciences, Inc. (a) | 98,960 | | 4,521,482 |
GTx, Inc. (a) | 10,700 | | 118,663 |
Halozyme Therapeutics, Inc. (a) | 6,310 | | 34,768 |
Human Genome Sciences, Inc. (a) | 21,777 | | 121,516 |
ImClone Systems, Inc. (a) | 9,800 | | 426,006 |
Incyte Corp. (a) | 34,395 | | 412,052 |
Indevus Pharmaceuticals, Inc. (a) | 26,057 | | 165,983 |
Isis Pharmaceuticals, Inc. (a) | 28,300 | | 441,480 |
LifeCell Corp. (a) | 3,500 | | 138,285 |
Ligand Pharmaceuticals, Inc. Class B | 10,400 | | 43,264 |
MannKind Corp. (a) | 17,108 | | 135,153 |
Martek Biosciences (a) | 4,300 | | 122,550 |
Medarex, Inc. (a) | 8,134 | | 81,259 |
Millennium Pharmaceuticals, Inc. (a) | 60,319 | | 915,039 |
Myriad Genetics, Inc. (a) | 14,605 | | 628,161 |
Neurochem, Inc. (a) | 1,300 | | 2,228 |
Omrix Biopharmaceuticals, Inc. (a) | 3,200 | | 74,432 |
ONYX Pharmaceuticals, Inc. (a) | 11,494 | | 546,310 |
OREXIGEN Therapeutics, Inc. | 11,126 | | 117,379 |
OSI Pharmaceuticals, Inc. (a) | 12,600 | | 502,488 |
PDL BioPharma, Inc. (a) | 34,500 | | 515,085 |
Pharmion Corp. (a) | 9,900 | | 682,605 |
Poniard Pharmaceuticals, Inc. (a) | 8,500 | | 44,370 |
Progenics Pharmaceuticals, Inc. (a) | 6,800 | | 111,112 |
Regeneron Pharmaceuticals, Inc. (a) | 18,391 | | 372,969 |
Rigel Pharmaceuticals, Inc. (a) | 10,035 | | 276,264 |
Sangamo Biosciences, Inc. (a) | 12,798 | | 146,537 |
Savient Pharmaceuticals, Inc. (a) | 14,505 | | 280,672 |
|
| Shares | | Value |
Theratechnologies, Inc. (a) | 6,300 | | $ 57,755 |
Theravance, Inc. (a) | 9,365 | | 184,771 |
United Therapeutics Corp. (a) | 20,203 | | 1,696,648 |
Vanda Pharmaceuticals, Inc. (a) | 63,239 | | 270,031 |
Vertex Pharmaceuticals, Inc. (a) | 60,400 | | 1,229,744 |
Zymogenetics, Inc. (a) | 12,795 | | 129,102 |
| | 40,871,556 |
HEALTH CARE EQUIPMENT & SUPPLIES - 1.8% |
Health Care Equipment - 1.8% |
Alsius Corp. (a) | 15,600 | | 55,848 |
Clinical Data, Inc. (a) | 6,747 | | 141,485 |
Quidel Corp. (a) | 43,600 | | 687,572 |
TomoTherapy, Inc. | 200 | | 2,962 |
| | 887,867 |
HEALTH CARE PROVIDERS & SERVICES - 0.2% |
Health Care Services - 0.2% |
Oracle Healthcare Acquisition Corp. unit (a) | 11,000 | | 89,760 |
LIFE SCIENCES TOOLS & SERVICES - 2.8% |
Life Sciences Tools & Services - 2.8% |
AMAG Pharmaceuticals, Inc. | 3,615 | | 186,389 |
Applera Corp. - Celera Genomics Group (a) | 14,100 | | 216,012 |
Exelixis, Inc. (a) | 41,700 | | 305,244 |
Medivation, Inc. (a) | 1,359 | | 21,744 |
QIAGEN NV (a) | 34,555 | | 704,922 |
| | 1,434,311 |
PHARMACEUTICALS - 14.2% |
Pharmaceuticals - 14.2% |
Akorn, Inc. (a) | 131,279 | | 984,593 |
Auxilium Pharmaceuticals, Inc. (a) | 47,658 | | 1,629,904 |
Biodel, Inc. | 69,770 | | 1,243,999 |
Catalyst Pharmaceutical Partners, Inc. (a) | 22,041 | | 74,499 |
Elan Corp. PLC sponsored ADR (a) | 67,400 | | 1,712,634 |
Jazz Pharmaceuticals, Inc. | 6,900 | | 90,390 |
Sepracor, Inc. (a) | 11,996 | | 338,767 |
ULURU, Inc. (a) | 2,100 | | 4,914 |
XenoPort, Inc. (a) | 18,000 | | 1,104,480 |
| | 7,184,180 |
TOTAL COMMON STOCKS (Cost $47,253,494) | 50,467,674 |
Money Market Funds - 1.2% |
| Shares | | Value |
Fidelity Cash Central Fund, 3.79% (b)
(Cost $570,865) | 570,865 | | $ 570,865 |
TOTAL INVESTMENT PORTFOLIO - 101.0% (Cost $47,824,359) | | 51,038,539 |
NET OTHER ASSETS - (1.0)% | | (481,230) |
NET ASSETS - 100% | $ 50,557,309 |
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) 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 $1,468,583 or 2.9% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Antigenics, Inc. unit | 1/9/08 | $ 1,356,000 |
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 | $ 6,939 |
Fidelity Securities Lending Cash Central Fund | 5,335 |
Total | $ 12,274 |
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, 2008 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $47,253,494) | $ 50,467,674 | |
Fidelity Central Funds (cost $570,865) | 570,865 | |
Total Investments (cost $47,824,359) | | $ 51,038,539 |
Receivable for investments sold | | 1,061,773 |
Receivable for fund shares sold | | 56,096 |
Distributions receivable from Fidelity Central Funds | | 592 |
Prepaid expenses | | 163 |
Other receivables | | 123 |
Total assets | | 52,157,286 |
| | |
Liabilities | | |
Payable for investments purchased | $ 1,396,075 | |
Payable for fund shares redeemed | 108,582 | |
Accrued management fee | 27,878 | |
Distribution fees payable | 28,294 | |
Other affiliated payables | 15,154 | |
Other payables and accrued expenses | 23,994 | |
Total liabilities | | 1,599,977 |
| | |
Net Assets | | $ 50,557,309 |
Net Assets consist of: | | |
Paid in capital | | $ 51,602,322 |
Accumulated net investment loss | | (478,923) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (3,780,270) |
Net unrealized appreciation (depreciation) on investments | | 3,214,180 |
Net Assets | | $ 50,557,309 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($13,238,927 ÷ 1,923,338 shares) | | $ 6.88 |
| | |
Maximum offering price per share (100/94.25 of $6.88) | | $ 7.30 |
Class T:
Net Asset Value and redemption price per share ($13,320,899 ÷ 1,973,076 shares) | | $ 6.75 |
| | |
Maximum offering price per share (100/96.50 of $6.75) | | $ 6.99 |
Class B:
Net Asset Value and offering price per share ($11,465,945 ÷ 1,765,637 shares) A | | $ 6.49 |
| | |
Class C:
Net Asset Value and offering price per share ($11,458,337 ÷ 1,764,098 shares)A | | $ 6.50 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($1,073,201 ÷ 152,540 shares) | | $ 7.04 |
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, 2008 (Unaudited) |
| | |
Investment Income | | |
Interest | | $ 87 |
Income from Fidelity Central Funds (including $5,335 from security lending) | | 12,274 |
Total income | | 12,361 |
| | |
Expenses | | |
Management fee | $ 151,327 | |
Transfer agent fees | 88,591 | |
Distribution fees | 178,921 | |
Accounting and security lending fees | 11,670 | |
Custodian fees and expenses | 5,990 | |
Independent trustees' compensation | 111 | |
Registration fees | 38,256 | |
Audit | 22,375 | |
Legal | 152 | |
Miscellaneous | 218 | |
Total expenses before reductions | 497,611 | |
Expense reductions | (6,327) | 491,284 |
Net investment income (loss) | | (478,923) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (828,422) | |
Foreign currency transactions | 287 | |
Total net realized gain (loss) | | (828,135) |
Change in net unrealized appreciation (depreciation) on investment securities | | 2,303,055 |
Net gain (loss) | | 1,474,920 |
Net increase (decrease) in net assets resulting from operations | | $ 995,997 |
Statement of Changes in Net Assets
| Six months ended
January 31, 2008
(Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (478,923) | $ (966,220) |
Net realized gain (loss) | (828,135) | 8,930,811 |
Change in net unrealized appreciation (depreciation) | 2,303,055 | (4,482,074) |
Net increase (decrease) in net assets resulting from operations | 995,997 | 3,482,517 |
Distributions to shareholders from net realized gain | (3,898,929) | - |
Share transactions - net increase (decrease) | 1,910,148 | (8,274,098) |
Redemption fees | 888 | 1,128 |
Total increase (decrease) in net assets | (991,896) | (4,790,453) |
| | |
Net Assets | | |
Beginning of period | 51,549,205 | 56,339,658 |
End of period (including accumulated net investment loss of $478,923 and $0, respectively) | $ 50,557,309 | $ 51,549,205 |
See accompanying notes which are an integral part of the financial statements.
Biotechnology
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.23 | $ 6.81 | $ 6.80 | $ 6.00 | $ 5.94 | $ 4.39 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.09) | (.09) | (.08) H | (.09) | (.05) |
Net realized and unrealized gain (loss) | .23 | .51 | .10 | .88 | .15 | 1.60 |
Total from investment operations | .18 | .42 | .01 | .80 | .06 | 1.55 |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Distributions from net realized gain | (.53) | - | - | - | - | - |
Net asset value, end of period | $ 6.88 | $ 7.23 | $ 6.81 | $ 6.80 | $ 6.00 | $ 5.94 |
Total Return B, C, D | 2.14% | 6.17% | .15% | 13.33% | 1.01% | 35.31% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.40% A | 1.42% | 1.48% | 1.56% | 1.68% | 2.04% |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.40% | 1.45% | 1.50% | 1.50% |
Expenses net of all reductions | 1.40% A | 1.40% | 1.37% | 1.43% | 1.48% | 1.47% |
Net investment income (loss) | (1.35)% A | (1.25)% | (1.29)% | (1.36)% H | (1.38)% | (1.11)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 13,239 | $ 13,081 | $ 12,539 | $ 11,022 | $ 10,197 | $ 7,718 |
Portfolio turnover rate G | 143% A | 120% | 62% | 30% | 50% | 71% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.11 | $ 6.71 | $ 6.72 | $ 5.95 | $ 5.90 | $ 4.37 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.06) | (.11) | (.11) | (.10) H | (.10) | (.06) |
Net realized and unrealized gain (loss) | .23 | .51 | .10 | .87 | .15 | 1.59 |
Total from investment operations | .17 | .40 | (.01) | .77 | .05 | 1.53 |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Distributions from net realized gain | (.53) | - | - | - | - | - |
Net asset value, end of period | $ 6.75 | $ 7.11 | $ 6.71 | $ 6.72 | $ 5.95 | $ 5.90 |
Total Return B, C, D | 2.03% | 5.96% | (.15)% | 12.94% | .85% | 35.01% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.74% A | 1.75% | 1.79% | 1.93% | 2.10% | 2.39% |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.65% | 1.70% | 1.75% | 1.75% |
Expenses net of all reductions | 1.65% A | 1.65% | 1.62% | 1.68% | 1.73% | 1.72% |
Net investment income (loss) | (1.61)% A | (1.49)% | (1.54)% | (1.61)% H | (1.63)% | (1.36)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 13,321 | $ 13,008 | $ 13,808 | $ 14,177 | $ 13,367 | $ 10,281 |
Portfolio turnover rate G | 143% A | 120% | 62% | 30% | 50% | 71% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.88 | $ 6.52 | $ 6.56 | $ 5.84 | $ 5.82 | $ 4.33 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.07) | (.14) | (.14) | (.13) H | (.13) | (.09) |
Net realized and unrealized gain (loss) | .21 | .50 | .10 | .85 | .15 | 1.58 |
Total from investment operations | .14 | .36 | (.04) | .72 | .02 | 1.49 |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Distributions from net realized gain | (.53) | - | - | - | - | - |
Net asset value, end of period | $ 6.49 | $ 6.88 | $ 6.52 | $ 6.56 | $ 5.84 | $ 5.82 |
Total Return B, C, D | 1.65% | 5.52% | (.61)% | 12.33% | .34% | 34.41% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.15% A | 2.17% | 2.23% | 2.33% | 2.46% | 2.78% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.19% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.15% | 2.12% | 2.18% | 2.22% | 2.22% |
Net investment income (loss) | (2.10)% A | (1.99)% | (2.04)% | (2.11)% H | (2.12)% | (1.86)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 11,466 | $ 12,656 | $ 14,938 | $ 16,921 | $ 16,819 | $ 15,154 |
Portfolio turnover rate G | 143% A | 120% | 62% | 30% | 50% | 71% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 6.88 | $ 6.52 | $ 6.57 | $ 5.84 | $ 5.82 | $ 4.33 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.07) | (.14) | (.14) | (.13) H | (.13) | (.09) |
Net realized and unrealized gain (loss) | .22 | .50 | .09 | .86 | .15 | 1.58 |
Total from investment operations | .15 | .36 | (.05) | .73 | .02 | 1.49 |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Distributions from net realized gain | (.53) | - | - | - | - | - |
Net asset value, end of period | $ 6.50 | $ 6.88 | $ 6.52 | $ 6.57 | $ 5.84 | $ 5.82 |
Total Return B, C, D | 1.81% | 5.52% | (.76)% | 12.50% | .34% | 34.41% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.15% A | 2.16% | 2.17% | 2.24% | 2.31% | 2.58% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.19% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.15% | 2.12% | 2.18% | 2.23% | 2.22% |
Net investment income (loss) | (2.11)% A | (1.99)% | (2.04)% | (2.11)% H | (2.13)% | (1.86)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 11,458 | $ 11,813 | $ 13,787 | $ 12,538 | $ 13,215 | $ 10,493 |
Portfolio turnover rate G | 143% A | 120% | 62% | 30% | 50% | 71% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 7.37 | $ 6.91 | $ 6.89 | $ 6.06 | $ 5.97 | $ 4.40 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | (.04) | (.07) | (.07) | (.06) G | (.06) | (.04) |
Net realized and unrealized gain (loss) | .24 | .53 | .09 | .89 | .15 | 1.61 |
Total from investment operations | .20 | .46 | .02 | .83 | .09 | 1.57 |
Redemption fees added to paid in capital D, I | - | - | - | - | - | - |
Distributions from net realized gain | (.53) | - | - | - | - | - |
Net asset value, end of period | $ 7.04 | $ 7.37 | $ 6.91 | $ 6.89 | $ 6.06 | $ 5.97 |
Total Return B, C | 2.39% | 6.66% | .29% | 13.70% | 1.51% | 35.68% |
Ratios to Average Net Assets E, H | | | | | | |
Expenses before reductions | 1.09% A | 1.06% | 1.05% | 1.10% | 1.16% | 1.37% |
Expenses net of fee waivers, if any | 1.09% A | 1.06% | 1.05% | 1.10% | 1.16% | 1.25% |
Expenses net of all reductions | 1.09% A | 1.06% | 1.03% | 1.09% | 1.14% | 1.22% |
Net investment income (loss) | (1.04)% A | (.91)% | (.94)% | (1.02)% G | (1.04)% | (.86)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,073 | $ 991 | $ 1,268 | $ 1,243 | $ 1,146 | $ 1,153 |
Portfolio turnover rate F | 143% A | 120% | 62% | 30% | 50% | 71% |
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, 2008 (Unaudited)
1. Organization.
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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
Biotechnology
3. Significant Accounting Policies - continued
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. Interest income and distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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, 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 | $ 7,184,827 | |
Unrealized depreciation | (4,337,216) | |
Net unrealized appreciation (depreciation) | $ 2,847,611 | |
Cost for federal income tax purposes | $ 48,190,928 | |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to 0.75% 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 Pronouncement. 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.
4. 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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $38,560,673 and $41,250,005, respectively.
6. 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% | $ 17,186 | $ 216 |
Class T | .25% | .25% | 34,778 | - |
Class B | .75% | .25% | 65,067 | 48,971 |
Class C | .75% | .25% | 61,890 | 8,269 |
| | | $ 178,921 | $ 57,456 |
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 | $ 4,220 |
Class T | 3,918 |
Class B* | 13,577 |
Class C* | 969 |
| $ 22,684 |
* 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 | $ 20,890 | .30 |
Class T | 27,448 | .39 |
Class B | 19,783 | .30 |
Class C | 18,878 | .31 |
Institutional Class | 1,592 | .24 |
| $ 88,591 | |
* 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.
Biotechnology
6. Fees and Other Transactions with Affiliates - continued
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 $1,023 for the period.
7. 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.
8. 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.
9. 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 T | 1.65% | $ 6,204 |
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 $123 for the period.
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $6,156.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
From net realized gain | | |
Class A | $ 958,767 | $ - |
Class T | 975,567 | - |
Class B | 968,071 | - |
Class C | 911,566 | - |
Institutional Class | 84,958 | - |
Total | $ 3,898,929 | $ - |
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 | Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 297,112 | 654,030 | $ 2,195,566 | $ 4,756,477 |
Reinvestment of distributions | 116,475 | - | 854,207 | - |
Shares redeemed | (298,354) | (687,789) | (2,203,206) | (5,067,147) |
Net increase (decrease) | 115,233 | (33,759) | $ 846,567 | $ (310,670) |
Class T | | | | |
Shares sold | 268,451 | 413,953 | $ 1,960,575 | $ 2,989,158 |
Reinvestment of distributions | 133,154 | - | 959,166 | - |
Shares redeemed | (257,075) | (643,045) | (1,884,963) | (4,647,999) |
Net increase (decrease) | 144,530 | (229,092) | $ 1,034,778 | $ (1,658,841) |
Class B | | | | |
Shares sold | 95,815 | 235,936 | $ 673,854 | $ 1,623,598 |
Reinvestment of distributions | 123,818 | - | 860,151 | - |
Shares redeemed | (294,189) | (686,826) | (2,039,831) | (4,815,046) |
Net increase (decrease) | (74,556) | (450,890) | $ (505,826) | $ (3,191,448) |
Class C | | | | |
Shares sold | 196,131 | 294,514 | $ 1,396,524 | $ 2,075,073 |
Reinvestment of distributions | 110,151 | - | 765,068 | - |
Shares redeemed | (259,392) | (691,341) | (1,807,430) | (4,822,276) |
Net increase (decrease) | 46,890 | (396,827) | $ 354,162 | $ (2,747,203) |
Institutional Class | | | | |
Shares sold | 111,194 | 40,455 | $ 858,271 | $ 308,779 |
Reinvestment of distributions | 6,538 | - | 48,898 | - |
Shares redeemed | (99,564) | (89,434) | (726,702) | (674,715) |
Net increase (decrease) | 18,168 | (48,979) | $ 180,467 | $ (365,936) |
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 852.80 | $ 6.52 |
HypotheticalA | $ 1,000.00 | $ 1,018.10 | $ 7.10 |
Class T | | | |
Actual | $ 1,000.00 | $ 851.50 | $ 7.68 |
HypotheticalA | $ 1,000.00 | $ 1,016.84 | $ 8.36 |
Class B | | | |
Actual | $ 1,000.00 | $ 849.70 | $ 10.00 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Class C | | | |
Actual | $ 1,000.00 | $ 849.70 | $ 10.00 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 853.10 | $ 5.36 |
HypotheticalA | $ 1,000.00 | $ 1,019.36 | $ 5.84 |
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 184/366 (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, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Cisco Systems, Inc. | 15.4 | 6.6 |
Research In Motion Ltd. | 10.1 | 10.2 |
Comverse Technology, Inc. | 6.9 | 4.7 |
QUALCOMM, Inc. | 6.6 | 19.6 |
Corning, Inc. | 6.5 | 4.8 |
High Tech Computer Corp. | 4.7 | 0.0 |
Juniper Networks, Inc. | 4.1 | 5.8 |
Powerwave Technologies, Inc. | 3.5 | 4.4 |
F5 Networks, Inc. | 2.9 | 4.2 |
Sandvine Corp. (U.K.) | 2.8 | 3.0 |
| 63.5 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Communications Equipment | 72.9% | |
| Software | 6.1% | |
| Semiconductors & Semiconductor Equipment | 5.9% | |
| Computers & Peripherals | 5.1% | |
| Household Durables | 2.4% | |
| All Others* | 7.6% | |
|
As of July 31, 2007 |
| Communications Equipment | 79.6% | |
| Software | 6.9% | |
| Semiconductors & Semiconductor Equipment | 6.2% | |
| Computers & Peripherals | 1.6% | |
| Household Durables | 1.5% | |
| All Others* | 4.2% | |
* Includes short-term investments and net other assets. |
Communications Equipment
Advisor Communications Equipment Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 93.8% |
| Shares | | Value |
COMMUNICATIONS EQUIPMENT - 72.7% |
Communications Equipment - 72.7% |
Acme Packet, Inc. (a) | 100 | | $ 962 |
ADC Telecommunications, Inc. (a) | 12,200 | | 180,438 |
Adtran, Inc. | 3,083 | | 64,157 |
ADVA AG Optical Networking (a) | 7,013 | | 24,062 |
Airvana, Inc. | 6,808 | | 35,606 |
Aruba Networks, Inc. | 100 | | 946 |
AudioCodes Ltd. (a) | 20,500 | | 96,145 |
Avanex Corp. (a) | 11,600 | | 11,020 |
Ceragon Networks Ltd. (a) | 100 | | 909 |
Cisco Systems, Inc. (a) | 47,669 | | 1,167,889 |
Comtech Group, Inc. (a) | 15,601 | | 167,867 |
Comverse Technology, Inc. (a) | 31,906 | | 521,663 |
Corning, Inc. | 20,600 | | 495,842 |
F5 Networks, Inc. (a) | 9,300 | | 218,829 |
Finisar Corp. (a) | 2,800 | | 4,480 |
Foundry Networks, Inc. (a) | 5,400 | | 74,520 |
Foxconn International Holdings Ltd. (a) | 2,000 | | 3,299 |
Harris Stratex Networks, Inc. Class A (a) | 15,495 | | 168,741 |
Infinera Corp. | 1,300 | | 13,247 |
Ixia (a) | 2,963 | | 21,926 |
Juniper Networks, Inc. (a) | 11,450 | | 310,868 |
Opnext, Inc. | 500 | | 2,580 |
Orckit Communications Ltd. (a) | 3,800 | | 28,500 |
Powerwave Technologies, Inc. (a) | 69,500 | | 264,100 |
QUALCOMM, Inc. | 11,800 | | 500,556 |
Research In Motion Ltd. (a) | 8,120 | | 762,306 |
Riverbed Technology, Inc. (a) | 2,300 | | 51,405 |
Sonus Networks, Inc. (a) | 34,204 | | 139,894 |
Starent Networks Corp. | 11,000 | | 135,960 |
Symmetricom, Inc. (a) | 8,145 | | 35,594 |
| | 5,504,311 |
COMPUTERS & PERIPHERALS - 5.1% |
Computer Hardware - 4.9% |
Compal Electronics, Inc. | 5,698 | | 4,905 |
Concurrent Computer Corp. (a) | 11,340 | | 9,526 |
High Tech Computer Corp. | 19,000 | | 358,183 |
NEC Corp. sponsored ADR | 90 | | 369 |
| | 372,983 |
Computer Storage & Peripherals - 0.2% |
SanDisk Corp. (a) | 610 | | 15,525 |
TOTAL COMPUTERS & PERIPHERALS | | 388,508 |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.2% |
Electronic Equipment & Instruments - 1.0% |
Chi Mei Optoelectronics Corp. | 8,227 | | 9,699 |
|
| Shares | | Value |
HannStar Display Corp. (a) | 48,024 | | $ 18,040 |
Nippon Electric Glass Co. Ltd. | 3,000 | | 44,889 |
| | 72,628 |
Electronic Manufacturing Services - 0.2% |
Trimble Navigation Ltd. (a) | 600 | | 15,870 |
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS | | 88,498 |
HOUSEHOLD DURABLES - 2.4% |
Consumer Electronics - 2.4% |
Tele Atlas NV (a) | 4,700 | | 185,227 |
INTERNET SOFTWARE & SERVICES - 0.4% |
Internet Software & Services - 0.4% |
RADVision Ltd. (a) | 3,050 | | 30,653 |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 5.9% |
Semiconductor Equipment - 0.8% |
EMCORE Corp. (a) | 4,600 | | 62,882 |
Semiconductors - 5.1% |
Actel Corp. (a) | 451 | | 5,371 |
AMIS Holdings, Inc. (a) | 5,900 | | 43,129 |
Applied Micro Circuits Corp. (a) | 2,758 | | 22,147 |
Broadcom Corp. Class A (a) | 1,300 | | 28,704 |
Conexant Systems, Inc. (a) | 12,800 | | 8,832 |
Cree, Inc. (a) | 1,100 | | 32,505 |
CSR PLC (a) | 2,000 | | 21,226 |
Exar Corp. (a) | 143 | | 1,174 |
Hittite Microwave Corp. (a) | 600 | | 23,892 |
Marvell Technology Group Ltd. (a) | 5,900 | | 70,033 |
Microsemi Corp. (a) | 449 | | 10,201 |
Mindspeed Technologies, Inc. (a) | 12,509 | | 10,220 |
MIPS Technologies, Inc. (a) | 1,398 | | 6,221 |
Pericom Semiconductor Corp. (a) | 1,700 | | 23,052 |
Pixelplus Co. Ltd. sponsored ADR (a) | 3,600 | | 2,160 |
PLX Technology, Inc. (a) | 1,400 | | 9,828 |
PMC-Sierra, Inc. (a) | 3,100 | | 14,539 |
Silicon Motion Technology Corp. sponsored ADR (a) | 1,800 | | 27,720 |
Silicon Storage Technology, Inc. (a) | 1,200 | | 3,408 |
Soitec SA (a) | 2,100 | | 18,530 |
Transmeta Corp. (a) | 290 | | 3,903 |
| | 386,795 |
TOTAL SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT | | 449,677 |
SOFTWARE - 6.1% |
Application Software - 2.3% |
Smith Micro Software, Inc. (a) | 6,700 | | 50,451 |
Taleo Corp. Class A (a) | 100 | | 2,113 |
Ulticom, Inc. (a) | 17,598 | | 125,826 |
| | 178,390 |
Common Stocks - continued |
| Shares | | Value |
SOFTWARE - CONTINUED |
Home Entertainment Software - 1.0% |
Ubisoft Entertainment SA (a) | 800 | | $ 72,722 |
Systems Software - 2.8% |
Allot Communications Ltd. (a) | 300 | | 1,191 |
Sandvine Corp. (U.K.) (a) | 56,400 | | 207,839 |
| | 209,030 |
TOTAL SOFTWARE | | 460,142 |
TOTAL COMMON STOCKS (Cost $8,040,016) | 7,107,016 |
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 | | 17,888 |
Money Market Funds - 6.4% |
| Shares | | |
Fidelity Cash Central Fund, 3.79% (b)
(Cost $481,822) | 481,822 | | 481,822 |
TOTAL INVESTMENT PORTFOLIO - 100.4% (Cost $8,541,838) | | 7,606,726 |
NET OTHER ASSETS - (0.4)% | | (31,948) |
NET ASSETS - 100% | $ 7,574,778 |
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 | $ 3,719 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 73.7% |
Canada | 12.9% |
Taiwan | 5.6% |
Netherlands | 2.4% |
Israel | 2.1% |
France | 1.2% |
Others (individually less than 1%) | 2.1% |
| 100.0% |
Income Tax Information |
The fund intends to elect to defer to its fiscal year ending July 31, 2008 approximately $221,739 of losses recognized during the period November 1, 2006 to July 31, 2007. |
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, 2008 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $8,060,016) | $ 7,124,904 | |
Fidelity Central Funds (cost $481,822) | 481,822 | |
Total Investments (cost $8,541,838) | | $ 7,606,726 |
Receivable for investments sold | | 27,415 |
Dividends receivable | | 190 |
Interest receivable | | 12 |
Distributions receivable from Fidelity Central Funds | | 352 |
Prepaid expenses | | 32 |
Receivable from investment adviser for expense reductions | | 3,262 |
Other receivables | | 219 |
Total assets | | 7,638,208 |
| | |
Liabilities | | |
Payable for fund shares redeemed | $ 29,334 | |
Accrued management fee | 3,619 | |
Distribution fees payable | 3,964 | |
Other affiliated payables | 2,546 | |
Other payables and accrued expenses | 23,967 | |
Total liabilities | | 63,430 |
| | |
Net Assets | | $ 7,574,778 |
Net Assets consist of: | | |
Paid in capital | | $ 8,938,953 |
Accumulated net investment loss | | (73,133) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (355,930) |
Net unrealized appreciation (depreciation) on investments | | (935,112) |
Net Assets | | $ 7,574,778 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($2,139,712 ÷ 268,285 shares) | | $ 7.98 |
| | |
Maximum offering price per share (100/94.25 of $7.98) | | $ 8.47 |
Class T:
Net Asset Value and redemption price per share ($2,183,189 ÷ 278,588 shares) | | $ 7.84 |
| | |
Maximum offering price per share (100/96.50 of $7.84) | | $ 8.12 |
Class B:
Net Asset Value and offering price per share ($1,669,961 ÷ 220,930 shares) A | | $ 7.56 |
| | |
Class C:
Net Asset Value and offering price per share ($1,314,984 ÷ 174,040 shares)A | | $ 7.56 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($266,932 ÷ 32,862 shares) | | $ 8.12 |
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, 2008 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 10,279 |
Interest | | 81 |
Income from Fidelity Central Funds | | 3,719 |
Total income | | 14,079 |
| | |
Expenses | | |
Management fee | $ 27,592 | |
Transfer agent fees | 17,923 | |
Distribution fees | 30,052 | |
Accounting fees and expenses | 1,928 | |
Custodian fees and expenses | 1,286 | |
Independent trustees' compensation | 21 | |
Registration fees | 37,741 | |
Audit | 22,979 | |
Legal | 36 | |
Miscellaneous | 43 | |
Total expenses before reductions | 139,601 | |
Expense reductions | (52,389) | 87,212 |
Net investment income (loss) | | (73,133) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (15,903) | |
Foreign currency transactions | (38) | |
Total net realized gain (loss) | | (15,941) |
Change in net unrealized appreciation (depreciation) on investment securities | | (1,282,930) |
Net gain (loss) | | (1,298,871) |
Net increase (decrease) in net assets resulting from operations | | $ (1,372,004) |
Statement of Changes in Net Assets
| Six months ended
January 31, 2008
(Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (73,133) | $ (146,568) |
Net realized gain (loss) | (15,941) | 337,365 |
Change in net unrealized appreciation (depreciation) | (1,282,930) | 2,613,997 |
Net increase (decrease) in net assets resulting from operations | (1,372,004) | 2,804,794 |
Distributions to shareholders from net realized gain | (150,546) | - |
Share transactions - net increase (decrease) | (1,292,974) | (3,045,289) |
Redemption fees | 346 | 192 |
Total increase (decrease) in net assets | (2,815,178) | (240,303) |
| | |
Net Assets | | |
Beginning of period | 10,389,956 | 10,630,259 |
End of period (including accumulated net investment loss of $73,133 and $0, respectively) | $ 7,574,778 | $ 10,389,956 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 9.49 | $ 7.29 | $ 7.70 | $ 6.53 | $ 5.57 | $ 3.96 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.09) | (.09) | (.07) | (.09) | (.04) |
Net realized and unrealized gain (loss) | (1.32) | 2.29 | (.32) | 1.24 | 1.01 | 1.65 |
Total from investment operations | (1.37) | 2.20 | (.41) | 1.17 | .92 | 1.61 |
Distributions from net realized gain | (.14) | - | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .04 | - I |
Net asset value, end of period | $ 7.98 | $ 9.49 | $ 7.29 | $ 7.70 | $ 6.53 | $ 5.57 |
Total Return B, C, D | (14.72)% | 30.18% | (5.32)% | 17.92% | 17.24% | 40.66% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.43% A | 2.24% | 2.13% | 2.32% | 2.38% | 6.13% |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.40% | 1.45% | 1.50% | 1.50% |
Expenses net of all reductions | 1.40% A | 1.40% | 1.32% | 1.28% | 1.35% | 1.36% |
Net investment income (loss) | (1.11)% A | (1.00)% | (1.05)% | (.92)% | (1.18)% | (.82)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 2,140 | $ 2,825 | $ 3,145 | $ 2,406 | $ 3,480 | $ 970 |
Portfolio turnover rate G | 48% A | 58% | 174% | 250% | 306% | 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 9.34 | $ 7.19 | $ 7.61 | $ 6.48 | $ 5.54 | $ 3.95 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.06) | (.11) | (.11) | (.08) | (.10) | (.05) |
Net realized and unrealized gain (loss) | (1.30) | 2.26 | (.31) | 1.21 | 1.00 | 1.64 |
Total from investment operations | (1.36) | 2.15 | (.42) | 1.13 | .90 | 1.59 |
Distributions from net realized gain | (.14) | - | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .04 | - I |
Net asset value, end of period | $ 7.84 | $ 9.34 | $ 7.19 | $ 7.61 | $ 6.48 | $ 5.54 |
Total Return B, C, D | (14.85)% | 29.90% | (5.52)% | 17.44% | 16.97% | 40.25% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.79% A | 2.57% | 2.51% | 2.78% | 3.06% | 6.82% |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.65% | 1.71% | 1.75% | 1.75% |
Expenses net of all reductions | 1.65% A | 1.64% | 1.57% | 1.54% | 1.60% | 1.61% |
Net investment income (loss) | (1.37)% A | (1.25)% | (1.30)% | (1.18)% | (1.43)% | (1.07)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 2,183 | $ 3,271 | $ 2,932 | $ 3,034 | $ 3,250 | $ 1,723 |
Portfolio turnover rate G | 48% A | 58% | 174% | 250% | 306% | 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.
Communications Equipment
Financial Highlights - Class B
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 9.03 | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 | $ 3.92 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.08) | (.14) | (.14) | (.12) | (.13) | (.07) |
Net realized and unrealized gain (loss) | (1.25) | 2.18 | (.31) | 1.20 | .98 | 1.62 |
Total from investment operations | (1.33) | 2.04 | (.45) | 1.08 | .85 | 1.55 |
Distributions from net realized gain | (.14) | - | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .04 | - I |
Net asset value, end of period | $ 7.56 | $ 9.03 | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 |
Total Return B, C, D | (15.03)% | 29.18% | (6.05)% | 16.98% | 16.27% | 39.54% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 3.16% A | 3.00% | 2.94% | 3.14% | 3.48% | 6.88% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.20% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.15% | 2.07% | 2.04% | 2.11% | 2.11% |
Net investment income (loss) | (1.87)% A | (1.75)% | (1.80)% | (1.68)% | (1.93)% | (1.56)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,670 | $ 2,225 | $ 2,406 | $ 2,864 | $ 2,998 | $ 1,846 |
Portfolio turnover rate G | 48% A | 58% | 174% | 250% | 306% | 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. IAmount represents less than $.01 per share. |
Financial Highlights - Class C
| Six months ended
Janaury 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 9.03 | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 | $ 3.92 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.08) | (.14) | (.15) | (.12) | (.14) | (.07) |
Net realized and unrealized gain (loss) | (1.25) | 2.18 | (.30) | 1.20 | .99 | 1.62 |
Total from investment operations | (1.33) | 2.04 | (.45) | 1.08 | .85 | 1.55 |
Distributions from net realized gain | (.14) | - | - | - | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .04 | - I |
Net asset value, end of period | $ 7.56 | $ 9.03 | $ 6.99 | $ 7.44 | $ 6.36 | $ 5.47 |
Total Return B, C, D | (15.03)% | 29.18% | (6.05)% | 16.98% | 16.27% | 39.54% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 3.16% A | 2.98% | 2.86% | 3.07% | 3.19% | 6.81% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.19% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.15% | 2.07% | 2.02% | 2.10% | 2.11% |
Net investment income (loss) | (1.87)% A | (1.75)% | (1.81)% | (1.66)% | (1.93)% | (1.57)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,315 | $ 1,745 | $ 1,768 | $ 1,846 | $ 3,180 | $ 1,009 |
Portfolio turnover rate G | 48% A | 58% | 174% | 250% | 306% | 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. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended
Janary 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 9.65 | $ 7.39 | $ 7.79 | $ 6.60 | $ 5.61 | $ 3.98 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | (.04) | (.07) | (.07) | (.05) | (.07) | (.03) |
Net realized and unrealized gain (loss) | (1.35) | 2.33 | (.33) | 1.24 | 1.02 | 1.66 |
Total from investment operations | (1.39) | 2.26 | (.40) | 1.19 | .95 | 1.63 |
Distributions from net realized gain | (.14) | - | - | - | - | - |
Redemption fees added to paid in capital D | - H | - H | - H | - H | .04 | - H |
Net asset value, end of period | $ 8.12 | $ 9.65 | $ 7.39 | $ 7.79 | $ 6.60 | $ 5.61 |
Total Return B, C | (14.69)% | 30.58% | (5.13)% | 18.03% | 17.65% | 40.95% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | 2.09% A | 1.87% | 1.70% | 1.85% | 1.55% | 5.34% |
Expenses net of fee waivers, if any | 1.15% A | 1.15% | 1.15% | 1.18% | 1.25% | 1.25% |
Expenses net of all reductions | 1.15% A | 1.15% | 1.07% | 1.01% | 1.11% | 1.11% |
Net investment income (loss) | (.86)% A | (.75)% | (.80)% | (.65)% | (.93)% | (.57)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 267 | $ 324 | $ 379 | $ 319 | $ 607 | $ 154 |
Portfolio turnover rate F | 48% A | 58% | 174% | 250% | 306% | 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.
Communications Equipment
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
1. Organization.
Fidelity Advisor Communications Equipment 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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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 available 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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Foreign Currency - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year, the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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 and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 853,521 | |
Unrealized depreciation | (1,872,636) | |
Net unrealized appreciation (depreciation) | $ (1,019,115) | |
Cost for federal income tax purposes | $ 8,625,841 | |
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. 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 Pronouncement. 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.
Communications Equipment
4. 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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $2,335,732 and $4,143,167, respectively.
6. 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% | $ 3,414 | $ 17 |
Class T | .25% | .25% | 7,662 | - |
Class B | .75% | .25% | 10,527 | 7,895 |
Class C | .75% | .25% | 8,449 | 1,114 |
| | | $ 30,052 | $ 9,026 |
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 | $ 883 |
Class T | 1,045 |
Class B* | 1,164 |
Class C* | 206 |
| $ 3,298 |
* 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
Notes to Financial Statements (Unaudited) - continued
6. 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 | $ 4,501 | .33 |
Class T | 6,779 | .44 |
Class B | 3,452 | .33 |
Class C | 2,769 | .33 |
Institutional Class | 422 | .26 |
| $ 17,923 | |
* Annualized
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.
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 $168 for the period.
7. 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.
8. 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% | $ 13,982 |
Class T | 1.65% | 17,439 |
Class B | 2.15% | 10,666 |
Class C | 2.15% | 8,552 |
Institutional Class | 1.15% | 1,532 |
| | $ 52,171 |
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 $218 for the period.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Communications Equipment
9. Other - continued
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $4,027.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 |
From net realized gain | |
Class A | $ 39,064 |
Class T | 47,716 |
Class B | 32,890 |
Class C | 26,349 |
Institutional Class | 4,527 |
Total | $ 150,546 |
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 | Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 55,145 | 81,005 | $ 532,808 | $ 690,457 |
Reinvestment of distributions | 4,001 | - | 38,211 | - |
Shares redeemed | (88,520) | (214,792) | (812,836) | (1,810,328) |
Net increase (decrease) | (29,374) | (133,787) | $ (241,817) | $ (1,119,871) |
Class T | | | | |
Shares sold | 29,008 | 82,403 | $ 266,761 | $ 704,729 |
Reinvestment of distributions | 5,010 | - | 47,041 | - |
Shares redeemed | (105,727) | (139,753) | (978,230) | (1,173,589) |
Net increase (decrease) | (71,709) | (57,350) | $ (664,428) | $ (468,860) |
Class B | | | | |
Shares sold | 13,811 | 24,084 | $ 122,159 | $ 199,321 |
Reinvestment of distributions | 3,437 | - | 31,211 | - |
Shares redeemed | (42,635) | (121,877) | (377,724) | (1,002,926) |
Net increase (decrease) | (25,387) | (97,793) | $ (224,354) | $ (803,605) |
Class C | | | | |
Shares sold | 25,047 | 60,107 | $ 227,235 | $ 487,807 |
Reinvestment of distributions | 2,609 | - | 23,659 | - |
Shares redeemed | (46,830) | (119,863) | (408,582) | (990,194) |
Net increase (decrease) | (19,174) | (59,756) | $ (157,688) | $ (502,387) |
Institutional Class | | | | |
Shares sold | 3,195 | 1,716 | $ 30,324 | $ 15,290 |
Reinvestment of distributions | 356 | - | 3,461 | - |
Shares redeemed | (4,219) | (19,380) | (38,472) | (165,856) |
Net increase (decrease) | (668) | (17,664) | $ (4,687) | $ (150,566) |
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 900.10 | $ 6.50 |
HypotheticalA | $ 1,000.00 | $ 1,018.30 | $ 6.90 |
Class T | | | |
Actual | $ 1,000.00 | $ 899.50 | $ 7.69 |
HypotheticalA | $ 1,000.00 | $ 1,017.04 | $ 8.16 |
Class B | | | |
Actual | $ 1,000.00 | $ 896.80 | $ 10.06 |
HypotheticalA | $ 1,000.00 | $ 1,014.53 | $ 10.68 |
Class C | | | |
Actual | $ 1,000.00 | $ 897.00 | $ 10.06 |
HypotheticalA | $ 1,000.00 | $ 1,014.53 | $ 10.68 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 901.10 | $ 5.30 |
HypotheticalA | $ 1,000.00 | $ 1,019.56 | $ 5.63 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.36% |
Class T | 1.61% |
Class B | 2.11% |
Class C | 2.11% |
Institutional Class | 1.11% |
Consumer Discretionary
Advisor Consumer Discretionary Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Target Corp. | 6.3 | 5.5 |
Time Warner, Inc. | 5.7 | 6.1 |
McDonald's Corp. | 5.1 | 5.0 |
Home Depot, Inc. | 4.4 | 6.3 |
Lowe's Companies, Inc. | 3.9 | 1.5 |
Comcast Corp. Class A | 3.3 | 4.5 |
Staples, Inc. | 3.2 | 3.2 |
Johnson Controls, Inc. | 2.8 | 1.7 |
News Corp. Class A | 2.7 | 3.2 |
The Walt Disney Co. | 2.6 | 1.2 |
| 40.0 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Media | 27.3% | |
| Specialty Retail | 24.8% | |
| Hotels, Restaurants & Leisure | 14.0% | |
| Multiline Retail | 8.3% | |
| Food & Staples Retailing | 4.7% | |
| All Others* | 20.9% | |
|
As of July 31, 2007 |
| Media | 27.2% | |
| Specialty Retail | 20.8% | |
| Hotels, Restaurants & Leisure | 16.0% | |
| Multiline Retail | 12.5% | |
| Textiles, Apparel & Luxury Goods | 6.4% | |
| All Others* | 17.1% | |
* Includes short-term investments and net other assets. |
Semiannual Report
Advisor Consumer Discretionary Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 100.2% |
| Shares | | Value |
AUTO COMPONENTS - 2.8% |
Auto Parts & Equipment - 2.8% |
Johnson Controls, Inc. | 31,200 | | $ 1,103,544 |
AUTOMOBILES - 1.3% |
Automobile Manufacturers - 0.7% |
Renault SA | 1,000 | | 114,156 |
Toyota Motor Corp. sponsored ADR | 1,500 | | 162,825 |
| | 276,981 |
Motorcycle Manufacturers - 0.6% |
Harley-Davidson, Inc. | 6,400 | | 259,712 |
TOTAL AUTOMOBILES | | 536,693 |
DISTRIBUTORS - 0.5% |
Distributors - 0.5% |
Li & Fung Ltd. | 58,000 | | 215,712 |
DIVERSIFIED CONSUMER SERVICES - 2.8% |
Education Services - 2.4% |
Apollo Group, Inc. Class A (non-vtg.) (a) | 8,900 | | 709,686 |
Career Education Corp. (a) | 3,100 | | 67,394 |
Princeton Review, Inc. (a) | 5,429 | | 42,835 |
Strayer Education, Inc. | 900 | | 155,322 |
| | 975,237 |
Specialized Consumer Services - 0.4% |
Sotheby's Class A (ltd. vtg.) | 4,700 | | 146,029 |
TOTAL DIVERSIFIED CONSUMER SERVICES | | 1,121,266 |
FOOD & STAPLES RETAILING - 4.7% |
Drug Retail - 2.2% |
CVS Caremark Corp. | 22,600 | | 882,982 |
Food Distributors - 0.6% |
Sysco Corp. | 7,200 | | 209,160 |
Food Retail - 0.9% |
Susser Holdings Corp. (a) | 15,283 | | 360,679 |
Hypermarkets & Super Centers - 1.0% |
Costco Wholesale Corp. (d) | 6,000 | | 407,640 |
TOTAL FOOD & STAPLES RETAILING | | 1,860,461 |
HOTELS, RESTAURANTS & LEISURE - 14.0% |
Casinos & Gaming - 4.0% |
International Game Technology | 21,600 | | 921,672 |
Las Vegas Sands Corp. (a) | 4,000 | | 350,680 |
Penn National Gaming, Inc. (a) | 1,900 | | 99,085 |
Wynn Resorts Ltd. | 1,800 | | 206,964 |
| | 1,578,401 |
Hotels, Resorts & Cruise Lines - 2.9% |
Carnival Corp. unit | 15,800 | | 702,942 |
Royal Caribbean Cruises Ltd. | 11,400 | | 459,192 |
| | 1,162,134 |
|
| Shares | | Value |
Restaurants - 7.1% |
Burger King Holdings, Inc. | 4,000 | | $ 105,400 |
Darden Restaurants, Inc. | 3,600 | | 101,952 |
McDonald's Corp. | 38,300 | | 2,050,965 |
Sonic Corp. (a)(d) | 9,600 | | 212,928 |
Starbucks Corp. (a) | 20,200 | | 381,982 |
| | 2,853,227 |
TOTAL HOTELS, RESTAURANTS & LEISURE | | 5,593,762 |
HOUSEHOLD DURABLES - 1.0% |
Household Appliances - 1.0% |
The Stanley Works | 2,100 | | 107,856 |
Whirlpool Corp. | 3,400 | | 289,374 |
| | 397,230 |
INTERNET & CATALOG RETAIL - 3.8% |
Catalog Retail - 1.1% |
Liberty Media Corp. - Interactive Series A (a) | 27,800 | | 442,298 |
Internet Retail - 2.7% |
Amazon.com, Inc. (a) | 6,700 | | 520,590 |
Blue Nile, Inc. (a)(d) | 10,100 | | 558,025 |
| | 1,078,615 |
TOTAL INTERNET & CATALOG RETAIL | | 1,520,913 |
INTERNET SOFTWARE & SERVICES - 2.0% |
Internet Software & Services - 2.0% |
Google, Inc. Class A (sub. vtg.) (a) | 1,000 | | 564,300 |
LoopNet, Inc. (a)(d) | 15,300 | | 215,883 |
| | 780,183 |
LEISURE EQUIPMENT & PRODUCTS - 1.4% |
Leisure Products - 1.1% |
Mattel, Inc. | 20,900 | | 439,109 |
Photographic Products - 0.3% |
Eastman Kodak Co. | 7,000 | | 139,510 |
TOTAL LEISURE EQUIPMENT & PRODUCTS | | 578,619 |
MEDIA - 27.3% |
Advertising - 3.3% |
National CineMedia, Inc. | 14,800 | | 337,292 |
Omnicom Group, Inc. | 21,900 | | 993,603 |
| | 1,330,895 |
Broadcasting & Cable TV - 7.4% |
Clear Channel Communications, Inc. | 10,000 | | 307,100 |
Comcast Corp. Class A (a) | 72,550 | | 1,317,508 |
Grupo Televisa SA de CV (CPO) sponsored ADR | 25,500 | | 568,395 |
The DIRECTV Group, Inc. (a) | 26,400 | | 596,112 |
Time Warner Cable, Inc. (a)(d) | 7,000 | | 176,120 |
| | 2,965,235 |
Common Stocks - continued |
| Shares | | Value |
MEDIA - CONTINUED |
Movies & Entertainment - 14.4% |
Cinemark Holdings, Inc. | 6,600 | | $ 94,380 |
Live Nation, Inc. (a) | 16,733 | | 182,390 |
News Corp.: | | | |
Class A | 56,984 | | 1,076,998 |
Class B | 4,600 | | 89,424 |
Regal Entertainment Group Class A (d) | 54,400 | | 1,008,576 |
The Walt Disney Co. | 34,000 | | 1,017,620 |
Time Warner, Inc. | 145,400 | | 2,288,596 |
| | 5,757,984 |
Publishing - 2.2% |
McGraw-Hill Companies, Inc. | 20,400 | | 872,304 |
TOTAL MEDIA | | 10,926,418 |
MULTILINE RETAIL - 8.3% |
Department Stores - 2.0% |
Kohl's Corp. (a) | 7,600 | | 346,864 |
Nordstrom, Inc. (d) | 11,500 | | 447,350 |
| | 794,214 |
General Merchandise Stores - 6.3% |
Lojas Americanas SA (PN) | 150 | | 1,142 |
Target Corp. | 45,200 | | 2,512,213 |
| | 2,513,355 |
TOTAL MULTILINE RETAIL | | 3,307,569 |
PERSONAL PRODUCTS - 0.5% |
Personal Products - 0.5% |
Bare Escentuals, Inc. (a)(d) | 8,900 | | 212,176 |
SOFTWARE - 0.3% |
Home Entertainment Software - 0.3% |
Activision, Inc. (a) | 4,900 | | 126,763 |
SPECIALTY RETAIL - 24.8% |
Apparel Retail - 5.9% |
Abercrombie & Fitch Co. Class A | 5,000 | | 398,450 |
American Eagle Outfitters, Inc. | 4,800 | | 110,544 |
Casual Male Retail Group, Inc. (a) | 21,600 | | 104,976 |
Citi Trends, Inc. (a) | 8,599 | | 117,548 |
Collective Brands, Inc. (a)(d) | 13,700 | | 241,394 |
Ross Stores, Inc. | 11,500 | | 335,225 |
TJX Companies, Inc. | 18,448 | | 582,219 |
Tween Brands, Inc. (a)(d) | 9,100 | | 291,473 |
Urban Outfitters, Inc. (a) | 6,600 | | 191,400 |
| | 2,373,229 |
|
| Shares | | Value |
Automotive Retail - 1.6% |
Advance Auto Parts, Inc. | 15,400 | | $ 549,472 |
Penske Auto Group, Inc. | 5,700 | | 103,512 |
| | 652,984 |
Computer & Electronics Retail - 0.7% |
Gamestop Corp. Class A (a) | 5,700 | | 294,861 |
Home Improvement Retail - 9.1% |
Home Depot, Inc. | 57,867 | | 1,774,781 |
Lowe's Companies, Inc. | 58,900 | | 1,557,316 |
Sherwin-Williams Co. (d) | 5,500 | | 314,655 |
| | 3,646,752 |
Homefurnishing Retail - 1.4% |
Williams-Sonoma, Inc. (d) | 20,300 | | 545,664 |
Specialty Stores - 6.1% |
Jo-Ann Stores, Inc. (a) | 900 | | 11,403 |
PetSmart, Inc. | 35,400 | | 809,598 |
Staples, Inc. | 52,638 | | 1,260,154 |
Tiffany & Co., Inc. (d) | 8,600 | | 343,140 |
| | 2,424,295 |
TOTAL SPECIALTY RETAIL | | 9,937,785 |
TEXTILES, APPAREL & LUXURY GOODS - 4.7% |
Apparel, Accessories & Luxury Goods - 2.7% |
Burberry Group PLC | 17,647 | | 153,945 |
Coach, Inc. (a) | 22,700 | | 727,535 |
G-III Apparel Group Ltd. (a) | 12,700 | | 169,799 |
Lululemon Athletica, Inc. | 700 | | 23,723 |
| | 1,075,002 |
Footwear - 2.0% |
Deckers Outdoor Corp. (a) | 2,648 | | 321,044 |
Iconix Brand Group, Inc. (a) | 18,600 | | 386,694 |
K-Swiss, Inc. Class A | 4,900 | | 88,984 |
| | 796,722 |
TOTAL TEXTILES, APPAREL & LUXURY GOODS | | 1,871,724 |
TOTAL COMMON STOCKS (Cost $41,924,687) | 40,090,818 |
Money Market Funds - 11.2% |
| Shares | | Value |
Fidelity Cash Central Fund, 3.79% (b) | 176,746 | | $ 176,746 |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 4,332,625 | | 4,332,625 |
TOTAL MONEY MARKET FUNDS (Cost $4,509,371) | 4,509,371 |
TOTAL INVESTMENT PORTFOLIO - 111.4% (Cost $46,434,058) | | 44,600,189 |
NET OTHER ASSETS - (11.4)% | | (4,577,249) |
NET ASSETS - 100% | $ 40,022,940 |
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 | $ 7,446 |
Fidelity Securities Lending Cash Central Fund | 17,748 |
Total | $ 25,194 |
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, 2008 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $4,365,004) - See accompanying schedule: Unaffiliated issuers (cost $41,924,687) | $ 40,090,818 | |
Fidelity Central Funds (cost $4,509,371) | 4,509,371 | |
Total Investments (cost $46,434,058) | | $ 44,600,189 |
Receivable for investments sold | | 673,987 |
Receivable for fund shares sold | | 40,626 |
Dividends receivable | | 10,505 |
Distributions receivable from Fidelity Central Funds | | 3,734 |
Prepaid expenses | | 149 |
Other receivables | | 8,916 |
Total assets | | 45,338,106 |
| | |
Liabilities | | |
Payable for investments purchased | $ 787,190 | |
Payable for fund shares redeemed | 122,318 | |
Accrued management fee | 18,123 | |
Distribution fees payable | 18,243 | |
Other affiliated payables | 12,523 | |
Other payables and accrued expenses | 24,144 | |
Collateral on securities loaned, at value | 4,332,625 | |
Total liabilities | | 5,315,166 |
| | |
Net Assets | | $ 40,022,940 |
Net Assets consist of: | | |
Paid in capital | | $ 42,846,085 |
Accumulated net investment loss | | (40,823) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (948,507) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (1,833,815) |
Net Assets | | $ 40,022,940 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($15,084,149 ÷ 1,156,612 shares) | | $ 13.04 |
| | |
Maximum offering price per share (100/94.25 of $13.04) | | $ 13.84 |
Class T:
Net Asset Value and redemption price per share ($11,303,678 ÷ 892,357 shares) | | $ 12.67 |
| | |
Maximum offering price per share (100/96.50 of $12.67) | | $ 13.13 |
Class B:
Net Asset Value and offering price per share ($7,495,512 ÷ 631,467 shares) A | | $ 11.87 |
| | |
Class C:
Net Asset Value and offering price per share ($5,427,104 ÷ 456,544 shares) A | | $ 11.89 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($712,497 ÷ 52,718 shares) | | $ 13.52 |
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, 2008 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 339,924 |
Income from Fidelity Central Funds | | 25,194 |
Total income | | 365,118 |
| | |
Expenses | | |
Management fee | $ 134,766 | |
Transfer agent fees | 74,450 | |
Distribution fees | 137,228 | |
Accounting and security lending fees | 10,200 | |
Custodian fees and expenses | 4,058 | |
Independent trustees' compensation | 106 | |
Registration fees | 23,959 | |
Audit | 22,591 | |
Legal | 171 | |
Miscellaneous | 212 | |
Total expenses before reductions | 407,741 | |
Expense reductions | (1,812) | 405,929 |
Net investment income (loss) | | (40,811) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (563,405) | |
Foreign currency transactions | (234) | |
Total net realized gain (loss) | | (563,639) |
Change in net unrealized appreciation (depreciation) on investment securities | | (4,441,180) |
Net gain (loss) | | (5,004,819) |
Net increase (decrease) in net assets resulting from operations | | $ (5,045,630) |
Statement of Changes in Net Assets
| Six months ended
January 31, 2008
(Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (40,811) | $ (126,710) |
Net realized gain (loss) | (563,639) | 8,083,666 |
Change in net unrealized appreciation (depreciation) | (4,441,180) | (1,699,408) |
Net increase (decrease) in net assets resulting from operations | (5,045,630) | 6,257,548 |
Distributions to shareholders from net investment income | - | (93,265) |
Distributions to shareholders from net realized gain | (4,774,704) | (7,904,219) |
Total distributions | (4,774,704) | (7,997,484) |
Share transactions - net increase (decrease) | (5,169,792) | 3,157,156 |
Redemption fees | 286 | 895 |
Total increase (decrease) in net assets | (14,989,840) | 1,418,115 |
| | |
Net Assets | | |
Beginning of period | 55,012,780 | 53,594,665 |
End of period (including accumulated net investment loss of $40,823 and accumulated net investment loss of $12, respectively) | $ 40,022,940 | $ 55,012,780 |
See accompanying notes which are an integral part of the financial statements.
Consumer Discretionary
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 15.89 | $ 16.39 | $ 16.62 | $ 14.51 | $ 13.71 | $ 12.71 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .01 | .02 H | (.04) | (.07) | (.07) | (.04) |
Net realized and unrealized gain (loss) | (1.45) | 1.83 | (.07) | 2.71 | .87 | 1.04 |
Total from investment operations | (1.44) | 1.85 | (.11) | 2.64 | .80 | 1.00 |
Distributions from net investment income | - | (.05) | - | - | - | - |
Distributions from net realized gain | (1.41) | (2.30) | (.12) | (.53) | - | - |
Total distributions | (1.41) | (2.35) | (.12) | (.53) | - | - |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Net asset value, end of period | $ 13.04 | $ 15.89 | $ 16.39 | $ 16.62 | $ 14.51 | $ 13.71 |
Total Return B, C, D | (9.99)% | 11.67% | (.69)% | 18.85% | 5.84% | 7.87% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.36% A | 1.42% | 1.42% | 1.47% | 1.55% | 1.70% |
Expenses net of fee waivers, if any | 1.36% A | 1.40% | 1.40% | 1.44% | 1.50% | 1.53% |
Expenses net of all reductions | 1.36% A | 1.39% | 1.39% | 1.42% | 1.45% | 1.48% |
Net investment income (loss) | .14% A | .11% H | (.23)% | (.45)% | (.50)% | (.33)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 15,084 | $ 19,708 | $ 16,935 | $ 17,887 | $ 11,856 | $ 9,101 |
Portfolio turnover rate G | 76% A | 164% | 81% | 66% | 152% | 88% |
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 (.32)%. 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 15.47 | $ 16.03 | $ 16.29 | $ 14.27 | $ 13.51 | $ 12.57 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | (.02) H | (.07) | (.11) | (.11) | (.07) |
Net realized and unrealized gain (loss) | (1.40) | 1.79 | (.07) | 2.66 | .87 | 1.01 |
Total from investment operations | (1.41) | 1.77 | (.14) | 2.55 | .76 | .94 |
Distributions from net investment income | - | (.03) | - | - | - | - |
Distributions from net realized gain | (1.39) | (2.30) | (.12) | (.53) | - | - |
Total distributions | (1.39) | (2.33) | (.12) | (.53) | - | - |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Net asset value, end of period | $ 12.67 | $ 15.47 | $ 16.03 | $ 16.29 | $ 14.27 | $ 13.51 |
Total Return B, C, D | (10.05)% | 11.43% | (.89)% | 18.52% | 5.63% | 7.48% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.61% A | 1.69% | 1.69% | 1.75% | 1.81% | 1.87% |
Expenses net of fee waivers, if any | 1.61% A | 1.65% | 1.65% | 1.69% | 1.75% | 1.78% |
Expenses net of all reductions | 1.58% A | 1.61% | 1.62% | 1.67% | 1.70% | 1.73% |
Net investment income (loss) | (.08)% A | (.10)% H | (.46)% | (.70)% | (.74)% | (.58)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 11,304 | $ 14,787 | $ 14,267 | $ 16,782 | $ 15,555 | $ 13,693 |
Portfolio turnover rate G | 76% A | 164% | 81% | 66% | 152% | 88% |
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 (.53)%. 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 ende
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 14.56 | $ 15.26 | $ 15.60 | $ 13.75 | $ 13.08 | $ 12.22 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.10) H | (.15) | (.17) | (.18) | (.13) |
Net realized and unrealized gain (loss) | (1.32) | 1.70 | (.07) | 2.55 | .85 | .99 |
Total from investment operations | (1.36) | 1.60 | (.22) | 2.38 | .67 | .86 |
Distributions from net realized gain | (1.33) | (2.30) | (.12) | (.53) | - | - |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Net asset value, end of period | $ 11.87 | $ 14.56 | $ 15.26 | $ 15.60 | $ 13.75 | $ 13.08 |
Total Return B, C, D | (10.32)% | 10.82% | (1.45)% | 17.97% | 5.12% | 7.04% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.11% A | 2.20% | 2.19% | 2.24% | 2.29% | 2.37% |
Expenses net of fee waivers, if any | 2.11% A | 2.15% | 2.15% | 2.19% | 2.25% | 2.25% |
Expenses net of all reductions | 2.11% A | 2.15% | 2.14% | 2.16% | 2.20% | 2.19% |
Net investment income (loss) | (.61)% A | (.64)% H | (.98)% | (1.20)% | (1.25)% | (1.05)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 7,496 | $ 11,081 | $ 14,088 | $ 18,862 | $ 17,302 | $ 15,944 |
Portfolio turnover rate G | 76% A | 164% | 81% | 66% | 152% | 88% |
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. 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 (1.07)%. 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 14.59 | $ 15.28 | $ 15.62 | $ 13.77 | $ 13.10 | $ 12.24 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.10) H | (.15) | (.17) | (.18) | (.13) |
Net realized and unrealized gain (loss) | (1.32) | 1.71 | (.07) | 2.55 | .85 | .99 |
Total from investment operations | (1.36) | 1.61 | (.22) | 2.38 | .67 | .86 |
Distributions from net realized gain | (1.34) | (2.30) | (.12) | (.53) | - | - |
Redemption fees added to paid in capital E, J | - | - | - | - | - | - |
Net asset value, end of period | $ 11.89 | $ 14.59 | $ 15.28 | $ 15.62 | $ 13.77 | $ 13.10 |
Total Return B, C, D | (10.30)% | 10.88% | (1.45)% | 17.94% | 5.11% | 7.03% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 2.11% A | 2.16% | 2.12% | 2.17% | 2.24% | 2.33% |
Expenses net of fee waivers, if any | 2.11% A | 2.15% | 2.12% | 2.17% | 2.24% | 2.25% |
Expenses net of all reductions | 2.11% A | 2.15% | 2.12% | 2.14% | 2.19% | 2.19% |
Net investment income (loss) | (.61)% A | (.64)% H | (.95)% | (1.18)% | (1.24)% | (1.05)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 5,427 | $ 8,051 | $ 7,160 | $ 8,505 | $ 6,992 | $ 6,759 |
Portfolio turnover rate G | 76% A | 164% | 81% | 66% | 152% | 88% |
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 (1.07)%. 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.41 | $ 16.82 | $ 17.01 | $ 14.81 | $ 13.95 | $ 12.91 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .03 | .06 G | - | (.03) | (.04) | (.01) |
Net realized and unrealized gain (loss) | (1.51) | 1.89 | (.07) | 2.76 | .90 | 1.05 |
Total from investment operations | (1.48) | 1.95 | (.07) | 2.73 | .86 | 1.04 |
Distributions from net investment income | - | (.06) | - | - | - | - |
Distributions from net realized gain | (1.41) | (2.30) | (.12) | (.53) | - | - |
Total distributions | (1.41) | (2.36) | (.12) | (.53) | - | - |
Redemption fees added to paid in capital D, I | - | - | - | - | - | - |
Net asset value, end of period | $ 13.52 | $ 16.41 | $ 16.82 | $ 17.01 | $ 14.81 | $ 13.95 |
Total Return B, C | (9.89)% | 12.04% | (.44)% | 19.08% | 6.16% | 8.06% |
Ratios to Average Net Assets E, H | | | | | | |
Expenses before reductions | 1.11% A | 1.15% | 1.18% | 1.26% | 1.34% | 1.49% |
Expenses net of fee waivers, if any | 1.11% A | 1.15% | 1.15% | 1.20% | 1.25% | 1.25% |
Expenses net of all reductions | 1.11% A | 1.14% | 1.14% | 1.17% | 1.20% | 1.19% |
Net investment income (loss) | .40% A | .36% G | .02% | (.21)% | (.25)% | (.05)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 712 | $ 1,385 | $ 1,144 | $ 1,371 | $ 907 | $ 766 |
Portfolio turnover rate F | 76% A | 164% | 81% | 66% | 152% | 88% |
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 (.07)%. 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, 2008 (Unaudited)
1. Organization.
Fidelity Advisor Consumer Discretionary 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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
Consumer Discretionary
3. Significant Accounting Policies - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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, 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 | $ 3,141,956 | |
Unrealized depreciation | (5,160,163) | |
Net unrealized appreciation (depreciation) | $ (2,018,207) | |
Cost for federal income tax purposes | $ 46,618,396 | |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to 0.75% 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 Pronouncement. 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.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $18,535,963 and $28,310,864, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
5. 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% | $ 22,037 | $ 451 |
Class T | .25% | .25% | 33,422 | - |
Class B | .75% | .25% | 46,887 | 35,174 |
Class C | .75% | .25% | 34,882 | 5,069 |
| | | $ 137,228 | $ 40,694 |
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 | $ 2,758 |
Class T | 1,553 |
Class B* | 10,851 |
Class C* | 268 |
| $ 15,430 |
* 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 | $ 27,173 | .31 |
Class T | 20,379 | .30 |
Class B | 14,428 | .31 |
Class C | 10,867 | .31 |
Institutional Class | 1,603 | .30 |
| $ 74,450 | |
* 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.
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 $1,024 for the period.
Consumer Discretionary
6. 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 $73 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. 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 $17,748.
8. 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 $86 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 T | $ 1,726 | |
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $12,226.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
From net investment income | | |
Class A | $ - | $ 58,649 |
Class T | - | 28,339 |
Class C | - | 505 |
Institutional Class | - | 5,772 |
Total | $ - | $ 93,265 |
From net realized gain | | |
Class A | $ 1,697,903 | $ 2,496,425 |
Class T | 1,304,169 | 2,054,841 |
Class B | 954,937 | 2,079,901 |
Class C | 712,751 | 1,100,868 |
Institutional Class | 104,944 | 172,184 |
Total | $ 4,774,704 | $ 7,904,219 |
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 | Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 129,022 | 540,609 | $ 1,814,946 | $ 8,973,622 |
Reinvestment of distributions | 104,669 | 141,640 | 1,531,841 | 2,265,680 |
Shares redeemed | (317,043) | (475,746) | (4,477,349) | (7,950,826) |
Net increase (decrease) | (83,352) | 206,503 | $ (1,130,562) | $ 3,288,476 |
Class T | | | | |
Shares sold | 56,361 | 188,336 | $ 793,238 | $ 3,060,088 |
Reinvestment of distributions | 84,915 | 122,934 | 1,207,897 | 1,916,483 |
Shares redeemed | (204,629) | (245,736) | (2,771,472) | (4,018,366) |
Net increase (decrease) | (63,353) | 65,534 | $ (770,337) | $ 958,205 |
Class B | | | | |
Shares sold | 14,584 | 83,325 | $ 191,577 | $ 1,279,468 |
Reinvestment of distributions | 65,209 | 122,770 | 871,754 | 1,810,224 |
Shares redeemed | (209,218) | (368,667) | (2,701,977) | (5,659,191) |
Net increase (decrease) | (129,425) | (162,572) | $ (1,638,646) | $ (2,569,499) |
Class C | | | | |
Shares sold | 24,048 | 183,143 | $ 312,213 | $ 2,817,553 |
Reinvestment of distributions | 37,921 | 59,948 | 507,490 | 885,827 |
Shares redeemed | (157,176) | (159,811) | (1,996,212) | (2,453,389) |
Net increase (decrease) | (95,207) | 83,280 | $ (1,176,509) | $ 1,249,991 |
Institutional Class | | | | |
Shares sold | 28,906 | 116,522 | $ 425,543 | $ 1,988,792 |
Reinvestment of distributions | 5,683 | 8,916 | 86,193 | 146,867 |
Shares redeemed | (66,288) | (109,046) | (965,474) | (1,905,676) |
Net increase (decrease) | (31,699) | 16,392 | $ (453,738) | $ 229,983 |
Consumer Discretionary
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 790.30 | $ 6.30 |
HypotheticalA | $ 1,000.00 | $ 1,018.10 | $ 7.10 |
Class T | | | |
Actual | $ 1,000.00 | $ 789.50 | $ 7.42 |
HypotheticalA | $ 1,000.00 | $ 1,016.84 | $ 8.36 |
Class B | | | |
Actual | $ 1,000.00 | $ 786.20 | $ 9.65 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Class C | | | |
Actual | $ 1,000.00 | $ 787.10 | $ 9.66 |
HypotheticalA | $ 1,000.00 | $ 1,014.33 | $ 10.89 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 790.30 | $ 5.18 |
HypotheticalA | $ 1,000.00 | $ 1,019.36 | $ 5.84 |
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 184/366 (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 Electronics Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Intel Corp. | 19.9 | 18.8 |
Applied Materials, Inc. | 7.6 | 5.0 |
Texas Instruments, Inc. | 6.0 | 4.2 |
Broadcom Corp. Class A | 4.4 | 5.9 |
Marvell Technology Group Ltd. | 4.2 | 4.8 |
Xilinx, Inc. | 3.2 | 2.5 |
Microchip Technology, Inc. | 2.6 | 0.1 |
Varian Semiconductor Equipment Associates, Inc. | 2.2 | 1.4 |
National Semiconductor Corp. | 2.2 | 3.0 |
Altera Corp. | 2.1 | 2.4 |
| 54.4 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Semiconductors & Semiconductor Equipment | 77.8% | |
| Communications Equipment | 5.1% | |
| Computers & Peripherals | 4.0% | |
| Electrical Equipment | 3.6% | |
| Electronic Equipment & Instruments | 3.0% | |
| All Others* | 6.5% | |
|
As of July 31, 2007 |
| Semiconductors & Semiconductor Equipment | 85.2% | |
| Commercial Services & Supplies | 4.6% | |
| Electronic Equipment & Instruments | 3.6% | |
| Communications Equipment | 2.0% | |
| Chemicals | 1.3% | |
| All Others* | 3.3% | |
* Includes short-term investments and net other assets. |
Electronics
Advisor Electronics Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.3% |
| Shares | | Value |
CAPITAL MARKETS - 0.7% |
Asset Management & Custody Banks - 0.3% |
Harris & Harris Group, Inc. (a) | 8,452 | | $ 59,756 |
Diversified Capital Markets - 0.1% |
Indochina Capital Vietnam Holdings Ltd. | 3,100 | | 25,188 |
Investment Banking & Brokerage - 0.3% |
REXCAPITAL Financial Holdings Ltd. (a) | 375,000 | | 48,093 |
TOTAL CAPITAL MARKETS | | 133,037 |
CHEMICALS - 1.2% |
Specialty Chemicals - 1.2% |
Nanophase Technologies Corp. (a) | 25,200 | | 98,532 |
Nitto Denko Corp. | 800 | | 39,048 |
Tokuyama Corp. | 3,000 | | 21,414 |
Wacker Chemie AG | 400 | | 87,109 |
| | 246,103 |
COMMERCIAL SERVICES & SUPPLIES - 2.5% |
Diversified Commercial & Professional Services - 2.5% |
Arrowhead Research Corp. (a) | 6,800 | | 21,352 |
Arrowhead Research Corp. (a)(c) | 109,016 | | 342,310 |
Arrowhead Research Corp. warrants 5/21/17 (a)(c) | 64,879 | | 146,853 |
| | 510,515 |
COMMUNICATIONS EQUIPMENT - 5.1% |
Communications Equipment - 5.1% |
AAC Acoustic Technology Holdings, Inc. (a) | 34,000 | | 31,787 |
Alcatel-Lucent SA sponsored ADR | 8,700 | | 55,071 |
China Techfaith Wireless Communication Technology Ltd. sponsored ADR (a) | 14,703 | | 60,429 |
Cisco Systems, Inc. (a) | 8,600 | | 210,700 |
Foxconn International Holdings Ltd. (a) | 83,600 | | 137,878 |
Nokia Corp. sponsored ADR | 7,400 | | 273,430 |
QUALCOMM, Inc. | 5,100 | | 216,342 |
Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 2,300 | | 52,256 |
| | 1,037,893 |
COMPUTERS & PERIPHERALS - 4.0% |
Computer Hardware - 2.5% |
Apple, Inc. (a) | 1,200 | | 162,432 |
Hewlett-Packard Co. | 2,500 | | 109,375 |
High Tech Computer Corp. | 12,000 | | 226,221 |
| | 498,028 |
Computer Storage & Peripherals - 1.5% |
ASUSTeK Computer, Inc. | 51,243 | | 133,625 |
STEC, Inc. (a) | 8,500 | | 63,155 |
Synaptics, Inc. (a) | 4,000 | | 106,000 |
| | 302,780 |
TOTAL COMPUTERS & PERIPHERALS | | 800,808 |
|
| Shares | | Value |
ELECTRICAL EQUIPMENT - 3.6% |
Electrical Components & Equipment - 3.6% |
Evergreen Solar, Inc. (a) | 10,300 | | $ 125,557 |
First Solar, Inc. (a) | 1,000 | | 181,770 |
JA Solar Holdings Co. Ltd. ADR | 900 | | 45,747 |
Neo-Neon Holdings Ltd. | 68,700 | | 41,850 |
Q-Cells AG (a) | 1,000 | | 94,098 |
Renewable Energy Corp. AS (a) | 400 | | 10,457 |
SolarWorld AG | 2,500 | | 110,858 |
Suntech Power Holdings Co. Ltd. sponsored ADR (a) | 2,100 | | 114,933 |
| | 725,270 |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 3.0% |
Electronic Equipment & Instruments - 1.0% |
Cyntec Co. Ltd. | 6,000 | | 5,551 |
Ibiden Co. Ltd. | 200 | | 12,602 |
Motech Industries, Inc. | 9,850 | | 58,807 |
Nan Ya Printed Circuit Board Corp. | 10,000 | | 47,756 |
Nidec Corp. | 700 | | 45,885 |
Universal Display Corp. (a) | 1,100 | | 17,787 |
| | 188,388 |
Electronic Manufacturing Services - 1.5% |
Hon Hai Precision Industry Co. Ltd. (Foxconn) | 57,200 | | 307,035 |
Technology Distributors - 0.5% |
Arrow Electronics, Inc. (a) | 2,600 | | 88,972 |
Wolfson Microelectronics PLC (a) | 4,300 | | 13,561 |
| | 102,533 |
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS | | 597,956 |
MACHINERY - 0.1% |
Industrial Machinery - 0.1% |
NGK Insulators Ltd. | 1,000 | | 25,769 |
MEDIA - 0.1% |
Broadcasting & Cable TV - 0.1% |
JumpTV, Inc. | 18,000 | | 26,904 |
PHARMACEUTICALS - 0.0% |
Pharmaceuticals - 0.0% |
VODone Ltd. (a) | 22,000 | | 2,314 |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 77.8% |
Semiconductor Equipment - 16.3% |
Applied Materials, Inc. | 86,200 | | 1,544,704 |
ASML Holding NV (NY Shares) (a) | 5,200 | | 138,268 |
FormFactor, Inc. (a) | 5,650 | | 136,843 |
Global Unichip Corp. | 7,000 | | 31,857 |
Lam Research Corp. (a) | 8,600 | | 330,154 |
MEMC Electronic Materials, Inc. (a) | 5,200 | | 371,592 |
Tessera Technologies, Inc. (a) | 7,500 | | 293,775 |
Common Stocks - continued |
| Shares | | Value |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - CONTINUED |
Semiconductor Equipment - continued |
Topco Scientific Co. Ltd. | 12,840 | | $ 18,130 |
Varian Semiconductor Equipment Associates, Inc. (a) | 13,900 | | 447,719 |
| | 3,313,042 |
Semiconductors - 61.5% |
Advanced Micro Devices, Inc. (a) | 30,200 | | 230,728 |
Advanced Semiconductor Engineering, Inc. sponsored ADR | 37,681 | | 160,521 |
Altera Corp. | 25,900 | | 437,451 |
ARM Holdings PLC sponsored ADR | 39,200 | | 277,536 |
Atheros Communications, Inc. (a) | 5,000 | | 136,550 |
Broadcom Corp. Class A (a) | 40,500 | | 894,240 |
Cavium Networks, Inc. | 1,700 | | 32,487 |
Ceva, Inc. (a) | 1,500 | | 12,675 |
Diodes, Inc. (a) | 10,500 | | 243,075 |
Epistar Corp. | 26,153 | | 62,658 |
Global Mixed-mode Technology, Inc. | 13,500 | | 60,370 |
Himax Technologies, Inc. sponsored ADR | 16,800 | | 82,824 |
Hittite Microwave Corp. (a) | 4,400 | | 175,208 |
Infineon Technologies AG sponsored ADR (a) | 8,600 | | 88,064 |
Intel Corp. | 190,390 | | 4,036,267 |
Intersil Corp. Class A | 15,500 | | 356,965 |
Linear Technology Corp. | 1,900 | | 52,573 |
Marvell Technology Group Ltd. (a) | 72,400 | | 859,388 |
Maxim Integrated Products, Inc. | 10,400 | | 204,464 |
Microchip Technology, Inc. | 16,500 | | 526,515 |
Monolithic Power Systems, Inc. (a) | 2,600 | | 40,664 |
National Semiconductor Corp. | 24,220 | | 446,375 |
NVIDIA Corp. (a) | 12,200 | | 299,998 |
ON Semiconductor Corp. (a) | 15,100 | | 97,848 |
Richtek Technology Corp. | 18,550 | | 127,986 |
Silicon Laboratories, Inc. (a) | 7,000 | | 218,680 |
Soitec SA (a) | 1,300 | | 11,471 |
Spreadtrum Communications, Inc. ADR | 6,900 | | 65,550 |
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR | 24,300 | | 225,504 |
Texas Instruments, Inc. | 39,700 | | 1,227,921 |
TriQuint Semiconductor, Inc. (a) | 15,400 | | 72,996 |
|
| Shares | | Value |
Volterra Semiconductor Corp. (a) | 7,800 | | $ 71,604 |
Xilinx, Inc. | 29,500 | | 645,165 |
| | 12,482,321 |
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | | 15,795,363 |
SOFTWARE - 1.2% |
Home Entertainment Software - 1.2% |
Nintendo Co. Ltd. | 500 | | 247,000 |
TOTAL COMMON STOCKS (Cost $25,497,757) | 20,148,932 |
Money Market Funds - 0.7% |
| | | |
Fidelity Cash Central Fund, 3.79% (b)
(Cost $140,042) | 140,042 | | 140,042 |
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $25,637,799) | | 20,288,974 |
NET OTHER ASSETS - 0.0% | | 6,013 |
NET ASSETS - 100% | $ 20,294,987 |
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) 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 $489,163 or 2.4% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Arrowhead Research Corp. | 5/18/07 | $ 531,419 |
Arrowhead Research Corp. warrants 5/21/17 | 5/18/07 | 234,942 |
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 | $ 5,515 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 77.3% |
Taiwan | 7.3% |
Bermuda | 4.2% |
Cayman Islands | 2.5% |
Japan | 1.9% |
Germany | 1.8% |
United Kingdom | 1.5% |
Finland | 1.3% |
Others (individually less than 1%) | 2.2% |
| 100.0% |
Income Tax Information |
At July 31, 2007, the fund had a capital loss carryforward of approximately $7,319,181 of which $4,774,109, $2,265,871 and $279,201 will expire on July 31, 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, 2008 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $25,497,757) | $ 20,148,932 | |
Fidelity Central Funds (cost $140,042) | 140,042 | |
Total Investments (cost $25,637,799) | | $ 20,288,974 |
Foreign currency held at value (cost $4,889) | | 4,880 |
Receivable for investments sold | | 621,093 |
Receivable for fund shares sold | | 35,462 |
Dividends receivable | | 3,864 |
Distributions receivable from Fidelity Central Funds | | 952 |
Prepaid expenses | | 86 |
Receivable from investment adviser for expense reductions | | 3,592 |
Other receivables | | 534 |
Total assets | | 20,959,437 |
| | |
Liabilities | | |
Payable to custodian bank | $ 460,091 | |
Payable for investments purchased | 94,480 | |
Payable for fund shares redeemed | 59,502 | |
Accrued management fee | 9,859 | |
Distribution fees payable | 11,620 | |
Other affiliated payables | 7,074 | |
Other payables and accrued expenses | 21,824 | |
Total liabilities | | 664,450 |
| | |
Net Assets | | $ 20,294,987 |
Net Assets consist of: | | |
Paid in capital | | $ 35,004,514 |
Accumulated net investment loss | | (88,308) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (9,272,403) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (5,348,816) |
Net Assets | | $ 20,294,987 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($4,745,739 ÷ 659,094 shares) | | $ 7.20 |
| | |
Maximum offering price per share (100/94.25 of $7.20) | | $ 7.64 |
Class T:
Net Asset Value and redemption price per share ($5,740,809 ÷ 810,107 shares) | | $ 7.09 |
| | |
Maximum offering price per share (100/96.50 of $7.09) | | $ 7.35 |
Class B:
Net Asset Value and offering price per share ($3,077,824 ÷ 449,697 shares) A | | $ 6.84 |
| | |
Class C:
Net Asset Value and offering price per share ($6,199,389 ÷ 906,591 shares) A | | $ 6.84 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($531,226 ÷ 72,244 shares) | | $ 7.35 |
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, 2008 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 149,399 |
Interest | | 352 |
Income from Fidelity Central Funds | | 5,515 |
Total income | | 155,266 |
| | |
Expenses | | |
Management fee | $ 75,379 | |
Transfer agent fees | 44,631 | |
Distribution fees | 87,998 | |
Accounting fees and expenses | 5,267 | |
Custodian fees and expenses | 11,076 | |
Independent trustees' compensation | 58 | |
Registration fees | 38,178 | |
Audit | 23,131 | |
Legal | 84 | |
Miscellaneous | 119 | |
Total expenses before reductions | 285,921 | |
Expense reductions | (42,347) | 243,574 |
Net investment income (loss) | | (88,308) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (1,662,060) | |
Foreign currency transactions | (1,900) | |
Total net realized gain (loss) | | (1,663,960) |
Change in net unrealized appreciation (depreciation) on: Investment securities | (4,000,880) | |
Assets and liabilities in foreign currencies | 3 | |
Total change in net unrealized appreciation (depreciation) | | (4,000,877) |
Net gain (loss) | | (5,664,837) |
Net increase (decrease) in net assets resulting from operations | | $ (5,753,145) |
Statement of Changes in Net Assets
| Six months ended
January 31, 2008
(Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (88,308) | $ (226,545) |
Net realized gain (loss) | (1,663,960) | 4,562,227 |
Change in net unrealized appreciation (depreciation) | (4,000,877) | 2,119,265 |
Net increase (decrease) in net assets resulting from operations | (5,753,145) | 6,454,947 |
Share transactions - net increase (decrease) | (3,296,003) | (7,957,827) |
Redemption fees | 177 | 878 |
Total increase (decrease) in net assets | (9,048,971) | (1,502,002) |
| | |
Net Assets | | |
Beginning of period | 29,343,958 | 30,845,960 |
End of period (including accumulated net investment loss of $88,308 and $0, respectively) | $ 20,294,987 | $ 29,343,958 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 9.11 | $ 7.38 | $ 8.04 | $ 6.58 | $ 6.59 | $ 5.57 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | (.03) | (.04) | (.07) | (.09) | (.06) |
Net realized and unrealized gain (loss) | (1.90) | 1.76 | (.62) | 1.53 | .08 | 1.07 |
Total from investment operations | (1.91) | 1.73 | (.66) | 1.46 | (.01) | 1.01 |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | .01 |
Net asset value, end of period | $ 7.20 | $ 9.11 | $ 7.38 | $ 8.04 | $ 6.58 | $ 6.59 |
Total Return B, C, D | (20.97)% | 23.44% | (8.21)% | 22.19% | (.15)% | 18.31% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.69% A | 1.60% | 1.50% | 1.59% | 1.55% | 1.89% |
Expenses net of fee waivers, if any | 1.40% A | 1.40% | 1.40% | 1.45% | 1.50% | 1.50% |
Expenses net of all reductions | 1.40% A | 1.38% | 1.36% | 1.38% | 1.48% | 1.46% |
Net investment income (loss) | (.25)% A | (.35)% | (.52)% | (.96)% | (1.15)% | (1.09)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 4,746 | $ 7,551 | $ 7,916 | $ 11,397 | $ 8,374 | $ 8,116 |
Portfolio turnover rate G | 81% A | 97% | 95% | 128% | 84% | 66% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 8.98 | $ 7.29 | $ 7.96 | $ 6.53 | $ 6.56 | $ 5.55 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.02) | (.05) | (.06) | (.08) | (.11) | (.07) |
Net realized and unrealized gain (loss) | (1.87) | 1.74 | (.61) | 1.51 | .08 | 1.07 |
Total from investment operations | (1.89) | 1.69 | (.67) | 1.43 | (.03) | 1.00 |
Redemption fees added to paid in capital E | - I | - I | - I | - I | - I | .01 |
Net asset value, end of period | $ 7.09 | $ 8.98 | $ 7.29 | $ 7.96 | $ 6.53 | $ 6.56 |
Total Return B, C, D | (21.05)% | 23.18% | (8.42)% | 21.90% | (.46)% | 18.20% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.99% A | 1.89% | 1.82% | 1.89% | 1.83% | 2.14% |
Expenses net of fee waivers, if any | 1.65% A | 1.65% | 1.65% | 1.69% | 1.75% | 1.75% |
Expenses net of all reductions | 1.65% A | 1.64% | 1.61% | 1.61% | 1.72% | 1.71% |
Net investment income (loss) | (.50)% A | (.60)% | (.77)% | (1.20)% | (1.39)% | (1.33)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 5,741 | $ 8,103 | $ 9,048 | $ 12,085 | $ 15,445 | $ 14,362 |
Portfolio turnover rate G | 81% A | 97% | 95% | 128% | 84% | 66% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 8.70 | $ 7.10 | $ 7.78 | $ 6.42 | $ 6.48 | $ 5.52 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.09) | (.10) | (.12) | (.14) | (.10) |
Net realized and unrealized gain (loss) | (1.82) | 1.69 | (.58) | 1.48 | .08 | 1.06 |
Total from investment operations | (1.86) | 1.60 | (.68) | 1.36 | (.06) | .96 |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 6.84 | $ 8.70 | $ 7.10 | $ 7.78 | $ 6.42 | $ 6.48 |
Total Return B, C, D | (21.38)% | 22.54% | (8.74)% | 21.18% | (.93)% | 17.39% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.44% A | 2.36% | 2.29% | 2.41% | 2.41% | 2.76% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.21% | 2.25% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.13% | 2.11% | 2.13% | 2.23% | 2.21% |
Net investment income (loss) | (1.00)% A | (1.10)% | (1.27)% | (1.72)% | (1.90)% | (1.83)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 3,078 | $ 4,572 | $ 6,123 | $ 8,963 | $ 8,498 | $ 11,335 |
Portfolio turnover rate G | 81% A | 97% | 95% | 128% | 84% | 66% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 8.69 | $ 7.09 | $ 7.77 | $ 6.41 | $ 6.47 | $ 5.51 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.04) | (.09) | (.10) | (.11) | (.14) | (.10) |
Net realized and unrealized gain (loss) | (1.81) | 1.69 | (.58) | 1.47 | .08 | 1.06 |
Total from investment operations | (1.85) | 1.60 | (.68) | 1.36 | (.06) | .96 |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 6.84 | $ 8.69 | $ 7.09 | $ 7.77 | $ 6.41 | $ 6.47 |
Total Return B, C, D | (21.29)% | 22.57% | (8.75)% | 21.22% | (.93)% | 17.42% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 2.44% A | 2.34% | 2.26% | 2.31% | 2.24% | 2.52% |
Expenses net of fee waivers, if any | 2.15% A | 2.15% | 2.15% | 2.18% | 2.24% | 2.25% |
Expenses net of all reductions | 2.15% A | 2.13% | 2.11% | 2.11% | 2.21% | 2.21% |
Net investment income (loss) | (1.00)% A | (1.10)% | (1.27)% | (1.69)% | (1.88)% | (1.83)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 6,199 | $ 8,389 | $ 7,009 | $ 11,058 | $ 12,322 | $ 13,061 |
Portfolio turnover rate G | 81% A | 97% | 95% | 128% | 84% | 66% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 9.30 | $ 7.51 | $ 8.15 | $ 6.65 | $ 6.64 | $ 5.60 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | - H | (.01) | (.02) | (.05) | (.06) | (.04) |
Net realized and unrealized gain (loss) | (1.95) | 1.80 | (.62) | 1.55 | .07 | 1.07 |
Total from investment operations | (1.95) | 1.79 | (.64) | 1.50 | .01 | 1.03 |
Redemption fees added to paid in capital D | - H | - H | - H | - H | - H | .01 |
Net asset value, end of period | $ 7.35 | $ 9.30 | $ 7.51 | $ 8.15 | $ 6.65 | $ 6.64 |
Total Return B, C | (20.97)% | 23.83% | (7.85)% | 22.56% | .15% | 18.57% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | 1.43% A | 1.26% | 1.11% | 1.16% | 1.12% | 1.46% |
Expenses net of fee waivers, if any | 1.15% A | 1.15% | 1.11% | 1.16% | 1.12% | 1.25% |
Expenses net of all reductions | 1.14% A | 1.13% | 1.07% | 1.08% | 1.09% | 1.21% |
Net investment income (loss) | .00% A | (.10)% | (.23)% | (.67)% | (.76)% | (.84)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 531 | $ 730 | $ 750 | $ 899 | $ 687 | $ 625 |
Portfolio turnover rate F | 81% A | 97% | 95% | 128% | 84% | 66% |
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, 2008 (Unaudited)
1. Organization.
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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year, the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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, passive foreign investment companies (PFIC), 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 | $ 518,009 | |
Unrealized depreciation | (6,048,613) | |
Net unrealized appreciation (depreciation) | $ (5,530,604) | |
Cost for federal income tax purposes | $ 25,819,578 | |
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. 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 Pronouncement. 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.
4. 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.
Electronics
4. Operating Policies - continued
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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $10,925,310 and $14,447,757, respectively.
6. 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% | $ 8,374 | $ 158 |
Class T | .25% | .25% | 18,824 | 154 |
Class B | .75% | .25% | 20,930 | 15,702 |
Class C | .75% | .25% | 39,870 | 5,877 |
| | | $ 87,998 | $ 21,891 |
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 | $ 808 |
Class T | 866 |
Class B* | 2,512 |
Class C* | 88 |
| $ 4,274 |
* 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
Notes to Financial Statements (Unaudited) - continued
6. 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 | $ 10,582 | .32 |
Class T | 13,776 | .37 |
Class B | 6,639 | .32 |
Class C | 12,581 | .32 |
Institutional Class | 1,053 | .30 |
| $ 44,631 | |
* Annualized
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.
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 $436 for the period.
7. 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.
8. 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% | $ 9,768 |
Class T | 1.65% | 12,850 |
Class B | 2.15% | 6,097 |
Class C | 2.15% | 11,556 |
Institutional Class | 1.15% | 977 |
| | $ 41,248 |
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 $1,099 for the period.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Electronics
9. Other - continued
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $6,751.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 | Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 53,034 | 172,908 | $ 444,245 | $ 1,452,847 |
Shares redeemed | (222,366) | (416,578) | (1,889,622) | (3,518,739) |
Net increase (decrease) | (169,332) | (243,670) | $ (1,445,377) | $ (2,065,892) |
Class T | | | | |
Shares sold | 54,336 | 96,013 | $ 462,582 | $ 811,586 |
Shares redeemed | (146,266) | (434,383) | (1,206,300) | (3,616,000) |
Net increase (decrease) | (91,930) | (338,370) | $ (743,718) | $ (2,804,414) |
Class B | | | | |
Shares sold | 17,628 | 33,257 | $ 147,332 | $ 271,410 |
Shares redeemed | (93,686) | (370,189) | (750,422) | (3,005,497) |
Net increase (decrease) | (76,058) | (336,932) | $ (603,090) | $ (2,734,087) |
Class C | | | | |
Shares sold | 80,444 | 354,933 | $ 680,602 | $ 2,907,179 |
Shares redeemed | (139,333) | (378,058) | (1,136,751) | (3,063,507) |
Net increase (decrease) | (58,889) | (23,125) | $ (456,149) | $ (156,328) |
Institutional Class | | | | |
Shares sold | 6,197 | 23,807 | $ 59,675 | $ 203,253 |
Shares redeemed | (12,418) | (45,136) | (107,344) | (400,359) |
Net increase (decrease) | (6,221) | (21,329) | $ (47,669) | $ (197,106) |
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
|
Beginning
Account Value
August 1, 2007
|
Ending
Account Value
January 31, 2008
| Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,057.00 | $ 5.89 |
HypotheticalA | $ 1,000.00 | $ 1,019.41 | $ 5.79 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,056.00 | $ 6.98 |
HypotheticalA | $ 1,000.00 | $ 1,018.35 | $ 6.85 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,052.90 | $ 9.91 |
HypotheticalA | $ 1,000.00 | $ 1,015.48 | $ 9.73 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,053.30 | $ 9.60 |
HypotheticalA | $ 1,000.00 | $ 1,015.79 | $ 9.42 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,058.70 | $ 4.35 |
HypotheticalA | $ 1,000.00 | $ 1,020.91 | $ 4.27 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.14% |
Class T | 1.35% |
Class B | 1.92% |
Class C | 1.86% |
Institutional Class | .84% |
Energy
Advisor Energy Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Exxon Mobil Corp. | 14.0 | 15.1 |
Valero Energy Corp. | 6.6 | 6.9 |
National Oilwell Varco, Inc. | 5.9 | 5.6 |
Range Resources Corp. | 5.2 | 3.8 |
CONSOL Energy, Inc. | 4.6 | 1.1 |
Schlumberger Ltd. (NY Shares) | 4.3 | 7.4 |
Peabody Energy Corp. | 3.8 | 1.0 |
Ultra Petroleum Corp. | 3.6 | 3.2 |
Transocean, Inc. | 3.2 | 2.4 |
Cabot Oil & Gas Corp. | 2.9 | 2.6 |
| 54.1 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Oil, Gas & Consumable Fuels | 69.9% | |
| Energy Equipment & Services | 24.9% | |
| Electrical Equipment | 3.3% | |
| Construction & Engineering | 0.7% | |
| Chemicals | 0.5% | |
| All Others* | 0.7% | |
|
As of July 31, 2007 |
| Oil, Gas & Consumable Fuels | 63.4% | |
| Energy Equipment & Services | 32.2% | |
| Electrical Equipment | 1.5% | |
| Construction & Engineering | 1.0% | |
| Industrial Conglomerates | 0.4% | |
| All Others* | 1.5% | |
* Includes short-term investments and net other assets. |
Semiannual Report
Advisor Energy Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 100.0% |
| Shares | | Value |
CHEMICALS - 0.5% |
Specialty Chemicals - 0.5% |
Albemarle Corp. | 140,557 | | $ 5,096,597 |
COMMERCIAL SERVICES & SUPPLIES - 0.0% |
Environmental & Facility Services - 0.0% |
Fuel Tech, Inc. (a) | 16,062 | | 305,820 |
CONSTRUCTION & ENGINEERING - 0.7% |
Construction & Engineering - 0.7% |
Chicago Bridge & Iron Co. NV (NY Shares) | 20,400 | | 907,596 |
Jacobs Engineering Group, Inc. (a) | 86,800 | | 6,634,992 |
| | 7,542,588 |
ELECTRICAL EQUIPMENT - 3.3% |
Electrical Components & Equipment - 1.5% |
Evergreen Solar, Inc. (a) | 14,500 | | 176,755 |
First Solar, Inc. (a) | 5,100 | | 927,027 |
JA Solar Holdings Co. Ltd. ADR | 101,900 | | 5,179,577 |
Q-Cells AG (a) | 14,228 | | 1,338,828 |
Renewable Energy Corp. AS (a) | 57,200 | | 1,495,365 |
Sunpower Corp. Class A (a) | 64,500 | | 4,456,305 |
Suntech Power Holdings Co. Ltd. sponsored ADR (a) | 19,000 | | 1,039,870 |
| | 14,613,727 |
Heavy Electrical Equipment - 1.8% |
Suzlon Energy Ltd. | 351,540 | | 2,764,529 |
Vestas Wind Systems AS (a) | 160,600 | | 15,601,064 |
| | 18,365,593 |
TOTAL ELECTRICAL EQUIPMENT | | 32,979,320 |
ENERGY EQUIPMENT & SERVICES - 24.9% |
Oil & Gas Drilling - 8.1% |
Atwood Oceanics, Inc. (a) | 91,600 | | 7,611,044 |
Diamond Offshore Drilling, Inc. | 111,600 | | 12,602,988 |
Nabors Industries Ltd. (a) | 228,917 | | 6,231,121 |
Noble Corp. | 331,700 | | 14,518,509 |
Pride International, Inc. (a) | 269,700 | | 8,552,187 |
Transocean, Inc. (a) | 259,764 | | 31,847,066 |
| | 81,362,915 |
Oil & Gas Equipment & Services - 16.8% |
Baker Hughes, Inc. | 33 | | 2,143 |
Cameron International Corp. (a) | 121,400 | | 4,887,564 |
Compagnie Generale de Geophysique SA (a) | 17,541 | | 4,103,930 |
Emer International Group Ltd. (a) | 1,098,000 | | 421,038 |
Expro International Group PLC | 165,000 | | 3,060,053 |
Exterran Holdings, Inc. (a) | 71,675 | | 4,676,077 |
FMC Technologies, Inc. (a) | 152,600 | | 7,349,216 |
Fugro NV (Certificaten Van Aandelen) unit | 58,500 | | 4,010,372 |
NATCO Group, Inc. Class A (a) | 4,200 | | 192,276 |
|
| Shares | | Value |
National Oilwell Varco, Inc. (a) | 977,657 | | $ 58,884,281 |
Oceaneering International, Inc. (a) | 86,491 | | 4,980,152 |
Oil States International, Inc. (a) | 48,400 | | 1,696,904 |
Petroleum Geo-Services ASA | 188,400 | | 4,048,716 |
Saipem SpA | 117,900 | | 4,091,501 |
Schlumberger Ltd. (NY Shares) | 580,000 | | 43,766,800 |
Smith International, Inc. | 155,527 | | 8,431,119 |
Superior Energy Services, Inc. (a) | 177,000 | | 7,095,930 |
Weatherford International Ltd. (a) | 125,600 | | 7,763,336 |
| | 169,461,408 |
TOTAL ENERGY EQUIPMENT & SERVICES | | 250,824,323 |
GAS UTILITIES - 0.2% |
Gas Utilities - 0.2% |
Questar Corp. | 19,400 | | 987,654 |
Zhongyu Gas Holdings Ltd. (a) | 6,592,000 | | 997,577 |
| | 1,985,231 |
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 0.3% |
Independent Power Producers & Energy Traders - 0.3% |
AES Corp. (a) | 41,400 | | 789,912 |
Constellation Energy Group, Inc. | 11,500 | | 1,080,540 |
NRG Energy, Inc. (a) | 21,900 | | 845,121 |
| | 2,715,573 |
INDUSTRIAL CONGLOMERATES - 0.2% |
Industrial Conglomerates - 0.2% |
McDermott International, Inc. (a) | 40,900 | | 1,929,662 |
MULTI-UTILITIES - 0.0% |
Multi-Utilities - 0.0% |
Sempra Energy | 4 | | 224 |
OIL, GAS & CONSUMABLE FUELS - 69.9% |
Coal & Consumable Fuels - 10.4% |
Alpha Natural Resources, Inc. (a) | 9,600 | | 321,216 |
Arch Coal, Inc. | 224,785 | | 9,890,540 |
CONSOL Energy, Inc. | 628,659 | | 45,892,107 |
Foundation Coal Holdings, Inc. | 131,600 | | 6,882,680 |
International Coal Group, Inc. (a) | 33,600 | | 208,656 |
Massey Energy Co. | 88,900 | | 3,305,302 |
Natural Resource Partners LP | 4,700 | | 142,880 |
Peabody Energy Corp. | 703,157 | | 37,984,541 |
| | 104,627,922 |
Integrated Oil & Gas - 24.7% |
Chevron Corp. | 167,256 | | 14,133,132 |
ConocoPhillips | 350,694 | | 28,167,742 |
Exxon Mobil Corp. (d) | 1,631,298 | | 140,944,148 |
Hess Corp. | 158,800 | | 14,423,804 |
Marathon Oil Corp. | 298,700 | | 13,994,095 |
Occidental Petroleum Corp. | 254,900 | | 17,300,063 |
Common Stocks - continued |
| Shares | | Value |
OIL, GAS & CONSUMABLE FUELS - CONTINUED |
Integrated Oil & Gas - continued |
Petroleo Brasileiro SA - Petrobras sponsored ADR | 152,200 | | $ 16,915,508 |
Suncor Energy, Inc. | 28,700 | | 2,699,696 |
| | 248,578,188 |
Oil & Gas Exploration & Production - 23.4% |
American Oil & Gas, Inc. NV (a) | 84,003 | | 365,413 |
Apache Corp. | 46,200 | | 4,409,328 |
Aurora Oil & Gas Corp. (a) | 252,174 | | 277,391 |
Cabot Oil & Gas Corp. | 741,625 | | 28,693,471 |
Canadian Natural Resources Ltd. | 47,300 | | 3,026,389 |
Chesapeake Energy Corp. | 412,700 | | 15,364,821 |
Concho Resources, Inc. | 139,000 | | 2,821,700 |
EOG Resources, Inc. | 193,600 | | 16,940,000 |
EXCO Resources, Inc. (a) | 6,300 | | 94,437 |
Goodrich Petroleum Corp. (a) | 29,100 | | 579,381 |
Kodiak Oil & Gas Corp. (a) | 168,100 | | 347,967 |
Newfield Exploration Co. (a) | 21,800 | | 1,087,384 |
Noble Energy, Inc. (d) | 86,900 | | 6,307,202 |
OPTI Canada, Inc. (a) | 155,600 | | 2,566,070 |
Petrohawk Energy Corp. (a)(d) | 818,457 | | 12,890,698 |
Plains Exploration & Production Co. (a) | 8,400 | | 408,576 |
Quicksilver Resources, Inc. (a) | 307,150 | | 17,455,335 |
Range Resources Corp. | 999,427 | | 52,190,078 |
Southwestern Energy Co. (a) | 193,600 | | 10,824,176 |
Ultra Petroleum Corp. (a) | 526,700 | | 36,236,960 |
Vanguard Natural Resources LLC | 5,600 | | 91,000 |
XTO Energy, Inc. | 434,125 | | 22,548,453 |
| | 235,526,230 |
Oil & Gas Refining & Marketing - 9.3% |
Frontier Oil Corp. | 108,700 | | 3,833,849 |
Holly Corp. | 25,600 | | 1,239,552 |
Petroplus Holdings AG (a) | 29,887 | | 1,840,258 |
Sunoco, Inc. | 84,805 | | 5,274,871 |
Tesoro Corp. | 340,700 | | 13,304,335 |
|
| Shares | | Value |
Valero Energy Corp. | 1,125,581 | | $ 66,623,139 |
Western Refining, Inc. | 83,066 | | 1,773,459 |
| | 93,889,463 |
Oil & Gas Storage & Transport - 2.1% |
El Paso Pipeline Partners LP | 77,800 | | 1,841,526 |
Williams Companies, Inc. | 599,577 | | 19,168,477 |
| | 21,010,003 |
TOTAL OIL, GAS & CONSUMABLE FUELS | | 703,631,806 |
TOTAL COMMON STOCKS (Cost $724,547,466) | 1,007,011,144 |
Money Market Funds - 1.4% |
| | | |
Fidelity Cash Central Fund, 3.79% (b) | 2,363,810 | | 2,363,810 |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 11,233,700 | | 11,233,700 |
TOTAL MONEY MARKET FUNDS (Cost $13,597,510) | 13,597,510 |
TOTAL INVESTMENT PORTFOLIO - 101.4% (Cost $738,144,976) | 1,020,608,654 |
NET OTHER ASSETS - (1.4)% | (13,762,318) |
NET ASSETS - 100% | $ 1,006,846,336 |
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 | $ 157,854 |
Fidelity Securities Lending Cash Central Fund | 44,924 |
Total | $ 202,778 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 82.9% |
Canada | 4.5% |
Netherlands Antilles | 4.3% |
Cayman Islands | 2.1% |
Brazil | 1.7% |
Denmark | 1.5% |
Others (individually less than 1%) | 3.0% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Energy
Advisor Energy Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2008 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $11,155,070) - See accompanying schedule: Unaffiliated issuers (cost $724,547,466) | $ 1,007,011,144 | |
Fidelity Central Funds (cost $13,597,510) | 13,597,510 | |
Total Investments (cost $738,144,976) | | $ 1,020,608,654 |
Receivable for investments sold | | 10,271,949 |
Receivable for fund shares sold | | 2,192,697 |
Dividends receivable | | 145,022 |
Distributions receivable from Fidelity Central Funds | | 51,488 |
Prepaid expenses | | 6,712 |
Other receivables | | 9,137 |
Total assets | | 1,033,285,659 |
| | |
Liabilities | | |
Payable for investments purchased | $ 11,257,723 | |
Payable for fund shares redeemed | 2,628,220 | |
Accrued management fee | 484,663 | |
Distribution fees payable | 460,881 | |
Other affiliated payables | 250,933 | |
Other payables and accrued expenses | 123,203 | |
Collateral on securities loaned, at value | 11,233,700 | |
Total liabilities | | 26,439,323 |
| | |
Net Assets | | $ 1,006,846,336 |
Net Assets consist of: | | |
Paid in capital | | $ 709,878,333 |
Accumulated net investment loss | | (3,137,059) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 17,728,824 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 282,376,238 |
Net Assets | | $ 1,006,846,336 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($311,028,451 ÷ 6,531,136 shares) | | $ 47.62 |
| | |
Maximum offering price per share (100/94.25 of $47.62) | | $ 50.53 |
Class T:
Net Asset Value and redemption price per share ($394,467,625 ÷ 8,087,316 shares) | | $ 48.78 |
| | |
Maximum offering price per share (100/96.50 of $48.78) | | $ 50.55 |
Class B:
Net Asset Value and offering price per share ($106,804,099 ÷ 2,320,940 shares) A | | $ 46.02 |
| | |
Class C:
Net Asset Value and offering price per share ($145,163,496 ÷ 3,137,496 shares) A | | $ 46.27 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($49,382,665 ÷ 1,007,836 shares) | | $ 49.00 |
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 Energy Fund
Financial Statements - continued
Statement of Operations
| Six months ended January 31, 2008 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 3,784,076 |
Interest | | 1,824 |
Income from Fidelity Central Funds | | 202,778 |
Total income | | 3,988,678 |
| | |
Expenses | | |
Management fee | $ 2,800,914 | |
Transfer agent fees | 1,282,891 | |
Distribution fees | 2,729,963 | |
Accounting and security lending fees | 168,688 | |
Custodian fees and expenses | 30,470 | |
Independent trustees' compensation | 2,101 | |
Registration fees | 65,223 | |
Audit | 25,977 | |
Legal | 2,664 | |
Miscellaneous | 2,293 | |
Total expenses before reductions | 7,111,184 | |
Expense reductions | (11,737) | 7,099,447 |
Net investment income (loss) | | (3,110,769) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers (net of foreign taxes of $3,424) | 50,018,139 | |
Foreign currency transactions | 11,636 | |
Total net realized gain (loss) | | 50,029,775 |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of increase in deferred foreign taxes of $49,852) | (242,931) | |
Assets and liabilities in foreign currencies | 4 | |
Total change in net unrealized appreciation (depreciation) | | (242,927) |
Net gain (loss) | | 49,786,848 |
Net increase (decrease) in net assets resulting from operations | | $ 46,676,079 |
Statement of Changes in Net Assets
| Six months ended January 31, 2008 (Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (3,110,769) | $ (2,803,549) |
Net realized gain (loss) | 50,029,775 | 67,298,011 |
Change in net unrealized appreciation (depreciation) | (242,927) | 88,822,102 |
Net increase (decrease) in net assets resulting from operations | 46,676,079 | 153,316,564 |
Distributions to shareholders from net realized gain | (64,657,618) | (117,273,909) |
Share transactions - net increase (decrease) | 105,792,770 | 40,324,071 |
Redemption fees | 18,723 | 36,406 |
Total increase (decrease) in net assets | 87,829,954 | 76,403,132 |
| | |
Net Assets | | |
Beginning of period | 919,016,382 | 842,613,250 |
End of period (including accumulated net investment loss of $3,137,059 and accumulated net investment loss of $26,290, respectively) | $ 1,006,846,336 | $ 919,016,382 |
See accompanying notes which are an integral part of the financial statements.
Energy
Financial Highlights - Class A
| Six months ended January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 48.28 | $ 46.39 | $ 40.93 | $ 29.12 | $ 21.65 | $ 20.33 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.09) | (.02) H | (.04) | .06 | .07 | .13 |
Net realized and unrealized gain (loss) | 2.89 | 8.42 | 12.30 | 12.21 | 7.50 | 1.30 |
Total from investment operations | 2.80 | 8.40 | 12.26 | 12.27 | 7.57 | 1.43 |
Distributions from net investment income | - | - | - | (.06) | (.10) | (.11) |
Distributions from net realized gain | (3.46) | (6.51) | (6.81) | (.41) | - | - |
Total distributions | (3.46) | (6.51) | (6.81) | (.47) | (.10) | (.11) |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 | - J | - J |
Net asset value, end of period | $ 47.62 | $ 48.28 | $ 46.39 | $ 40.93 | $ 29.12 | $ 21.65 |
Total Return B, C, D | 5.70% | 22.08% | 32.90% | 42.69% | 35.08% | 7.07% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.14% A | 1.19% | 1.21% | 1.25% | 1.30% | 1.36% |
Expenses net of fee waivers, if any | 1.14% A | 1.19% | 1.21% | 1.25% | 1.30% | 1.36% |
Expenses net of all reductions | 1.13% A | 1.19% | 1.17% | 1.19% | 1.29% | 1.32% |
Net investment income (loss) | (.34)% A | (.05)% H | (.09)% | .19% | .28% | .63% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 311,028 | $ 268,108 | $ 204,391 | $ 90,342 | $ 44,315 | $ 21,798 |
Portfolio turnover rate G | 58% A | 80% | 139% | 125% | 40% | 41% |
A Annualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower had certain expenses not been reduced during the periods shown. DTotal 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. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HInvestment income per share reflects a special dividend which amounted to $.05 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.17)%. IExpense 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. JAmount represents less than $.01 per share. |
Financial Highlights - Class T
| Six months ended January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 49.26 | $ 47.18 | $ 41.46 | $ 29.52 | $ 21.97 | $ 20.61 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.14) | (.11) H | (.13) | - J | .03 | .10 |
Net realized and unrealized gain (loss) | 2.95 | 8.61 | 12.49 | 12.37 | 7.60 | 1.32 |
Total from investment operations | 2.81 | 8.50 | 12.36 | 12.37 | 7.63 | 1.42 |
Distributions from net investment income | - | - | - | (.03) | (.08) | (.06) |
Distributions from net realized gain | (3.29) | (6.42) | (6.65) | (.41) | - | - |
Total distributions | (3.29) | (6.42) | (6.65) | (.44) | (.08) | (.06) |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 | - J | - J |
Net asset value, end of period | $ 48.78 | $ 49.26 | $ 47.18 | $ 41.46 | $ 29.52 | $ 21.97 |
Total Return B, C, D | 5.60% | 21.84% | 32.60% | 42.41% | 34.82% | 6.91% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.35% A | 1.40% | 1.42% | 1.44% | 1.48% | 1.50% |
Expenses net of fee waivers, if any | 1.35% A | 1.40% | 1.42% | 1.44% | 1.48% | 1.50% |
Expenses net of all reductions | 1.35% A | 1.39% | 1.38% | 1.39% | 1.47% | 1.47% |
Net investment income (loss) | (.56)% A | (.26)% H | (.29)% | (.01)% | .10% | .48% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 394,468 | $ 382,222 | $ 362,272 | $ 280,820 | $ 201,187 | $ 155,249 |
Portfolio turnover rate G | 58% A | 80% | 139% | 125% | 40% | 41% |
A Annualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower had certain expenses not been reduced during the periods shown. DTotal returns do not include the effect of the sales charges. ECalculated 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. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HInvestment income per share reflects a special dividend which amounted to $.05 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.37)%. IExpense 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 46.64 | $ 45.10 | $ 39.89 | $ 28.54 | $ 21.28 | $ 20.02 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.27) | (.34) H | (.35) | (.18) | (.11) | (.01) |
Net realized and unrealized gain (loss) | 2.79 | 8.17 | 11.98 | 11.93 | 7.37 | 1.27 |
Total from investment operations | 2.52 | 7.83 | 11.63 | 11.75 | 7.26 | 1.26 |
Distributions from net realized gain | (3.14) | (6.29) | (6.43) | (.41) | - | - |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 | - J | - J |
Net asset value, end of period | $ 46.02 | $ 46.64 | $ 45.10 | $ 39.89 | $ 28.54 | $ 21.28 |
Total Return B, C, D | 5.29% | 21.18% | 31.86% | 41.66% | 34.12% | 6.29% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.92% A | 1.96% | 1.96% | 1.98% | 2.02% | 2.06% |
Expenses net of fee waivers, if any | 1.92% A | 1.96% | 1.96% | 1.98% | 2.02% | 2.06% |
Expenses net of all reductions | 1.92% A | 1.95% | 1.92% | 1.93% | 2.01% | 2.02% |
Net investment income (loss) | (1.12)% A | (.82)% H | (.84)% | (.55)% | (.44)% | (.07)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 106,804 | $ 116,487 | $ 130,973 | $ 102,003 | $ 68,347 | $ 50,833 |
Portfolio turnover rate G | 58% A | 80% | 139% | 125% | 40% | 41% |
A Annualized BTotal returns for periods of less than one year are not annualized. CTotal 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. ECalculated 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. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HInvestment income per share reflects a special dividend which amounted to $.05 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.93)%. IExpense 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 46.88 | $ 45.33 | $ 40.10 | $ 28.68 | $ 21.38 | $ 20.10 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.26) | (.32) H | (.34) | (.17) | (.10) | - J |
Net realized and unrealized gain (loss) | 2.81 | 8.20 | 12.06 | 11.99 | 7.40 | 1.28 |
Total from investment operations | 2.55 | 7.88 | 11.72 | 11.82 | 7.30 | 1.28 |
Distributions from net realized gain | (3.16) | (6.33) | (6.50) | (.41) | - | - |
Redemption fees added to paid in capital E | - J | - J | .01 | .01 | - J | - J |
Net asset value, end of period | $ 46.27 | $ 46.88 | $ 45.33 | $ 40.10 | $ 28.68 | $ 21.38 |
Total Return B, C, D | 5.33% | 21.22% | 31.96% | 41.70% | 34.14% | 6.37% |
Ratios to Average Net Assets F, I | | | | | | |
Expenses before reductions | 1.86% A | 1.91% | 1.92% | 1.94% | 1.99% | 2.01% |
Expenses net of fee waivers, if any | 1.86% A | 1.91% | 1.92% | 1.94% | 1.99% | 2.01% |
Expenses net of all reductions | 1.86% A | 1.91% | 1.88% | 1.89% | 1.97% | 1.97% |
Net investment income (loss) | (1.07)% A | (.77)% H | (.79)% | (.51)% | (.41)% | (.02)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 145,163 | $ 135,072 | $ 125,424 | $ 72,832 | $ 37,206 | $ 22,044 |
Portfolio turnover rate G | 58% A | 80% | 139% | 125% | 40% | 41% |
A Annualized BTotal returns for periods of less than one year are not annualized. CTotal 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. ECalculated 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. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HInvestment income per share reflects a special dividend which amounted to $.05 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.88)%. IExpense 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.
Energy
Financial Highlights - Institutional Class
| Six months ended January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 49.68 | $ 47.48 | $ 41.76 | $ 29.64 | $ 22.03 | $ 20.67 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | (.01) | .11 G | .12 | .19 | .18 | .22 |
Net realized and unrealized gain (loss) | 2.97 | 8.67 | 12.56 | 12.44 | 7.62 | 1.32 |
Total from investment operations | 2.96 | 8.78 | 12.68 | 12.63 | 7.80 | 1.54 |
Distributions from net investment income | - | - | - | (.11) | (.19) | (.18) |
Distributions from net realized gain | (3.64) | (6.58) | (6.97) | (.41) | - | - |
Total distributions | (3.64) | (6.58) | (6.97) | (.52) | (.19) | (.18) |
Redemption fees added to paid in capital D | - I | - I | .01 | .01 | - I | - I |
Net asset value, end of period | $ 49.00 | $ 49.68 | $ 47.48 | $ 41.76 | $ 29.64 | $ 22.03 |
Total Return B, C | 5.87% | 22.47% | 33.35% | 43.21% | 35.60% | 7.51% |
Ratios to Average Net Assets E, H | | | | | | |
Expenses before reductions | .84% A | .88% | .87% | .89% | .90% | .95% |
Expenses net of fee waivers, if any | .84% A | .88% | .87% | .89% | .90% | .95% |
Expenses net of all reductions | .84% A | .88% | .83% | .84% | .89% | .91% |
Net investment income (loss) | (.04)% A | .25% G | .26% | .54% | .68% | 1.04% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 49,383 | $ 17,127 | $ 19,553 | $ 9,433 | $ 4,206 | $ 2,652 |
Portfolio turnover rate F | 58% A | 80% | 139% | 125% | 40% | 41% |
A Annualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower had certain expenses not been reduced during the periods shown. DCalculated based on average shares outstanding during the period. EFees 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. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GInvestment income per share reflects a special dividend which amounted to $.05 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been .14%. 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. IAmount 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, 2008 (Unaudited)
1. Organization.
Fidelity Advisor Energy 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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
Energy
3. Significant Accounting Policies - continued
Foreign Currency - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the fund's fiscal year, the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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), partnerships, deferred trustee 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 | $ 304,097,397 | |
Unrealized depreciation | (23,381,955) | |
Net unrealized appreciation (depreciation) | $ 280,715,442 | |
Cost for federal income tax purposes | $ 739,893,212 | |
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. 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 Pronouncement. 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.
4. 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
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $335,785,515 and $289,987,608, respectively.
6. 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% | $ 381,463 | $ 19,304 |
Class T | .25% | .25% | 1,022,450 | 5,526 |
Class B | .75% | .25% | 582,915 | 437,185 |
Class C | .75% | .25% | 743,135 | 134,198 |
| | | $ 2,729,963 | $ 596,213 |
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 | $ 145,726 |
Class T | 36,843 |
Class B* | 73,078 |
Class C* | 12,584 |
| $ 268,231 |
* 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 | $ 410,688 | .27 |
Class T | 482,512 | .24 |
Class B | 176,942 | .30 |
Class C | 182,867 | .25 |
Institutional Class | 29,882 | .22 |
| $ 1,282,891 | |
* Annualized
Energy
6. 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.
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 $2,483 for the period.
7. 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 $1,243 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. 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 $44,924.
9. 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 $10,742 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 expense by $804. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction | |
Class C | $ 76 | |
Institutional Class | 115 | |
| $ 191 | |
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Other - continued
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $30,652.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
From net realized gain | | |
Class A | $ 20,341,404 | $ 30,378,115 |
Class T | 25,677,022 | 48,658,927 |
Class B | 7,474,589 | 18,097,588 |
Class C | 9,397,559 | 17,464,821 |
Institutional Class | 1,767,044 | 2,674,458 |
Total | $ 64,657,618 | $ 117,273,909 |
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2008 | Year ended
July 31,
2007 | Six months ended January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 1,512,057 | 2,409,415 | $ 75,995,988 | $ 103,800,389 |
Reinvestment of distributions | 375,188 | 718,262 | 18,473,319 | 27,810,279 |
Shares redeemed | (909,071) | (1,980,718) | (44,980,803) | (81,122,220) |
Net increase (decrease) | 978,174 | 1,146,959 | $ 49,488,504 | $ 50,488,448 |
Class T | | | | |
Shares sold | 810,145 | 1,250,444 | $ 41,639,032 | $ 54,473,563 |
Reinvestment of distributions | 478,809 | 1,161,034 | 24,106,914 | 45,909,961 |
Shares redeemed | (960,999) | (2,330,754) | (48,728,876) | (98,273,495) |
Net increase (decrease) | 327,955 | 80,724 | $ 17,017,070 | $ 2,110,029 |
Class B | | | | |
Shares sold | 234,189 | 451,905 | $ 11,343,777 | $ 18,746,589 |
Reinvestment of distributions | 135,516 | 414,158 | 6,434,106 | 15,588,355 |
Shares redeemed | (546,435) | (1,272,145) | (26,103,555) | (50,696,372) |
Net increase (decrease) | (176,730) | (406,082) | $ (8,325,672) | $ (16,361,428) |
Class C | | | | |
Shares sold | 456,064 | 863,338 | $ 22,265,737 | $ 36,256,164 |
Reinvestment of distributions | 161,800 | 385,215 | 7,736,807 | 14,569,142 |
Shares redeemed | (361,411) | (1,134,191) | (17,253,070) | (44,464,337) |
Net increase (decrease) | 256,453 | 114,362 | $ 12,749,474 | $ 6,360,969 |
Institutional Class | | | | |
Shares sold | 702,855 | 150,039 | $ 36,889,817 | $ 6,836,544 |
Reinvestment of distributions | 25,669 | 39,397 | 1,318,208 | 1,561,516 |
Shares redeemed | (65,439) | (256,502) | (3,344,631) | (10,672,007) |
Net increase (decrease) | 663,085 | (67,066) | $ 34,863,394 | $ (2,273,947) |
Energy
Advisor Financial Services
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 905.70 | $ 5.75 |
HypotheticalA | $ 1,000.00 | $ 1,019.10 | $ 6.09 |
Class T | | | |
Actual | $ 1,000.00 | $ 905.00 | $ 6.94 |
HypotheticalA | $ 1,000.00 | $ 1,017.85 | $ 7.35 |
Class B | | | |
Actual | $ 1,000.00 | $ 902.60 | $ 9.28 |
HypotheticalA | $ 1,000.00 | $ 1,015.38 | $ 9.83 |
Class C | | | |
Actual | $ 1,000.00 | $ 902.70 | $ 9.23 |
HypotheticalA | $ 1,000.00 | $ 1,015.43 | $ 9.78 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 907.10 | $ 4.41 |
HypotheticalA | $ 1,000.00 | $ 1,020.51 | $ 4.67 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.20% |
Class T | 1.45% |
Class B | 1.94% |
Class C | 1.93% |
Institutional Class | .92% |
Semiannual Report
Advisor Financial Services Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
JPMorgan Chase & Co. | 6.9 | 5.2 |
American International Group, Inc. | 6.5 | 6.0 |
Bank of America Corp. | 5.6 | 5.3 |
Citigroup, Inc. | 5.2 | 5.1 |
Wells Fargo & Co. | 4.8 | 5.2 |
ACE Ltd. | 2.9 | 3.6 |
Wachovia Corp. | 2.4 | 2.1 |
Everest Re Group Ltd. | 2.3 | 0.7 |
State Street Corp. | 2.1 | 2.4 |
Goldman Sachs Group, Inc. | 2.1 | 0.6 |
| 40.8 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
 | Insurance | 27.0% | |
| Diversified Financial Services | 20.7% | |
| Capital Markets | 18.8% | |
| Commercial Banks | 12.8% | |
| Real Estate Investment Trusts | 5.6% | |
| All Others* | 15.1% | |
|
As of July 31, 2007 |
| Insurance | 31.6% | |
| Diversified Financial Services | 18.4% | |
| Capital Markets | 16.3% | |
| Commercial Banks | 13.4% | |
| Thrifts & Mortgage Finance | 8.9% | |
| All Others* | 11.4% | |
* Includes short-term investments and net other assets. |
Financial Services
Advisor Financial Services Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 95.9% |
| Shares | | Value |
CAPITAL MARKETS - 18.8% |
Asset Management & Custody Banks - 9.0% |
Bank of New York Mellon Corp. | 117,700 | | $ 5,488,351 |
EFG International | 49,110 | | 1,470,382 |
Fortress Investment Group LLC (d) | 43,500 | | 644,235 |
Franklin Resources, Inc. | 34,400 | | 3,585,512 |
GLG Partners, Inc. (a) | 60,800 | | 716,832 |
Janus Capital Group, Inc. | 53,800 | | 1,453,138 |
Julius Baer Holding AG | 18,539 | | 1,302,140 |
KKR Private Equity Investors, LP | 21,200 | | 355,100 |
KKR Private Equity Investors, LP Restricted Depositary Units (e) | 34,300 | | 574,525 |
Legg Mason, Inc. | 9,200 | | 662,400 |
State Street Corp. | 70,182 | | 5,763,346 |
T. Rowe Price Group, Inc. | 28,700 | | 1,451,933 |
The Blackstone Group LP | 43,400 | | 796,390 |
| | 24,264,284 |
Diversified Capital Markets - 0.5% |
UBS AG (NY Shares) | 33,500 | | 1,383,215 |
Investment Banking & Brokerage - 9.3% |
Bear Stearns Companies, Inc. (d) | 30,300 | | 2,736,090 |
Charles Schwab Corp. | 156,600 | | 3,492,180 |
Goldman Sachs Group, Inc. | 28,400 | | 5,701,868 |
Lazard Ltd. Class A | 20,800 | | 822,016 |
Lehman Brothers Holdings, Inc. | 81,700 | | 5,242,689 |
Merrill Lynch & Co., Inc. | 88,800 | | 5,008,320 |
MF Global Ltd. | 18,600 | | 558,930 |
Morgan Stanley | 33,600 | | 1,660,848 |
| | 25,222,941 |
TOTAL CAPITAL MARKETS | | 50,870,440 |
COMMERCIAL BANKS - 12.8% |
Diversified Banks - 9.4% |
ICICI Bank Ltd. sponsored ADR | 10,900 | | 662,284 |
U.S. Bancorp, Delaware | 156,800 | | 5,323,360 |
Wachovia Corp. | 170,598 | | 6,641,380 |
Wells Fargo & Co. | 378,100 | | 12,859,181 |
| | 25,486,205 |
Regional Banks - 3.4% |
Associated Banc-Corp. | 79,600 | | 2,243,128 |
Cathay General Bancorp | 184 | | 4,771 |
Colonial Bancgroup, Inc. (d) | 49,559 | | 778,076 |
KeyCorp | 35,800 | | 936,170 |
PNC Financial Services Group, Inc. | 75,300 | | 4,941,186 |
Wintrust Financial Corp. | 2,700 | | 102,708 |
| | 9,006,039 |
TOTAL COMMERCIAL BANKS | | 34,492,244 |
CONSUMER FINANCE - 4.4% |
Consumer Finance - 4.4% |
American Express Co. | 77,600 | | 3,827,232 |
|
| Shares | | Value |
Capital One Financial Corp. (d) | 90,630 | | $ 4,967,430 |
Discover Financial Services | 106,100 | | 1,856,750 |
Dollar Financial Corp. (a) | 43,262 | | 1,089,337 |
| | 11,740,749 |
DIVERSIFIED FINANCIAL SERVICES - 20.7% |
Other Diversifed Financial Services - 17.7% |
Bank of America Corp. (d) | 344,072 | | 15,259,593 |
Citigroup, Inc. | 496,269 | | 14,004,711 |
JPMorgan Chase & Co. | 390,794 | | 18,582,254 |
| | 47,846,558 |
Specialized Finance - 3.0% |
CME Group, Inc. | 7,025 | | 4,347,773 |
Deutsche Boerse AG | 15,700 | | 2,747,601 |
JSE Ltd. | 30,200 | | 281,754 |
MarketAxess Holdings, Inc. (a) | 85,600 | | 808,920 |
| | 8,186,048 |
TOTAL DIVERSIFIED FINANCIAL SERVICES | | 56,032,606 |
INSURANCE - 27.0% |
Insurance Brokers - 0.8% |
National Financial Partners Corp. (d) | 37,400 | | 1,350,140 |
Willis Group Holdings Ltd. | 19,140 | | 674,494 |
| | 2,024,634 |
Life & Health Insurance - 6.5% |
AFLAC, Inc. | 65,700 | | 4,029,381 |
MetLife, Inc. | 96,500 | | 5,690,605 |
Principal Financial Group, Inc. | 56,500 | | 3,367,965 |
Prudential Financial, Inc. | 53,900 | | 4,547,543 |
| | 17,635,494 |
Multi-Line Insurance - 8.4% |
American International Group, Inc. | 320,460 | | 17,676,574 |
Assurant, Inc. | 23,200 | | 1,505,448 |
Hartford Financial Services Group, Inc. | 44,000 | | 3,553,880 |
| | 22,735,902 |
Property & Casualty Insurance - 6.5% |
ACE Ltd. | 134,600 | | 7,852,564 |
AMBAC Financial Group, Inc. | 13,700 | | 160,564 |
Argo Group International Holdings, Ltd. (a) | 35,211 | | 1,438,017 |
Aspen Insurance Holdings Ltd. | 45,800 | | 1,292,476 |
Axis Capital Holdings Ltd. | 20,800 | | 832,832 |
First American Corp., California | 16,700 | | 727,285 |
LandAmerica Financial Group, Inc. | 3,800 | | 198,208 |
MBIA, Inc. (d) | 37,800 | | 585,900 |
The Travelers Companies, Inc. | 31,800 | | 1,529,580 |
United America Indemnity Ltd.
Class A (a) | 66,800 | | 1,370,068 |
XL Capital Ltd. Class A | 31,000 | | 1,395,000 |
| | 17,382,494 |
Common Stocks - continued |
| Shares | | Value |
INSURANCE - CONTINUED |
Reinsurance - 4.8% |
Everest Re Group Ltd. | 60,200 | | $ 6,121,738 |
IPC Holdings Ltd. | 45,866 | | 1,180,132 |
Max Capital Group Ltd. | 59,376 | | 1,685,685 |
Montpelier Re Holdings Ltd. | 17,900 | | 306,806 |
Platinum Underwriters Holdings Ltd. | 60,000 | | 2,025,000 |
RenaissanceRe Holdings Ltd. | 30,400 | | 1,732,496 |
| | 13,051,857 |
TOTAL INSURANCE | | 72,830,381 |
REAL ESTATE INVESTMENT TRUSTS - 5.6% |
Mortgage REITs - 1.7% |
Annaly Capital Management, Inc. | 164,100 | | 3,236,052 |
Chimera Investment Corp. | 62,000 | | 1,187,300 |
| | 4,423,352 |
Residential REITs - 1.1% |
Equity Lifestyle Properties, Inc. | 37,900 | | 1,655,093 |
UDR, Inc. | 61,500 | | 1,404,045 |
| | 3,059,138 |
Retail REITs - 2.8% |
CBL & Associates Properties, Inc. | 22,392 | | 595,179 |
Developers Diversified Realty Corp. | 68,900 | | 2,835,235 |
General Growth Properties, Inc. | 68,600 | | 2,505,272 |
Simon Property Group, Inc. | 19,000 | | 1,698,220 |
| | 7,633,906 |
TOTAL REAL ESTATE INVESTMENT TRUSTS | | 15,116,396 |
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.1% |
Real Estate Management & Development - 1.1% |
Mitsubishi Estate Co. Ltd. | 115,000 | | 3,049,939 |
THRIFTS & MORTGAGE FINANCE - 5.5% |
Thrifts & Mortgage Finance - 5.5% |
BankUnited Financial Corp. Class A (d) | 38,100 | | 225,933 |
Countrywide Financial Corp. | 139,899 | | 973,697 |
Fannie Mae | 135,535 | | 4,589,215 |
FirstFed Financial Corp. (a)(d) | 19,300 | | 809,635 |
Freddie Mac (d) | 137,500 | | 4,178,625 |
Hudson City Bancorp, Inc. | 143,275 | | 2,346,845 |
Radian Group, Inc. (d) | 46,000 | | 420,440 |
Washington Mutual, Inc. | 70,300 | | 1,400,376 |
| | 14,944,766 |
TOTAL COMMON STOCKS (Cost $227,945,727) | 259,077,521 |
Money Market Funds - 14.6% |
| Shares | | Value |
Fidelity Cash Central Fund, 3.79% (b) | 13,033,841 | | $ 13,033,841 |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 26,460,554 | | 26,460,554 |
TOTAL MONEY MARKET FUNDS (Cost $39,494,395) | 39,494,395 |
TOTAL INVESTMENT PORTFOLIO - 110.5% (Cost $267,440,122) | | 298,571,916 |
NET OTHER ASSETS - (10.5)% | | (28,257,860) |
NET ASSETS - 100% | $ 270,314,056 |
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 $574,525 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 | $ 125,087 |
Fidelity Securities Lending Cash Central Fund | 83,133 |
Total | $ 208,220 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 85.4% |
Bermuda | 6.9% |
Cayman Islands | 3.4% |
Switzerland | 1.6% |
Japan | 1.1% |
Germany | 1.0% |
Others (individually less than 1%) | 0.6% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Financial Services
Financial Statements
Statement of Assets and Liabilities
| January 31, 2008 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $27,241,075) - See accompanying schedule: Unaffiliated issuers (cost $227,945,727) | $ 259,077,521 | |
Fidelity Central Funds (cost $39,494,395) | 39,494,395 | |
Total Investments (cost $267,440,122) | | $ 298,571,916 |
Cash | | 430,634 |
Receivable for investments sold | | 47,863 |
Receivable for fund shares sold | | 1,993,731 |
Dividends receivable | | 286,580 |
Distributions receivable from Fidelity Central Funds | | 40,458 |
Prepaid expenses | | 2,682 |
Other receivables | | 68 |
Total assets | | 301,373,932 |
| | |
Liabilities | | |
Payable for investments purchased | $ 3,122,855 | |
Payable for fund shares redeemed | 1,133,820 | |
Accrued management fee | 120,749 | |
Distribution fees payable | 116,386 | |
Other affiliated payables | 80,424 | |
Other payables and accrued expenses | 25,088 | |
Collateral on securities loaned, at value | 26,460,554 | |
Total liabilities | | 31,059,876 |
| | |
Net Assets | | $ 270,314,056 |
Net Assets consist of: | | |
Paid in capital | | $ 243,018,503 |
Undistributed net investment income | | 139,464 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (3,976,057) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 31,132,146 |
Net Assets | | $ 270,314,056 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($105,449,672 ÷ 6,034,555 shares) | | $ 17.47 |
| | |
Maximum offering price per share (100/94.25 of $17.47) | | $ 18.54 |
Class T:
Net Asset Value and redemption price per share ($74,397,411 ÷ 4,263,588 shares) | | $ 17.45 |
| | |
Maximum offering price per share (100/96.50 of $17.45) | | $ 18.08 |
Class B:
Net Asset Value and offering price per share ($35,819,419 ÷ 2,093,307 shares)A | | $ 17.11 |
| | |
Class C:
Net Asset Value and offering price per share ($46,359,328 ÷ 2,725,578 shares)A | | $ 17.01 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($8,288,226 ÷ 467,901 shares) | | $ 17.71 |
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, 2008 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 3,992,260 |
Income from Fidelity Central Funds | | 208,220 |
Total income | | 4,200,480 |
| | |
Expenses | | |
Management fee | $ 845,980 | |
Transfer agent fees | 456,384 | |
Distribution fees | 849,506 | |
Accounting and security lending fees | 60,807 | |
Custodian fees and expenses | 8,437 | |
Independent trustees' compensation | 657 | |
Registration fees | 29,247 | |
Audit | 34,347 | |
Legal | 1,037 | |
Interest | 3,760 | |
Miscellaneous | 895 | |
Total expenses before reductions | 2,291,057 | |
Expense reductions | (2,143) | 2,288,914 |
Net investment income (loss) | | 1,911,566 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 544,476 | |
Foreign currency transactions | (3,082) | |
Total net realized gain (loss) | | 541,394 |
Change in net unrealized appreciation (depreciation) on: Investment securities | (31,953,920) | |
Assets and liabilities in foreign currencies | 3,877 | |
Total change in net unrealized appreciation (depreciation) | | (31,950,043) |
Net gain (loss) | | (31,408,649) |
Net increase (decrease) in net assets resulting from operations | | $ (29,497,083) |
Statement of Changes in Net Assets
| Six months ended January 31, 2008 (Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 1,911,566 | $ 2,504,527 |
Net realized gain (loss) | 541,394 | 49,174,884 |
Change in net unrealized appreciation (depreciation) | (31,950,043) | (30,974,733) |
Net increase (decrease) in net assets resulting from operations | (29,497,083) | 20,704,678 |
Distributions to shareholders from net investment income | (2,830,304) | (1,993,507) |
Distributions to shareholders from net realized gain | (22,361,824) | (54,831,267) |
Total distributions | (25,192,128) | (56,824,774) |
Share transactions - net increase (decrease) | (5,677,939) | (19,915,758) |
Redemption fees | 2,486 | 2,369 |
Total increase (decrease) in net assets | (60,364,664) | (56,033,485) |
| | |
Net Assets | | |
Beginning of period | 330,678,720 | 386,712,205 |
End of period (including undistributed net investment income of $139,464 and undistributed net investment income of $1,282,613, respectively) | $ 270,314,056 | $ 330,678,720 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.02 | $ 23.34 | $ 23.01 | $ 22.17 | $ 19.98 | $ 17.83 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .15 | .23 | .20 | .19 | .14 | .16 |
Net realized and unrealized gain (loss) | (1.97) | .92 | 2.02 | 2.48 | 2.20 | 2.07 |
Total from investment operations | (1.82) | 1.15 | 2.22 | 2.67 | 2.34 | 2.23 |
Distributions from net investment income | (.27) | (.22) | (.26) | (.07) | (.15) | (.08) |
Distributions from net realized gain | (1.46) | (3.25) | (1.63) | (1.76) | - | - |
Total distributions | (1.73) | (3.47) J | (1.89) | (1.83) | (.15) | (.08) |
Redemption fees added to paid in capital E,I | - | - | - | - | - | - |
Net asset value, end of period | $ 17.47 | $ 21.02 | $ 23.34 | $ 23.01 | $ 22.17 | $ 19.98 |
Total Return B,C,D | (9.43)% | 4.54% | 10.32% | 12.60% | 11.76% | 12.57% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.20% A | 1.23% | 1.25% | 1.26% | 1.27% | 1.31% |
Expenses net of fee waivers, if any | 1.20% A | 1.23% | 1.25% | 1.26% | 1.27% | 1.31% |
Expenses net of all reductions | 1.20% A | 1.22% | 1.23% | 1.23% | 1.25% | 1.27% |
Net investment income (loss) | 1.56% A | 1.01% | .87% | .88% | .63% | .89% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 105,450 | $ 106,722 | $ 85,356 | $ 68,012 | $ 58,222 | $ 57,255 |
Portfolio turnover rate G | 45% A | 53% | 33% | 61% | 74% | 60% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.94 | $ 23.26 | $ 22.87 | $ 22.07 | $ 19.90 | $ 17.77 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .13 | .18 | .15 | .14 | .09 | .12 |
Net realized and unrealized gain (loss) | (1.97) | .91 | 2.02 | 2.47 | 2.19 | 2.07 |
Total from investment operations | (1.84) | 1.09 | 2.17 | 2.61 | 2.28 | 2.19 |
Distributions from net investment income | (.19) | (.16) | (.15) | (.05) | (.11) | (.06) |
Distributions from net realized gain | (1.46) | (3.25) | (1.63) | (1.76) | - | - |
Total distributions | (1.65) | (3.41) J | (1.78) | (1.81) | (.11) | (.06) |
Redemption fees added to paid in capital E,I | - | - | - | - | - | - |
Net asset value, end of period | $ 17.45 | $ 20.94 | $ 23.26 | $ 22.87 | $ 22.07 | $ 19.90 |
Total Return B,C,D | (9.50)% | 4.25% | 10.11% | 12.37% | 11.49% | 12.37% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.45% A | 1.46% | 1.47% | 1.48% | 1.50% | 1.53% |
Expenses net of fee waivers, if any | 1.45% A | 1.46% | 1.47% | 1.48% | 1.50% | 1.53% |
Expenses net of all reductions | 1.45% A | 1.46% | 1.46% | 1.46% | 1.48% | 1.49% |
Net investment income (loss) | 1.31% A | .77% | .65% | .66% | .41% | .67% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 74,397 | $ 95,426 | $ 113,344 | $ 128,388 | $ 144,887 | $ 157,238 |
Portfolio turnover rate G | 45% A | 53% | 33% | 61% | 74% | 60% |
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. GAmount 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.44 | $ 22.75 | $ 22.33 | $ 21.65 | $ 19.53 | $ 17.50 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .08 | .06 | .03 | .03 | (.02) | .03 |
Net realized and unrealized gain (loss) | (1.93) | .89 | 1.97 | 2.41 | 2.16 | 2.03 |
Total from investment operations | (1.85) | .95 | 2.00 | 2.44 | 2.14 | 2.06 |
Distributions from net investment income | (.04) | (.02) | (.01) | - | (.02) | (.03) |
Distributions from net realized gain | (1.44) | (3.25) | (1.57) | (1.76) | - | - |
Total distributions | (1.48) | (3.26) J | (1.58) | (1.76) | (.02) | (.03) |
Redemption fees added to paid in capital E,I | - | - | - | - | - | - |
Net asset value, end of period | $ 17.11 | $ 20.44 | $ 22.75 | $ 22.33 | $ 21.65 | $ 19.53 |
Total Return B,C,D | (9.74)% | 3.71% | 9.52% | 11.78% | 10.96% | 11.80% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.94% A | 1.98% | 1.99% | 2.00% | 2.02% | 2.03% |
Expenses net of fee waivers, if any | 1.94% A | 1.98% | 1.99% | 2.00% | 2.02% | 2.03% |
Expenses net of all reductions | 1.94% A | 1.98% | 1.98% | 1.98% | 2.00% | 1.99% |
Net investment income (loss) | .82% A | .25% | .13% | .14% | (.11)% | .17% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 35,819 | $ 64,837 | $ 113,652 | $ 145,046 | $ 179,873 | $ 193,373 |
Portfolio turnover rate G | 45% A | 53% | 33% | 61% | 74% | 60% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.40 | $ 22.74 | $ 22.34 | $ 21.65 | $ 19.53 | $ 17.49 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .08 | .06 | .04 | .04 | (.01) | .04 |
Net realized and unrealized gain (loss) | (1.92) | .90 | 1.98 | 2.42 | 2.15 | 2.03 |
Total from investment operations | (1.84) | .96 | 2.02 | 2.46 | 2.14 | 2.07 |
Distributions from net investment income | (.09) | (.05) | (.02) | (.01) | (.02) | (.03) |
Distributions from net realized gain | (1.46) | (3.25) | (1.60) | (1.76) | - | - |
Total distributions | (1.55) | (3.30) J | (1.62) | (1.77) | (.02) | (.03) |
Redemption fees added to paid in capital E,I | - | - | - | - | - | - |
Net asset value, end of period | $ 17.01 | $ 20.40 | $ 22.74 | $ 22.34 | $ 21.65 | $ 19.53 |
Total Return B,C,D | (9.73)% | 3.75% | 9.58% | 11.88% | 10.96% | 11.86% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.93% A | 1.94% | 1.94% | 1.95% | 1.97% | 1.99% |
Expenses net of fee waivers, if any | 1.93% A | 1.94% | 1.94% | 1.95% | 1.97% | 1.99% |
Expenses net of all reductions | 1.93% A | 1.94% | 1.93% | 1.92% | 1.95% | 1.95% |
Net investment income (loss) | .83% A | .29% | .18% | .19% | (.06)% | .22% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 46,359 | $ 55,219 | $ 62,469 | $ 72,181 | $ 86,199 | $ 97,434 |
Portfolio turnover rate G | 45% A | 53% | 33% | 61% | 74% | 60% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.32 | $ 23.63 | $ 23.29 | $ 22.37 | $ 20.17 | $ 17.95 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .18 | .31 | .29 | .29 | .23 | .24 |
Net realized and unrealized gain (loss) | (2.00) | .93 | 2.05 | 2.50 | 2.21 | 2.09 |
Total from investment operations | (1.82) | 1.24 | 2.34 | 2.79 | 2.44 | 2.33 |
Distributions from net investment income | (.33) | (.30) | (.37) | (.11) | (.24) | (.11) |
Distributions from net realized gain | (1.46) | (3.25) | (1.63) | (1.76) | - | - |
Total distributions | (1.79) | (3.55) I | (2.00) | (1.87) | (.24) | (.11) |
Redemption fees added to paid in capital D,H | - | - | - | - | - | - |
Net asset value, end of period | $ 17.71 | $ 21.32 | $ 23.63 | $ 23.29 | $ 22.37 | $ 20.17 |
Total Return B,C | (9.29)% | 4.88% | 10.78% | 13.06% | 12.18% | 13.07% |
Ratios to Average Net Assets E,G | | | | | | |
Expenses before reductions | .92% A | .89% | .86% | .86% | .88% | .88% |
Expenses net of fee waivers, if any | .92% A | .89% | .86% | .86% | .88% | .88% |
Expenses net of all reductions | .92% A | .88% | .85% | .84% | .85% | .84% |
Net investment income (loss) | 1.83% A | 1.34% | 1.26% | 1.28% | 1.03% | 1.32% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 8,288 | $ 8,474 | $ 11,892 | $ 12,629 | $ 13,008 | $ 14,539 |
Portfolio turnover rate F | 45% A | 53% | 33% | 61% | 74% | 60% |
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, 2008 (Unaudited)
1. Organization.
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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Foreign Currency - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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, partnerships 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 | $ 55,032,943 | |
Unrealized depreciation | (25,253,295) | |
Net unrealized appreciation (depreciation) | $ 29,779,648 | |
Cost for federal income tax purposes | $ 268,792,268 | |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to 0.75% 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 Pronouncement. 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.
4. 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
Financial Services
4. Operating Policies - continued
Repurchase Agreements - continued
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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $68,317,770 and $101,998,250, respectively.
6. 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% | $ 133,243 | $ 3,369 |
Class T | .25% | .25% | 213,820 | 22 |
Class B | .75% | .25% | 250,158 | 187,618 |
Class C | .75% | .25% | 252,285 | 12,674 |
| | | $ 849,506 | $ 203,683 |
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 | $ 30,894 |
Class T | 5,847 |
Class B* | 30,271 |
Class C* | 2,756 |
| $ 69,768 |
* 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
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
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 | $ 161,225 | .30 |
Class T | 131,773 | .31 |
Class B | 74,997 | .30 |
Class C | 72,866 | .29 |
Institutional Class | 15,523 | .28 |
| $ 456,384 | |
* 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.
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 $364 for the period.
7. 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 $448 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. 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 $83,133.
9. 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 $1,079 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 | $ 1,064 | |
Financial Services
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $95,210.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
From net investment income | | |
Class A | $ 1,429,165 | $ 867,686 |
Class T | 833,715 | 765,107 |
Class B | 103,066 | 69,445 |
Class C | 241,331 | 139,125 |
Institutional Class | 223,027 | 152,144 |
Total | $ 2,830,304 | $ 1,993,507 |
From net realized gain | | |
Class A | $ 7,600,490 | $ 12,753,057 |
Class T | 6,343,916 | 15,966,933 |
Class B | 3,935,812 | 15,271,397 |
Class C | 3,829,721 | 9,173,101 |
Institutional Class | 651,885 | 1,666,779 |
Total | $ 22,361,824 | $ 54,831,267 |
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2008 | Year ended
July 31,
2007 | Six months ended January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 1,603,303 | 2,132,186 | $ 30,346,406 | $ 48,786,912 |
Reinvestment of distributions | 413,923 | 548,319 | 8,063,132 | 12,292,012 |
Shares redeemed | (1,059,708) | (1,259,845) | (20,286,911) | (28,919,491) |
Net increase (decrease) | 957,518 | 1,420,660 | $ 18,122,627 | $ 32,159,433 |
Class T | | | | |
Shares sold | 291,571 | 372,346 | $ 5,442,318 | $ 8,558,636 |
Reinvestment of distributions | 344,513 | 703,948 | 6,720,713 | 15,750,996 |
Shares redeemed | (928,699) | (1,393,386) | (18,082,298) | (31,851,718) |
Net increase (decrease) | (292,615) | (317,092) | $ (5,919,267) | $ (7,542,086) |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Share Transactions - continued
Transactions for each class of shares were as follows: - continued
| Shares | Dollars |
| Six months ended January 31,
2008 | Year ended
July 31,
2007 | Six months ended January 31,
2008 | Year ended
July 31,
2007 |
Class B | | | | |
Shares sold | 219,885 | 242,400 | $ 3,994,477 | $ 5,428,899 |
Reinvestment of distributions | 187,880 | 609,690 | 3,607,910 | 13,365,246 |
Shares redeemed | (1,486,247) | (2,676,523) | (28,262,637) | (59,803,637) |
Net increase (decrease) | (1,078,482) | (1,824,433) | $ (20,660,250) | $ (41,009,492) |
Class C | | | | |
Shares sold | 399,193 | 284,897 | $ 7,074,294 | $ 6,372,368 |
Reinvestment of distributions | 173,024 | 345,073 | 3,293,938 | 7,545,497 |
Shares redeemed | (553,303) | (670,985) | (10,367,496) | (14,937,683) |
Net increase (decrease) | 18,914 | (41,015) | $ 736 | $ (1,019,818) |
Institutional Class | | | | |
Shares sold | 884,822 | 75,332 | $ 17,189,299 | $ 1,755,195 |
Reinvestment of distributions | 36,137 | 56,949 | 687,993 | 1,292,278 |
Shares redeemed | (850,496) | (238,050) | (15,099,077) | (5,551,268) |
Net increase (decrease) | 70,463 | (105,769) | $ 2,778,215 | $ (2,503,795) |
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,003.40 | $ 5.99 |
HypotheticalA | $ 1,000.00 | $ 1,019.15 | $ 6.04 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,002.00 | $ 7.30 |
HypotheticalA | $ 1,000.00 | $ 1,017.85 | $ 7.35 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,000.00 | $ 9.70 |
HypotheticalA | $ 1,000.00 | $ 1,015.43 | $ 9.78 |
Class C | | | |
Actual | $ 1,000.00 | $ 999.70 | $ 9.65 |
HypotheticalA | $ 1,000.00 | $ 1,015.48 | $ 9.73 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,004.90 | $ 4.54 |
HypotheticalA | $ 1,000.00 | $ 1,020.61 | $ 4.57 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.19% |
Class T | 1.45% |
Class B | 1.93% |
Class C | 1.92% |
Institutional Class | .90% |
Semiannual Report
Advisor Health Care Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Merck & Co., Inc. | 6.2 | 7.6 |
UnitedHealth Group, Inc. | 4.8 | 4.2 |
Abbott Laboratories | 4.2 | 0.0 |
Wyeth | 3.1 | 1.7 |
Allergan, Inc. | 3.0 | 2.7 |
Thermo Fisher Scientific, Inc. | 2.9 | 2.3 |
Baxter International, Inc. | 2.7 | 1.0 |
Bristol-Myers Squibb Co. | 2.5 | 3.2 |
Becton, Dickinson & Co. | 2.5 | 3.1 |
Waters Corp. | 2.4 | 0.8 |
| 34.3 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Pharmaceuticals | 25.6% | |
| Health Care Equipment & Supplies | 20.3% | |
| Health Care Providers & Services | 19.9% | |
| Biotechnology | 13.6% | |
| Life Sciences Tools & Services | 11.3% | |
| All Others* | 9.3% | |
|
As of July 31, 2007 |
| Pharmaceuticals | 33.6% | |
| Health Care Providers & Services | 19.7% | |
| Health Care Equipment & Supplies | 15.5% | |
| Biotechnology | 11.3% | |
| Life Sciences Tools & Services | 9.8% | |
| All Others* | 10.1% | |
* Includes short-term investments and net other assets. |
Health Care
Advisor Health Care Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.3% |
| Shares | | Value |
BIOTECHNOLOGY - 13.6% |
Biotechnology - 13.6% |
3SBio, Inc. sponsored ADR | 49,675 | | $ 553,380 |
Acorda Therapeutics, Inc. (a) | 17,800 | | 451,408 |
Alexion Pharmaceuticals, Inc. (a)(d) | 17,900 | | 1,169,228 |
Alnylam Pharmaceuticals, Inc. (a) | 108,400 | | 3,256,336 |
Amgen, Inc. (a)(d) | 234,700 | | 10,934,673 |
Amylin Pharmaceuticals, Inc. (a) | 46,200 | | 1,369,830 |
Arena Pharmaceuticals, Inc. (a) | 36,600 | | 264,984 |
Biogen Idec, Inc. (a) | 174,025 | | 10,606,824 |
BioMarin Pharmaceutical, Inc. (a) | 125,100 | | 4,636,206 |
Cephalon, Inc. (a) | 21,900 | | 1,437,297 |
Cepheid, Inc. (a) | 22,900 | | 699,366 |
Cougar Biotechnology, Inc. (a) | 13,326 | | 398,581 |
CSL Ltd. | 162,253 | | 4,969,739 |
CytRx Corp. (a) | 163,200 | | 300,288 |
deCODE genetics, Inc. (a)(d) | 237,105 | | 815,641 |
Genentech, Inc. (a) | 111,987 | | 7,860,368 |
Genmab AS (a) | 5,600 | | 338,646 |
Genzyme Corp. (a) | 120,400 | | 9,406,852 |
Gilead Sciences, Inc. (a) | 228,592 | | 10,444,368 |
Grifols SA | 23,723 | | 579,670 |
GTx, Inc. (a)(d) | 107,417 | | 1,191,255 |
Idera Pharmaceuticals, Inc. (a)(d) | 9,100 | | 92,547 |
ImClone Systems, Inc. (a) | 54,100 | | 2,351,727 |
Indevus Pharmaceuticals, Inc. (a) | 58,900 | | 375,193 |
Isis Pharmaceuticals, Inc. (a) | 83,419 | | 1,301,336 |
MannKind Corp. (a) | 30,591 | | 241,669 |
Millennium Pharmaceuticals, Inc. (a) | 113,300 | | 1,718,761 |
Molecular Insight Pharmaceuticals, Inc. (d) | 80,400 | | 682,596 |
Myriad Genetics, Inc. (a) | 14,800 | | 636,548 |
Omrix Biopharmaceuticals, Inc. (a) | 2,500 | | 58,150 |
Orchid Cellmark, Inc. (a) | 46,000 | | 228,620 |
OREXIGEN Therapeutics, Inc. | 15,100 | | 159,305 |
PDL BioPharma, Inc. (a) | 6,900 | | 103,017 |
Pharmion Corp. (a) | 500 | | 34,475 |
Progenics Pharmaceuticals, Inc. (a)(d) | 41,599 | | 679,728 |
Theravance, Inc. (a) | 45,200 | | 891,796 |
United Therapeutics Corp. (a) | 3,700 | | 310,726 |
Vertex Pharmaceuticals, Inc. (a) | 75,261 | | 1,532,314 |
Zymogenetics, Inc. (a)(d) | 18,200 | | 183,638 |
| | 83,267,086 |
CHEMICALS - 1.3% |
Diversified Chemicals - 0.9% |
Bayer AG | 9,100 | | 746,200 |
Bayer AG sponsored ADR | 59,077 | | 4,844,314 |
| | 5,590,514 |
|
| Shares | | Value |
Fertilizers & Agricultural Chemicals - 0.4% |
Monsanto Co. | 10,300 | | $ 1,158,132 |
The Mosaic Co. (a) | 13,300 | | 1,210,433 |
| | 2,368,565 |
TOTAL CHEMICALS | | 7,959,079 |
DIVERSIFIED CONSUMER SERVICES - 0.1% |
Specialized Consumer Services - 0.1% |
Service Corp. International | 57,400 | | 690,522 |
FOOD & STAPLES RETAILING - 0.9% |
Drug Retail - 0.9% |
A&D Pharma Holdings NV (Reg. S) unit | 13,800 | | 297,539 |
China Nepstar Chain Drugstore Ltd. ADR | 17,400 | | 210,714 |
CVS Caremark Corp. | 132,100 | | 5,161,147 |
| | 5,669,400 |
FOOD PRODUCTS - 0.5% |
Agricultural Products - 0.5% |
Bunge Ltd. | 27,039 | | 3,203,310 |
HEALTH CARE EQUIPMENT & SUPPLIES - 20.3% |
Health Care Equipment - 16.6% |
American Medical Systems Holdings, Inc. (a)(d) | 183,300 | | 2,619,357 |
Aspect Medical Systems, Inc. (a)(d) | 237,900 | | 2,988,024 |
Baxter International, Inc. | 269,330 | | 16,359,104 |
Beckman Coulter, Inc. | 12,100 | | 804,650 |
Becton, Dickinson & Co. | 173,862 | | 15,044,279 |
Boston Scientific Corp. (a) | 249,200 | | 3,022,796 |
C.R. Bard, Inc. | 79,179 | | 7,646,316 |
China Medical Technologies, Inc. sponsored ADR | 6,700 | | 319,389 |
Covidien Ltd. | 230,932 | | 10,306,495 |
Electro-Optical Sciences, Inc. (a) | 243,923 | | 1,209,858 |
Electro-Optical Sciences, Inc.: | | | |
warrants 11/2/11 (a)(e) | 60,018 | | 127,076 |
warrants 8/2/12 (a)(e) | 16,500 | | 35,482 |
Gen-Probe, Inc. (a) | 63,500 | | 3,629,025 |
Golden Meditech Co. Ltd. | 5,240,000 | | 2,123,566 |
Hillenbrand Industries, Inc. | 18,200 | | 941,304 |
I-Flow Corp. (a)(d) | 174,884 | | 2,500,841 |
IDEXX Laboratories, Inc. (a) | 5,500 | | 310,035 |
Integra LifeSciences Holdings Corp. (a)(d) | 59,385 | | 2,470,416 |
Intuitive Surgical, Inc. (a) | 4,300 | | 1,092,200 |
Kinetic Concepts, Inc. (a) | 2,800 | | 139,384 |
Medtronic, Inc. | 73,200 | | 3,408,924 |
Mentor Corp. | 11,000 | | 380,820 |
Meridian Bioscience, Inc. | 17,300 | | 543,393 |
Mindray Medical International Ltd. sponsored ADR | 38,300 | | 1,306,030 |
NeuroMetrix, Inc. (a) | 64,400 | | 679,420 |
Orthofix International NV (a) | 7,700 | | 421,036 |
Common Stocks - continued |
| Shares | | Value |
HEALTH CARE EQUIPMENT & SUPPLIES - CONTINUED |
Health Care Equipment - continued |
Quidel Corp. (a) | 19,900 | | $ 313,823 |
Sirona Dental Systems, Inc. (a) | 8,935 | | 246,874 |
Smith & Nephew PLC | 259,900 | | 3,500,853 |
Smith & Nephew PLC sponsored ADR | 52,900 | | 3,562,815 |
St. Jude Medical, Inc. (a) | 142,300 | | 5,764,573 |
Stryker Corp. | 94,700 | | 6,342,059 |
Symmetry Medical, Inc. (a) | 40,846 | | 743,397 |
The Spectranetics Corp. (a) | 64,309 | | 802,576 |
ThermoGenesis Corp. (a) | 123,934 | | 220,603 |
| | 101,926,793 |
Health Care Supplies - 3.7% |
Alcon, Inc. | 33,391 | | 4,741,522 |
Cooper Companies, Inc. | 19,043 | | 749,913 |
Haemonetics Corp. (a) | 5,400 | | 323,136 |
Immucor, Inc. (a) | 36,300 | | 1,046,892 |
InfuSystems Holdings, Inc. (a) | 453,700 | | 1,837,485 |
InfuSystems Holdings, Inc. warrants 4/11/11 (a) | 83,700 | | 26,784 |
Inverness Medical Innovations, Inc. (a) | 281,744 | | 12,692,567 |
Shandong Weigao Group Medical Polymer Co. Ltd. (H Shares) | 700,000 | | 1,181,412 |
TranS1, Inc. | 3,700 | | 53,983 |
| | 22,653,694 |
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | | 124,580,487 |
HEALTH CARE PROVIDERS & SERVICES - 19.9% |
Health Care Distributors & Services - 4.1% |
Celesio AG | 900 | | 53,009 |
Henry Schein, Inc. (a) | 51,800 | | 3,011,134 |
McKesson Corp. | 227,300 | | 14,272,167 |
Profarma Distribuidora de Produtos Farmaceuticos SA (a) | 434,800 | | 7,415,577 |
United Drug PLC (Ireland) | 64,300 | | 373,078 |
| | 25,124,965 |
Health Care Facilities - 1.7% |
Acibadem Saglik Hizmetleri AS | 325,923 | | 2,294,547 |
Apollo Hospitals Enterprise Ltd. | 103,739 | | 1,311,263 |
Bumrungrad Hospital PCL (For. Reg.) | 130,700 | | 145,420 |
CVS Group plc | 200 | | 933 |
Emeritus Corp. (a) | 135,290 | | 2,996,674 |
Raffles Medical Group Ltd. | 56,000 | | 50,981 |
Sun Healthcare Group, Inc. (a) | 109,825 | | 1,892,285 |
Universal Health Services, Inc. Class B | 16,600 | | 782,358 |
VCA Antech, Inc. (a) | 30,520 | | 1,179,903 |
| | 10,654,364 |
Health Care Services - 4.5% |
athenahealth, Inc. | 500 | | 15,700 |
Diagnosticos da America SA | 318,500 | | 5,451,981 |
|
| Shares | | Value |
Emergency Medical Services Corp. Class A (a) | 100 | | $ 3,077 |
Express Scripts, Inc. (a) | 145,280 | | 9,804,947 |
Health Grades, Inc. (a) | 356,798 | | 2,048,021 |
Healthways, Inc. (a) | 13,033 | | 733,758 |
HMS Holdings Corp. (a) | 37,400 | | 1,181,840 |
Laboratory Corp. of America Holdings (a) | 15,000 | | 1,108,200 |
LHC Group, Inc. (a)(d) | 86,497 | | 1,994,621 |
Nighthawk Radiology Holdings, Inc. (a) | 291,681 | | 4,637,728 |
Omnicare, Inc. | 31,729 | | 702,480 |
Rural/Metro Corp. (a) | 13,331 | | 37,993 |
Virtual Radiologic Corp. | 4,400 | | 66,616 |
| | 27,786,962 |
Managed Health Care - 9.6% |
Health Net, Inc. (a) | 135,100 | | 6,280,799 |
Healthspring, Inc. (a) | 10,217 | | 211,390 |
Humana, Inc. (a) | 99,725 | | 8,007,918 |
Medial Saude SA (a) | 348,400 | | 4,000,955 |
Triple-S Management Corp. | 23,066 | | 438,485 |
UnitedHealth Group, Inc. | 576,509 | | 29,309,718 |
Universal American Financial Corp. (a) | 344,694 | | 7,214,445 |
Wellcare Health Plans, Inc. (a) | 20,300 | | 953,897 |
WellPoint, Inc. (a) | 26,000 | | 2,033,200 |
| | 58,450,807 |
TOTAL HEALTH CARE PROVIDERS & SERVICES | | 122,017,098 |
HEALTH CARE TECHNOLOGY - 2.0% |
Health Care Technology - 2.0% |
Allscripts Healthcare Solutions, Inc. (a) | 158,747 | | 2,354,218 |
Cerner Corp. (a) | 29,829 | | 1,563,040 |
Eclipsys Corp. (a) | 169,127 | | 4,353,329 |
HLTH Corp. (a) | 325,000 | | 3,636,750 |
MedAssets, Inc. | 18,100 | | 364,715 |
| | 12,272,052 |
INDUSTRIAL CONGLOMERATES - 0.1% |
Industrial Conglomerates - 0.1% |
Carlisle Companies, Inc. | 10,800 | | 359,640 |
INTERNET SOFTWARE & SERVICES - 0.3% |
Internet Software & Services - 0.3% |
WebMD Health Corp. Class A (a)(d) | 42,289 | | 1,563,001 |
LIFE SCIENCES TOOLS & SERVICES - 11.3% |
Life Sciences Tools & Services - 11.3% |
Affymetrix, Inc. (a) | 95,514 | | 1,916,011 |
AMAG Pharmaceuticals, Inc. | 56,801 | | 2,928,660 |
Applera Corp. - Applied Biosystems Group | 87,300 | | 2,752,569 |
Bruker BioSciences Corp. (a) | 314,210 | | 3,220,653 |
Charles River Laboratories International, Inc. (a) | 16,700 | | 1,037,070 |
Covance, Inc. (a) | 22,632 | | 1,882,077 |
Common Stocks - continued |
| Shares | | Value |
LIFE SCIENCES TOOLS & SERVICES - CONTINUED |
Life Sciences Tools & Services - continued |
Dishman Pharmaceuticals and Chemicals Ltd. | 139,579 | | $ 1,131,059 |
Divi's Laboratories Ltd. (a) | 14,168 | | 508,540 |
Exelixis, Inc. (a) | 75,713 | | 554,219 |
Illumina, Inc. (a) | 43,772 | | 2,788,276 |
Invitrogen Corp. (a) | 38,236 | | 3,275,678 |
Lonza Group AG | 6,935 | | 889,953 |
Luminex Corp. (a)(d) | 30,404 | | 455,148 |
Millipore Corp. (a) | 21,120 | | 1,481,568 |
PAREXEL International Corp. (a) | 7,200 | | 391,752 |
PerkinElmer, Inc. | 235,978 | | 5,873,492 |
Pharmaceutical Product Development, Inc. | 37,500 | | 1,626,000 |
QIAGEN NV (a) | 146,100 | | 2,980,440 |
Techne Corp. (a) | 10,135 | | 658,775 |
Thermo Fisher Scientific, Inc. (a)(d) | 347,225 | | 17,878,615 |
Third Wave Technologies, Inc. (a) | 36,700 | | 298,738 |
Waters Corp. (a) | 251,100 | | 14,425,695 |
Wuxi Pharmatech Cayman, Inc. Sponsored ADR | 5,900 | | 148,621 |
| | 69,103,609 |
MACHINERY - 0.5% |
Industrial Machinery - 0.5% |
Pall Corp. | 79,800 | | 2,943,822 |
PERSONAL PRODUCTS - 0.2% |
Personal Products - 0.2% |
Bare Escentuals, Inc. (a)(d) | 46,290 | | 1,103,554 |
PHARMACEUTICALS - 25.6% |
Pharmaceuticals - 25.6% |
Abbott Laboratories | 452,800 | | 25,492,640 |
Alembic Ltd. | 187,348 | | 303,343 |
Allergan, Inc. (d) | 273,939 | | 18,405,961 |
Barr Pharmaceuticals, Inc. (a) | 109,900 | | 5,735,681 |
Beijing Med-Pharm Corp. (a)(d) | 31,685 | | 265,837 |
Biodel, Inc. | 13,500 | | 240,705 |
BioForm Medical, Inc. | 8,600 | | 60,200 |
BioMimetic Therapeutics, Inc. (a) | 213,662 | | 3,177,154 |
Bristol-Myers Squibb Co. | 653,800 | | 15,161,622 |
China Shineway Pharmaceutical Group Ltd. | 1,830,000 | | 1,253,256 |
Eczacibasi ILAC Sanayi TAS (a) | 82,000 | | 278,500 |
Elan Corp. PLC sponsored ADR (a) | 78,100 | | 1,984,521 |
Jazz Pharmaceuticals, Inc. (d) | 58,691 | | 768,852 |
Johnson & Johnson | 100 | | 6,326 |
Merck & Co., Inc. | 814,800 | | 37,708,941 |
Nexmed, Inc. (a) | 401,447 | | 578,084 |
Novo Nordisk AS Series B sponsored ADR | 54,600 | | 3,426,150 |
Perrigo Co. | 40,800 | | 1,258,272 |
|
| Shares | | Value |
Schering-Plough Corp. | 591,400 | | $ 11,573,698 |
Shire PLC sponsored ADR | 77,300 | | 4,162,605 |
Simcere Pharmaceutical Group sponsored ADR | 26,750 | | 320,733 |
Sirtris Pharmaceuticals, Inc. | 47,200 | | 569,232 |
Stada Arzneimittel AG | 7,300 | | 459,616 |
Sun Pharmaceutical Industries Ltd. | 12,775 | | 368,420 |
Teva Pharmaceutical Industries Ltd. sponsored ADR | 26,900 | | 1,238,476 |
ULURU, Inc. (a) | 24,500 | | 57,330 |
Wyeth | 472,342 | | 18,799,212 |
XenoPort, Inc. (a)(d) | 56,000 | | 3,436,160 |
| | 157,091,527 |
SOFTWARE - 0.1% |
Application Software - 0.1% |
Nuance Communications, Inc. (a) | 35,800 | | 568,862 |
Systems Software - 0.0% |
Quality Systems, Inc. | 2,848 | | 86,551 |
TOTAL SOFTWARE | | 655,413 |
TEXTILES, APPAREL & LUXURY GOODS - 0.1% |
Footwear - 0.1% |
China Hongxing Sports Ltd. | 658,000 | | 285,582 |
WATER UTILITIES - 0.5% |
Water Utilities - 0.5% |
Companhia de Saneamento Basico do Estado de Sao Paulo (SABESP) sponsored ADR (d) | 77,900 | | 3,334,899 |
TOTAL COMMON STOCKS (Cost $541,619,183) | 596,100,081 |
Money Market Funds - 10.5% |
| | | |
Fidelity Cash Central Fund, 3.79% (b) | 13,816,583 | | 13,816,583 |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 50,366,933 | | 50,366,933 |
TOTAL MONEY MARKET FUNDS (Cost $64,183,516) | 64,183,516 |
TOTAL INVESTMENT PORTFOLIO - 107.8% (Cost $605,802,699) | | 660,283,597 |
NET OTHER ASSETS - (7.8)% | | (47,602,013) |
NET ASSETS - 100% | $ 612,681,584 |
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 $162,558 or 0.0% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Electro-Optical Sciences, Inc. warrants 11/2/11 | 11/1/06 | $ 6 |
Electro-Optical Sciences, Inc. warrants 8/2/12 | 8/1/07 | 17 |
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 | $ 234,508 |
Fidelity Securities Lending Cash Central Fund | 118,990 |
Total | $ 353,498 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 85.7% |
Brazil | 3.3% |
Bermuda | 2.2% |
United Kingdom | 1.9% |
Germany | 1.0% |
Others (individually less than 1%) | 5.9% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Health Care
Advisor Health Care Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2008 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $49,873,869) - See accompanying schedule: Unaffiliated issuers (cost $541,619,183) | $ 596,100,081 | |
Fidelity Central Funds (cost $64,183,516) | 64,183,516 | |
Total Investments (cost $605,802,699) | | $ 660,283,597 |
Cash | | 15,172 |
Foreign currency held at value (cost $38,117) | | 38,123 |
Receivable for investments sold | | 15,644,223 |
Receivable for fund shares sold | | 794,854 |
Dividends receivable | | 549,024 |
Distributions receivable from Fidelity Central Funds | | 42,040 |
Prepaid expenses | | 1,942 |
Other receivables | | 49,529 |
Total assets | | 677,418,504 |
| | |
Liabilities | | |
Payable for investments purchased | $ 11,974,485 | |
Payable for fund shares redeemed | 1,580,781 | |
Accrued management fee | 299,442 | |
Distribution fees payable | 289,445 | |
Other affiliated payables | 185,360 | |
Other payables and accrued expenses | 40,474 | |
Collateral on securities loaned, at value | 50,366,933 | |
Total liabilities | | 64,736,920 |
| | |
Net Assets | | $ 612,681,584 |
Net Assets consist of: | | |
Paid in capital | | $ 536,175,324 |
Accumulated net investment loss | | (1,509,141) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 23,512,955 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 54,502,446 |
Net Assets | | $ 612,681,584 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($237,211,078 ÷ 11,312,461 shares) | | $ 20.97 |
| | |
Maximum offering price per share (100/94.25 of $20.97) | | $ 22.25 |
Class T:
Net Asset Value and redemption price per share ($172,135,774 ÷ 8,396,957 shares) | | $ 20.50 |
| | |
Maximum offering price per share (100/96.50 of $20.50) | | $ 21.24 |
Class B:
Net Asset Value and offering price per share ($84,037,020 ÷ 4,310,295 shares)A | | $ 19.50 |
| | |
Class C:
Net Asset Value and offering price per share ($98,230,850 ÷ 5,050,369 shares)A | | $ 19.45 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($21,066,862 ÷ 973,207 shares) | | $ 21.65 |
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
Advisor Health Care Fund
Financial Statements - continued
Statement of Operations
| Six months ended January 31, 2008 (Unaudited) |
Investment Income | | |
Dividends | | $ 3,046,888 |
Interest | | 4,639 |
Income from Fidelity Central Funds | | 353,498 |
Total income | | 3,405,025 |
| | |
Expenses | | |
Management fee | $ 1,860,084 | |
Transfer agent fees | 1,001,712 | |
Distribution fees | 1,827,310 | |
Accounting and security lending fees | 123,836 | |
Custodian fees and expenses | 60,211 | |
Independent trustees' compensation | 1,375 | |
Registration fees | 38,282 | |
Audit | 30,974 | |
Legal | 2,030 | |
Interest | 960 | |
Miscellaneous | 2,750 | |
Total expenses before reductions | 4,949,524 | |
Expense reductions | (35,557) | 4,913,967 |
Net investment income (loss) | | (1,508,942) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers (net of foreign taxes of $41,064) | 38,921,983 | |
Foreign currency transactions | (12,146) | |
Total net realized gain (loss) | | 38,909,837 |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $70,753) | (33,621,860) | |
Assets and liabilities in foreign currencies | (10,277) | |
Total change in net unrealized appreciation (depreciation) | | (33,632,137) |
Net gain (loss) | | 5,277,700 |
Net increase (decrease) in net assets resulting from operations | | $ 3,768,758 |
Statement of Changes in Net Assets
| Six months ended
January 31, 2008
(Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (1,508,942) | $ (3,461,354) |
Net realized gain (loss) | 38,909,837 | 78,309,606 |
Change in net unrealized appreciation (depreciation) | (33,632,137) | (16,377,138) |
Net increase (decrease) in net assets resulting from operations | 3,768,758 | 58,471,114 |
Distributions to shareholders from net realized gain | (58,231,092) | (83,314,166) |
Share transactions - net increase (decrease) | 4,777,886 | (46,973,972) |
Redemption fees | 5,066 | 16,966 |
Total increase (decrease) in net assets | (49,679,382) | (71,800,058) |
| | |
Net Assets | | |
Beginning of period | 662,360,966 | 734,161,024 |
End of period (including accumulated net investment loss of $1,509,141 and accumulated net investment loss of $199, respectively) | $ 612,681,584 | $ 662,360,966 |
See accompanying notes which are an integral part of the financial statements.
Health Care
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.90 | $ 23.77 | $ 22.94 | $ 18.91 | $ 18.29 | $ 16.51 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.02) | (.03) | (.09) | (.05) | (.05) | - I |
Net realized and unrealized gain (loss) | .15 | 1.91 | .96 | 4.08 | .67 | 1.78 |
Total from investment operations | .13 | 1.88 | .87 | 4.03 | .62 | 1.78 |
Distributions from net realized gain | (2.06) | (2.75) | (.04) | - | - | - |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 20.97 | $ 22.90 | $ 23.77 | $ 22.94 | $ 18.91 | $ 18.29 |
Total Return B, C, D | .34% | 8.54% | 3.79% | 21.31% | 3.39% | 10.78% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.19% A | 1.22% | 1.25% | 1.28% | 1.32% | 1.34% |
Expenses net of fee waivers, if any | 1.19% A | 1.22% | 1.25% | 1.28% | 1.32% | 1.34% |
Expenses net of all reductions | 1.17% A | 1.21% | 1.21% | 1.26% | 1.29% | 1.27% |
Net investment income (loss) | (.15)% A | (.14)% | (.38)% | (.22)% | (.26)% | (.01)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 237,211 | $ 234,656 | $ 199,221 | $ 139,158 | $ 104,258 | $ 108,692 |
Portfolio turnover rate G | 118% A | 141% | 99% | 71% | 60% | 120% |
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 sales charges. 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. 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 22.39 | $ 23.26 | $ 22.50 | $ 18.60 | $ 18.03 | $ 16.31 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.09) | (.15) | (.09) | (.09) | (.04) |
Net realized and unrealized gain (loss) | .15 | 1.87 | .95 | 3.99 | .66 | 1.76 |
Total from investment operations | .10 | 1.78 | .80 | 3.90 | .57 | 1.72 |
Distributions from net realized gain | (1.99) | (2.65) | (.04) | - | - | - |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 20.50 | $ 22.39 | $ 23.26 | $ 22.50 | $ 18.60 | $ 18.03 |
Total Return B, C, D | .20% | 8.25% | 3.55% | 20.97% | 3.16% | 10.55% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.45% A | 1.48% | 1.50% | 1.53% | 1.56% | 1.59% |
Expenses net of fee waivers, if any | 1.45% A | 1.48% | 1.50% | 1.53% | 1.56% | 1.59% |
Expenses net of all reductions | 1.44% A | 1.47% | 1.47% | 1.51% | 1.53% | 1.51% |
Net investment income (loss) | (.42)% A | (.40)% | (.63)% | (.47)% | (.51)% | (.26)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 172,136 | $ 186,628 | $ 218,280 | $ 243,353 | $ 243,176 | $ 264,115 |
Portfolio turnover rate G | 118% A | 141% | 99% | 71% | 60% | 120% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.29 | $ 22.17 | $ 21.55 | $ 17.91 | $ 17.45 | $ 15.86 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.10) | (.20) | (.25) | (.19) | (.18) | (.12) |
Net realized and unrealized gain (loss) | .16 | 1.79 | .91 | 3.83 | .64 | 1.71 |
Total from investment operations | .06 | 1.59 | .66 | 3.64 | .46 | 1.59 |
Distributions from net realized gain | (1.85) | (2.47) | (.04) | - | - | - |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 19.50 | $ 21.29 | $ 22.17 | $ 21.55 | $ 17.91 | $ 17.45 |
Total Return B, C, D | 0.00% | 7.66% | 3.06% | 20.32% | 2.64% | 10.03% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.93% A | 1.99% | 2.01% | 2.04% | 2.06% | 2.05% |
Expenses net of fee waivers, if any | 1.93% A | 1.99% | 2.01% | 2.04% | 2.06% | 2.05% |
Expenses net of all reductions | 1.93% A | 1.98% | 1.98% | 2.01% | 2.03% | 1.98% |
Net investment income (loss) | (.91)% A | (.91)% | (1.14)% | (.98)% | (1.01)% | (.73)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 84,037 | $ 113,384 | $ 180,364 | $ 266,319 | $ 285,299 | $ 317,906 |
Portfolio turnover rate G | 118% A | 141% | 99% | 71% | 60% | 120% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.29 | $ 22.24 | $ 21.61 | $ 17.94 | $ 17.47 | $ 15.87 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.09) | (.19) | (.24) | (.17) | (.17) | (.11) |
Net realized and unrealized gain (loss) | .14 | 1.79 | .91 | 3.84 | .64 | 1.71 |
Total from investment operations | .05 | 1.60 | .67 | 3.67 | .47 | 1.60 |
Distributions from net realized gain | (1.89) | (2.55) | (.04) | - | - | - |
Redemption fees added to paid in capital E, I | - | - | - | - | - | - |
Net asset value, end of period | $ 19.45 | $ 21.29 | $ 22.24 | $ 21.61 | $ 17.94 | $ 17.47 |
Total Return B, C, D | (.03)% | 7.75% | 3.10% | 20.46% | 2.69% | 10.08% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.92% A | 1.94% | 1.94% | 1.97% | 2.00% | 2.00% |
Expenses net of fee waivers, if any | 1.92% A | 1.94% | 1.94% | 1.97% | 2.00% | 2.00% |
Expenses net of all reductions | 1.91% A | 1.93% | 1.91% | 1.94% | 1.97% | 1.92% |
Net investment income (loss) | (.89)% A | (.86)% | (1.07)% | (.91)% | (.95)% | (.67)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 98,231 | $ 105,519 | $ 115,644 | $ 131,277 | $ 130,184 | $ 150,576 |
Portfolio turnover rate G | 118% A | 141% | 99% | 71% | 60% | 120% |
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.
Health Care
Financial Highlights - Institutional Class
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 23.62 | $ 24.43 | $ 23.48 | $ 19.28 | $ 18.58 | $ 16.70 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .02 | .05 | - H | .04 | .03 | .06 |
Net realized and unrealized gain (loss) | .15 | 1.96 | .99 | 4.16 | .67 | 1.82 |
Total from investment operations | .17 | 2.01 | .99 | 4.20 | .70 | 1.88 |
Distributions from net realized gain | (2.14) | (2.82) | (.04) | - | - | - |
Redemption fees added to paid in capital D, H | - | - | - | - | - | - |
Net asset value, end of period | $ 21.65 | $ 23.62 | $ 24.43 | $ 23.48 | $ 19.28 | $ 18.58 |
Total Return B, C | .49% | 8.90% | 4.21% | 21.78% | 3.77% | 11.26% |
Ratios to Average Net Assets E, G | | | | | | |
Expenses before reductions | .90% A | .88% | .86% | .88% | .91% | .96% |
Expenses net of fee waivers, if any | .90% A | .88% | .86% | .88% | .91% | .96% |
Expenses net of all reductions | .89% A | .87% | .83% | .85% | .88% | .88% |
Net investment income (loss) | .13% A | .19% | .01% | .18% | .14% | .37% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 21,067 | $ 22,174 | $ 20,652 | $ 19,698 | $ 20,358 | $ 23,364 |
Portfolio turnover rate F | 118% A | 141% | 99% | 71% | 60% | 120% |
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, 2008 (Unaudited)
1. Organization.
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 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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
Health Care
3. Significant Accounting Policies - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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 | $ 91,230,100 | |
Unrealized depreciation | (38,954,537) | |
Net unrealized appreciation (depreciation) | $ 52,275,563 | |
Cost for federal income tax purposes | $ 608,008,034 | |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to 0.75% 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 Pronouncement. 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.
4. 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
4. Operating Policies - continued
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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $384,547,537 and $452,390,682, respectively.
6. 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% | $ 307,239 | $ 8,786 |
Class T | .25% | .25% | 470,300 | - |
Class B | .75% | .25% | 516,620 | 387,465 |
Class C | .75% | .25% | 533,151 | 24,235 |
| | | $ 1,827,310 | $ 420,486 |
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 | $ 19,771 |
Class T | 11,928 |
Class B* | 57,663 |
Class C* | 2,519 |
| $ 91,881 |
* 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.
Health Care
6. Fees and Sales of Investments - 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 | $ 369,694 | .30 |
Class T | 293,011 | .31 |
Class B | 155,668 | .30 |
Class C | 151,057 | .28 |
Institutional Class | 32,282 | .26 |
| $ 1,001,712 | |
* 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.
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 $3,572 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 | $ 6,555,000 | 5.27% | $ 960 |
7. 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 $902 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. 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 $118,990.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
9. 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 $21,906 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 $3,875. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction | |
Class A | $ 9,051 | |
Class C | 478 | |
Institutional Class | 247 | |
| $ 9,776 | |
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $196,360.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
From net realized gain | | |
Class A | $ 21,294,002 | $ 23,887,113 |
Class T | 16,323,384 | 24,697,844 |
Class B | 9,098,608 | 18,914,669 |
Class C | 9,241,641 | 13,345,526 |
Institutional Class | 2,273,457 | 2,469,014 |
Total | $ 58,231,092 | $ 83,314,166 |
Health Care
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 | Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 1,685,557 | 3,628,491 | $ 38,209,390 | $ 84,047,399 |
Reinvestment of distributions | 845,680 | 919,326 | 18,560,715 | 20,489,356 |
Shares redeemed | (1,467,885) | (2,679,409) | (33,397,421) | (62,216,884) |
Net increase (decrease) | 1,063,352 | 1,868,408 | $ 23,372,684 | $ 42,319,871 |
Class T | | | | |
Shares sold | 413,137 | 811,354 | $ 9,151,826 | $ 18,411,031 |
Reinvestment of distributions | 718,829 | 1,065,004 | 15,418,473 | 23,268,418 |
Shares redeemed | (1,072,172) | (2,924,887) | (23,791,317) | (66,315,193) |
Net increase (decrease) | 59,794 | (1,048,529) | $ 778,982 | $ (24,635,744) |
Class B | | | | |
Shares sold | 165,311 | 416,759 | $ 3,471,964 | $ 8,968,832 |
Reinvestment of distributions | 400,837 | 800,087 | 8,174,993 | 16,715,113 |
Shares redeemed | (1,581,038) | (4,028,295) | (33,392,311) | (87,078,801) |
Net increase (decrease) | (1,014,890) | (2,811,449) | $ (21,745,354) | $ (61,394,856) |
Class C | | | | |
Shares sold | 241,112 | 498,290 | $ 5,013,753 | $ 10,716,280 |
Reinvestment of distributions | 358,758 | 508,339 | 7,307,934 | 10,614,471 |
Shares redeemed | (506,780) | (1,249,593) | (10,704,480) | (26,990,765) |
Net increase (decrease) | 93,090 | (242,964) | $ 1,617,207 | $ (5,660,014) |
Institutional Class | | | | |
Shares sold | 294,078 | 415,448 | $ 6,933,940 | $ 10,086,881 |
Reinvestment of distributions | 64,316 | 77,688 | 1,455,613 | 1,779,821 |
Shares redeemed | (324,178) | (399,590) | (7,635,186) | (9,469,931) |
Net increase (decrease) | 34,216 | 93,546 | $ 754,367 | $ 2,396,771 |
Semiannual Report
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
|
Beginning
Account Value
August 1, 2007
|
Ending
Account Value
January 31, 2008
| Expenses Paid
During Period*
August 1, 2007 to
January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 961.50 | $ 5.72 |
HypotheticalA | $ 1,000.00 | $ 1,019.30 | $ 5.89 |
Class T | | | |
Actual | $ 1,000.00 | $ 960.50 | $ 6.95 |
HypotheticalA | $ 1,000.00 | $ 1,018.05 | $ 7.15 |
Class B | | | |
Actual | $ 1,000.00 | $ 957.70 | $ 9.60 |
HypotheticalA | $ 1,000.00 | $ 1,015.33 | $ 9.88 |
Class C | | | |
Actual | $ 1,000.00 | $ 957.90 | $ 9.35 |
HypotheticalA | $ 1,000.00 | $ 1,015.58 | $ 9.63 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 963.10 | $ 4.29 |
HypotheticalA | $ 1,000.00 | $ 1,020.76 | $ 4.42 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.16% |
Class T | 1.41% |
Class B | 1.95% |
Class C | 1.90% |
Institutional Class | .87% |
Industrials
Advisor Industrials Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
General Electric Co. | 9.1 | 9.8 |
United Technologies Corp. | 5.8 | 7.2 |
Honeywell International, Inc. | 5.0 | 4.0 |
Lockheed Martin Corp. | 3.7 | 2.3 |
Danaher Corp. | 2.8 | 2.6 |
Siemens AG sponsored ADR | 2.2 | 1.4 |
The Brink's Co. | 2.2 | 1.4 |
Raytheon Co. | 2.2 | 2.3 |
Johnson Controls, Inc. | 2.1 | 1.0 |
Illinois Tool Works, Inc. | 2.0 | 2.3 |
| 37.1 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Machinery | 20.7% | |
| Aerospace & Defense | 19.6% | |
| Industrial Conglomerates | 13.3% | |
| Commercial Services & Supplies | 11.3% | |
| Electrical Equipment | 9.2% | |
| All Others* | 25.9% | |
|
As of July 31, 2007 |
| Aerospace & Defense | 18.8% | |
| Machinery | 17.7% | |
| Industrial Conglomerates | 16.5% | |
| Road & Rail | 8.4% | |
| Electrical Equipment | 8.1% | |
| All Others* | 30.5% | |
* Includes short-term investments and net other assets. |
Semiannual Report
Advisor Industrials Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.9% |
| Shares | | Value |
AEROSPACE & DEFENSE - 19.6% |
Aerospace & Defense - 19.6% |
Honeywell International, Inc. | 309,400 | | $ 18,276,258 |
Lockheed Martin Corp. | 125,300 | | 13,522,376 |
Northrop Grumman Corp. | 47,900 | | 3,801,344 |
Raytheon Co. | 120,300 | | 7,836,342 |
The Boeing Co. | 83,700 | | 6,962,166 |
United Technologies Corp. | 286,300 | | 21,017,283 |
| | 71,415,769 |
AIR FREIGHT & LOGISTICS - 1.4% |
Air Freight & Logistics - 1.4% |
C.H. Robinson Worldwide, Inc. | 54,600 | | 3,032,484 |
FedEx Corp. | 23,700 | | 2,215,476 |
| | 5,247,960 |
AIRLINES - 1.5% |
Airlines - 1.5% |
Delta Air Lines, Inc. (a)(d) | 162,247 | | 2,730,617 |
UAL Corp. | 68,900 | | 2,614,755 |
| | 5,345,372 |
AUTO COMPONENTS - 2.8% |
Auto Parts & Equipment - 2.8% |
Johnson Controls, Inc. | 214,800 | | 7,597,476 |
WABCO Holdings, Inc. | 64,100 | | 2,582,589 |
| | 10,180,065 |
AUTOMOBILES - 1.6% |
Automobile Manufacturers - 1.6% |
DaimlerChrysler AG | 28,900 | | 2,260,847 |
Fiat SpA | 152,600 | | 3,571,144 |
| | 5,831,991 |
BUILDING PRODUCTS - 1.6% |
Building Products - 1.6% |
Masco Corp. (d) | 247,300 | | 5,670,589 |
CHEMICALS - 2.1% |
Specialty Chemicals - 2.1% |
Albemarle Corp. | 92,000 | | 3,335,920 |
Nalco Holding Co. | 156,800 | | 3,283,392 |
W.R. Grace & Co. (a) | 42,400 | | 959,088 |
| | 7,578,400 |
COMMERCIAL SERVICES & SUPPLIES - 11.3% |
Commercial Printing - 0.7% |
R.R. Donnelley & Sons Co. | 78,900 | | 2,752,821 |
Diversified Commercial & Professional Services - 4.1% |
Cintas Corp. | 42,000 | | 1,378,440 |
Corrections Corp. of America (a) | 99,000 | | 2,627,460 |
Equifax, Inc. | 82,900 | | 3,074,761 |
The Brink's Co. | 130,100 | | 7,887,963 |
| | 14,968,624 |
|
| Shares | | Value |
Environmental & Facility Services - 5.0% |
Allied Waste Industries, Inc. (a) | 592,900 | | $ 5,840,065 |
Fuel Tech, Inc. (a)(d) | 154,279 | | 2,937,472 |
Waste Connections, Inc. (a) | 104,800 | | 3,055,968 |
Waste Management, Inc. | 194,100 | | 6,296,604 |
| | 18,130,109 |
Human Resource & Employment Services - 1.1% |
Manpower, Inc. | 69,721 | | 3,922,503 |
Office Services & Supplies - 0.4% |
Avery Dennison Corp. | 27,900 | | 1,445,778 |
TOTAL COMMERCIAL SERVICES & SUPPLIES | | 41,219,835 |
CONSTRUCTION & ENGINEERING - 3.0% |
Construction & Engineering - 3.0% |
Chicago Bridge & Iron Co. NV
(NY Shares) | 81,500 | | 3,625,935 |
Quanta Services, Inc. (a) | 106,534 | | 2,335,225 |
Shaw Group, Inc. (a) | 91,150 | | 5,149,975 |
| | 11,111,135 |
ELECTRICAL EQUIPMENT - 9.2% |
Electrical Components & Equipment - 6.2% |
Acuity Brands, Inc. | 39,700 | | 1,806,747 |
AMETEK, Inc. | 43,100 | | 1,898,124 |
Cooper Industries Ltd. Class A | 111,200 | | 4,952,848 |
Emerson Electric Co. | 102,700 | | 5,221,268 |
First Solar, Inc. (a) | 14,400 | | 2,617,488 |
Nexans SA | 32,200 | | 3,558,958 |
SolarWorld AG | 21,100 | | 935,643 |
Sunpower Corp. Class A (a)(d) | 22,100 | | 1,526,889 |
| | 22,517,965 |
Heavy Electrical Equipment - 3.0% |
ABB Ltd. sponsored ADR | 136,900 | | 3,422,500 |
Alstom SA | 17,400 | | 3,514,308 |
Suzlon Energy Ltd. | 83,691 | | 658,150 |
Vestas Wind Systems AS (a) | 36,000 | | 3,497,125 |
| | 11,092,083 |
TOTAL ELECTRICAL EQUIPMENT | | 33,610,048 |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.2% |
Electronic Equipment & Instruments - 0.2% |
Itron, Inc. (a)(d) | 10,300 | | 848,720 |
HEALTH CARE PROVIDERS & SERVICES - 0.4% |
Health Care Distributors & Services - 0.4% |
Henry Schein, Inc. (a) | 28,200 | | 1,639,266 |
HEALTH CARE TECHNOLOGY - 0.2% |
Health Care Technology - 0.2% |
Cerner Corp. (a) | 14,100 | | 738,840 |
Common Stocks - continued |
| Shares | | Value |
INDUSTRIAL CONGLOMERATES - 13.3% |
Industrial Conglomerates - 13.3% |
General Electric Co. | 943,000 | | $ 33,391,631 |
Orkla ASA (A Shares) | 55,600 | | 736,233 |
Siemens AG sponsored ADR (d) | 63,035 | | 8,181,943 |
Tyco International Ltd. | 162,825 | | 6,408,792 |
| | 48,718,599 |
MACHINERY - 20.7% |
Construction & Farm Machinery & Heavy Trucks - 6.4% |
Bucyrus International, Inc. Class A | 41,400 | | 3,838,194 |
CNH Global NV | 36,300 | | 1,795,398 |
Cummins, Inc. | 113,832 | | 5,495,809 |
Navistar International Corp. (a) | 57,100 | | 2,821,636 |
Oshkosh Truck Co. | 99,608 | | 4,558,062 |
Terex Corp. (a) | 83,900 | | 4,929,964 |
| | 23,439,063 |
Industrial Machinery - 14.3% |
Danaher Corp. | 137,800 | | 10,259,210 |
Eaton Corp. | 67,200 | | 5,561,472 |
Flowserve Corp. | 58,600 | | 4,812,232 |
Illinois Tool Works, Inc. | 145,500 | | 7,333,200 |
Ingersoll-Rand Co. Ltd. Class A | 151,100 | | 5,971,472 |
ITT Corp. | 96,600 | | 5,740,938 |
Pall Corp. | 69,200 | | 2,552,788 |
SPX Corp. | 49,100 | | 4,939,460 |
Sulzer AG (Reg.) | 4,715 | | 4,985,924 |
| | 52,156,696 |
TOTAL MACHINERY | | 75,595,759 |
METALS & MINING - 0.5% |
Diversified Metals & Mining - 0.5% |
Titanium Metals Corp. (d) | 87,100 | | 1,893,554 |
ROAD & RAIL - 7.9% |
Railroads - 2.1% |
Norfolk Southern Corp. | 69,710 | | 3,791,527 |
Union Pacific Corp. | 32,400 | | 4,050,972 |
| | 7,842,499 |
Trucking - 5.8% |
Con-way, Inc. | 14,100 | | 686,529 |
Hertz Global Holdings, Inc. (a) | 196,900 | | 2,937,748 |
J.B. Hunt Transport Services, Inc. | 28,200 | | 877,020 |
Knight Transportation, Inc. | 114,800 | | 1,969,968 |
|
| Shares | | Value |
Landstar System, Inc. | 104,126 | | $ 5,209,424 |
Old Dominion Freight Lines, Inc. (a) | 118,136 | | 3,443,664 |
Ryder System, Inc. | 113,600 | | 5,914,016 |
| | 21,038,369 |
TOTAL ROAD & RAIL | | 28,880,868 |
TRADING COMPANIES & DISTRIBUTORS - 0.6% |
Trading Companies & Distributors - 0.6% |
Rush Enterprises, Inc. Class A (a) | 137,205 | | 2,302,300 |
TOTAL COMMON STOCKS (Cost $347,776,228) | 357,829,070 |
Nonconvertible Bonds - 0.0% |
| Principal Amount | | |
AIRLINES - 0.0% |
Airlines - 0.0% |
Delta Air Lines, Inc. 8.3% 12/15/29 (a)
(Cost $77,750) | $ 2,690,000 | | 134,500 |
Money Market Funds - 7.1% |
| Shares | | |
Fidelity Cash Central Fund, 3.79% (b) | 2,086,183 | | 2,086,183 |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 23,685,098 | | 23,685,098 |
TOTAL MONEY MARKET FUNDS (Cost $25,771,281) | 25,771,281 |
TOTAL INVESTMENT PORTFOLIO - 105.0% (Cost $373,625,259) | | 383,734,851 |
NET OTHER ASSETS - (5.0)% | | (18,418,491) |
NET ASSETS - 100% | $ 365,316,360 |
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 | $ 124,472 |
Fidelity Securities Lending Cash Central Fund | 81,014 |
Total | $ 205,486 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 84.0% |
Bermuda | 4.8% |
Germany | 3.1% |
Switzerland | 2.3% |
France | 2.0% |
Netherlands | 1.5% |
Italy | 1.0% |
Others (individually less than 1%) | 1.3% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Industrials
Advisor Industrials Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2008 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $23,605,335) - See accompanying schedule: Unaffiliated issuers (cost $347,853,978) | $ 357,963,570 | |
Fidelity Central Funds (cost $25,771,281) | 25,771,281 | |
Total Investments (cost $373,625,259) | | $ 383,734,851 |
Receivable for investments sold | | 14,288,607 |
Receivable for fund shares sold | | 1,478,143 |
Dividends receivable | | 292,899 |
Distributions receivable from Fidelity Central Funds | | 49,525 |
Prepaid expenses | | 1,124 |
Other receivables | | 1,565 |
Total assets | | 399,846,714 |
| | |
Liabilities | | |
Payable for investments purchased | $ 9,505,505 | |
Payable for fund shares redeemed | 897,847 | |
Accrued management fee | 168,869 | |
Distribution fees payable | 147,582 | |
Other affiliated payables | 97,696 | |
Other payables and accrued expenses | 27,757 | |
Collateral on securities loaned, at value | 23,685,098 | |
Total liabilities | | 34,530,354 |
| | |
Net Assets | | $ 365,316,360 |
Net Assets consist of: | | |
Paid in capital | | $ 351,876,540 |
Undistributed net investment income | | 181,241 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 3,147,913 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 10,110,666 |
Net Assets | | $ 365,316,360 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
Calculation of Maximum
Offering Price Class A:
Net Asset Value and redemption price per share ($169,386,955 ÷ 7,639,762 shares) | | $ 22.17 |
| | |
Maximum offering price per share (100/94.25 of $22.17) | | $ 23.52 |
Class T:
Net Asset Value and redemption price per share ($73,994,892 ÷ 3,379,089 shares) | | $ 21.90 |
| | |
Maximum offering price per share (100/96.50 of $21.90) | | $ 22.69 |
Class B:
Net Asset Value and offering price per share ($41,307,792 ÷ 1,965,751 shares)A | | $ 21.01 |
| | |
Class C:
Net Asset Value and offering price per share ($56,677,182 ÷ 2,691,003 shares)A | | $ 21.06 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($23,949,539 ÷ 1,046,234 shares) | | $ 22.89 |
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, 2008 (Unaudited) |
Investment Income | | |
Dividends | | $ 2,624,444 |
Interest | | 20 |
Income from Fidelity Central Funds | | 205,486 |
Total income | | 2,829,950 |
| | |
Expenses | | |
Management fee | $ 1,054,918 | |
Transfer agent fees | 507,231 | |
Distribution fees | 933,354 | |
Accounting and security lending fees | 75,483 | |
Custodian fees and expenses | 15,783 | |
Independent trustees' compensation | 763 | |
Registration fees | 41,110 | |
Audit | 23,089 | |
Legal | 969 | |
Miscellaneous | 1,172 | |
Total expenses before reductions | 2,653,872 | |
Expense reductions | (5,169) | 2,648,703 |
Net investment income (loss) | | 181,247 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers (net of foreign taxes of $46,578) | 13,485,583 | |
Foreign currency transactions | (18,296) | |
Total net realized gain (loss) | | 13,467,287 |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $60) | (30,335,998) | |
Assets and liabilities in foreign currencies | 1,074 | |
Total change in net unrealized appreciation (depreciation) | | (30,334,924) |
Net gain (loss) | | (16,867,637) |
Net increase (decrease) in net assets resulting from operations | | $ (16,686,390) |
Statement of Changes in Net Assets
| Six months ended January 31, 2008 (Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 181,247 | $ 348,138 |
Net realized gain (loss) | 13,467,287 | 35,388,071 |
Change in net unrealized appreciation (depreciation) | (30,334,924) | 31,233,909 |
Net increase (decrease) in net assets resulting from operations | (16,686,390) | 66,970,118 |
Distributions to shareholders from net investment income | - | (473,352) |
Distributions to shareholders from net realized gain | (36,229,639) | (21,383,547) |
Total distributions | (36,229,639) | (21,856,899) |
Share transactions - net increase (decrease) | 63,556,082 | 61,861,883 |
Redemption fees | 5,593 | 14,915 |
Total increase (decrease) in net assets | 10,645,646 | 106,990,017 |
| | |
Net Assets | | |
Beginning of period | 354,670,714 | 247,680,697 |
End of period (including undistributed net investment income of $181,241 and distributions in excess of net investment income of $6, respectively) | $ 365,316,360 | $ 354,670,714 |
See accompanying notes which are an integral part of the financial statements.
Industrials
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 25.49 | $ 22.16 | $ 21.53 | $ 18.10 | $ 14.15 | $ 12.75 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .04 | .09 | .08 | .02 | (.02) | .06 |
Net realized and unrealized gain (loss) | (.90) | 5.11 | 1.63 | 4.35 | 3.96 | 1.36 |
Total from investment operations | (.86) | 5.20 | 1.71 | 4.37 | 3.94 | 1.42 |
Distributions from net investment income | - | (.06) | - | - | - | (.02) |
Distributions from net realized gain | (2.46) | (1.81) | (1.08) | (.94) | - | - |
Total distributions | (2.46) | (1.87) | (1.08) | (.94) | - | (.02) |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .01 | - I |
Net asset value, end of period | $ 22.17 | $ 25.49 | $ 22.16 | $ 21.53 | $ 18.10 | $ 14.15 |
Total Return B,C,D | (3.85)% | 25.13% | 8.40% | 25.04% | 27.92% | 11.16% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.16% A | 1.21% | 1.26% | 1.34% | 1.65% | 1.99% |
Expenses net of fee waivers, if any | 1.16% A | 1.21% | 1.26% | 1.34% | 1.50% | 1.53% |
Expenses net of all reductions | 1.15% A | 1.21% | 1.24% | 1.29% | 1.47% | 1.46% |
Net investment income (loss) | .34% A | .38% | .34% | .09% | (.12)% | .46% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 169,387 | $ 157,451 | $ 99,255 | $ 40,264 | $ 12,612 | $ 4,272 |
Portfolio turnover rate G | 97% A | 130% | 94% | 116% | 106% | 149% |
A Annualized BTotal 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 25.17 | $ 21.86 | $ 21.27 | $ 17.90 | $ 14.02 | $ 12.66 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .01 | .03 | .02 | (.03) | (.06) | .03 |
Net realized and unrealized gain (loss) | (.88) | 5.05 | 1.61 | 4.31 | 3.93 | 1.34 |
Total from investment operations | (.87) | 5.08 | 1.63 | 4.28 | 3.87 | 1.37 |
Distributions from net investment income | - | (.03) | - | - | - | (.01) |
Distributions from net realized gain | (2.40) | (1.74) | (1.04) | (.91) | - | - |
Total distributions | (2.40) | (1.77) | (1.04) | (.91) | - | (.01) |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .01 | - I |
Net asset value, end of period | $ 21.90 | $ 25.17 | $ 21.86 | $ 21.27 | $ 17.90 | $ 14.02 |
Total Return B,C,D | (3.95)% | 24.82% | 8.13% | 24.78% | 27.67% | 10.84% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.41% A | 1.46% | 1.49% | 1.57% | 1.90% | 2.25% |
Expenses net of fee waivers, if any | 1.41% A | 1.46% | 1.49% | 1.57% | 1.75% | 1.78% |
Expenses net of all reductions | 1.41% A | 1.46% | 1.47% | 1.52% | 1.72% | 1.71% |
Net investment income (loss) | .09% A | .13% | .11% | (.14)% | (.36)% | .22% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 73,995 | $ 75,530 | $ 55,936 | $ 40,126 | $ 13,089 | $ 5,493 |
Portfolio turnover rate G | 97% A | 130% | 94% | 116% | 106% | 149% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 24.19 | $ 21.02 | $ 20.55 | $ 17.27 | $ 13.61 | $ 12.33 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.09) | (.09) | (.13) | (.14) | (.03) |
Net realized and unrealized gain (loss) | (.85) | 4.87 | 1.55 | 4.17 | 3.79 | 1.31 |
Total from investment operations | (.90) | 4.78 | 1.46 | 4.04 | 3.65 | 1.28 |
Distributions from net realized gain | (2.28) | (1.61) | (.99) | (.76) | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .01 | - I |
Net asset value, end of period | $ 21.01 | $ 24.19 | $ 21.02 | $ 20.55 | $ 17.27 | $ 13.61 |
Total Return B,C,D | (4.23)% | 24.18% | 7.54% | 24.12% | 26.89% | 10.38% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.95% A | 2.00% | 2.04% | 2.11% | 2.37% | 2.68% |
Expenses net of fee waivers, if any | 1.95% A | 2.00% | 2.04% | 2.11% | 2.25% | 2.25% |
Expenses net of all reductions | 1.95% A | 2.00% | 2.02% | 2.07% | 2.22% | 2.18% |
Net investment income (loss) | (.45)% A | (.41)% | (.44)% | (.68)% | (.87)% | (.26)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 41,308 | $ 44,330 | $ 37,082 | $ 32,242 | $ 14,722 | $ 9,005 |
Portfolio turnover rate G | 97% A | 130% | 94% | 116% | 106% | 149% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 24.26 | $ 21.16 | $ 20.68 | $ 17.36 | $ 13.67 | $ 12.39 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.05) | (.08) | (.08) | (.12) | (.14) | (.03) |
Net realized and unrealized gain (loss) | (.85) | 4.88 | 1.56 | 4.19 | 3.82 | 1.31 |
Total from investment operations | (.90) | 4.80 | 1.48 | 4.07 | 3.68 | 1.28 |
Distributions from net realized gain | (2.30) | (1.70) | (1.00) | (.75) | - | - |
Redemption fees added to paid in capital E | - I | - I | - I | - I | .01 | - I |
Net asset value, end of period | $ 21.06 | $ 24.26 | $ 21.16 | $ 20.68 | $ 17.36 | $ 13.67 |
Total Return B,C,D | (4.21)% | 24.25% | 7.59% | 24.16% | 26.99% | 10.33% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | 1.90% A | 1.94% | 1.99% | 2.07% | 2.28% | 2.57% |
Expenses net of fee waivers, if any | 1.90% A | 1.94% | 1.99% | 2.07% | 2.25% | 2.25% |
Expenses net of all reductions | 1.90% A | 1.94% | 1.97% | 2.02% | 2.22% | 2.18% |
Net investment income (loss) | (.40)% A | (.35)% | (.38)% | (.64)% | (.87)% | (.26)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 56,677 | $ 57,862 | $ 42,363 | $ 20,595 | $ 9,507 | $ 5,307 |
Portfolio turnover rate G | 97% A | 130% | 94% | 116% | 106% | 149% |
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.
Industrials
Financial Highlights - Institutional Class
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 26.26 | $ 22.77 | $ 22.06 | $ 18.48 | $ 14.41 | $ 12.96 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .08 | .16 | .16 | .07 | .02 | .09 |
Net realized and unrealized gain (loss) | (.92) | 5.27 | 1.66 | 4.46 | 4.04 | 1.39 |
Total from investment operations | (.84) | 5.43 | 1.82 | 4.53 | 4.06 | 1.48 |
Distributions from net investment income | - | (.13) | - | - | - | (.03) |
Distributions from net realized gain | (2.53) | (1.81) | (1.11) | (.95) | - | - |
Total distributions | (2.53) | (1.94) | (1.11) | (.95) | - | (.03) |
Redemption fees added to paid in capital D | - H | - H | - H | - H | .01 | - H |
Net asset value, end of period | $ 22.89 | $ 26.26 | $ 22.77 | $ 22.06 | $ 18.48 | $ 14.41 |
Total Return B,C | (3.69)% | 25.53% | 8.73% | 25.41% | 28.24% | 11.46% |
Ratios to Average Net Assets E,G | | | | | | |
Expenses before reductions | .87% A | .92% | .91% | 1.06% | 1.38% | 1.55% |
Expenses net of fee waivers, if any | .87% A | .92% | .91% | 1.06% | 1.25% | 1.25% |
Expenses net of all reductions | .87% A | .91% | .89% | 1.01% | 1.22% | 1.18% |
Net investment income (loss) | .63% A | .67% | .69% | .37% | .13% | .74% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 23,950 | $ 19,498 | $ 13,043 | $ 4,379 | $ 1,490 | $ 1,156 |
Portfolio turnover rate F | 97% A | 130% | 94% | 116% | 106% | 149% |
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, 2008 (Unaudited)
1. Organization.
Fidelity Advisor Industrials 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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
Industrials
3. Significant Accounting Policies - continued
Foreign Currency - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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 | $ 35,705,110 | |
Unrealized depreciation | (26,279,893) | |
Net unrealized appreciation (depreciation) | $ 9,425,217 | |
Cost for federal income tax purposes | $ 374,309,634 | |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to 0.75% 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 Pronouncement. 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.
4. 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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies - continued
Repurchase Agreements - continued
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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $207,084,220 and $182,166,086, respectively.
6. 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% | $ 215,813 | $ 15,603 |
Class T | .25% | .25% | 192,692 | - |
Class B | .75% | .25% | 223,518 | 167,638 |
Class C | .75% | .25% | 301,331 | 68,454 |
| | | $ 933,354 | $ 251,695 |
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 | $ 104,635 |
Class T | 9,830 |
Class B* | 31,902 |
Class C* | 3,040 |
| $ 149,407 |
* 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 | $ 229,632 | .27 |
Class T | 103,125 | .27 |
Class B | 68,910 | .31 |
Class C | 77,767 | .26 |
Institutional Class | 27,797 | .23 |
| $ 507,231 | |
* Annualized
Industrials
6. 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.
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 $3,926 for the period.
7. 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 $477 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. 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 $81,014.
9. 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 $1,879 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 $2,789. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction | |
Class A | $ 501 | |
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $9,115.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Other - continued
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
From net investment income | | |
Class A | $ - | $ 317,175 |
Class T | - | 81,458 |
Institutional Class | - | 74,719 |
Total | $ - | $ 473,352 |
From net realized gain | | |
Class A | $ 16,681,958 | $ 9,177,798 |
Class T | 7,329,612 | 4,598,164 |
Class B | 4,260,086 | 2,897,402 |
Class C | 5,759,701 | 3,663,404 |
Institutional Class | 2,198,282 | 1,046,779 |
Total | $ 36,229,639 | $ 21,383,547 |
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2008 | Year ended
July 31,
2007 | Six months ended January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 1,900,071 | 3,210,590 | $ 46,285,461 | $ 74,239,252 |
Reinvestment of distributions | 645,527 | 397,118 | 15,366,127 | 8,609,345 |
Shares redeemed | (1,082,770) | (1,910,674) | (25,693,196) | (44,327,457) |
Net increase (decrease) | 1,462,828 | 1,697,034 | $ 35,958,392 | $ 38,521,140 |
Class T | | | | |
Shares sold | 460,530 | 851,649 | $ 11,015,906 | $ 19,483,528 |
Reinvestment of distributions | 292,360 | 204,709 | 6,876,189 | 4,388,662 |
Shares redeemed | (374,663) | (614,792) | (8,647,912) | (14,036,675) |
Net increase (decrease) | 378,227 | 441,566 | $ 9,244,183 | $ 9,835,515 |
Class B | | | | |
Shares sold | 227,618 | 490,419 | $ 5,245,486 | $ 10,776,085 |
Reinvestment of distributions | 159,890 | 118,628 | 3,612,025 | 2,452,560 |
Shares redeemed | (254,224) | (540,505) | (5,732,609) | (11,926,256) |
Net increase (decrease) | 133,284 | 68,542 | $ 3,124,902 | $ 1,302,389 |
Class C | | | | |
Shares sold | 499,024 | 809,623 | $ 11,520,936 | $ 17,844,285 |
Reinvestment of distributions | 198,290 | 135,846 | 4,489,227 | 2,814,613 |
Shares redeemed | (391,622) | (562,223) | (8,754,715) | (12,468,615) |
Net increase (decrease) | 305,692 | 383,246 | $ 7,255,448 | $ 8,190,283 |
Institutional Class | | | | |
Shares sold | 461,195 | 466,987 | $ 11,760,754 | $ 11,092,441 |
Reinvestment of distributions | 66,827 | 33,033 | 1,640,412 | 737,185 |
Shares redeemed | (224,211) | (330,519) | (5,428,009) | (7,817,070) |
Net increase (decrease) | 303,811 | 169,501 | $ 7,973,157 | $ 4,012,556 |
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 844.80 | $ 5.56 |
HypotheticalA | $ 1,000.00 | $ 1,019.10 | $ 6.09 |
Class T | | | |
Actual | $ 1,000.00 | $ 843.70 | $ 6.72 |
HypotheticalA | $ 1,000.00 | $ 1,017.85 | $ 7.35 |
Class B | | | |
Actual | $ 1,000.00 | $ 841.40 | $ 8.98 |
HypotheticalA | $ 1,000.00 | $ 1,015.38 | $ 9.83 |
Class C | | | |
Actual | $ 1,000.00 | $ 841.50 | $ 8.98 |
HypotheticalA | $ 1,000.00 | $ 1,015.38 | $ 9.83 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 845.70 | $ 4.22 |
HypotheticalA | $ 1,000.00 | $ 1,020.56 | $ 4.62 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.20% |
Class T | 1.45% |
Class B | 1.94% |
Class C | 1.94% |
Institutional Class | .91% |
Semiannual Report
Advisor Technology Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Cisco Systems, Inc. | 10.7 | 2.8 |
Nintendo Co. Ltd. | 7.5 | 1.4 |
Nokia Corp. sponsored ADR | 4.5 | 0.5 |
Google, Inc. Class A (sub. vtg.) | 3.5 | 5.9 |
Marvell Technology Group Ltd. | 3.1 | 5.1 |
Apple, Inc. | 3.0 | 4.3 |
High Tech Computer Corp. | 2.4 | 0.2 |
Mindray Medical International Ltd. sponsored ADR | 2.3 | 0.0 |
Research In Motion Ltd. | 2.0 | 2.5 |
Corning, Inc. | 2.0 | 0.9 |
| 41.0 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Communications Equipment | 30.0% | |
| Semiconductors & Semiconductor Equipment | 22.0% | |
| Software | 19.4% | |
| Computers & Peripherals | 8.6% | |
| Internet Software & Services | 6.6% | |
| All Others* | 13.4% | |
|
As of July 31, 2007 |
| Semiconductors & Semiconductor Equipment | 32.0% | |
| Communications Equipment | 24.9% | |
| Computers & Peripherals | 12.0% | |
| Internet Software & Services | 9.5% | |
| Software | 9.1% | |
| All Others* | 12.5% | |
* Includes short-term investments and net other assets. |
Technology
Advisor Technology Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.5% |
| Shares | | Value |
COMMERCIAL SERVICES & SUPPLIES - 0.5% |
Diversified Commercial & Professional Services - 0.5% |
China Security & Surveillance Technology, Inc. (a)(c) | 185,939 | | $ 2,941,555 |
COMMUNICATIONS EQUIPMENT - 29.8% |
Communications Equipment - 29.8% |
ADVA AG Optical Networking (a) | 442,449 | | 1,518,090 |
Airvana, Inc. | 223,413 | | 1,168,450 |
Arris Group, Inc. (a) | 88,400 | | 777,036 |
Aruba Networks, Inc. | 9,800 | | 92,708 |
AudioCodes Ltd. (a) | 557,550 | | 2,614,910 |
Balda AG (a)(c) | 111,500 | | 956,848 |
Cisco Systems, Inc. (a) | 2,779,100 | | 68,087,949 |
Comtech Group, Inc. (a) | 450,667 | | 4,849,177 |
Comverse Technology, Inc. (a) | 326,000 | | 5,330,100 |
Corning, Inc. (c) | 526,200 | | 12,665,634 |
Delta Networks, Inc. | 1,875,000 | | 541,042 |
F5 Networks, Inc. (a) | 123,600 | | 2,908,308 |
Finisar Corp. (a) | 1,025,471 | | 1,640,754 |
Foxconn International Holdings Ltd. (a) | 1,756,000 | | 2,896,096 |
Harris Stratex Networks, Inc. Class A (a) | 190,600 | | 2,075,634 |
Infinera Corp. | 111,700 | | 1,138,223 |
Juniper Networks, Inc. (a) | 257,846 | | 7,000,519 |
Mogem Co. Ltd. | 309,043 | | 1,052,681 |
Nokia Corp. sponsored ADR | 770,000 | | 28,451,500 |
Opnext, Inc. | 102,700 | | 529,932 |
Optium Corp. (a) | 158,400 | | 1,094,544 |
OZ Optics Ltd. unit (d) | 68,000 | | 821,100 |
Powerwave Technologies, Inc. (a) | 1,060,700 | | 4,030,660 |
QUALCOMM, Inc. | 156,500 | | 6,638,730 |
RADWARE Ltd. (a) | 79,000 | | 1,105,210 |
Research In Motion Ltd. (a) | 136,210 | | 12,787,396 |
Riverbed Technology, Inc. (a) | 73,800 | | 1,649,430 |
SIM Technology Group | 5,180,000 | | 856,972 |
Sonus Networks, Inc. (a)(c) | 2,178,200 | | 8,908,838 |
Starent Networks Corp. | 455,212 | | 5,626,420 |
| | 189,814,891 |
COMPUTERS & PERIPHERALS - 8.6% |
Computer Hardware - 6.2% |
3PAR, Inc. | 5,900 | | 46,787 |
Apple, Inc. (a) | 143,155 | | 19,377,461 |
Foxconn Technology Co. Ltd. | 78,000 | | 447,335 |
Hewlett-Packard Co. | 87,100 | | 3,810,625 |
High Tech Computer Corp. | 795,600 | | 14,998,429 |
Palm, Inc. | 170,500 | | 924,110 |
| | 39,604,747 |
Computer Storage & Peripherals - 2.4% |
ASUSTeK Computer, Inc. | 1,127,278 | | 2,939,569 |
Innolux Display Corp. | 639,171 | | 1,371,923 |
|
| Shares | | Value |
Netezza Corp. | 207,700 | | $ 2,035,460 |
Network Appliance, Inc. (a) | 116,500 | | 2,705,130 |
Synaptics, Inc. (a) | 238,800 | | 6,328,200 |
| | 15,380,282 |
TOTAL COMPUTERS & PERIPHERALS | | 54,985,029 |
DIVERSIFIED CONSUMER SERVICES - 1.4% |
Education Services - 1.4% |
New Oriental Education & Technology Group, Inc. sponsored ADR (a) | 155,000 | | 8,780,750 |
ELECTRICAL EQUIPMENT - 2.9% |
Electrical Components & Equipment - 2.9% |
First Solar, Inc. (a) | 29,800 | | 5,416,746 |
JA Solar Holdings Co. Ltd. ADR | 71,400 | | 3,629,262 |
Neo-Neon Holdings Ltd. | 4,976,000 | | 3,031,247 |
Q-Cells AG (a) | 1,200 | | 112,918 |
Seoul Semiconductor Co. Ltd. | 26,639 | | 396,544 |
Sunpower Corp. Class A (a) | 29,200 | | 2,017,428 |
Suntech Power Holdings Co. Ltd. sponsored ADR (a) | 68,200 | | 3,732,586 |
| | 18,336,731 |
ELECTRONIC EQUIPMENT & INSTRUMENTS - 2.0% |
Electronic Equipment & Instruments - 0.5% |
Chi Mei Optoelectronics Corp. | 1,723,920 | | 2,032,377 |
Cyntec Co. Ltd. | 504,637 | | 466,868 |
ENE Technology, Inc. | 66,000 | | 151,700 |
TXC Corp. | 444,000 | | 575,904 |
| | 3,226,849 |
Technology Distributors - 1.5% |
Ingram Micro, Inc. Class A (a) | 119,400 | | 2,122,932 |
Mellanox Technologies Ltd. | 193,800 | | 3,067,854 |
Mingyuan Medicare Development Co. Ltd. (c) | 26,750,000 | | 4,151,037 |
| | 9,341,823 |
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS | | 12,568,672 |
HEALTH CARE EQUIPMENT & SUPPLIES - 2.6% |
Health Care Equipment - 2.5% |
Golden Meditech Co. Ltd. | 3,380,000 | | 1,369,781 |
Mindray Medical International Ltd. sponsored ADR | 437,900 | | 14,932,390 |
| | 16,302,171 |
Health Care Supplies - 0.1% |
Shandong Weigao Group Medical Polymer Co. Ltd. (H Shares) | 356,000 | | 600,832 |
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | | 16,903,003 |
HEALTH CARE PROVIDERS & SERVICES - 0.0% |
Health Care Services - 0.0% |
athenahealth, Inc. | 600 | | 18,840 |
Common Stocks - continued |
| Shares | | Value |
HOTELS, RESTAURANTS & LEISURE - 2.1% |
Hotels, Resorts & Cruise Lines - 2.1% |
Ctrip.com International Ltd. sponsored ADR | 177,100 | | $ 8,086,386 |
Home Inns & Hotels Management, Inc. ADR (a)(c) | 194,700 | | 5,449,653 |
| | 13,536,039 |
HOUSEHOLD DURABLES - 0.6% |
Consumer Electronics - 0.6% |
Harman International Industries, Inc. | 65,900 | | 3,068,963 |
TomTom Group BV (a) | 12,900 | | 712,100 |
| | 3,781,063 |
INTERNET SOFTWARE & SERVICES - 6.6% |
Internet Software & Services - 6.6% |
Akamai Technologies, Inc. (a) | 167,900 | | 5,070,580 |
Alibaba.com Ltd. | 738,000 | | 1,747,171 |
DealerTrack Holdings, Inc. (a) | 12,300 | | 331,608 |
Google, Inc. Class A (sub. vtg.) (a) | 39,750 | | 22,430,925 |
Greenfield Online, Inc. (a) | 89,700 | | 1,153,542 |
LivePerson, Inc. (a) | 454,600 | | 1,772,940 |
Omniture, Inc. (a) | 262,108 | | 6,479,310 |
Tencent Holdings Ltd. | 555,000 | | 3,277,706 |
| | 42,263,782 |
IT SERVICES - 0.8% |
Data Processing & Outsourced Services - 0.6% |
ExlService Holdings, Inc. (a)(c) | 88,900 | | 1,687,322 |
WNS Holdings Ltd. ADR (a) | 114,500 | | 1,993,445 |
| | 3,680,767 |
IT Consulting & Other Services - 0.2% |
RightNow Technologies, Inc. (a) | 170,648 | | 1,745,729 |
TOTAL IT SERVICES | | 5,426,496 |
MACHINERY - 0.2% |
Industrial Machinery - 0.2% |
Hi-P International Ltd. | 2,622,000 | | 767,911 |
Shin Zu Shing Co. Ltd. | 135,000 | | 595,031 |
| | 1,362,942 |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 22.0% |
Semiconductor Equipment - 6.6% |
Applied Materials, Inc. | 626,800 | | 11,232,256 |
ASML Holding NV (NY Shares) (a) | 185,300 | | 4,927,127 |
Cymer, Inc. (a) | 89,400 | | 2,414,694 |
Global Unichip Corp. | 362,807 | | 1,651,120 |
Lam Research Corp. (a) | 18,300 | | 702,537 |
LTX Corp. (a) | 400,965 | | 1,082,606 |
MEMC Electronic Materials, Inc. (a) | 22,300 | | 1,593,558 |
MEMSIC, Inc. | 75,700 | | 522,330 |
|
| Shares | | Value |
Tessera Technologies, Inc. (a)(c) | 197,300 | | $ 7,728,241 |
Varian Semiconductor Equipment Associates, Inc. (a) | 318,400 | | 10,255,664 |
| | 42,110,133 |
Semiconductors - 15.4% |
Advanced Analog Technology, Inc. | 554,500 | | 1,527,990 |
Advanced Micro Devices, Inc. (a)(c) | 357,236 | | 2,729,283 |
Advanced Semiconductor Engineering, Inc. sponsored ADR (c) | 373,000 | | 1,588,980 |
Amkor Technology, Inc. (a) | 215,600 | | 1,647,184 |
Anpec Electronics Corp. | 192,677 | | 363,482 |
Applied Micro Circuits Corp. (a) | 173,250 | | 1,391,198 |
Atheros Communications, Inc. (a) | 222,400 | | 6,073,744 |
AuthenTec, Inc. (c) | 154,900 | | 1,928,505 |
Bright Led Electronics Corp. | 170,000 | | 321,432 |
Broadcom Corp. Class A (a) | 344,122 | | 7,598,214 |
Cavium Networks, Inc. | 357,331 | | 6,828,595 |
Cypress Semiconductor Corp. (a) | 576,300 | | 12,246,375 |
Diodes, Inc. (a) | 29,100 | | 673,665 |
Elan Microelectronics Corp. | 195,000 | | 252,778 |
Epistar Corp. | 1,749,913 | | 4,192,502 |
Faraday Technology Corp. | 283,000 | | 441,519 |
Formosa Epitaxy, Inc. (a) | 1,120,000 | | 692,670 |
Global Mixed-mode Technology, Inc. | 400,900 | | 1,792,755 |
Hittite Microwave Corp. (a) | 63,600 | | 2,532,552 |
Intersil Corp. Class A | 27,100 | | 624,113 |
Marvell Technology Group Ltd. (a) | 1,668,800 | | 19,808,656 |
MediaTek, Inc. | 99,000 | | 986,202 |
Microchip Technology, Inc. | 84,200 | | 2,686,822 |
Mindspeed Technologies, Inc. (a) | 2,939,215 | | 2,401,339 |
MoSys, Inc. (a) | 32,100 | | 116,523 |
Omnivision Technologies, Inc. (a)(c) | 151,600 | | 2,146,656 |
PLX Technology, Inc. (a) | 45,400 | | 318,708 |
PMC-Sierra, Inc. (a) | 350,065 | | 1,641,805 |
Powertech Technology, Inc. | 547,000 | | 1,599,362 |
Richtek Technology Corp. | 512,850 | | 3,538,407 |
Silicon Laboratories, Inc. (a) | 46,400 | | 1,449,536 |
Siliconware Precision Industries Co. Ltd. sponsored ADR | 214,300 | | 1,658,682 |
Spreadtrum Communications, Inc. ADR (c) | 7,100 | | 67,450 |
Taiwan Semiconductor Co. Ltd. | 704,000 | | 617,686 |
Taiwan Semiconductor Manufacturing Co. Ltd. | 4,449 | | 8,335 |
Xilinx, Inc. | 173,900 | | 3,803,193 |
| | 98,296,898 |
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | | 140,407,031 |
SOFTWARE - 19.4% |
Application Software - 4.5% |
Ansys, Inc. (a) | 61,700 | | 2,153,947 |
BladeLogic, Inc. | 71,563 | | 1,175,780 |
Common Stocks - continued |
| Shares | | Value |
SOFTWARE - CONTINUED |
Application Software - continued |
Cadence Design Systems, Inc. (a) | 92,500 | | $ 938,875 |
Callidus Software, Inc. (a) | 499,298 | | 2,461,539 |
Concur Technologies, Inc. (a) | 137,000 | | 4,803,220 |
Global Digital Creations Holdings Ltd. (a) | 7,908,000 | | 1,288,006 |
Longtop Financial Technologies Ltd. ADR | 91,100 | | 1,662,575 |
Mentor Graphics Corp. (a) | 66,300 | | 546,975 |
Salesforce.com, Inc. (a) | 122,400 | | 6,399,072 |
Smith Micro Software, Inc. (a)(c) | 485,900 | | 3,658,827 |
SuccessFactors, Inc. | 5,200 | | 46,852 |
Synopsys, Inc. (a) | 52,500 | | 1,156,050 |
Ulticom, Inc. (a) | 359,426 | | 2,569,896 |
| | 28,861,614 |
Home Entertainment Software - 10.7% |
Activision, Inc. (a) | 275,100 | | 7,116,837 |
Nintendo Co. Ltd. | 97,200 | | 48,016,802 |
Nintendo Co. Ltd. ADR | 66,100 | | 4,081,675 |
Take-Two Interactive Software, Inc. (a) | 202,100 | | 3,322,524 |
THQ, Inc. (a) | 323,840 | | 5,832,358 |
| | 68,370,196 |
Systems Software - 4.2% |
Allot Communications Ltd. (a) | 100,000 | | 397,000 |
Microsoft Corp. | 101,900 | | 3,321,940 |
Moldflow Corp. (a) | 37,300 | | 487,138 |
Oracle Corp. (a) | 311,000 | | 6,391,050 |
Sandvine Corp. (a) | 1,239,900 | | 4,608,467 |
Sandvine Corp. (U.K.) (a) | 1,078,100 | | 3,972,903 |
VMware, Inc. Class A (c) | 128,600 | | 7,285,190 |
| | 26,463,688 |
TOTAL SOFTWARE | | 123,695,498 |
TOTAL COMMON STOCKS (Cost $790,523,404) | 634,822,322 |
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 | | 1,135,877 |
Money Market Funds - 3.9% |
| Shares | | |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c)
(Cost $24,956,475) | 24,956,475 | | 24,956,475 |
Cash Equivalents - 1.1% |
| Maturity Amount | | Value |
Investments in repurchase agreements in a joint trading account at 1.69%, dated 1/31/08 due 2/1/08 (Collateralized by U.S. Government Obligations) #
(Cost $6,794,000) | $ 6,794,319 | | $ 6,794,000 |
TOTAL INVESTMENT PORTFOLIO - 104.7% (Cost $823,543,879) | | 667,708,674 |
NET OTHER ASSETS - (4.7)% | | (29,866,978) |
NET ASSETS - 100% | $ 637,841,696 |
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) Security or a portion of the security is on loan at period end. |
(d) 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 $821,100 or 0.1% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
OZ Optics Ltd. unit | 8/18/00 | $ 1,003,680 |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty | Value |
$6,794,000 due 2/01/08 at 1.69% |
Banc of America Securities LLC | $ 1,483,191 |
Barclays Capital, Inc. | 2,139,076 |
ING Financial Markets LLC | 3,171,733 |
| $ 6,794,000 |
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 | $ 72,759 |
Fidelity Securities Lending Cash Central Fund | 302,719 |
Total | $ 375,478 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 60.2% |
Japan | 8.2% |
Cayman Islands | 7.8% |
Taiwan | 7.1% |
Finland | 4.5% |
Bermuda | 4.1% |
Canada | 3.4% |
China | 1.4% |
Israel | 1.2% |
Others (individually less than 1%) | 2.1% |
| 100.0% |
Income Tax Information |
At July 31, 2007, the fund had a capital loss carryforward of approximately $1,419,316,323 of which $919,509,540 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.
Technology
Advisor Technology Fund
Financial Statements
Statement of Assets and Liabilities
| January 31, 2008 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $24,230,139 and repurchase agreements of $6,794,000) - See accompanying schedule: Unaffiliated issuers (cost $798,587,404) | $ 642,752,199 | |
Fidelity Central Funds (cost $24,956,475) | 24,956,475 | |
Total Investments (cost $823,543,879) | | $ 667,708,674 |
Cash | | 933 |
Receivable for investments sold | | 37,104,775 |
Receivable for fund shares sold | | 1,177,320 |
Dividends receivable | | 13,563 |
Interest receivable | | 785 |
Distributions receivable from Fidelity Central Funds | | 73,818 |
Prepaid expenses | | 2,456 |
Other receivables | | 73,660 |
Total assets | | 706,155,984 |
| | |
Liabilities | | |
Payable for investments purchased | $ 24,825,142 | |
Payable for fund shares redeemed | 2,139,876 | |
Accrued management fee | 316,046 | |
Distribution fees payable | 276,775 | |
Notes payable to affiliates | 15,532,000 | |
Other affiliated payables | 219,607 | |
Other payables and accrued expenses | 48,367 | |
Collateral on securities loaned, at value | 24,956,475 | |
Total liabilities | | 68,314,288 |
| | |
Net Assets | | $ 637,841,696 |
Net Assets consist of: | | |
Paid in capital | | $ 2,174,101,231 |
Accumulated net investment loss | | (4,124,505) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (1,376,300,032) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (155,834,998) |
Net Assets | | $ 637,841,696 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
Calculation of Maximum
Offering Price Class A:
Net Asset Value and redemption price per share ($268,850,599 ÷ 15,487,178 shares) | | $ 17.36 |
| | |
Maximum offering price per share (100/94.25 of $17.36) | | $ 18.42 |
Class T:
Net Asset Value and redemption price per share ($210,786,409 ÷ 12,435,352 shares) | | $ 16.95 |
| | |
Maximum offering price per share (100/96.50 of $16.95) | | $ 17.56 |
Class B:
Net Asset Value and offering price per share ($66,193,881 ÷ 4,118,866 shares)A | | $ 16.07 |
| | |
Class C:
Net Asset Value and offering price per share ($70,718,762 ÷ 4,381,106 shares)A | | $ 16.14 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($21,292,045 ÷ 1,183,963 shares) | | $ 17.98 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Advisor Technology Fund
Financial Statements - continued
Statement of Operations
| Six months ended January 31, 2008 (Unaudited) |
Investment Income | | |
Dividends | | $ 1,112,657 |
Interest | | 5,307 |
Income from Fidelity Central Funds (including $302,719 from security lending) | | 375,478 |
Total income | | 1,493,442 |
| | |
Expenses | | |
Management fee | $ 2,197,058 | |
Transfer agent fees | 1,222,234 | |
Distribution fees | 1,959,982 | |
Accounting and security lending fees | 141,022 | |
Custodian fees and expenses | 87,817 | |
Independent trustees' compensation | 1,638 | |
Registration fees | 35,782 | |
Audit | 34,427 | |
Legal | 3,076 | |
Interest | 8,072 | |
Miscellaneous | 3,025 | |
Total expenses before reductions | 5,694,133 | |
Expense reductions | (76,474) | 5,617,659 |
Net investment income (loss) | | (4,124,217) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 47,951,897 | |
Foreign currency transactions | (10,619) | |
Total net realized gain (loss) | | 47,941,278 |
Change in net unrealized appreciation (depreciation) on: Investment securities | (164,263,370) | |
Assets and liabilities in foreign currencies | (1,324) | |
Total change in net unrealized appreciation (depreciation) | | (164,264,694) |
Net gain (loss) | | (116,323,416) |
Net increase (decrease) in net assets resulting from operations | | $ (120,447,633) |
Statement of Changes in Net Assets
| Six months ended January 31, 2008 (Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (4,124,217) | $ (9,596,456) |
Net realized gain (loss) | 47,941,278 | 101,139,166 |
Change in net unrealized appreciation (depreciation) | (164,264,694) | 120,841,656 |
Net increase (decrease) in net assets resulting from operations | (120,447,633) | 212,384,366 |
Share transactions - net increase (decrease) | (21,914,211) | (169,547,974) |
Redemption fees | 20,193 | 20,415 |
Total increase (decrease) in net assets | (142,341,651) | 42,856,807 |
| | |
Net Assets | | |
Beginning of period | 780,183,347 | 737,326,540 |
End of period (including accumulated net investment loss of $4,124,505 and accumulated net investment loss
of $288, respectively) | $ 637,841,696 | $ 780,183,347 |
See accompanying notes which are an integral part of the financial statements.
Technology
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.55 | $ 15.59 | $ 16.16 | $ 13.98 | $ 13.36 | $ 10.03 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.08) | (.17) | (.15) | .02 H | (.17) | (.11) |
Net realized and unrealized gain (loss) | (3.11) | 5.13 | (.42) | 2.24 | .79 | 3.44 |
Total from investment operations | (3.19) | 4.96 | (.57) | 2.26 | .62 | 3.33 |
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 | $ 17.36 | $ 20.55 | $ 15.59 | $ 16.16 | $ 13.98 | $ 13.36 |
Total Return B,C,D | (15.52)% | 31.82% | (3.53)% | 16.20% | 4.64% | 33.20% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.20% A | 1.25% | 1.30% | 1.37% | 1.44% | 1.70% |
Expenses net of fee waivers, if any | 1.20% A | 1.25% | 1.30% | 1.37% | 1.44% | 1.59% |
Expenses net of all reductions | 1.17% A | 1.24% | 1.20% | 1.26% | 1.35% | 1.38% |
Net investment income (loss) | (.80)% A | (.91)% | (.88)% | .12% H | (1.10)% | (1.03)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 268,851 | $ 309,105 | $ 189,054 | $ 144,970 | $ 123,389 | $ 123,604 |
Portfolio turnover rate G | 236% A | 208% | 258% | 180% | 105% | 140% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.09 | $ 15.28 | $ 15.88 | $ 13.76 | $ 13.17 | $ 9.91 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.11) | (.21) | (.19) | (.02) H | (.19) | (.14) |
Net realized and unrealized gain (loss) | (3.03) | 5.02 | (.41) | 2.21 | .78 | 3.40 |
Total from investment operations | (3.14) | 4.81 | (.60) | 2.19 | .59 | 3.26 |
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 | $ 16.95 | $ 20.09 | $ 15.28 | $ 15.88 | $ 13.76 | $ 13.17 |
Total Return B,C,D | (15.63)% | 31.48% | (3.78)% | 15.94% | 4.48% | 32.90% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.45% A | 1.51% | 1.55% | 1.60% | 1.62% | 1.85% |
Expenses net of fee waivers, if any | 1.45% A | 1.51% | 1.55% | 1.60% | 1.62% | 1.83% |
Expenses net of all reductions | 1.43% A | 1.49% | 1.44% | 1.48% | 1.53% | 1.63% |
Net investment income (loss) | (1.05)% A | (1.16)% | (1.13)% | (.11)% H | (1.28)% | (1.28)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 210,786 | $ 260,339 | $ 260,966 | $ 315,930 | $ 363,399 | $ 367,257 |
Portfolio turnover rate G | 236% A | 208% | 258% | 180% | 105% | 140% |
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.
Semiannual Report
Financial Highlights - Class B
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 19.10 | $ 14.59 | $ 15.24 | $ 13.25 | $ 12.76 | $ 9.64 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.15) | (.28) | (.27) | (.09) H | (.27) | (.17) |
Net realized and unrealized gain (loss) | (2.88) | 4.79 | (.38) | 2.12 | .76 | 3.29 |
Total from investment operations | (3.03) | 4.51 | (.65) | 2.03 | .49 | 3.12 |
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 | $ 16.07 | $ 19.10 | $ 14.59 | $ 15.24 | $ 13.25 | $ 12.76 |
Total Return B,C,D | (15.86)% | 30.91% | (4.27)% | 15.33% | 3.84% | 32.37% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.94% A | 2.01% | 2.05% | 2.13% | 2.21% | 2.38% |
Expenses net of fee waivers, if any | 1.94% A | 2.01% | 2.05% | 2.13% | 2.21% | 2.25% |
Expenses net of all reductions | 1.92% A | 2.00% | 1.94% | 2.02% | 2.12% | 2.05% |
Net investment income (loss) | (1.55)% A | (1.67)% | (1.63)% | (.65)% H | (1.87)% | (1.69)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 66,194 | $ 102,655 | $ 192,790 | $ 309,020 | $ 355,927 | $ 391,832 |
Portfolio turnover rate G | 236% A | 208% | 258% | 180% | 105% | 140% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 19.18 | $ 14.66 | $ 15.31 | $ 13.31 | $ 12.80 | $ 9.67 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.15) | (.29) | (.27) | (.08) H | (.26) | (.17) |
Net realized and unrealized gain (loss) | (2.89) | 4.81 | (.38) | 2.12 | .77 | 3.30 |
Total from investment operations | (3.04) | 4.52 | (.65) | 2.04 | .51 | 3.13 |
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 | $ 16.14 | $ 19.18 | $ 14.66 | $ 15.31 | $ 13.31 | $ 12.80 |
Total Return B,C,D | (15.85)% | 30.83% | (4.25)% | 15.34% | 3.98% | 32.37% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.94% A | 2.01% | 2.05% | 2.10% | 2.13% | 2.28% |
Expenses net of fee waivers, if any | 1.94% A | 2.01% | 2.05% | 2.10% | 2.13% | 2.25% |
Expenses net of all reductions | 1.92% A | 1.99% | 1.94% | 1.99% | 2.04% | 2.05% |
Net investment income (loss) | (1.55)% A | (1.66)% | (1.63)% | (.61)% H | (1.79)% | (1.69)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 70,719 | $ 86,974 | $ 82,835 | $ 108,287 | $ 125,926 | $ 139,654 |
Portfolio turnover rate G | 236% A | 208% | 258% | 180% | 105% | 140% |
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.
Technology
Financial Highlights - Institutional Class
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 21.26 | $ 16.07 | $ 16.60 | $ 14.32 | $ 13.61 | $ 10.15 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | (.06) | (.11) | (.09) | .09 G | (.09) | (.05) |
Net realized and unrealized gain (loss) | (3.22) | 5.30 | (.44) | 2.30 | .80 | 3.51 |
Total from investment operations | (3.28) | 5.19 | (.53) | 2.39 | .71 | 3.46 |
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 | $ 17.98 | $ 21.26 | $ 16.07 | $ 16.60 | $ 14.32 | $ 13.61 |
Total Return B,C | (15.43)% | 32.30% | (3.19)% | 16.73% | 5.22% | 34.09% |
Ratios to Average Net Assets E,H | | | | | | |
Expenses before reductions | .91% A | .93% | .90% | .92% | .93% | .99% |
Expenses net of fee waivers, if any | .91% A | .93% | .90% | .92% | .93% | .99% |
Expenses net of all reductions | .89% A | .92% | .80% | .81% | .84% | .79% |
Net investment income (loss) | (.51)% A | (.59)% | (.49)% | .57% G | (.59)% | (.43)% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 21,292 | $ 21,111 | $ 11,681 | $ 11,640 | $ 10,984 | $ 11,511 |
Portfolio turnover rate F | 236% A | 208% | 258% | 180% | 105% | 140% |
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.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2008 (Unaudited)
1. Organization.
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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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 available 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.
Technology
3. Significant Accounting Policies - continued
Foreign Currency - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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 | $ 22,276,055 | |
Unrealized depreciation | (181,623,293) | |
Net unrealized appreciation (depreciation) | $ (159,347,238) | |
Cost for federal income tax purposes | $ 827,055,912 | |
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. 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 Pronouncement. 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.
4. 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
4. Operating Policies - continued
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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $929,762,380 and $956,887,405, respectively.
6. 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% | $ 402,371 | $ 11,107 |
Class T | .25% | .25% | 652,410 | - |
Class B | .75% | .25% | 466,567 | 349,926 |
Class C | .75% | .25% | 438,634 | 25,327 |
| | | $ 1,959,982 | $ 386,360 |
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 | $ 39,935 |
Class T | 13,518 |
Class B* | 44,611 |
Class C* | 3,749 |
| $ 101,813 |
* 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 | $ 499,038 | .31 |
Class T | 407,933 | .31 |
Class B | 144,159 | .31 |
Class C | 135,850 | .31 |
Institutional Class | 35,254 | .28 |
| $ 1,222,234 | |
* Annualized
Technology
6. 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.
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 $23,783 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. Any open loans, including accrued interest, at period end are presented under the caption "Notes Payable to Affiliates" in the Fund's Statement of Assets and Liabilities. 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 | $ 7,130,000 | 4.53% | $ 8,072 |
7. 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 $1,044 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. 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.
9. 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 $68,011 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 | $ 6,307 | |
Class B | 502 | |
Class C | 1,238 | |
Institutional Class | 416 | |
| $ 8,463 | |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $258,686.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended January 31,
2008 | Year ended
July 31,
2007 | Six months ended January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 2,629,593 | 7,888,385 | $ 55,246,092 | $ 145,922,304 |
Shares redeemed | (2,182,096) | (4,978,587) | (44,675,478) | (92,460,573) |
Net increase (decrease) | 447,497 | 2,909,798 | $ 10,570,614 | $ 53,461,731 |
Class T | | | | |
Shares sold | 1,326,161 | 1,926,573 | $ 27,323,427 | $ 34,966,338 |
Shares redeemed | (1,846,396) | (6,053,307) | (37,111,253) | (109,073,221) |
Net increase (decrease) | (520,235) | (4,126,734) | $ (9,787,826) | $ (74,106,883) |
Class B | | | | |
Shares sold | 289,808 | 357,014 | $ 5,630,459 | $ 6,182,320 |
Shares redeemed | (1,546,226) | (8,194,716) | (30,083,371) | (140,978,328) |
Net increase (decrease) | (1,256,418) | (7,837,702) | $ (24,452,912) | $ (134,796,008) |
Class C | | | | |
Shares sold | 380,719 | 490,290 | $ 7,562,330 | $ 8,483,174 |
Shares redeemed | (533,581) | (1,608,094) | (10,172,311) | (27,833,773) |
Net increase (decrease) | (152,862) | (1,117,804) | $ (2,609,981) | $ (19,350,599) |
Institutional Class | | | | |
Shares sold | 407,388 | 640,632 | $ 8,867,277 | $ 12,507,491 |
Shares redeemed | (216,397) | (374,535) | (4,501,383) | (7,263,706) |
Net increase (decrease) | 190,991 | 266,097 | $ 4,365,894 | $ 5,243,785 |
Technology
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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007
to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 1,043.70 | $ 6.11 |
HypotheticalA | $ 1,000.00 | $ 1,019.15 | $ 6.04 |
Class T | | | |
Actual | $ 1,000.00 | $ 1,042.10 | $ 7.49 |
HypotheticalA | $ 1,000.00 | $ 1,017.80 | $ 7.41 |
Class B | | | |
Actual | $ 1,000.00 | $ 1,039.70 | $ 9.95 |
HypotheticalA | $ 1,000.00 | $ 1,015.38 | $ 9.83 |
Class C | | | |
Actual | $ 1,000.00 | $ 1,039.50 | $ 9.89 |
HypotheticalA | $ 1,000.00 | $ 1,015.43 | $ 9.78 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 1,045.50 | $ 4.52 |
HypotheticalA | $ 1,000.00 | $ 1,020.71 | $ 4.47 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.19% |
Class T | 1.46% |
Class B | 1.94% |
Class C | 1.93% |
Institutional Class | .88% |
Semiannual Report
Advisor Utilities Fund
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
PPL Corp. | 9.3 | 5.2 |
Exelon Corp. | 8.8 | 8.1 |
Public Service Enterprise Group, Inc. | 7.6 | 5.3 |
Constellation Energy Group, Inc. | 6.0 | 5.8 |
FPL Group, Inc. | 5.3 | 3.8 |
Entergy Corp. | 5.2 | 5.0 |
AES Corp. | 4.9 | 5.4 |
Sempra Energy | 4.8 | 4.1 |
Allegheny Energy, Inc. | 4.1 | 1.6 |
Edison International | 4.1 | 1.2 |
| 60.1 | |
Top Industries (% of fund's net assets) |
As of January 31, 2008 |
| Electric Utilities | 50.4% | |
| Multi-utilities | 20.6% | |
| Independent Power Producers & Energy Traders | 15.9% | |
| Gas Utilities | 4.0% | |
| Water Utilities | 0.5% | |
| All Others* | 8.6% | |
|
As of July 31, 2007 |
| Electric Utilities | 42.4% | |
| Multi-utilities | 26.6% | |
| Independent Power Producers & Energy Traders | 26.0% | |
| Gas Utilities | 4.3% | |
| Water Utilities | 0.6% | |
| All Others* | 0.1% | |
* Includes short-term investments and net other assets. |
Utilities
Advisor Utilities Fund
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 91.6% |
| Shares | | Value |
DIVERSIFIED FINANCIAL SERVICES - 0.2% |
Other Diversifed Financial Services - 0.2% |
Hicks Acquisition Co. I, Inc. unit | 52,100 | | $ 518,395 |
ELECTRIC UTILITIES - 50.4% |
Electric Utilities - 50.4% |
Allegheny Energy, Inc. | 207,700 | | 11,379,883 |
American Electric Power Co., Inc. | 247,900 | | 10,617,557 |
DPL, Inc. | 50,500 | | 1,401,880 |
Edison International | 217,300 | | 11,334,368 |
Entergy Corp. | 132,000 | | 14,279,760 |
Exelon Corp. | 317,100 | | 24,159,849 |
FirstEnergy Corp. | 141,700 | | 10,091,874 |
FPL Group, Inc. | 228,700 | | 14,746,576 |
Great Plains Energy, Inc. | 37,300 | | 1,039,924 |
ITC Holdings Corp. | 17,500 | | 924,700 |
Northeast Utilities | 70,100 | | 1,943,172 |
Pepco Holdings, Inc. | 193,700 | | 4,931,602 |
PPL Corp. | 527,600 | | 25,810,192 |
Reliant Energy, Inc. (a) | 190,800 | | 4,058,316 |
Sierra Pacific Resources | 97,600 | | 1,461,072 |
Westar Energy, Inc. | 47,900 | | 1,166,844 |
| | 139,347,569 |
GAS UTILITIES - 4.0% |
Gas Utilities - 4.0% |
Equitable Resources, Inc. | 51,500 | | 2,871,125 |
Questar Corp. | 72,100 | | 3,670,611 |
Southern Union Co. | 163,400 | | 4,441,212 |
| | 10,982,948 |
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 15.9% |
Independent Power Producers & Energy Traders - 15.9% |
AES Corp. (a) | 710,200 | | 13,550,616 |
Constellation Energy Group, Inc. | 177,400 | | 16,668,504 |
Dynegy, Inc. Class A (a) | 264,600 | | 1,857,492 |
Mirant Corp. (a) | 121,500 | | 4,476,060 |
NRG Energy, Inc. (a) | 191,800 | | 7,401,562 |
| | 43,954,234 |
|
| Shares | | Value |
MULTI-UTILITIES - 20.6% |
Multi-Utilities - 20.6% |
Ameren Corp. | 109,000 | | $ 4,884,290 |
CenterPoint Energy, Inc. | 190,700 | | 3,053,107 |
CMS Energy Corp. | 185,590 | | 2,908,195 |
Integrys Energy Group, Inc. | 32,100 | | 1,560,702 |
MDU Resources Group, Inc. | 71,100 | | 1,842,912 |
PNM Resources, Inc. | 37,500 | | 724,500 |
Public Service Enterprise Group, Inc. | 218,800 | | 21,004,800 |
Sempra Energy | 239,200 | | 13,371,280 |
Wisconsin Energy Corp. | 55,600 | | 2,531,468 |
Xcel Energy, Inc. | 239,500 | | 4,979,205 |
| | 56,860,459 |
WATER UTILITIES - 0.5% |
Water Utilities - 0.5% |
Aqua America, Inc. | 68,200 | | 1,359,226 |
TOTAL COMMON STOCKS (Cost $228,362,768) | 253,022,831 |
Money Market Funds - 6.9% |
| | | |
Fidelity Cash Central Fund, 3.79% (b)
(Cost $18,918,767) | 18,918,767 | | 18,918,767 |
TOTAL INVESTMENT PORTFOLIO - 98.5% (Cost $247,281,535) | | 271,941,598 |
NET OTHER ASSETS - 1.5% | | 4,130,489 |
NET ASSETS - 100% | $ 276,072,087 |
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 | $ 492,535 |
Fidelity Securities Lending Cash Central Fund | 24,852 |
Total | $ 517,387 |
Income Tax Information |
At July 31, 2007, the fund had a capital loss carryforward of approximately $248,189,753 of which $93,777,221 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, 2008 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $228,362,768) | $ 253,022,831 | |
Fidelity Central Funds (cost $18,918,767) | 18,918,767 | |
Total Investments (cost $247,281,535) | | $ 271,941,598 |
Receivable for investments sold | | 8,100,403 |
Receivable for fund shares sold | | 997,197 |
Dividends receivable | | 8,625 |
Distributions receivable from Fidelity Central Funds | | 66,654 |
Prepaid expenses | | 761 |
Other receivables | | 3 |
Total assets | | 281,115,241 |
| | |
Liabilities | | |
Payable for investments purchased | $ 3,674,813 | |
Payable for fund shares redeemed | 1,018,830 | |
Accrued management fee | 131,078 | |
Distribution fees payable | 116,407 | |
Other affiliated payables | 78,621 | |
Other payables and accrued expenses | 23,405 | |
Total liabilities | | 5,043,154 |
| | |
Net Assets | | $ 276,072,087 |
Net Assets consist of: | | |
Paid in capital | | $ 495,724,986 |
Distributions in excess of net investment income | | (691,086) |
Accumulated undistributed net realized gain (loss) on investments | | (243,621,876) |
Net unrealized appreciation (depreciation) on investments | | 24,660,063 |
Net Assets | | $ 276,072,087 |
Statement of Assets and Liabilities - continued
| January 31, 2008 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($113,214,151 ÷ 5,305,748 shares) | | $ 21.34 |
| | |
Maximum offering price per share (100/94.25 of $21.34) | | $ 22.64 |
Class T:
Net Asset Value and redemption price per share ($62,248,370 ÷ 2,915,247 shares) | | $ 21.35 |
| | |
Maximum offering price per share (100/96.50 of $21.35) | | $ 22.12 |
Class B:
Net Asset Value and offering price per share ($30,412,367 ÷ 1,438,646 shares) A | | $ 21.14 |
| | |
Class C:
Net Asset Value and offering price per share ($43,846,919 ÷ 2,082,774 shares) A | | $ 21.05 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($26,350,280 ÷ 1,222,386 shares) | | $ 21.56 |
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, 2008 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 2,445,053 |
Interest | | 3,280 |
Income from Fidelity Central Funds | | 517,387 |
Total income | | 2,965,720 |
| | |
Expenses | | |
Management fee | $ 750,010 | |
Transfer agent fees | 400,616 | |
Distribution fees | 707,094 | |
Accounting and security lending fees | 53,949 | |
Custodian fees and expenses | 6,684 | |
Independent trustees' compensation | 550 | |
Registration fees | 28,615 | |
Audit | 23,009 | |
Legal | 2,815 | |
Miscellaneous | 892 | |
Total expenses before reductions | 1,974,234 | |
Expense reductions | (1,424) | 1,972,810 |
Net investment income (loss) | | 992,910 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | | 4,666,340 |
Change in net unrealized appreciation (depreciation) on investment securities | | 2,945,765 |
Net gain (loss) | | 7,612,105 |
Net increase (decrease) in net assets resulting from operations | | $ 8,605,015 |
Statement of Changes in Net Assets
| Six months ended
January 31, 2008
(Unaudited) | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 992,910 | $ 1,715,800 |
Net realized gain (loss) | 4,666,340 | 44,242,815 |
Change in net unrealized appreciation (depreciation) | 2,945,765 | (2,387,149) |
Net increase (decrease) in net assets resulting from operations | 8,605,015 | 43,571,466 |
Distributions to shareholders from net investment income | (2,837,540) | (1,795,359) |
Share transactions - net increase (decrease) | 12,905,057 | 17,609,310 |
Redemption fees | 6,550 | 19,962 |
Total increase (decrease) in net assets | 18,679,082 | 59,405,379 |
| | |
Net Assets | | |
Beginning of period | 257,393,005 | 197,987,626 |
End of period (including distributions in excess of net investment income of $691,086 and undistributed net investment income of $1,153,544, respectively) | $ 276,072,087 | $ 257,393,005 |
See accompanying notes which are an integral part of the financial statements.
Utilities
Financial Highlights - Class A
| Six months ended
January 31, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.74 | $ 17.20 | $ 15.17 | $ 12.09 | $ 10.37 | $ 8.74 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .11 | .21 | .24 | .28 H | .10 | .13 |
Net realized and unrealized gain (loss) | .81 | 3.56 | 2.06 | 3.01 | 1.72 | 1.69 |
Total from investment operations | .92 | 3.77 | 2.30 | 3.29 | 1.82 | 1.82 |
Distributions from net investment income | (.32) | (.23) | (.27) | (.21) | (.10) | (.19) |
Redemption fees added to paid in capital E,J | - | - | - | - | - | - |
Net asset value, end of period | $ 21.34 | $ 20.74 | $ 17.20 | $ 15.17 | $ 12.09 | $ 10.37 |
Total Return B,C,D | 4.37% | 22.14% | 15.38% | 27.48% | 17.67% | 21.22% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.19% A | 1.27% | 1.34% | 1.39% | 1.51% | 1.67% |
Expenses net of fee waivers, if any | 1.19% A | 1.27% | 1.34% | 1.39% | 1.50% | 1.58% |
Expenses net of all reductions | 1.19% A | 1.26% | 1.32% | 1.36% | 1.45% | 1.47% |
Net investment income (loss) | 1.01% A | 1.04% | 1.51% | 2.03% H | .87% | 1.46% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 113,214 | $ 94,842 | $ 40,599 | $ 29,150 | $ 21,987 | $ 21,761 |
Portfolio turnover rate G | 71% A | 118% | 64% | 44% | 38% | 81% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.71 | $ 17.18 | $ 15.10 | $ 12.04 | $ 10.33 | $ 8.68 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .08 | .15 | .19 | .24 H | .07 | .11 |
Net realized and unrealized gain (loss) | .80 | 3.56 | 2.08 | 2.99 | 1.72 | 1.68 |
Total from investment operations | .88 | 3.71 | 2.27 | 3.23 | 1.79 | 1.79 |
Distributions from net investment income | (.24) | (.18) | (.19) | (.17) | (.08) | (.14) |
Redemption fees added to paid in capital E,J | - | - | - | - | - | - |
Net asset value, end of period | $ 21.35 | $ 20.71 | $ 17.18 | $ 15.10 | $ 12.04 | $ 10.33 |
Total Return B,C,D | 4.21% | 21.74% | 15.20% | 27.03% | 17.42% | 20.91% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.46% A | 1.54% | 1.60% | 1.67% | 1.79% | 1.94% |
Expenses net of fee waivers, if any | 1.46% A | 1.54% | 1.60% | 1.67% | 1.75% | 1.83% |
Expenses net of all reductions | 1.46% A | 1.54% | 1.58% | 1.64% | 1.70% | 1.72% |
Net investment income (loss) | .74% A | .76% | 1.25% | 1.76% H | .62% | 1.21% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 62,248 | $ 62,592 | $ 52,128 | $ 55,683 | $ 53,255 | $ 55,510 |
Portfolio turnover rate G | 71% A | 118% | 64% | 44% | 38% | 81% |
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 1.12%. 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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.40 | $ 16.90 | $ 14.83 | $ 11.82 | $ 10.15 | $ 8.49 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .03 | .05 | .12 | .17 H | .01 | .07 |
Net realized and unrealized gain (loss) | .79 | 3.52 | 2.03 | 2.95 | 1.69 | 1.65 |
Total from investment operations | .82 | 3.57 | 2.15 | 3.12 | 1.70 | 1.72 |
Distributions from net investment income | (.08) | (.07) | (.08) | (.11) | (.03) | (.06) |
Redemption fees added to paid in capital E,J | - | - | - | - | - | - |
Net asset value, end of period | $ 21.14 | $ 20.40 | $ 16.90 | $ 14.83 | $ 11.82 | $ 10.15 |
Total Return B,C,D | 3.97% | 21.18% | 14.57% | 26.51% | 16.79% | 20.37% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.94% A | 2.04% | 2.09% | 2.14% | 2.25% | 2.32% |
Expenses net of fee waivers, if any | 1.94% A | 2.04% | 2.09% | 2.14% | 2.25% | 2.25% |
Expenses net of all reductions | 1.94% A | 2.03% | 2.06% | 2.11% | 2.20% | 2.13% |
Net investment income (loss) | .26% A | .27% | .76% | 1.28% H | .12% | .79% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 30,412 | $ 43,845 | $ 65,959 | $ 82,577 | $ 84,742 | $ 87,868 |
Portfolio turnover rate G | 71% A | 118% | 64% | 44% | 38% | 81% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.38 | $ 16.91 | $ 14.84 | $ 11.84 | $ 10.16 | $ 8.50 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .03 | .06 | .13 | .18 H | .02 | .07 |
Net realized and unrealized gain (loss) | .78 | 3.51 | 2.04 | 2.94 | 1.70 | 1.65 |
Total from investment operations | .81 | 3.57 | 2.17 | 3.12 | 1.72 | 1.72 |
Distributions from net investment income | (.14) | (.10) | (.10) | (.12) | (.04) | (.06) |
Redemption fees added to paid in capital E,J | - | - | - | - | - | - |
Net asset value, end of period | $ 21.05 | $ 20.38 | $ 16.91 | $ 14.84 | $ 11.84 | $ 10.16 |
Total Return B,C,D | 3.95% | 21.23% | 14.72% | 26.48% | 16.98% | 20.35% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | 1.93% A | 1.99% | 2.02% | 2.07% | 2.17% | 2.23% |
Expenses net of fee waivers, if any | 1.93% A | 1.99% | 2.02% | 2.07% | 2.17% | 2.23% |
Expenses net of all reductions | 1.93% A | 1.99% | 2.00% | 2.04% | 2.12% | 2.12% |
Net investment income (loss) | .27% A | .32% | .83% | 1.36% H | .21% | .80% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 43,847 | $ 43,292 | $ 32,823 | $ 34,827 | $ 35,038 | $ 37,530 |
Portfolio turnover rate G | 71% A | 118% | 64% | 44% | 38% | 81% |
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, 2008 | Years ended July 31, |
| (Unaudited) | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 20.95 | $ 17.38 | $ 15.31 | $ 12.20 | $ 10.47 | $ 8.86 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | .15 | .29 | .30 | .33 G | .15 | .18 |
Net realized and unrealized gain (loss) | .82 | 3.58 | 2.10 | 3.03 | 1.73 | 1.71 |
Total from investment operations | .97 | 3.87 | 2.40 | 3.36 | 1.88 | 1.89 |
Distributions from net investment income | (.36) | (.30) | (.33) | (.25) | (.15) | (.28) |
Redemption fees added to paid in capital D,I | - | - | - | - | - | - |
Net asset value, end of period | $ 21.56 | $ 20.95 | $ 17.38 | $ 15.31 | $ 12.20 | $ 10.47 |
Total Return B,C | 4.55% | 22.54% | 15.95% | 27.88% | 18.14% | 21.94% |
Ratios to Average Net Assets E,H | | | | | | |
Expenses before reductions | .88% A | .92% | .94% | .99% | 1.09% | 1.06% |
Expenses net of fee waivers, if any | .88% A | .92% | .94% | .99% | 1.09% | 1.06% |
Expenses net of all reductions | .88% A | .92% | .92% | .96% | 1.04% | .94% |
Net investment income (loss) | 1.33% A | 1.39% | 1.91% | 2.44% G | 1.29% | 1.98% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 26,350 | $ 12,822 | $ 6,479 | $ 1,766 | $ 2,254 | $ 2,891 |
Portfolio turnover rate F | 71% A | 118% | 64% | 44% | 38% | 81% |
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, 2008 (Unaudited)
1. Organization.
Fidelity Advisor Utilities 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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
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.
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
Utilities
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
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 distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.
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 | $ 33,299,816 | |
Unrealized depreciation | (8,655,687) | |
Net unrealized appreciation (depreciation) | $ 24,644,129 | |
Cost for federal income tax purposes | $ 247,297,469 | |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to 0.75% 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 Pronouncement. 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.
4. 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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $89,438,838 and $100,804,704, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. 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% | $ 133,603 | $ 5,799 |
Class T | .25% | .25% | 160,334 | - |
Class B | .75% | .25% | 189,082 | 141,811 |
Class C | .75% | .25% | 224,075 | 36,895 |
| | | $ 707,094 | $ 184,505 |
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 | $ 32,121 |
Class T | 7,661 |
Class B* | 23,607 |
Class C* | 6,672 |
| $ 70,061 |
* 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 | $ 159,364 | .30 |
Class T | 101,666 | .32 |
Class B | 57,046 | .30 |
Class C | 64,029 | .29 |
Institutional Class | 18,511 | .23 |
| $ 400,616 | |
* 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.
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.
Utilities
7. 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 $366 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. 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. Net income from lending portfolio securities during the period amounted to $24,852.
9. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $271 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 | $ 1,009 | |
Class C | 144 | |
| $ 1,153 | |
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $41,180.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
From net investment income | | |
Class A | $ 1,513,481 | $ 644,012 |
Class T | 697,661 | 560,438 |
Class B | 116,029 | 253,871 |
Class C | 289,509 | 209,022 |
Institutional Class | 220,860 | 128,016 |
Total | $ 2,837,540 | $ 1,795,359 |
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31,
2008 | Year ended
July 31,
2007 | Six months ended
January 31,
2008 | Year ended
July 31,
2007 |
Class A | | | | |
Shares sold | 1,652,512 | 3,629,587 | $ 37,072,261 | $ 74,211,808 |
Reinvestment of distributions | 60,065 | 31,700 | 1,341,195 | 573,106 |
Shares redeemed | (979,697) | (1,448,205) | (21,405,873) | (30,175,903) |
Net increase (decrease) | 732,880 | 2,213,082 | $ 17,007,583 | $ 44,609,011 |
Class T | | | | |
Shares sold | 359,873 | 1,035,618 | $ 8,067,431 | $ 20,689,420 |
Reinvestment of distributions | 29,500 | 29,413 | 659,941 | 530,959 |
Shares redeemed | (496,158) | (1,078,012) | (10,880,547) | (22,011,808) |
Net increase (decrease) | (106,785) | (12,981) | $ (2,153,175) | $ (791,429) |
Class B | | | | |
Shares sold | 173,786 | 496,053 | $ 3,855,870 | $ 9,866,415 |
Reinvestment of distributions | 4,528 | 12,604 | 103,786 | 221,292 |
Shares redeemed | (888,928) | (2,262,406) | (19,312,968) | (44,828,420) |
Net increase (decrease) | (710,614) | (1,753,749) | $ (15,353,312) | $ (34,740,713) |
Class C | | | | |
Shares sold | 270,248 | 1,008,161 | $ 5,979,450 | $ 20,364,886 |
Reinvestment of distributions | 10,061 | 8,956 | 223,730 | 157,448 |
Shares redeemed | (321,909) | (834,201) | (6,937,011) | (16,902,583) |
Net increase (decrease) | (41,600) | 182,916 | $ (733,831) | $ 3,619,751 |
Institutional Class | | | | |
Shares sold | 946,529 | 1,116,023 | $ 21,494,099 | $ 24,167,100 |
Reinvestment of distributions | 7,559 | 2,016 | 173,189 | 36,805 |
Shares redeemed | (343,634) | (878,823) | (7,529,496) | (19,291,215) |
Net increase (decrease) | 610,454 | 239,216 | $ 14,137,792 | $ 4,912,690 |
Utilities
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.
AFOCI-USAN-0308
1.789280.105
(Fidelity Investment logo)(registered trademark)
Fidelity® Advisor
Real Estate
Fund - Class A, Class T, Class B
and Class C
Semiannual Report
January 31, 2008
(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. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
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:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but 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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a share-holder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007 to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 951.00 | $ 5.93 |
HypotheticalA | $ 1,000.00 | $ 1,019.05 | $ 6.14 |
Class T | | | |
Actual | $ 1,000.00 | $ 949.90 | $ 7.21 |
HypotheticalA | $ 1,000.00 | $ 1,017.75 | $ 7.46 |
Class B | | | |
Actual | $ 1,000.00 | $ 947.00 | $ 9.59 |
HypotheticalA | $ 1,000.00 | $ 1,015.28 | $ 9.93 |
Class C | | | |
Actual | $ 1,000.00 | $ 947.10 | $ 9.54 |
HypotheticalA | $ 1,000.00 | $ 1,015.33 | $ 9.88 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 952.00 | $ 4.71 |
HypotheticalA | $ 1,000.00 | $ 1,020.31 | $ 4.88 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.21% |
Class T | 1.47% |
Class B | 1.96% |
Class C | 1.95% |
Institutional Class | .96% |
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Simon Property Group, Inc. | 8.4 | 7.6 |
ProLogis Trust | 7.4 | 5.9 |
Public Storage | 6.6 | 5.1 |
General Growth Properties, Inc. | 5.7 | 6.4 |
Vornado Realty Trust | 4.3 | 4.9 |
Boston Properties, Inc. | 3.9 | 3.0 |
Home Properties, Inc. | 3.8 | 3.5 |
Highwoods Properties, Inc. (SBI) | 3.6 | 2.1 |
Apartment Investment & Management Co. Class A | 3.4 | 0.0 |
Kimco Realty Corp. | 3.0 | 2.0 |
| 50.1 | |
Top Five REIT Sectors as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
REITs - Office Buildings | 17.8 | 18.7 |
REITs - Industrial Buildings | 15.5 | 14.6 |
REITs - Malls | 15.1 | 16.0 |
REITs - Apartments | 14.9 | 17.1 |
REITs - Shopping Centers | 12.2 | 11.6 |
Asset Allocation (% of fund's net assets) |
As of January 31, 2008 * | As of July 31, 2007 ** |
 | Stocks 97.9% | | | Stocks 97.8% | |
 | Short-Term
Investments and
Net Other Assets 2.1% | | | Short-Term
Investments and
Net Other Assets 2.2% | |
* Foreign
investments | 3.5% | | ** Foreign investments | 3.9% | |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.9% |
| Shares | | Value |
HEALTH CARE PROVIDERS & SERVICES - 1.1% |
Health Care Facilities - 1.1% |
Capital Senior Living Corp. (a) | 22,727 | | $ 174,316 |
Emeritus Corp. (a) | 81,900 | | 1,814,085 |
Sun Healthcare Group, Inc. (a) | 61,300 | | 1,056,199 |
TOTAL HEALTH CARE FACILITIES | | 3,044,600 |
HOTELS, RESTAURANTS & LEISURE - 2.3% |
Hotels, Resorts & Cruise Lines - 2.3% |
Gaylord Entertainment Co. (a) | 41,900 | | 1,223,061 |
Starwood Hotels & Resorts Worldwide, Inc. | 111,100 | | 5,027,275 |
TOTAL HOTELS, RESORTS & CRUISE LINES | | 6,250,336 |
HOUSEHOLD DURABLES - 0.5% |
Homebuilding - 0.5% |
Centex Corp. | 48,100 | | 1,336,218 |
REAL ESTATE INVESTMENT TRUSTS - 90.4% |
REITs - Apartments - 14.9% |
Apartment Investment & Management Co. Class A | 234,262 | | 9,286,146 |
AvalonBay Communities, Inc. | 57,400 | | 5,392,730 |
BRE Properties, Inc. | 68,300 | | 2,977,197 |
Equity Residential (SBI) | 170,900 | | 6,393,369 |
GMH Communities Trust | 167,479 | | 884,289 |
Home Properties, Inc. (d) | 214,800 | | 10,308,252 |
Pennsylvania Real Estate Investment Trust (SBI) | 106,100 | | 2,827,565 |
Post Properties, Inc. | 25,500 | | 1,077,885 |
UDR, Inc. | 76,200 | | 1,739,646 |
TOTAL REITS - APARTMENTS | | 40,887,079 |
REITs - Factory Outlets - 2.9% |
Tanger Factory Outlet Centers, Inc. (d) | 208,300 | | 7,825,831 |
REITs - Health Care Facilities - 5.3% |
HCP, Inc. | 176,900 | | 5,379,529 |
Healthcare Realty Trust, Inc. (d) | 190,009 | | 4,907,932 |
Common Stocks - continued |
| Shares | | Value |
REAL ESTATE INVESTMENT TRUSTS - CONTINUED |
REITs - Health Care Facilities - continued |
LTC Properties, Inc. | 5,300 | | $ 138,065 |
Ventas, Inc. | 93,000 | | 4,110,600 |
TOTAL REITS - HEALTH CARE FACILITIES | | 14,536,126 |
REITs - Hotels - 4.4% |
Host Hotels & Resorts, Inc. | 295,994 | | 4,954,940 |
LaSalle Hotel Properties (SBI) | 259,600 | | 7,115,636 |
TOTAL REITS - HOTELS | | 12,070,576 |
REITs - Industrial Buildings - 15.5% |
DCT Industrial Trust, Inc. | 441,649 | | 4,182,416 |
ProLogis Trust | 341,323 | | 20,257,520 |
Public Storage | 232,618 | | 18,202,359 |
TOTAL REITS - INDUSTRIAL BUILDINGS | | 42,642,295 |
REITs - Malls - 15.1% |
General Growth Properties, Inc. | 423,599 | | 15,469,835 |
Simon Property Group, Inc. | 259,000 | | 23,149,419 |
Taubman Centers, Inc. | 55,500 | | 2,783,325 |
TOTAL REITS - MALLS | | 41,402,579 |
REITs - Management/Investment - 1.8% |
Digital Realty Trust, Inc. | 38,300 | | 1,368,459 |
Equity Lifestyle Properties, Inc. | 46,500 | | 2,030,655 |
Unibail-Rodamco | 6,800 | | 1,613,913 |
TOTAL REITS - MANAGEMENT/INVESTMENT | | 5,013,027 |
REITs - Mortgage - 0.5% |
MFA Mortgage Investments, Inc. | 146,300 | | 1,492,260 |
REITs - Office Buildings - 17.8% |
Alexandria Real Estate Equities, Inc. (d) | 81,000 | | 7,956,630 |
Boston Properties, Inc. (d) | 118,300 | | 10,874,136 |
Corporate Office Properties Trust (SBI) | 219,800 | | 7,040,194 |
Highwoods Properties, Inc. (SBI) | 329,200 | | 9,852,956 |
Kilroy Realty Corp. | 97,000 | | 4,755,910 |
Common Stocks - continued |
| Shares | | Value |
REAL ESTATE INVESTMENT TRUSTS - CONTINUED |
REITs - Office Buildings - continued |
Maguire Properties, Inc. (d) | 9,800 | | $ 270,284 |
SL Green Realty Corp. | 89,000 | | 8,260,090 |
TOTAL REITS - OFFICE BUILDINGS | | 49,010,200 |
REITs - Shopping Centers - 12.2% |
Developers Diversified Realty Corp. | 147,400 | | 6,065,510 |
Equity One, Inc. | 24,500 | | 578,445 |
Inland Real Estate Corp. | 509,200 | | 6,813,096 |
Kimco Realty Corp. | 233,490 | | 8,361,277 |
Vornado Realty Trust (d) | 129,950 | | 11,747,480 |
TOTAL REITS - SHOPPING CENTERS | | 33,565,808 |
TOTAL REAL ESTATE INVESTMENT TRUSTS | | 248,445,781 |
REAL ESTATE MANAGEMENT & DEVELOPMENT - 3.6% |
Real Estate Management & Development - 3.6% |
Brookfield Properties Corp. | 391,700 | | 7,955,431 |
CB Richard Ellis Group, Inc. Class A (a) | 99,200 | | 1,925,472 |
TOTAL REAL ESTATE MANAGEMENT & DEVELOPMENT | | 9,880,903 |
TOTAL COMMON STOCKS (Cost $260,185,671) | 268,957,838 |
Money Market Funds - 12.6% |
| Shares | | Value |
Fidelity Cash Central Fund, 3.79% (b) | 7,812,094 | | $ 7,812,094 |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 26,815,050 | | 26,815,050 |
TOTAL MONEY MARKET FUNDS (Cost $34,627,144) | 34,627,144 |
TOTAL INVESTMENT PORTFOLIO - 110.5% (Cost $294,812,815) | | 303,584,982 |
NET OTHER ASSETS - (10.5)% | | (28,867,776) |
NET ASSETS - 100% | $ 274,717,206 |
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 | $ 148,629 |
Fidelity Securities Lending Cash Central Fund | 73,079 |
Total | $ 221,708 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements (Unaudited)
Statement of Assets and Liabilities
| January 31, 2008 |
Assets | | |
Investment in securities, at value (including securities loaned of $26,810,178) - See accompanying schedule: Unaffiliated issuers (cost $260,185,671) | $ 268,957,838 | |
Fidelity Central Funds (cost $34,627,144) | 34,627,144 | |
Total Investments (cost $294,812,815) | | $ 303,584,982 |
Cash | | 203,106 |
Foreign currency held at value (cost $25) | | 25 |
Receivable for investments sold | | 2,211,836 |
Receivable for fund shares sold | | 2,030,750 |
Dividends receivable | | 272,227 |
Distributions receivable from Fidelity Central Funds | | 33,970 |
Prepaid expenses | | 816 |
Other receivables | | 361 |
Total assets | | 308,338,073 |
| | |
Liabilities | | |
Payable for investments purchased | $ 5,704,691 | |
Payable for fund shares redeemed | 785,502 | |
Accrued management fee | 116,040 | |
Distribution fees payable | 84,764 | |
Other affiliated payables | 77,166 | |
Other payables and accrued expenses | 37,654 | |
Collateral on securities loaned, at value | 26,815,050 | |
Total liabilities | | 33,620,867 |
| | |
Net Assets | | $ 274,717,206 |
Net Assets consist of: | | |
Paid in capital | | $ 270,488,179 |
Undistributed net investment income | | 510,800 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (5,053,940) |
Net unrealized appreciation (depreciation) on investments | | 8,772,167 |
Net Assets | | $ 274,717,206 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements (Unaudited) - continued
Statement of Assets and Liabilities - continued
| January 31, 2008 |
Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption price per share ($95,636,444 ÷ 5,762,875 shares) | | $ 16.60 |
| | |
Maximum offering price per share (100/94.25 of $16.60) | | $ 17.61 |
Class T:
Net Asset Value and redemption price per share ($77,038,998 ÷ 4,639,003 shares) | | $ 16.61 |
| | |
Maximum offering price per share (100/96.50 of $16.61) | | $ 17.21 |
Class B:
Net Asset Value and offering price per share ($17,505,151 ÷ 1,062,558 shares)A | | $ 16.47 |
| | |
Class C:
Net Asset Value and offering price per share ($24,958,859 ÷ 1,515,065 shares)A | | $ 16.47 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($59,577,754 ÷ 3,574,290 shares) | | $ 16.67 |
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, 2008 |
Investment Income | | |
Dividends | | $ 4,005,633 |
Income from Fidelity Central Funds | | 221,708 |
Total income | | 4,227,341 |
| | |
Expenses | | |
Management fee | $ 751,413 | |
Transfer agent fees | 411,399 | |
Distribution fees | 625,435 | |
Accounting and security lending fees | 56,932 | |
Custodian fees and expenses | 12,225 | |
Independent trustees' compensation | 585 | |
Registration fees | 34,482 | |
Audit | 35,916 | |
Legal | 1,116 | |
Miscellaneous | 1,061 | |
Total expenses before reductions | 1,930,564 | |
Expense reductions | (3,695) | 1,926,869 |
Net investment income (loss) | | 2,300,472 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (2,707,260) | |
Foreign currency transactions | 269 | |
Total net realized gain (loss) | | (2,706,991) |
Change in net unrealized appreciation (depreciation) on: Investment securities | (9,563,002) | |
Assets and liabilities in foreign currencies | 52 | |
Total change in net unrealized appreciation (depreciation) | | (9,562,950) |
Net gain (loss) | | (12,269,941) |
Net increase (decrease) in net assets resulting from operations | | $ (9,969,469) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements (Unaudited) - continued
Statement of Changes in Net Assets
| Six months ended January 31,
2008 | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 2,300,472 | $ 1,890,445 |
Net realized gain (loss) | (2,706,991) | 24,132,442 |
Change in net unrealized appreciation (depreciation) | (9,562,950) | (38,960,833) |
Net increase (decrease) in net assets resulting
from operations | (9,969,469) | (12,937,946) |
Distributions to shareholders from net investment income | (2,072,104) | (1,881,167) |
Distributions to shareholders from net realized gain | (15,771,689) | (20,008,529) |
Total distributions | (17,843,793) | (21,889,696) |
Share transactions - net increase (decrease) | 9,851,428 | 80,064,090 |
Total increase (decrease) in net assets | (17,961,834) | 45,236,448 |
| | |
Net Assets | | |
Beginning of period | 292,679,040 | 247,442,592 |
End of period (including undistributed net investment income of $510,800 and undistributed net investment income of $282,432, respectively) | $ 274,717,206 | $ 292,679,040 |
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, |
| 2008 | 2007 | 2006 | 2005 | 2004 | 2003 H |
Selected Per-Share Data | | | | | |
Net asset value, beginning of period | $ 18.67 | $ 20.34 | $ 18.23 | $ 13.22 | $ 11.33 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .17 | .18 | .29 | .31 | .27 | .21 |
Net realized and unrealized gain (loss) | (.98) | (.17) | 2.85 | 5.52 | 2.03 | 1.28 |
Total from investment operations | (.81) | .01 | 3.14 | 5.83 | 2.30 | 1.49 |
Distributions from net investment income | (.18) | (.18) | (.23) | (.29) | (.30) | (.16) |
Distributions from net realized gain | (1.08) | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions | (1.26) J | (1.68) | (1.03) | (.82) | (.41) | (.16) |
Net asset value, end of period | $ 16.60 | $ 18.67 | $ 20.34 | $ 18.23 | $ 13.22 | $ 11.33 |
Total Return B,C,D | (4.90)% | (.65)% | 18.32% | 45.48% | 20.59% | 15.13% |
Ratios to Average Net Assets F,I | | | | | |
Expenses before reductions | 1.21% A | 1.25% | 1.29% | 1.31% | 1.54% | 2.98% A |
Expenses net of fee waivers, if any | 1.21% A | 1.25% | 1.25% | 1.28% | 1.54% | 1.75% A |
Expenses net of all reductions | 1.20% A | 1.25% | 1.24% | 1.25% | 1.52% | 1.72% A |
Net investment income (loss) | 1.92% A | .81% | 1.59% | 1.98% | 2.10% | 2.35% A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 95,636 | $ 117,831 | $ 85,000 | $ 53,097 | $ 22,273 | $ 3,993 |
Portfolio turnover rate G | 111% A | 84% | 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. J Total distributions of $1.261 per share is comprised of distributions from net investment income of $.176 and distributions from net realized gain of $1.085 per share. |
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, |
| 2008 | 2007 | 2006 | 2005 | 2004 | 2003H |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.64 | $ 20.31 | $ 18.23 | $ 13.21 | $ 11.32 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | .15 | .12 | .24 | .26 | .23 | .18 |
Net realized and unrealized gain (loss) | (.98) | (.16) | 2.84 | 5.53 | 2.02 | 1.29 |
Total from investment operations | (.83) | (.04) | 3.08 | 5.79 | 2.25 | 1.47 |
Distributions from net investment income | (.11) | (.13) | (.20) | (.24) | (.25) | (.15) |
Distributions from net realized gain | (1.08) | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions | (1.20)J | (1.63) | (1.00) | (.77) | (.36) | (.15) |
Net asset value, end of period | $ 16.61 | $ 18.64 | $ 20.31 | $ 18.23 | $ 13.21 | $ 11.32 |
Total ReturnB,C,D | (5.01)% | (.89)% | 17.98% | 45.12% | 20.12% | 14.91% |
Ratios to Average Net AssetsF,I | | | | | |
Expenses before reductions | 1.47%A | 1.50% | 1.55% | 1.61% | 1.86% | 3.32%A |
Expenses net of fee waivers, if any | 1.47%A | 1.50% | 1.50% | 1.57% | 1.85% | 2.00%A |
Expenses net of all reductions | 1.47%A | 1.49% | 1.49% | 1.54% | 1.83% | 1.97%A |
Net investment income (loss) | 1.65%A | .57% | 1.34% | 1.70% | 1.80% | 2.10%A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 77,039 | $ 100,621 | $ 91,224 | $ 66,303 | $ 26,037 | $ 9,049 |
Portfolio turnover rateG | 111%A | 84% | 65% | 62% | 52% | 47%A |
A Annualized B Total returns for periods of less than one year are not annualized. CTotal 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. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HFor the period September 12, 2002 (commencement of operations) to July 31, 2003. IExpense 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. JTotal distributions of $1.197 per share is comprised of distributions from net investment income of $.112 and distributions from net realized gain of $1.085 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, | Years ended July 31, |
| 2008 | 2007 | 2006 | 2005 | 2004 | 2003H |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.51 | $ 20.19 | $ 18.16 | $ 13.18 | $ 11.29 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | .11 | .01 | .15 | .18 | .16 | .14 |
Net realized and unrealized gain (loss) | (.99) | (.16) | 2.83 | 5.50 | 2.04 | 1.28 |
Total from investment operations | (.88) | (.15) | 2.98 | 5.68 | 2.20 | 1.42 |
Distributions from net investment income | (.08) | (.05) | (.15) | (.17) | (.20) | (.13) |
Distributions from net realized gain | (1.08) | (1.48) | (.80) | (.53) | (.11) | - |
Total distributions | (1.16)J | (1.53) | (.95) | (.70) | (.31) | (.13) |
Net asset value, end of period | $ 16.47 | $ 18.51 | $ 20.19 | $ 18.16 | $ 13.18 | $ 11.29 |
Total ReturnB,C,D | (5.30)% | (1.45)% | 17.42% | 44.31% | 19.67% | 14.38% |
Ratios to Average Net AssetsF,I | | | | | |
Expenses before reductions | 1.96%A | 2.02% | 2.05% | 2.10% | 2.33% | 3.82%A |
Expenses net of fee waivers, if any | 1.96%A | 2.00% | 2.00% | 2.07% | 2.33% | 2.50%A |
Expenses net of all reductions | 1.95%A | 2.00% | 1.98% | 2.03% | 2.31% | 2.47%A |
Net investment income (loss) | 1.17%A | .07% | .84% | 1.20% | 1.31% | 1.60%A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 17,505 | $ 25,114 | $ 27,397 | $ 26,349 | $ 12,910 | $ 5,061 |
Portfolio turnover rateG | 111%A | 84% | 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. GAmount 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. J Total distributions of $1.162 per share is comprised of distributions from net investment income of $.077 and distributions from net realized gain of $1.085 per share. |
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, |
| 2008 | 2007 | 2006 | 2005 | 2004 | 2003H |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.51 | $ 20.21 | $ 18.17 | $ 13.18 | $ 11.29 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | .11 | .01 | .15 | .19 | .17 | .14 |
Net realized and unrealized gain (loss) | (.99) | (.16) | 2.84 | 5.50 | 2.03 | 1.28 |
Total from investment operations | (.88) | (.15) | 2.99 | 5.69 | 2.20 | 1.42 |
Distributions from net investment income | (.08) | (.05) | (.15) | (.17) | (.20) | (.13) |
Distributions from net realized gain | (1.08) | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions | (1.16)J | (1.55) | (.95) | (.70) | (.31) | (.13) |
Net asset value, end of period | $ 16.47 | $ 18.51 | $ 20.21 | $ 18.17 | $ 13.18 | $ 11.29 |
Total ReturnB,C,D | (5.29)% | (1.45)% | 17.46% | 44.38% | 19.67% | 14.38% |
Ratios to Average Net AssetsF,I | | | | | |
Expenses before reductions | 1.95%A | 2.01% | 2.05% | 2.09% | 2.29% | 3.76%A |
Expenses net of fee waivers, if any | 1.95%A | 2.00% | 2.00% | 2.05% | 2.29% | 2.50%A |
Expenses net of all reductions | 1.95%A | 2.00% | 1.98% | 2.02% | 2.27% | 2.47%A |
Net investment income (loss) | 1.17%A | .06% | .84% | 1.22% | 1.35% | 1.60%A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 24,959 | $ 36,854 | $ 36,669 | $ 29,410 | $ 13,671 | $ 5,059 |
Portfolio turnover rateG | 111%A | 84% | 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. HFor 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. J Total distributions of $1.163 per share is comprised of distributions from net investment income of $.078 and distributions from net realized gain of $1.085 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, | Years ended July 31, |
| 2008 | 2007 | 2006 | 2005 | 2004 | 2003G |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.80 | $ 20.47 | $ 18.33 | $ 13.28 | $ 11.35 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss)D | .18 | .24 | .35 | .36 | .32 | .23 |
Net realized and unrealized gain (loss) | (.97) | (.17) | 2.85 | 5.56 | 2.04 | 1.28 |
Total from investment operations | (.79) | .07 | 3.20 | 5.92 | 2.36 | 1.51 |
Distributions from net investment income | (.25) | (.24) | (.26) | (.34) | (.32) | (.16) |
Distributions from net realized gain | (1.08) | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions | (1.34)I | (1.74) | (1.06) | (.87) | (.43) | (.16) |
Net asset value, end of period | $ 16.67 | $ 18.80 | $ 20.47 | $ 18.33 | $ 13.28 | $ 11.35 |
Total ReturnB,C | (4.80)% | (.37)% | 18.61% | 46.05% | 21.11% | 15.33% |
Ratios to Average Net AssetsE,H | | | | | |
Expenses before reductions | .96%A | .98% | .94% | .91% | 1.12% | 2.68%A |
Expenses net of fee waivers, if any | .96%A | .98% | .94% | .91% | 1.12% | 1.50%A |
Expenses net of all reductions | .96%A | .97% | .92% | .88% | 1.10% | 1.47%A |
Net investment income (loss) | 2.16%A | 1.09% | 1.90% | 2.35% | 2.53% | 2.60%A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 59,578 | $ 12,259 | $ 7,152 | $ 4,162 | $ 2,478 | $ 1,225 |
Portfolio turnover rateF | 111%A | 84% | 65% | 62% | 52% | 47%A |
A Annualized B Total returns for periods of less than one year are not annualized. CTotal returns would have been lower had certain expenses not been reduced during the periods shown. DCalculated based on average shares outstanding during the period. EFees 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. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GFor the period September 12, 2002 (commencement of operations) to July 31, 2003. 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. 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. ITotal distributions of $1.337 per share is comprised of distributions from net investment income of $.252 and distributions from net realized gain of $1.085 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, 2008 (Unaudited)
1. Organization.
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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
3. Significant Accounting Policies - continued
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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Foreign Currency - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
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 short-term capital gains, foreign currency transactions 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 | $ 35,285,133 |
Unrealized depreciation | (28,672,866) |
Net unrealized appreciation (depreciation) | $ 6,612,267 |
| |
Cost for federal income tax purposes | $ 296,972,715 |
New Accounting Pronouncement. 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.
4. 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
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies - continued
Repurchase Agreements - continued
collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $150,147,685 and $152,770,163, respectively.
6. 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 .55% 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% | $ 135,306 | $ 18,060 |
Class T | .25% | .25% | 229,022 | - |
Class B | .75% | .25% | 108,087 | 81,064 |
Class C | .75% | .25% | 153,020 | 32,096 |
| | | $ 625,435 | $ 131,220 |
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
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
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 | $ 27,948 |
Class T | 6,461 |
Class B* | 34,852 |
Class C* | 11,340 |
| $ 80,601 |
* 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 | $ 162,773 | .30 |
Class T | 143,381 | .31 |
Class B | 32,545 | .30 |
Class C | 45,884 | .30 |
Institutional Class | 26,816 | .30 |
| $ 411,399 | |
* 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.
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 $2,070 for the period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. 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 $414 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. 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 $73,079.
9. 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 $559 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 $1,025. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction |
Class A | $ 1,991 |
Institutional Class | 120 |
| $ 2,111 |
Semiannual Report
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $8,019.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31, | Year ended
July 31, |
| 2008 | 2007 |
From net investment income | | |
Class A | $ 1,028,404 | $ 910,999 |
Class T | 539,251 | 671,347 |
Class B | 86,808 | 73,434 |
Class C | 124,679 | 121,385 |
Institutional Class | 292,962 | 104,002 |
Total | $ 2,072,104 | $ 1,881,167 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
11. Distributions to Shareholders - continued
| Six months ended
January 31, | Year ended
July 31, |
| 2008 | 2007 |
From net realized gain | | |
Class A | $ 6,384,488 | $ 7,016,390 |
Class T | 5,512,566 | 7,245,930 |
Class B | 1,322,406 | 2,110,416 |
Class C | 1,827,178 | 3,021,230 |
Institutional Class | 725,051 | 614,563 |
Total | $ 15,771,689 | $ 20,008,529 |
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31, | Year ended
July 31, | Six months ended
January 31, | Year ended
July 31, |
| 2008 | 2007 | 2008 | 2007 |
Class A | | | | |
Shares sold | 1,122,460 | 4,162,272 | $ 20,167,293 | $ 91,668,160 |
Reinvestment of distributions | 386,912 | 360,748 | 7,075,020 | 7,512,896 |
Shares redeemed | (2,057,878) | (2,390,088) | (37,291,714) | (51,262,823) |
Net increase (decrease) | (548,506) | 2,132,932 | $ (10,049,401) | $ 47,918,233 |
Class T | | | | |
Shares sold | 518,524 | 3,133,447 | $ 9,222,649 | $ 69,066,846 |
Reinvestment of distributions | 319,347 | 366,028 | 5,850,825 | 7,615,273 |
Shares redeemed | (1,596,338) | (2,592,591) | (28,881,291) | (55,812,105) |
Net increase (decrease) | (758,467) | 906,884 | $ (13,807,817) | $ 20,870,014 |
Class B | | | | |
Shares sold | 53,270 | 522,263 | $ 957,208 | $ 11,374,401 |
Reinvestment of distributions | 69,276 | 95,389 | 1,261,925 | 1,975,227 |
Shares redeemed | (416,645) | (618,201) | (7,503,545) | (13,210,441) |
Net increase (decrease) | (294,099) | (549) | $ (5,284,412) | $ 139,187 |
Class C | | | | |
Shares sold | 156,329 | 1,257,900 | $ 2,804,174 | $ 27,435,286 |
Reinvestment of distributions | 95,565 | 135,205 | 1,740,332 | 2,802,482 |
Shares redeemed | (727,624) | (1,217,050) | (13,202,031) | (25,938,064) |
Net increase (decrease) | (475,730) | 176,055 | $ (8,657,525) | $ 4,299,704 |
Institutional Class | | | | |
Shares sold | 3,334,886 | 643,980 | $ 55,152,992 | $ 14,342,713 |
Reinvestment of distributions | 40,847 | 30,501 | 744,359 | 638,492 |
Shares redeemed | (453,513) | (371,732) | (8,246,768) | (8,144,253) |
Net increase (decrease) | 2,922,220 | 302,749 | $ 47,650,583 | $ 6,836,952 |
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 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
(Fidelity Investment logo)(registered trademark)
ARE-USAN-0308
1.789730.105
(Fidelity Investment logo)(registered trademark)
Fidelity ® Advisor
Real Estate
Fund - Institutional Class
Semiannual Report
January 31, 2008
(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. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
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:
Stocks got off to a poor start in 2008, while investment-grade bonds and money markets showed positive returns, once again underscoring the importance of a diversified portfolio. Financial markets are always unpredictable, but 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, 2007 to January 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a share-holder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report
| Beginning
Account Value
August 1, 2007 | Ending
Account Value
January 31, 2008 | Expenses Paid
During Period*
August 1, 2007 to January 31, 2008 |
Class A | | | |
Actual | $ 1,000.00 | $ 951.00 | $ 5.93 |
HypotheticalA | $ 1,000.00 | $ 1,019.05 | $ 6.14 |
Class T | | | |
Actual | $ 1,000.00 | $ 949.90 | $ 7.21 |
HypotheticalA | $ 1,000.00 | $ 1,017.75 | $ 7.46 |
Class B | | | |
Actual | $ 1,000.00 | $ 947.00 | $ 9.59 |
HypotheticalA | $ 1,000.00 | $ 1,015.28 | $ 9.93 |
Class C | | | |
Actual | $ 1,000.00 | $ 947.10 | $ 9.54 |
HypotheticalA | $ 1,000.00 | $ 1,015.33 | $ 9.88 |
Institutional Class | | | |
Actual | $ 1,000.00 | $ 952.00 | $ 4.71 |
HypotheticalA | $ 1,000.00 | $ 1,020.31 | $ 4.88 |
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 184/366 (to reflect the one-half year period).
| Annualized
Expense Ratio |
Class A | 1.21% |
Class T | 1.47% |
Class B | 1.96% |
Class C | 1.95% |
Institutional Class | .96% |
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Simon Property Group, Inc. | 8.4 | 7.6 |
ProLogis Trust | 7.4 | 5.9 |
Public Storage | 6.6 | 5.1 |
General Growth Properties, Inc. | 5.7 | 6.4 |
Vornado Realty Trust | 4.3 | 4.9 |
Boston Properties, Inc. | 3.9 | 3.0 |
Home Properties, Inc. | 3.8 | 3.5 |
Highwoods Properties, Inc. (SBI) | 3.6 | 2.1 |
Apartment Investment & Management Co. Class A | 3.4 | 0.0 |
Kimco Realty Corp. | 3.0 | 2.0 |
| 50.1 | |
Top Five REIT Sectors as of January 31, 2008 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
REITs - Office Buildings | 17.8 | 18.7 |
REITs - Industrial Buildings | 15.5 | 14.6 |
REITs - Malls | 15.1 | 16.0 |
REITs - Apartments | 14.9 | 17.1 |
REITs - Shopping Centers | 12.2 | 11.6 |
Asset Allocation (% of fund's net assets) |
As of January 31, 2008 * | As of July 31, 2007 ** |
| Stocks 97.9% | | | Stocks 97.8% | |
| Short-Term
Investments and
Net Other Assets 2.1% | | | Short-Term
Investments and
Net Other Assets 2.2% | |
* Foreign
investments | 3.5% | | ** Foreign investments | 3.9% | |
Semiannual Report
Investments January 31, 2008 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.9% |
| Shares | | Value |
HEALTH CARE PROVIDERS & SERVICES - 1.1% |
Health Care Facilities - 1.1% |
Capital Senior Living Corp. (a) | 22,727 | | $ 174,316 |
Emeritus Corp. (a) | 81,900 | | 1,814,085 |
Sun Healthcare Group, Inc. (a) | 61,300 | | 1,056,199 |
TOTAL HEALTH CARE FACILITIES | | 3,044,600 |
HOTELS, RESTAURANTS & LEISURE - 2.3% |
Hotels, Resorts & Cruise Lines - 2.3% |
Gaylord Entertainment Co. (a) | 41,900 | | 1,223,061 |
Starwood Hotels & Resorts Worldwide, Inc. | 111,100 | | 5,027,275 |
TOTAL HOTELS, RESORTS & CRUISE LINES | | 6,250,336 |
HOUSEHOLD DURABLES - 0.5% |
Homebuilding - 0.5% |
Centex Corp. | 48,100 | | 1,336,218 |
REAL ESTATE INVESTMENT TRUSTS - 90.4% |
REITs - Apartments - 14.9% |
Apartment Investment & Management Co. Class A | 234,262 | | 9,286,146 |
AvalonBay Communities, Inc. | 57,400 | | 5,392,730 |
BRE Properties, Inc. | 68,300 | | 2,977,197 |
Equity Residential (SBI) | 170,900 | | 6,393,369 |
GMH Communities Trust | 167,479 | | 884,289 |
Home Properties, Inc. (d) | 214,800 | | 10,308,252 |
Pennsylvania Real Estate Investment Trust (SBI) | 106,100 | | 2,827,565 |
Post Properties, Inc. | 25,500 | | 1,077,885 |
UDR, Inc. | 76,200 | | 1,739,646 |
TOTAL REITS - APARTMENTS | | 40,887,079 |
REITs - Factory Outlets - 2.9% |
Tanger Factory Outlet Centers, Inc. (d) | 208,300 | | 7,825,831 |
REITs - Health Care Facilities - 5.3% |
HCP, Inc. | 176,900 | | 5,379,529 |
Healthcare Realty Trust, Inc. (d) | 190,009 | | 4,907,932 |
Common Stocks - continued |
| Shares | | Value |
REAL ESTATE INVESTMENT TRUSTS - CONTINUED |
REITs - Health Care Facilities - continued |
LTC Properties, Inc. | 5,300 | | $ 138,065 |
Ventas, Inc. | 93,000 | | 4,110,600 |
TOTAL REITS - HEALTH CARE FACILITIES | | 14,536,126 |
REITs - Hotels - 4.4% |
Host Hotels & Resorts, Inc. | 295,994 | | 4,954,940 |
LaSalle Hotel Properties (SBI) | 259,600 | | 7,115,636 |
TOTAL REITS - HOTELS | | 12,070,576 |
REITs - Industrial Buildings - 15.5% |
DCT Industrial Trust, Inc. | 441,649 | | 4,182,416 |
ProLogis Trust | 341,323 | | 20,257,520 |
Public Storage | 232,618 | | 18,202,359 |
TOTAL REITS - INDUSTRIAL BUILDINGS | | 42,642,295 |
REITs - Malls - 15.1% |
General Growth Properties, Inc. | 423,599 | | 15,469,835 |
Simon Property Group, Inc. | 259,000 | | 23,149,419 |
Taubman Centers, Inc. | 55,500 | | 2,783,325 |
TOTAL REITS - MALLS | | 41,402,579 |
REITs - Management/Investment - 1.8% |
Digital Realty Trust, Inc. | 38,300 | | 1,368,459 |
Equity Lifestyle Properties, Inc. | 46,500 | | 2,030,655 |
Unibail-Rodamco | 6,800 | | 1,613,913 |
TOTAL REITS - MANAGEMENT/INVESTMENT | | 5,013,027 |
REITs - Mortgage - 0.5% |
MFA Mortgage Investments, Inc. | 146,300 | | 1,492,260 |
REITs - Office Buildings - 17.8% |
Alexandria Real Estate Equities, Inc. (d) | 81,000 | | 7,956,630 |
Boston Properties, Inc. (d) | 118,300 | | 10,874,136 |
Corporate Office Properties Trust (SBI) | 219,800 | | 7,040,194 |
Highwoods Properties, Inc. (SBI) | 329,200 | | 9,852,956 |
Kilroy Realty Corp. | 97,000 | | 4,755,910 |
Common Stocks - continued |
| Shares | | Value |
REAL ESTATE INVESTMENT TRUSTS - CONTINUED |
REITs - Office Buildings - continued |
Maguire Properties, Inc. (d) | 9,800 | | $ 270,284 |
SL Green Realty Corp. | 89,000 | | 8,260,090 |
TOTAL REITS - OFFICE BUILDINGS | | 49,010,200 |
REITs - Shopping Centers - 12.2% |
Developers Diversified Realty Corp. | 147,400 | | 6,065,510 |
Equity One, Inc. | 24,500 | | 578,445 |
Inland Real Estate Corp. | 509,200 | | 6,813,096 |
Kimco Realty Corp. | 233,490 | | 8,361,277 |
Vornado Realty Trust (d) | 129,950 | | 11,747,480 |
TOTAL REITS - SHOPPING CENTERS | | 33,565,808 |
TOTAL REAL ESTATE INVESTMENT TRUSTS | | 248,445,781 |
REAL ESTATE MANAGEMENT & DEVELOPMENT - 3.6% |
Real Estate Management & Development - 3.6% |
Brookfield Properties Corp. | 391,700 | | 7,955,431 |
CB Richard Ellis Group, Inc. Class A (a) | 99,200 | | 1,925,472 |
TOTAL REAL ESTATE MANAGEMENT & DEVELOPMENT | | 9,880,903 |
TOTAL COMMON STOCKS (Cost $260,185,671) | 268,957,838 |
Money Market Funds - 12.6% |
| Shares | | Value |
Fidelity Cash Central Fund, 3.79% (b) | 7,812,094 | | $ 7,812,094 |
Fidelity Securities Lending Cash Central Fund, 3.84% (b)(c) | 26,815,050 | | 26,815,050 |
TOTAL MONEY MARKET FUNDS (Cost $34,627,144) | 34,627,144 |
TOTAL INVESTMENT PORTFOLIO - 110.5% (Cost $294,812,815) | | 303,584,982 |
NET OTHER ASSETS - (10.5)% | | (28,867,776) |
NET ASSETS - 100% | $ 274,717,206 |
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 | $ 148,629 |
Fidelity Securities Lending Cash Central Fund | 73,079 |
Total | $ 221,708 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements (Unaudited)
Statement of Assets and Liabilities
| January 31, 2008 |
Assets | | |
Investment in securities, at value (including securities loaned of $26,810,178) - See accompanying schedule: Unaffiliated issuers (cost $260,185,671) | $ 268,957,838 | |
Fidelity Central Funds (cost $34,627,144) | 34,627,144 | |
Total Investments (cost $294,812,815) | | $ 303,584,982 |
Cash | | 203,106 |
Foreign currency held at value (cost $25) | | 25 |
Receivable for investments sold | | 2,211,836 |
Receivable for fund shares sold | | 2,030,750 |
Dividends receivable | | 272,227 |
Distributions receivable from Fidelity Central Funds | | 33,970 |
Prepaid expenses | | 816 |
Other receivables | | 361 |
Total assets | | 308,338,073 |
| | |
Liabilities | | |
Payable for investments purchased | $ 5,704,691 | |
Payable for fund shares redeemed | 785,502 | |
Accrued management fee | 116,040 | |
Distribution fees payable | 84,764 | |
Other affiliated payables | 77,166 | |
Other payables and accrued expenses | 37,654 | |
Collateral on securities loaned, at value | 26,815,050 | |
Total liabilities | | 33,620,867 |
| | |
Net Assets | | $ 274,717,206 |
Net Assets consist of: | | |
Paid in capital | | $ 270,488,179 |
Undistributed net investment income | | 510,800 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (5,053,940) |
Net unrealized appreciation (depreciation) on investments | | 8,772,167 |
Net Assets | | $ 274,717,206 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements (Unaudited) - continued
Statement of Assets and Liabilities - continued
| January 31, 2008 |
Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption price per share ($95,636,444 ÷ 5,762,875 shares) | | $ 16.60 |
| | |
Maximum offering price per share (100/94.25 of $16.60) | | $ 17.61 |
Class T:
Net Asset Value and redemption price per share ($77,038,998 ÷ 4,639,003 shares) | | $ 16.61 |
| | |
Maximum offering price per share (100/96.50 of $16.61) | | $ 17.21 |
Class B:
Net Asset Value and offering price per share ($17,505,151 ÷ 1,062,558 shares)A | | $ 16.47 |
| | |
Class C:
Net Asset Value and offering price per share ($24,958,859 ÷ 1,515,065 shares)A | | $ 16.47 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($59,577,754 ÷ 3,574,290 shares) | | $ 16.67 |
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, 2008 |
Investment Income | | |
Dividends | | $ 4,005,633 |
Income from Fidelity Central Funds | | 221,708 |
Total income | | 4,227,341 |
| | |
Expenses | | |
Management fee | $ 751,413 | |
Transfer agent fees | 411,399 | |
Distribution fees | 625,435 | |
Accounting and security lending fees | 56,932 | |
Custodian fees and expenses | 12,225 | |
Independent trustees' compensation | 585 | |
Registration fees | 34,482 | |
Audit | 35,916 | |
Legal | 1,116 | |
Miscellaneous | 1,061 | |
Total expenses before reductions | 1,930,564 | |
Expense reductions | (3,695) | 1,926,869 |
Net investment income (loss) | | 2,300,472 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | (2,707,260) | |
Foreign currency transactions | 269 | |
Total net realized gain (loss) | | (2,706,991) |
Change in net unrealized appreciation (depreciation) on: Investment securities | (9,563,002) | |
Assets and liabilities in foreign currencies | 52 | |
Total change in net unrealized appreciation (depreciation) | | (9,562,950) |
Net gain (loss) | | (12,269,941) |
Net increase (decrease) in net assets resulting from operations | | $ (9,969,469) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements (Unaudited) - continued
Statement of Changes in Net Assets
| Six months ended January 31,
2008 | Year ended
July 31,
2007 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 2,300,472 | $ 1,890,445 |
Net realized gain (loss) | (2,706,991) | 24,132,442 |
Change in net unrealized appreciation (depreciation) | (9,562,950) | (38,960,833) |
Net increase (decrease) in net assets resulting
from operations | (9,969,469) | (12,937,946) |
Distributions to shareholders from net investment income | (2,072,104) | (1,881,167) |
Distributions to shareholders from net realized gain | (15,771,689) | (20,008,529) |
Total distributions | (17,843,793) | (21,889,696) |
Share transactions - net increase (decrease) | 9,851,428 | 80,064,090 |
Total increase (decrease) in net assets | (17,961,834) | 45,236,448 |
| | |
Net Assets | | |
Beginning of period | 292,679,040 | 247,442,592 |
End of period (including undistributed net investment income of $510,800 and undistributed net investment income of $282,432, respectively) | $ 274,717,206 | $ 292,679,040 |
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, |
| 2008 | 2007 | 2006 | 2005 | 2004 | 2003 H |
Selected Per-Share Data | | | | | |
Net asset value, beginning of period | $ 18.67 | $ 20.34 | $ 18.23 | $ 13.22 | $ 11.33 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .17 | .18 | .29 | .31 | .27 | .21 |
Net realized and unrealized gain (loss) | (.98) | (.17) | 2.85 | 5.52 | 2.03 | 1.28 |
Total from investment operations | (.81) | .01 | 3.14 | 5.83 | 2.30 | 1.49 |
Distributions from net investment income | (.18) | (.18) | (.23) | (.29) | (.30) | (.16) |
Distributions from net realized gain | (1.08) | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions | (1.26) J | (1.68) | (1.03) | (.82) | (.41) | (.16) |
Net asset value, end of period | $ 16.60 | $ 18.67 | $ 20.34 | $ 18.23 | $ 13.22 | $ 11.33 |
Total Return B,C,D | (4.90)% | (.65)% | 18.32% | 45.48% | 20.59% | 15.13% |
Ratios to Average Net Assets F,I | | | | | |
Expenses before reductions | 1.21% A | 1.25% | 1.29% | 1.31% | 1.54% | 2.98% A |
Expenses net of fee waivers, if any | 1.21% A | 1.25% | 1.25% | 1.28% | 1.54% | 1.75% A |
Expenses net of all reductions | 1.20% A | 1.25% | 1.24% | 1.25% | 1.52% | 1.72% A |
Net investment income (loss) | 1.92% A | .81% | 1.59% | 1.98% | 2.10% | 2.35% A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 95,636 | $ 117,831 | $ 85,000 | $ 53,097 | $ 22,273 | $ 3,993 |
Portfolio turnover rate G | 111% A | 84% | 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. J Total distributions of $1.261 per share is comprised of distributions from net investment income of $.176 and distributions from net realized gain of $1.085 per share. |
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, |
| 2008 | 2007 | 2006 | 2005 | 2004 | 2003H |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.64 | $ 20.31 | $ 18.23 | $ 13.21 | $ 11.32 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | .15 | .12 | .24 | .26 | .23 | .18 |
Net realized and unrealized gain (loss) | (.98) | (.16) | 2.84 | 5.53 | 2.02 | 1.29 |
Total from investment operations | (.83) | (.04) | 3.08 | 5.79 | 2.25 | 1.47 |
Distributions from net investment income | (.11) | (.13) | (.20) | (.24) | (.25) | (.15) |
Distributions from net realized gain | (1.08) | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions | (1.20)J | (1.63) | (1.00) | (.77) | (.36) | (.15) |
Net asset value, end of period | $ 16.61 | $ 18.64 | $ 20.31 | $ 18.23 | $ 13.21 | $ 11.32 |
Total ReturnB,C,D | (5.01)% | (.89)% | 17.98% | 45.12% | 20.12% | 14.91% |
Ratios to Average Net AssetsF,I | | | | | |
Expenses before reductions | 1.47%A | 1.50% | 1.55% | 1.61% | 1.86% | 3.32%A |
Expenses net of fee waivers, if any | 1.47%A | 1.50% | 1.50% | 1.57% | 1.85% | 2.00%A |
Expenses net of all reductions | 1.47%A | 1.49% | 1.49% | 1.54% | 1.83% | 1.97%A |
Net investment income (loss) | 1.65%A | .57% | 1.34% | 1.70% | 1.80% | 2.10%A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 77,039 | $ 100,621 | $ 91,224 | $ 66,303 | $ 26,037 | $ 9,049 |
Portfolio turnover rateG | 111%A | 84% | 65% | 62% | 52% | 47%A |
A Annualized B Total returns for periods of less than one year are not annualized. CTotal 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. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. HFor the period September 12, 2002 (commencement of operations) to July 31, 2003. IExpense 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. JTotal distributions of $1.197 per share is comprised of distributions from net investment income of $.112 and distributions from net realized gain of $1.085 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, | Years ended July 31, |
| 2008 | 2007 | 2006 | 2005 | 2004 | 2003H |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.51 | $ 20.19 | $ 18.16 | $ 13.18 | $ 11.29 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | .11 | .01 | .15 | .18 | .16 | .14 |
Net realized and unrealized gain (loss) | (.99) | (.16) | 2.83 | 5.50 | 2.04 | 1.28 |
Total from investment operations | (.88) | (.15) | 2.98 | 5.68 | 2.20 | 1.42 |
Distributions from net investment income | (.08) | (.05) | (.15) | (.17) | (.20) | (.13) |
Distributions from net realized gain | (1.08) | (1.48) | (.80) | (.53) | (.11) | - |
Total distributions | (1.16)J | (1.53) | (.95) | (.70) | (.31) | (.13) |
Net asset value, end of period | $ 16.47 | $ 18.51 | $ 20.19 | $ 18.16 | $ 13.18 | $ 11.29 |
Total ReturnB,C,D | (5.30)% | (1.45)% | 17.42% | 44.31% | 19.67% | 14.38% |
Ratios to Average Net AssetsF,I | | | | | |
Expenses before reductions | 1.96%A | 2.02% | 2.05% | 2.10% | 2.33% | 3.82%A |
Expenses net of fee waivers, if any | 1.96%A | 2.00% | 2.00% | 2.07% | 2.33% | 2.50%A |
Expenses net of all reductions | 1.95%A | 2.00% | 1.98% | 2.03% | 2.31% | 2.47%A |
Net investment income (loss) | 1.17%A | .07% | .84% | 1.20% | 1.31% | 1.60%A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 17,505 | $ 25,114 | $ 27,397 | $ 26,349 | $ 12,910 | $ 5,061 |
Portfolio turnover rateG | 111%A | 84% | 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. GAmount 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. J Total distributions of $1.162 per share is comprised of distributions from net investment income of $.077 and distributions from net realized gain of $1.085 per share. |
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, |
| 2008 | 2007 | 2006 | 2005 | 2004 | 2003H |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.51 | $ 20.21 | $ 18.17 | $ 13.18 | $ 11.29 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | .11 | .01 | .15 | .19 | .17 | .14 |
Net realized and unrealized gain (loss) | (.99) | (.16) | 2.84 | 5.50 | 2.03 | 1.28 |
Total from investment operations | (.88) | (.15) | 2.99 | 5.69 | 2.20 | 1.42 |
Distributions from net investment income | (.08) | (.05) | (.15) | (.17) | (.20) | (.13) |
Distributions from net realized gain | (1.08) | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions | (1.16)J | (1.55) | (.95) | (.70) | (.31) | (.13) |
Net asset value, end of period | $ 16.47 | $ 18.51 | $ 20.21 | $ 18.17 | $ 13.18 | $ 11.29 |
Total ReturnB,C,D | (5.29)% | (1.45)% | 17.46% | 44.38% | 19.67% | 14.38% |
Ratios to Average Net AssetsF,I | | | | | |
Expenses before reductions | 1.95%A | 2.01% | 2.05% | 2.09% | 2.29% | 3.76%A |
Expenses net of fee waivers, if any | 1.95%A | 2.00% | 2.00% | 2.05% | 2.29% | 2.50%A |
Expenses net of all reductions | 1.95%A | 2.00% | 1.98% | 2.02% | 2.27% | 2.47%A |
Net investment income (loss) | 1.17%A | .06% | .84% | 1.22% | 1.35% | 1.60%A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 24,959 | $ 36,854 | $ 36,669 | $ 29,410 | $ 13,671 | $ 5,059 |
Portfolio turnover rateG | 111%A | 84% | 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. HFor 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. J Total distributions of $1.163 per share is comprised of distributions from net investment income of $.078 and distributions from net realized gain of $1.085 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, | Years ended July 31, |
| 2008 | 2007 | 2006 | 2005 | 2004 | 2003G |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.80 | $ 20.47 | $ 18.33 | $ 13.28 | $ 11.35 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss)D | .18 | .24 | .35 | .36 | .32 | .23 |
Net realized and unrealized gain (loss) | (.97) | (.17) | 2.85 | 5.56 | 2.04 | 1.28 |
Total from investment operations | (.79) | .07 | 3.20 | 5.92 | 2.36 | 1.51 |
Distributions from net investment income | (.25) | (.24) | (.26) | (.34) | (.32) | (.16) |
Distributions from net realized gain | (1.08) | (1.50) | (.80) | (.53) | (.11) | - |
Total distributions | (1.34)I | (1.74) | (1.06) | (.87) | (.43) | (.16) |
Net asset value, end of period | $ 16.67 | $ 18.80 | $ 20.47 | $ 18.33 | $ 13.28 | $ 11.35 |
Total ReturnB,C | (4.80)% | (.37)% | 18.61% | 46.05% | 21.11% | 15.33% |
Ratios to Average Net AssetsE,H | | | | | |
Expenses before reductions | .96%A | .98% | .94% | .91% | 1.12% | 2.68%A |
Expenses net of fee waivers, if any | .96%A | .98% | .94% | .91% | 1.12% | 1.50%A |
Expenses net of all reductions | .96%A | .97% | .92% | .88% | 1.10% | 1.47%A |
Net investment income (loss) | 2.16%A | 1.09% | 1.90% | 2.35% | 2.53% | 2.60%A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 59,578 | $ 12,259 | $ 7,152 | $ 4,162 | $ 2,478 | $ 1,225 |
Portfolio turnover rateF | 111%A | 84% | 65% | 62% | 52% | 47%A |
A Annualized B Total returns for periods of less than one year are not annualized. CTotal returns would have been lower had certain expenses not been reduced during the periods shown. DCalculated based on average shares outstanding during the period. EFees 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. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GFor the period September 12, 2002 (commencement of operations) to July 31, 2003. 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. 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. ITotal distributions of $1.337 per share is comprised of distributions from net investment income of $.252 and distributions from net realized gain of $1.085 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, 2008 (Unaudited)
1. Organization.
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.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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.
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.
A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
3. Significant Accounting Policies - continued
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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Foreign Currency - continued
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 distributions from the Fidelity Central Funds are accrued as earned. 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 substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Effective with the beginning of the Fund's fiscal year the Fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. 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.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
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 short-term capital gains, foreign currency transactions 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 | $ 35,285,133 |
Unrealized depreciation | (28,672,866) |
Net unrealized appreciation (depreciation) | $ 6,612,267 |
| |
Cost for federal income tax purposes | $ 296,972,715 |
New Accounting Pronouncement. 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.
4. 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
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies - continued
Repurchase Agreements - continued
collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $150,147,685 and $152,770,163, respectively.
6. 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 .55% 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% | $ 135,306 | $ 18,060 |
Class T | .25% | .25% | 229,022 | - |
Class B | .75% | .25% | 108,087 | 81,064 |
Class C | .75% | .25% | 153,020 | 32,096 |
| | | $ 625,435 | $ 131,220 |
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
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
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 | $ 27,948 |
Class T | 6,461 |
Class B* | 34,852 |
Class C* | 11,340 |
| $ 80,601 |
* 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 | $ 162,773 | .30 |
Class T | 143,381 | .31 |
Class B | 32,545 | .30 |
Class C | 45,884 | .30 |
Institutional Class | 26,816 | .30 |
| $ 411,399 | |
* 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.
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 $2,070 for the period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. 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 $414 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. 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 $73,079.
9. 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 $559 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 $1,025. During the period, credits reduced each class' transfer agent expense as noted in the table below.
| Transfer Agent
expense reduction |
Class A | $ 1,991 |
Institutional Class | 120 |
| $ 2,111 |
Semiannual Report
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed 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 was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
Subsequent to period end, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $8,019.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
January 31, | Year ended
July 31, |
| 2008 | 2007 |
From net investment income | | |
Class A | $ 1,028,404 | $ 910,999 |
Class T | 539,251 | 671,347 |
Class B | 86,808 | 73,434 |
Class C | 124,679 | 121,385 |
Institutional Class | 292,962 | 104,002 |
Total | $ 2,072,104 | $ 1,881,167 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
11. Distributions to Shareholders - continued
| Six months ended
January 31, | Year ended
July 31, |
| 2008 | 2007 |
From net realized gain | | |
Class A | $ 6,384,488 | $ 7,016,390 |
Class T | 5,512,566 | 7,245,930 |
Class B | 1,322,406 | 2,110,416 |
Class C | 1,827,178 | 3,021,230 |
Institutional Class | 725,051 | 614,563 |
Total | $ 15,771,689 | $ 20,008,529 |
12. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
January 31, | Year ended
July 31, | Six months ended
January 31, | Year ended
July 31, |
| 2008 | 2007 | 2008 | 2007 |
Class A | | | | |
Shares sold | 1,122,460 | 4,162,272 | $ 20,167,293 | $ 91,668,160 |
Reinvestment of distributions | 386,912 | 360,748 | 7,075,020 | 7,512,896 |
Shares redeemed | (2,057,878) | (2,390,088) | (37,291,714) | (51,262,823) |
Net increase (decrease) | (548,506) | 2,132,932 | $ (10,049,401) | $ 47,918,233 |
Class T | | | | |
Shares sold | 518,524 | 3,133,447 | $ 9,222,649 | $ 69,066,846 |
Reinvestment of distributions | 319,347 | 366,028 | 5,850,825 | 7,615,273 |
Shares redeemed | (1,596,338) | (2,592,591) | (28,881,291) | (55,812,105) |
Net increase (decrease) | (758,467) | 906,884 | $ (13,807,817) | $ 20,870,014 |
Class B | | | | |
Shares sold | 53,270 | 522,263 | $ 957,208 | $ 11,374,401 |
Reinvestment of distributions | 69,276 | 95,389 | 1,261,925 | 1,975,227 |
Shares redeemed | (416,645) | (618,201) | (7,503,545) | (13,210,441) |
Net increase (decrease) | (294,099) | (549) | $ (5,284,412) | $ 139,187 |
Class C | | | | |
Shares sold | 156,329 | 1,257,900 | $ 2,804,174 | $ 27,435,286 |
Reinvestment of distributions | 95,565 | 135,205 | 1,740,332 | 2,802,482 |
Shares redeemed | (727,624) | (1,217,050) | (13,202,031) | (25,938,064) |
Net increase (decrease) | (475,730) | 176,055 | $ (8,657,525) | $ 4,299,704 |
Institutional Class | | | | |
Shares sold | 3,334,886 | 643,980 | $ 55,152,992 | $ 14,342,713 |
Reinvestment of distributions | 40,847 | 30,501 | 744,359 | 638,492 |
Shares redeemed | (453,513) | (371,732) | (8,246,768) | (8,144,253) |
Net increase (decrease) | 2,922,220 | 302,749 | $ 47,650,583 | $ 6,836,952 |
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
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
(Fidelity Investment logo)(registered trademark)
AREI-USAN-0308
1.789731.105
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: | April 1, 2008 |
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: | April 1, 2008 |
By: | /s/Joseph B. Hollis |
| Joseph B. Hollis |
| Chief Financial Officer |
| |
Date: | April 1, 2008 |
