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)
245 Summer St., Boston, Massachusetts 02210
(Address of principal executive offices) (Zip code)
Marc Bryant Secretary
245 Summer St.
Boston, Massachusetts 02210
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-563-7000
Date of fiscal year end: | July 31 |
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Date of reporting period: | July 31, 2014 |
Item 1. Reports to Stockholders
Fidelity Advisor
Focus Funds®
Class A, Class T, Class B and Class C
Fidelity Advisor® Biotechnology Fund
Fidelity Advisor Communications Equipment Fund
Fidelity Advisor Consumer Discretionary Fund
Fidelity Advisor Electronics Fund
Fidelity Advisor Energy Fund
Fidelity Advisor Financial Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Industrials Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Fund
Annual Report
July 31, 2014
(Fidelity Cover Art)
Contents
Fidelity Advisor® | Performance | |
Management's Discussion of Fund Performance | ||
| Shareholder Expense Example | |
Investment Changes | ||
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor | Performance | |
Management's Discussion of Fund Performance | ||
| Shareholder Expense Example | |
Investment Changes | ||
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor | Performance | |
Management's Discussion of Fund Performance | ||
| Shareholder Expense Example | |
Investment Changes | ||
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor Electronics Fund | Performance | |
| Management's Discussion of Fund Performance | |
| Shareholder Expense Example | |
| Investment Changes | |
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor Energy Fund | Performance | |
| Management's Discussion of Fund Performance | |
| Shareholder Expense Example | |
| Investment Changes | |
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor Financial | Performance | |
Management's Discussion of Fund Performance | ||
| Shareholder Expense Example | |
Investment Changes | ||
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor Health Care Fund | Performance | |
| Management's Discussion of Fund Performance | |
| Shareholder Expense Example | |
| Investment Changes | |
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor Industrials Fund | Performance | |
| Management's Discussion of Fund Performance | |
| Shareholder Expense Example | |
| Investment Changes | |
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor Technology Fund | Performance | |
| Management's Discussion of Fund Performance | |
| Shareholder Expense Example | |
| Investment Changes | |
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor Utilities Fund | Performance | |
| Management's Discussion of Fund Performance | |
| Shareholder Expense Example | |
| Investment Changes | |
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Report of Independent Registered Public Accounting Firm |
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Trustees and Officers |
| |
Distributions |
| |
Board Approval of Investment Advisory Contracts and Management Fees |
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To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2014 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the funds. This report is not authorized for distribution to prospective investors in the funds unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the funds nor Fidelity Distributors Corporation is a bank.
Annual Report
Fidelity Advisor® Biotechnology Fund - Class A, T, B, and C
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow. Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 years |
Class A (incl. 5.75% sales charge) | 10.63% | 23.83% | 13.71% |
Class T (incl. 3.50% sales charge) | 12.85% | 24.04% | 13.66% |
Class B (incl. contingent deferred sales charge) A | 11.42% | 24.19% | 13.77% |
Class C (incl. contingent deferred sales charge) B | 15.54% | 24.40% | 13.53% |
A Class B shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 5%, 2%, and 0%, respectively.
B Class C shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 1%, 0%, and 0%, respectively.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Biotechnology Fund - Class A on July 31, 2004, and the current 5.75% sales charge was paid. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
Annual Report
Fidelity Advisor Biotechnology Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Rajiv Kaul, Portfolio Manager of Fidelity Advisor® Biotechnology Fund: For the year, the fund's Class A, Class T, Class B and Class C shares returned 17.38%, 16.95%, 16.42% and 16.54%, respectively (excluding sales charges), lagging the 24.79% advance of the MSCI U.S. IMI Biotechnology 25-50 Index but about in line with the S&P 500®. Favorable product stories and investors' preference for companies with earnings growth that was less dependent on the broader U.S. economy spurred solid performance in biotechnology stocks. A large overweighting in Aegerion Pharmaceuticals made this stock by far the fund's biggest detractor versus the MSCI index. In November 2013, the company received a warning letter from the U.S. Food and Drug Administration about its marketing of JUXTAPID®, Aegerion's oral treatment for a rare but potentially fatal disease that causes high cholesterol. I viewed this development as only a temporary setback for the stock, so I significantly increased our stake as the shares declined. A number of other key detractors were strong-performing large-cap index components in which the fund was underweighted: Gilead Sciences, Celgene and Amgen. Gilead was easily the fund's largest holding, with an average weighting of roughly 15% of net assets, so our exposure here was significant but less than the benchmark's. In Amgen's case, I significantly reduced our stake to free up cash for investing in smaller-cap stocks that I thought were undervalued. Conversely, the top relative contributor by a wide margin was Intercept Pharmaceuticals. This stock rocketed higher in January, after the firm announced that a clinical trial of obeticholic acid, a treatment for a common fatty liver disease, was stopped early because the drug was clearly effective. Pacira Pharmaceuticals also contributed to relative performance. This stock rose fairly steadily during the period, as sales of EXPAREL®, the firm's injectable non-opioid pain reliever for post-surgical patients, steadily gained traction. Pacira was an out-of-benchmark position. I'll also mention Puma Biotechnology, which saw the value of its shares more than triple in July, after positive phase three results from testing neratinib as a treatment for women suffering from a form of early-stage breast cancer.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.07% |
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|
|
Actual |
| $ 1,000.00 | $ 956.40 | $ 5.19 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.49 | $ 5.36 |
Class T | 1.40% |
|
|
|
Actual |
| $ 1,000.00 | $ 954.70 | $ 6.79 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.85 | $ 7.00 |
Class B | 1.87% |
|
|
|
Actual |
| $ 1,000.00 | $ 952.40 | $ 9.05 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.52 | $ 9.35 |
Class C | 1.82% |
|
|
|
Actual |
| $ 1,000.00 | $ 952.50 | $ 8.81 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.77 | $ 9.10 |
Institutional Class | .80% |
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|
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Actual |
| $ 1,000.00 | $ 957.80 | $ 3.88 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.83 | $ 4.01 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Biotechnology Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Gilead Sciences, Inc. | 15.3 | 14.3 |
Celgene Corp. | 6.1 | 5.9 |
Vertex Pharmaceuticals, Inc. | 5.5 | 3.2 |
Biogen Idec, Inc. | 3.7 | 7.7 |
Amgen, Inc. | 3.4 | 9.2 |
Alexion Pharmaceuticals, Inc. | 3.4 | 4.5 |
Regeneron Pharmaceuticals, Inc. | 3.3 | 3.2 |
Puma Biotechnology, Inc. | 3.0 | 1.4 |
Intercept Pharmaceuticals, Inc. | 2.6 | 3.6 |
InterMune, Inc. | 2.3 | 0.5 |
| 48.6 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
 | Biotechnology | 94.8% |
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 | Pharmaceuticals | 5.1% |
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 | Life Sciences Tools & Services | 0.0%† |
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 | Personal Products | 0.0%† |
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 | Health Care Equipment & Supplies | 0.0%† |
|
 | All Others* | 0.1% |
|
As of January 31, 2014 | |||
| Biotechnology | 93.6% |
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| Pharmaceuticals | 3.1% |
|
| Health Care Providers & Services | 0.3% |
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| Life Sciences Tools & Services | 0.0%† |
|
| Health Care Equipment & Supplies | 0.0%† |
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| All Others* | 3.0% |
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* Includes short-term investments and net other assets (liabilities). |
† Amount represents less than 0.1%. |
Annual Report
Fidelity Advisor Biotechnology Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 99.5% | |||
Shares | Value | ||
BIOTECHNOLOGY - 94.5% | |||
Biotechnology - 94.5% | |||
ACADIA Pharmaceuticals, Inc. (a)(d) | 417,586 | $ 8,464,468 | |
Acceleron Pharma, Inc. | 504,023 | 14,929,161 | |
Achillion Pharmaceuticals, Inc. (a)(d) | 985,172 | 6,748,428 | |
Acorda Therapeutics, Inc. (a) | 613,487 | 17,956,764 | |
Actelion Ltd. | 59,339 | 7,176,183 | |
Adamas Pharmaceuticals, Inc. | 215,821 | 3,433,712 | |
ADMA Biologics, Inc. | 50,300 | 497,970 | |
Aegerion Pharmaceuticals, Inc. (a) | 436,143 | 14,658,766 | |
Agenus, Inc. (a) | 9,425 | 31,103 | |
Agenus, Inc. warrants 1/9/18 (a) | 452,000 | 25,954 | |
Agios Pharmaceuticals, Inc. | 17,087 | 688,606 | |
Akebia Therapeutics, Inc. (a)(d) | 101,100 | 2,238,354 | |
Alder Biopharmaceuticals, Inc. | 115,442 | 1,949,815 | |
Aldeyra Therapeutics, Inc. (e) | 278,295 | 993,513 | |
Alexion Pharmaceuticals, Inc. (a) | 322,999 | 51,353,611 | |
Alkermes PLC (a) | 308,256 | 13,181,027 | |
Alnylam Pharmaceuticals, Inc. (a) | 184,161 | 9,953,902 | |
AMAG Pharmaceuticals, Inc. (a)(d) | 118,935 | 2,270,469 | |
Ambit Biosciences Corp. (a) | 14,910 | 83,049 | |
Amgen, Inc. | 408,817 | 52,079,198 | |
Anacor Pharmaceuticals, Inc. (a)(d) | 246,113 | 4,097,781 | |
Applied Genetic Technologies Corp. | 99,465 | 1,591,440 | |
Ardelyx, Inc. | 232,350 | 3,359,781 | |
Arena Pharmaceuticals, Inc. (a)(d) | 6,328 | 29,299 | |
ARIAD Pharmaceuticals, Inc. (a)(d) | 1,170,695 | 6,743,203 | |
ArQule, Inc. (a) | 950 | 1,292 | |
Array BioPharma, Inc. (a) | 498,104 | 1,992,416 | |
Arrowhead Research Corp. (a) | 553,155 | 6,997,411 | |
Asterias Biotherapeutics, Inc. (a) | 115,914 | 260,807 | |
Auspex Pharmaceuticals, Inc. | 131,243 | 2,389,935 | |
Avalanche Biotechnologies, Inc. (a) | 24,604 | 688,666 | |
BioCryst Pharmaceuticals, Inc. (a) | 168,200 | 2,105,864 | |
Biogen Idec, Inc. (a) | 168,590 | 56,374,810 | |
BioMarin Pharmaceutical, Inc. (a) | 475,338 | 29,385,395 | |
Bionovo, Inc. warrants 2/2/16 (a) | 56,850 | 1 | |
Bluebird Bio, Inc. (a) | 23,249 | 776,517 | |
Cara Therapeutics, Inc. | 184,735 | 2,355,371 | |
Catalyst Pharmaceutical Partners, Inc.: | |||
warrants 5/2/17 (a) | 8,557 | 8,628 | |
warrants 5/30/17 (a) | 17,900 | 22,600 | |
Celgene Corp. (a) | 1,064,361 | 92,759,061 | |
Cell Therapeutics, Inc. warrants 7/6/16 (a) | 46,404 | 932 | |
Celldex Therapeutics, Inc. (a)(d) | 413,902 | 5,417,977 | |
Cellectar Biosciences, Inc. (a) | 6,880 | 48,160 | |
Cepheid, Inc. (a) | 51,400 | 1,934,696 | |
Cerulean Pharma, Inc. | 530,000 | 2,135,900 | |
Chimerix, Inc. (a) | 130,682 | 2,969,095 | |
Clovis Oncology, Inc. (a)(d) | 140,534 | 5,122,464 | |
CTI BioPharma Corp. (a)(d) | 464,007 | 1,201,778 | |
Cubist Pharmaceuticals, Inc. | 262,881 | 16,009,453 | |
| |||
Shares | Value | ||
Cytokinetics, Inc. (a) | 67,916 | $ 287,285 | |
Cytokinetics, Inc. warrants 6/25/17 (a) | 244,500 | 1,315 | |
Dendreon Corp. (a)(d) | 327,540 | 678,008 | |
Dicerna Pharmaceuticals, Inc. (d) | 45,606 | 685,002 | |
Durata Therapeutics, Inc. (a)(d) | 129,737 | 1,668,418 | |
Dyax Corp. (a) | 1,096,505 | 10,329,077 | |
Dynavax Technologies Corp. (a) | 5,369 | 7,946 | |
Eleven Biotherapeutics, Inc. (d) | 123,940 | 1,359,622 | |
Emergent BioSolutions, Inc. (a) | 146,555 | 3,224,210 | |
Enanta Pharmaceuticals, Inc. (a)(d) | 140,822 | 5,296,315 | |
Epizyme, Inc. (a)(d) | 647,371 | 20,275,660 | |
Esperion Therapeutics, Inc. (a)(d) | 10,708 | 153,446 | |
Exact Sciences Corp. (a)(d) | 183,159 | 2,859,112 | |
Exelixis, Inc. (a)(d) | 263,845 | 1,065,934 | |
Fate Therapeutics, Inc. | 145,502 | 877,377 | |
Fibrocell Science, Inc. (a) | 279,800 | 937,330 | |
Foundation Medicine, Inc. | 159,200 | 3,585,184 | |
Genmab A/S (a) | 113,500 | 4,551,659 | |
Genocea Biosciences, Inc. (d) | 97,179 | 1,691,886 | |
Genomic Health, Inc. (a) | 54,120 | 1,378,978 | |
Geron Corp. (a)(d) | 2,782,517 | 6,691,953 | |
Gilead Sciences, Inc. (a) | 2,554,512 | 233,865,568 | |
Halozyme Therapeutics, Inc. (a)(d) | 410,617 | 3,999,410 | |
Heron Therapeutics, Inc. (a)(d) | 65,145 | 572,625 | |
Hyperion Therapeutics, Inc. (a)(d) | 291,271 | 6,632,241 | |
Ignyta, Inc. (a)(d) | 237,700 | 1,930,124 | |
Immune Design Corp. (a) | 140,400 | 1,684,800 | |
ImmunoGen, Inc. (a)(d) | 184,438 | 1,988,242 | |
Immunomedics, Inc. (a)(d) | 575,159 | 1,863,515 | |
Incyte Corp. (a) | 450,174 | 21,414,777 | |
Infinity Pharmaceuticals, Inc. (a) | 185,334 | 1,684,686 | |
Insys Therapeutics, Inc. (a)(d) | 166,692 | 4,505,685 | |
Intercept Pharmaceuticals, Inc. (a) | 168,060 | 39,050,422 | |
InterMune, Inc. (a) | 804,065 | 35,274,332 | |
Intrexon Corp. (d) | 109,008 | 2,407,987 | |
Ironwood Pharmaceuticals, Inc. Class A (a) | 670,651 | 9,925,635 | |
Isis Pharmaceuticals, Inc. (a)(d) | 355,594 | 11,019,858 | |
KaloBios Pharmaceuticals, Inc. (a) | 165,702 | 273,408 | |
Karyopharm Therapeutics, Inc. (d) | 475,382 | 16,491,002 | |
Keryx Biopharmaceuticals, Inc. (a)(d) | 453,112 | 6,819,336 | |
Kindred Biosciences, Inc. | 191,920 | 2,924,861 | |
Kite Pharma, Inc. | 120,180 | 2,824,230 | |
KYTHERA Biopharmaceuticals, Inc. (a)(d) | 219,330 | 7,365,101 | |
La Jolla Pharmaceutical Co. (a)(d) | 189,944 | 1,850,055 | |
Lexicon Pharmaceuticals, Inc. (a) | 1,437,492 | 2,113,113 | |
Ligand Pharmaceuticals, Inc. Class B (a) | 156,285 | 7,684,533 | |
Lion Biotechnologies, Inc. (a) | 89,246 | 638,109 | |
Macrogenics, Inc. | 461,857 | 9,375,697 | |
MannKind Corp. (a)(d) | 1,151,662 | 9,627,894 | |
Medivation, Inc. (a) | 408,359 | 30,312,489 | |
Merrimack Pharmaceuticals, Inc. (a) | 60,200 | 355,782 | |
MiMedx Group, Inc. (a)(d) | 250,413 | 1,730,354 | |
Common Stocks - continued | |||
Shares | Value | ||
BIOTECHNOLOGY - CONTINUED | |||
Biotechnology - continued | |||
Minerva Neurosciences, Inc. | 228,600 | $ 1,442,466 | |
Mirati Therapeutics, Inc. (a) | 25,300 | 459,701 | |
Momenta Pharmaceuticals, Inc. (a) | 121,037 | 1,287,834 | |
Myriad Genetics, Inc. (a)(d) | 234,057 | 8,449,458 | |
Neurocrine Biosciences, Inc. (a) | 624,728 | 8,483,806 | |
NewLink Genetics Corp. (a)(d) | 252,479 | 5,347,505 | |
Novavax, Inc. (a)(d) | 2,301,331 | 9,964,763 | |
Novelos Therapeutics, Inc. warrants 12/6/16 (a) | 137,600 | 1 | |
NPS Pharmaceuticals, Inc. (a) | 439,525 | 12,280,329 | |
OncoMed Pharmaceuticals, Inc. (d) | 120,434 | 2,600,170 | |
Ophthotech Corp. (d) | 624,137 | 24,378,791 | |
Opko Health, Inc. (a)(d) | 791,951 | 6,985,008 | |
Oragenics, Inc. (a) | 250,308 | 438,039 | |
Orexigen Therapeutics, Inc. (a)(d) | 1,349,072 | 6,731,869 | |
Organovo Holdings, Inc. (a)(d) | 244,983 | 1,854,521 | |
Osiris Therapeutics, Inc. (a) | 203,971 | 3,018,771 | |
OvaScience, Inc. (a)(d) | 96,100 | 942,741 | |
PDL BioPharma, Inc. (d) | 99,788 | 936,011 | |
Pharmacyclics, Inc. (a) | 185,133 | 22,297,419 | |
PolyMedix, Inc. (a) | 7,142 | 143 | |
PolyMedix, Inc. warrants 4/10/16 (a) | 163,833 | 2 | |
Portola Pharmaceuticals, Inc. (a) | 248,117 | 6,237,661 | |
Progenics Pharmaceuticals, Inc. (a) | 607,944 | 2,905,972 | |
Prosensa Holding BV (a)(d) | 112,766 | 1,113,000 | |
Protalix BioTherapeutics, Inc. (a)(d) | 90,943 | 299,202 | |
Prothena Corp. PLC (a) | 54,500 | 946,120 | |
PTC Therapeutics, Inc. (a) | 233,912 | 6,179,955 | |
Puma Biotechnology, Inc. (a) | 203,549 | 45,130,884 | |
Raptor Pharmaceutical Corp. (a)(d) | 228,373 | 1,966,292 | |
Receptos, Inc. (a) | 229,010 | 9,483,304 | |
Regeneron Pharmaceuticals, Inc. (a) | 158,080 | 49,988,058 | |
Regulus Therapeutics, Inc. (a)(d) | 186,217 | 1,189,927 | |
Repligen Corp. (a) | 228,585 | 4,793,427 | |
Rigel Pharmaceuticals, Inc. (a) | 416,077 | 1,360,572 | |
Sage Therapeutics, Inc. (a) | 226,646 | 6,395,950 | |
Sage Therapeutics, Inc. | 25,896 | 657,707 | |
Sangamo Biosciences, Inc. (a)(d) | 982,368 | 11,670,532 | |
Sarepta Therapeutics, Inc. (a)(d) | 160,901 | 3,433,627 | |
Seattle Genetics, Inc. (a)(d) | 196,850 | 6,929,120 | |
Sophiris Bio, Inc. (a) | 141,653 | 368,298 | |
Sorrento Therapeutics, Inc. (a) | 45,800 | 249,152 | |
Spectrum Pharmaceuticals, Inc. (a) | 338,247 | 2,381,259 | |
Stemline Therapeutics, Inc. (a)(d) | 292,993 | 3,753,240 | |
Sunesis Pharmaceuticals, Inc. (a) | 443,217 | 2,916,368 | |
Synageva BioPharma Corp. (a)(d) | 168,200 | 11,506,562 | |
Synergy Pharmaceuticals, Inc. (a)(d) | 242,484 | 885,067 | |
Synergy Pharmaceuticals, Inc. warrants 11/14/16 (a) | 20,600 | 21,630 | |
| |||
Shares | Value | ||
Synta Pharmaceuticals Corp. (a)(d) | 471,286 | $ 1,861,580 | |
Synthetic Biologics, Inc. (a) | 100 | 175 | |
TESARO, Inc. (a) | 153,779 | 4,422,684 | |
Threshold Pharmaceuticals, Inc. (a) | 92,584 | 389,779 | |
Threshold Pharmaceuticals, Inc. warrants 3/16/16 (a) | 35,146 | 67,297 | |
Ultragenyx Pharmaceutical, Inc. | 71,735 | 3,134,820 | |
uniQure B.V. | 63,432 | 648,275 | |
United Therapeutics Corp. (a) | 152,594 | 13,876,898 | |
Verastem, Inc. (a) | 202,208 | 1,494,317 | |
Versartis, Inc. (a)(d) | 211,002 | 4,304,441 | |
Versartis, Inc. | 97,274 | 1,785,951 | |
Vertex Pharmaceuticals, Inc. (a) | 951,126 | 84,564,613 | |
Vical, Inc. (a) | 659,862 | 864,419 | |
Vital Therapies, Inc. | 180,500 | 4,133,450 | |
Xencor, Inc. | 187,673 | 1,812,921 | |
XOMA Corp. (a) | 709,143 | 2,751,475 | |
Zafgen, Inc. (d) | 891,452 | 15,600,410 | |
Zafgen, Inc. | 129,125 | 2,033,719 | |
ZIOPHARM Oncology, Inc. (a)(d) | 59,779 | 187,108 | |
| 1,445,902,940 | ||
HEALTH CARE EQUIPMENT & SUPPLIES - 0.0% | |||
Health Care Equipment - 0.0% | |||
Alsius Corp. (a) | 14,200 | 0 | |
InVivo Therapeutics Holdings Corp. (a) | 98,300 | 90,436 | |
| 90,436 | ||
LIFE SCIENCES TOOLS & SERVICES - 0.0% | |||
Life Sciences Tools & Services - 0.0% | |||
BG Medicine, Inc. (a)(d) | 75,570 | 71,792 | |
ChromaDex, Inc. (a) | 143,866 | 192,780 | |
Transgenomic, Inc. (a) | 16,258 | 64,056 | |
Transgenomic, Inc. warrants 2/3/17 (a) | 81,000 | 1 | |
| 328,629 | ||
PERSONAL PRODUCTS - 0.0% | |||
Personal Products - 0.0% | |||
MYOS Corp. (a) | 6,666 | 91,991 | |
PHARMACEUTICALS - 5.0% | |||
Pharmaceuticals - 5.0% | |||
AcelRx Pharmaceuticals, Inc. (a)(d) | 52,410 | 364,774 | |
Achaogen, Inc. (a) | 141,215 | 1,526,534 | |
ALK-Abello A/S | 1,500 | 216,318 | |
Aradigm Corp. (a) | 8,241 | 69,505 | |
Aradigm Corp. (a) | 545 | 4,633 | |
Auxilium Pharmaceuticals, Inc. (a)(d) | 200,238 | 4,008,765 | |
AVANIR Pharmaceuticals Class A (a) | 1,482,487 | 7,723,757 | |
ContraVir Pharmaceuticals, Inc. (a)(d) | 23,908 | 30,124 | |
Egalet Corp. (d) | 196,663 | 2,379,622 | |
Endocyte, Inc. (a) | 1,544 | 10,244 | |
Horizon Pharma, Inc. (a)(d) | 811,450 | 6,897,325 | |
Common Stocks - continued | |||
Shares | Value | ||
PHARMACEUTICALS - CONTINUED | |||
Pharmaceuticals - continued | |||
Horizon Pharma, Inc. warrants 9/25/17 (a) | 55,250 | $ 226,964 | |
Intra-Cellular Therapies, Inc. (d) | 225,154 | 3,262,481 | |
Jazz Pharmaceuticals PLC (a) | 70,620 | 9,867,733 | |
NeurogesX, Inc. (a) | 187,202 | 880 | |
Pacira Pharmaceuticals, Inc. (a) | 152,160 | 13,998,720 | |
Parnell Pharmaceuticals Holdings Ltd. | 123,569 | 768,599 | |
Perrigo Co. PLC | 49 | 7,372 | |
Relypsa, Inc. | 182,613 | 4,128,880 | |
Repros Therapeutics, Inc. (a)(d) | 211,800 | 2,969,436 | |
TherapeuticsMD, Inc. (a)(d) | 818,700 | 3,798,768 | |
Theravance Biopharma, Inc. (a)(d) | 44,290 | 1,241,449 | |
Theravance, Inc. (a)(d) | 249,076 | 5,404,949 | |
Zogenix, Inc. (a) | 1,284,991 | 1,696,188 | |
Zogenix, Inc. warrants 7/27/17 (a) | 32,985 | 0 | |
ZS Pharma, Inc. | 191,186 | 5,355,120 | |
| 75,959,140 | ||
TOTAL COMMON STOCKS (Cost $1,192,632,509) |
| ||
Preferred Stocks - 0.4% | |||
|
|
|
|
Convertible Preferred Stocks - 0.4% | |||
BIOTECHNOLOGY - 0.3% | |||
Biotechnology - 0.3% | |||
Avalanche Biotechnologies, Inc. Series B (f) | 89,832 | 2,262,958 | |
ProQR Therapeutics BV (f) | 2,337 | 1,643,477 | |
| 3,906,435 | ||
PHARMACEUTICALS - 0.1% | |||
Pharmaceuticals - 0.1% | |||
aTyr Pharma, Inc. 8.00% (a)(f) | 282,494 | 714,427 | |
Kolltan Pharmaceuticals, Inc. Series D (f) | 1,610,391 | 1,610,391 | |
| 2,324,818 | ||
TOTAL CONVERTIBLE PREFERRED STOCKS | 6,231,253 | ||
Nonconvertible Preferred Stocks - 0.0% | |||
BIOTECHNOLOGY - 0.0% | |||
Biotechnology - 0.0% | |||
Moderna LLC Series D, 8.00% (f) | 26,918 | 574,161 | |
| |||
Shares | Value | ||
PHARMACEUTICALS - 0.0% | |||
Pharmaceuticals - 0.0% | |||
Equilibrate Asia Therapeutics Series D (a)(f) | 299,320 | $ 4,885 | |
Equilibrate Worldwide Therapeutics Series D (a)(f) | 299,320 | 12,024 | |
Neuropathic Worldwide Therapeutics Series D (a)(f) | 299,320 | 2,254 | |
Oculus Worldwide Therapeutics Series D (a)(f) | 299,320 | 3,756 | |
Orchestrate U.S. Therapeutics, Inc. Series D (a)(f) | 299,320 | 5,259 | |
Orchestrate Worldwide Therapeutics Series D (a)(f) | 299,320 | 9,393 | |
| 37,571 | ||
TOTAL NONCONVERTIBLE PREFERRED STOCKS | 611,732 | ||
TOTAL PREFERRED STOCKS (Cost $5,308,379) |
| ||
Money Market Funds - 8.4% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 6,633,107 | 6,633,107 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 121,475,612 | 121,475,612 | |
TOTAL MONEY MARKET FUNDS (Cost $128,108,719) |
| ||
TOTAL INVESTMENT PORTFOLIO - 108.3% (Cost $1,326,049,607) | 1,657,324,840 | ||
NET OTHER ASSETS (LIABILITIES) - (8.3)% | (126,798,273) | ||
NET ASSETS - 100% | $ 1,530,526,567 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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) Affiliated company |
(f) 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 $6,842,985 or 0.4% of net assets. |
Additional information on each restricted holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
aTyr Pharma, Inc. 8.00% | 4/8/13 - 5/17/13 | $ 714,427 |
Avalanche Biotechnologies, Inc. Series B | 4/17/14 | $ 676,435 |
Equilibrate Asia Therapeutics Series D | 5/17/13 | $ 4,885 |
Equilibrate Worldwide Therapeutics Series D | 5/17/13 | $ 12,024 |
Kolltan Pharmaceuticals, Inc. Series D | 3/13/14 | $ 1,610,391 |
Moderna LLC Series D, 8.00% | 11/6/13 | $ 574,161 |
Neuropathic Worldwide Therapeutics Series D | 5/17/13 | $ 2,254 |
Oculus Worldwide Therapeutics Series D | 5/17/13 | $ 3,756 |
Orchestrate U.S. Therapeutics, Inc. Series D | 5/17/13 | $ 5,259 |
Orchestrate Worldwide Therapeutics Series D | 5/17/13 | $ 9,393 |
ProQR Therapeutics BV | 4/17/14 | $ 1,695,394 |
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 | $ 12,703 |
Fidelity Securities Lending Cash Central Fund | 2,336,849 |
Total | $ 2,349,552 |
Other Affiliated Issuers |
An affiliated company is a company in which the Fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows: |
Affiliate | Value, | Purchases | Sales | Dividend | Value, |
Aldeyra Therapeutics, Inc. | $ - | $ 2,219,341 | $ - | $ - | $ 993,513 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 1,522,373,136 | $ 1,517,542,064 | $ 4,831,072 | $ - |
Preferred Stocks | 6,842,985 | - | 2,262,958 | 4,580,027 |
Money Market Funds | 128,108,719 | 128,108,719 | - | - |
Total Investments in Securities: | $ 1,657,324,840 | $ 1,645,650,783 | $ 7,094,030 | $ 4,580,027 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Biotechnology Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $113,523,863) - See accompanying schedule: Unaffiliated issuers (cost $1,195,721,547) | $ 1,528,222,608 |
|
Fidelity Central Funds (cost $128,108,719) | 128,108,719 |
|
Other affiliated issuers (cost $2,219,341) | 993,513 |
|
Total Investments (cost $1,326,049,607) |
| $ 1,657,324,840 |
Receivable for investments sold | 2,417,358 | |
Receivable for fund shares sold | 4,396,165 | |
Distributions receivable from Fidelity Central Funds | 397,907 | |
Other receivables | 2,321 | |
Total assets | 1,664,538,591 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 7,112,941 | |
Payable for fund shares redeemed | 3,836,805 | |
Accrued management fee | 704,864 | |
Distribution and service plan fees payable | 473,542 | |
Other affiliated payables | 299,092 | |
Other payables and accrued expenses | 109,168 | |
Collateral on securities loaned, at value | 121,475,612 | |
Total liabilities | 134,012,024 | |
|
|
|
Net Assets | $ 1,530,526,567 | |
Net Assets consist of: |
| |
Paid in capital | $ 1,197,814,678 | |
Accumulated net investment loss | (6,816,483) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 8,253,139 | |
Net unrealized appreciation (depreciation) on investments | 331,275,233 | |
Net Assets | $ 1,530,526,567 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 20.19 | |
|
|
|
Maximum offering price per share (100/94.25 of $20.19) | $ 21.42 | |
Class T: | $ 19.39 | |
|
|
|
Maximum offering price per share (100/96.50 of $19.39) | $ 20.09 | |
Class B: | $ 18.01 | |
|
|
|
Class C: | $ 18.04 | |
|
|
|
Institutional Class: | $ 21.10 | |
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.
Annual Report
Fidelity Advisor Biotechnology Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 2,482,457 |
Interest |
| 2,977 |
Income from Fidelity Central Funds (including $2,336,849 from security lending) |
| 2,349,552 |
Total income |
| 4,834,986 |
|
|
|
Expenses | ||
Management fee | $ 6,811,384 | |
Transfer agent fees | 2,583,031 | |
Distribution and service plan fees | 4,548,469 | |
Accounting and security lending fees | 411,556 | |
Custodian fees and expenses | 59,779 | |
Independent trustees' compensation | 27,881 | |
Registration fees | 237,578 | |
Audit | 46,947 | |
Legal | 12,413 | |
Interest | 1,541 | |
Miscellaneous | 10,548 | |
Total expenses before reductions | 14,751,127 | |
Expense reductions | (34,011) | 14,717,116 |
Net investment income (loss) | (9,882,130) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 15,834,775 | |
Foreign currency transactions | 918 | |
Total net realized gain (loss) |
| 15,835,693 |
Change in net unrealized appreciation (depreciation) on investment securities | 126,643,560 | |
Net gain (loss) | 142,479,253 | |
Net increase (decrease) in net assets resulting from operations | $ 132,597,123 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (9,882,130) | $ (2,400,307) |
Net realized gain (loss) | 15,835,693 | (3,418,106) |
Change in net unrealized appreciation (depreciation) | 126,643,560 | 172,587,152 |
Net increase (decrease) in net assets resulting from operations | 132,597,123 | 166,768,739 |
Distributions to shareholders from net realized gain | (3,083,051) | (10,422,000) |
Share transactions - net increase (decrease) | 713,552,409 | 368,981,342 |
Redemption fees | 133,198 | 20,216 |
Total increase (decrease) in net assets | 843,199,679 | 525,348,297 |
|
|
|
Net Assets | ||
Beginning of period | 687,326,888 | 161,978,591 |
End of period (including accumulated net investment loss of $6,816,483 and accumulated net investment loss of $1,831,365, respectively) | $ 1,530,526,567 | $ 687,326,888 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 17.25 | $ 11.79 | $ 8.81 | $ 6.67 | $ 6.94 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.13) | (.09) | (.07) | (.07) F | (.08) G |
Net realized and unrealized gain (loss) | 3.12 | 6.24 | 3.05 | 2.21 | (.19) |
Total from investment operations | 2.99 | 6.15 | 2.98 | 2.14 | (.27) |
Distributions from net realized gain | (.05) | (.69) | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 20.19 | $ 17.25 | $ 11.79 | $ 8.81 | $ 6.67 |
Total ReturnA, B | 17.38% | 54.94% | 33.83% | 32.08% | (3.89)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.08% | 1.15% | 1.27% | 1.35% | 1.39% |
Expenses net of fee waivers, if any | 1.08% | 1.15% | 1.27% | 1.35% | 1.39% |
Expenses net of all reductions | 1.08% | 1.14% | 1.27% | 1.34% | 1.38% |
Net investment income (loss) | (.68)% | (.63)% | (.73)% | (.91)% F | (1.15)% G |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 602,625 | $ 286,695 | $ 68,993 | $ 30,639 | $ 20,154 |
Portfolio turnover rateE | 50% | 22% | 82% | 99% | 130% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.04)%.
G Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.29)%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 16.63 | $ 11.42 | $ 8.56 | $ 6.50 | $ 6.78 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.19) | (.12) | (.10) | (.09) F | (.09) G |
Net realized and unrealized gain (loss) | 3.00 | 6.02 | 2.96 | 2.15 | (.19) |
Total from investment operations | 2.81 | 5.90 | 2.86 | 2.06 | (.28) |
Distributions from net realized gain | (.05) | (.69) | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 19.39 | $ 16.63 | $ 11.42 | $ 8.56 | $ 6.50 |
Total ReturnA, B | 16.95% | 54.50% | 33.41% | 31.69% | (4.13)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.41% | 1.46% | 1.56% | 1.64% | 1.69% |
Expenses net of fee waivers, if any | 1.41% | 1.46% | 1.56% | 1.64% | 1.65% |
Expenses net of all reductions | 1.40% | 1.46% | 1.56% | 1.64% | 1.64% |
Net investment income (loss) | (1.01)% | (.94)% | (1.02)% | (1.21)% F | (1.41)% G |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 95,945 | $ 67,887 | $ 28,154 | $ 16,454 | $ 11,684 |
Portfolio turnover rateE | 50% | 22% | 82% | 99% | 130% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.34)%.
G Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.55)%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 15.52 | $ 10.75 | $ 8.09 | $ 6.17 | $ 6.47 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.26) | (.17) | (.13) | (.12) F | (.12) G |
Net realized and unrealized gain (loss) | 2.80 | 5.63 | 2.79 | 2.04 | (.18) |
Total from investment operations | 2.54 | 5.46 | 2.66 | 1.92 | (.30) |
Distributions from net realized gain | (.05) | (.69) | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 18.01 | $ 15.52 | $ 10.75 | $ 8.09 | $ 6.17 |
Total ReturnA, B | 16.42% | 53.76% | 32.88% | 31.12% | (4.64)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.89% | 1.94% | 2.03% | 2.10% | 2.14% |
Expenses net of fee waivers, if any | 1.89% | 1.94% | 2.03% | 2.10% | 2.14% |
Expenses net of all reductions | 1.88% | 1.94% | 2.02% | 2.09% | 2.13% |
Net investment income (loss) | (1.49)% | (1.42)% | (1.49)% | (1.66)% F | (1.90)% G |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 6,101 | $ 8,136 | $ 6,349 | $ 5,849 | $ 6,297 |
Portfolio turnover rateE | 50% | 22% | 82% | 99% | 130% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.79)%.
G Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (2.04)%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 15.53 | $ 10.76 | $ 8.10 | $ 6.18 | $ 6.47 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.25) | (.17) | (.13) | (.12) F | (.12) G |
Net realized and unrealized gain (loss) | 2.81 | 5.63 | 2.79 | 2.04 | (.17) |
Total from investment operations | 2.56 | 5.46 | 2.66 | 1.92 | (.29) |
Distributions from net realized gain | (.05) | (.69) | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 18.04 | $ 15.53 | $ 10.76 | $ 8.10 | $ 6.18 |
Total ReturnA, B | 16.54% | 53.71% | 32.84% | 31.07% | (4.48)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.83% | 1.88% | 2.01% | 2.10% | 2.14% |
Expenses net of fee waivers, if any | 1.83% | 1.88% | 2.01% | 2.10% | 2.14% |
Expenses net of all reductions | 1.83% | 1.87% | 2.01% | 2.09% | 2.13% |
Net investment income (loss) | (1.43)% | (1.36)% | (1.47)% | (1.66)% F | (1.90)% G |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 359,967 | $ 146,684 | $ 31,710 | $ 15,787 | $ 11,421 |
Portfolio turnover rateE | 50% | 22% | 82% | 99% | 130% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.79)%.
G Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (2.04)%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 17.97 | $ 12.22 | $ 9.10 | $ 6.87 | $ 7.12 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | (.08) | (.05) | (.04) | (.05) E | (.06) F |
Net realized and unrealized gain (loss) | 3.26 | 6.49 | 3.16 | 2.28 | (.19) |
Total from investment operations | 3.18 | 6.44 | 3.12 | 2.23 | (.25) |
Distributions from net realized gain | (.05) | (.69) | - | - | - |
Redemption fees added to paid in capital B, H | - | - | - | - | - |
Net asset value, end of period | $ 21.10 | $ 17.97 | $ 12.22 | $ 9.10 | $ 6.87 |
Total ReturnA | 17.74% | 55.39% | 34.29% | 32.46% | (3.51)% |
Ratios to Average Net Assets C, G |
|
|
|
|
|
Expenses before reductions | .81% | .85% | .95% | 1.04% | 1.07% |
Expenses net of fee waivers, if any | .81% | .85% | .95% | 1.04% | 1.07% |
Expenses net of all reductions | .80% | .84% | .94% | 1.03% | 1.06% |
Net investment income (loss) | (.41)% | (.32)% | (.40)% | (.60)% E | (.83)% F |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 465,889 | $ 177,926 | $ 26,772 | $ 5,903 | $ 3,008 |
Portfolio turnover rateD | 50% | 22% | 82% | 99% | 130% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.73)%.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.97)%.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Annual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. 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. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), partnerships, net operating losses, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 448,874,092 |
Gross unrealized depreciation | (123,618,223) |
Net unrealized appreciation (depreciation) on securities | $ 325,255,869 |
|
|
Tax Cost | $ 1,332,068,971 |
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Undistributed long-term capital gain | $ 14,272,505 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 325,255,869 |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Long-term Capital Gains | $ 3,083,051 | $ 10,422,000 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,320,090,617 and $610,606,472, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 1,277,012 | $ 34,881 |
Class T | .25% | .25% | 434,339 | 2,886 |
Class B | .75% | .25% | 77,485 | 58,326 |
Class C | .75% | .25% | 2,759,633 | 1,738,659 |
|
|
| $ 4,548,469 | $ 1,834,752 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Annual Report
5. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 1,085,516 |
Class T | 76,720 |
Class B* | 13,831 |
Class C* | 127,045 |
| $ 1,303,112 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 1,070,342 | .21 |
Class T | 248,578 | .29 |
Class B | 20,560 | .27 |
Class C | 575,016 | .21 |
Institutional Class | 668,535 | .19 |
| $ 2,583,031 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $26,947 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 or other affiliated entities of 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 Loan | Weighted Average | Interest |
Borrower | $ 6,730,048 | .32% | $ 1,236 |
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,946 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit
Annual Report
Notes to Financial Statements - continued
7. Security Lending - continued
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, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. During the period, there were no securities loaned to FCM.
8. Bank Borrowings.
The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity requirements. The Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average loan balance during the period for which loans were outstanding amounted to $4,645,000. The weighted average interest rate was .59%. The interest expense amounted to $305 under the bank borrowing program. At period end, there were no bank borrowings outstanding.
9. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $34,011 for the period.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net realized gain |
|
|
Class A | $ 1,291,021 | $ 4,291,683 |
Class T | 234,772 | 1,771,667 |
Class B | 24,488 | 386,626 |
Class C | 722,216 | 2,278,583 |
Institutional Class | 810,554 | 1,693,441 |
Total | $ 3,083,051 | $ 10,422,000 |
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 26,291,422 | 13,694,524 | $ 513,888,215 | $ 191,221,226 |
Reinvestment of distributions | 64,680 | 314,111 | 1,162,299 | 3,649,967 |
Shares redeemed | (13,129,582) | (3,240,220) | (254,303,314) | (42,003,741) |
Net increase (decrease) | 13,226,520 | 10,768,415 | $ 260,747,200 | $ 152,867,452 |
Class T |
|
|
|
|
Shares sold | 2,490,442 | 2,069,871 | $ 47,007,190 | $ 26,930,551 |
Reinvestment of distributions | 13,197 | 149,494 | 228,306 | 1,678,816 |
Shares redeemed | (1,639,876) | (601,268) | (30,470,117) | (7,670,183) |
Net increase (decrease) | 863,763 | 1,618,097 | $ 16,765,379 | $ 20,939,184 |
Class B |
|
|
|
|
Shares sold | 92,681 | 144,734 | $ 1,623,597 | $ 1,825,757 |
Reinvestment of distributions | 1,384 | 32,327 | 22,292 | 340,408 |
Shares redeemed | (279,647) | (243,257) | (4,810,522) | (2,832,185) |
Net increase (decrease) | (185,582) | (66,196) | $ (3,164,633) | $ (666,020) |
Annual Report
11. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class C |
|
|
|
|
Shares sold | 14,509,075 | 7,472,327 | $ 256,484,365 | $ 93,824,317 |
Reinvestment of distributions | 36,658 | 172,010 | 591,299 | 1,812,981 |
Shares redeemed | (4,036,055) | (1,149,639) | (69,713,827) | (13,555,676) |
Net increase (decrease) | 10,509,678 | 6,494,698 | $ 187,361,837 | $ 82,081,622 |
Institutional Class |
|
|
|
|
Shares sold | 21,677,297 | 9,398,986 | $ 442,824,898 | $ 138,330,404 |
Reinvestment of distributions | 35,974 | 114,710 | 674,146 | 1,385,697 |
Shares redeemed | (9,529,193) | (1,804,114) | (191,656,418) | (25,956,997) |
Net increase (decrease) | 12,184,078 | 7,709,582 | $ 251,842,626 | $ 113,759,104 |
12. 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.
Annual Report
Fidelity Advisor Communications Equipment Fund - Class A, T, B, and C
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow. Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) C | 10.11% | 9.63% | 6.00% |
Class T (incl. 3.50% sales charge) C | 12.47% | 9.88% | 5.98% |
Class B (incl. contingent deferred sales charge)A,C | 11.06% | 9.82% | 6.07% |
Class C (incl. contingent deferred sales charge)B,C | 14.95% | 10.11% | 5.82% |
A Class B shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 5%, 2%, and 0%, respectively.
B Class C shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 1%, 0%, and 0%, respectively.
C Prior to October 1, 2006, Fidelity Advisor Communications Equipment Fund was named Fidelity Advisor Developing Communications Fund, and the fund operated under certain different investment policies and compared its performance to a different additional index. The fund's historical performance may not represent its current investment policies.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Communications Equipment Fund - Class A on July 31, 2004, and the current 5.75% sales charge was paid. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Communications Equipment
Fidelity Advisor Communications Equipment Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Ali Khan, Portfolio Manager of Fidelity Advisor® Communications Equipment Fund: For the year, the fund's Class A, Class T, Class B and Class C shares returned 16.83%, 16.55%, 16.06% and 15.95%, respectively (excluding sales charges), straddling the 16.29% advance of the S&P® Custom Communications Equipment Index and trailing the S&P 500®. While communications equipment stocks handily outperformed the broader market during the first six months of the period, driven especially by strength in the technology hardware, storage & peripherals segment, the S&P 500® played some catch-up in the second half. I generally had good success with my method of buying above-average businesses at below-average valuations. However, our positions in two stocks in the industry benchmark were particularly unrewarding and kept the fund from finishing with better relative results. The fund's largest relative detractor was Finland-based Nokia, an index component in which the fund had a sizable underweighting to start the period because I thought the firm faced significant challenges from smartphone rivals such as Apple and Korea's Samsung Electronics. However, Nokia's stock price more than doubled during the period, with most of this gain occurring in September 2013, the month Microsoft announced plans to buy the company's handset business and license many of its patents. I added to our stake here to bring the position more in line with the fund's other telecom equipment holdings, although Nokia remained an underweighting at period end. The other significant relative detractor was Arris Group, an index component the fund didn't own that also posted an advance of more than 100% during the period. I was skeptical of the company's ability to integrate a recent large acquisition, but this process went more smoothly than I expected, which helped its stock. Conversely, the fund's top relative contributor was JDS Uniphase, a poorly performing index stock I avoided for most of the first half of the period. Like many telecom-related companies, this one tends to experience cyclical ebbs and flows in its fundamentals, and I thought investors had become too negative on the stock, so I established a stake in January. This worked out well, as I managed to avoid most of the downside in this stock. A non-benchmark position in Apple also worked out well. About six months prior to the start of the period, sentiment about this stock was relatively negative, and it was trading at a discount to similar companies. Apple was a good fit for my emphasis on high quality at reasonable valuation, so I established a position here. The stock responded with a gain of 51% for the year, so I trimmed our stake to nail down profits. An out-of-benchmark position in specialty server provider Super Micro Computer also proved timely. As I anticipated, the company's costs fell back in line and profits expanded when hard-disk drive manufacturing plants of the firm's Thailand-based suppliers came on line after recent flooding there abated. Subsequently, I thought this stock's price reflected most of the improvement I had anticipated, so I liquidated the position. The fund's cash position also lifted relative performance during the period.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.40% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,052.00 | $ 7.12 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.85 | $ 7.00 |
Class T | 1.65% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,051.00 | $ 8.39 |
HypotheticalA |
| $ 1,000.00 | $ 1,016.61 | $ 8.25 |
Class B | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,048.70 | $ 10.92 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Class C | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,047.70 | $ 10.92 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Institutional Class | 1.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,052.90 | $ 5.85 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.09 | $ 5.76 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Communications Equipment Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Cisco Systems, Inc. | 17.6 | 18.1 |
QUALCOMM, Inc. | 14.8 | 16.0 |
Nokia Corp. sponsored ADR | 5.5 | 4.5 |
Juniper Networks, Inc. | 4.7 | 5.8 |
Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 4.6 | 4.4 |
Alcatel-Lucent SA sponsored ADR | 3.5 | 3.6 |
Riverbed Technology, Inc. | 3.3 | 3.0 |
F5 Networks, Inc. | 3.3 | 4.9 |
Plantronics, Inc. | 2.5 | 1.7 |
Motorola Solutions, Inc. | 2.3 | 2.5 |
| 62.1 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Communications Equipment | 73.4% |
|
| Technology Hardware, Storage & Peripherals | 8.9% |
|
| Software | 3.6% |
|
| Semiconductors & Semiconductor Equipment | 2.7% |
|
| Internet Software & Services | 2.5% |
|
| All Others* | 8.9% |
|
As of January 31, 2014 | |||
| Communications Equipment | 85.3% |
|
| Semiconductors & Semiconductor Equipment | 2.9% |
|
| Computers & Peripherals | 2.6% |
|
| Internet Software & Services | 1.8% |
|
| IT Services | 1.7% |
|
| All Others* | 5.7% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Communications Equipment Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 91.9% | |||
Shares | Value | ||
COMMUNICATIONS EQUIPMENT - 73.4% | |||
Communications Equipment - 73.4% | |||
ADTRAN, Inc. | 2,100 | $ 46,704 | |
ADVA Optical Networking SE (a) | 16,128 | 59,994 | |
Alcatel-Lucent SA sponsored ADR | 147,057 | 504,406 | |
Aruba Networks, Inc. (a) | 12,340 | 220,392 | |
Calix Networks, Inc. (a) | 3,500 | 32,515 | |
Ciena Corp. (a)(d) | 4,200 | 82,026 | |
Cisco Systems, Inc. | 100,724 | 2,541,267 | |
Comtech Telecommunications Corp. | 400 | 13,520 | |
Emulex Corp. (a) | 5,200 | 30,576 | |
F5 Networks, Inc. (a) | 4,265 | 480,196 | |
Finisar Corp. (a)(d) | 3,900 | 76,947 | |
InterDigital, Inc. | 2,800 | 123,452 | |
Ixia (a) | 13,700 | 146,590 | |
JDS Uniphase Corp. (a) | 10,400 | 123,448 | |
Juniper Networks, Inc. | 28,588 | 672,962 | |
Motorola Solutions, Inc. | 5,247 | 334,129 | |
NETGEAR, Inc. (a) | 4,800 | 150,288 | |
Palo Alto Networks, Inc. (a) | 2,900 | 234,494 | |
Plantronics, Inc. | 7,800 | 366,366 | |
Polycom, Inc. (a) | 16,299 | 208,953 | |
Procera Networks, Inc. (a) | 1,200 | 12,012 | |
QUALCOMM, Inc. | 28,981 | 2,135,900 | |
Radware Ltd. (a) | 15,100 | 247,489 | |
Riverbed Technology, Inc. (a) | 26,858 | 480,758 | |
Ruckus Wireless, Inc. (a) | 14,900 | 192,359 | |
Sonus Networks, Inc. (a) | 47,600 | 168,028 | |
Spirent Communications PLC | 46,800 | 81,304 | |
Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR (d) | 53,020 | 659,039 | |
ViaSat, Inc. (a) | 2,300 | 134,481 | |
Wi-Lan, Inc. (d) | 15,100 | 48,471 | |
| 10,609,066 | ||
ELECTRICAL EQUIPMENT - 0.4% | |||
Electrical Components & Equipment - 0.4% | |||
General Cable Corp. | 2,500 | 55,575 | |
HEALTH CARE TECHNOLOGY - 0.4% | |||
Health Care Technology - 0.4% | |||
Vocera Communications, Inc. (a) | 4,500 | 56,565 | |
INTERNET SOFTWARE & SERVICES - 2.5% | |||
Internet Software & Services - 2.5% | |||
Google, Inc.: | |||
Class A (a) | 299 | 173,285 | |
Class C (a) | 309 | 176,624 | |
Rackspace Hosting, Inc. (a) | 600 | 18,174 | |
| 368,083 | ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.7% | |||
Semiconductors - 2.7% | |||
Altera Corp. | 8,200 | 268,304 | |
| |||
Shares | Value | ||
Semtech Corp. (a) | 3,100 | $ 69,223 | |
Xilinx, Inc. | 1,400 | 57,582 | |
| 395,109 | ||
SOFTWARE - 3.6% | |||
Application Software - 0.8% | |||
BroadSoft, Inc. (a) | 3,500 | 85,400 | |
Interactive Intelligence Group, Inc. (a) | 700 | 31,759 | |
| 117,159 | ||
Systems Software - 2.8% | |||
Gigamon, Inc. (a)(d) | 3,400 | 39,236 | |
Imperva, Inc. (a) | 2,400 | 53,208 | |
Infoblox, Inc. (a) | 7,100 | 86,052 | |
Oracle Corp. | 2,900 | 117,131 | |
Rovi Corp. (a) | 1,800 | 42,066 | |
Symantec Corp. | 2,700 | 63,882 | |
| 401,575 | ||
TOTAL SOFTWARE | 518,734 | ||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 8.9% | |||
Technology Hardware, Storage & Peripherals - 8.9% | |||
Apple, Inc. | 732 | 69,957 | |
BlackBerry Ltd. (a)(d) | 31,900 | 297,627 | |
Nokia Corp. sponsored ADR | 99,920 | 792,366 | |
QLogic Corp. (a) | 13,500 | 122,850 | |
| 1,282,800 | ||
TOTAL COMMON STOCKS (Cost $10,944,115) |
| ||
Money Market Funds - 12.9% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 1,291,510 | 1,291,510 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 575,130 | 575,130 | |
TOTAL MONEY MARKET FUNDS (Cost $1,866,640) |
| ||
TOTAL INVESTMENT PORTFOLIO - 104.8% (Cost $12,810,755) | 15,152,572 | ||
NET OTHER ASSETS (LIABILITIES) - (4.8)% | (698,431) | ||
NET ASSETS - 100% | $ 14,454,141 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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 | $ 870 |
Fidelity Securities Lending Cash Central Fund | 8,602 |
Total | $ 9,472 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 81.3% |
Finland | 5.5% |
Sweden | 4.6% |
France | 3.5% |
Canada | 2.4% |
Israel | 1.7% |
Others (Individually Less Than 1%) | 1.0% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Communications Equipment Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $537,295) - See accompanying schedule: Unaffiliated issuers (cost $10,944,115) | $ 13,285,932 |
|
Fidelity Central Funds (cost $1,866,640) | 1,866,640 |
|
Total Investments (cost $12,810,755) |
| $ 15,152,572 |
Receivable for investments sold | 15,024 | |
Receivable for fund shares sold | 35,128 | |
Dividends receivable | 309 | |
Distributions receivable from Fidelity Central Funds | 200 | |
Receivable from investment adviser for expense reductions | 1,773 | |
Other receivables | 144 | |
Total assets | 15,205,150 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 117,216 | |
Payable for fund shares redeemed | 4,450 | |
Accrued management fee | 6,703 | |
Distribution and service plan fees payable | 5,337 | |
Other affiliated payables | 3,821 | |
Other payables and accrued expenses | 38,352 | |
Collateral on securities loaned, at value | 575,130 | |
Total liabilities | 751,009 | |
|
|
|
Net Assets | $ 14,454,141 | |
Net Assets consist of: |
| |
Paid in capital | $ 12,822,685 | |
Undistributed net investment income | 23,615 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (733,978) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 2,341,819 | |
Net Assets | $ 14,454,141 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 11.94 | |
|
|
|
Maximum offering price per share (100/94.25 of $11.94) | $ 12.67 | |
Class T: | $ 11.55 | |
|
|
|
Maximum offering price per share (100/96.50 of $11.55) | $ 11.97 | |
Class B: | $ 10.77 | |
|
|
|
Class C: | $ 10.76 | |
|
|
|
Institutional Class: | $ 12.35 | |
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.
Annual Report
Fidelity Advisor Communications Equipment Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 221,137 |
Special dividends |
| 35,460 |
Interest |
| 20 |
Income from Fidelity Central Funds |
| 9,472 |
Income before foreign taxes withheld |
| 266,089 |
Less foreign taxes withheld |
| (15,265) |
Total income |
| 250,824 |
|
|
|
Expenses | ||
Management fee | $ 77,401 | |
Transfer agent fees | 40,560 | |
Distribution and service plan fees | 58,052 | |
Accounting and security lending fees | 5,571 | |
Custodian fees and expenses | 8,600 | |
Independent trustees' compensation | 335 | |
Registration fees | 53,414 | |
Audit | 46,702 | |
Legal | 256 | |
Interest | 547 | |
Miscellaneous | 517 | |
Total expenses before reductions | 291,955 | |
Expense reductions | (73,726) | 218,229 |
Net investment income (loss) | 32,595 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 685,929 | |
Foreign currency transactions | (136) | |
Total net realized gain (loss) |
| 685,793 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 1,223,848 | |
Assets and liabilities in foreign currencies | 2 | |
Total change in net unrealized appreciation (depreciation) |
| 1,223,850 |
Net gain (loss) | 1,909,643 | |
Net increase (decrease) in net assets resulting from operations | $ 1,942,238 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 32,595 | $ (7,046) |
Net realized gain (loss) | 685,793 | 329,684 |
Change in net unrealized appreciation (depreciation) | 1,223,850 | 2,517,574 |
Net increase (decrease) in net assets resulting from operations | 1,942,238 | 2,840,212 |
Distributions to shareholders from net investment income | - | (3,925) |
Share transactions - net increase (decrease) | 1,539,076 | (1,708,594) |
Redemption fees | 568 | 1,030 |
Total increase (decrease) in net assets | 3,481,882 | 1,128,723 |
|
|
|
Net Assets | ||
Beginning of period | 10,972,259 | 9,843,536 |
End of period (including undistributed net investment income of $23,615 and accumulated net investment loss of $8,844, respectively) | $ 14,454,141 | $ 10,972,259 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.22 | $ 7.71 | $ 9.73 | $ 8.67 | $ 7.28 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .04 F | .02 | (.01) | (.06) | (.11) |
Net realized and unrealized gain (loss) | 1.68 | 2.50 | (1.81) | 1.12 | 1.50 |
Total from investment operations | 1.72 | 2.52 | (1.82) | 1.06 | 1.39 |
Distributions from net investment income | - | (.01) | - | - | - |
Distributions from net realized gain | - | - | (.20) | - | - |
Total distributions | - | (.01) | (.20) | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 11.94 | $ 10.22 | $ 7.71 | $ 9.73 | $ 8.67 |
Total ReturnA, B | 16.83% | 32.65% | (18.88)% | 12.23% | 19.09% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 1.96% | 2.22% | 1.96% | 1.64% | 1.90% |
Expenses net of fee waivers, if any | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% |
Expenses net of all reductions | 1.39% | 1.37% | 1.39% | 1.39% | 1.38% |
Net investment income (loss) | .40% F | .18% | (.16)% | (.60)% | (1.32)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 4,725 | $ 3,962 | $ 3,568 | $ 8,787 | $ 4,860 |
Portfolio turnover rateE | 160% | 33% | 79% | 101% | 106% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .14%.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 9.91 | $ 7.49 | $ 9.48 | $ 8.46 | $ 7.13 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .02 F | (.01) | (.03) | (.09) | (.13) |
Net realized and unrealized gain (loss) | 1.62 | 2.43 | (1.76) | 1.11 | 1.46 |
Total from investment operations | 1.64 | 2.42 | (1.79) | 1.02 | 1.33 |
Distributions from net realized gain | - | - | (.20) | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 11.55 | $ 9.91 | $ 7.49 | $ 9.48 | $ 8.46 |
Total ReturnA, B | 16.55% | 32.31% | (19.06)% | 12.06% | 18.65% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 2.25% | 2.52% | 2.27% | 1.97% | 2.20% |
Expenses net of fee waivers, if any | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% |
Expenses net of all reductions | 1.64% | 1.62% | 1.64% | 1.64% | 1.63% |
Net investment income (loss) | .14% F | (.07)% | (.41)% | (.85)% | (1.57)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 3,995 | $ 3,342 | $ 2,843 | $ 4,607 | $ 3,273 |
Portfolio turnover rateE | 160% | 33% | 79% | 101% | 106% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.11)%.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 9.28 | $ 7.05 | $ 8.99 | $ 8.06 | $ 6.83 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.04) F | (.05) | (.07) | (.13) | (.16) |
Net realized and unrealized gain (loss) | 1.53 | 2.28 | (1.67) | 1.06 | 1.39 |
Total from investment operations | 1.49 | 2.23 | (1.74) | .93 | 1.23 |
Distributions from net realized gain | - | - | (.20) | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 10.77 | $ 9.28 | $ 7.05 | $ 8.99 | $ 8.06 |
Total ReturnA, B | 16.06% | 31.63% | (19.56)% | 11.54% | 18.01% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 2.74% | 3.00% | 2.71% | 2.47% | 2.68% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.14% | 2.13% | 2.13% | 2.14% | 2.13% |
Net investment income (loss) | (.36)% F | (.57)% | (.91)% | (1.35)% | (2.07)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 399 | $ 480 | $ 570 | $ 1,316 | $ 1,408 |
Portfolio turnover rateE | 160% | 33% | 79% | 101% | 106% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.61)%.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 9.28 | $ 7.05 | $ 8.98 | $ 8.06 | $ 6.82 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.04) F | (.05) | (.07) | (.13) | (.16) |
Net realized and unrealized gain (loss) | 1.52 | 2.28 | (1.66) | 1.05 | 1.40 |
Total from investment operations | 1.48 | 2.23 | (1.73) | .92 | 1.24 |
Distributions from net realized gain | - | - | (.20) | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 10.76 | $ 9.28 | $ 7.05 | $ 8.98 | $ 8.06 |
Total ReturnA, B | 15.95% | 31.63% | (19.47)% | 11.41% | 18.18% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 2.73% | 2.98% | 2.71% | 2.40% | 2.67% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.14% | 2.12% | 2.14% | 2.14% | 2.13% |
Net investment income (loss) | (.35)% F | (.57)% | (.91)% | (1.35)% | (2.07)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 2,744 | $ 2,334 | $ 2,142 | $ 5,866 | $ 3,029 |
Portfolio turnover rateE | 160% | 33% | 79% | 101% | 106% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.61)%.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.55 | $ 7.95 | $ 10.00 | $ 8.88 | $ 7.45 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .08 E | .04 | .01 | (.04) | (.09) |
Net realized and unrealized gain (loss) | 1.72 | 2.58 | (1.86) | 1.16 | 1.52 |
Total from investment operations | 1.80 | 2.62 | (1.85) | 1.12 | 1.43 |
Distributions from net investment income | - | (.02) | - | - | - |
Distributions from net realized gain | - | - | (.20) | - | - |
Total distributions | - | (.02) | (.20) | - | - |
Redemption fees added to paid in capital B, G | - | - | - | - | - |
Net asset value, end of period | $ 12.35 | $ 10.55 | $ 7.95 | $ 10.00 | $ 8.88 |
Total ReturnA | 17.06% | 32.92% | (18.66)% | 12.61% | 19.19% |
Ratios to Average Net Assets C, F |
|
|
|
|
|
Expenses before reductions | 1.45% | 1.93% | 1.66% | 1.22% | 1.54% |
Expenses net of fee waivers, if any | 1.15% | 1.15% | 1.15% | 1.15% | 1.15% |
Expenses net of all reductions | 1.14% | 1.12% | 1.13% | 1.14% | 1.13% |
Net investment income (loss) | .65% E | .43% | .10% | (.35)% | (1.07)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 2,592 | $ 855 | $ 721 | $ 2,855 | $ 1,717 |
Portfolio turnover rateD | 160% | 33% | 79% | 101% | 106% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .39%.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds ,including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Annual Report
3. Significant Accounting Policies - continued
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Large, non-recurring dividends recognized by the Fund are presented separately on the Statement of Operations as "Special Dividends" and the impact of these dividends is presented in the Financial Highlights. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 2,568,670 |
Gross unrealized depreciation | (385,372) |
Net unrealized appreciation (depreciation) on securities | $ 2,183,298 |
|
|
Tax Cost | $ 12,969,274 |
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 23,616 |
Capital loss carryforward | $ (575,460) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 2,183,300 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
No expiration |
|
Short-term | $ (575,460) |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ - | $ 3,925 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $21,079,675 and $19,926,735, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment advisor and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 10,291 | $ 137 |
Class T | .25% | .25% | 18,664 | - |
Class B | .75% | .25% | 4,228 | 3,171 |
Class C | .75% | .25% | 24,869 | 4,459 |
|
|
| $ 58,052 | $ 7,767 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Annual Report
5. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 3,542 |
Class T | 1,750 |
Class B* | 1,323 |
Class C* | 285 |
| $ 6,900 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 12,773 | .31 |
Class T | 13,022 | .35 |
Class B | 1,316 | .31 |
Class C | 7,789 | .31 |
Institutional Class | 5,660 | .17 |
| $ 40,560 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $1,773 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $24 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $8,602. During the period, there were no securities loaned to FCM.
Annual Report
Notes to Financial Statements - continued
8. Bank Borrowings.
The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity requirements. The Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average loan balance during the period for which loans were outstanding amounted to $6,771,400. The weighted average interest rate was .58%. The interest expense amounted to $547 under the bank borrowing program.
9. Expense Reductions.
The investment adviser voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense | Reimbursement |
Class A | 1.40% | $ 23,119 |
Class T | 1.65% | 22,382 |
Class B | 2.15% | 2,485 |
Class C | 2.15% | 14,282 |
Institutional Class | 1.15% | 9,684 |
|
| $ 71,952 |
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $1,765 for the period. In addition, through arrangements with the Fund's custodian, 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 $9.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net investment income |
|
|
Class A | $ - | $ 2,612 |
Institutional Class | - | 1,313 |
Total | $ - | $ 3,925 |
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 118,184 | 119,229 | $ 1,378,044 | $ 1,075,395 |
Reinvestment of distributions | - | 272 | - | 2,398 |
Shares redeemed | (110,145) | (194,578) | (1,218,133) | (1,739,434) |
Net increase (decrease) | 8,039 | (75,077) | $ 159,911 | $ (661,641) |
Class T |
|
|
|
|
Shares sold | 51,248 | 54,310 | $ 564,493 | $ 477,965 |
Shares redeemed | (42,610) | (96,623) | (470,057) | (817,480) |
Net increase (decrease) | 8,638 | (42,313) | $ 94,436 | $ (339,515) |
Class B |
|
|
|
|
Shares sold | 64 | 612 | $ 624 | $ 4,500 |
Shares redeemed | (14,700) | (29,754) | (144,244) | (242,910) |
Net increase (decrease) | (14,636) | (29,142) | $ (143,620) | $ (238,410) |
Class C |
|
|
|
|
Shares sold | 74,081 | 99,311 | $ 769,830 | $ 848,531 |
Shares redeemed | (70,636) | (151,640) | (715,373) | (1,232,762) |
Net increase (decrease) | 3,445 | (52,329) | $ 54,457 | $ (384,231) |
Annual Report
11. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Institutional Class |
|
|
|
|
Shares sold | 1,448,765 | 37,292 | $ 17,115,064 | $ 354,493 |
Reinvestment of distributions | - | 122 | - | 1,105 |
Shares redeemed | (1,319,932) | (47,116) | (15,741,172) | (440,395) |
Net increase (decrease) | 128,833 | (9,702) | $ 1,373,892 | $ (84,797) |
12. 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.
Annual Report
Fidelity Advisor Consumer Discretionary Fund - Class A, T, B, and C
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow. Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge)C | 2.99% | 18.30% | 8.05% |
Class T (incl. 3.50% sales charge)C | 5.12% | 18.54% | 8.03% |
Class B (incl. contingent deferred sales charge) A, C | 3.39% | 18.59% | 8.13% |
Class C (incl. contingent deferred sales charge) B, C | 7.45% | 18.85% | 7.89% |
A Class B shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 5%, 2%, and 0%, respectively.
B Class C shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 1%, 0%, and 0%, respectively.
C Prior to October 1, 2006, Fidelity Advisor Consumer Discretionary Fund was named Fidelity Advisor Consumer Industries Fund, and the fund operated under certain different investment policies and compared its performance to a different additional index. The fund's historical performance may not represent its current investment policies.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Consumer Discretionary Fund - Class A on July 31, 2004, and the current 5.75% sales charge was paid. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Consumer Discretionary Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Peter Dixon, who became Portfolio Manager of Portfolio Manager of Fidelity Advisor® Consumer Discretionary Fund on July 1, 2014: For the year, the fund's Class A, Class T, Class B and Class C shares advanced 9.28%, 8.94%, 8.36% and 8.44%, respectively (excluding sales charges), underperforming the 12.63% gain of the MSCI U.S. IMI Consumer Discretionary 25-50 Index and the S&P 500®. The sector tumbled after a long stretch of outperformance, as a harsh winter hindered sales for brick-and-mortar retailers. Intense competition in the industry hurt margins, which dampened the performance of many stocks in the index. Multiple factors weighed on consumers' discretionary spending, including concern over rising oil prices in the period's second half, tepid wage growth and an uptick in inflation, despite reduced personal debt loads. However, fundamentals appeared to be improving, as housing strengthened, unemployment trended lower and auto sales increased. Signs of economic improvement in the broad market, despite some volatility, also helped consumer confidence. Looking at individual stocks, it hurt the most to underweight Internet and cable provider Comcast. In January, the stock benefited from speculation that the firm would merge with another cable giant, Time Warner. Additionally, Comcast announced higher fourth-quarter revenue, raised its dividend and authorized a new share repurchase program, which pleased investors. Elsewhere, off-price retailer Ross Stores detracted, as the stock fell on weak first-quarter financial results, dampened by ongoing softness in retail foot traffic. Ross Stores was not held in the fund at period end. Conversely, an overweighting in digital cable provider DIRECTV was the fund's biggest individual contributor. The stock jumped in May when the company announced it would be acquired by telecom giant AT&T. Apparel retail was another source of strength. Here, it helped to overweight athletic footwear seller Foot Locker, as the firm reported quarterly financial results that easily surpassed analysts' expectations, benefiting from growing demand for specialty sneakers. Additionally, investors liked management's consistent stock-repurchase program, as well as recently announced plans to remodel more than 300 retail stores in 2014 - both of which drove the stock higher.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.16% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,038.40 | $ 5.86 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.04 | $ 5.81 |
Class T | 1.45% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,036.50 | $ 7.32 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.60 | $ 7.25 |
Class B | 1.97% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,033.90 | $ 9.93 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.03 | $ 9.84 |
Class C | 1.92% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,033.90 | $ 9.68 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.27 | $ 9.59 |
Institutional Class | .87% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,040.10 | $ 4.40 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.48 | $ 4.36 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Consumer Discretionary Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
The Walt Disney Co. | 6.6 | 6.1 |
Home Depot, Inc. | 5.5 | 0.0 |
priceline.com, Inc. | 3.8 | 2.4 |
TJX Companies, Inc. | 3.5 | 2.7 |
DIRECTV | 3.5 | 3.7 |
CBS Corp. Class B | 3.3 | 0.0 |
Time Warner Cable, Inc. | 3.3 | 0.0 |
NIKE, Inc. Class B | 3.2 | 0.4 |
Time Warner, Inc. | 3.1 | 3.1 |
Twenty-First Century Fox, Inc. Class A | 2.9 | 3.7 |
| 38.7 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Media | 33.0% |
|
| Specialty Retail | 19.1% |
|
| Hotels, Restaurants & Leisure | 14.8% |
|
| Textiles, Apparel & Luxury Goods | 11.1% |
|
| Internet & Catalog Retail | 5.6% |
|
| All Others* | 16.4% |
|
As of January 31, 2014 | |||
| Specialty Retail | 27.2% |
|
| Media | 22.0% |
|
| Hotels, Restaurants & Leisure | 14.8% |
|
| Multiline Retail | 11.6% |
|
| Textiles, Apparel & Luxury Goods | 9.4% |
|
| All Others* | 15.0% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Consumer Discretionary Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 97.3% | |||
Shares | Value | ||
AUTO COMPONENTS - 4.4% | |||
Auto Parts & Equipment - 4.4% | |||
Delphi Automotive PLC | 46,084 | $ 3,078,411 | |
Tenneco, Inc. (a) | 35,800 | 2,280,460 | |
| 5,358,871 | ||
AUTOMOBILES - 1.3% | |||
Automobile Manufacturers - 1.3% | |||
Ford Motor Co. | 32,951 | 560,826 | |
General Motors Co. | 7,500 | 253,650 | |
Hyundai Motor Co. | 1,568 | 371,137 | |
Tata Motors Ltd. | 51,639 | 377,741 | |
| 1,563,354 | ||
BEVERAGES - 0.5% | |||
Soft Drinks - 0.5% | |||
Monster Beverage Corp. (a) | 10,100 | 645,996 | |
COMMERCIAL SERVICES & SUPPLIES - 2.4% | |||
Diversified Support Services - 2.4% | |||
KAR Auction Services, Inc. | 100,904 | 2,957,496 | |
FOOD PRODUCTS - 0.5% | |||
Packaged Foods & Meats - 0.5% | |||
Keurig Green Mountain, Inc. | 5,600 | 667,968 | |
HOTELS, RESTAURANTS & LEISURE - 14.8% | |||
Casinos & Gaming - 2.6% | |||
Las Vegas Sands Corp. | 27,900 | 2,060,415 | |
Wynn Resorts Ltd. | 5,300 | 1,129,960 | |
| 3,190,375 | ||
Hotels, Resorts & Cruise Lines - 3.7% | |||
Marriott International, Inc. Class A | 22,250 | 1,439,798 | |
Wyndham Worldwide Corp. | 39,786 | 3,005,832 | |
| 4,445,630 | ||
Restaurants - 8.5% | |||
Fiesta Restaurant Group, Inc. (a) | 17,500 | 794,150 | |
Jubilant Foodworks Ltd. (a) | 15,613 | 322,547 | |
McDonald's Corp. | 13,677 | 1,293,297 | |
Ruth's Hospitality Group, Inc. | 47,200 | 535,720 | |
Starbucks Corp. | 46,000 | 3,573,280 | |
Texas Roadhouse, Inc. Class A | 52,041 | 1,294,780 | |
Yum! Brands, Inc. | 37,014 | 2,568,772 | |
| 10,382,546 | ||
TOTAL HOTELS, RESTAURANTS & LEISURE | 18,018,551 | ||
HOUSEHOLD DURABLES - 2.3% | |||
Homebuilding - 1.6% | |||
KB Home | 26,400 | 430,320 | |
Lennar Corp. Class A | 17,300 | 626,779 | |
PulteGroup, Inc. | 37,400 | 660,110 | |
Ryland Group, Inc. | 7,800 | 250,380 | |
| 1,967,589 | ||
| |||
Shares | Value | ||
Household Appliances - 0.7% | |||
Whirlpool Corp. | 6,100 | $ 870,104 | |
TOTAL HOUSEHOLD DURABLES | 2,837,693 | ||
INTERNET & CATALOG RETAIL - 5.6% | |||
Internet Retail - 5.6% | |||
HomeAway, Inc. (a) | 8,300 | 288,176 | |
Liberty Interactive Corp. Series A (a) | 67,468 | 1,892,477 | |
priceline.com, Inc. (a) | 3,740 | 4,646,763 | |
| 6,827,416 | ||
LEISURE PRODUCTS - 1.2% | |||
Leisure Products - 1.2% | |||
Brunswick Corp. | 36,100 | 1,455,913 | |
MEDIA - 33.0% | |||
Advertising - 0.0% | |||
MDC Partners, Inc. Class A (sub. vtg.) | 600 | 12,596 | |
Broadcasting - 6.0% | |||
CBS Corp. Class B | 71,800 | 4,080,394 | |
ITV PLC | 788,929 | 2,779,777 | |
Liberty Media Corp. (a) | 6,524 | 306,628 | |
Liberty Media Corp. Class A (a) | 3,262 | 153,477 | |
| 7,320,276 | ||
Cable & Satellite - 11.6% | |||
Cablevision Systems Corp. - NY Group Class A | 32,600 | 626,572 | |
Comcast Corp. Class A | 64,800 | 3,481,704 | |
DIRECTV (a) | 49,052 | 4,220,925 | |
Liberty Global PLC: | |||
Class A (a) | 4,979 | 207,126 | |
Class C | 39,879 | 1,594,761 | |
Time Warner Cable, Inc. | 27,500 | 3,990,250 | |
| 14,121,338 | ||
Movies & Entertainment - 15.4% | |||
The Walt Disney Co. | 93,406 | 8,021,711 | |
Time Warner, Inc. | 46,000 | 3,818,920 | |
Twenty-First Century Fox, Inc. Class A | 113,033 | 3,580,885 | |
Viacom, Inc. Class B (non-vtg.) | 41,547 | 3,434,690 | |
| 18,856,206 | ||
TOTAL MEDIA | 40,310,416 | ||
MULTILINE RETAIL - 1.1% | |||
General Merchandise Stores - 1.1% | |||
B&M European Value Retail S.A. | 11,021 | 50,517 | |
Dollar Tree, Inc. (a) | 18,509 | 1,008,185 | |
Don Quijote Holdings Co. Ltd. | 4,600 | 248,556 | |
| 1,307,258 | ||
SPECIALTY RETAIL - 19.1% | |||
Apparel Retail - 8.0% | |||
Foot Locker, Inc. | 44,851 | 2,131,768 | |
Common Stocks - continued | |||
Shares | Value | ||
SPECIALTY RETAIL - CONTINUED | |||
Apparel Retail - continued | |||
L Brands, Inc. | 57,600 | $ 3,339,072 | |
TJX Companies, Inc. | 80,308 | 4,279,613 | |
| 9,750,453 | ||
Automotive Retail - 3.4% | |||
AutoZone, Inc. (a) | 4,000 | 2,068,120 | |
O'Reilly Automotive, Inc. (a) | 13,600 | 2,040,000 | |
| 4,108,120 | ||
Home Improvement Retail - 5.8% | |||
Home Depot, Inc. | 83,200 | 6,726,720 | |
Lumber Liquidators Holdings, Inc. (a) | 7,500 | 406,650 | |
| 7,133,370 | ||
Specialty Stores - 1.9% | |||
PetSmart, Inc. | 11,989 | 816,930 | |
Tiffany & Co., Inc. | 11,355 | 1,108,362 | |
World Duty Free SpA (a) | 32,264 | 368,523 | |
| 2,293,815 | ||
TOTAL SPECIALTY RETAIL | 23,285,758 | ||
TEXTILES, APPAREL & LUXURY GOODS - 11.1% | |||
Apparel, Accessories & Luxury Goods - 7.9% | |||
Compagnie Financiere Richemont SA Series A | 12,682 | 1,209,238 | |
G-III Apparel Group Ltd. (a) | 9,500 | 737,865 | |
PVH Corp. | 28,223 | 3,109,610 | |
Ralph Lauren Corp. | 17,225 | 2,684,689 | |
| |||
Shares | Value | ||
Swatch Group AG (Bearer) (Reg.) | 7,238 | $ 726,787 | |
VF Corp. | 19,104 | 1,170,502 | |
| 9,638,691 | ||
Footwear - 3.2% | |||
NIKE, Inc. Class B | 50,917 | 3,927,228 | |
TOTAL TEXTILES, APPAREL & LUXURY GOODS | 13,565,919 | ||
TOTAL COMMON STOCKS (Cost $108,427,897) |
| ||
Money Market Funds - 1.9% | |||
|
|
|
|
Fidelity Cash Central Fund,0.11% (b) | 2,393,097 |
| |
TOTAL INVESTMENT PORTFOLIO - 99.2% (Cost $110,820,994) | 121,195,706 | ||
NET OTHER ASSETS (LIABILITIES) - 0.8% | 929,707 | ||
NET ASSETS - 100% | $ 122,125,413 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 1,753 |
Fidelity Securities Lending Cash Central Fund | 7,580 |
Total | $ 9,333 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 118,802,609 | $ 117,482,628 | $ 1,319,981 | $ - |
Money Market Funds | 2,393,097 | 2,393,097 | - | - |
Total Investments in Securities: | $ 121,195,706 | $ 119,875,725 | $ 1,319,981 | $ - |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Consumer Discretionary Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $108,427,897) | $ 118,802,609 |
|
Fidelity Central Funds (cost $2,393,097) | 2,393,097 |
|
Total Investments (cost $110,820,994) |
| $ 121,195,706 |
Receivable for investments sold | 2,088,341 | |
Receivable for fund shares sold | 1,242,249 | |
Dividends receivable | 59,439 | |
Distributions receivable from Fidelity Central Funds | 593 | |
Other receivables | 881 | |
Total assets | 124,587,209 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 2,147,977 | |
Payable for fund shares redeemed | 145,142 | |
Accrued management fee | 58,219 | |
Distribution and service plan fees payable | 40,644 | |
Other affiliated payables | 29,647 | |
Other payables and accrued expenses | 40,167 | |
Total liabilities | 2,461,796 | |
|
|
|
Net Assets | $ 122,125,413 | |
Net Assets consist of: |
| |
Paid in capital | $ 99,673,196 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 12,076,670 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 10,375,547 | |
Net Assets | $ 122,125,413 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 19.75 | |
|
|
|
Maximum offering price per share (100/94.25 of $19.75) | $ 20.95 | |
Class T: | $ 18.75 | |
|
|
|
Maximum offering price per share (100/96.50 of $18.75) | $ 19.43 | |
Class B: | $ 16.76 | |
|
|
|
Class C: | $ 16.79 | |
|
|
|
Institutional Class: | $ 21.00 | |
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.
Annual Report
Fidelity Advisor Consumer Discretionary Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 1,169,025 |
Income from Fidelity Central Funds |
| 9,333 |
Total income |
| 1,178,358 |
|
|
|
Expenses | ||
Management fee | $ 659,821 | |
Transfer agent fees | 288,052 | |
Distribution and service plan fees | 473,763 | |
Accounting and security lending fees | 47,082 | |
Custodian fees and expenses | 17,505 | |
Independent trustees' compensation | 2,852 | |
Registration fees | 68,818 | |
Audit | 55,807 | |
Legal | 1,505 | |
Miscellaneous | 1,610 | |
Total expenses before reductions | 1,616,815 | |
Expense reductions | (7,754) | 1,609,061 |
Net investment income (loss) | (430,703) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 17,601,848 | |
Foreign currency transactions | (2,180) | |
Total net realized gain (loss) |
| 17,599,668 |
Change in net unrealized appreciation (depreciation) on: Investment securities | (7,704,472) | |
Assets and liabilities in foreign currencies | 896 | |
Total change in net unrealized appreciation (depreciation) |
| (7,703,576) |
Net gain (loss) | 9,896,092 | |
Net increase (decrease) in net assets resulting from operations | $ 9,465,389 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (430,703) | $ (195,793) |
Net realized gain (loss) | 17,599,668 | 9,882,077 |
Change in net unrealized appreciation (depreciation) | (7,703,576) | 10,583,809 |
Net increase (decrease) in net assets resulting from operations | 9,465,389 | 20,270,093 |
Distributions to shareholders from net realized gain | (8,442,076) | (6,688,896) |
Share transactions - net increase (decrease) | 27,584,653 | 16,864,514 |
Redemption fees | 3,923 | 6,411 |
Total increase (decrease) in net assets | 28,611,889 | 30,452,122 |
|
|
|
Net Assets | ||
Beginning of period | 93,513,524 | 63,061,402 |
End of period | $ 122,125,413 | $ 93,513,524 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 19.59 | $ 16.22 | $ 16.00 | $ 12.75 | $ 10.26 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.04) | (.02) | .01 | (.02) | (.02) |
Net realized and unrealized gain (loss) | 1.75 | 5.04 | 1.07 | 3.27 | 2.51 |
Total from investment operations | 1.71 | 5.02 | 1.08 | 3.25 | 2.49 |
Distributions from net investment income | - | - | (.03) | - | - |
Distributions from net realized gain | (1.55) | (1.65) | (.83) | - | - |
Total distributions | (1.55) | (1.65) | (.86) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 19.75 | $ 19.59 | $ 16.22 | $ 16.00 | $ 12.75 |
Total ReturnA, B | 9.28% | 33.65% | 7.96% | 25.49% | 24.27% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.20% | 1.31% | 1.38% | 1.39% | 1.44% |
Expenses net of fee waivers, if any | 1.20% | 1.31% | 1.38% | 1.39% | 1.40% |
Expenses net of all reductions | 1.19% | 1.29% | 1.37% | 1.38% | 1.39% |
Net investment income (loss) | (.21)% | (.10)% | .04% | (.15)% | (.15)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 59,089 | $ 45,292 | $ 26,547 | $ 23,447 | $ 19,423 |
Portfolio turnover rateE | 171% | 146% | 217% | 179% | 163% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 18.68 | $ 15.57 | $ 15.43 | $ 12.32 | $ 9.94 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.10) | (.06) | (.03) | (.06) | (.05) |
Net realized and unrealized gain (loss) | 1.67 | 4.81 | 1.02 | 3.17 | 2.43 |
Total from investment operations | 1.57 | 4.75 | .99 | 3.11 | 2.38 |
Distributions from net investment income | - | - | (.02) | - | - |
Distributions from net realized gain | (1.50) | (1.64) | (.83) | - | - |
Total distributions | (1.50) | (1.64) | (.85) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 18.75 | $ 18.68 | $ 15.57 | $ 15.43 | $ 12.32 |
Total ReturnA, B | 8.94% | 33.25% | 7.62% | 25.24% | 23.94% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.50% | 1.60% | 1.64% | 1.66% | 1.71% |
Expenses net of fee waivers, if any | 1.50% | 1.60% | 1.64% | 1.65% | 1.65% |
Expenses net of all reductions | 1.49% | 1.58% | 1.63% | 1.64% | 1.64% |
Net investment income (loss) | (.51)% | (.39)% | (.23)% | (.40)% | (.40)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 18,779 | $ 15,613 | $ 10,447 | $ 9,897 | $ 8,018 |
Portfolio turnover rateE | 171% | 146% | 217% | 179% | 163% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 16.85 | $ 14.23 | $ 14.23 | $ 11.42 | $ 9.26 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.17) | (.13) | (.10) | (.12) | (.10) |
Net realized and unrealized gain (loss) | 1.49 | 4.36 | .93 | 2.93 | 2.26 |
Total from investment operations | 1.32 | 4.23 | .83 | 2.81 | 2.16 |
Distributions from net realized gain | (1.41) | (1.61) | (.83) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 16.76 | $ 16.85 | $ 14.23 | $ 14.23 | $ 11.42 |
Total ReturnA, B | 8.36% | 32.61% | 7.11% | 24.61% | 23.33% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.01% | 2.09% | 2.13% | 2.15% | 2.21% |
Expenses net of fee waivers, if any | 2.01% | 2.09% | 2.13% | 2.15% | 2.15% |
Expenses net of all reductions | 2.01% | 2.07% | 2.12% | 2.13% | 2.14% |
Net investment income (loss) | (1.02)% | (.88)% | (.72)% | (.90)% | (.90)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 1,824 | $ 2,389 | $ 2,577 | $ 3,170 | $ 3,643 |
Portfolio turnover rateE | 171% | 146% | 217% | 179% | 163% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 16.90 | $ 14.27 | $ 14.26 | $ 11.44 | $ 9.27 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.16) | (.12) | (.09) | (.12) | (.10) |
Net realized and unrealized gain (loss) | 1.49 | 4.37 | .93 | 2.94 | 2.27 |
Total from investment operations | 1.33 | 4.25 | .84 | 2.82 | 2.17 |
Distributions from net realized gain | (1.44) | (1.62) | (.83) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 16.79 | $ 16.90 | $ 14.27 | $ 14.26 | $ 11.44 |
Total ReturnA, B | 8.44% | 32.68% | 7.17% | 24.65% | 23.41% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.97% | 2.04% | 2.09% | 2.11% | 2.12% |
Expenses net of fee waivers, if any | 1.97% | 2.04% | 2.09% | 2.11% | 2.12% |
Expenses net of all reductions | 1.96% | 2.02% | 2.08% | 2.09% | 2.11% |
Net investment income (loss) | (.97)% | (.83)% | (.68)% | (.86)% | (.87)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 20,726 | $ 17,176 | $ 13,507 | $ 7,341 | $ 9,288 |
Portfolio turnover rateE | 171% | 146% | 217% | 179% | 163% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 20.72 | $ 17.04 | $ 16.72 | $ 13.27 | $ 10.66 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .02 | .04 | .07 | .03 | .02 |
Net realized and unrealized gain (loss) | 1.85 | 5.32 | 1.13 | 3.42 | 2.60 |
Total from investment operations | 1.87 | 5.36 | 1.20 | 3.45 | 2.62 |
Distributions from net investment income | - | - | (.05) | - | (.01) |
Distributions from net realized gain | (1.59) | (1.68) | (.83) | - | - |
Total distributions | (1.59) | (1.68) | (.88) | - | (.01) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 21.00 | $ 20.72 | $ 17.04 | $ 16.72 | $ 13.27 |
Total ReturnA | 9.61% | 34.06% | 8.33% | 26.00% | 24.62% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .91% | .97% | 1.00% | 1.03% | 1.09% |
Expenses net of fee waivers, if any | .91% | .97% | 1.00% | 1.03% | 1.09% |
Expenses net of all reductions | .91% | .96% | .99% | 1.01% | 1.08% |
Net investment income (loss) | .08% | .24% | .41% | .22% | .16% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 21,708 | $ 13,044 | $ 9,984 | $ 9,406 | $ 9,013 |
Portfolio turnover rateD | 171% | 146% | 217% | 179% | 163% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Annual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. 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. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, deferred trustees compensation, net operating losses and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 13,005,120 |
Gross unrealized depreciation | (2,822,694) |
Net unrealized appreciation (depreciation) on securities | $ 10,182,426 |
|
|
Tax Cost | $ 111,013,280 |
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 1,678,654 |
Undistributed long-term capital gain | $ 10,590,302 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 10,183,261 |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 3,587,518 | $ 780,691 |
Long-term Capital Gains | 4,854,558 | 5,908,205 |
Total | $ 8,442,076 | $ 6,688,896 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $217,631,782 and $200,469,634, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 148,635 | $ 4,811 |
Class T | .25% | .25% | 92,884 | - |
Class B | .75% | .25% | 22,621 | 16,970 |
Class C | .75% | .25% | 209,623 | 60,404 |
|
|
| $ 473,763 | $ 82,185 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Annual Report
5. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 51,413 |
Class T | 7,088 |
Class B* | 2,151 |
Class C* | 4,439 |
| $ 65,091 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 140,064 | .24 |
Class T | 52,468 | .28 |
Class B | 6,744 | .30 |
Class C | 52,259 | .25 |
Institutional Class | 36,517 | .20 |
| $ 288,052 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $4,239 for the period.
Other. During the period, the investment adviser reimbursed the Fund for certain losses in the amount of $11,514.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $198 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $7,580. During the period, there were no securities loaned to FCM.
Annual Report
Notes to Financial Statements - continued
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $7,754 for the period.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net realized gain |
|
|
Class A | $ 4,039,405 | $ 2,760,192 |
Class T | 1,360,265 | 1,156,068 |
Class B | 196,098 | 276,657 |
Class C | 1,615,723 | 1,553,543 |
Institutional Class | 1,230,585 | 942,436 |
Total | $ 8,442,076 | $ 6,688,896 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 1,790,947 | 1,258,652 | $ 35,353,582 | $ 22,336,491 |
Reinvestment of distributions | 185,416 | 153,097 | 3,485,073 | 2,439,799 |
Shares redeemed | (1,296,503) | (736,031) | (25,801,801) | (12,466,044) |
Net increase (decrease) | 679,860 | 675,718 | $ 13,036,854 | $ 12,310,246 |
Class T |
|
|
|
|
Shares sold | 282,329 | 212,852 | $ 5,295,701 | $ 3,581,408 |
Reinvestment of distributions | 73,668 | 73,194 | 1,316,540 | 1,114,024 |
Shares redeemed | (190,454) | (121,300) | (3,590,224) | (1,949,037) |
Net increase (decrease) | 165,543 | 164,746 | $ 3,022,017 | $ 2,746,395 |
Class B |
|
|
|
|
Shares sold | 14,978 | 14,257 | $ 248,602 | $ 220,513 |
Reinvestment of distributions | 9,369 | 16,131 | 150,012 | 223,127 |
Shares redeemed | (57,312) | (69,701) | (968,609) | (1,023,777) |
Net increase (decrease) | (32,965) | (39,313) | $ (569,995) | $ (580,137) |
Class C |
|
|
|
|
Shares sold | 472,482 | 555,264 | $ 7,968,901 | $ 8,601,818 |
Reinvestment of distributions | 89,038 | 102,005 | 1,432,315 | 1,411,723 |
Shares redeemed | (343,513) | (587,502) | (5,820,370) | (8,790,601) |
Net increase (decrease) | 218,007 | 69,767 | $ 3,580,846 | $ 1,222,940 |
Institutional Class |
|
|
|
|
Shares sold | 777,526 | 404,001 | $ 16,341,397 | $ 7,620,195 |
Reinvestment of distributions | 51,438 | 46,665 | 1,028,758 | 784,588 |
Shares redeemed | (424,690) | (407,175) | (8,855,224) | (7,239,713) |
Net increase (decrease) | 404,274 | 43,491 | $ 8,514,931 | $ 1,165,070 |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report
Fidelity Advisor Electronics Fund - Class A, T, B, and C
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow. Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) | 26.46% | 14.75% | 7.14% |
Class T (incl. 3.50% sales charge) | 29.15% | 15.00% | 7.12% |
Class B (incl. contingent deferred | 28.09% | 15.03% | 7.20% |
Class C (incl. contingent deferred | 32.26% | 15.28% | 6.97% |
A Class B shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 5%, 2%, and 0%, respectively.
B Class C shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 1%, 0%, and 0%, respectively.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Electronics Fund - Class A on July 31, 2004, and the current 5.75% sales charge was paid. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Electronics Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Stephen Barwikowski, Portfolio Manager of Fidelity Advisor® Electronics Fund: For the year, the fund's Class A, Class T, Class B and Class C shares returned 34.17%, 33.83%, 33.09% and 33.26%, respectively (excluding sales charges), topping the 32.50% gain of the MSCI U.S. IMI Semiconductors & Semiconductor Equipment 25-50 Index and also outdistancing the S&P 500®. A combination of an improving macroeconomic environment, generally favorable earnings news, some industry catalysts and positive investor sentiment helped semiconductor stocks post a market-beating gain for the period. Steering clear of Cree, a maker of LED lights, proved timely given this MSCI index component's roughly 32% decline. A non-index position in Netherlands-based NXP Semiconductors also lifted performance. A key supplier of chips for near-field communication, which is used to make electronic payments with mobile devices, NXP rode a combination of expanding profit margins and debt reduction to robust earnings growth. A timely overweighting in LSI, a maker of high-performance storage and networking semiconductors, further bolstered our relative results. Based on the stock's favorable fundamentals, I increased the fund's stake here in advance of the mid-December 2013 offer by Avago Technologies to purchase the company at roughly a 41% premium to the stock's price at the time. I liquidated this position in advance of the deal's May 2014 completion to lock in profits. One other contributor was RF Micro Devices, a position I initiated during the period. Conversely, an out-of-benchmark position in electronic manufacturing services firm Jabil Circuit performed poorly, making this stock the fund's biggest relative detractor. Additionally, large average underweightings in two strong-performing MSCI index components, personal computer chipmaker Intel and DRAM computer manufacturer Micron, weighed on the fund's relative performance. I meaningfully increased the fund's stake in both stocks but remained underweighted here. Lastly, a cash position averaging 5% of net assets detracted in a robust market environment.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.40% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,194.80 | $ 7.62 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.85 | $ 7.00 |
Class T | 1.65% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,193.40 | $ 8.97 |
HypotheticalA |
| $ 1,000.00 | $ 1,016.61 | $ 8.25 |
Class B | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,190.00 | $ 11.67 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Class C | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,190.20 | $ 11.68 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Institutional Class | 1.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,196.50 | $ 6.26 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.09 | $ 5.76 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Electronics Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Intel Corp. | 16.9 | 10.8 |
Broadcom Corp. Class A | 7.8 | 10.2 |
Texas Instruments, Inc. | 6.7 | 0.9 |
Altera Corp. | 5.3 | 5.7 |
Micron Technology, Inc. | 4.8 | 2.4 |
Samsung Electronics Co. Ltd. | 4.1 | 2.8 |
Lam Research Corp. | 3.3 | 2.0 |
Xilinx, Inc. | 3.0 | 3.2 |
Analog Devices, Inc. | 3.0 | 6.7 |
QUALCOMM, Inc. | 2.9 | 1.1 |
| 57.8 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Semiconductors & Semiconductor Equipment | 82.4% |
|
| Communications Equipment | 4.5% |
|
| Electronic Equipment & Components | 3.7% |
|
| Internet Software & Services | 1.9% |
|
| Software | 1.3% |
|
| All Others* | 6.2% |
|
As of January 31, 2014 | |||
| Semiconductors & Semiconductor Equipment | 82.2% |
|
| Electronic Equipment & Components | 8.0% |
|
| Communications Equipment | 2.7% |
|
| Computers & Peripherals | 2.4% |
|
| Software | 0.9% |
|
| All Others* | 3.8% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Electronics Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 95.4% | |||
Shares | Value | ||
BIOTECHNOLOGY - 0.0% | |||
Biotechnology - 0.0% | |||
Arrowhead Research Corp. warrants 5/21/17 (a) | 64,879 | $ 1 | |
COMMERCIAL SERVICES & SUPPLIES - 0.4% | |||
Office Services & Supplies - 0.4% | |||
West Corp. | 8,683 | 223,761 | |
COMMUNICATIONS EQUIPMENT - 4.5% | |||
Communications Equipment - 4.5% | |||
Cisco Systems, Inc. | 6,787 | 171,236 | |
Emulex Corp. (a) | 29,160 | 171,461 | |
Ixia (a) | 5,686 | 60,840 | |
Juniper Networks, Inc. | 5,100 | 120,054 | |
NETGEAR, Inc. (a) | 1,630 | 51,035 | |
QUALCOMM, Inc. | 22,526 | 1,660,166 | |
Riverbed Technology, Inc. (a) | 17,914 | 320,661 | |
| 2,555,453 | ||
ELECTRONIC EQUIPMENT & COMPONENTS - 3.7% | |||
Electronic Components - 0.0% | |||
Corning, Inc. | 657 | 12,910 | |
Electronic Manufacturing Services - 3.2% | |||
Jabil Circuit, Inc. | 26,376 | 526,465 | |
Multi-Fineline Electronix, Inc. (a) | 6,879 | 67,139 | |
Neonode, Inc. (a) | 10,000 | 27,200 | |
TTM Technologies, Inc. (a) | 151,162 | 1,135,227 | |
Viasystems Group, Inc. (a) | 3,019 | 29,556 | |
| 1,785,587 | ||
Technology Distributors - 0.5% | |||
Avnet, Inc. | 7,100 | 300,543 | |
TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 2,099,040 | ||
INTERNET & CATALOG RETAIL - 0.0% | |||
Internet Retail - 0.0% | |||
Amazon.com, Inc. (a) | 1 | 313 | |
INTERNET SOFTWARE & SERVICES - 1.9% | |||
Internet Software & Services - 1.9% | |||
Cornerstone OnDemand, Inc. (a) | 1,638 | 68,534 | |
Demand Media, Inc. (a) | 26,987 | 146,539 | |
Google, Inc.: | |||
Class A (a) | 1,419 | 822,381 | |
Class C (a) | 5 | 2,858 | |
Rackspace Hosting, Inc. (a) | 600 | 18,174 | |
| 1,058,486 | ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 82.4% | |||
Semiconductor Equipment - 4.8% | |||
Advanced Energy Industries, Inc. (a) | 17,988 | 302,558 | |
GT Advanced Technologies, Inc. (a)(d) | 16,657 | 230,533 | |
| |||
Shares | Value | ||
Lam Research Corp. | 26,381 | $ 1,846,670 | |
PDF Solutions, Inc. (a) | 8,153 | 156,211 | |
Ultratech, Inc. (a) | 6,700 | 158,656 | |
| 2,694,628 | ||
Semiconductors - 77.6% | |||
Advanced Micro Devices, Inc. (a) | 22 | 86 | |
Altera Corp. | 90,899 | 2,974,215 | |
Analog Devices, Inc. | 33,926 | 1,683,747 | |
Applied Micro Circuits Corp. (a) | 6,434 | 53,724 | |
Atmel Corp. (a) | 50,579 | 414,748 | |
Audience, Inc. (a) | 10,725 | 102,209 | |
Broadcom Corp. Class A | 115,201 | 4,407,590 | |
Cavium, Inc. (a) | 2,779 | 129,640 | |
Cypress Semiconductor Corp. (d) | 102,246 | 1,033,707 | |
Entropic Communications, Inc. (a) | 16,659 | 46,479 | |
Exar Corp. (a) | 2,800 | 26,964 | |
Fairchild Semiconductor International, Inc. (a) | 48,277 | 734,776 | |
Freescale Semiconductor, Inc. (a)(d) | 56,014 | 1,121,400 | |
Himax Technologies, Inc. sponsored ADR (d) | 14,003 | 89,549 | |
Inphi Corp. (a) | 19,086 | 291,252 | |
Intel Corp. | 282,178 | 9,563,010 | |
Intermolecular, Inc. (a)(d) | 17,784 | 39,658 | |
International Rectifier Corp. (a) | 15,290 | 379,804 | |
Intersil Corp. Class A | 65,537 | 840,840 | |
M/A-COM Technology Solutions, Inc. (a) | 1 | 20 | |
MagnaChip Semiconductor Corp. (a) | 38,036 | 532,884 | |
Marvell Technology Group Ltd. | 84,000 | 1,120,560 | |
Maxim Integrated Products, Inc. | 37,808 | 1,108,152 | |
MaxLinear, Inc. Class A (a) | 3,849 | 36,489 | |
Micrel, Inc. | 8,912 | 93,220 | |
Micron Technology, Inc. (a) | 88,112 | 2,691,822 | |
Motech Industries, Inc. | 1 | 1 | |
NVIDIA Corp. | 60,523 | 1,059,153 | |
NXP Semiconductors NV (a) | 18,696 | 1,165,696 | |
O2Micro International Ltd. sponsored ADR (a) | 19,701 | 60,285 | |
ON Semiconductor Corp. (a) | 97,099 | 831,167 | |
Peregrine Semiconductor Corp. (a) | 29,699 | 200,171 | |
Pericom Semiconductor Corp. (a) | 2,002 | 17,678 | |
PMC-Sierra, Inc. (a) | 114,920 | 773,412 | |
RF Micro Devices, Inc. (a) | 39,336 | 438,990 | |
Samsung Electronics Co. Ltd. | 1,783 | 2,307,248 | |
Semtech Corp. (a) | 39,833 | 889,471 | |
Silicon Laboratories, Inc. (a) | 5,278 | 214,973 | |
Skyworks Solutions, Inc. | 26 | 1,320 | |
Spansion, Inc. Class A (a) | 43,083 | 817,285 | |
SunEdison Semiconductor Ltd. | 5,963 | 100,775 | |
Texas Instruments, Inc. | 81,418 | 3,765,583 | |
Common Stocks - continued | |||
Shares | Value | ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - CONTINUED | |||
Semiconductors - continued | |||
Trident Microsystems, Inc. (a) | 19 | $ 0 | |
Xilinx, Inc. | 41,736 | 1,716,602 | |
| 43,876,355 | ||
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | 46,570,983 | ||
SOFTWARE - 1.3% | |||
Application Software - 0.5% | |||
Citrix Systems, Inc. (a) | 1,060 | 71,794 | |
Comverse, Inc. (a) | 824 | 21,160 | |
Nuance Communications, Inc. (a) | 9,531 | 173,274 | |
| 266,228 | ||
Home Entertainment Software - 0.1% | |||
Zynga, Inc. (a) | 18,535 | 54,122 | |
Systems Software - 0.7% | |||
CommVault Systems, Inc. (a) | 1,300 | 62,426 | |
Gigamon, Inc. (a) | 4,400 | 50,776 | |
Imperva, Inc. (a) | 2,844 | 63,051 | |
Infoblox, Inc. (a) | 7,532 | 91,288 | |
Symantec Corp. | 4,510 | 106,707 | |
| 374,248 | ||
TOTAL SOFTWARE | 694,598 | ||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.2% | |||
Technology Hardware, Storage & Peripherals - 1.2% | |||
BlackBerry Ltd. (a) | 30 | 280 | |
| |||
Shares | Value | ||
EMC Corp. | 16,285 | $ 477,151 | |
QLogic Corp. (a) | 22,623 | 205,869 | |
| 683,300 | ||
TOTAL COMMON STOCKS (Cost $54,041,123) |
| ||
Money Market Funds - 7.4% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 2,656,980 | 2,656,980 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 1,535,570 | 1,535,570 | |
TOTAL MONEY MARKET FUNDS (Cost $4,192,550) |
| ||
TOTAL INVESTMENT PORTFOLIO - 102.8% (Cost $58,233,673) | 58,078,485 | ||
NET OTHER ASSETS (LIABILITIES) - (2.8)% | (1,568,840) | ||
NET ASSETS - 100% | $ 56,509,645 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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 | $ 1,537 |
Fidelity Securities Lending Cash Central Fund | 7,276 |
Total | $ 8,813 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 53,885,935 | $ 51,578,685 | $ 2,307,250 | $ - |
Money Market Funds | 4,192,550 | 4,192,550 | - | - |
Total Investments in Securities: | $ 58,078,485 | $ 55,771,235 | $ 2,307,250 | $ - |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 89.5% |
Korea (South) | 4.1% |
Bermuda | 4.0% |
Netherlands | 2.0% |
Others (Individually Less Than 1%) | 0.4% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Electronics Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $1,445,210) - See accompanying schedule: Unaffiliated issuers (cost $54,041,123) | $ 53,885,935 |
|
Fidelity Central Funds (cost $4,192,550) | 4,192,550 |
|
Total Investments (cost $58,233,673) |
| $ 58,078,485 |
Receivable for investments sold | 877,417 | |
Receivable for fund shares sold | 1,155,060 | |
Dividends receivable | 25,526 | |
Distributions receivable from Fidelity Central Funds | 831 | |
Receivable from investment adviser for expense reductions | 5,475 | |
Other receivables | 541 | |
Total assets | 60,143,335 | |
|
|
|
Liabilities | ||
Payable to custodian bank | $ 461,952 | |
Payable for investments purchased | 1,388,416 | |
Payable for fund shares redeemed | 137,150 | |
Accrued management fee | 25,335 | |
Distribution and service plan fees payable | 12,610 | |
Other affiliated payables | 11,028 | |
Other payables and accrued expenses | 61,629 | |
Collateral on securities loaned, at value | 1,535,570 | |
Total liabilities | 3,633,690 | |
|
|
|
Net Assets | $ 56,509,645 | |
Net Assets consist of: |
| |
Paid in capital | $ 59,008,222 | |
Accumulated net investment loss | (62,995) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (2,280,394) | |
Net unrealized appreciation (depreciation) on investments | (155,188) | |
Net Assets | $ 56,509,645 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 13.86 | |
|
|
|
Maximum offering price per share (100/94.25 of $13.86) | $ 14.71 | |
Class T: | $ 13.45 | |
|
|
|
Maximum offering price per share (100/96.50 of $13.45) | $ 13.94 | |
Class B: | $ 12.59 | |
|
|
|
Class C: | $ 12.58 | |
|
|
|
Institutional Class: | $ 14.37 | |
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.
Annual Report
Fidelity Advisor Electronics Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 293,508 |
Interest |
| 932 |
Income from Fidelity Central Funds |
| 8,813 |
Total income |
| 303,253 |
|
|
|
Expenses | ||
Management fee | $ 135,288 | |
Transfer agent fees | 67,539 | |
Distribution and service plan fees | 90,158 | |
Accounting and security lending fees | 9,688 | |
Custodian fees and expenses | 65,068 | |
Independent trustees' compensation | 516 | |
Registration fees | 56,777 | |
Audit | 45,704 | |
Legal | 299 | |
Miscellaneous | 572 | |
Total expenses before reductions | 471,609 | |
Expense reductions | (102,044) | 369,565 |
Net investment income (loss) | (66,312) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 5,068,614 | |
Foreign currency transactions | 2,559 | |
Total net realized gain (loss) |
| 5,071,173 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 1,173,617 | |
Assets and liabilities in foreign currencies | 7 | |
Total change in net unrealized appreciation (depreciation) |
| 1,173,624 |
Net gain (loss) | 6,244,797 | |
Net increase (decrease) in net assets resulting from operations | $ 6,178,485 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (66,312) | $ (41,761) |
Net realized gain (loss) | 5,071,173 | (680,452) |
Change in net unrealized appreciation (depreciation) | 1,173,624 | 3,203,673 |
Net increase (decrease) in net assets resulting from operations | 6,178,485 | 2,481,460 |
Share transactions - net increase (decrease) | 34,400,043 | (3,915,862) |
Redemption fees | 4,495 | 1,278 |
Total increase (decrease) in net assets | 40,583,023 | (1,433,124) |
|
|
|
Net Assets | ||
Beginning of period | 15,926,622 | 17,359,746 |
End of period (including accumulated net investment loss of $62,995 and accumulated net investment loss of $32,651, respectively) | $ 56,509,645 | $ 15,926,622 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.33 | $ 8.45 | $ 8.93 | $ 7.14 | $ 6.59 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.02) | (.01) | (.05) | (.04) | (.01) |
Net realized and unrealized gain (loss) | 3.55 | 1.89 | (.43) | 1.83 | .59 |
Total from investment operations | 3.53 | 1.88 | (.48) | 1.79 | .58 |
Distributions from net investment income | - | - | - | - | (.03) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 13.86 | $ 10.33 | $ 8.45 | $ 8.93 | $ 7.14 |
Total ReturnA, B | 34.17% | 22.25% | (5.38)% | 25.07% | 8.74% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.84% | 2.18% | 1.88% | 1.89% | 1.97% |
Expenses net of fee waivers, if any | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% |
Expenses net of all reductions | 1.39% | 1.37% | 1.39% | 1.39% | 1.39% |
Net investment income (loss) | (.16)% | (.07)% | (.53)% | (.40)% | (.15)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 16,542 | $ 5,833 | $ 6,000 | $ 7,537 | $ 5,394 |
Portfolio turnover rateE | 156% | 179% | 140% | 166% | 87% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.05 | $ 8.24 | $ 8.73 | $ 7.00 | $ 6.46 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.05) | (.03) | (.07) | (.06) | (.03) |
Net realized and unrealized gain (loss) | 3.45 | 1.84 | (.42) | 1.79 | .58 |
Total from investment operations | 3.40 | 1.81 | (.49) | 1.73 | .55 |
Distributions from net investment income | - | - | - | - | (.01) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 13.45 | $ 10.05 | $ 8.24 | $ 8.73 | $ 7.00 |
Total ReturnA, B | 33.83% | 21.97% | (5.61)% | 24.71% | 8.50% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.19% | 2.48% | 2.23% | 2.25% | 2.26% |
Expenses net of fee waivers, if any | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% |
Expenses net of all reductions | 1.64% | 1.62% | 1.64% | 1.64% | 1.64% |
Net investment income (loss) | (.42)% | (.32)% | (.78)% | (.65)% | (.40)% |
Supplemental Data |
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|
|
|
|
Net assets, end of period (000 omitted) | $ 7,144 | $ 3,756 | $ 3,909 | $ 4,476 | $ 3,862 |
Portfolio turnover rateE | 156% | 179% | 140% | 166% | 87% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
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|
|
|
|
Net asset value, beginning of period | $ 9.46 | $ 7.79 | $ 8.29 | $ 6.69 | $ 6.19 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.10) | (.07) | (.10) | (.09) | (.06) |
Net realized and unrealized gain (loss) | 3.23 | 1.74 | (.40) | 1.69 | .56 |
Total from investment operations | 3.13 | 1.67 | (.50) | 1.60 | .50 |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 12.59 | $ 9.46 | $ 7.79 | $ 8.29 | $ 6.69 |
Total ReturnA, B | 33.09% | 21.44% | (6.03)% | 23.92% | 8.08% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.68% | 2.95% | 2.70% | 2.76% | 2.73% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.14% | 2.12% | 2.15% | 2.14% | 2.15% |
Net investment income (loss) | (.92)% | (.82)% | (1.29)% | (1.15)% | (.90)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 392 | $ 306 | $ 459 | $ 691 | $ 1,073 |
Portfolio turnover rateE | 156% | 179% | 140% | 166% | 87% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 9.44 | $ 7.78 | $ 8.29 | $ 6.68 | $ 6.18 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.10) | (.07) | (.10) | (.09) | (.06) |
Net realized and unrealized gain (loss) | 3.24 | 1.73 | (.41) | 1.70 | .56 |
Total from investment operations | 3.14 | 1.66 | (.51) | 1.61 | .50 |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 12.58 | $ 9.44 | $ 7.78 | $ 8.29 | $ 6.68 |
Total ReturnA, B | 33.26% | 21.34% | (6.15)% | 24.10% | 8.09% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.60% | 2.93% | 2.65% | 2.70% | 2.72% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.14% | 2.12% | 2.14% | 2.14% | 2.14% |
Net investment income (loss) | (.91)% | (.82)% | (1.28)% | (1.15)% | (.90)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 7,381 | $ 3,157 | $ 3,721 | $ 3,836 | $ 3,256 |
Portfolio turnover rateE | 156% | 179% | 140% | 166% | 87% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.68 | $ 8.72 | $ 9.19 | $ 7.33 | $ 6.75 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .01 | .02 | (.02) | (.01) | .01 |
Net realized and unrealized gain (loss) | 3.68 | 1.94 | (.45) | 1.87 | .60 |
Total from investment operations | 3.69 | 1.96 | (.47) | 1.86 | .61 |
Distributions from net investment income | - | - | - | - | (.03) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 14.37 | $ 10.68 | $ 8.72 | $ 9.19 | $ 7.33 |
Total ReturnA | 34.55% | 22.48% | (5.11)% | 25.38% | 9.10% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | 1.34% | 1.86% | 1.55% | 1.42% | 1.64% |
Expenses net of fee waivers, if any | 1.15% | 1.15% | 1.15% | 1.15% | 1.15% |
Expenses net of all reductions | 1.14% | 1.12% | 1.14% | 1.14% | 1.14% |
Net investment income (loss) | .08% | .18% | (.28)% | (.15)% | .11% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 25,050 | $ 2,874 | $ 3,271 | $ 1,765 | $ 645 |
Portfolio turnover rateD | 156% | 179% | 140% | 166% | 87% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Annual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), market discount, net operating losses, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 2,943,006 |
Gross unrealized depreciation | (3,333,133) |
Net unrealized appreciation (depreciation) on securities | $ (390,127) |
|
|
Tax Cost | $ 58,468,612 |
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Capital loss carryforward | $ (2,045,455) |
Net unrealized appreciation (depreciation) on securities and other investments | $ (390,127) |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
Fiscal year of expiration |
|
2017 | $ (2,045,455) |
The Fund intends to elect to defer to its next fiscal year $62,995 of ordinary losses recognized during the period January 1, 2014 to July 31, 2014.
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $70,118,222 and $37,391,610, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 21,508 | $ 562 |
Class T | .25% | .25% | 24,030 | 114 |
Class B | .75% | .25% | 3,160 | 2,374 |
Class C | .75% | .25% | 41,460 | 8,908 |
|
|
| $ 90,158 | $ 11,958 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 17,769 |
Class T | 4,084 |
Class B* | 216 |
Class C* | 337 |
| $ 22,406 |
* 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.
Annual Report
5. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 25,244 | .29 |
Class T | 16,847 | .35 |
Class B | 970 | .31 |
Class C | 12,102 | .29 |
Institutional Class | 12,376 | .18 |
| $ 67,539 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $5,427 for the period.
Other. During the period, the investment adviser reimbursed the Fund for certain losses in the amount of $1,982.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $35 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $7,276. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
The investment adviser voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
Annual Report
Notes to Financial Statements - continued
8. Expense Reductions - continued
The following classes were in reimbursement during the period:
| Expense | Reimbursement |
Class A | 1.40% | $ 38,193 |
Class T | 1.65% | 25,950 |
Class B | 2.15% | 1,694 |
Class C | 2.15% | 19,046 |
Institutional Class | 1.15% | 13,806 |
|
| $ 98,689 |
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $3,355 for the period.
9. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 772,579 | 137,609 | $ 10,230,441 | $ 1,216,436 |
Shares redeemed | (143,457) | (283,233) | (1,810,191) | (2,448,434) |
Net increase (decrease) | 629,122 | (145,624) | $ 8,420,250 | $ (1,231,998) |
Class T |
|
|
|
|
Shares sold | 230,216 | 112,240 | $ 2,844,843 | $ 987,721 |
Shares redeemed | (72,780) | (212,855) | (817,318) | (1,812,736) |
Net increase (decrease) | 157,436 | (100,615) | $ 2,027,525 | $ (825,015) |
Class B |
|
|
|
|
Shares sold | 7,793 | 678 | $ 94,749 | $ 4,830 |
Shares redeemed | (9,002) | (27,225) | (95,467) | (220,563) |
Net increase (decrease) | (1,209) | (26,547) | $ (718) | $ (215,733) |
Class C |
|
|
|
|
Shares sold | 357,228 | 96,174 | $ 4,283,093 | $ 799,164 |
Shares redeemed | (104,588) | (240,043) | (1,156,253) | (1,893,943) |
Net increase (decrease) | 252,640 | (143,869) | $ 3,126,840 | $ (1,094,779) |
Institutional Class |
|
|
|
|
Shares sold | 1,892,867 | 228,631 | $ 26,288,223 | $ 2,347,005 |
Shares redeemed | (418,217) | (334,852) | (5,462,077) | (2,895,342) |
Net increase (decrease) | 1,474,650 | (106,221) | $ 20,826,146 | $ (548,337) |
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.
Annual Report
Fidelity Advisor Energy Fund - Class A, T, B, and C
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow. Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) C | 11.65% | 12.21% | 10.88% |
Class T (incl. 3.50% sales charge) C | 14.06% | 12.49% | 10.90% |
Class B (incl. contingent deferred sales charge) A,C | 12.50% | 12.43% | 10.94% |
Class C (incl. contingent deferred sales charge) B,C | 16.57% | 12.71% | 10.72% |
A Class B shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 5%, 2%, and 0%, respectively.
B Class C shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 1%, 0%, and 0%, respectively.
C Prior to October 1, 2006, Fidelity Advisor Energy Fund was named Fidelity Advisor Natural Resources Fund, and the fund operated under certain different investment policies and compared its performance to a different additional index. The fund's historical performance may not represent its current investment policies.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Energy Fund - Class A on July 31, 2004, and the current 5.75% sales charge was paid. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Energy Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from John Dowd, Portfolio Manager of Fidelity Advisor® Energy Fund: For the year, the fund's Class A, Class T, Class B and Class C shares returned 18.46%, 18.19%, 17.50% and 17.57%, respectively (excluding sales charges), versus 19.33% for its sector benchmark, the MSCI U.S. IMI Energy 25-50 Index, and 16.94% for the S&P 500® Index. Energy stocks fared well for the period, amid the continued boom in North American oil and natural gas production. Several industry segments enjoyed gains of more than 20%, including oil & gas storage & transport. Relative to the MSCI sector index, fund results were held back by underweighting refiners, which benefited from rapid expansion of the U.S. pipeline system that facilitates getting cheaper U.S. crude to Gulf Coast refiners. Here, we missed by not owning enough Valero Energy in the first half of the period - believing it was overvalued - when the stock returned roughly 45% on increased refining volume. I moved to an overweighting in February based on a reassessment of refining margins, and it proved to be a contributor in later months, as the firm showed consistent positive earnings surprises. Among other individual stocks, Cobalt International Energy was a detractor. The share price fell to nearly a two-year low in December, and I sold the stock in February. A lighter-than-benchmark stake in Williams Companies notably detracted from results. I believed the pipeline firm was slightly overpriced, but the stock jumped in June on its plans to acquire Access Midstream Partners. Conversely, performance was helped by good picks and a sizable overweighting in domestic exploration & production (E&P) firms. Here, two of the fund's largest holdings - EOG Resources and Cimarex Energy - were the fund's top relative contributors for the period. The fund also benefited from underweighting major index constituent Exxon Mobil, which struggled amid production declines.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.10% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,167.00 | $ 5.91 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.34 | $ 5.51 |
Class T | 1.33% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,165.40 | $ 7.14 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.20 | $ 6.66 |
Class B | 1.91% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,162.10 | $ 10.24 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.32 | $ 9.54 |
Class C | 1.85% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,162.30 | $ 9.92 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.62 | $ 9.25 |
Institutional Class | .84% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,168.20 | $ 4.52 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.63 | $ 4.21 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Energy Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Exxon Mobil Corp. | 16.3 | 10.0 |
Chevron Corp. | 11.8 | 11.3 |
Schlumberger Ltd. | 9.1 | 5.8 |
Halliburton Co. | 5.9 | 2.9 |
EOG Resources, Inc. | 5.7 | 7.5 |
Anadarko Petroleum Corp. | 4.0 | 4.9 |
Cimarex Energy Co. | 3.7 | 2.9 |
Noble Energy, Inc. | 2.8 | 2.8 |
Concho Resources, Inc. | 2.7 | 0.1 |
FMC Technologies, Inc. | 2.7 | 2.2 |
| 64.7 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Oil, Gas & Consumable Fuels | 75.2% |
|
| Energy Equipment & Services | 22.8% |
|
| Independent Power Producers & Energy Traders | 0.5% |
|
| Independent Power and Renewable Electricity Producers | 0.1% |
|
| Trading Companies & Distributors | 0.1% |
|
| All Others* | 1.3% |
|
As of January 31, 2014 | |||
| Oil, Gas & Consumable Fuels | 80.0% |
|
 | Energy Equipment & Services | 18.6% |
|
 | Construction & Engineering | 0.2% |
|
| Metals & Mining | 0.1% |
|
| All Others* | 1.1% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Energy Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 98.7% | |||
Shares | Value | ||
ENERGY EQUIPMENT & SERVICES - 22.8% | |||
Oil & Gas Drilling - 1.7% | |||
Ocean Rig UDW, Inc. (United States) | 108,900 | $ 1,902,483 | |
Odfjell Drilling A/S | 567,856 | 2,917,710 | |
Pacific Drilling SA (a) | 169,749 | 1,616,010 | |
Precision Drilling Corp. (d) | 102,800 | 1,281,288 | |
Vantage Drilling Co. (a) | 1,887,530 | 3,529,681 | |
Xtreme Drilling & Coil Services Corp. (a) | 813,202 | 3,550,091 | |
| 14,797,263 | ||
Oil & Gas Equipment & Services - 21.1% | |||
Cameron International Corp. (a) | 2 | 142 | |
Dril-Quip, Inc. (a) | 46,391 | 4,674,821 | |
FMC Technologies, Inc. (a) | 381,706 | 23,207,725 | |
Halliburton Co. | 740,414 | 51,081,162 | |
National Oilwell Varco, Inc. | 93,715 | 7,594,664 | |
Oceaneering International, Inc. | 247,672 | 16,819,406 | |
Schlumberger Ltd. | 736,809 | 79,862,728 | |
Total Energy Services, Inc. | 53,200 | 1,061,219 | |
| 184,301,867 | ||
TOTAL ENERGY EQUIPMENT & SERVICES | 199,099,130 | ||
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS - 0.1% | |||
Renewable Electricity - 0.1% | |||
NextEra Energy Partners LP | 37,600 | 1,279,904 | |
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 0.5% | |||
Independent Power Producers & Energy Traders - 0.5% | |||
Dynegy, Inc. (a) | 151,622 | 4,025,564 | |
OIL, GAS & CONSUMABLE FUELS - 75.2% | |||
Coal & Consumable Fuels - 0.7% | |||
Peabody Energy Corp. | 431,618 | 6,547,645 | |
Integrated Oil & Gas - 30.5% | |||
BG Group PLC | 662,900 | 13,071,898 | |
Chevron Corp. | 801,809 | 103,625,795 | |
Exxon Mobil Corp. | 1,441,611 | 142,632,990 | |
Imperial Oil Ltd. | 116,800 | 5,993,452 | |
Occidental Petroleum Corp. | 16,600 | 1,621,986 | |
| 266,946,121 | ||
Oil & Gas Exploration & Production - 31.4% | |||
Anadarko Petroleum Corp. | 322,983 | 34,510,734 | |
Bankers Petroleum Ltd. (a) | 760,700 | 4,297,622 | |
Bonanza Creek Energy, Inc. (a) | 104,025 | 5,831,642 | |
BPZ Energy, Inc. (a) | 590,800 | 1,547,896 | |
Canadian Natural Resources Ltd. | 147,000 | 6,407,952 | |
Cimarex Energy Co. | 229,447 | 31,897,722 | |
Concho Resources, Inc. (a) | 169,300 | 23,837,440 | |
ConocoPhillips Co. | 274,736 | 22,665,720 | |
Continental Resources, Inc. (a)(d) | 62,115 | 9,117,240 | |
Devon Energy Corp. | 79,800 | 6,024,900 | |
Diamondback Energy, Inc. (a) | 11,700 | 962,091 | |
| |||
Shares | Value | ||
EOG Resources, Inc. | 457,286 | $ 50,045,380 | |
Evolution Petroleum Corp. | 60,495 | 641,852 | |
Kodiak Oil & Gas Corp. (a) | 801,963 | 12,462,505 | |
Laredo Petroleum Holdings, Inc. (a) | 64,294 | 1,744,939 | |
Memorial Resource Development Corp. (d) | 74,600 | 1,714,308 | |
Newfield Exploration Co. (a) | 53,100 | 2,139,930 | |
Noble Energy, Inc. | 364,108 | 24,209,541 | |
Northern Oil & Gas, Inc. (a) | 213,793 | 3,439,929 | |
Parsley Energy, Inc. Class A | 40,300 | 909,571 | |
PDC Energy, Inc. (a) | 115,188 | 6,250,101 | |
Peyto Exploration & Development Corp. (d) | 66,500 | 2,235,268 | |
Pioneer Natural Resources Co. | 46,416 | 10,279,287 | |
Rex Energy Corp. (a) | 85,415 | 1,177,873 | |
SM Energy Co. | 21,500 | 1,688,610 | |
Synergy Resources Corp. (a) | 115,015 | 1,209,958 | |
TAG Oil Ltd. (a) | 446,700 | 1,024,212 | |
Whiting Petroleum Corp. (a) | 65,843 | 5,826,447 | |
| 274,100,670 | ||
Oil & Gas Refining & Marketing - 5.5% | |||
Alon U.S.A. Energy, Inc. | 50,100 | 643,785 | |
Alon U.S.A. Partners LP | 10,249 | 180,177 | |
CVR Refining, LP | 33,873 | 869,181 | |
Delek U.S. Holdings, Inc. | 77,900 | 2,276,238 | |
Marathon Petroleum Corp. | 34,052 | 2,842,661 | |
Phillips 66 Co. | 186,923 | 15,161,325 | |
Tesoro Corp. | 53,200 | 3,273,928 | |
Valero Energy Corp. | 399,226 | 20,280,681 | |
Western Refining, Inc. | 18,700 | 765,952 | |
World Fuel Services Corp. | 40,833 | 1,753,777 | |
| 48,047,705 | ||
Oil & Gas Storage & Transport - 7.1% | |||
Cheniere Energy, Inc. (a) | 112,200 | 7,939,272 | |
Enable Midstream Partners LP | 42,900 | 1,021,878 | |
EnLink Midstream LLC | 13,600 | 519,656 | |
EQT Midstream Partners LP | 31,400 | 2,717,356 | |
Golar LNG Ltd. | 38,000 | 2,341,180 | |
Magellan Midstream Partners LP | 32,034 | 2,568,806 | |
MPLX LP | 88,194 | 5,005,010 | |
ONEOK, Inc. | 34,200 | 2,203,506 | |
Phillips 66 Partners LP | 95,369 | 6,098,848 | |
Plains GP Holdings LP Class A | 48,700 | 1,446,877 | |
SemGroup Corp. Class A | 25,600 | 1,973,248 | |
Targa Resources Corp. | 71,132 | 9,069,330 | |
The Williams Companies, Inc. | 196,800 | 11,144,784 | |
Valero Energy Partners LP | 175,543 | 8,159,239 | |
| 62,208,990 | ||
TOTAL OIL, GAS & CONSUMABLE FUELS | 657,851,131 | ||
Common Stocks - continued | |||
Shares | Value | ||
TRADING COMPANIES & DISTRIBUTORS - 0.1% | |||
Trading Companies & Distributors - 0.1% | |||
Now, Inc. | 23,428 | $ 754,147 | |
TOTAL COMMON STOCKS (Cost $717,358,972) |
| ||
Money Market Funds - 3.2% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 13,317,323 | 13,317,323 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 14,957,274 | 14,957,274 | |
TOTAL MONEY MARKET FUNDS (Cost $28,274,597) |
| ||
TOTAL INVESTMENT PORTFOLIO - 101.9% (Cost $745,633,569) | 891,284,473 | ||
NET OTHER ASSETS (LIABILITIES) - (1.9)% | (16,948,611) | ||
NET ASSETS - 100% | $ 874,335,862 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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 | $ 15,930 |
Fidelity Securities Lending Cash Central Fund | 56,572 |
Total | $ 72,502 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 863,009,876 | $ 849,937,978 | $ 13,071,898 | $ - |
Money Market Funds | 28,274,597 | 28,274,597 | - | - |
Total Investments in Securities: | $ 891,284,473 | $ 878,212,575 | $ 13,071,898 | $ - |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 83.6% |
Curacao | 9.1% |
Canada | 4.4% |
United Kingdom | 1.5% |
Others (Individually Less Than 1%) | 1.4% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Energy Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $14,198,835) - See accompanying schedule: Unaffiliated issuers (cost $717,358,972) | $ 863,009,876 |
|
Fidelity Central Funds (cost $28,274,597) | 28,274,597 |
|
Total Investments (cost $745,633,569) |
| $ 891,284,473 |
Receivable for investments sold | 4,064,140 | |
Receivable for fund shares sold | 1,892,628 | |
Dividends receivable | 510,902 | |
Distributions receivable from Fidelity Central Funds | 2,865 | |
Other receivables | 15,897 | |
Total assets | 897,770,905 | |
|
|
|
Liabilities | ||
Payable to custodian bank | $ 4,416 | |
Payable for investments purchased | 4,327,270 | |
Payable for fund shares redeemed | 3,164,931 | |
Accrued management fee | 413,394 | |
Distribution and service plan fees payable | 312,248 | |
Other affiliated payables | 196,723 | |
Other payables and accrued expenses | 58,787 | |
Collateral on securities loaned, at value | 14,957,274 | |
Total liabilities | 23,435,043 | |
|
|
|
Net Assets | $ 874,335,862 | |
Net Assets consist of: |
| |
Paid in capital | $ 692,751,886 | |
Undistributed net investment income | 44,776 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 35,888,376 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 145,650,824 | |
Net Assets | $ 874,335,862 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 45.71 | |
|
|
|
Maximum offering price per share (100/94.25 of $45.71) | $ 48.50 | |
Class T: | $ 46.64 | |
|
|
|
Maximum offering price per share (100/96.50 of $46.64) | $ 48.33 | |
Class B: | $ 42.08 | |
|
|
|
Class C: | $ 42.40 | |
|
|
|
Institutional Class: | $ 48.05 | |
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.
Annual Report
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 11,173,859 |
Income from Fidelity Central Funds |
| 72,502 |
Total income |
| 11,246,361 |
|
|
|
Expenses | ||
Management fee | $ 4,199,053 | |
Transfer agent fees | 1,870,783 | |
Distribution and service plan fees | 3,269,159 | |
Accounting and security lending fees | 269,434 | |
Custodian fees and expenses | 33,267 | |
Independent trustees' compensation | 18,433 | |
Registration fees | 95,125 | |
Audit | 49,609 | |
Legal | 10,926 | |
Miscellaneous | 10,619 | |
Total expenses before reductions | 9,826,408 | |
Expense reductions | (31,146) | 9,795,262 |
Net investment income (loss) | 1,451,099 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 63,932,371 | |
Foreign currency transactions | 34,182 | |
Total net realized gain (loss) |
| 63,966,553 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 60,343,732 | |
Assets and liabilities in foreign currencies | (20) | |
Total change in net unrealized appreciation (depreciation) |
| 60,343,712 |
Net gain (loss) | 124,310,265 | |
Net increase (decrease) in net assets resulting from operations | $ 125,761,364 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 1,451,099 | $ 2,837,213 |
Net realized gain (loss) | 63,966,553 | 68,491,304 |
Change in net unrealized appreciation (depreciation) | 60,343,712 | 51,387,693 |
Net increase (decrease) in net assets resulting from operations | 125,761,364 | 122,716,210 |
Distributions to shareholders from net investment income | (2,028,433) | (2,261,471) |
Distributions to shareholders from net realized gain | (32,993,983) | - |
Total distributions | (35,022,416) | (2,261,471) |
Share transactions - net increase (decrease) | 95,115,595 | (79,579,362) |
Redemption fees | 17,148 | 15,482 |
Total increase (decrease) in net assets | 185,871,691 | 40,890,859 |
|
|
|
Net Assets | ||
Beginning of period | 688,464,171 | 647,573,312 |
End of period (including undistributed net investment income of $44,776 and accumulated net investment loss of $571,396, respectively) | $ 874,335,862 | $ 688,464,171 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 40.59 | $ 33.71 | $ 40.17 | $ 27.70 | $ 25.82 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .15 | .23 | .25 | .11 | (.05) |
Net realized and unrealized gain (loss) | 7.06 | 6.81 | (6.50) | 12.47 | 1.93 |
Total from investment operations | 7.21 | 7.04 | (6.25) | 12.58 | 1.88 |
Distributions from net investment income | (.17) | (.16) | (.21) | (.11) | - |
Distributions from net realized gain | (1.93) | - | - | - | - |
Total distributions | (2.09) H | (.16) | (.21) | (.11) | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 45.71 | $ 40.59 | $ 33.71 | $ 40.17 | $ 27.70 |
Total ReturnA, B | 18.46% | 20.94% | (15.58)% | 45.46% | 7.28% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.12% | 1.16% | 1.17% | 1.16% | 1.20% |
Expenses net of fee waivers, if any | 1.12% | 1.16% | 1.17% | 1.16% | 1.20% |
Expenses net of all reductions | 1.12% | 1.15% | 1.17% | 1.16% | 1.19% |
Net investment income (loss) | .36% | .61% | .72% | .30% | (.16)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 369,400 | $ 279,798 | $ 253,332 | $ 331,120 | $ 214,407 |
Portfolio turnover rateE | 112% | 68% | 88% | 91% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
H Total distributions of $2.09 per share is comprised of distributions from net investment income of $.165 and distributions from net realized gain of $1.929 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 41.38 | $ 34.40 | $ 41.04 | $ 28.33 | $ 26.47 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .06 | .15 | .18 | .03 | (.11) |
Net realized and unrealized gain (loss) | 7.21 | 6.95 | (6.65) | 12.75 | 1.97 |
Total from investment operations | 7.27 | 7.10 | (6.47) | 12.78 | 1.86 |
Distributions from net investment income | (.08) | (.12) | (.17) | (.07) | - |
Distributions from net realized gain | (1.93) | - | - | - | - |
Total distributions | (2.01) | (.12) | (.17) | (.07) | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 46.64 | $ 41.38 | $ 34.40 | $ 41.04 | $ 28.33 |
Total ReturnA, B | 18.19% | 20.70% | (15.77)% | 45.16% | 7.03% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.34% | 1.36% | 1.38% | 1.37% | 1.41% |
Expenses net of fee waivers, if any | 1.34% | 1.36% | 1.38% | 1.37% | 1.41% |
Expenses net of all reductions | 1.34% | 1.35% | 1.38% | 1.37% | 1.41% |
Net investment income (loss) | .14% | .40% | .50% | .09% | (.37)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 245,828 | $ 223,248 | $ 215,488 | $ 290,512 | $ 219,051 |
Portfolio turnover rateE | 112% | 68% | 88% | 91% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 37.65 | $ 31.41 | $ 37.61 | $ 26.06 | $ 24.48 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.17) | (.05) | (.01) | (.15) | (.25) |
Net realized and unrealized gain (loss) | 6.52 | 6.34 | (6.09) | 11.71 | 1.83 |
Total from investment operations | 6.35 | 6.29 | (6.10) | 11.56 | 1.58 |
Distributions from net investment income | - | (.05) | (.10) | (.01) | - |
Distributions from net realized gain | (1.92) | - | - | - | - |
Total distributions | (1.92) | (.05) | (.10) | (.01) | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 42.08 | $ 37.65 | $ 31.41 | $ 37.61 | $ 26.06 |
Total ReturnA, B | 17.50% | 20.04% | (16.22)% | 44.38% | 6.45% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.91% | 1.92% | 1.92% | 1.93% | 1.96% |
Expenses net of fee waivers, if any | 1.91% | 1.92% | 1.92% | 1.93% | 1.96% |
Expenses net of all reductions | 1.91% | 1.91% | 1.92% | 1.92% | 1.95% |
Net investment income (loss) | (.44)% | (.15)% | (.03)% | (.46)% | (.92)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 17,432 | $ 20,551 | $ 28,558 | $ 49,793 | $ 44,330 |
Portfolio turnover rateE | 112% | 68% | 88% | 91% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 37.92 | $ 31.63 | $ 37.88 | $ 26.25 | $ 24.65 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.15) | (.04) | (.01) | (.15) | (.25) |
Net realized and unrealized gain (loss) | 6.57 | 6.38 | (6.13) | 11.80 | 1.85 |
Total from investment operations | 6.42 | 6.34 | (6.14) | 11.65 | 1.60 |
Distributions from net investment income | (.01) | (.05) | (.11) | (.02) | - |
Distributions from net realized gain | (1.93) | - | - | - | - |
Total distributions | (1.94) | (.05) | (.11) | (.02) | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 42.40 | $ 37.92 | $ 31.63 | $ 37.88 | $ 26.25 |
Total ReturnA, B | 17.57% | 20.08% | (16.22)% | 44.38% | 6.49% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.86% | 1.90% | 1.92% | 1.90% | 1.94% |
Expenses net of fee waivers, if any | 1.86% | 1.90% | 1.92% | 1.90% | 1.94% |
Expenses net of all reductions | 1.86% | 1.88% | 1.91% | 1.89% | 1.93% |
Net investment income (loss) | (.38)% | (.13)% | (.03)% | (.43)% | (.90)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 130,881 | $ 99,833 | $ 93,504 | $ 133,476 | $ 90,596 |
Portfolio turnover rateE | 112% | 68% | 88% | 91% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 42.55 | $ 35.28 | $ 41.95 | $ 28.87 | $ 26.83 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .28 | .35 | .37 | .23 | .04 |
Net realized and unrealized gain (loss) | 7.42 | 7.12 | (6.79) | 12.99 | 2.00 |
Total from investment operations | 7.70 | 7.47 | (6.42) | 13.22 | 2.04 |
Distributions from net investment income | (.27) | (.20) | (.25) | (.14) | - |
Distributions from net realized gain | (1.93) | - | - | - | - |
Total distributions | (2.20) | (.20) | (.25) | (.14) | - |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 48.05 | $ 42.55 | $ 35.28 | $ 41.95 | $ 28.87 |
Total ReturnA | 18.80% | 21.26% | (15.31)% | 45.87% | 7.60% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .85% | .88% | .86% | .86% | .90% |
Expenses net of fee waivers, if any | .85% | .88% | .86% | .86% | .90% |
Expenses net of all reductions | .85% | .86% | .85% | .85% | .90% |
Net investment income (loss) | .63% | .89% | 1.03% | .60% | .14% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 110,795 | $ 65,034 | $ 56,692 | $ 54,024 | $ 27,338 |
Portfolio turnover rateD | 112% | 68% | 88% | 91% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Investment Valuation - continued
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. 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. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Annual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), partnerships, deferred trustees compensation and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 157,009,768 |
Gross unrealized depreciation | (12,283,155) |
Net unrealized appreciation (depreciation) on securities | $ 144,726,613 |
|
|
Tax Cost | $ 746,557,860 |
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 11,515,204 |
Undistributed long-term capital gain | $ 25,350,408 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 144,726,533 |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 11,364,599 | $ 2,261,471 |
Long-term Capital Gains | 23,657,817 | - |
Total | $ 35,022,416 | $ 2,261,471 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $914,549,771 and $837,356,104, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 789,742 | $ 9,586 |
Class T | .25% | .25% | 1,163,792 | 2,396 |
Class B | .75% | .25% | 188,072 | 141,340 |
Class C | .75% | .25% | 1,127,553 | 180,560 |
|
|
| $ 3,269,159 | $ 333,882 |
Annual Report
Notes to Financial Statements - continued
5. Fees and Other Transactions with Affiliates - continued
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 130,781 |
Class T | 26,998 |
Class B* | 18,105 |
Class C* | 7,254 |
| $ 183,138 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 808,805 | .26 |
Class T | 531,363 | .23 |
Class B | 56,518 | .30 |
Class C | 278,663 | .25 |
Institutional Class | 195,434 | .24 |
| $ 1,870,783 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $18,503 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,262 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash
Annual Report
7. Security Lending - continued
collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $56,572. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $31,122 for the period. In addition, through arrangements with the Fund's custodian, 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 $24.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net investment income |
|
|
Class A | $ 1,151,717 | $ 1,079,554 |
Class T | 407,949 | 706,555 |
Class B | - | 36,766 |
Class C | 21,755 | 148,895 |
Institutional Class | 447,012 | 289,701 |
Total | $ 2,028,433 | $ 2,261,471 |
From net realized gain |
|
|
Class A | $ 13,468,952 | $ - |
Class T | 10,162,438 | - |
Class B | 951,726 | - |
Class C | 5,213,518 | - |
Institutional Class | 3,197,349 | - |
Total | $ 32,993,983 | $ - |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 2,566,576 | 1,740,823 | $ 110,639,298 | $ 65,442,879 |
Reinvestment of distributions | 321,215 | 27,199 | 13,089,815 | 963,658 |
Shares redeemed | (1,699,770) | (2,390,270) | (72,383,987) | (87,941,708) |
Net increase (decrease) | 1,188,021 | (622,248) | $ 51,345,126 | $ (21,535,171) |
Class T |
|
|
|
|
Shares sold | 572,893 | 467,358 | $ 25,352,574 | $ 17,841,598 |
Reinvestment of distributions | 243,465 | 18,548 | 10,134,909 | 670,876 |
Shares redeemed | (940,893) | (1,355,160) | (41,085,209) | (50,748,604) |
Net increase (decrease) | (124,535) | (869,254) | $ (5,597,726) | $ (32,236,130) |
Class B |
|
|
|
|
Shares sold | 26,300 | 13,140 | $ 1,074,846 | $ 454,110 |
Reinvestment of distributions | 22,691 | 989 | 856,078 | 32,636 |
Shares redeemed | (180,679) | (377,487) | (7,111,293) | (13,045,539) |
Net increase (decrease) | (131,688) | (363,358) | $ (5,180,369) | $ (12,558,793) |
Class C |
|
|
|
|
Shares sold | 779,598 | 525,111 | $ 31,528,558 | $ 18,433,044 |
Reinvestment of distributions | 118,310 | 3,815 | 4,495,184 | 126,850 |
Shares redeemed | (444,228) | (851,939) | (17,602,373) | (29,267,435) |
Net increase (decrease) | 453,680 | (323,013) | $ 18,421,369 | $ (10,707,541) |
Annual Report
Notes to Financial Statements - continued
10. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Institutional Class |
|
|
|
|
Shares sold | 1,344,490 | 923,636 | $ 61,641,683 | $ 35,802,942 |
Reinvestment of distributions | 75,999 | 6,056 | 3,249,427 | 224,624 |
Shares redeemed | (642,747) | (1,008,582) | (28,763,915) | (38,569,293) |
Net increase (decrease) | 777,742 | (78,890) | $ 36,127,195 | $ (2,541,727) |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report
Fidelity Advisor Financial Services Fund - Class A, T, B, and C
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow. Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) | 5.93% | 8.75% | 0.01% |
Class T (incl. 3.50% sales charge) | 8.18% | 8.97% | -0.01% |
Class B (incl. contingent deferred sales charge) A | 6.50% | 8.93% | 0.07% |
Class C (incl. contingent deferred sales charge) B | 10.65% | 9.23% | -0.12% |
A Class B shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 5%, 2%, and 0%, respectively.
B Class C shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 1%, 0%, and 0%, respectively.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Financial Services Fund - Class A on July 31, 2004, and the current 5.75% sales charge was paid. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Financial Services Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Christopher Lee, Portfolio Manager of Fidelity Advisor® Financial Services Fund: For the 12-month period, the fund's Class A, Class T, Class B and Class C shares returned 12.39%, 12.10%, 11.50%, and 11.65%, respectively (excluding sales charges), beating the 10.80% gain of the MSCI U.S. IMI Financials 25-50 Index but lagging the S&P 500®. Financials underperformed the broader market due to declining interest rates, the overhangs of regulatory reform and depressed trading volumes. Banks were among the weaker performers, while asset management & custody banks, investment banking & brokerage and many real estate investment trust (REIT) segments stood out. Security selection drove the fund ahead of the MSCI sector index. Individual contributors included an out-of-index stake in alternative asset manager Blackstone Group, which realized sizable profits from investments made during the financial downturn. An overweighting in specialty REIT and wireless tower company American Tower also contributed, benefiting from declining interest rates, growing demand for cellular bandwidth and constrained tower supply. By contrast, an outsized stake in specialized REIT Rayonier hurt, as pricing pressure hindered its cellulose business. I sold Rayonier from the portfolio by period end.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity Advisor Financial Services Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.19% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,059.40 | $ 6.08 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.89 | $ 5.96 |
Class T | 1.45% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,058.40 | $ 7.40 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.60 | $ 7.25 |
Class B | 1.95% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,055.90 | $ 9.94 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.12 | $ 9.74 |
Class C | 1.90% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,056.50 | $ 9.69 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.37 | $ 9.49 |
Institutional Class | .85% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,061.60 | $ 4.34 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.58 | $ 4.26 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Financial Services Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
JPMorgan Chase & Co. | 5.4 | 4.8 |
Bank of America Corp. | 5.1 | 5.4 |
Citigroup, Inc. | 4.8 | 4.8 |
U.S. Bancorp | 4.6 | 5.1 |
Berkshire Hathaway, Inc. Class B | 4.2 | 2.2 |
Capital One Financial Corp. | 4.1 | 3.9 |
Wells Fargo & Co. | 3.8 | 4.6 |
American Tower Corp. | 3.8 | 3.5 |
MetLife, Inc. | 2.7 | 2.8 |
Invesco Ltd. | 2.4 | 2.3 |
| 40.9 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Banks | 29.4% |
|
| Capital Markets | 14.5% |
|
| Insurance | 13.4% |
|
| Real Estate | 10.6% |
|
| Diversified Financial Services | 8.8% |
|
| All Others* | 23.3% |
|
As of January 31, 2014 | |||
| Diversified Financial Services | 22.3% |
|
| Insurance | 16.6% |
|
| Commercial Banks | 16.4% |
|
| Capital Markets | 14.2% |
|
| Real Estate | 10.2% |
|
| All Others* | 20.3% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Financial Services Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 97.7% | |||
Shares | Value | ||
BANKS - 29.4% | |||
Diversified Banks - 24.1% | |||
Bank of America Corp. | 561,856 | $ 8,568,304 | |
Citigroup, Inc. | 165,465 | 8,092,893 | |
JPMorgan Chase & Co. | 156,931 | 9,050,210 | |
PT Bank Rakyat Indonesia Tbk | 641,700 | 615,500 | |
U.S. Bancorp | 184,308 | 7,746,465 | |
Wells Fargo & Co. | 125,948 | 6,410,753 | |
| 40,484,125 | ||
Regional Banks - 5.3% | |||
CoBiz, Inc. | 58,891 | 666,646 | |
Commerce Bancshares, Inc. | 13,385 | 603,128 | |
Fifth Third Bancorp | 120,340 | 2,464,563 | |
M&T Bank Corp. (d) | 15,270 | 1,855,305 | |
Popular, Inc. (a) | 34,800 | 1,110,120 | |
SunTrust Banks, Inc. | 56,400 | 2,146,020 | |
| 8,845,782 | ||
TOTAL BANKS | 49,329,907 | ||
CAPITAL MARKETS - 14.5% | |||
Asset Management & Custody Banks - 11.5% | |||
Affiliated Managers Group, Inc. (a) | 11,264 | 2,244,352 | |
Ameriprise Financial, Inc. | 20,700 | 2,475,720 | |
Artisan Partners Asset Management, Inc. | 34,000 | 1,771,400 | |
BlackRock, Inc. Class A | 4,986 | 1,519,384 | |
Franklin Resources, Inc. | 52,650 | 2,850,998 | |
Invesco Ltd. | 105,338 | 3,963,869 | |
Oaktree Capital Group LLC Class A | 32,500 | 1,625,000 | |
The Blackstone Group LP | 86,465 | 2,825,676 | |
| 19,276,399 | ||
Diversified Capital Markets - 0.4% | |||
Close Brothers Group PLC | 33,800 | 725,290 | |
Investment Banking & Brokerage - 2.6% | |||
E*TRADE Financial Corp. (a) | 85,300 | 1,793,006 | |
FXCM, Inc. Class A (d) | 50,500 | 687,810 | |
Raymond James Financial, Inc. | 35,700 | 1,818,915 | |
| 4,299,731 | ||
TOTAL CAPITAL MARKETS | 24,301,420 | ||
CONSUMER FINANCE - 7.0% | |||
Consumer Finance - 7.0% | |||
Capital One Financial Corp. | 86,538 | 6,883,233 | |
Navient Corp. | 94,015 | 1,617,058 | |
Santander Consumer U.S.A. Holdings, Inc. | 22,900 | 438,993 | |
SLM Corp. | 120,515 | 1,067,763 | |
Springleaf Holdings, Inc. (d) | 65,500 | 1,714,790 | |
| 11,721,837 | ||
| |||
Shares | Value | ||
DIVERSIFIED CONSUMER SERVICES - 1.1% | |||
Specialized Consumer Services - 1.1% | |||
H&R Block, Inc. | 57,800 | $ 1,857,114 | |
DIVERSIFIED FINANCIAL SERVICES - 8.8% | |||
Multi-Sector Holdings - 4.2% | |||
Berkshire Hathaway, Inc. Class B (a) | 56,419 | 7,076,635 | |
Specialized Finance - 4.6% | |||
IntercontinentalExchange Group, Inc. | 20,114 | 3,866,313 | |
McGraw Hill Financial, Inc. | 41,400 | 3,321,108 | |
TPG Specialty Lending, Inc. (d) | 25,905 | 501,780 | |
| 7,689,201 | ||
TOTAL DIVERSIFIED FINANCIAL SERVICES | 14,765,836 | ||
HEALTH CARE PROVIDERS & SERVICES - 0.6% | |||
Health Care Facilities - 0.6% | |||
Brookdale Senior Living, Inc. (a) | 30,500 | 1,056,825 | |
INSURANCE - 13.4% | |||
Insurance Brokers - 2.4% | |||
Brown & Brown, Inc. | 48,900 | 1,505,142 | |
Marsh & McLennan Companies, Inc. | 48,900 | 2,482,653 | |
| 3,987,795 | ||
Life & Health Insurance - 4.4% | |||
MetLife, Inc. | 86,526 | 4,551,268 | |
Prudential PLC | 48,894 | 1,123,773 | |
Torchmark Corp. | 34,000 | 1,793,160 | |
| 7,468,201 | ||
Property & Casualty Insurance - 5.4% | |||
Allstate Corp. | 56,440 | 3,298,918 | |
FNF Group | 60,200 | 1,632,022 | |
FNFV Group | 20,497 | 335,331 | |
The Travelers Companies, Inc. | 41,592 | 3,724,980 | |
| 8,991,251 | ||
Reinsurance - 1.2% | |||
Everest Re Group Ltd. | 12,900 | 2,011,239 | |
TOTAL INSURANCE | 22,458,486 | ||
INTERNET SOFTWARE & SERVICES - 1.3% | |||
Internet Software & Services - 1.3% | |||
eBay, Inc. (a) | 41,400 | 2,185,920 | |
IT SERVICES - 5.0% | |||
Data Processing & Outsourced Services - 5.0% | |||
EVERTEC, Inc. | 60,200 | 1,346,072 | |
Fiserv, Inc. (a) | 38,166 | 2,353,697 | |
FleetCor Technologies, Inc. (a) | 9,200 | 1,221,668 | |
The Western Union Co. | 82,700 | 1,444,769 | |
Visa, Inc. Class A | 9,430 | 1,989,824 | |
| 8,356,030 | ||
Common Stocks - continued | |||
Shares | Value | ||
MEDIA - 1.0% | |||
Advertising - 1.0% | |||
CBS Outdoor Americas, Inc. | 48,900 | $ 1,627,881 | |
REAL ESTATE INVESTMENT TRUSTS - 10.6% | |||
Mortgage REITs - 3.0% | |||
Blackstone Mortgage Trust, Inc. | 45,100 | 1,283,997 | |
NorthStar Realty Finance Corp. | 39,050 | 628,705 | |
Redwood Trust, Inc. (d) | 60,200 | 1,142,596 | |
Starwood Property Trust, Inc. | 82,700 | 1,951,720 | |
| 5,007,018 | ||
Residential REITs - 2.3% | |||
Essex Property Trust, Inc. | 11,450 | 2,170,577 | |
Starwood Waypoint Residential (a) | 60,160 | 1,581,606 | |
| 3,752,183 | ||
Retail REITs - 1.5% | |||
Simon Property Group, Inc. | 7,188 | 1,208,950 | |
Washington Prime Group, Inc. (a) | 72,169 | 1,363,272 | |
| 2,572,222 | ||
Specialized REITs - 3.8% | |||
American Tower Corp. | 67,650 | 6,385,484 | |
TOTAL REAL ESTATE INVESTMENT TRUSTS | 17,716,907 | ||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 4.1% | |||
Real Estate Operating Companies - 0.5% | |||
Global Logistic Properties Ltd. | 381,000 | 848,170 | |
Real Estate Services - 3.6% | |||
Altisource Portfolio Solutions SA (a) | 7,550 | 818,269 | |
CBRE Group, Inc. (a) | 118,487 | 3,654,139 | |
Realogy Holdings Corp. (a) | 45,100 | 1,657,876 | |
| 6,130,284 | ||
TOTAL REAL ESTATE MANAGEMENT & DEVELOPMENT | 6,978,454 | ||
| |||
Shares | Value | ||
THRIFTS & MORTGAGE FINANCE - 0.9% | |||
Thrifts & Mortgage Finance - 0.9% | |||
MGIC Investment Corp. (a) | 50,000 | $ 369,500 | |
Ocwen Financial Corp. (a) | 28,850 | 870,405 | |
Radian Group, Inc. | 19,600 | 248,136 | |
| 1,488,041 | ||
TOTAL COMMON STOCKS (Cost $145,554,635) |
| ||
Money Market Funds - 4.8% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 3,871,808 | 3,871,808 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 4,239,975 | 4,239,975 | |
TOTAL MONEY MARKET FUNDS (Cost $8,111,783) |
| ||
TOTAL INVESTMENT PORTFOLIO - 102.5% (Cost $153,666,418) | 171,956,441 | ||
NET OTHER ASSETS (LIABILITIES) - (2.5)% | (4,243,037) | ||
NET ASSETS - 100% | $ 167,713,404 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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 | $ 3,308 |
Fidelity Securities Lending Cash Central Fund | 40,449 |
Total | $ 43,757 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 163,844,658 | $ 161,257,215 | $ 2,587,443 | $ - |
Money Market Funds | 8,111,783 | 8,111,783 | - | - |
Total Investments in Securities: | $ 171,956,441 | $ 169,368,998 | $ 2,587,443 | $ - |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Financial Services Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $4,042,147) - See accompanying schedule: Unaffiliated issuers (cost $145,554,635) | $ 163,844,658 |
|
Fidelity Central Funds (cost $8,111,783) | 8,111,783 |
|
Total Investments (cost $153,666,418) |
| $ 171,956,441 |
Cash |
| 1,005 |
Receivable for investments sold | 106,170 | |
Receivable for fund shares sold | 133,922 | |
Dividends receivable | 91,067 | |
Distributions receivable from Fidelity Central Funds | 22,253 | |
Other receivables | 157,775 | |
Total assets | 172,468,633 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 66,478 | |
Payable for fund shares redeemed | 220,158 | |
Accrued management fee | 78,904 | |
Distribution and service plan fees payable | 65,936 | |
Other affiliated payables | 44,061 | |
Other payables and accrued expenses | 39,717 | |
Collateral on securities loaned, at value | 4,239,975 | |
Total liabilities | 4,755,229 | |
|
|
|
Net Assets | $ 167,713,404 | |
Net Assets consist of: |
| |
Paid in capital | $ 208,707,700 | |
Undistributed net investment income | 327,058 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (59,611,679) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 18,290,325 | |
Net Assets | $ 167,713,404 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 14.97 | |
|
|
|
Maximum offering price per share (100/94.25 of $14.97) | $ 15.88 | |
Class T: | $ 14.86 | |
|
|
|
Maximum offering price per share (100/96.50 of $14.86) | $ 15.40 | |
Class B: | $ 14.35 | |
|
|
|
Class C: | $ 14.22 | |
|
|
|
Institutional Class: | $ 15.34 | |
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.
Annual Report
Fidelity Advisor Financial Services Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 2,980,098 |
Income from Fidelity Central Funds |
| 43,757 |
Total income |
| 3,023,855 |
|
|
|
Expenses | ||
Management fee | $ 876,474 | |
Transfer agent fees | 446,452 | |
Distribution and service plan fees | 742,675 | |
Accounting and security lending fees | 62,863 | |
Custodian fees and expenses | 13,750 | |
Independent trustees' compensation | 3,882 | |
Registration fees | 60,470 | |
Audit | 53,082 | |
Legal | 3,004 | |
Miscellaneous | 2,284 | |
Total expenses before reductions | 2,264,936 | |
Expense reductions | (5,268) | 2,259,668 |
Net investment income (loss) | 764,187 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 7,591,926 | |
Foreign currency transactions | 1,609 | |
Total net realized gain (loss) |
| 7,593,535 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 9,237,332 | |
Assets and liabilities in foreign currencies | 987 | |
Total change in net unrealized appreciation (depreciation) |
| 9,238,319 |
Net gain (loss) | 16,831,854 | |
Net increase (decrease) in net assets resulting from operations | $ 17,596,041 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 764,187 | $ 1,261,864 |
Net realized gain (loss) | 7,593,535 | 21,677,767 |
Change in net unrealized appreciation (depreciation) | 9,238,319 | 10,094,408 |
Net increase (decrease) in net assets resulting from operations | 17,596,041 | 33,034,039 |
Distributions to shareholders from net investment income | (647,193) | (847,180) |
Distributions to shareholders from net realized gain | (72,538) | - |
Total distributions | (719,731) | (847,180) |
Share transactions - net increase (decrease) | 10,142,137 | 4,858,599 |
Redemption fees | 8,658 | 3,052 |
Total increase (decrease) in net assets | 27,027,105 | 37,048,510 |
|
|
|
Net Assets | ||
Beginning of period | 140,686,299 | 103,637,789 |
End of period (including undistributed net investment income of $327,058 and undistributed net investment income of $426,508, respectively) | $ 167,713,404 | $ 140,686,299 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 13.41 | $ 10.18 | $ 10.06 | $ 10.35 | $ 9.53 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .10 | .15 | .07 | (.02) | (.01) |
Net realized and unrealized gain (loss) | 1.55 | 3.18 | .06 | (.27) | .93 |
Total from investment operations | 1.65 | 3.33 | .13 | (.29) | .92 |
Distributions from net investment income | (.08) | (.10) | (.01) | - | (.10) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.09) | (.10) | (.01) | - | (.10) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 14.97 | $ 13.41 | $ 10.18 | $ 10.06 | $ 10.35 |
Total ReturnA, B | 12.39% | 32.99% | 1.34% | (2.80)% | 9.61% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.22% | 1.29% | 1.28% | 1.26% | 1.27% |
Expenses net of fee waivers, if any | 1.22% | 1.29% | 1.28% | 1.26% | 1.27% |
Expenses net of all reductions | 1.22% | 1.21% | 1.20% | 1.21% | 1.22% |
Net investment income (loss) | .68% | 1.31% | .72% | (.24)% | (.09)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 77,674 | $ 64,428 | $ 47,055 | $ 63,937 | $ 69,723 |
Portfolio turnover rateE | 49% | 288% | 441% | 260% | 254% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 13.31 | $ 10.11 | $ 10.01 | $ 10.32 | $ 9.52 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .06 | .12 | .04 | (.05) | (.04) |
Net realized and unrealized gain (loss) | 1.55 | 3.16 | .06 | (.26) | .92 |
Total from investment operations | 1.61 | 3.28 | .10 | (.31) | .88 |
Distributions from net investment income | (.05) | (.08) | - G | - | (.08) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.06) | (.08) | - G | - | (.08) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 14.86 | $ 13.31 | $ 10.11 | $ 10.01 | $ 10.32 |
Total ReturnA, B | 12.10% | 32.66% | 1.03% | (3.00)% | 9.26% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.48% | 1.55% | 1.54% | 1.52% | 1.53% |
Expenses net of fee waivers, if any | 1.48% | 1.55% | 1.54% | 1.52% | 1.53% |
Expenses net of all reductions | 1.48% | 1.47% | 1.45% | 1.47% | 1.47% |
Net investment income (loss) | .42% | 1.06% | .46% | (.49)% | (.35)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 31,596 | $ 30,576 | $ 24,367 | $ 27,037 | $ 33,310 |
Portfolio turnover rateE | 49% | 288% | 441% | 260% | 254% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 12.87 | $ 9.79 | $ 9.73 | $ 10.09 | $ 9.33 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.01) | .06 | - G | (.10) | (.09) |
Net realized and unrealized gain (loss) | 1.49 | 3.06 | .06 | (.26) | .91 |
Total from investment operations | 1.48 | 3.12 | .06 | (.36) | .82 |
Distributions from net investment income | - | (.04) | - | - | (.06) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 14.35 | $ 12.87 | $ 9.79 | $ 9.73 | $ 10.09 |
Total ReturnA, B | 11.50% | 32.00% | .62% | (3.57)% | 8.78% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.98% | 2.04% | 2.03% | 2.01% | 2.02% |
Expenses net of fee waivers, if any | 1.98% | 2.04% | 2.03% | 2.01% | 2.02% |
Expenses net of all reductions | 1.98% | 1.97% | 1.94% | 1.96% | 1.97% |
Net investment income (loss) | (.08)% | .56% | (.03)% | (.98)% | (.85)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 5,540 | $ 6,511 | $ 5,745 | $ 7,480 | $ 10,992 |
Portfolio turnover rateE | 49% | 288% | 441% | 260% | 254% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 12.75 | $ 9.70 | $ 9.65 | $ 10.00 | $ 9.25 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | - G | .06 | - G | (.10) | (.09) |
Net realized and unrealized gain (loss) | 1.48 | 3.03 | .05 | (.25) | .90 |
Total from investment operations | 1.48 | 3.09 | .05 | (.35) | .81 |
Distributions from net investment income | (.01) | (.04) | - | - | (.06) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 14.22 | $ 12.75 | $ 9.70 | $ 9.65 | $ 10.00 |
Total ReturnA, B | 11.65% | 31.98% | .52% | (3.50)% | 8.79% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.94% | 2.03% | 2.03% | 2.01% | 2.02% |
Expenses net of fee waivers, if any | 1.94% | 2.03% | 2.03% | 2.01% | 2.02% |
Expenses net of all reductions | 1.93% | 1.96% | 1.94% | 1.96% | 1.96% |
Net investment income (loss) | (.03)% | .57% | (.03)% | (.99)% | (.84)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 36,740 | $ 29,897 | $ 20,875 | $ 23,196 | $ 30,804 |
Portfolio turnover rateE | 49% | 288% | 441% | 260% | 254% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 13.73 | $ 10.42 | $ 10.28 | $ 10.55 | $ 9.69 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .15 | .20 | .10 | .01 | .02 |
Net realized and unrealized gain (loss) | 1.60 | 3.25 | .06 | (.28) | .95 |
Total from investment operations | 1.75 | 3.45 | .16 | (.27) | .97 |
Distributions from net investment income | (.13) | (.14) | (.02) | - | (.11) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.14) | (.14) | (.02) | - | (.11) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 15.34 | $ 13.73 | $ 10.42 | $ 10.28 | $ 10.55 |
Total ReturnA | 12.85% | 33.45% | 1.61% | (2.56)% | 9.99% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .87% | .96% | .98% | .96% | .99% |
Expenses net of fee waivers, if any | .87% | .96% | .98% | .96% | .99% |
Expenses net of all reductions | .86% | .88% | .89% | .91% | .94% |
Net investment income (loss) | 1.04% | 1.65% | 1.02% | .07% | .19% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 16,164 | $ 9,275 | $ 5,596 | $ 8,162 | $ 5,158 |
Portfolio turnover rateD | 49% | 288% | 441% | 260% | 254% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Annual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 19,432,045 |
Gross unrealized depreciation | (1,861,572) |
Net unrealized appreciation (depreciation) on securities | $ 17,570,473 |
|
|
Tax Cost | $ 154,385,968 |
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 327,069 |
Capital loss carryforward | $ (58,892,130) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 17,570,775 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
Fiscal year of expiration |
|
2017 | $ (35,189,589) |
2018 | (23,251,884) |
2019 | (450,657) |
Total capital loss carryforward | $ (58,892,130) |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 719,731 | $ 847,180 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $84,579,700 and $75,332,273, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 179,690 | $ 4,881 |
Class T | .25% | .25% | 157,782 | 784 |
Class B | .75% | .25% | 62,815 | 47,230 |
Class C | .75% | .25% | 342,388 | 73,448 |
|
|
| $ 742,675 | $ 126,343 |
Annual Report
5. Fees and Other Transactions with Affiliates - continued
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 47,937 |
Class T | 7,810 |
Class B* | 6,232 |
Class C* | 8,195 |
| $ 70,174 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 212,843 | .30 |
Class T | 96,821 | .31 |
Class B | 19,084 | .30 |
Class C | 88,891 | .26 |
Institutional Class | 28,813 | .19 |
| $ 446,452 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $1,600 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $266 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending
Annual Report
Notes to Financial Statements - continued
7. Security Lending - continued
Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $40,449. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $5,268 for the period.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net investment income |
|
|
Class A | $ 405,756 | $ 468,043 |
Class T | 104,978 | 194,766 |
Class B | - | 25,088 |
Class C | 31,349 | 89,452 |
Institutional Class | 105,110 | 69,831 |
Total | $ 647,193 | $ 847,180 |
From net realized gain |
|
|
Class A | $ 43,910 | $ - |
Class T | 20,144 | - |
Institutional Class | 8,484 | - |
Total | $ 72,538 | $ - |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 1,697,938 | 1,230,107 | $ 24,378,496 | $ 14,721,154 |
Reinvestment of distributions | 28,780 | 36,718 | 390,562 | 401,001 |
Shares redeemed | (1,342,224) | (1,085,572) | (19,118,798) | (12,586,886) |
Net increase (decrease) | 384,494 | 181,253 | $ 5,650,260 | $ 2,535,269 |
Class T |
|
|
|
|
Shares sold | 306,863 | 446,551 | $ 4,347,352 | $ 5,238,758 |
Reinvestment of distributions | 8,794 | 16,926 | 118,136 | 183,990 |
Shares redeemed | (486,368) | (576,646) | (6,897,348) | (6,688,740) |
Net increase (decrease) | (170,711) | (113,169) | $ (2,431,860) | $ (1,265,992) |
Class B |
|
|
|
|
Shares sold | 29,215 | 117,587 | $ 390,860 | $ 1,311,553 |
Reinvestment of distributions | - | 1,943 | - | 20,652 |
Shares redeemed | (149,230) | (200,454) | (2,060,292) | (2,232,316) |
Net increase (decrease) | (120,015) | (80,924) | $ (1,669,432) | $ (900,111) |
Class C |
|
|
|
|
Shares sold | 859,537 | 769,144 | $ 11,703,173 | $ 8,857,879 |
Reinvestment of distributions | 2,148 | 7,186 | 26,657 | 75,671 |
Shares redeemed | (621,486) | (584,253) | (8,469,563) | (6,452,079) |
Net increase (decrease) | 240,199 | 192,077 | $ 3,260,267 | $ 2,481,471 |
Annual Report
10. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Institutional Class |
|
|
|
|
Shares sold | 823,593 | 490,356 | $ 12,007,905 | $ 6,177,619 |
Reinvestment of distributions | 5,144 | 5,017 | 71,934 | 55,775 |
Shares redeemed | (450,058) | (356,871) | (6,746,937) | (4,225,432) |
Net increase (decrease) | 378,679 | 138,502 | $ 5,332,902 | $ 2,007,962 |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report
Fidelity Advisor Health Care Fund - Class A, T, B, and C
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow. Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) | 27.04% | 23.84% | 12.78% |
Class T (incl. 3.50% sales charge) | 29.79% | 24.12% | 12.76% |
Class B (incl. contingent deferred sales charge) A | 28.72% | 24.19% | 12.85% |
Class C (incl. contingent deferred sales charge) B | 32.83% | 24.42% | 12.63% |
A Class B shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 5%, 2%, and 0%, respectively.
B Class C shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 1%, 0%, and 0%, respectively.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Health Care Fund - Class A on July 31, 2004, and the current 5.75% sales charge was paid. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Health Care Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Edward Yoon, Portfolio Manager of Fidelity Advisor® Health Care Fund: For the year, the fund's Class A, Class T, Class B and Class C shares gained 34.79%, 34.49%, 33.72% and 33.83%, respectively (excluding sales charges), outpacing the 21.26% advance of the MSCI U.S. IMI Health Care 25-50 Index and the S&P 500®. Strong fundamentals continued to underpin the health care sector's solid performance, and increased merger-and-acquisition activity fueled outsized gains in many stocks. Despite some volatility in higher-growth areas such as biotechnology, the sector's diversified composition, attractive valuation and defensive qualities helped it maintain its strong performance. Versus the MSCI sector index, exceptional stock picking drove the fund's outperformance. Choices in pharmaceuticals helped the most - although I maintained my sizable underweighting in the industry - including U.K.-based Shire, the fund's top individual contributor that benefited from multiple takeover bids by drugmaker AbbVie. I continued to add to my position over the period, and I expect to keep AbbVie as a fund holding should the deal finalize. Life science tools & services helped, and leading the way here was genetic analysis tool maker Illumina, which I overweighted but trimmed exposure as the stock's valuation rose. Stock selection in biotechnology also added value, especially Intercept Pharmaceuticals, which contributed this period despite experiencing extreme volatility during the second half. Notable relative detractors were hard to come by this period, but stock picking in health care services was weak. I also reduced exposure to this group, as I've always been generally cautious of areas sensitive to fluctuations in health policy. At the stock level, it hurt the most not to own large-cap pharma firm Allergan when its shares shot higher in April on news that Valeant Pharmaceuticals International would acquire the firm. I did establish a small stake in June, but it was too little, too late this period.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.06% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,079.60 | $ 5.47 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.54 | $ 5.31 |
Class T | 1.33% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,078.10 | $ 6.85 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.20 | $ 6.66 |
Class B | 1.89% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,075.20 | $ 9.72 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.42 | $ 9.44 |
Class C | 1.81% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,075.60 | $ 9.31 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.82 | $ 9.05 |
Institutional Class | .80% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,081.20 | $ 4.13 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.83 | $ 4.01 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Health Care Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Actavis PLC | 6.9 | 4.6 |
McKesson Corp. | 5.3 | 3.4 |
Shire PLC sponsored ADR | 4.9 | 1.8 |
Covidien PLC | 4.0 | 0.9 |
Biogen Idec, Inc. | 3.4 | 4.3 |
Agilent Technologies, Inc. | 3.4 | 1.5 |
Alexion Pharmaceuticals, Inc. | 3.3 | 4.5 |
Boston Scientific Corp. | 3.1 | 3.6 |
AbbVie, Inc. | 2.8 | 1.0 |
Allergan, Inc. | 2.8 | 0.0 |
| 39.9 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Pharmaceuticals | 30.4% |
|
| Biotechnology | 24.2% |
|
| Health Care Equipment & Supplies | 16.8% |
|
| Health Care | 14.3% |
|
| Life Sciences | 6.0% |
|
| All Others* | 8.3% |
|
As of January 31, 2014 | |||
| Biotechnology | 32.7% |
|
| Pharmaceuticals | 24.9% |
|
| Health Care Equipment & Supplies | 14.1% |
|
| Health Care | 13.0% |
|
| Life Sciences | 8.0% |
|
| All Others* | 7.3% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Health Care Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 98.0% | |||
Shares | Value | ||
BIOTECHNOLOGY - 24.2% | |||
Biotechnology - 24.2% | |||
Acceleron Pharma, Inc. | 56,538 | $ 1,674,656 | |
Actelion Ltd. | 50,892 | 6,154,642 | |
Alexion Pharmaceuticals, Inc. (a) | 285,814 | 45,441,568 | |
Alnylam Pharmaceuticals, Inc. (a) | 74,720 | 4,038,616 | |
Amgen, Inc. | 232,496 | 29,617,665 | |
Array BioPharma, Inc. (a) | 475,300 | 1,901,200 | |
Arrowhead Research Corp. (a) | 170,200 | 2,153,030 | |
Avalanche Biotechnologies, Inc. (a) | 22,209 | 621,630 | |
BioCryst Pharmaceuticals, Inc. (a) | 296,900 | 3,717,188 | |
Biogen Idec, Inc. (a) | 139,884 | 46,775,811 | |
BioMarin Pharmaceutical, Inc. (a) | 105,800 | 6,540,556 | |
Celgene Corp. (a) | 216,500 | 18,867,975 | |
Celldex Therapeutics, Inc. (a) | 55,100 | 721,259 | |
Cubist Pharmaceuticals, Inc. | 289,497 | 17,630,367 | |
Discovery Laboratories, Inc. (a) | 796,000 | 1,249,720 | |
Genomic Health, Inc. (a)(d) | 110,254 | 2,809,272 | |
Gilead Sciences, Inc. (a) | 352,886 | 32,306,713 | |
Grifols SA ADR | 201,830 | 7,401,106 | |
Innate Pharma SA (a)(d) | 268,800 | 2,667,131 | |
Insmed, Inc. (a) | 164,900 | 2,818,141 | |
Intercept Pharmaceuticals, Inc. (a) | 44,121 | 10,251,956 | |
InterMune, Inc. (a) | 440,980 | 19,345,793 | |
Kindred Biosciences, Inc. | 148,400 | 2,261,616 | |
Neurocrine Biosciences, Inc. (a) | 460,334 | 6,251,336 | |
NewLink Genetics Corp. (a) | 57,196 | 1,211,411 | |
NPS Pharmaceuticals, Inc. (a) | 80,590 | 2,251,685 | |
Prothena Corp. PLC (a) | 2,500 | 43,400 | |
PTC Therapeutics, Inc. (a) | 80,800 | 2,134,736 | |
Puma Biotechnology, Inc. (a) | 86,600 | 19,200,952 | |
Rigel Pharmaceuticals, Inc. (a) | 208,731 | 682,550 | |
Ultragenyx Pharmaceutical, Inc. | 60,805 | 2,657,179 | |
Vanda Pharmaceuticals, Inc. (a)(d) | 373,329 | 5,487,936 | |
Vertex Pharmaceuticals, Inc. (a) | 324,700 | 28,869,077 | |
ZIOPHARM Oncology, Inc. (a)(d) | 404,100 | 1,264,833 | |
| 337,022,706 | ||
DIVERSIFIED CONSUMER SERVICES - 0.2% | |||
Specialized Consumer Services - 0.2% | |||
Carriage Services, Inc. | 159,335 | 2,570,074 | |
HEALTH CARE EQUIPMENT & SUPPLIES - 16.8% | |||
Health Care Equipment - 14.9% | |||
Accuray, Inc. (a) | 208,500 | 1,640,895 | |
Boston Scientific Corp. (a) | 3,334,001 | 42,608,533 | |
Cardiovascular Systems, Inc. (a) | 107,420 | 2,900,340 | |
CONMED Corp. | 197,018 | 7,683,702 | |
Covidien PLC | 649,523 | 56,190,235 | |
Edwards Lifesciences Corp. (a) | 170,953 | 15,428,508 | |
HeartWare International, Inc. (a) | 106,331 | 8,954,134 | |
Intuitive Surgical, Inc. (a) | 11,800 | 5,399,090 | |
Lumenis Ltd. Class B | 156,400 | 1,388,832 | |
| |||
Shares | Value | ||
Masimo Corp. (a) | 230,731 | $ 5,556,002 | |
Medtronic, Inc. | 364,300 | 22,491,882 | |
NxStage Medical, Inc. (a) | 355,200 | 4,741,920 | |
ResMed, Inc. (d) | 100,900 | 5,220,566 | |
Roka Bioscience, Inc. | 124,327 | 1,122,300 | |
Roka Bioscience, Inc. (a) | 83,300 | 835,499 | |
Smith & Nephew PLC sponsored ADR | 90,963 | 7,829,185 | |
Steris Corp. | 173,184 | 8,811,602 | |
Volcano Corp. (a) | 259,000 | 4,276,090 | |
Zeltiq Aesthetics, Inc. (a) | 269,618 | 5,457,068 | |
| 208,536,383 | ||
Health Care Supplies - 1.9% | |||
Derma Sciences, Inc. (a) | 212,595 | 2,057,920 | |
Endologix, Inc. (a) | 298,823 | 4,228,345 | |
The Cooper Companies, Inc. | 124,200 | 19,981,296 | |
| 26,267,561 | ||
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | 234,803,944 | ||
HEALTH CARE PROVIDERS & SERVICES - 14.2% | |||
Health Care Distributors & Services - 6.8% | |||
Amplifon SpA | 647,495 | 3,875,616 | |
Cardinal Health, Inc. | 149,700 | 10,726,005 | |
EBOS Group Ltd. | 593,979 | 5,106,402 | |
McKesson Corp. | 389,709 | 74,769,569 | |
United Drug PLC (United Kingdom) | 182,300 | 1,093,840 | |
| 95,571,432 | ||
Health Care Facilities - 3.2% | |||
Brookdale Senior Living, Inc. (a) | 184,870 | 6,405,746 | |
HCA Holdings, Inc. (a) | 264,100 | 17,248,371 | |
NMC Health PLC | 314,500 | 2,495,561 | |
Surgical Care Affiliates, Inc. | 148,385 | 4,359,551 | |
Universal Health Services, Inc. Class B | 129,527 | 13,807,578 | |
| 44,316,807 | ||
Health Care Services - 1.4% | |||
Air Methods Corp. (a)(d) | 277,484 | 13,943,571 | |
MEDNAX, Inc. (a) | 83,320 | 4,930,878 | |
| 18,874,449 | ||
Managed Health Care - 2.8% | |||
Cigna Corp. | 194,812 | 17,540,872 | |
Humana, Inc. | 108,237 | 12,734,083 | |
UnitedHealth Group, Inc. | 106,724 | 8,649,980 | |
| 38,924,935 | ||
TOTAL HEALTH CARE PROVIDERS & SERVICES | 197,687,623 | ||
HEALTH CARE TECHNOLOGY - 3.7% | |||
Health Care Technology - 3.7% | |||
athenahealth, Inc. (a)(d) | 59,400 | 7,389,360 | |
Castlight Health, Inc. | 336,800 | 4,064,839 | |
Castlight Health, Inc. Class B (a) | 6,800 | 91,188 | |
Cerner Corp. (a) | 539,596 | 29,785,699 | |
Common Stocks - continued | |||
Shares | Value | ||
HEALTH CARE TECHNOLOGY - CONTINUED | |||
Health Care Technology - continued | |||
HealthStream, Inc. (a) | 97,512 | $ 2,433,900 | |
Medidata Solutions, Inc. (a) | 187,800 | 8,420,952 | |
| 52,185,938 | ||
INDUSTRIAL CONGLOMERATES - 1.9% | |||
Industrial Conglomerates - 1.9% | |||
Danaher Corp. | 355,023 | 26,229,099 | |
LIFE SCIENCES TOOLS & SERVICES - 6.0% | |||
Life Sciences Tools & Services - 6.0% | |||
Agilent Technologies, Inc. | 833,500 | 46,751,015 | |
Bruker BioSciences Corp. (a) | 259,553 | 5,899,640 | |
Illumina, Inc. (a) | 193,389 | 30,924,835 | |
| 83,575,490 | ||
PHARMACEUTICALS - 30.4% | |||
Pharmaceuticals - 30.4% | |||
AbbVie, Inc. | 747,480 | 39,123,103 | |
Actavis PLC (a) | 450,355 | 96,493,059 | |
Allergan, Inc. | 233,600 | 38,744,896 | |
Auxilium Pharmaceuticals, Inc. (a)(d) | 212,000 | 4,244,240 | |
Bristol-Myers Squibb Co. | 259,803 | 13,151,228 | |
Dechra Pharmaceuticals PLC | 350,100 | 4,102,052 | |
Jazz Pharmaceuticals PLC (a) | 83,426 | 11,657,115 | |
Merck & Co., Inc. | 400,933 | 22,748,938 | |
Pacira Pharmaceuticals, Inc. (a) | 55,200 | 5,078,400 | |
Perrigo Co. PLC | 216,456 | 32,565,805 | |
Prestige Brands Holdings, Inc. (a) | 271,372 | 8,358,258 | |
Salix Pharmaceuticals Ltd. (a) | 216,448 | 28,551,656 | |
Shire PLC sponsored ADR | 279,300 | 68,847,450 | |
Teva Pharmaceutical Industries Ltd. sponsored ADR | 634,983 | 33,971,591 | |
The Medicines Company (a) | 249,000 | 5,819,130 | |
TherapeuticsMD, Inc. (a) | 661,050 | 3,067,272 | |
UCB SA | 84,800 | 7,794,171 | |
| 424,318,364 | ||
PROFESSIONAL SERVICES - 0.6% | |||
Human Resource & Employment Services - 0.6% | |||
Towers Watson & Co. | 23,927 | 2,441,033 | |
WageWorks, Inc. (a) | 138,395 | 5,776,607 | |
| 8,217,640 | ||
TOTAL COMMON STOCKS (Cost $1,042,406,903) |
| ||
Convertible Preferred Stocks - 0.1% | |||
Shares | Value | ||
HEALTH CARE PROVIDERS & SERVICES - 0.1% | |||
Health Care Services - 0.1% | |||
1Life Healthcare, Inc. Series G (e) | 322,145 | $ 2,238,908 | |
Money Market Funds - 3.6% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 36,951,816 | 36,951,816 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 13,128,282 | 13,128,282 | |
TOTAL MONEY MARKET FUNDS (Cost $50,080,098) |
| ||
TOTAL INVESTMENT PORTFOLIO - 101.7% (Cost $1,094,608,584) | 1,418,929,884 | ||
NET OTHER ASSETS (LIABILITIES) - (1.7)% | (24,044,339) | ||
NET ASSETS - 100% | $ 1,394,885,545 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $2,238,908 or 0.1% of net assets. |
Additional information on each restricted holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
1Life Healthcare, Inc. Series G | 4/10/14 | $ 2,121,583 |
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 | $ 19,491 |
Fidelity Securities Lending Cash Central Fund | 281,825 |
Total | $ 301,316 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 1,366,610,878 | $ 1,361,423,739 | $ 5,187,139 | $ - |
Convertible Preferred Stocks | 2,238,908 | - | - | 2,238,908 |
Money Market Funds | 50,080,098 | 50,080,098 | - | - |
Total Investments in Securities: | $ 1,418,929,884 | $ 1,411,503,837 | $ 5,187,139 | $ 2,238,908 |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 75.1% |
Ireland | 14.1% |
Bailiwick of Jersey | 4.9% |
Israel | 2.5% |
United Kingdom | 1.1% |
Others (Individually Less Than 1%) | 2.3% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Health Care Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $12,559,019) - See accompanying schedule: Unaffiliated issuers (cost $1,044,528,486) | $ 1,368,849,786 |
|
Fidelity Central Funds (cost $50,080,098) | 50,080,098 |
|
Total Investments (cost $1,094,608,584) |
| $ 1,418,929,884 |
Receivable for investments sold | 27,126,664 | |
Receivable for fund shares sold | 5,263,502 | |
Dividends receivable | 401,785 | |
Distributions receivable from Fidelity Central Funds | 13,302 | |
Other receivables | 12,457 | |
Total assets | 1,451,747,594 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 40,053,831 | |
Payable for fund shares redeemed | 2,295,699 | |
Accrued management fee | 629,604 | |
Distribution and service plan fees payable | 441,222 | |
Other affiliated payables | 261,720 | |
Other payables and accrued expenses | 51,691 | |
Collateral on securities loaned, at value | 13,128,282 | |
Total liabilities | 56,862,049 | |
|
|
|
Net Assets | $ 1,394,885,545 | |
Net Assets consist of: |
| |
Paid in capital | $ 956,280,793 | |
Accumulated net investment loss | (4,464,030) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 118,747,574 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 324,321,208 | |
Net Assets | $ 1,394,885,545 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 37.72 | |
|
|
|
Maximum offering price per share (100/94.25 of $37.72) | $ 40.02 | |
Class T: | $ 35.87 | |
|
|
|
Maximum offering price per share (100/96.50 of $35.87) | $ 37.17 | |
Class B: | $ 32.17 | |
|
|
|
Class C: | $ 32.03 | |
|
|
|
Institutional Class: | $ 40.22 | |
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.
Annual Report
Fidelity Advisor Health Care Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 5,217,545 |
Interest |
| 4 |
Income from Fidelity Central Funds (including $281,825 from security lending) |
| 301,316 |
Total income |
| 5,518,865 |
|
|
|
Expenses | ||
Management fee | $ 5,691,350 | |
Transfer agent fees | 2,229,952 | |
Distribution and service plan fees | 4,165,648 | |
Accounting and security lending fees | 350,304 | |
Custodian fees and expenses | 59,662 | |
Independent trustees' compensation | 23,801 | |
Registration fees | 130,856 | |
Audit | 52,033 | |
Legal | 12,425 | |
Miscellaneous | 10,985 | |
Total expenses before reductions | 12,727,016 | |
Expense reductions | (50,156) | 12,676,860 |
Net investment income (loss) | (7,157,995) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 181,430,864 | |
Foreign currency transactions | 12,331 | |
Total net realized gain (loss) |
| 181,443,195 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 110,914,093 | |
Assets and liabilities in foreign currencies | 2,020 | |
Total change in net unrealized appreciation (depreciation) |
| 110,916,113 |
Net gain (loss) | 292,359,308 | |
Net increase (decrease) in net assets resulting from operations | $ 285,201,313 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (7,157,995) | $ (1,047,566) |
Net realized gain (loss) | 181,443,195 | 65,048,667 |
Change in net unrealized appreciation (depreciation) | 110,916,113 | 144,188,245 |
Net increase (decrease) in net assets resulting from operations | 285,201,313 | 208,189,346 |
Distributions to shareholders from net realized gain | (91,415,211) | (53,403,217) |
Share transactions - net increase (decrease) | 462,114,251 | 98,074,235 |
Redemption fees | 59,322 | 6,876 |
Total increase (decrease) in net assets | 655,959,675 | 252,867,240 |
|
|
|
Net Assets | ||
Beginning of period | 738,925,870 | 486,058,630 |
End of period (including accumulated net investment loss of $4,464,030 and accumulated net investment loss of $1,170,069, respectively) | $ 1,394,885,545 | $ 738,925,870 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 31.29 | $ 24.35 | $ 25.60 | $ 19.01 | $ 17.15 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.18) | - G | (.04) | (.10) | (.07) |
Net realized and unrealized gain (loss) | 10.13 | 9.53 | 1.43 | 6.69 | 1.93 |
Total from investment operations | 9.95 | 9.53 | 1.39 | 6.59 | 1.86 |
Distributions from net realized gain | (3.52) | (2.59) | (2.64) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 37.72 | $ 31.29 | $ 24.35 | $ 25.60 | $ 19.01 |
Total ReturnA, B | 34.79% | 42.77% | 7.58% | 34.67% | 10.85% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.08% | 1.14% | 1.19% | 1.19% | 1.22% |
Expenses net of fee waivers, if any | 1.08% | 1.14% | 1.19% | 1.19% | 1.22% |
Expenses net of all reductions | 1.07% | 1.13% | 1.18% | 1.18% | 1.21% |
Net investment income (loss) | (.54)% | (.01)% | (.18)% | (.43)% | (.36)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 613,995 | $ 365,416 | $ 233,188 | $ 224,704 | $ 179,586 |
Portfolio turnover rateE | 111% | 92% | 124% | 125% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 29.91 | $ 23.42 | $ 24.80 | $ 18.46 | $ 16.69 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.26) | (.07) | (.09) | (.16) | (.12) |
Net realized and unrealized gain (loss) | 9.67 | 9.13 | 1.35 | 6.50 | 1.89 |
Total from investment operations | 9.41 | 9.06 | 1.26 | 6.34 | 1.77 |
Distributions from net realized gain | (3.45) | (2.57) | (2.64) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 35.87 | $ 29.91 | $ 23.42 | $ 24.80 | $ 18.46 |
Total ReturnA, B | 34.49% | 42.39% | 7.27% | 34.34% | 10.61% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.34% | 1.39% | 1.43% | 1.44% | 1.47% |
Expenses net of fee waivers, if any | 1.34% | 1.39% | 1.43% | 1.44% | 1.47% |
Expenses net of all reductions | 1.34% | 1.38% | 1.43% | 1.43% | 1.46% |
Net investment income (loss) | (.80)% | (.26)% | (.42)% | (.69)% | (.62)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 216,973 | $ 158,611 | $ 117,969 | $ 123,606 | $ 100,883 |
Portfolio turnover rateE | 111% | 92% | 124% | 125% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 27.16 | $ 21.55 | $ 23.15 | $ 17.32 | $ 15.74 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.40) | (.18) | (.19) | (.25) | (.20) |
Net realized and unrealized gain (loss) | 8.71 | 8.31 | 1.23 | 6.08 | 1.78 |
Total from investment operations | 8.31 | 8.13 | 1.04 | 5.83 | 1.58 |
Distributions from net realized gain | (3.30) | (2.52) | (2.64) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 32.17 | $ 27.16 | $ 21.55 | $ 23.15 | $ 17.32 |
Total ReturnA, B | 33.72% | 41.61% | 6.78% | 33.66% | 10.04% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.91% | 1.93% | 1.94% | 1.94% | 1.97% |
Expenses net of fee waivers, if any | 1.91% | 1.93% | 1.94% | 1.94% | 1.97% |
Expenses net of all reductions | 1.90% | 1.91% | 1.93% | 1.93% | 1.96% |
Net investment income (loss) | (1.37)% | (.80)% | (.93)% | (1.19)% | (1.11)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 13,405 | $ 14,517 | $ 15,403 | $ 20,365 | $ 23,543 |
Portfolio turnover rateE | 111% | 92% | 124% | 125% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 27.11 | $ 21.51 | $ 23.11 | $ 17.29 | $ 15.70 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.38) | (.17) | (.18) | (.24) | (.19) |
Net realized and unrealized gain (loss) | 8.68 | 8.31 | 1.22 | 6.06 | 1.78 |
Total from investment operations | 8.30 | 8.14 | 1.04 | 5.82 | 1.59 |
Distributions from net realized gain | (3.38) | (2.54) | (2.64) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 32.03 | $ 27.11 | $ 21.51 | $ 23.11 | $ 17.29 |
Total ReturnA, B | 33.83% | 41.74% | 6.80% | 33.66% | 10.13% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.83% | 1.87% | 1.90% | 1.90% | 1.94% |
Expenses net of fee waivers, if any | 1.83% | 1.87% | 1.90% | 1.90% | 1.94% |
Expenses net of all reductions | 1.82% | 1.85% | 1.89% | 1.89% | 1.93% |
Net investment income (loss) | (1.29)% | (.74)% | (.89)% | (1.15)% | (1.08)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 257,859 | $ 125,965 | $ 78,763 | $ 77,749 | $ 60,861 |
Portfolio turnover rateE | 111% | 92% | 124% | 125% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 33.12 | $ 25.60 | $ 26.69 | $ 19.77 | $ 17.78 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | (.10) | .07 | .03 | (.03) | (.02) |
Net realized and unrealized gain (loss) | 10.80 | 10.07 | 1.52 | 6.95 | 2.01 |
Total from investment operations | 10.70 | 10.14 | 1.55 | 6.92 | 1.99 |
Distributions from net realized gain | (3.60) | (2.62) | (2.64) | - | - |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 40.22 | $ 33.12 | $ 25.60 | $ 26.69 | $ 19.77 |
Total ReturnA | 35.21% | 43.12% | 7.91% | 35.00% | 11.19% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .81% | .87% | .89% | .89% | .96% |
Expenses net of fee waivers, if any | .81% | .87% | .89% | .89% | .96% |
Expenses net of all reductions | .81% | .85% | .88% | .88% | .95% |
Net investment income (loss) | (.27)% | .26% | .12% | (.13)% | (.10)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 292,654 | $ 74,417 | $ 40,737 | $ 45,243 | $ 14,172 |
Portfolio turnover rateD | 111% | 92% | 124% | 125% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
1. Organization.
Fidelity Advisor Health Care 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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (Select Co) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Annual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. 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. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, deferred trustees compensation, net operating losses and losses deferred due to wash sales and excise tax regulations.
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 348,227,417 |
Gross unrealized depreciation | (26,094,106) |
Net unrealized appreciation (depreciation) on securities | $ 322,133,311 |
|
|
Tax Cost | $ 1,096,796,573 |
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 31,365,366 |
Undistributed long-term capital gain | $ 89,570,197 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 322,133,219 |
The Fund intends to elect to defer to its next fiscal year $4,464,013 of ordinary losses recognized during the period January 1, 2014 to July 31, 2014.
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 26,242,071 | $ 1,722,659 |
Long-term Capital Gains | 65,173,140 | 51,680,558 |
Total | $ 91,415,211 | $ 53,403,217 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,473,905,468 and $1,133,492,004, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 1,205,538 | $ 20,184 |
Class T | .25% | .25% | 951,294 | 3,110 |
Class B | .75% | .25% | 142,623 | 107,354 |
Class C | .75% | .25% | 1,866,193 | 501,935 |
|
|
| $ 4,165,648 | $ 632,583 |
Annual Report
5. Fees and Other Transactions with Affiliates - continued
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 380,868 |
Class T | 51,075 |
Class B* | 9,283 |
Class C * | 21,053 |
| $ 462,279 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 1,039,016 | .22 |
Class T | 429,879 | .23 |
Class B | 41,545 | .29 |
Class C | 399,920 | .21 |
Institutional Class | 319,592 | .20 |
| $ 2,229,952 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $15,471 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,642 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income
Annual Report
Notes to Financial Statements - continued
7. Security Lending - continued
earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $281,825. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $50,102 for the period. In addition, through arrangements with the Fund's custodian, 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 $54.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net realized gain |
|
|
Class A | $ 43,930,276 | $ 25,387,002 |
Class T | 18,842,643 | 13,085,534 |
Class B | 1,694,148 | 1,715,002 |
Class C | 17,484,352 | 9,051,114 |
Institutional Class | 9,463,792 | 4,164,565 |
Total | $ 91,415,211 | $ 53,403,217 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 7,083,573 | 3,549,260 | $ 246,500,176 | $ 93,836,372 |
Reinvestment of distributions | 1,286,052 | 942,761 | 39,516,716 | 22,474,621 |
Shares redeemed | (3,773,574) | (2,389,171) | (131,027,775) | (61,582,185) |
Net increase (decrease) | 4,596,051 | 2,102,850 | $ 154,989,117 | $ 54,728,808 |
Class T |
|
|
|
|
Shares sold | 1,019,177 | 680,868 | $ 33,380,934 | $ 17,081,065 |
Reinvestment of distributions | 618,886 | 547,411 | 18,107,896 | 12,508,788 |
Shares redeemed | (891,508) | (963,078) | (29,012,294) | (23,759,625) |
Net increase (decrease) | 746,555 | 265,201 | $ 22,476,536 | $ 5,830,228 |
Class B |
|
|
|
|
Shares sold | 52,714 | 53,093 | $ 1,492,321 | $ 1,227,477 |
Reinvestment of distributions | 57,285 | 72,420 | 1,511,205 | 1,510,947 |
Shares redeemed | (227,802) | (305,905) | (6,589,471) | (6,859,622) |
Net increase (decrease) | (117,803) | (180,392) | $ (3,585,945) | $ (4,121,198) |
Class C |
|
|
|
|
Shares sold | 3,765,135 | 1,458,495 | $ 111,711,536 | $ 33,813,707 |
Reinvestment of distributions | 567,385 | 363,077 | 14,940,641 | 7,555,835 |
Shares redeemed | (928,018) | (836,253) | (27,242,442) | (18,706,199) |
Net increase (decrease) | 3,404,502 | 985,319 | $ 99,409,735 | $ 22,663,343 |
Institutional Class |
|
|
|
|
Shares sold | 6,450,084 | 1,149,859 | $ 241,929,933 | $ 32,276,173 |
Reinvestment of distributions | 259,255 | 148,348 | 8,481,841 | 3,734,787 |
Shares redeemed | (1,678,853) | (643,078) | (61,586,966) | (17,037,906) |
Net increase (decrease) | 5,030,486 | 655,129 | $ 188,824,808 | $ 18,973,054 |
Annual Report
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report
Fidelity Advisor Industrials Fund - Class A, T, B, and C
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow. Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge)C | 6.05% | 17.44% | 10.84% |
Class T (incl. 3.50% sales charge)C | 8.34% | 17.70% | 10.83% |
Class B (incl. contingent deferred sales charge) A, C | 6.64% | 17.70% | 10.89% |
Class C (incl. contingent deferred sales charge) B, C | 10.71% | 17.96% | 10.67% |
A Class B shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 5%, 2%, and 0%, respectively.
B Class C shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 1%, 0%, and 0%, respectively.
C Prior to October 1, 2006, Fidelity Advisor Industrials Fund was named Fidelity Advisor Cyclical Industries Fund, and the fund operated under certain different investment policies and compared its performance to a different additional index. The fund's historical performance may not represent its current investment policies.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Industrials Fund - Class A on July 31, 2004, and the current 5.75% sales charge was paid. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Industrials Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Tobias Welo, Portfolio Manager of Fidelity Advisor® Industrials Fund: For the year, the fund's Class A, Class T, Class B and Class C shares returned 12.52%, 12.27%, 11.64% and 11.71%, respectively (excluding sales charges), trailing the 16.37% gain of the MSCI U.S. IMI Industrials 25-50 Index and also lagging the S&P 500®. During the period, the MSCI sector index was lifted by robust performance in airlines, construction machinery & heavy trucks, and aerospace & defense, while industrial conglomerates lagged. The fund missed out by not owning three strong-performing defense contractors in the MSCI index: Lockheed Martin, the fund's biggest relative detractor, Raytheon and Northrop Grumman. Despite shrinking orders and backlogs, these contractors were able to postpone their day of reckoning by carefully managing costs and aggressively returning capital to shareholders. We were also hurt by overweighting the lagging stock of United Technologies, the fund's largest position and an aerospace & defense company I liked because of its management team and diversified portfolio of businesses. Two aerospace & defense stocks I bought during the period, index components Boeing and General Dynamics, were both detractors from relative performance because the fund didn't own them earlier in the period when their stocks were rising. I built Boeing into the fund's third-largest holding by period end. Unfortunately, this stock's price declined modestly during the remainder of the period. Not owning strong-performing MSCI index component Southwest Airlines further held back our relative results, while Delta Air Lines was a relative detractor because I missed much of this stock's advance earlier in the period. Conversely, the top relative contributor was an out-of-benchmark stake in Golar LNG, a provider of shipping for liquefied natural gas (LNG) and a leader in the development of floating LNG facilities. Overweighting media research firm Nielsen Holdings also paid off, as did a large overweighting in Manitowoc, a manufacturer of cranes and food service equipment. American Airlines Group was the fund's seventh-largest relative contributor. American and Delta were purchased early in 2014.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.08% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,015.70 | $ 5.40 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.44 | $ 5.41 |
Class T | 1.33% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,014.50 | $ 6.64 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.20 | $ 6.66 |
Class B | 1.86% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,011.90 | $ 9.28 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.57 | $ 9.30 |
Class C | 1.82% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,011.90 | $ 9.08 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.77 | $ 9.10 |
Institutional Class | .81% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,016.90 | $ 4.05 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.78 | $ 4.06 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Industrials Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
United Technologies Corp. | 6.2 | 7.5 |
Danaher Corp. | 5.8 | 5.1 |
The Boeing Co. | 5.0 | 0.0 |
Union Pacific Corp. | 4.9 | 4.4 |
FedEx Corp. | 4.2 | 3.7 |
Caterpillar, Inc. | 4.1 | 3.8 |
Honeywell International, Inc. | 4.0 | 3.9 |
General Electric Co. | 3.8 | 6.9 |
Dun & Bradstreet Corp. | 2.9 | 1.5 |
Emerson Electric Co. | 2.7 | 2.2 |
| 43.6 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Aerospace & Defense | 22.3% |
|
| Machinery | 17.2% |
|
| Electrical Equipment | 9.7% |
|
| Industrial Conglomerates | 9.6% |
|
| Professional Services | 9.2% |
|
| All Others* | 32.0% |
|
As of January 31, 2014 | |||
| Machinery | 24.8% |
|
| Aerospace & Defense | 17.8% |
|
| Industrial Conglomerates | 12.0% |
|
| Electrical Equipment | 8.9% |
|
| Professional Services | 8.4% |
|
| All Others* | 28.1% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Industrials Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 98.1% | |||
Shares | Value | ||
AEROSPACE & DEFENSE - 22.3% | |||
Aerospace & Defense - 22.3% | |||
Alliant Techsystems, Inc. | 98,494 | $ 12,797,324 | |
General Dynamics Corp. | 191,862 | 22,403,726 | |
Honeywell International, Inc. | 380,033 | 34,898,430 | |
L-3 Communications Holdings, Inc. | 50,200 | 5,268,992 | |
Meggitt PLC | 374,741 | 3,217,154 | |
Teledyne Technologies, Inc. (a) | 79,973 | 7,293,538 | |
Textron, Inc. | 281,478 | 10,237,355 | |
The Boeing Co. | 359,929 | 43,364,246 | |
United Technologies Corp. | 519,651 | 54,641,303 | |
| 194,122,068 | ||
AIR FREIGHT & LOGISTICS - 4.2% | |||
Air Freight & Logistics - 4.2% | |||
FedEx Corp. | 252,188 | 37,041,373 | |
AIRLINES - 3.9% | |||
Airlines - 3.9% | |||
American Airlines Group, Inc. | 377,332 | 14,659,348 | |
Delta Air Lines, Inc. | 512,600 | 19,201,996 | |
| 33,861,344 | ||
AUTO COMPONENTS - 1.0% | |||
Auto Parts & Equipment - 1.0% | |||
Johnson Controls, Inc. | 184,576 | 8,719,370 | |
BUILDING PRODUCTS - 2.5% | |||
Building Products - 2.5% | |||
A.O. Smith Corp. | 314,842 | 14,703,121 | |
Lennox International, Inc. | 86,204 | 7,354,925 | |
| 22,058,046 | ||
COMMERCIAL SERVICES & SUPPLIES - 2.9% | |||
Diversified Support Services - 1.0% | |||
KAR Auction Services, Inc. | 306,700 | 8,989,377 | |
Environmental & Facility Services - 1.4% | |||
Waste Connections, Inc. | 245,700 | 11,631,438 | |
Office Services & Supplies - 0.5% | |||
West Corp. | 165,300 | 4,259,781 | |
TOTAL COMMERCIAL SERVICES & SUPPLIES | 24,880,596 | ||
CONSTRUCTION & ENGINEERING - 4.1% | |||
Construction & Engineering - 4.1% | |||
EMCOR Group, Inc. | 232,941 | 9,534,275 | |
Jacobs Engineering Group, Inc. (a) | 215,600 | 10,954,636 | |
MasTec, Inc. (a) | 316,804 | 8,613,901 | |
Tutor Perini Corp. (a) | 257,535 | 7,012,678 | |
| 36,115,490 | ||
ELECTRICAL EQUIPMENT - 9.7% | |||
Electrical Components & Equipment - 8.8% | |||
Eaton Corp. PLC | 321,260 | 21,819,979 | |
| |||
Shares | Value | ||
Emerson Electric Co. | 363,253 | $ 23,121,053 | |
EnerSys | 83,300 | 5,283,719 | |
Generac Holdings, Inc. (a)(d) | 107,744 | 4,676,090 | |
Hubbell, Inc. Class B | 71,426 | 8,352,556 | |
Rockwell Automation, Inc. | 118,345 | 13,214,403 | |
| 76,467,800 | ||
Heavy Electrical Equipment - 0.9% | |||
Babcock & Wilcox Co. | 253,600 | 7,871,744 | |
TOTAL ELECTRICAL EQUIPMENT | 84,339,544 | ||
ENERGY EQUIPMENT & SERVICES - 0.4% | |||
Oil & Gas Equipment & Services - 0.4% | |||
Aspen Aerogels, Inc. (a) | 389,214 | 3,152,633 | |
INDUSTRIAL CONGLOMERATES - 9.6% | |||
Industrial Conglomerates - 9.6% | |||
Danaher Corp. | 680,632 | 50,285,092 | |
General Electric Co. | 1,328,648 | 33,415,497 | |
| 83,700,589 | ||
MACHINERY - 17.2% | |||
Agricultural & Farm Machinery - 1.3% | |||
Deere & Co. | 129,950 | 11,060,045 | |
Construction Machinery & Heavy Trucks - 9.0% | |||
Caterpillar, Inc. | 359,053 | 36,174,590 | |
Cummins, Inc. | 126,309 | 17,606,212 | |
Manitowoc Co., Inc. | 740,156 | 19,658,543 | |
Wabtec Corp. | 63,405 | 5,115,515 | |
| 78,554,860 | ||
Industrial Machinery - 6.9% | |||
Crane Co. | 80,500 | 5,523,105 | |
Dover Corp. | 110,921 | 9,512,585 | |
Global Brass & Copper Holdings, Inc. | 106,540 | 1,617,277 | |
Hyster-Yale Materials Handling Class A | 28,800 | 2,306,880 | |
IDEX Corp. | 87,529 | 6,636,449 | |
Pall Corp. | 136,016 | 10,537,160 | |
Timken Co. | 104,707 | 4,638,520 | |
Valmont Industries, Inc. (d) | 135,009 | 19,661,361 | |
| 60,433,337 | ||
TOTAL MACHINERY | 150,048,242 | ||
OIL, GAS & CONSUMABLE FUELS - 2.1% | |||
Oil & Gas Storage & Transport - 2.1% | |||
Golar LNG Ltd. (d) | 176,800 | 10,892,648 | |
Scorpio Tankers, Inc. | 836,675 | 7,856,378 | |
| 18,749,026 | ||
PROFESSIONAL SERVICES - 9.2% | |||
Human Resource & Employment Services - 2.2% | |||
Towers Watson & Co. | 190,184 | 19,402,572 | |
Research & Consulting Services - 7.0% | |||
CRA International, Inc. (a) | 92,701 | 2,213,700 | |
Common Stocks - continued | |||
Shares | Value | ||
PROFESSIONAL SERVICES - CONTINUED | |||
Research & Consulting Services - continued | |||
Dun & Bradstreet Corp. | 225,696 | $ 24,833,331 | |
Huron Consulting Group, Inc. (a) | 178,620 | 10,795,793 | |
Nielsen Holdings B.V. | 254,012 | 11,712,493 | |
Verisk Analytics, Inc. (a) | 190,644 | 11,446,266 | |
| 61,001,583 | ||
TOTAL PROFESSIONAL SERVICES | 80,404,155 | ||
ROAD & RAIL - 7.2% | |||
Railroads - 4.9% | |||
Union Pacific Corp. | 433,228 | 42,590,645 | |
Trucking - 2.3% | |||
J.B. Hunt Transport Services, Inc. | 263,381 | 20,348,816 | |
TOTAL ROAD & RAIL | 62,939,461 | ||
TRADING COMPANIES & DISTRIBUTORS - 1.8% | |||
Trading Companies & Distributors - 1.8% | |||
W.W. Grainger, Inc. | 41,194 | 9,686,769 | |
WESCO International, Inc. (a) | 71,120 | 5,582,209 | |
| 15,268,978 | ||
TOTAL COMMON STOCKS (Cost $723,710,324) |
| ||
Money Market Funds - 4.1% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 0.11% (b) | 13,177,520 | $ 13,177,520 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 22,817,564 | 22,817,564 | |
TOTAL MONEY MARKET FUNDS (Cost $35,995,084) |
| ||
TOTAL INVESTMENT PORTFOLIO - 102.2% (Cost $759,705,408) | 891,395,999 | ||
NET OTHER ASSETS (LIABILITIES) - (2.2)% | (19,080,650) | ||
NET ASSETS - 100% | $ 872,315,349 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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 | $ 11,987 |
Fidelity Securities Lending Cash Central Fund | 23,336 |
Total | $ 35,323 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 855,400,915 | $ 852,248,282 | $ 3,152,633 | $ - |
Money Market Funds | 35,995,084 | 35,995,084 | - | - |
Total Investments in Securities: | $ 891,395,999 | $ 888,243,366 | $ 3,152,633 | $ - |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Industrials Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $21,755,840) - See accompanying schedule: Unaffiliated issuers (cost $723,710,324) | $ 855,400,915 |
|
Fidelity Central Funds (cost $35,995,084) | 35,995,084 |
|
Total Investments (cost $759,705,408) |
| $ 891,395,999 |
Cash |
| 104,679 |
Receivable for investments sold | 18,056,455 | |
Receivable for fund shares sold | 2,022,472 | |
Dividends receivable | 823,574 | |
Distributions receivable from Fidelity Central Funds | 10,246 | |
Other receivables | 5,180 | |
Total assets | 912,418,605 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 11,351,860 | |
Payable for fund shares redeemed | 4,997,274 | |
Accrued management fee | 418,920 | |
Distribution and service plan fees payable | 264,104 | |
Other affiliated payables | 180,622 | |
Other payables and accrued expenses | 72,912 | |
Collateral on securities loaned, at value | 22,817,564 | |
Total liabilities | 40,103,256 | |
|
|
|
Net Assets | $ 872,315,349 | |
Net Assets consist of: |
| |
Paid in capital | $ 691,165,665 | |
Undistributed net investment income | 853,887 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 48,604,718 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 131,691,079 | |
Net Assets | $ 872,315,349 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 36.92 | |
|
|
|
Maximum offering price per share (100/94.25 of $36.92) | $ 39.17 | |
Class T: | $ 36.29 | |
|
|
|
Maximum offering price per share (100/96.50 of $36.29) | $ 37.61 | |
Class B: | $ 34.02 | |
|
|
|
Class C: | $ 34.13 | |
|
|
|
Institutional Class: | $ 38.42 | |
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.
Annual Report
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 10,749,313 |
Interest |
| 181,995 |
Income from Fidelity Central Funds |
| 35,323 |
Total income |
| 10,966,631 |
|
|
|
Expenses | ||
Management fee | $ 4,166,182 | |
Transfer agent fees | 1,607,682 | |
Distribution and service plan fees | 2,751,687 | |
Accounting and security lending fees | 265,537 | |
Custodian fees and expenses | 26,698 | |
Independent trustees' compensation | 17,623 | |
Registration fees | 136,709 | |
Audit | 50,777 | |
Legal | 9,103 | |
Miscellaneous | 8,593 | |
Total expenses before reductions | 9,040,591 | |
Expense reductions | (22,773) | 9,017,818 |
Net investment income (loss) | 1,948,813 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 62,723,049 | |
Foreign currency transactions | (3,302) | |
Total net realized gain (loss) |
| 62,719,747 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 7,086,272 | |
Assets and liabilities in foreign currencies | 284 | |
Total change in net unrealized appreciation (depreciation) |
| 7,086,556 |
Net gain (loss) | 69,806,303 | |
Net increase (decrease) in net assets resulting from operations | $ 71,755,116 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 1,948,813 | $ 2,656,191 |
Net realized gain (loss) | 62,719,747 | 38,246,997 |
Change in net unrealized appreciation (depreciation) | 7,086,556 | 82,647,313 |
Net increase (decrease) in net assets resulting from operations | 71,755,116 | 123,550,501 |
Distributions to shareholders from net investment income | (2,130,491) | (2,791,779) |
Distributions to shareholders from net realized gain | (26,777,623) | - |
Total distributions | (28,908,114) | (2,791,779) |
Share transactions - net increase (decrease) | 286,586,081 | 36,897,765 |
Redemption fees | 23,406 | 13,370 |
Total increase (decrease) in net assets | 329,456,489 | 157,669,857 |
|
|
|
Net Assets | ||
Beginning of period | 542,858,860 | 385,189,003 |
End of period (including undistributed net investment income of $853,887 and undistributed net investment income of $768,614, respectively) | $ 872,315,349 | $ 542,858,860 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 34.50 | $ 26.18 | $ 25.73 | $ 21.54 | $ 16.87 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .13 | .23 | .20 | .09 | .06 |
Net realized and unrealized gain (loss) | 4.01 | 8.33 | .61 | 4.13 | 4.68 |
Total from investment operations | 4.14 | 8.56 | .81 | 4.22 | 4.74 |
Distributions from net investment income | (.15) | (.24) | (.11) | (.03) | (.07) |
Distributions from net realized gain | (1.58) | - | (.25) | - | - |
Total distributions | (1.72) H | (.24) | (.36) | (.03) | (.07) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 36.92 | $ 34.50 | $ 26.18 | $ 25.73 | $ 21.54 |
Total ReturnA, B | 12.52% | 32.92% | 3.42% | 19.59% | 28.13% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.09% | 1.11% | 1.14% | 1.13% | 1.18% |
Expenses net of fee waivers, if any | 1.09% | 1.11% | 1.14% | 1.13% | 1.18% |
Expenses net of all reductions | 1.09% | 1.11% | 1.14% | 1.13% | 1.17% |
Net investment income (loss) | .37% | .77% | .80% | .36% | .31% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 378,826 | $ 271,512 | $ 192,038 | $ 228,106 | $ 165,029 |
Portfolio turnover rateE | 57% | 78% | 82% | 75% | 110% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
H Total distributions of $1.72 per share is comprised of distributions from net investment income of $.146 and distributions from net realized gain of $1.577 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 33.93 | $ 25.75 | $ 25.33 | $ 21.24 | $ 16.64 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .04 | .15 | .13 | .03 | .01 |
Net realized and unrealized gain (loss) | 3.95 | 8.20 | .61 | 4.07 | 4.61 |
Total from investment operations | 3.99 | 8.35 | .74 | 4.10 | 4.62 |
Distributions from net investment income | (.06) | (.17) | (.07) | (.01) | (.02) |
Distributions from net realized gain | (1.58) | - | (.25) | - | - |
Total distributions | (1.63) H | (.17) | (.32) | (.01) | (.02) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 36.29 | $ 33.93 | $ 25.75 | $ 25.33 | $ 21.24 |
Total ReturnA, B | 12.27% | 32.60% | 3.15% | 19.28% | 27.80% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.33% | 1.37% | 1.40% | 1.39% | 1.44% |
Expenses net of fee waivers, if any | 1.33% | 1.37% | 1.40% | 1.39% | 1.44% |
Expenses net of all reductions | 1.33% | 1.36% | 1.39% | 1.38% | 1.43% |
Net investment income (loss) | .12% | .52% | .54% | .10% | .06% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 90,509 | $ 79,172 | $ 63,954 | $ 71,542 | $ 58,202 |
Portfolio turnover rateE | 57% | 78% | 82% | 75% | 110% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
H Total distributions of $1.63 per share is comprised of distributions from net investment income of $.057 and distributions from net realized gain of $1.577 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 31.97 | $ 24.29 | $ 23.99 | $ 20.22 | $ 15.90 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.14) | (.01) | - H | (.11) | (.09) |
Net realized and unrealized gain (loss) | 3.71 | 7.74 | .57 | 3.88 | 4.41 |
Total from investment operations | 3.57 | 7.73 | .57 | 3.77 | 4.32 |
Distributions from net investment income | - | (.05) | (.02) | - | - |
Distributions from net realized gain | (1.52) | - | (.25) | - | - |
Total distributions | (1.52) | (.05) | (.27) | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 34.02 | $ 31.97 | $ 24.29 | $ 23.99 | $ 20.22 |
Total ReturnA, B | 11.64% | 31.87% | 2.59% | 18.64% | 27.17% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 1.88% | 1.92% | 1.94% | 1.93% | 1.97% |
Expenses net of fee waivers, if any | 1.88% | 1.92% | 1.94% | 1.93% | 1.97% |
Expenses net of all reductions | 1.87% | 1.91% | 1.94% | 1.93% | 1.97% |
Net investment income (loss) | (.42)% | (.04)% | -% F | (.44)% | (.48)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 12,459 | $ 17,502 | $ 20,058 | $ 28,600 | $ 29,048 |
Portfolio turnover rateE | 57% | 78% | 82% | 75% | 110% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Amount represents less than .01%.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 32.08 | $ 24.38 | $ 24.07 | $ 20.28 | $ 15.94 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.13) | .01 | .01 | (.09) | (.08) |
Net realized and unrealized gain (loss) | 3.73 | 7.75 | .58 | 3.88 | 4.42 |
Total from investment operations | 3.60 | 7.76 | .59 | 3.79 | 4.34 |
Distributions from net investment income | - | (.06) | (.03) | - | - |
Distributions from net realized gain | (1.55) | - | (.25) | - | - |
Total distributions | (1.55) | (.06) | (.28) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 34.13 | $ 32.08 | $ 24.38 | $ 24.07 | $ 20.28 |
Total ReturnA, B | 11.71% | 31.90% | 2.67% | 18.69% | 27.23% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.83% | 1.87% | 1.89% | 1.89% | 1.93% |
Expenses net of fee waivers, if any | 1.83% | 1.87% | 1.89% | 1.89% | 1.93% |
Expenses net of all reductions | 1.83% | 1.86% | 1.88% | 1.88% | 1.92% |
Net investment income (loss) | (.38)% | .02% | .05% | (.40)% | (.43)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 147,749 | $ 89,893 | $ 66,289 | $ 72,673 | $ 51,760 |
Portfolio turnover rateE | 57% | 78% | 82% | 75% | 110% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 35.83 | $ 27.18 | $ 26.69 | $ 22.30 | $ 17.45 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .25 | .33 | .28 | .17 | .13 |
Net realized and unrealized gain (loss) | 4.16 | 8.64 | .63 | 4.28 | 4.83 |
Total from investment operations | 4.41 | 8.97 | .91 | 4.45 | 4.96 |
Distributions from net investment income | (.24) | (.32) | (.17) | (.06) | (.11) |
Distributions from net realized gain | (1.58) | - | (.25) | - | - |
Total distributions | (1.82) | (.32) | (.42) | (.06) | (.11) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 38.42 | $ 35.83 | $ 27.18 | $ 26.69 | $ 22.30 |
Total ReturnA | 12.82% | 33.28% | 3.72% | 19.95% | 28.52% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .81% | .84% | .85% | .85% | .89% |
Expenses net of fee waivers, if any | .81% | .84% | .85% | .85% | .89% |
Expenses net of all reductions | .81% | .83% | .85% | .84% | .88% |
Net investment income (loss) | .64% | 1.04% | 1.08% | .65% | .61% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 242,772 | $ 84,780 | $ 42,850 | $ 68,323 | $ 29,578 |
Portfolio turnover rateD | 57% | 78% | 82% | 75% | 110% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Investment Valuation - continued
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. 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. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, original issue discount and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 146,109,784 |
Gross unrealized depreciation | (16,224,896) |
Net unrealized appreciation (depreciation) on securities | $ 129,884,888 |
|
|
Tax Cost | $ 761,511,111 |
Annual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 3,380,032 |
Undistributed long-term capital gain | $ 47,884,277 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 129,885,376 |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 6,372,762 | $ 2,791,779 |
Long-term Capital Gains | 22,535,352 | - |
Total | $ 28,908,114 | $ 2,791,779 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $671,449,261 and $419,224,664, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 887,322 | $ 12,709 |
Class T | .25% | .25% | 444,818 | 3,652 |
Class B | .75% | .25% | 155,692 | 116,923 |
Class C | .75% | .25% | 1,263,855 | 380,560 |
|
|
| $ 2,751,687 | $ 513,844 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Annual Report
Notes to Financial Statements - continued
5. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 229,224 |
Class T | 26,327 |
Class B* | 9,555 |
Class C* | 15,004 |
| $ 280,110 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 778,043 | .22 |
Class T | 190,529 | .21 |
Class B | 39,759 | .26 |
Class C | 270,482 | .21 |
Institutional Class | 328,869 | .19 |
| $ 1,607,682 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $11,936 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,222 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $23,336. During the period, there were no securities loaned to FCM.
Annual Report
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $22,746 for the period. In addition, through arrangements with the Fund's custodian, 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 $27.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net investment income |
|
|
Class A | $ 1,245,229 | $ 1,710,170 |
Class T | 134,405 | 408,593 |
Class B | - | 36,770 |
Class C | - | 160,671 |
Institutional Class | 750,857 | 475,575 |
Total | $ 2,130,491 | $ 2,791,779 |
From net realized gain |
|
|
Class A | $ 13,069,252 | $ - |
Class T | 3,703,526 | - |
Class B | 784,693 | - |
Class C | 4,700,595 | - |
Institutional Class | 4,519,557 | - |
Total | $ 26,777,623 | $ - |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 4,772,547 | 2,574,295 | $ 175,272,457 | $ 79,657,790 |
Reinvestment of distributions | 371,629 | 53,714 | 12,577,496 | 1,500,721 |
Shares redeemed | (2,753,437) | (2,093,962) | (102,587,048) | (62,545,427) |
Net increase (decrease) | 2,390,739 | 534,047 | $ 85,262,905 | $ 18,613,084 |
Class T |
|
|
|
|
Shares sold | 488,031 | 353,347 | $ 17,620,607 | $ 10,754,227 |
Reinvestment of distributions | 111,368 | 14,180 | 3,695,039 | 390,674 |
Shares redeemed | (438,393) | (517,661) | (15,778,298) | (15,034,025) |
Net increase (decrease) | 161,006 | (150,134) | $ 5,537,348 | $ (3,889,124) |
Class B |
|
|
|
|
Shares sold | 23,437 | 24,479 | $ 779,028 | $ 701,454 |
Reinvestment of distributions | 20,842 | 1,145 | 646,413 | 30,226 |
Shares redeemed | (225,514) | (303,898) | (7,608,429) | (8,464,475) |
Net increase (decrease) | (181,235) | (278,274) | $ (6,182,988) | $ (7,732,795) |
Class C |
|
|
|
|
Shares sold | 2,035,151 | 682,170 | $ 69,252,170 | $ 19,951,920 |
Reinvestment of distributions | 122,955 | 5,091 | 3,851,644 | 134,814 |
Shares redeemed | (631,000) | (604,905) | (21,673,420) | (16,678,512) |
Net increase (decrease) | 1,527,106 | 82,356 | $ 51,430,394 | $ 3,408,222 |
Institutional Class |
|
|
|
|
Shares sold | 5,450,475 | 1,667,388 | $ 209,069,151 | $ 53,671,489 |
Reinvestment of distributions | 116,471 | 12,331 | 4,133,979 | 356,365 |
Shares redeemed | (1,614,908) | (890,195) | (62,664,708) | (27,529,476) |
Net increase (decrease) | 3,952,038 | 789,524 | $ 150,538,422 | $ 26,498,378 |
Annual Report
Notes to Financial Statements - continued
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report
Fidelity Advisor Technology Fund - Class A, T, B, and C
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow. Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) | 15.13% | 16.52% | 9.49% |
Class T (incl. 3.50% sales charge) | 17.62% | 16.78% | 9.47% |
Class B (incl. contingent deferred sales charge) A | 16.21% | 16.81% | 9.56% |
Class C (incl. contingent deferred sales charge) B | 20.31% | 17.04% | 9.32% |
A Class B shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 5%, 2%, and 0%, respectively.
B Class C shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 1%, 0%, and 0%, respectively.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Technology Fund - Class A on July 31, 2004, and the current 5.75% sales charge was paid. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Technology Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Charlie Chai, Portfolio Manager of Fidelity Advisor® Technology Fund: For the year, the fund's Class A, Class T, Class B and Class C shares returned 22.15%, 21.89%, 21.21% and 21.31%, respectively (excluding sales charges), trailing the 26.28% gain of the MSCI U.S. IMI Information Technology 25-50 Index but topping the S&P 500®. Strong results in a variety of technology subsectors - notably, technology hardware, storage & peripherals - enabled the MSCI sector index to outpace the S&P 500® by a healthy margin. Versus the MSCI index, a rotation from growth to value stocks in March and April hurt many of the smaller-cap growth shares owned by the fund. Further, although the MSCI sector index easily outperformed the S&P 500® during the period, the best performance was concentrated in large-caps, as investors in the sector remained somewhat cautious. Consequently, the fund's underexposure to large-caps hampered performance. A resurgence of personal computer-related stocks in the index also detracted from our relative results. Specifically, the fund was hurt by a large underweighting in operating system software provider Microsoft and no stake in PC chipmaker Intel, the two biggest detractors from the fund's relative performance. An average overweighting in NCR also worked against us. When this maker of ATMs and point-of-sale payment devices missed its sales estimates for the third quarter of 2013, I sold down and eventually eliminated this position in favor of other stocks I thought had more potential. Lastly, the fund's cash position dampened its relative performance. Conversely, although my decision to underweight stocks with more than $100 billion in market capitalization hurt our relative results, security selection in this group was a positive. In particular, largely avoiding IT consulting heavyweight IBM was timely, as the share price of this slow-growing index component struggled around the break-even mark during the period. The fund did not hold IBM at period end. One theme that paid off for the fund during the period was mobile messaging. A contributor here was South Korea-based NAVER, which I built into a major position. Another important mobile messaging player that contributed was China's Tencent Holdings, with its WeChat application, which combines instant messaging and social networking capabilities. Tencent was buoyed partly by a five-for-one stock split in May, and I sold some of the position to lock in profits, as I thought the upside potential elsewhere might be better. NAVER and Tencent were non-index holdings.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.12% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,057.50 | $ 5.71 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.24 | $ 5.61 |
Class T | 1.37% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,056.40 | $ 6.99 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.00 | $ 6.85 |
Class B | 1.91% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,053.30 | $ 9.72 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.32 | $ 9.54 |
Class C | 1.86% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,053.70 | $ 9.47 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.57 | $ 9.30 |
Institutional Class | .82% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,059.00 | $ 4.19 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.73 | $ 4.11 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Technology Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Apple, Inc. | 13.6 | 4.5 |
Google, Inc. Class C | 4.9 | 0.0 |
Google, Inc. Class A | 4.4 | 10.4 |
Microsoft Corp. | 4.3 | 4.6 |
Facebook, Inc. Class A | 3.7 | 4.6 |
Fidelity National Information Services, Inc. | 2.6 | 2.4 |
NAVER Corp. | 2.5 | 2.5 |
Yahoo!, Inc. | 2.3 | 5.3 |
Baidu.com, Inc. sponsored ADR | 2.0 | 0.0 |
Ctrip.com International Ltd. sponsored ADR | 1.5 | 0.1 |
| 41.8 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Internet Software | 27.7% |
|
| Software | 17.2% |
|
| Technology Hardware, Storage & Peripherals | 17.1% |
|
| Semiconductors & Semiconductor Equipment | 9.9% |
|
| IT Services | 8.9% |
|
| All Others* | 19.2% |
|
As of January 31, 2014 | |||
| Internet Software | 32.2% |
|
| Software | 18.6% |
|
| IT Services | 12.5% |
|
| Semiconductors & Semiconductor Equipment | 9.1% |
|
| Computers & Peripherals | 8.0% |
|
| All Others* | 19.6% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Technology Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 98.0% | |||
Shares | Value | ||
AUTOMOBILES - 0.5% | |||
Automobile Manufacturers - 0.5% | |||
Tesla Motors, Inc. (a) | 24,809 | $ 5,539,850 | |
COMMUNICATIONS EQUIPMENT - 3.9% | |||
Communications Equipment - 3.9% | |||
ADVA Optical Networking SE (a) | 151,224 | 562,535 | |
F5 Networks, Inc. (a) | 32,443 | 3,652,757 | |
Ixia (a) | 203,925 | 2,181,998 | |
Juniper Networks, Inc. | 330,666 | 7,783,878 | |
Palo Alto Networks, Inc. (a) | 21,900 | 1,770,834 | |
Procera Networks, Inc. (a) | 19,700 | 197,197 | |
QUALCOMM, Inc. | 158,000 | 11,644,600 | |
Radware Ltd. (a) | 235,510 | 3,860,009 | |
Riverbed Technology, Inc. (a) | 328,955 | 5,888,295 | |
Sandvine Corp. (U.K.) (a)(f) | 278,700 | 915,069 | |
Sonus Networks, Inc. (a) | 713,653 | 2,519,195 | |
Spirent Communications PLC | 2,996,468 | 5,205,646 | |
| 46,182,013 | ||
CONSTRUCTION MATERIALS - 0.0% | |||
Construction Materials - 0.0% | |||
Universal Cement Corp. | 371,280 | 359,073 | |
DIVERSIFIED CONSUMER SERVICES - 0.2% | |||
Education Services - 0.0% | |||
TAL Education Group ADR (a) | 19,600 | 577,220 | |
Specialized Consumer Services - 0.2% | |||
LifeLock, Inc. (a) | 128,967 | 1,790,062 | |
TOTAL DIVERSIFIED CONSUMER SERVICES | 2,367,282 | ||
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.2% | |||
Alternative Carriers - 0.2% | |||
8x8, Inc. (a) | 247,500 | 1,999,800 | |
ELECTRICAL EQUIPMENT - 0.9% | |||
Electrical Components & Equipment - 0.9% | |||
Acuity Brands, Inc. | 79,000 | 8,474,330 | |
BizLink Holding, Inc. | 371,673 | 1,478,571 | |
BizLink Holding, Inc. rights 9/9/14 (a) | 9,301 | 3,032 | |
Zippy Technology Corp. | 300,000 | 477,591 | |
| 10,433,524 | ||
ELECTRONIC EQUIPMENT & COMPONENTS - 6.4% | |||
Electronic Components - 3.7% | |||
Alps Electric Co. Ltd. | 638,400 | 8,861,022 | |
Delta Electronics, Inc. | 430,000 | 2,914,993 | |
Iljin Materials Co. Ltd. (a) | 8,820 | 88,446 | |
InvenSense, Inc. (a)(d) | 354,526 | 8,157,643 | |
Largan Precision Co. Ltd. | 68,000 | 5,211,438 | |
Ledlink Optics, Inc. | 586,118 | 1,135,849 | |
LG Innotek Co. Ltd. (a) | 8,541 | 1,034,079 | |
OMRON Corp. | 119,900 | 5,317,894 | |
| |||
Shares | Value | ||
Samsung SDI Co. Ltd. | 1,973 | $ 303,760 | |
Sapphire Technology Co. Ltd. (a) | 10,342 | 312,531 | |
Sunny Optical Technology Group Co. Ltd. (d) | 3,146,000 | 4,137,588 | |
Yageo Corp. | 9,150,000 | 6,158,231 | |
Yaskawa Electric Corp. | 37,000 | 482,212 | |
| 44,115,686 | ||
Electronic Equipment & Instruments - 1.2% | |||
Chroma ATE, Inc. | 1,253,683 | 3,314,619 | |
DynaColor, Inc. | 178,000 | 439,843 | |
FEI Co. | 3,300 | 252,780 | |
PAX Global Technology Ltd. (a) | 3,389,000 | 2,597,816 | |
Posiflex Technologies, Inc. | 20,100 | 121,525 | |
TPK Holding Co. Ltd. | 1,138,000 | 7,126,163 | |
| 13,852,746 | ||
Electronic Manufacturing Services - 1.1% | |||
AIC, Inc. | 87,000 | 507,623 | |
Merry Electronics Co. Ltd. | 222,000 | 1,103,191 | |
TE Connectivity Ltd. | 78,529 | 4,860,160 | |
Trimble Navigation Ltd. (a) | 230,796 | 7,131,596 | |
| 13,602,570 | ||
Technology Distributors - 0.4% | |||
Digital China Holdings Ltd. (H Shares) | 4,302,000 | 4,233,946 | |
TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 75,804,948 | ||
HEALTH CARE EQUIPMENT & SUPPLIES - 0.3% | |||
Health Care Equipment - 0.3% | |||
Intai Technology Corp. | 439,000 | 2,441,811 | |
PW Medtech Group Ltd. (a) | 946,000 | 492,014 | |
| 2,933,825 | ||
HEALTH CARE PROVIDERS & SERVICES - 0.0% | |||
Managed Health Care - 0.0% | |||
Healthequity, Inc. (a) | 3,000 | 52,800 | |
HEALTH CARE TECHNOLOGY - 1.3% | |||
Health Care Technology - 1.3% | |||
athenahealth, Inc. (a)(d) | 36,494 | 4,539,854 | |
M3, Inc. | 222,100 | 3,584,682 | |
Medidata Solutions, Inc. (a) | 165,900 | 7,438,956 | |
| 15,563,492 | ||
HOUSEHOLD DURABLES - 0.1% | |||
Consumer Electronics - 0.0% | |||
Skyworth Digital Holdings Ltd. | 862,000 | 425,486 | |
Housewares & Specialties - 0.1% | |||
Cuckoo Electronics Co. Ltd. | 5,068 | 487,080 | |
TOTAL HOUSEHOLD DURABLES | 912,566 | ||
INTERNET & CATALOG RETAIL - 1.7% | |||
Internet Retail - 1.7% | |||
Cogobuy Group (a) | 2,292,000 | 1,137,774 | |
Common Stocks - continued | |||
Shares | Value | ||
INTERNET & CATALOG RETAIL - CONTINUED | |||
Internet Retail - continued | |||
Ctrip.com International Ltd. sponsored ADR (a) | 281,912 | $ 18,050,825 | |
HomeAway, Inc. (a) | 99 | 3,437 | |
InterPark INT Corp. | 2,302 | 42,144 | |
Jumei International Holding Ltd. sponsored ADR | 2,200 | 62,788 | |
MySale Group PLC | 5,700 | 20,016 | |
RetailMeNot, Inc. (d) | 21,800 | 533,228 | |
TripAdvisor, Inc. (a) | 4,748 | 450,300 | |
| 20,300,512 | ||
INTERNET SOFTWARE & SERVICES - 27.4% | |||
Internet Software & Services - 27.4% | |||
21Vianet Group, Inc. ADR (a) | 129,800 | 3,612,334 | |
58.com, Inc. ADR (d) | 90,400 | 4,443,160 | |
Addcn Technology Co. Ltd. | 7,000 | 87,005 | |
Amber Road, Inc. (a) | 1,000 | 13,700 | |
Autohome, Inc. ADR Class A | 53,900 | 1,996,995 | |
Baidu.com, Inc. sponsored ADR (a) | 109,200 | 23,592,660 | |
Benefitfocus, Inc. (d) | 14,400 | 554,976 | |
blinkx PLC (a) | 241,500 | 140,665 | |
ChannelAdvisor Corp. (a) | 227,092 | 5,207,220 | |
Constant Contact, Inc. (a) | 38,900 | 1,210,957 | |
Cornerstone OnDemand, Inc. (a) | 182,032 | 7,616,219 | |
Cvent, Inc. | 56,808 | 1,551,426 | |
Demandware, Inc. (a) | 29,006 | 1,747,321 | |
E2open, Inc. (a)(d) | 140,926 | 2,280,183 | |
eGain Communications Corp. (a) | 54,950 | 350,032 | |
Endurance International Group Holdings, Inc. (d) | 554,800 | 7,561,924 | |
Facebook, Inc. Class A (a) | 604,011 | 43,881,399 | |
Google, Inc.: | |||
Class A (a) | 89,187 | 51,688,326 | |
Class C (a) | 99,887 | 57,095,409 | |
Just Dial Ltd. (a) | 4,643 | 127,459 | |
LinkedIn Corp. (a) | 33,800 | 6,105,632 | |
Marketo, Inc. (a) | 96,113 | 2,628,691 | |
Move, Inc. (a) | 254,813 | 3,720,270 | |
NAVER Corp. | 41,957 | 29,954,889 | |
NIC, Inc. | 50,508 | 852,070 | |
Opower, Inc. | 34,800 | 556,800 | |
Q2 Holdings, Inc. (a) | 31,300 | 412,221 | |
Rackspace Hosting, Inc. (a) | 36,639 | 1,109,795 | |
SciQuest, Inc. (a) | 59,654 | 918,075 | |
SouFun Holdings Ltd. ADR | 12,200 | 139,934 | |
TelecityGroup PLC | 275,632 | 3,699,529 | |
Tencent Holdings Ltd. | 557,200 | 9,048,794 | |
Textura Corp. (a)(d) | 134,915 | 3,368,828 | |
Trulia, Inc. (a) | 27,700 | 1,676,681 | |
Twitter, Inc. | 114,600 | 5,178,774 | |
Web.com Group, Inc. (a) | 156,586 | 4,157,358 | |
| |||
Shares | Value | ||
Yahoo!, Inc. (a) | 741,804 | $ 26,564,001 | |
Yandex NV (a) | 115,800 | 3,506,424 | |
Yelp, Inc. (a)(d) | 39,843 | 2,675,856 | |
YY, Inc. ADR (a)(d) | 15,700 | 1,213,924 | |
| 322,247,916 | ||
IT SERVICES - 8.9% | |||
Data Processing & Outsourced Services - 7.5% | |||
Alliance Data Systems Corp. (a) | 26,000 | 6,819,540 | |
Computer Sciences Corp. | 154,800 | 9,657,972 | |
DST Systems, Inc. | 61,768 | 5,563,444 | |
Euronet Worldwide, Inc. (a) | 26,335 | 1,317,803 | |
Fidelity National Information Services, Inc. | 541,195 | 30,523,398 | |
Fiserv, Inc. (a) | 39,291 | 2,423,076 | |
Global Payments, Inc. | 33,000 | 2,285,910 | |
MasterCard, Inc. Class A | 79,500 | 5,894,925 | |
NETELLER PLC (a) | 819,150 | 6,264,858 | |
QIWI PLC Class B sponsored ADR (d) | 2,600 | 93,730 | |
Quindell PLC (d) | 382,073 | 1,322,360 | |
Total System Services, Inc. | 288,453 | 9,230,496 | |
Vantiv, Inc. (a) | 72,700 | 2,383,106 | |
Visa, Inc. Class A | 19,700 | 4,156,897 | |
| 87,937,515 | ||
IT Consulting & Other Services - 1.4% | |||
Cognizant Technology Solutions Corp. Class A (a) | 290,794 | 14,263,446 | |
EPAM Systems, Inc. (a) | 39,161 | 1,513,964 | |
Virtusa Corp. (a) | 30,400 | 950,912 | |
| 16,728,322 | ||
TOTAL IT SERVICES | 104,665,837 | ||
LEISURE PRODUCTS - 0.3% | |||
Leisure Products - 0.3% | |||
Bandai Namco Holdings, Inc. | 132,500 | 3,353,418 | |
Sega Sammy Holdings, Inc. | 31,100 | 615,205 | |
| 3,968,623 | ||
MACHINERY - 0.1% | |||
Industrial Machinery - 0.1% | |||
King Slide Works Co. Ltd. | 117,000 | 1,544,677 | |
MEDIA - 0.4% | |||
Broadcasting - 0.4% | |||
Fuji Media Holdings, Inc. | 303,600 | 4,848,568 | |
Publishing - 0.0% | |||
NEXT Co. Ltd. | 41,100 | 306,753 | |
TOTAL MEDIA | 5,155,321 | ||
PROFESSIONAL SERVICES - 0.9% | |||
Human Resource & Employment Services - 0.5% | |||
51job, Inc. sponsored ADR (a) | 1,900 | 143,564 | |
Common Stocks - continued | |||
Shares | Value | ||
PROFESSIONAL SERVICES - CONTINUED | |||
Human Resource & Employment Services - continued | |||
Paylocity Holding Corp. (a)(d) | 31,700 | $ 621,003 | |
WageWorks, Inc. (a) | 115,100 | 4,804,274 | |
| 5,568,841 | ||
Research & Consulting Services - 0.4% | |||
ICF International, Inc. (a) | 30,400 | 1,050,928 | |
Verisk Analytics, Inc. (a) | 57,968 | 3,480,399 | |
| 4,531,327 | ||
TOTAL PROFESSIONAL SERVICES | 10,100,168 | ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 9.9% | |||
Semiconductor Equipment - 1.6% | |||
Aixtron AG (a)(d) | 41,900 | 565,378 | |
ASM Pacific Technology Ltd. | 249,400 | 2,649,274 | |
Daqo New Energy Corp. ADR (a)(d) | 62,622 | 1,558,035 | |
GCL-Poly Energy Holdings Ltd. (a) | 3,419,000 | 1,103,769 | |
GT Advanced Technologies, Inc. (a)(d) | 225,683 | 3,123,453 | |
Nanometrics, Inc. (a) | 8,409 | 130,844 | |
Rubicon Technology, Inc. (a)(d) | 501,267 | 3,774,541 | |
SMA Solar Technology AG (a)(d) | 22,683 | 615,067 | |
Tessera Technologies, Inc. | 197,514 | 5,018,831 | |
Ultratech, Inc. (a) | 9,000 | 213,120 | |
| 18,752,312 | ||
Semiconductors - 8.3% | |||
Altera Corp. | 67,779 | 2,217,729 | |
Atmel Corp. (a) | 127,400 | 1,044,680 | |
Audience, Inc. (a) | 129,100 | 1,230,323 | |
Broadcom Corp. Class A | 308,522 | 11,804,052 | |
Capella Microsystems, Inc. | 125,000 | 566,070 | |
Cree, Inc. (a) | 84,445 | 3,988,337 | |
Crystalwise Technology, Inc. (a) | 227,371 | 230,235 | |
EPISTAR Corp. | 1,464,000 | 3,179,729 | |
Fairchild Semiconductor International, Inc. (a) | 36,300 | 552,486 | |
First Solar, Inc. (a) | 127,800 | 8,065,458 | |
Freescale Semiconductor, Inc. (a) | 101,399 | 2,030,008 | |
Genesis Photonics, Inc. (a) | 1,979,000 | 1,502,062 | |
Inphi Corp. (a) | 41,993 | 640,813 | |
Intermolecular, Inc. (a) | 349,254 | 778,836 | |
Intersil Corp. Class A | 75,694 | 971,154 | |
Lextar Electronics Corp. | 214,000 | 210,349 | |
M/A-COM Technology Solutions, Inc. (a) | 93,500 | 1,860,650 | |
Macronix International Co. Ltd. (a) | 484,000 | 124,448 | |
MagnaChip Semiconductor Corp. (a) | 125,454 | 1,757,611 | |
Melexis NV | 48,299 | 2,235,807 | |
Mellanox Technologies Ltd. (a)(d) | 135,152 | 5,629,081 | |
Micrel, Inc. | 51,500 | 538,690 | |
Micron Technology, Inc. (a) | 148,400 | 4,533,620 | |
Monolithic Power Systems, Inc. | 99,901 | 4,119,917 | |
NXP Semiconductors NV (a) | 81,286 | 5,068,182 | |
| |||
Shares | Value | ||
On-Bright Electronics, Inc. | 79,000 | $ 544,862 | |
Peregrine Semiconductor Corp. (a) | 397,203 | 2,677,148 | |
PixArt Imaging, Inc. (a) | 20,000 | 56,592 | |
PMC-Sierra, Inc. (a) | 392,700 | 2,642,871 | |
Power Integrations, Inc. | 31,900 | 1,717,177 | |
Radiant Opto-Electronics Corp. | 636,000 | 2,635,273 | |
RF Micro Devices, Inc. (a) | 205,011 | 2,287,923 | |
Semiconductor Manufacturing International Corp. (a) | 49,268,000 | 4,531,023 | |
Seoul Semiconductor Co. Ltd. | 170,113 | 4,694,238 | |
Silicon Laboratories, Inc. (a) | 36,800 | 1,498,864 | |
Spansion, Inc. Class A (a) | 207,000 | 3,926,790 | |
SunEdison Semiconductor Ltd. | 133,352 | 2,253,649 | |
SunPower Corp. (a)(d) | 39,500 | 1,450,835 | |
TriQuint Semiconductor, Inc. (a) | 128,000 | 2,301,440 | |
YoungTek Electronics Corp. | 34,491 | 72,154 | |
| 98,171,166 | ||
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | 116,923,478 | ||
SOFTWARE - 17.2% | |||
Application Software - 7.5% | |||
Adobe Systems, Inc. (a) | 67,116 | 4,638,387 | |
ANSYS, Inc. (a) | 15,575 | 1,198,341 | |
Aspen Technology, Inc. (a) | 88,321 | 3,836,664 | |
Autodesk, Inc. (a) | 130,200 | 6,946,170 | |
Broadleaf Co. Ltd. | 31,300 | 589,739 | |
BroadSoft, Inc. (a) | 183,630 | 4,480,572 | |
Callidus Software, Inc. (a) | 49,400 | 529,568 | |
Citrix Systems, Inc. (a) | 125,915 | 8,528,223 | |
Concur Technologies, Inc. (a)(d) | 156,951 | 14,590,165 | |
Descartes Systems Group, Inc. (a) | 101,500 | 1,367,483 | |
Guidewire Software, Inc. (a) | 208 | 8,424 | |
Interactive Intelligence Group, Inc. (a) | 126,760 | 5,751,101 | |
Jive Software, Inc. (a) | 42,898 | 339,752 | |
Kingdee International Software Group Co. Ltd. (a) | 19,791,800 | 6,834,387 | |
Linx SA | 25,000 | 595,041 | |
MicroStrategy, Inc. Class A (a) | 33,730 | 4,827,775 | |
MobileIron, Inc. | 15,400 | 138,600 | |
Paycom Software, Inc. | 1,000 | 12,780 | |
PROS Holdings, Inc. (a) | 8,633 | 221,177 | |
Qlik Technologies, Inc. (a) | 128,600 | 3,402,756 | |
salesforce.com, Inc. (a) | 297,419 | 16,134,981 | |
SolarWinds, Inc. (a) | 29,133 | 1,198,532 | |
Splunk, Inc. (a) | 27,196 | 1,278,756 | |
TIBCO Software, Inc. (a) | 533 | 10,287 | |
Ultimate Software Group, Inc. (a) | 83 | 11,198 | |
Workday, Inc. Class A (a) | 1,003 | 84,092 | |
Zendesk, Inc. | 36,900 | 641,691 | |
| 88,196,642 | ||
Home Entertainment Software - 1.0% | |||
Activision Blizzard, Inc. | 255,370 | 5,715,181 | |
Common Stocks - continued | |||
Shares | Value | ||
SOFTWARE - CONTINUED | |||
Home Entertainment Software - continued | |||
Electronic Arts, Inc. (a) | 14,946 | $ 502,186 | |
Nintendo Co. Ltd. | 32,800 | 3,643,753 | |
Nintendo Co. Ltd. ADR | 27,100 | 374,793 | |
Ourgame International Holdings Ltd. | 3,330,000 | 1,551,061 | |
| 11,786,974 | ||
Systems Software - 8.7% | |||
Allot Communications Ltd. (a) | 231,419 | 2,992,248 | |
CommVault Systems, Inc. (a) | 18,700 | 897,974 | |
Fleetmatics Group PLC (a) | 139,169 | 4,396,349 | |
Imperva, Inc. (a) | 21,000 | 465,570 | |
Infoblox, Inc. (a) | 37,600 | 455,712 | |
MICROS Systems, Inc. (a) | 18,100 | 1,224,103 | |
Microsoft Corp. | 1,158,695 | 50,009,276 | |
NetSuite, Inc. (a) | 173,877 | 14,659,570 | |
Oracle Corp. | 294,500 | 11,894,855 | |
Red Hat, Inc. (a) | 121,876 | 7,083,433 | |
ServiceNow, Inc. (a) | 143,995 | 8,466,906 | |
Varonis Systems, Inc. | 1,000 | 21,080 | |
| 102,567,076 | ||
TOTAL SOFTWARE | 202,550,692 | ||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 17.1% | |||
Technology Hardware, Storage & Peripherals - 17.1% | |||
ADLINK Technology, Inc. | 47,081 | 118,842 | |
Apple, Inc. | 1,673,529 | 159,939,164 | |
BlackBerry Ltd. (a) | 1,286 | 11,998 | |
Casetek Holdings | 103,000 | 590,107 | |
Catcher Technology Co. Ltd. | 462,000 | 3,767,022 | |
Cray, Inc. (a) | 285,846 | 7,580,636 | |
Hewlett-Packard Co. | 456,800 | 16,266,648 | |
Lite-On Technology Corp. | 1,338,664 | 2,240,538 | |
NEC Corp. | 1,709,000 | 6,598,212 | |
Nimble Storage, Inc. (d) | 59,300 | 1,534,684 | |
QLogic Corp. (a) | 43,800 | 398,580 | |
Silicon Graphics International Corp. (a) | 182,558 | 1,736,127 | |
| 200,782,558 | ||
WIRELESS TELECOMMUNICATION SERVICES - 0.3% | |||
Wireless Telecommunication Services - 0.3% | |||
RingCentral, Inc. (d) | 257,400 | 3,842,982 | |
TOTAL COMMON STOCKS (Cost $1,009,052,957) |
| ||
Convertible Preferred Stocks - 0.3% | |||
Shares | Value | ||
INTERNET SOFTWARE & SERVICES - 0.3% | |||
Internet Software & Services - 0.3% | |||
Uber Technologies, Inc. 8.00% (e) | 58,016 | $ 3,600,020 | |
Money Market Funds - 3.3% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 3,200,392 | 3,200,392 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 35,534,556 | 35,534,556 | |
TOTAL MONEY MARKET FUNDS (Cost $38,734,948) |
| ||
TOTAL INVESTMENT PORTFOLIO - 101.6% (Cost $1,051,387,925) | 1,196,566,905 | ||
NET OTHER ASSETS (LIABILITIES) - (1.6)% | (18,657,891) | ||
NET ASSETS - 100% | $ 1,177,909,014 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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 $3,600,020 or 0.3% of net assets. |
Additional information on each restricted holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Uber Technologies, Inc. 8.00% | 6/6/14 | $ 3,600,020 |
(f) A portion of the security sold on a delayed delivery basis. |
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 | $ 27,616 |
Fidelity Securities Lending Cash Central Fund | 436,441 |
Total | $ 464,057 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 1,154,231,937 | $ 989,414,025 | $ 164,330,832 | $ 487,080 |
Convertible Preferred Stocks | 3,600,020 | - | - | 3,600,020 |
Money Market Funds | 38,734,948 | 38,734,948 | - | - |
Total Investments in Securities: | $ 1,196,566,905 | $ 1,028,148,973 | $ 164,330,832 | $ 4,087,100 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended July 31, 2014. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements: |
Transfers | Total |
Level 1 to Level 2 | $ 26,207,254 |
Level 2 to Level 1 | $ 0 |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 76.9% |
Cayman Islands | 7.8% |
Taiwan | 3.3% |
Japan | 3.3% |
Korea (South) | 3.1% |
Israel | 1.1% |
Others (Individually Less Than 1%) | 4.5% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Technology Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $33,201,371) - See accompanying schedule: Unaffiliated issuers (cost $1,012,652,977) | $ 1,157,831,957 |
|
Fidelity Central Funds (cost $38,734,948) | 38,734,948 |
|
Total Investments (cost $1,051,387,925) |
| $ 1,196,566,905 |
Cash |
| 482 |
Foreign currency held at value (cost $106,335) | 106,333 | |
Receivable for investments sold: | ||
Regular delivery | 33,255,035 | |
Delayed delivery | 777,651 | |
Receivable for fund shares sold | 1,062,916 | |
Dividends receivable | 501,148 | |
Distributions receivable from Fidelity Central Funds | 73,432 | |
Other receivables | 30,862 | |
Total assets | 1,232,374,764 | |
|
|
|
Liabilities | ||
Payable for investments purchased, regular delivery | $ 16,457,006 | |
Payable for fund shares redeemed | 1,315,676 | |
Accrued management fee | 545,671 | |
Distribution and service plan fees payable | 268,339 | |
Other affiliated payables | 265,033 | |
Other payables and accrued expenses | 79,469 | |
Collateral on securities loaned, at value | 35,534,556 | |
Total liabilities | 54,465,750 | |
|
|
|
Net Assets | $ 1,177,909,014 | |
Net Assets consist of: |
| |
Paid in capital | $ 958,731,130 | |
Accumulated net investment loss | (10,080) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 74,013,894 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 145,174,070 | |
Net Assets | $ 1,177,909,014 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 36.06 | |
|
|
|
Maximum offering price per share (100/94.25 of $36.06) | $ 38.26 | |
Class T: | $ 34.66 | |
|
|
|
Maximum offering price per share (100/96.50 of $34.66) | $ 35.92 | |
Class B: | $ 31.83 | |
|
|
|
Class C: | $ 31.99 | |
|
|
|
Institutional Class: | $ 38.06 | |
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.
Annual Report
Fund Name
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 7,024,642 |
Interest |
| 413 |
Income from Fidelity Central Funds (including $436,441 from security lending) |
| 464,057 |
Total income |
| 7,489,112 |
|
|
|
Expenses | ||
Management fee | $ 5,357,994 | |
Transfer agent fees | 2,439,478 | |
Distribution and service plan fees | 3,034,212 | |
Accounting and security lending fees | 330,593 | |
Custodian fees and expenses | 128,621 | |
Independent trustees' compensation | 23,337 | |
Registration fees | 86,607 | |
Audit | 59,672 | |
Legal | 17,262 | |
Interest | 258 | |
Miscellaneous | 12,984 | |
Total expenses before reductions | 11,491,018 | |
Expense reductions | (131,904) | 11,359,114 |
Net investment income (loss) | (3,870,002) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 107,704,975 | |
Foreign currency transactions | (103,604) | |
Total net realized gain (loss) |
| 107,601,371 |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of increase in deferred foreign taxes of $3,197) | 87,969,355 | |
Assets and liabilities in foreign currencies | (702) | |
Total change in net unrealized appreciation (depreciation) |
| 87,968,653 |
Net gain (loss) | 195,570,024 | |
Net increase (decrease) in net assets resulting from operations | $ 191,700,022 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (3,870,002) | $ (2,608,860) |
Net realized gain (loss) | 107,601,371 | 108,122,498 |
Change in net unrealized appreciation (depreciation) | 87,968,653 | 25,685,939 |
Net increase (decrease) in net assets resulting from operations | 191,700,022 | 131,199,577 |
Distributions to shareholders from net realized gain | (11,189,247) | - |
Share transactions - net increase (decrease) | 150,832,224 | 5,042,118 |
Redemption fees | 21,186 | 41,110 |
Total increase (decrease) in net assets | 331,364,185 | 136,282,805 |
|
|
|
Net Assets | ||
Beginning of period | 846,544,829 | 710,262,024 |
End of period (including accumulated net investment loss of $10,080 and accumulated net investment loss of $1,634,632, respectively) | $ 1,177,909,014 | $ 846,544,829 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 29.90 | $ 25.25 | $ 25.14 | $ 19.83 | $ 16.03 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.12) | (.07) | (.13) | (.18) | (.16) |
Net realized and unrealized gain (loss) | 6.70 | 4.72 | .24 | 5.49 | 3.96 |
Total from investment operations | 6.58 | 4.65 | .11 | 5.31 | 3.80 |
Distributions from net realized gain | (.42) | - | - | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 36.06 | $ 29.90 | $ 25.25 | $ 25.14 | $ 19.83 |
Total ReturnA, B | 22.15% | 18.42% | .44% | 26.78% | 23.71% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.14% | 1.18% | 1.18% | 1.18% | 1.21% |
Expenses net of fee waivers, if any | 1.14% | 1.18% | 1.18% | 1.18% | 1.21% |
Expenses net of all reductions | 1.12% | 1.14% | 1.17% | 1.16% | 1.18% |
Net investment income (loss) | (.35)% | (.25)% | (.55)% | (.73)% | (.83)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 408,687 | $ 355,306 | $ 336,693 | $ 375,609 | $ 312,659 |
Portfolio turnover rateE | 186% | 142% | 201% | 167% | 115% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 28.79 | $ 24.38 | $ 24.33 | $ 19.24 | $ 15.59 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.19) | (.13) | (.19) | (.23) | (.20) |
Net realized and unrealized gain (loss) | 6.45 | 4.54 | .24 | 5.32 | 3.85 |
Total from investment operations | 6.26 | 4.41 | .05 | 5.09 | 3.65 |
Distributions from net realized gain | (.39) | - | - | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 34.66 | $ 28.79 | $ 24.38 | $ 24.33 | $ 19.24 |
Total ReturnA, B | 21.89% | 18.09% | .21% | 26.46% | 23.41% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.38% | 1.42% | 1.43% | 1.43% | 1.46% |
Expenses net of fee waivers, if any | 1.38% | 1.42% | 1.43% | 1.43% | 1.46% |
Expenses net of all reductions | 1.37% | 1.39% | 1.42% | 1.40% | 1.44% |
Net investment income (loss) | (.60)% | (.50)% | (.80)% | (.98)% | (1.09)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 196,067 | $ 173,692 | $ 172,709 | $ 196,913 | $ 169,049 |
Portfolio turnover rateE | 186% | 142% | 201% | 167% | 115% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 26.56 | $ 22.60 | $ 22.67 | $ 18.01 | $ 14.67 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.34) | (.24) | (.28) | (.33) | (.27) |
Net realized and unrealized gain (loss) | 5.94 | 4.20 | .21 | 4.99 | 3.61 |
Total from investment operations | 5.60 | 3.96 | (.07) | 4.66 | 3.34 |
Distributions from net realized gain | (.33) | - | - | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 31.83 | $ 26.56 | $ 22.60 | $ 22.67 | $ 18.01 |
Total ReturnA, B | 21.21% | 17.52% | (.31)% | 25.87% | 22.77% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.92% | 1.93% | 1.93% | 1.93% | 1.96% |
Expenses net of fee waivers, if any | 1.92% | 1.93% | 1.93% | 1.93% | 1.96% |
Expenses net of all reductions | 1.91% | 1.89% | 1.92% | 1.91% | 1.94% |
Net investment income (loss) | (1.14)% | (1.01)% | (1.30)% | (1.49)% | (1.59)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 12,043 | $ 13,745 | $ 17,476 | $ 25,508 | $ 29,176 |
Portfolio turnover rateE | 186% | 142% | 201% | 167% | 115% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 26.68 | $ 22.70 | $ 22.77 | $ 18.09 | $ 14.74 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.33) | (.24) | (.29) | (.33) | (.28) |
Net realized and unrealized gain (loss) | 5.98 | 4.22 | .22 | 5.01 | 3.63 |
Total from investment operations | 5.65 | 3.98 | (.07) | 4.68 | 3.35 |
Distributions from net realized gain | (.34) | - | - | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 31.99 | $ 26.68 | $ 22.70 | $ 22.77 | $ 18.09 |
Total ReturnA, B | 21.31% | 17.53% | (.31)% | 25.87% | 22.73% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.87% | 1.91% | 1.93% | 1.92% | 1.96% |
Expenses net of fee waivers, if any | 1.87% | 1.91% | 1.93% | 1.92% | 1.96% |
Expenses net of all reductions | 1.86% | 1.88% | 1.91% | 1.90% | 1.93% |
Net investment income (loss) | (1.09)% | (.99)% | (1.29)% | (1.48)% | (1.58)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 105,499 | $ 84,858 | $ 88,074 | $ 89,819 | $ 70,017 |
Portfolio turnover rateE | 186% | 142% | 201% | 167% | 115% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 31.47 | $ 26.50 | $ 26.30 | $ 20.68 | $ 16.67 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | (.02) | .02 | (.06) | (.11) | (.11) |
Net realized and unrealized gain (loss) | 7.06 | 4.95 | .26 | 5.73 | 4.12 |
Total from investment operations | 7.04 | 4.97 | .20 | 5.62 | 4.01 |
Distributions from net realized gain | (.45) | - | - | - | - |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 38.06 | $ 31.47 | $ 26.50 | $ 26.30 | $ 20.68 |
Total ReturnA | 22.55% | 18.75% | .76% | 27.18% | 24.06% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .83% | .86% | .86% | .87% | .92% |
Expenses net of fee waivers, if any | .83% | .86% | .86% | .87% | .92% |
Expenses net of all reductions | .82% | .83% | .85% | .85% | .90% |
Net investment income (loss) | (.05)% | .06% | (.23)% | (.43)% | (.55)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 455,612 | $ 218,944 | $ 95,310 | $ 81,350 | $ 42,277 |
Portfolio turnover rateD | 186% | 142% | 201% | 167% | 115% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Investment Valuation - continued
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014, including information on transfers between Levels 1 and 2, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment.. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. The Fund is subject to a tax imposed on capital gains by certain countries in which it invests. An estimated deferred tax liability for net unrealized appreciation on the applicable securities is included in Other payables and accrued expenses on the Statement of Assets & Liabilities.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Annual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), deferred trustees compensation, net operating losses, and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 180,428,590 |
Gross unrealized depreciation | (38,714,298) |
Net unrealized appreciation (depreciation) on securities | $ 141,714,292 |
|
|
Tax Cost | $ 1,054,852,613 |
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 39,505,000 |
Undistributed long-term capital gain | $ 37,973,582 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 141,712,579 |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 2,941,208 | $ - |
Long-term Capital Gains | 8,248,039 | - |
Total | $ 11,189,247 | $ - |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,900,489,470 and $1,754,188,824, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Annual Report
Notes to Financial Statements - continued
5. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 983,979 | $ 20,143 |
Class T | .25% | .25% | 949,326 | 6,760 |
Class B | .75% | .25% | 132,512 | 99,860 |
Class C | .75% | .25% | 968,395 | 113,187 |
|
|
| $ 3,034,212 | $ 239,950 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 87,002 |
Class T | 19,668 |
Class B* | 9,843 |
Class C* | 8,421 |
| $ 124,934 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 1,060,110 | .27 |
Class T | 493,875 | .26 |
Class B | 39,943 | .30 |
Class C | 246,914 | .26 |
Institutional Class | 598,636 | .21 |
| $ 2,439,478 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $39,244 for the period.
Annual Report
5. Fees and Other Transactions with Affiliates - continued
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 or other affiliated entities of 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 Loan | Weighted Average | Interest |
Borrower | $ 4,500,000 | .30% | $ 258 |
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,603 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $131,877 for the period. In addition, through arrangements with the Fund's custodian, 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 $27.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net realized gain |
|
|
Class A | $ 4,830,573 | $ - |
Class T | 2,285,378 | - |
Class B | 152,106 | - |
Class C | 1,068,092 | - |
Institutional Class | 2,853,098 | - |
Total | $ 11,189,247 | $ - |
Annual Report
Notes to Financial Statements - continued
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 1,967,332 | 2,023,713 | $ 66,338,054 | $ 54,950,216 |
Reinvestment of distributions | 136,812 | - | 4,412,177 | - |
Shares redeemed | (2,655,768) | (3,472,615) | (89,258,893) | (93,501,470) |
Net increase (decrease) | (551,624) | (1,448,902) | $ (18,508,662) | $ (38,551,254) |
Class T |
|
|
|
|
Shares sold | 604,269 | 649,951 | $ 19,519,431 | $ 16,942,760 |
Reinvestment of distributions | 71,453 | - | 2,218,622 | - |
Shares redeemed | (1,051,577) | (1,701,808) | (34,073,517) | (44,280,679) |
Net increase (decrease) | (375,855) | (1,051,857) | $ (12,335,464) | $ (27,337,919) |
Class B |
|
|
|
|
Shares sold | 9,706 | 13,056 | $ 287,815 | $ 310,857 |
Reinvestment of distributions | 4,834 | - | 138,293 | - |
Shares redeemed | (153,751) | (268,749) | (4,566,688) | (6,477,118) |
Net increase (decrease) | (139,211) | (255,693) | $ (4,140,580) | $ (6,166,261) |
Class C |
|
|
|
|
Shares sold | 594,192 | 460,587 | $ 17,948,827 | $ 11,287,228 |
Reinvestment of distributions | 31,647 | - | 909,547 | - |
Shares redeemed | (507,790) | (1,159,733) | (15,090,389) | (27,841,417) |
Net increase (decrease) | 118,049 | (699,146) | $ 3,767,985 | $ (16,554,189) |
Institutional Class |
|
|
|
|
Shares sold | 7,128,296 | 6,347,952 | $ 254,841,416 | $ 179,251,253 |
Reinvestment of distributions | 81,545 | - | 2,770,913 | - |
Shares redeemed | (2,196,859) | (2,987,970) | (75,563,384) | (85,599,512) |
Net increase (decrease) | 5,012,982 | 3,359,982 | $ 182,048,945 | $ 93,651,741 |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, Strategic Advisers U.S. Opportunity Fund was the owner of record of approximately 15% of the total outstanding shares of the Fund. Mutual funds managed by the investment adviser or its affiliates were the owners of record, in the aggregate, of approximately 22% of the total outstanding shares of the Fund.
Effective after the close of business on August 1, 2014, 8,219,599 shares of the Fund were delivered to the Strategic Advisers U.S. Opportunity Fund for investments with a value of $311,440,613. The Strategic Advisers U.S. Opportunity Fund's ownership in the Fund increased to approximately 40%.
Annual Report
Fidelity Advisor Utilities Fund - Class A, T, B, and C
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow. Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) C | 9.69% | 13.03% | 9.67% |
Class T (incl. 3.50% sales charge) C | 11.93% | 13.26% | 9.63% |
Class B (incl. contingent deferred sales charge) A,C | 10.41% | 13.26% | 9.75% |
Class C (incl. contingent deferred sales charge) B,C | 14.52% | 13.52% | 9.52% |
A Class B shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 5%, 2%, and 0%, respectively.
B Class C shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 1%, 0%, and 0%, respectively.
C Prior to October 1, 2006, Fidelity Advisor Utilities Fund was named Fidelity Advisor Telecommunications & Utilities Fund, and the fund operated under certain different investment policies and compared its performance to a different additional index. The fund's historical performance may not represent its current investment policies.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Utilities Fund - Class A on July 31, 2004, and the current 5.75% sales charge was paid. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Utilities Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Douglas Simmons, Portfolio Manager of Fidelity Advisor® Utilities Fund: For the year, the fund's Class A, Class T, Class B and Class C shares returned 16.38%, 15.99%, 15.41% and 15.52%, respectively (excluding sales charges), significantly outperforming the 8.85% gain of the MSCI U.S. IMI Utilities 25-50 Index but underperforming the S&P 500® Index. Utilities stocks lagged the overall market mainly due to their sensitivity to interest rates, which most investors believe will be on the rise going forward. Superior stock selection was the main reason behind the fund's outperformance of the MSCI index, particularly very strong picks in oil & gas storage & transport companies, including the two biggest individual contributors, liquefied natural gas terminal operator Cheniere Energy and pipeline company Energy Transfer Equity, neither of which was part of the index. The fund's relative performance also was helped by underweighting North Carolina electric utility Duke Energy - which was not in the fund at period end - and not owning index components electric utility Southern Company, based in Atlanta, and New York's Consolidated Edison. On the down side, untimely ownership of Virginia-based multi-utility Dominion Resources hurt, as did an average underweighting in Chicago-based electric utility Exelon.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.14% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,085.60 | $ 5.90 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.14 | $ 5.71 |
Class T | 1.42% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,083.80 | $ 7.34 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.75 | $ 7.10 |
Class B | 1.94% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,081.20 | $ 10.01 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.17 | $ 9.69 |
Class C | 1.87% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,081.20 | $ 9.65 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.52 | $ 9.35 |
Institutional Class | .84% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,087.00 | $ 4.35 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.63 | $ 4.21 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Utilities Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Dominion Resources, Inc. | 10.4 | 9.8 |
NextEra Energy, Inc. | 10.3 | 11.7 |
Sempra Energy | 7.7 | 9.5 |
PPL Corp. | 7.1 | 0.0 |
Edison International | 6.5 | 3.8 |
Exelon Corp. | 5.9 | 1.0 |
OGE Energy Corp. | 4.9 | 5.4 |
NiSource, Inc. | 4.7 | 4.2 |
ITC Holdings Corp. | 4.0 | 2.4 |
The Williams Companies, Inc. | 3.5 | 0.0 |
| 65.0 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Electric Utilities | 44.3% |
|
| Multi-Utilities | 25.9% |
|
| Oil, Gas & Consumable Fuels | 12.0% |
|
| Independent Power Producers & Energy Traders | 8.2% |
|
| Media | 3.1% |
|
| All Others* | 6.5% |
|
As of January 31, 2014 | |||
| Multi-Utilities | 36.0% |
|
| Electric Utilities | 28.3% |
|
| Oil, Gas & Consumable Fuels | 14.4% |
|
| Independent Power Producers & Energy Traders | 10.4% |
|
| Gas Utilities | 7.1% |
|
| All Others* | 3.8% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Utilities Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 99.8% | |||
Shares | Value | ||
CONSTRUCTION & ENGINEERING - 0.6% | |||
Construction & Engineering - 0.6% | |||
MasTec, Inc. (a) | 68,000 | $ 1,848,920 | |
DIVERSIFIED TELECOMMUNICATION SERVICES - 3.0% | |||
Integrated Telecommunication Services - 3.0% | |||
Verizon Communications, Inc. | 186,100 | 9,383,162 | |
ELECTRIC UTILITIES - 44.3% | |||
Electric Utilities - 44.3% | |||
Edison International | 365,002 | 20,002,110 | |
Exelon Corp. | 588,100 | 18,278,148 | |
FirstEnergy Corp. | 285,700 | 8,916,697 | |
ITC Holdings Corp. | 341,257 | 12,319,378 | |
NextEra Energy, Inc. | 338,440 | 31,776,132 | |
NRG Yield, Inc. Class A | 161,010 | 8,412,773 | |
OGE Energy Corp. | 417,323 | 15,002,762 | |
PPL Corp. | 668,800 | 22,063,712 | |
| 136,771,712 | ||
ELECTRICAL EQUIPMENT - 0.5% | |||
Heavy Electrical Equipment - 0.5% | |||
Vestas Wind Systems A/S (a) | 33,200 | 1,501,936 | |
GAS UTILITIES - 0.5% | |||
Gas Utilities - 0.5% | |||
National Fuel Gas Co. | 21,200 | 1,460,892 | |
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 8.2% | |||
Independent Power Producers & Energy Traders - 8.2% | |||
Black Hills Corp. | 39,500 | 2,082,045 | |
Calpine Corp. (a) | 308,617 | 6,801,919 | |
Drax Group PLC | 299,300 | 3,534,631 | |
Dynegy, Inc. (a) | 127,073 | 3,373,788 | |
NRG Energy, Inc. | 306,415 | 9,486,608 | |
| 25,278,991 | ||
MEDIA - 3.1% | |||
Cable & Satellite - 3.1% | |||
Comcast Corp. Class A | 177,200 | 9,520,956 | |
MULTI-UTILITIES - 25.9% | |||
Multi-Utilities - 25.9% | |||
Dominion Resources, Inc. | 476,299 | 32,216,862 | |
MDU Resources Group, Inc. | 48,400 | 1,525,084 | |
NiSource, Inc. | 388,363 | 14,633,518 | |
PG&E Corp. | 176,718 | 7,893,993 | |
Sempra Energy | 238,637 | 23,794,495 | |
| 80,063,952 | ||
| |||
Shares | Value | ||
OIL, GAS & CONSUMABLE FUELS - 12.0% | |||
Oil & Gas Exploration & Production - 1.0% | |||
Kodiak Oil & Gas Corp. (a) | 203,800 | $ 3,167,052 | |
Oil & Gas Storage & Transport - 11.0% | |||
Atlas Pipeline Partners LP | 91,408 | 3,152,662 | |
Cheniere Energy Partners LP Holdings LLC | 299,236 | 7,055,985 | |
Cheniere Energy, Inc. (a) | 81,706 | 5,781,517 | |
Energy Transfer Equity LP | 118,289 | 6,433,739 | |
Markwest Energy Partners LP | 8,721 | 608,726 | |
The Williams Companies, Inc. | 194,000 | 10,986,220 | |
| 34,018,849 | ||
TOTAL OIL, GAS & CONSUMABLE FUELS | 37,185,901 | ||
WIRELESS TELECOMMUNICATION SERVICES - 1.7% | |||
Wireless Telecommunication Services - 1.7% | |||
T-Mobile U.S., Inc. (a) | 101,300 | 3,336,822 | |
Telephone & Data Systems, Inc. | 79,044 | 1,976,100 | |
| 5,312,922 | ||
TOTAL COMMON STOCKS (Cost $288,979,009) |
| ||
Money Market Funds - 2.2% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 6,937,987 |
| |
TOTAL INVESTMENT PORTFOLIO - 102.0% (Cost $295,916,996) | 315,267,331 | ||
NET OTHER ASSETS (LIABILITIES) - (2.0)% | (6,318,109) | ||
NET ASSETS - 100% | $ 308,949,222 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 3,503 |
Fidelity Securities Lending Cash Central Fund | 15,566 |
Total | $ 19,069 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Utilities Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $288,979,009) | $ 308,329,344 |
|
Fidelity Central Funds (cost $6,937,987) | 6,937,987 |
|
Total Investments (cost $295,916,996) |
| $ 315,267,331 |
Receivable for investments sold | 1,320,660 | |
Receivable for fund shares sold | 831,736 | |
Dividends receivable | 292,340 | |
Distributions receivable from Fidelity Central Funds | 649 | |
Other receivables | 6,664 | |
Total assets | 317,719,380 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 7,692,946 | |
Payable for fund shares redeemed | 715,969 | |
Accrued management fee | 145,390 | |
Distribution and service plan fees payable | 104,761 | |
Other affiliated payables | 73,876 | |
Other payables and accrued expenses | 37,216 | |
Total liabilities | 8,770,158 | |
|
|
|
Net Assets | $ 308,949,222 | |
Net Assets consist of: |
| |
Paid in capital | $ 273,920,483 | |
Undistributed net investment income | 1,595,872 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 14,082,532 | |
Net unrealized appreciation (depreciation) on investments | 19,350,335 | |
Net Assets | $ 308,949,222 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 26.77 | |
|
|
|
Maximum offering price per share (100/94.25 of $26.77) | $ 28.40 | |
Class T: | $ 26.78 | |
|
|
|
Maximum offering price per share (100/96.50 of $26.78) | $ 27.75 | |
Class B: | $ 26.51 | |
|
|
|
Class C: | $ 26.23 | |
|
|
|
Institutional Class: | $ 27.24 | |
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.
Annual Report
Fidelity Advisor Utilities Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 6,704,975 |
Income from Fidelity Central Funds |
| 19,069 |
Total income |
| 6,724,044 |
|
|
|
Expenses | ||
Management fee | $ 1,326,135 | |
Transfer agent fees | 620,567 | |
Distribution and service plan fees | 998,626 | |
Accounting and security lending fees | 94,091 | |
Custodian fees and expenses | 9,531 | |
Independent trustees' compensation | 5,696 | |
Registration fees | 80,498 | |
Audit | 46,342 | |
Legal | 3,414 | |
Miscellaneous | 3,259 | |
Total expenses before reductions | 3,188,159 | |
Expense reductions | (23,656) | 3,164,503 |
Net investment income (loss) | 3,559,541 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 27,592,467 | |
Foreign currency transactions | 10,849 | |
Total net realized gain (loss) |
| 27,603,316 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 1,611,254 | |
Assets and liabilities in foreign currencies | (991) | |
Total change in net unrealized appreciation (depreciation) |
| 1,610,263 |
Net gain (loss) | 29,213,579 | |
Net increase (decrease) in net assets resulting from operations | $ 32,773,120 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 3,559,541 | $ 4,068,543 |
Net realized gain (loss) | 27,603,316 | 17,517,824 |
Change in net unrealized appreciation (depreciation) | 1,610,263 | 2,065,725 |
Net increase (decrease) in net assets resulting from operations | 32,773,120 | 23,652,092 |
Distributions to shareholders from net investment income | (3,729,207) | (3,653,862) |
Distributions to shareholders from net realized gain | (88,322) | - |
Total distributions | (3,817,529) | (3,653,862) |
Share transactions - net increase (decrease) | 71,585,618 | (6,877,753) |
Redemption fees | 9,809 | 5,578 |
Total increase (decrease) in net assets | 100,551,018 | 13,126,055 |
|
|
|
Net Assets | ||
Beginning of period | 208,398,204 | 195,272,149 |
End of period (including undistributed net investment income of $1,595,872 and undistributed net investment income of $2,085,978, respectively) | $ 308,949,222 | $ 208,398,204 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 23.48 | $ 21.20 | $ 19.09 | $ 16.59 | $ 15.27 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .41 | .47 | .43 | .39 | .40 |
Net realized and unrealized gain (loss) | 3.35 | 2.24 | 2.07 | 2.50 | 1.32 |
Total from investment operations | 3.76 | 2.71 | 2.50 | 2.89 | 1.72 |
Distributions from net investment income | (.46) | (.43) | (.39) | (.39) | (.40) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.47) | (.43) | (.39) | (.39) | (.40) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 26.77 | $ 23.48 | $ 21.20 | $ 19.09 | $ 16.59 |
Total ReturnA, B | 16.38% | 13.09% | 13.40% | 17.71% | 11.42% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.16% | 1.20% | 1.23% | 1.24% | 1.26% |
Expenses net of fee waivers, if any | 1.16% | 1.20% | 1.23% | 1.24% | 1.26% |
Expenses net of all reductions | 1.15% | 1.16% | 1.22% | 1.20% | 1.22% |
Net investment income (loss) | 1.64% | 2.16% | 2.24% | 2.18% | 2.49% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 154,134 | $ 106,851 | $ 99,813 | $ 78,312 | $ 64,890 |
Portfolio turnover rateE | 112% | 154% | 195% | 201% | 216% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 23.50 | $ 21.21 | $ 19.09 | $ 16.59 | $ 15.27 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .34 | .41 | .38 | .35 | .35 |
Net realized and unrealized gain (loss) | 3.35 | 2.25 | 2.07 | 2.50 | 1.33 |
Total from investment operations | 3.69 | 2.66 | 2.45 | 2.85 | 1.68 |
Distributions from net investment income | (.40) | (.37) | (.33) | (.35) | (.36) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.41) | (.37) | (.33) | (.35) | (.36) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 26.78 | $ 23.50 | $ 21.21 | $ 19.09 | $ 16.59 |
Total ReturnA, B | 15.99% | 12.81% | 13.13% | 17.39% | 11.13% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.45% | 1.47% | 1.49% | 1.50% | 1.52% |
Expenses net of fee waivers, if any | 1.45% | 1.47% | 1.49% | 1.50% | 1.52% |
Expenses net of all reductions | 1.44% | 1.43% | 1.48% | 1.46% | 1.49% |
Net investment income (loss) | 1.35% | 1.89% | 1.98% | 1.92% | 2.23% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 49,272 | $ 41,239 | $ 38,276 | $ 35,701 | $ 33,651 |
Portfolio turnover rateE | 112% | 154% | 195% | 201% | 216% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 23.24 | $ 20.96 | $ 18.86 | $ 16.38 | $ 15.08 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .21 | .30 | .28 | .25 | .27 |
Net realized and unrealized gain (loss) | 3.33 | 2.23 | 2.05 | 2.49 | 1.31 |
Total from investment operations | 3.54 | 2.53 | 2.33 | 2.74 | 1.58 |
Distributions from net investment income | (.26) | (.25) | (.23) | (.26) | (.28) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.27) | (.25) | (.23) | (.26) | (.28) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 26.51 | $ 23.24 | $ 20.96 | $ 18.86 | $ 16.38 |
Total ReturnA, B | 15.41% | 12.24% | 12.54% | 16.87% | 10.56% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.95% | 1.96% | 1.98% | 1.99% | 2.01% |
Expenses net of fee waivers, if any | 1.95% | 1.96% | 1.98% | 1.99% | 2.01% |
Expenses net of all reductions | 1.94% | 1.92% | 1.97% | 1.95% | 1.98% |
Net investment income (loss) | .85% | 1.40% | 1.49% | 1.43% | 1.74% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 4,598 | $ 5,289 | $ 6,677 | $ 7,773 | $ 8,794 |
Portfolio turnover rateE | 112% | 154% | 195% | 201% | 216% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 23.03 | $ 20.80 | $ 18.75 | $ 16.30 | $ 15.02 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .23 | .31 | .29 | .26 | .27 |
Net realized and unrealized gain (loss) | 3.29 | 2.20 | 2.03 | 2.46 | 1.30 |
Total from investment operations | 3.52 | 2.51 | 2.32 | 2.72 | 1.57 |
Distributions from net investment income | (.31) | (.28) | (.27) | (.27) | (.29) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.32) | (.28) | (.27) | (.27) | (.29) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 26.23 | $ 23.03 | $ 20.80 | $ 18.75 | $ 16.30 |
Total ReturnA, B | 15.52% | 12.27% | 12.56% | 16.85% | 10.54% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.89% | 1.93% | 1.95% | 1.98% | 2.01% |
Expenses net of fee waivers, if any | 1.89% | 1.93% | 1.95% | 1.98% | 2.01% |
Expenses net of all reductions | 1.88% | 1.89% | 1.95% | 1.94% | 1.97% |
Net investment income (loss) | .91% | 1.43% | 1.51% | 1.43% | 1.74% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 54,810 | $ 35,457 | $ 29,942 | $ 26,915 | $ 21,415 |
Portfolio turnover rateE | 112% | 154% | 195% | 201% | 216% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 23.87 | $ 21.56 | $ 19.40 | $ 16.85 | $ 15.51 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .51 | .55 | .50 | .45 | .44 |
Net realized and unrealized gain (loss) | 3.39 | 2.26 | 2.10 | 2.54 | 1.35 |
Total from investment operations | 3.90 | 2.81 | 2.60 | 2.99 | 1.79 |
Distributions from net investment income | (.52) | (.50) | (.44) | (.44) | (.45) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.53) | (.50) | (.44) | (.44) | (.45) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 27.24 | $ 23.87 | $ 21.56 | $ 19.40 | $ 16.85 |
Total ReturnA | 16.74% | 13.40% | 13.79% | 18.05% | 11.66% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .85% | .89% | .92% | .98% | 1.00% |
Expenses net of fee waivers, if any | .85% | .89% | .92% | .98% | 1.00% |
Expenses net of all reductions | .84% | .85% | .91% | .94% | .97% |
Net investment income (loss) | 1.95% | 2.46% | 2.55% | 2.44% | 2.75% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 46,135 | $ 19,562 | $ 20,564 | $ 10,914 | $ 6,511 |
Portfolio turnover rateD | 112% | 154% | 195% | 201% | 216% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Annual Report
3. Significant Accounting Policies - continued
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 24,885,712 |
Gross unrealized depreciation | (5,119,726) |
Net unrealized appreciation (depreciation) on securities | $ 19,765,986 |
|
|
Tax Cost | $ 295,501,345 |
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 2,660,324 |
Undistributed long-term capital gain | $ 12,900,726 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 19,765,986 |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 3,817,529 | $ 3,653,862 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $342,914,566 and $268,872,575, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 306,112 | $ 9,797 |
Class T | .25% | .25% | 222,456 | 1,646 |
Class B | .75% | .25% | 48,855 | 36,727 |
Class C | .75% | .25% | 421,203 | 80,224 |
|
|
| $ 998,626 | $ 128,394 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 107,328 |
Class T | 15,193 |
Class B* | 4,105 |
Class C* | 6,615 |
| $ 133,241 |
* 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.
Annual Report
5. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 317,942 | .26 |
Class T | 133,045 | .30 |
Class B | 14,783 | .30 |
Class C | 102,144 | .24 |
Institutional Class | 52,653 | .20 |
| $ 620,567 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $4,050 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $389 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $15,566. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $23,656 for the period.
Annual Report
Notes to Financial Statements - continued
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net investment income |
|
|
Class A | $ 2,098,780 | $ 2,004,234 |
Class T | 689,503 | 666,068 |
Class B | 54,086 | 71,622 |
Class C | 483,241 | 400,020 |
Institutional Class | 403,597 | 511,918 |
Total | $ 3,729,207 | $ 3,653,862 |
From net realized gain |
|
|
Class A | $ 45,735 | $ - |
Class T | 17,387 | - |
Class B | 2,010 | - |
Class C | 15,931 | - |
Institutional Class | 7,259 | - |
Total | $ 88,322 | $ - |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 2,276,742 | 1,274,291 | $ 59,563,163 | $ 28,192,446 |
Reinvestment of distributions | 82,514 | 85,327 | 1,888,613 | 1,751,329 |
Shares redeemed | (1,151,286) | (1,517,309) | (29,069,514) | (33,069,256) |
Net increase (decrease) | 1,207,970 | (157,691) | $ 32,382,262 | $ (3,125,481) |
Class T |
|
|
|
|
Shares sold | 365,889 | 287,114 | $ 9,445,083 | $ 6,306,381 |
Reinvestment of distributions | 29,388 | 30,843 | 673,761 | 634,437 |
Shares redeemed | (310,668) | (367,378) | (7,776,879) | (7,924,238) |
Net increase (decrease) | 84,609 | (49,421) | $ 2,341,965 | $ (983,420) |
Class B |
|
|
|
|
Shares sold | 19,626 | 17,365 | $ 511,179 | $ 386,769 |
Reinvestment of distributions | 2,105 | 3,129 | 47,986 | 63,812 |
Shares redeemed | (75,934) | (111,479) | (1,892,640) | (2,387,277) |
Net increase (decrease) | (54,203) | (90,985) | $ (1,333,475) | $ (1,936,696) |
Class C |
|
|
|
|
Shares sold | 898,033 | 509,725 | $ 23,064,197 | $ 11,190,388 |
Reinvestment of distributions | 17,647 | 15,458 | 397,963 | 312,553 |
Shares redeemed | (365,639) | (425,145) | (9,096,804) | (9,149,304) |
Net increase (decrease) | 550,041 | 100,038 | $ 14,365,356 | $ 2,353,637 |
Institutional Class |
|
|
|
|
Shares sold | 1,373,720 | 936,449 | $ 36,918,565 | $ 20,838,974 |
Reinvestment of distributions | 15,288 | 22,869 | 354,761 | 476,446 |
Shares redeemed | (514,863) | (1,093,899) | (13,443,816) | (24,501,213) |
Net increase (decrease) | 874,145 | (134,581) | $ 23,829,510 | $ (3,185,793) |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report
Report of Independent Registered Public Accounting Firm
To the Trustees of Advisor Series VII and the Shareholders of Fidelity Advisor Biotechnology Fund, Fidelity Advisor Communications Equipment Fund, Fidelity Advisor Consumer Discretionary Fund, Fidelity Advisor Electronics Fund, Fidelity Advisor Energy Fund, Fidelity Advisor Financial Services Fund, Fidelity Advisor Health Care Fund, Fidelity Advisor Industrials Fund, Fidelity Advisor Technology Fund and Fidelity Advisor Utilities Fund:
We have audited the accompanying statements of assets and liabilities of Fidelity Advisor Biotechnology Fund, Fidelity Advisor Communications Equipment Fund, Fidelity Advisor Consumer Discretionary Fund, Fidelity Advisor Electronics Fund, Fidelity Advisor Energy Fund, Fidelity Advisor Financial Services Fund, Fidelity Advisor Health Care Fund, Fidelity Advisor Industrials Fund, Fidelity Advisor Technology Fund and Fidelity Advisor Utilities Fund (collectively, the "Funds"), including the schedules of investments, as of July 31, 2014, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2014, by correspondence with the custodians and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Advisor Biotechnology Fund, Fidelity Advisor Communications Equipment Fund, Fidelity Advisor Consumer Discretionary Fund, Fidelity Advisor Electronics Fund, Fidelity Advisor Energy Fund, Fidelity Advisor Financial Services Fund, Fidelity Advisor Health Care Fund, Fidelity Advisor Industrials Fund, Fidelity Advisor Technology Fund and Fidelity Advisor Utilities Fund as of July 31, 2014, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
September 17, 2014
Annual Report
Trustees and Officers
The Trustees and officers of the trust and funds, as applicable, are listed below. The Board of Trustees governs each fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee each fund's activities, review contractual arrangements with companies that provide services to each fund, oversee management of the risks associated with such activities and contractual arrangements, and review each fund's performance. Each of the Trustees oversees 74 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. The officers hold office without limit in time, except that any officer may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
Experience, Skills, Attributes, and Qualifications of the Funds' Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing each fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the funds, is provided below.
Board Structure and Oversight Function. Brian B. Hogan is an interested person (as defined in the 1940 Act) and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the funds. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Michael E. Wiley serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity funds are overseen by different Boards of Trustees. The funds' Board oversees Fidelity's sector portfolios. Other Boards oversee Fidelity's equity and high income funds, and Fidelity's investment grade bond, money market, and asset allocation funds. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, each fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the funds' activities and associated risks. The Board, acting through its committees, has charged SelectCo and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the funds' business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the funds are carried out by or through SelectCo, its affiliates, and other service providers, the funds' exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the funds' activities, oversight is exercised primarily through the Operations and Audit Committees. Appropriate personnel, including but not limited to the funds' Chief Compliance Officer (CCO), SelectCo's internal auditor, the independent accountants, the funds' Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Funds' Trustees."
The funds' Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.
Annual Report
Interested Trustee*:
Correspondence intended for the Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+ | |
Brian B. Hogan (1964) | |
Year of Election or Appointment: 2014 Trustee Chairman of the Board of Trustees | |
| Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as President of FMR's Equity Division (2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. |
* Trustee has been determined to be an "Interested Trustee" by virtue of, among other things, his affiliation with the trust or various entities under common control with SelectCo.
+ The information above includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for each fund.
Independent Trustees:
Correspondence intended for each Independent Trustee (that is, the Trustees other than the Interested Trustee) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+ | |
David A. Rosow (1942) | |
Year of Election or Appointment: 2013 Trustee | |
| Mr. Rosow also serves as Trustee of other Fidelity funds. Mr. Rosow is Chairman and Chief Executive Officer of International Golf Group, Inc. (golf course development, 1989-present). Previously, Mr. Rosow served as Chairman and Chief Executive Officer of Rosow & Company, Inc. (private investment company, 1989-2011), a Lead Director of Hudson United Bancorp (2001-2006) and as a Director of TD Banknorth (1996-2006). In addition, Mr. Rosow is a member (2008-present) and President (2009-present) of the Town Council of Palm Beach, Florida. Mr. Rosow served as a Member of the Advisory Board of other Fidelity funds (2012-2013). |
Garnett A. Smith (1947) | |
Year of Election or Appointment: 2013 Trustee | |
| Mr. Smith also serves as Trustee of other Fidelity funds. Prior to Mr. Smith's retirement, he served as Chairman and Chief Executive Officer of Inbrand Corp. (manufacturer of personal absorbent products, 1990-1997). He also served as President (1986-1990) of Inbrand Corp. Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank. In addition, Mr. Smith served as a Member of the Advisory Board of other Fidelity funds (2012-2013) and as a board member of the Jackson Hole Land Trust (2009-2012). |
Michael E. Wiley (1950) | |
Year of Election or Appointment: 2008 Trustee Chairman of the Independent Trustees | |
| Mr. Wiley also serves as Trustee of other Fidelity funds. Mr. Wiley serves as a Director of Tesoro Corporation (independent oil refiner and marketer, 2005-present), and a Director of Bill Barrett Corporation (exploration and production, 2005-present). In addition, Mr. Wiley also serves as a Director of Post Oak Bank (privately-held bank, 2004-present). Previously, Mr. Wiley served as a Trustee of other Fidelity funds (2008-2013), as a Director of Asia Pacific Exploration Consolidated (international oil and gas exploration and productions, 2008-2013), as a member of the Board of Trustees of the University of Tulsa (2000-2006; 2007-2010), as a Senior Energy Advisor of Katzenbach Partners, LLC (consulting, 2006-2007), as an Advisory Director of Riverstone Holdings (private investment), Chairman, President, and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004), and as Director of Spinnaker Exploration Company (exploration and production, 2001-2005). |
Annual Report
Trustees and Officers - continued
+ The information above includes each Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to each Trustee's qualifications to serve as a Trustee, which led to the conclusion that each Trustee should serve as a Trustee for each fund.
Officers:
Except for Anthony R. Rochte, correspondence intended for each officer may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Correspondence intended for Mr. Rochte may be sent to SelectCo, 1225 17th Street, Denver, Colorado 80202-5541. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation | |
Christopher S. Bartel (1971) | |
Year of Election or Appointment: 2009 Vice President | |
| Mr. Bartel also serves as Vice President of other funds. Mr. Bartel serves as a Director, President, and Chief Executive Officer of Fidelity Management & Research (Japan) Inc. (2012-present), a Director of Fidelity Management & Research (Hong Kong) (2012-present), and Senior Vice President of Global Equity Research (2010-present). Previously, Mr. Bartel served as Senior Vice President of Equity Research (2009-2010), Managing Director of Research (2006-2009), and an analyst and portfolio manager (2000-2006). |
Elizabeth Paige Baumann (1968) | |
Year of Election or Appointment: 2012 Anti-Money Laundering (AML) Officer | |
| Ms. Baumann also serves as AML Officer of other funds. She is Chief AML Officer of FMR LLC (2012-present) and is an employee of Fidelity Investments. Previously, Ms. Baumann served as Vice President and Deputy Anti-Money Laundering Officer (2007-2012). |
Marc Bryant (1966) | |
Year of Election or Appointment: 2013 Secretary | |
| Mr. Bryant also serves as an officer of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC. Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006). |
William C. Coffey (1969) | |
Year of Election or Appointment: 2009 Assistant Secretary | |
| Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009). |
Jonathan Davis (1968) | |
Year of Election or Appointment: 2010 Assistant Treasurer | |
| Mr. Davis also serves as Assistant Treasurer of other funds. Mr. Davis is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (2003-2010). |
Adrien E. Deberghes (1967) | |
Year of Election or Appointment: 2013 President and Treasurer | |
| Mr. Deberghes also serves as an officer of other funds. He is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). |
Stephanie J. Dorsey (1969) | |
Year of Election or Appointment: 2010 Assistant Treasurer | |
| Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank. |
Howard J. Galligan III (1966) | |
Year of Election or Appointment: 2014 Chief Financial Officer | |
| Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011). |
James D. Gryglewicz (1972) | |
Year of Election or Appointment: 2014 Chief Compliance Officer | |
| Mr. Gryglewicz also serves as Chief Compliance Officer of other funds. Mr. Gryglewicz serves as Vice President of Asset Management Compliance (2009-present) and is an employee of Fidelity Investments (2004-present). |
Brian B. Hogan (1964) | |
Year of Election or Appointment: 2009 Vice President | |
| Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as President of FMR's Equity Division (2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. |
Chris Maher (1972) | |
Year of Election or Appointment: 2013 Assistant Treasurer | |
| Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of FMR's Program Management Group (2010-2013), and Vice President of Valuation Oversight (2008-2010). |
Kenneth B. Robins (1969) | |
Year of Election or Appointment: 2013 Deputy Treasurer | |
| Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (2013-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served in other fund officer roles. |
Anthony R. Rochte (1968) | |
Year of Election or Appointment: 2013 Vice President | |
| Mr. Rochte also serves as Vice President of other funds. Mr. Rochte serves as President of Fidelity SelectCo, LLC (2012-present) and is an employee of Fidelity Investments (2012-present). Prior to joining Fidelity Investments, Mr. Rochte served as Senior Managing Director and head of State Street Global Advisors' North American Intermediary Business Group (2006-2012). |
Stacie M. Smith (1974) | |
Year of Election or Appointment: 2013 Assistant Treasurer | |
| Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). |
Renee Stagnone (1975) | |
Year of Election or Appointment: 2013 Deputy Treasurer | |
| Ms. Stagnone also serves as Deputy Treasurer of other funds. Ms. Stagnone is an employee of Fidelity Investments. |
Joseph F. Zambello (1957) | |
Year of Election or Appointment: 2011 Deputy Treasurer | |
| Mr. Zambello also serves as Deputy Treasurer of other funds. Mr. Zambello is an employee of Fidelity Investments. Previously, Mr. Zambello served as Vice President of FMR's Program Management Group (2009-2011) and Vice President of the Transfer Agent Oversight Group (2005-2009). |
Annual Report
Distributions (Unaudited)
The Board of Trustees of each fund voted to pay to shareholders of record at the opening of business on record date the following distributions per share derived from capital gains realized from sales of portfolio securities and dividends derived from net investment income:
| Pay Date | Record Date | Dividends | Capital Gains |
Fidelity Advisor Biotechnology Fund |
|
|
|
|
Class A | 09/08/14 | 09/05/14 | $0.000 | $0.184 |
Class T | 09/08/14 | 09/05/14 | $0.000 | $0.184 |
Class B | 09/08/14 | 09/05/14 | $0.000 | $0.184 |
Class C | 09/08/14 | 09/05/14 | $0.000 | $0.184 |
Fidelity Advisor Communications Equipment Fund |
|
|
|
|
Class A | 09/15/14 | 09/12/14 | $0.031 | $0.000 |
Class T | 09/15/14 | 09/12/14 | $0.005 | $0.000 |
Class B | 09/15/14 | 09/12/14 | $0.000 | $0.000 |
Class C | 09/15/14 | 09/12/14 | $0.000 | $0.000 |
Fidelity Advisor Consumer Discretionary Fund |
|
|
|
|
Class A | 09/08/14 | 09/05/14 | $0.000 | $2.022 |
Class T | 09/08/14 | 09/05/14 | $0.000 | $1.997 |
Class B | 09/08/14 | 09/05/14 | $0.000 | $1.927 |
Class C | 09/08/14 | 09/05/14 | $0.000 | $1.953 |
Fidelity Advisor Electronics Fund |
|
|
|
|
Class A | 09/15/14 | 09/12/14 | $0.000 | $0.000 |
Class T | 09/15/14 | 09/12/14 | $0.000 | $0.000 |
Class B | 09/15/14 | 09/12/14 | $0.000 | $0.000 |
Class C | 09/15/14 | 09/12/14 | $0.000 | $0.000 |
Fidelity Advisor Energy Fund |
|
|
|
|
Class A | 09/08/14 | 09/05/14 | $0.000 | $2.018 |
Class T | 09/08/14 | 09/05/14 | $0.000 | $1.954 |
Class B | 09/08/14 | 09/05/14 | $0.000 | $1.810 |
Class C | 09/08/14 | 09/05/14 | $0.000 | $1.877 |
Fidelity Advisor Financial Services Fund |
|
|
|
|
Class A | 09/08/14 | 09/05/14 | $0.045 | $0.000 |
Class T | 09/08/14 | 09/05/14 | $0.020 | $0.000 |
Class B | 09/08/14 | 09/05/14 | $0.000 | $0.000 |
Class C | 09/08/14 | 09/05/14 | $0.000 | $0.000 |
Fidelity Advisor Health Care Fund |
|
|
|
|
Class A | 09/08/14 | 09/05/14 | $0.000 | $3.046 |
Class T | 09/08/14 | 09/05/14 | $0.000 | $2.990 |
Class B | 09/08/14 | 09/05/14 | $0.000 | $2.869 |
Class C | 09/08/14 | 09/05/14 | $0.000 | $2.950 |
Fidelity Advisor Industrials Fund |
|
|
|
|
Class A | 09/08/14 | 09/05/14 | $0.024 | $2.178 |
Class T | 09/08/14 | 09/05/14 | $0.000 | $2.170 |
Class B | 09/08/14 | 09/05/14 | $0.032 | $2.178 |
Class C | 09/08/14 | 09/05/14 | $0.000 | $2.053 |
Fidelity Advisor Technology Fund |
|
|
|
|
Class A | 09/08/14 | 09/05/14 | $0.000 | $1.998 |
Class T | 09/08/14 | 09/05/14 | $0.000 | $1.953 |
Class B | 09/08/14 | 09/05/14 | $0.000 | $1.840 |
Class C | 09/08/14 | 09/05/14 | $0.000 | $1.881 |
| Pay Date | Record Date | Dividends | Capital Gains |
Fidelity Advisor Utilities Fund |
|
|
|
|
Class A | 09/08/14 | 09/05/14 | $0.189 | $1.219 |
Class T | 09/08/14 | 09/05/14 | $0.143 | $1.219 |
Class B | 09/08/14 | 09/05/14 | $0.041 | $1.219 |
Class C | 09/08/14 | 09/05/14 | $0.095 | $1.219 |
The funds hereby designate as capital gain dividend the amounts noted below for the taxable year ended July 31, 2014, or, if subsequently determined to be different, the net capital gain of such year.
Fidelity Advisor Biotechnology Fund | $17,445,492 |
Fidelity Advisor Consumer Discretionary Fund | $13,097,425 |
Fidelity Advisor Energy Fund | $40,725,007 |
Fidelity Advisor Health Care Fund | $125,111,262 |
Fidelity Advisor Industrials Fund | $49,916,446 |
Fidelity Advisor Technology Fund | $46,221,621 |
Fidelity Advisor Utilities Fund | $12,900,726 |
A percentage of the dividends distributed during the fiscal year for the following funds qualify for the dividends-received deduction for corporate shareholders:
| September 2013 | December 2013 |
Fidelity Advisor Consumer Discretionary Fund |
|
|
Class A | 12% | 70% |
Class T | 12% | 89% |
Class B | 14% | 100% |
Class C | 13% | 100% |
Fidelity Advisor Energy Fund |
|
|
Class A | 100% | 36% |
Class T | 0% | 39% |
Class B | 0% | 45% |
Class C | 0% | 44% |
Fidelity Advisor Financial Services Fund |
|
|
Class A | 100% | 100% |
Class T | 100% | 100% |
Class B | 0% | 0% |
Class C | 100% | 0% |
Fidelity Advisor Health Care Fund |
|
|
Class A | 18% | 14% |
Class T | 19% | 15% |
Class B | 21% | 19% |
Class C | 20% | 18% |
Fidelity Advisor Industrials Fund |
|
|
Class A | 100% | 67% |
Class T | 100% | 79% |
Class B | 0% | 100% |
Class C | 0% | 97% |
Fidelity Advisor Technology Fund |
|
|
Class A | 0% | 69% |
Class T | 0% | 92% |
Class B | 0% | 100% |
Class C | 0% | 100% |
| September 2013 | December 2013 |
Fidelity Advisor Utilities Fund |
|
|
Class A | 100% | 100% |
Class T | 100% | 100% |
Class B | 100% | 100% |
Class C | 100% | 100% |
A percentage of the dividends distributed during the fiscal year for the following funds may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
| September 2013 | December 2013 |
Fidelity Advisor Consumer Discretionary Fund |
|
|
Class A | 12% | 76% |
Class T | 13% | 97% |
Class B | 14% | 100% |
Class C | 14% | 100% |
Fidelity Advisor Energy Fund |
|
|
Class A | 100% | 42% |
Class T | 0% | 45% |
Class B | 0% | 52% |
Class C | 0% | 50% |
Fidelity Advisor Financial Services Fund |
|
|
Class A | 100% | 100% |
Class T | 100% | 100% |
Class B | 0% | 0% |
Class C | 100% | 0% |
Fidelity Advisor Health Care Fund |
|
|
Class A | 22% | 15% |
Class T | 23% | 17% |
Class B | 26% | 21% |
Class C | 24% | 19% |
Fidelity Advisor Industrials Fund |
|
|
Class A | 100% | 62% |
Class T | 100% | 73% |
Class B | 0% | 100% |
Class C | 0% | 90% |
Fidelity Advisor Technology Fund |
|
|
Class A | 0% | 72% |
Class T | 0% | 94% |
Class B | 0% | 100% |
Class C | 0% | 100% |
Fidelity Advisor Utilities Fund |
|
|
Class A | 100% | 100% |
Class T | 100% | 100% |
Class B | 100% | 100% |
Class C | 100% | 100% |
The funds will notify shareholders in January 2015 of amounts for use in preparing 2014 income tax returns.
Annual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Advisor Focus Funds
In connection with separate internal corporate reorganizations involving Fidelity Management & Research (U.K.) Inc. (FMR U.K.) and Fidelity Management & Research (Japan) Inc. (FMR Japan), the Board approved certain non-material amendments to the funds' subadvisory agreements with FMR U.K. and FMR Japan to reflect that, after these reorganizations, FMR Investment Management (UK) Limited and Fidelity Management & Research (Japan) Limited will carry on the business of FMR U.K. and FMR Japan, respectively. The Board noted that no changes to the portfolio managers or to the foreign research or investment advisory services provided to the funds were expected in connection with either reorganization and that the same personnel and resources will be available to the funds with the new entities. After considering all of the factors it believed relevant, the Board concluded that the amended sub-advisory agreements should be approved.
Annual Report
Investment Adviser
Fidelity SelectCo, LLC
Denver, CO
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research (U.K.) Inc.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
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. ††
Boston, MA
State Street Bank and Trust †††
Quincy, MA
† Custodian for Fidelity Advisor Consumer Discretionary Fund, Fidelity Advisor Financial Services Fund, Fidelity Advisor Health Care Fund, Fidelity Advisor Industrials Fund, Fidelity Advisor Technology Fund, and Fidelity Advisor Utilities Fund.
†† Custodian for Fidelity Advisor Energy Fund.
††† Custodian for Fidelity Advisor Biotechnology Fund, Fidelity Advisor
Communications Equipment Fund, and Fidelity Advisor Electronics Fund.
(Fidelity Cover Art)
AFOC-UANNPRO-0914
1.789241.110
Fidelity Advisor
Focus Funds®
Institutional Class
Fidelity Advisor® Biotechnology Fund
Fidelity Advisor Communications Equipment Fund
Fidelity Advisor Consumer Discretionary Fund
Fidelity Advisor Electronics Fund
Fidelity Advisor Energy Fund
Fidelity Advisor Financial Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Industrials Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Fund
Annual Report
July 31, 2014
(Fidelity Cover Art)
Contents
Fidelity Advisor® | Performance | |
Management's Discussion of Fund Performance | ||
| Shareholder Expense Example | |
Investment Changes | ||
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor | Performance | |
Management's Discussion of Fund Performance | ||
| Shareholder Expense Example | |
Investment Changes | ||
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor | Performance | |
Management's Discussion of Fund Performance | ||
| Shareholder Expense Example | |
Investment Changes | ||
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor Electronics Fund | Performance | |
Management's Discussion of Fund Performance | ||
| Shareholder Expense Example | |
Investment Changes | ||
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor Energy Fund | Performance | |
| Management's Discussion of Fund Performance | |
| Shareholder Expense Example | |
| Investment Changes | |
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor Financial | Performance | |
Management's Discussion of Fund Performance | ||
| Shareholder Expense Example | |
Investment Changes | ||
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor Health Care Fund | Performance | |
Management's Discussion of Fund Performance | ||
| Shareholder Expense Example | |
| Investment Changes | |
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor Industrials Fund | Performance | |
| Management's Discussion of Fund Performance | |
| Shareholder Expense Example | |
| Investment Changes | |
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor Technology Fund | Performance | |
| Management's Discussion of Fund Performance | |
| Shareholder Expense Example | |
| Investment Changes | |
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Fidelity Advisor Utilities Fund | Performance | |
| Management's Discussion of Fund Performance | |
| Shareholder Expense Example | |
| Investment Changes | |
| Investments | |
| Financial Statements | |
| Notes to the Financial Statements | |
Report of Independent Registered Public Accounting Firm |
| |
Trustees and Officers |
| |
Distributions |
| |
Board Approval of Investment Advisory Contracts and Management Fees |
|
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2014 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the funds. This report is not authorized for distribution to prospective investors in the funds unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the funds nor Fidelity Distributors Corporation is a bank.
Annual Report
Fidelity Advisor® Biotechnology Fund - Institutional Class
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Institutional Class | 17.74% | 25.72% | 14.74% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Biotechnology Fund - Institutional Class on July 31, 2004. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
Annual Report
Fidelity Advisor Biotechnology Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Rajiv Kaul, Portfolio Manager of Fidelity Advisor® Biotechnology Fund: For the year, the fund's Institutional Class shares returned 17.74%, lagging the 24.79% advance of the MSCI U.S. IMI Biotechnology 25-50 Index but topping the S&P 500®. Favorable product stories and investors' preference for companies with earnings growth that was less dependent on the broader U.S. economy spurred solid performance in biotechnology stocks. A large overweighting in Aegerion Pharmaceuticals made this stock by far the fund's biggest detractor versus the MSCI index. In November 2013, the company received a warning letter from the U.S. Food and Drug Administration about its marketing of JUXTAPID®, Aegerion's oral treatment for a rare but potentially fatal disease that causes high cholesterol. I viewed this development as only a temporary setback for the stock, so I significantly increased our stake as the shares declined. A number of other key detractors were strong-performing large-cap index components in which the fund was underweighted: Gilead Sciences, Celgene and Amgen. Gilead was easily the fund's largest holding, with an average weighting of roughly 15% of net assets, so our exposure here was significant but less than the benchmark's. In Amgen's case, I significantly reduced our stake to free up cash for investing in smaller-cap stocks that I thought were undervalued. Conversely, the top relative contributor by a wide margin was Intercept Pharmaceuticals. This stock rocketed higher in January, after the firm announced that a clinical trial of obeticholic acid, a treatment for a common fatty liver disease, was stopped early because the drug was clearly effective. Pacira Pharmaceuticals also contributed to relative performance. This stock rose fairly steadily during the period, as sales of EXPAREL®, the firm's injectable non-opioid pain reliever for post-surgical patients, steadily gained traction. Pacira was an out-of-benchmark position. I'll also mention Puma Biotechnology, which saw the value of its shares more than triple in July, after positive phase three results from testing neratinib as a treatment for women suffering from a form of early-stage breast cancer.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.07% |
|
|
|
Actual |
| $ 1,000.00 | $ 956.40 | $ 5.19 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.49 | $ 5.36 |
Class T | 1.40% |
|
|
|
Actual |
| $ 1,000.00 | $ 954.70 | $ 6.79 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.85 | $ 7.00 |
Class B | 1.87% |
|
|
|
Actual |
| $ 1,000.00 | $ 952.40 | $ 9.05 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.52 | $ 9.35 |
Class C | 1.82% |
|
|
|
Actual |
| $ 1,000.00 | $ 952.50 | $ 8.81 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.77 | $ 9.10 |
Institutional Class | .80% |
|
|
|
Actual |
| $ 1,000.00 | $ 957.80 | $ 3.88 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.83 | $ 4.01 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Biotechnology Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Gilead Sciences, Inc. | 15.3 | 14.3 |
Celgene Corp. | 6.1 | 5.9 |
Vertex Pharmaceuticals, Inc. | 5.5 | 3.2 |
Biogen Idec, Inc. | 3.7 | 7.7 |
Amgen, Inc. | 3.4 | 9.2 |
Alexion Pharmaceuticals, Inc. | 3.4 | 4.5 |
Regeneron Pharmaceuticals, Inc. | 3.3 | 3.2 |
Puma Biotechnology, Inc. | 3.0 | 1.4 |
Intercept Pharmaceuticals, Inc. | 2.6 | 3.6 |
InterMune, Inc. | 2.3 | 0.5 |
| 48.6 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
 | Biotechnology | 94.8% |
|
 | Pharmaceuticals | 5.1% |
|
 | Life Sciences Tools & Services | 0.0%† |
|
 | Personal Products | 0.0%† |
|
 | Health Care Equipment & Supplies | 0.0%† |
|
 | All Others* | 0.1% |
|
As of January 31, 2014 | |||
| Biotechnology | 93.6% |
|
| Pharmaceuticals | 3.1% |
|
| Health Care Providers & Services | 0.3% |
|
| Life Sciences Tools & Services | 0.0%† |
|
| Health Care Equipment & Supplies | 0.0%† |
|
| All Others* | 3.0% |
|
* Includes short-term investments and net other assets (liabilities). |
† Amount represents less than 0.1%. |
Annual Report
Fidelity Advisor Biotechnology Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 99.5% | |||
Shares | Value | ||
BIOTECHNOLOGY - 94.5% | |||
Biotechnology - 94.5% | |||
ACADIA Pharmaceuticals, Inc. (a)(d) | 417,586 | $ 8,464,468 | |
Acceleron Pharma, Inc. | 504,023 | 14,929,161 | |
Achillion Pharmaceuticals, Inc. (a)(d) | 985,172 | 6,748,428 | |
Acorda Therapeutics, Inc. (a) | 613,487 | 17,956,764 | |
Actelion Ltd. | 59,339 | 7,176,183 | |
Adamas Pharmaceuticals, Inc. | 215,821 | 3,433,712 | |
ADMA Biologics, Inc. | 50,300 | 497,970 | |
Aegerion Pharmaceuticals, Inc. (a) | 436,143 | 14,658,766 | |
Agenus, Inc. (a) | 9,425 | 31,103 | |
Agenus, Inc. warrants 1/9/18 (a) | 452,000 | 25,954 | |
Agios Pharmaceuticals, Inc. | 17,087 | 688,606 | |
Akebia Therapeutics, Inc. (a)(d) | 101,100 | 2,238,354 | |
Alder Biopharmaceuticals, Inc. | 115,442 | 1,949,815 | |
Aldeyra Therapeutics, Inc. (e) | 278,295 | 993,513 | |
Alexion Pharmaceuticals, Inc. (a) | 322,999 | 51,353,611 | |
Alkermes PLC (a) | 308,256 | 13,181,027 | |
Alnylam Pharmaceuticals, Inc. (a) | 184,161 | 9,953,902 | |
AMAG Pharmaceuticals, Inc. (a)(d) | 118,935 | 2,270,469 | |
Ambit Biosciences Corp. (a) | 14,910 | 83,049 | |
Amgen, Inc. | 408,817 | 52,079,198 | |
Anacor Pharmaceuticals, Inc. (a)(d) | 246,113 | 4,097,781 | |
Applied Genetic Technologies Corp. | 99,465 | 1,591,440 | |
Ardelyx, Inc. | 232,350 | 3,359,781 | |
Arena Pharmaceuticals, Inc. (a)(d) | 6,328 | 29,299 | |
ARIAD Pharmaceuticals, Inc. (a)(d) | 1,170,695 | 6,743,203 | |
ArQule, Inc. (a) | 950 | 1,292 | |
Array BioPharma, Inc. (a) | 498,104 | 1,992,416 | |
Arrowhead Research Corp. (a) | 553,155 | 6,997,411 | |
Asterias Biotherapeutics, Inc. (a) | 115,914 | 260,807 | |
Auspex Pharmaceuticals, Inc. | 131,243 | 2,389,935 | |
Avalanche Biotechnologies, Inc. (a) | 24,604 | 688,666 | |
BioCryst Pharmaceuticals, Inc. (a) | 168,200 | 2,105,864 | |
Biogen Idec, Inc. (a) | 168,590 | 56,374,810 | |
BioMarin Pharmaceutical, Inc. (a) | 475,338 | 29,385,395 | |
Bionovo, Inc. warrants 2/2/16 (a) | 56,850 | 1 | |
Bluebird Bio, Inc. (a) | 23,249 | 776,517 | |
Cara Therapeutics, Inc. | 184,735 | 2,355,371 | |
Catalyst Pharmaceutical Partners, Inc.: | |||
warrants 5/2/17 (a) | 8,557 | 8,628 | |
warrants 5/30/17 (a) | 17,900 | 22,600 | |
Celgene Corp. (a) | 1,064,361 | 92,759,061 | |
Cell Therapeutics, Inc. warrants 7/6/16 (a) | 46,404 | 932 | |
Celldex Therapeutics, Inc. (a)(d) | 413,902 | 5,417,977 | |
Cellectar Biosciences, Inc. (a) | 6,880 | 48,160 | |
Cepheid, Inc. (a) | 51,400 | 1,934,696 | |
Cerulean Pharma, Inc. | 530,000 | 2,135,900 | |
Chimerix, Inc. (a) | 130,682 | 2,969,095 | |
Clovis Oncology, Inc. (a)(d) | 140,534 | 5,122,464 | |
CTI BioPharma Corp. (a)(d) | 464,007 | 1,201,778 | |
Cubist Pharmaceuticals, Inc. | 262,881 | 16,009,453 | |
| |||
Shares | Value | ||
Cytokinetics, Inc. (a) | 67,916 | $ 287,285 | |
Cytokinetics, Inc. warrants 6/25/17 (a) | 244,500 | 1,315 | |
Dendreon Corp. (a)(d) | 327,540 | 678,008 | |
Dicerna Pharmaceuticals, Inc. (d) | 45,606 | 685,002 | |
Durata Therapeutics, Inc. (a)(d) | 129,737 | 1,668,418 | |
Dyax Corp. (a) | 1,096,505 | 10,329,077 | |
Dynavax Technologies Corp. (a) | 5,369 | 7,946 | |
Eleven Biotherapeutics, Inc. (d) | 123,940 | 1,359,622 | |
Emergent BioSolutions, Inc. (a) | 146,555 | 3,224,210 | |
Enanta Pharmaceuticals, Inc. (a)(d) | 140,822 | 5,296,315 | |
Epizyme, Inc. (a)(d) | 647,371 | 20,275,660 | |
Esperion Therapeutics, Inc. (a)(d) | 10,708 | 153,446 | |
Exact Sciences Corp. (a)(d) | 183,159 | 2,859,112 | |
Exelixis, Inc. (a)(d) | 263,845 | 1,065,934 | |
Fate Therapeutics, Inc. | 145,502 | 877,377 | |
Fibrocell Science, Inc. (a) | 279,800 | 937,330 | |
Foundation Medicine, Inc. | 159,200 | 3,585,184 | |
Genmab A/S (a) | 113,500 | 4,551,659 | |
Genocea Biosciences, Inc. (d) | 97,179 | 1,691,886 | |
Genomic Health, Inc. (a) | 54,120 | 1,378,978 | |
Geron Corp. (a)(d) | 2,782,517 | 6,691,953 | |
Gilead Sciences, Inc. (a) | 2,554,512 | 233,865,568 | |
Halozyme Therapeutics, Inc. (a)(d) | 410,617 | 3,999,410 | |
Heron Therapeutics, Inc. (a)(d) | 65,145 | 572,625 | |
Hyperion Therapeutics, Inc. (a)(d) | 291,271 | 6,632,241 | |
Ignyta, Inc. (a)(d) | 237,700 | 1,930,124 | |
Immune Design Corp. (a) | 140,400 | 1,684,800 | |
ImmunoGen, Inc. (a)(d) | 184,438 | 1,988,242 | |
Immunomedics, Inc. (a)(d) | 575,159 | 1,863,515 | |
Incyte Corp. (a) | 450,174 | 21,414,777 | |
Infinity Pharmaceuticals, Inc. (a) | 185,334 | 1,684,686 | |
Insys Therapeutics, Inc. (a)(d) | 166,692 | 4,505,685 | |
Intercept Pharmaceuticals, Inc. (a) | 168,060 | 39,050,422 | |
InterMune, Inc. (a) | 804,065 | 35,274,332 | |
Intrexon Corp. (d) | 109,008 | 2,407,987 | |
Ironwood Pharmaceuticals, Inc. Class A (a) | 670,651 | 9,925,635 | |
Isis Pharmaceuticals, Inc. (a)(d) | 355,594 | 11,019,858 | |
KaloBios Pharmaceuticals, Inc. (a) | 165,702 | 273,408 | |
Karyopharm Therapeutics, Inc. (d) | 475,382 | 16,491,002 | |
Keryx Biopharmaceuticals, Inc. (a)(d) | 453,112 | 6,819,336 | |
Kindred Biosciences, Inc. | 191,920 | 2,924,861 | |
Kite Pharma, Inc. | 120,180 | 2,824,230 | |
KYTHERA Biopharmaceuticals, Inc. (a)(d) | 219,330 | 7,365,101 | |
La Jolla Pharmaceutical Co. (a)(d) | 189,944 | 1,850,055 | |
Lexicon Pharmaceuticals, Inc. (a) | 1,437,492 | 2,113,113 | |
Ligand Pharmaceuticals, Inc. Class B (a) | 156,285 | 7,684,533 | |
Lion Biotechnologies, Inc. (a) | 89,246 | 638,109 | |
Macrogenics, Inc. | 461,857 | 9,375,697 | |
MannKind Corp. (a)(d) | 1,151,662 | 9,627,894 | |
Medivation, Inc. (a) | 408,359 | 30,312,489 | |
Merrimack Pharmaceuticals, Inc. (a) | 60,200 | 355,782 | |
MiMedx Group, Inc. (a)(d) | 250,413 | 1,730,354 | |
Common Stocks - continued | |||
Shares | Value | ||
BIOTECHNOLOGY - CONTINUED | |||
Biotechnology - continued | |||
Minerva Neurosciences, Inc. | 228,600 | $ 1,442,466 | |
Mirati Therapeutics, Inc. (a) | 25,300 | 459,701 | |
Momenta Pharmaceuticals, Inc. (a) | 121,037 | 1,287,834 | |
Myriad Genetics, Inc. (a)(d) | 234,057 | 8,449,458 | |
Neurocrine Biosciences, Inc. (a) | 624,728 | 8,483,806 | |
NewLink Genetics Corp. (a)(d) | 252,479 | 5,347,505 | |
Novavax, Inc. (a)(d) | 2,301,331 | 9,964,763 | |
Novelos Therapeutics, Inc. warrants 12/6/16 (a) | 137,600 | 1 | |
NPS Pharmaceuticals, Inc. (a) | 439,525 | 12,280,329 | |
OncoMed Pharmaceuticals, Inc. (d) | 120,434 | 2,600,170 | |
Ophthotech Corp. (d) | 624,137 | 24,378,791 | |
Opko Health, Inc. (a)(d) | 791,951 | 6,985,008 | |
Oragenics, Inc. (a) | 250,308 | 438,039 | |
Orexigen Therapeutics, Inc. (a)(d) | 1,349,072 | 6,731,869 | |
Organovo Holdings, Inc. (a)(d) | 244,983 | 1,854,521 | |
Osiris Therapeutics, Inc. (a) | 203,971 | 3,018,771 | |
OvaScience, Inc. (a)(d) | 96,100 | 942,741 | |
PDL BioPharma, Inc. (d) | 99,788 | 936,011 | |
Pharmacyclics, Inc. (a) | 185,133 | 22,297,419 | |
PolyMedix, Inc. (a) | 7,142 | 143 | |
PolyMedix, Inc. warrants 4/10/16 (a) | 163,833 | 2 | |
Portola Pharmaceuticals, Inc. (a) | 248,117 | 6,237,661 | |
Progenics Pharmaceuticals, Inc. (a) | 607,944 | 2,905,972 | |
Prosensa Holding BV (a)(d) | 112,766 | 1,113,000 | |
Protalix BioTherapeutics, Inc. (a)(d) | 90,943 | 299,202 | |
Prothena Corp. PLC (a) | 54,500 | 946,120 | |
PTC Therapeutics, Inc. (a) | 233,912 | 6,179,955 | |
Puma Biotechnology, Inc. (a) | 203,549 | 45,130,884 | |
Raptor Pharmaceutical Corp. (a)(d) | 228,373 | 1,966,292 | |
Receptos, Inc. (a) | 229,010 | 9,483,304 | |
Regeneron Pharmaceuticals, Inc. (a) | 158,080 | 49,988,058 | |
Regulus Therapeutics, Inc. (a)(d) | 186,217 | 1,189,927 | |
Repligen Corp. (a) | 228,585 | 4,793,427 | |
Rigel Pharmaceuticals, Inc. (a) | 416,077 | 1,360,572 | |
Sage Therapeutics, Inc. (a) | 226,646 | 6,395,950 | |
Sage Therapeutics, Inc. | 25,896 | 657,707 | |
Sangamo Biosciences, Inc. (a)(d) | 982,368 | 11,670,532 | |
Sarepta Therapeutics, Inc. (a)(d) | 160,901 | 3,433,627 | |
Seattle Genetics, Inc. (a)(d) | 196,850 | 6,929,120 | |
Sophiris Bio, Inc. (a) | 141,653 | 368,298 | |
Sorrento Therapeutics, Inc. (a) | 45,800 | 249,152 | |
Spectrum Pharmaceuticals, Inc. (a) | 338,247 | 2,381,259 | |
Stemline Therapeutics, Inc. (a)(d) | 292,993 | 3,753,240 | |
Sunesis Pharmaceuticals, Inc. (a) | 443,217 | 2,916,368 | |
Synageva BioPharma Corp. (a)(d) | 168,200 | 11,506,562 | |
Synergy Pharmaceuticals, Inc. (a)(d) | 242,484 | 885,067 | |
Synergy Pharmaceuticals, Inc. warrants 11/14/16 (a) | 20,600 | 21,630 | |
| |||
Shares | Value | ||
Synta Pharmaceuticals Corp. (a)(d) | 471,286 | $ 1,861,580 | |
Synthetic Biologics, Inc. (a) | 100 | 175 | |
TESARO, Inc. (a) | 153,779 | 4,422,684 | |
Threshold Pharmaceuticals, Inc. (a) | 92,584 | 389,779 | |
Threshold Pharmaceuticals, Inc. warrants 3/16/16 (a) | 35,146 | 67,297 | |
Ultragenyx Pharmaceutical, Inc. | 71,735 | 3,134,820 | |
uniQure B.V. | 63,432 | 648,275 | |
United Therapeutics Corp. (a) | 152,594 | 13,876,898 | |
Verastem, Inc. (a) | 202,208 | 1,494,317 | |
Versartis, Inc. (a)(d) | 211,002 | 4,304,441 | |
Versartis, Inc. | 97,274 | 1,785,951 | |
Vertex Pharmaceuticals, Inc. (a) | 951,126 | 84,564,613 | |
Vical, Inc. (a) | 659,862 | 864,419 | |
Vital Therapies, Inc. | 180,500 | 4,133,450 | |
Xencor, Inc. | 187,673 | 1,812,921 | |
XOMA Corp. (a) | 709,143 | 2,751,475 | |
Zafgen, Inc. (d) | 891,452 | 15,600,410 | |
Zafgen, Inc. | 129,125 | 2,033,719 | |
ZIOPHARM Oncology, Inc. (a)(d) | 59,779 | 187,108 | |
| 1,445,902,940 | ||
HEALTH CARE EQUIPMENT & SUPPLIES - 0.0% | |||
Health Care Equipment - 0.0% | |||
Alsius Corp. (a) | 14,200 | 0 | |
InVivo Therapeutics Holdings Corp. (a) | 98,300 | 90,436 | |
| 90,436 | ||
LIFE SCIENCES TOOLS & SERVICES - 0.0% | |||
Life Sciences Tools & Services - 0.0% | |||
BG Medicine, Inc. (a)(d) | 75,570 | 71,792 | |
ChromaDex, Inc. (a) | 143,866 | 192,780 | |
Transgenomic, Inc. (a) | 16,258 | 64,056 | |
Transgenomic, Inc. warrants 2/3/17 (a) | 81,000 | 1 | |
| 328,629 | ||
PERSONAL PRODUCTS - 0.0% | |||
Personal Products - 0.0% | |||
MYOS Corp. (a) | 6,666 | 91,991 | |
PHARMACEUTICALS - 5.0% | |||
Pharmaceuticals - 5.0% | |||
AcelRx Pharmaceuticals, Inc. (a)(d) | 52,410 | 364,774 | |
Achaogen, Inc. (a) | 141,215 | 1,526,534 | |
ALK-Abello A/S | 1,500 | 216,318 | |
Aradigm Corp. (a) | 8,241 | 69,505 | |
Aradigm Corp. (a) | 545 | 4,633 | |
Auxilium Pharmaceuticals, Inc. (a)(d) | 200,238 | 4,008,765 | |
AVANIR Pharmaceuticals Class A (a) | 1,482,487 | 7,723,757 | |
ContraVir Pharmaceuticals, Inc. (a)(d) | 23,908 | 30,124 | |
Egalet Corp. (d) | 196,663 | 2,379,622 | |
Endocyte, Inc. (a) | 1,544 | 10,244 | |
Horizon Pharma, Inc. (a)(d) | 811,450 | 6,897,325 | |
Common Stocks - continued | |||
Shares | Value | ||
PHARMACEUTICALS - CONTINUED | |||
Pharmaceuticals - continued | |||
Horizon Pharma, Inc. warrants 9/25/17 (a) | 55,250 | $ 226,964 | |
Intra-Cellular Therapies, Inc. (d) | 225,154 | 3,262,481 | |
Jazz Pharmaceuticals PLC (a) | 70,620 | 9,867,733 | |
NeurogesX, Inc. (a) | 187,202 | 880 | |
Pacira Pharmaceuticals, Inc. (a) | 152,160 | 13,998,720 | |
Parnell Pharmaceuticals Holdings Ltd. | 123,569 | 768,599 | |
Perrigo Co. PLC | 49 | 7,372 | |
Relypsa, Inc. | 182,613 | 4,128,880 | |
Repros Therapeutics, Inc. (a)(d) | 211,800 | 2,969,436 | |
TherapeuticsMD, Inc. (a)(d) | 818,700 | 3,798,768 | |
Theravance Biopharma, Inc. (a)(d) | 44,290 | 1,241,449 | |
Theravance, Inc. (a)(d) | 249,076 | 5,404,949 | |
Zogenix, Inc. (a) | 1,284,991 | 1,696,188 | |
Zogenix, Inc. warrants 7/27/17 (a) | 32,985 | 0 | |
ZS Pharma, Inc. | 191,186 | 5,355,120 | |
| 75,959,140 | ||
TOTAL COMMON STOCKS (Cost $1,192,632,509) |
| ||
Preferred Stocks - 0.4% | |||
|
|
|
|
Convertible Preferred Stocks - 0.4% | |||
BIOTECHNOLOGY - 0.3% | |||
Biotechnology - 0.3% | |||
Avalanche Biotechnologies, Inc. Series B (f) | 89,832 | 2,262,958 | |
ProQR Therapeutics BV (f) | 2,337 | 1,643,477 | |
| 3,906,435 | ||
PHARMACEUTICALS - 0.1% | |||
Pharmaceuticals - 0.1% | |||
aTyr Pharma, Inc. 8.00% (a)(f) | 282,494 | 714,427 | |
Kolltan Pharmaceuticals, Inc. Series D (f) | 1,610,391 | 1,610,391 | |
| 2,324,818 | ||
TOTAL CONVERTIBLE PREFERRED STOCKS | 6,231,253 | ||
Nonconvertible Preferred Stocks - 0.0% | |||
BIOTECHNOLOGY - 0.0% | |||
Biotechnology - 0.0% | |||
Moderna LLC Series D, 8.00% (f) | 26,918 | 574,161 | |
| |||
Shares | Value | ||
PHARMACEUTICALS - 0.0% | |||
Pharmaceuticals - 0.0% | |||
Equilibrate Asia Therapeutics Series D (a)(f) | 299,320 | $ 4,885 | |
Equilibrate Worldwide Therapeutics Series D (a)(f) | 299,320 | 12,024 | |
Neuropathic Worldwide Therapeutics Series D (a)(f) | 299,320 | 2,254 | |
Oculus Worldwide Therapeutics Series D (a)(f) | 299,320 | 3,756 | |
Orchestrate U.S. Therapeutics, Inc. Series D (a)(f) | 299,320 | 5,259 | |
Orchestrate Worldwide Therapeutics Series D (a)(f) | 299,320 | 9,393 | |
| 37,571 | ||
TOTAL NONCONVERTIBLE PREFERRED STOCKS | 611,732 | ||
TOTAL PREFERRED STOCKS (Cost $5,308,379) |
| ||
Money Market Funds - 8.4% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 6,633,107 | 6,633,107 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 121,475,612 | 121,475,612 | |
TOTAL MONEY MARKET FUNDS (Cost $128,108,719) |
| ||
TOTAL INVESTMENT PORTFOLIO - 108.3% (Cost $1,326,049,607) | 1,657,324,840 | ||
NET OTHER ASSETS (LIABILITIES) - (8.3)% | (126,798,273) | ||
NET ASSETS - 100% | $ 1,530,526,567 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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) Affiliated company |
(f) 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 $6,842,985 or 0.4% of net assets. |
Additional information on each restricted holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
aTyr Pharma, Inc. 8.00% | 4/8/13 - 5/17/13 | $ 714,427 |
Avalanche Biotechnologies, Inc. Series B | 4/17/14 | $ 676,435 |
Equilibrate Asia Therapeutics Series D | 5/17/13 | $ 4,885 |
Equilibrate Worldwide Therapeutics Series D | 5/17/13 | $ 12,024 |
Kolltan Pharmaceuticals, Inc. Series D | 3/13/14 | $ 1,610,391 |
Moderna LLC Series D, 8.00% | 11/6/13 | $ 574,161 |
Neuropathic Worldwide Therapeutics Series D | 5/17/13 | $ 2,254 |
Oculus Worldwide Therapeutics Series D | 5/17/13 | $ 3,756 |
Orchestrate U.S. Therapeutics, Inc. Series D | 5/17/13 | $ 5,259 |
Orchestrate Worldwide Therapeutics Series D | 5/17/13 | $ 9,393 |
ProQR Therapeutics BV | 4/17/14 | $ 1,695,394 |
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 | $ 12,703 |
Fidelity Securities Lending Cash Central Fund | 2,336,849 |
Total | $ 2,349,552 |
Other Affiliated Issuers |
An affiliated company is a company in which the Fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows: |
Affiliate | Value, | Purchases | Sales | Dividend | Value, |
Aldeyra Therapeutics, Inc. | $ - | $ 2,219,341 | $ - | $ - | $ 993,513 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 1,522,373,136 | $ 1,517,542,064 | $ 4,831,072 | $ - |
Preferred Stocks | 6,842,985 | - | 2,262,958 | 4,580,027 |
Money Market Funds | 128,108,719 | 128,108,719 | - | - |
Total Investments in Securities: | $ 1,657,324,840 | $ 1,645,650,783 | $ 7,094,030 | $ 4,580,027 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Biotechnology Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $113,523,863) - See accompanying schedule: Unaffiliated issuers (cost $1,195,721,547) | $ 1,528,222,608 |
|
Fidelity Central Funds (cost $128,108,719) | 128,108,719 |
|
Other affiliated issuers (cost $2,219,341) | 993,513 |
|
Total Investments (cost $1,326,049,607) |
| $ 1,657,324,840 |
Receivable for investments sold | 2,417,358 | |
Receivable for fund shares sold | 4,396,165 | |
Distributions receivable from Fidelity Central Funds | 397,907 | |
Other receivables | 2,321 | |
Total assets | 1,664,538,591 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 7,112,941 | |
Payable for fund shares redeemed | 3,836,805 | |
Accrued management fee | 704,864 | |
Distribution and service plan fees payable | 473,542 | |
Other affiliated payables | 299,092 | |
Other payables and accrued expenses | 109,168 | |
Collateral on securities loaned, at value | 121,475,612 | |
Total liabilities | 134,012,024 | |
|
|
|
Net Assets | $ 1,530,526,567 | |
Net Assets consist of: |
| |
Paid in capital | $ 1,197,814,678 | |
Accumulated net investment loss | (6,816,483) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 8,253,139 | |
Net unrealized appreciation (depreciation) on investments | 331,275,233 | |
Net Assets | $ 1,530,526,567 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 20.19 | |
|
|
|
Maximum offering price per share (100/94.25 of $20.19) | $ 21.42 | |
Class T: | $ 19.39 | |
|
|
|
Maximum offering price per share (100/96.50 of $19.39) | $ 20.09 | |
Class B: | $ 18.01 | |
|
|
|
Class C: | $ 18.04 | |
|
|
|
Institutional Class: | $ 21.10 | |
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.
Annual Report
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 2,482,457 |
Interest |
| 2,977 |
Income from Fidelity Central Funds (including $2,336,849 from security lending) |
| 2,349,552 |
Total income |
| 4,834,986 |
|
|
|
Expenses | ||
Management fee | $ 6,811,384 | |
Transfer agent fees | 2,583,031 | |
Distribution and service plan fees | 4,548,469 | |
Accounting and security lending fees | 411,556 | |
Custodian fees and expenses | 59,779 | |
Independent trustees' compensation | 27,881 | |
Registration fees | 237,578 | |
Audit | 46,947 | |
Legal | 12,413 | |
Interest | 1,541 | |
Miscellaneous | 10,548 | |
Total expenses before reductions | 14,751,127 | |
Expense reductions | (34,011) | 14,717,116 |
Net investment income (loss) | (9,882,130) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 15,834,775 | |
Foreign currency transactions | 918 | |
Total net realized gain (loss) |
| 15,835,693 |
Change in net unrealized appreciation (depreciation) on investment securities | 126,643,560 | |
Net gain (loss) | 142,479,253 | |
Net increase (decrease) in net assets resulting from operations | $ 132,597,123 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (9,882,130) | $ (2,400,307) |
Net realized gain (loss) | 15,835,693 | (3,418,106) |
Change in net unrealized appreciation (depreciation) | 126,643,560 | 172,587,152 |
Net increase (decrease) in net assets resulting from operations | 132,597,123 | 166,768,739 |
Distributions to shareholders from net realized gain | (3,083,051) | (10,422,000) |
Share transactions - net increase (decrease) | 713,552,409 | 368,981,342 |
Redemption fees | 133,198 | 20,216 |
Total increase (decrease) in net assets | 843,199,679 | 525,348,297 |
|
|
|
Net Assets | ||
Beginning of period | 687,326,888 | 161,978,591 |
End of period (including accumulated net investment loss of $6,816,483 and accumulated net investment loss of $1,831,365, respectively) | $ 1,530,526,567 | $ 687,326,888 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 17.25 | $ 11.79 | $ 8.81 | $ 6.67 | $ 6.94 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.13) | (.09) | (.07) | (.07) F | (.08) G |
Net realized and unrealized gain (loss) | 3.12 | 6.24 | 3.05 | 2.21 | (.19) |
Total from investment operations | 2.99 | 6.15 | 2.98 | 2.14 | (.27) |
Distributions from net realized gain | (.05) | (.69) | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 20.19 | $ 17.25 | $ 11.79 | $ 8.81 | $ 6.67 |
Total ReturnA, B | 17.38% | 54.94% | 33.83% | 32.08% | (3.89)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.08% | 1.15% | 1.27% | 1.35% | 1.39% |
Expenses net of fee waivers, if any | 1.08% | 1.15% | 1.27% | 1.35% | 1.39% |
Expenses net of all reductions | 1.08% | 1.14% | 1.27% | 1.34% | 1.38% |
Net investment income (loss) | (.68)% | (.63)% | (.73)% | (.91)% F | (1.15)% G |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 602,625 | $ 286,695 | $ 68,993 | $ 30,639 | $ 20,154 |
Portfolio turnover rateE | 50% | 22% | 82% | 99% | 130% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.04)%.
G Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.29)%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 16.63 | $ 11.42 | $ 8.56 | $ 6.50 | $ 6.78 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.19) | (.12) | (.10) | (.09) F | (.09) G |
Net realized and unrealized gain (loss) | 3.00 | 6.02 | 2.96 | 2.15 | (.19) |
Total from investment operations | 2.81 | 5.90 | 2.86 | 2.06 | (.28) |
Distributions from net realized gain | (.05) | (.69) | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 19.39 | $ 16.63 | $ 11.42 | $ 8.56 | $ 6.50 |
Total ReturnA, B | 16.95% | 54.50% | 33.41% | 31.69% | (4.13)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.41% | 1.46% | 1.56% | 1.64% | 1.69% |
Expenses net of fee waivers, if any | 1.41% | 1.46% | 1.56% | 1.64% | 1.65% |
Expenses net of all reductions | 1.40% | 1.46% | 1.56% | 1.64% | 1.64% |
Net investment income (loss) | (1.01)% | (.94)% | (1.02)% | (1.21)% F | (1.41)% G |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 95,945 | $ 67,887 | $ 28,154 | $ 16,454 | $ 11,684 |
Portfolio turnover rateE | 50% | 22% | 82% | 99% | 130% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.34)%.
G Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.55)%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 15.52 | $ 10.75 | $ 8.09 | $ 6.17 | $ 6.47 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.26) | (.17) | (.13) | (.12) F | (.12) G |
Net realized and unrealized gain (loss) | 2.80 | 5.63 | 2.79 | 2.04 | (.18) |
Total from investment operations | 2.54 | 5.46 | 2.66 | 1.92 | (.30) |
Distributions from net realized gain | (.05) | (.69) | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 18.01 | $ 15.52 | $ 10.75 | $ 8.09 | $ 6.17 |
Total ReturnA, B | 16.42% | 53.76% | 32.88% | 31.12% | (4.64)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.89% | 1.94% | 2.03% | 2.10% | 2.14% |
Expenses net of fee waivers, if any | 1.89% | 1.94% | 2.03% | 2.10% | 2.14% |
Expenses net of all reductions | 1.88% | 1.94% | 2.02% | 2.09% | 2.13% |
Net investment income (loss) | (1.49)% | (1.42)% | (1.49)% | (1.66)% F | (1.90)% G |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 6,101 | $ 8,136 | $ 6,349 | $ 5,849 | $ 6,297 |
Portfolio turnover rateE | 50% | 22% | 82% | 99% | 130% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.79)%.
G Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (2.04)%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 15.53 | $ 10.76 | $ 8.10 | $ 6.18 | $ 6.47 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.25) | (.17) | (.13) | (.12) F | (.12) G |
Net realized and unrealized gain (loss) | 2.81 | 5.63 | 2.79 | 2.04 | (.17) |
Total from investment operations | 2.56 | 5.46 | 2.66 | 1.92 | (.29) |
Distributions from net realized gain | (.05) | (.69) | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 18.04 | $ 15.53 | $ 10.76 | $ 8.10 | $ 6.18 |
Total ReturnA, B | 16.54% | 53.71% | 32.84% | 31.07% | (4.48)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.83% | 1.88% | 2.01% | 2.10% | 2.14% |
Expenses net of fee waivers, if any | 1.83% | 1.88% | 2.01% | 2.10% | 2.14% |
Expenses net of all reductions | 1.83% | 1.87% | 2.01% | 2.09% | 2.13% |
Net investment income (loss) | (1.43)% | (1.36)% | (1.47)% | (1.66)% F | (1.90)% G |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 359,967 | $ 146,684 | $ 31,710 | $ 15,787 | $ 11,421 |
Portfolio turnover rateE | 50% | 22% | 82% | 99% | 130% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.79)%.
G Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (2.04)%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 17.97 | $ 12.22 | $ 9.10 | $ 6.87 | $ 7.12 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | (.08) | (.05) | (.04) | (.05) E | (.06) F |
Net realized and unrealized gain (loss) | 3.26 | 6.49 | 3.16 | 2.28 | (.19) |
Total from investment operations | 3.18 | 6.44 | 3.12 | 2.23 | (.25) |
Distributions from net realized gain | (.05) | (.69) | - | - | - |
Redemption fees added to paid in capital B, H | - | - | - | - | - |
Net asset value, end of period | $ 21.10 | $ 17.97 | $ 12.22 | $ 9.10 | $ 6.87 |
Total ReturnA | 17.74% | 55.39% | 34.29% | 32.46% | (3.51)% |
Ratios to Average Net Assets C, G |
|
|
|
|
|
Expenses before reductions | .81% | .85% | .95% | 1.04% | 1.07% |
Expenses net of fee waivers, if any | .81% | .85% | .95% | 1.04% | 1.07% |
Expenses net of all reductions | .80% | .84% | .94% | 1.03% | 1.06% |
Net investment income (loss) | (.41)% | (.32)% | (.40)% | (.60)% E | (.83)% F |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 465,889 | $ 177,926 | $ 26,772 | $ 5,903 | $ 3,008 |
Portfolio turnover rateD | 50% | 22% | 82% | 99% | 130% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.73)%.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.01 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.97)%.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Investment Valuation - continued
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. 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. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), partnerships, net operating losses, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 448,874,092 |
Gross unrealized depreciation | (123,618,223) |
Net unrealized appreciation (depreciation) on securities | $ 325,255,869 |
|
|
Tax Cost | $ 1,332,068,971 |
Annual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Undistributed long-term capital gain | $ 14,272,505 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 325,255,869 |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Long-term Capital Gains | $ 3,083,051 | $ 10,422,000 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,320,090,617 and $610,606,472, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 1,277,012 | $ 34,881 |
Class T | .25% | .25% | 434,339 | 2,886 |
Class B | .75% | .25% | 77,485 | 58,326 |
Class C | .75% | .25% | 2,759,633 | 1,738,659 |
|
|
| $ 4,548,469 | $ 1,834,752 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Annual Report
Notes to Financial Statements - continued
5. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 1,085,516 |
Class T | 76,720 |
Class B* | 13,831 |
Class C* | 127,045 |
| $ 1,303,112 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 1,070,342 | .21 |
Class T | 248,578 | .29 |
Class B | 20,560 | .27 |
Class C | 575,016 | .21 |
Institutional Class | 668,535 | .19 |
| $ 2,583,031 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $26,947 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 or other affiliated entities of 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 Loan | Weighted Average | Interest |
Borrower | $ 6,730,048 | .32% | $ 1,236 |
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,946 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit
Annual Report
7. Security Lending - continued
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, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. During the period, there were no securities loaned to FCM.
8. Bank Borrowings.
The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity requirements. The Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average loan balance during the period for which loans were outstanding amounted to $4,645,000. The weighted average interest rate was .59%. The interest expense amounted to $305 under the bank borrowing program. At period end, there were no bank borrowings outstanding.
9. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $34,011 for the period.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net realized gain |
|
|
Class A | $ 1,291,021 | $ 4,291,683 |
Class T | 234,772 | 1,771,667 |
Class B | 24,488 | 386,626 |
Class C | 722,216 | 2,278,583 |
Institutional Class | 810,554 | 1,693,441 |
Total | $ 3,083,051 | $ 10,422,000 |
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 26,291,422 | 13,694,524 | $ 513,888,215 | $ 191,221,226 |
Reinvestment of distributions | 64,680 | 314,111 | 1,162,299 | 3,649,967 |
Shares redeemed | (13,129,582) | (3,240,220) | (254,303,314) | (42,003,741) |
Net increase (decrease) | 13,226,520 | 10,768,415 | $ 260,747,200 | $ 152,867,452 |
Class T |
|
|
|
|
Shares sold | 2,490,442 | 2,069,871 | $ 47,007,190 | $ 26,930,551 |
Reinvestment of distributions | 13,197 | 149,494 | 228,306 | 1,678,816 |
Shares redeemed | (1,639,876) | (601,268) | (30,470,117) | (7,670,183) |
Net increase (decrease) | 863,763 | 1,618,097 | $ 16,765,379 | $ 20,939,184 |
Class B |
|
|
|
|
Shares sold | 92,681 | 144,734 | $ 1,623,597 | $ 1,825,757 |
Reinvestment of distributions | 1,384 | 32,327 | 22,292 | 340,408 |
Shares redeemed | (279,647) | (243,257) | (4,810,522) | (2,832,185) |
Net increase (decrease) | (185,582) | (66,196) | $ (3,164,633) | $ (666,020) |
Annual Report
Notes to Financial Statements - continued
11. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class C |
|
|
|
|
Shares sold | 14,509,075 | 7,472,327 | $ 256,484,365 | $ 93,824,317 |
Reinvestment of distributions | 36,658 | 172,010 | 591,299 | 1,812,981 |
Shares redeemed | (4,036,055) | (1,149,639) | (69,713,827) | (13,555,676) |
Net increase (decrease) | 10,509,678 | 6,494,698 | $ 187,361,837 | $ 82,081,622 |
Institutional Class |
|
|
|
|
Shares sold | 21,677,297 | 9,398,986 | $ 442,824,898 | $ 138,330,404 |
Reinvestment of distributions | 35,974 | 114,710 | 674,146 | 1,385,697 |
Shares redeemed | (9,529,193) | (1,804,114) | (191,656,418) | (25,956,997) |
Net increase (decrease) | 12,184,078 | 7,709,582 | $ 251,842,626 | $ 113,759,104 |
12. 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.
Annual Report
Fidelity Advisor Communications Equipment Fund - Institutional Class
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Institutional Class A | 17.06% | 11.18% | 6.87% |
A Prior to October 1, 2006, Fidelity Advisor Communications Equipment Fund was named Fidelity Advisor Developing Communications Fund, and the fund operated under certain different investment policies and compared its performance to a different additional index. The fund's historical performance may not represent its current investment policies.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Communications Equipment Fund - Institutional Class on July 31, 2004. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Communications Equipment Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Ali Khan, Portfolio Manager of Fidelity Advisor® Communications Equipment Fund: For the year, the fund's Institutional Class shares returned 17.06%, topping the 16.29% advance of the S&P® Custom Communications Equipment Index and the S&P 500®. While communications equipment stocks handily outperformed the broader market during the first six months of the period, driven especially by strength in the technology hardware, storage & peripherals segment, the S&P 500® played some catch-up in the second half. I generally had good success with my method of buying above-average businesses at below-average valuations. However, our positions in two stocks in the industry benchmark were particularly unrewarding and kept the fund from finishing with better relative results. The fund's largest relative detractor was Finland-based Nokia, an index component in which the fund had a sizable underweighting to start the period because I thought the firm faced significant challenges from smartphone rivals such as Apple and Korea's Samsung Electronics. However, Nokia's stock price more than doubled during the period, with most of this gain occurring in September 2013, the month Microsoft announced plans to buy the company's handset business and license many of its patents. I added to our stake here to bring the position more in line with the fund's other telecom equipment holdings, although Nokia remained an underweighting at period end. The other significant relative detractor was Arris Group, an index component the fund didn't own that also posted an advance of more than 100% during the period. I was skeptical of the company's ability to integrate a recent large acquisition, but this process went more smoothly than I expected, which helped its stock. Conversely, the fund's top relative contributor was JDS Uniphase, a poorly performing index stock I avoided for most of the first half of the period. Like many telecom-related companies, this one tends to experience cyclical ebbs and flows in its fundamentals, and I thought investors had become too negative on the stock, so I began buying it in January. This worked out well, as I managed to avoid most of the downside in this stock. A non-benchmark position in Apple also worked out well. About six months prior to the start of the period, sentiment about this stock was relatively negative, and it was trading at a discount to similar companies. Apple was a good fit for my emphasis on high quality at reasonable valuation, so I established a position here. The stock responded with a gain of more than 51% for the year, so I trimmed our stake to nail down profits. An out-of-benchmark position in specialty server provider Super Micro Computer also proved timely. As I anticipated, the company's costs fell back in line and profits expanded when hard-disk drive manufacturing plants of the firm's Thailand-based suppliers came on line after recent flooding there abated. Subsequently, I thought this stock's price reflected most of the improvement I had anticipated, so I liquidated the position. The fund's cash position also lifted relative performance during the period.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.40% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,052.00 | $ 7.12 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.85 | $ 7.00 |
Class T | 1.65% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,051.00 | $ 8.39 |
HypotheticalA |
| $ 1,000.00 | $ 1,016.61 | $ 8.25 |
Class B | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,048.70 | $ 10.92 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Class C | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,047.70 | $ 10.92 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Institutional Class | 1.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,052.90 | $ 5.85 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.09 | $ 5.76 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Communications Equipment Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Cisco Systems, Inc. | 17.6 | 18.1 |
QUALCOMM, Inc. | 14.8 | 16.0 |
Nokia Corp. sponsored ADR | 5.5 | 4.5 |
Juniper Networks, Inc. | 4.7 | 5.8 |
Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 4.6 | 4.4 |
Alcatel-Lucent SA sponsored ADR | 3.5 | 3.6 |
Riverbed Technology, Inc. | 3.3 | 3.0 |
F5 Networks, Inc. | 3.3 | 4.9 |
Plantronics, Inc. | 2.5 | 1.7 |
Motorola Solutions, Inc. | 2.3 | 2.5 |
| 62.1 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Communications Equipment | 73.4% |
|
| Technology Hardware, Storage & Peripherals | 8.9% |
|
| Software | 3.6% |
|
| Semiconductors & Semiconductor Equipment | 2.7% |
|
| Internet Software & Services | 2.5% |
|
| All Others* | 8.9% |
|
As of January 31, 2014 | |||
| Communications Equipment | 85.3% |
|
| Semiconductors & Semiconductor Equipment | 2.9% |
|
| Computers & Peripherals | 2.6% |
|
| Internet Software & Services | 1.8% |
|
| IT Services | 1.7% |
|
| All Others* | 5.7% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Communications Equipment Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 91.9% | |||
Shares | Value | ||
COMMUNICATIONS EQUIPMENT - 73.4% | |||
Communications Equipment - 73.4% | |||
ADTRAN, Inc. | 2,100 | $ 46,704 | |
ADVA Optical Networking SE (a) | 16,128 | 59,994 | |
Alcatel-Lucent SA sponsored ADR | 147,057 | 504,406 | |
Aruba Networks, Inc. (a) | 12,340 | 220,392 | |
Calix Networks, Inc. (a) | 3,500 | 32,515 | |
Ciena Corp. (a)(d) | 4,200 | 82,026 | |
Cisco Systems, Inc. | 100,724 | 2,541,267 | |
Comtech Telecommunications Corp. | 400 | 13,520 | |
Emulex Corp. (a) | 5,200 | 30,576 | |
F5 Networks, Inc. (a) | 4,265 | 480,196 | |
Finisar Corp. (a)(d) | 3,900 | 76,947 | |
InterDigital, Inc. | 2,800 | 123,452 | |
Ixia (a) | 13,700 | 146,590 | |
JDS Uniphase Corp. (a) | 10,400 | 123,448 | |
Juniper Networks, Inc. | 28,588 | 672,962 | |
Motorola Solutions, Inc. | 5,247 | 334,129 | |
NETGEAR, Inc. (a) | 4,800 | 150,288 | |
Palo Alto Networks, Inc. (a) | 2,900 | 234,494 | |
Plantronics, Inc. | 7,800 | 366,366 | |
Polycom, Inc. (a) | 16,299 | 208,953 | |
Procera Networks, Inc. (a) | 1,200 | 12,012 | |
QUALCOMM, Inc. | 28,981 | 2,135,900 | |
Radware Ltd. (a) | 15,100 | 247,489 | |
Riverbed Technology, Inc. (a) | 26,858 | 480,758 | |
Ruckus Wireless, Inc. (a) | 14,900 | 192,359 | |
Sonus Networks, Inc. (a) | 47,600 | 168,028 | |
Spirent Communications PLC | 46,800 | 81,304 | |
Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR (d) | 53,020 | 659,039 | |
ViaSat, Inc. (a) | 2,300 | 134,481 | |
Wi-Lan, Inc. (d) | 15,100 | 48,471 | |
| 10,609,066 | ||
ELECTRICAL EQUIPMENT - 0.4% | |||
Electrical Components & Equipment - 0.4% | |||
General Cable Corp. | 2,500 | 55,575 | |
HEALTH CARE TECHNOLOGY - 0.4% | |||
Health Care Technology - 0.4% | |||
Vocera Communications, Inc. (a) | 4,500 | 56,565 | |
INTERNET SOFTWARE & SERVICES - 2.5% | |||
Internet Software & Services - 2.5% | |||
Google, Inc.: | |||
Class A (a) | 299 | 173,285 | |
Class C (a) | 309 | 176,624 | |
Rackspace Hosting, Inc. (a) | 600 | 18,174 | |
| 368,083 | ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.7% | |||
Semiconductors - 2.7% | |||
Altera Corp. | 8,200 | 268,304 | |
| |||
Shares | Value | ||
Semtech Corp. (a) | 3,100 | $ 69,223 | |
Xilinx, Inc. | 1,400 | 57,582 | |
| 395,109 | ||
SOFTWARE - 3.6% | |||
Application Software - 0.8% | |||
BroadSoft, Inc. (a) | 3,500 | 85,400 | |
Interactive Intelligence Group, Inc. (a) | 700 | 31,759 | |
| 117,159 | ||
Systems Software - 2.8% | |||
Gigamon, Inc. (a)(d) | 3,400 | 39,236 | |
Imperva, Inc. (a) | 2,400 | 53,208 | |
Infoblox, Inc. (a) | 7,100 | 86,052 | |
Oracle Corp. | 2,900 | 117,131 | |
Rovi Corp. (a) | 1,800 | 42,066 | |
Symantec Corp. | 2,700 | 63,882 | |
| 401,575 | ||
TOTAL SOFTWARE | 518,734 | ||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 8.9% | |||
Technology Hardware, Storage & Peripherals - 8.9% | |||
Apple, Inc. | 732 | 69,957 | |
BlackBerry Ltd. (a)(d) | 31,900 | 297,627 | |
Nokia Corp. sponsored ADR | 99,920 | 792,366 | |
QLogic Corp. (a) | 13,500 | 122,850 | |
| 1,282,800 | ||
TOTAL COMMON STOCKS (Cost $10,944,115) |
| ||
Money Market Funds - 12.9% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 1,291,510 | 1,291,510 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 575,130 | 575,130 | |
TOTAL MONEY MARKET FUNDS (Cost $1,866,640) |
| ||
TOTAL INVESTMENT PORTFOLIO - 104.8% (Cost $12,810,755) | 15,152,572 | ||
NET OTHER ASSETS (LIABILITIES) - (4.8)% | (698,431) | ||
NET ASSETS - 100% | $ 14,454,141 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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 | $ 870 |
Fidelity Securities Lending Cash Central Fund | 8,602 |
Total | $ 9,472 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 81.3% |
Finland | 5.5% |
Sweden | 4.6% |
France | 3.5% |
Canada | 2.4% |
Israel | 1.7% |
Others (Individually Less Than 1%) | 1.0% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Communications Equipment Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $537,295) - See accompanying schedule: Unaffiliated issuers (cost $10,944,115) | $ 13,285,932 |
|
Fidelity Central Funds (cost $1,866,640) | 1,866,640 |
|
Total Investments (cost $12,810,755) |
| $ 15,152,572 |
Receivable for investments sold | 15,024 | |
Receivable for fund shares sold | 35,128 | |
Dividends receivable | 309 | |
Distributions receivable from Fidelity Central Funds | 200 | |
Receivable from investment adviser for expense reductions | 1,773 | |
Other receivables | 144 | |
Total assets | 15,205,150 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 117,216 | |
Payable for fund shares redeemed | 4,450 | |
Accrued management fee | 6,703 | |
Distribution and service plan fees payable | 5,337 | |
Other affiliated payables | 3,821 | |
Other payables and accrued expenses | 38,352 | |
Collateral on securities loaned, at value | 575,130 | |
Total liabilities | 751,009 | |
|
|
|
Net Assets | $ 14,454,141 | |
Net Assets consist of: |
| |
Paid in capital | $ 12,822,685 | |
Undistributed net investment income | 23,615 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (733,978) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 2,341,819 | |
Net Assets | $ 14,454,141 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 11.94 | |
|
|
|
Maximum offering price per share (100/94.25 of $11.94) | $ 12.67 | |
Class T: | $ 11.55 | |
|
|
|
Maximum offering price per share (100/96.50 of $11.55) | $ 11.97 | |
Class B: | $ 10.77 | |
|
|
|
Class C: | $ 10.76 | |
|
|
|
Institutional Class: | $ 12.35 | |
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.
Annual Report
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 221,137 |
Special dividends |
| 35,460 |
Interest |
| 20 |
Income from Fidelity Central Funds |
| 9,472 |
Income before foreign taxes withheld |
| 266,089 |
Less foreign taxes withheld |
| (15,265) |
Total income |
| 250,824 |
|
|
|
Expenses | ||
Management fee | $ 77,401 | |
Transfer agent fees | 40,560 | |
Distribution and service plan fees | 58,052 | |
Accounting and security lending fees | 5,571 | |
Custodian fees and expenses | 8,600 | |
Independent trustees' compensation | 335 | |
Registration fees | 53,414 | |
Audit | 46,702 | |
Legal | 256 | |
Interest | 547 | |
Miscellaneous | 517 | |
Total expenses before reductions | 291,955 | |
Expense reductions | (73,726) | 218,229 |
Net investment income (loss) | 32,595 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 685,929 | |
Foreign currency transactions | (136) | |
Total net realized gain (loss) |
| 685,793 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 1,223,848 | |
Assets and liabilities in foreign currencies | 2 | |
Total change in net unrealized appreciation (depreciation) |
| 1,223,850 |
Net gain (loss) | 1,909,643 | |
Net increase (decrease) in net assets resulting from operations | $ 1,942,238 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 32,595 | $ (7,046) |
Net realized gain (loss) | 685,793 | 329,684 |
Change in net unrealized appreciation (depreciation) | 1,223,850 | 2,517,574 |
Net increase (decrease) in net assets resulting from operations | 1,942,238 | 2,840,212 |
Distributions to shareholders from net investment income | - | (3,925) |
Share transactions - net increase (decrease) | 1,539,076 | (1,708,594) |
Redemption fees | 568 | 1,030 |
Total increase (decrease) in net assets | 3,481,882 | 1,128,723 |
|
|
|
Net Assets | ||
Beginning of period | 10,972,259 | 9,843,536 |
End of period (including undistributed net investment income of $23,615 and accumulated net investment loss of $8,844, respectively) | $ 14,454,141 | $ 10,972,259 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.22 | $ 7.71 | $ 9.73 | $ 8.67 | $ 7.28 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .04 F | .02 | (.01) | (.06) | (.11) |
Net realized and unrealized gain (loss) | 1.68 | 2.50 | (1.81) | 1.12 | 1.50 |
Total from investment operations | 1.72 | 2.52 | (1.82) | 1.06 | 1.39 |
Distributions from net investment income | - | (.01) | - | - | - |
Distributions from net realized gain | - | - | (.20) | - | - |
Total distributions | - | (.01) | (.20) | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 11.94 | $ 10.22 | $ 7.71 | $ 9.73 | $ 8.67 |
Total ReturnA, B | 16.83% | 32.65% | (18.88)% | 12.23% | 19.09% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 1.96% | 2.22% | 1.96% | 1.64% | 1.90% |
Expenses net of fee waivers, if any | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% |
Expenses net of all reductions | 1.39% | 1.37% | 1.39% | 1.39% | 1.38% |
Net investment income (loss) | .40% F | .18% | (.16)% | (.60)% | (1.32)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 4,725 | $ 3,962 | $ 3,568 | $ 8,787 | $ 4,860 |
Portfolio turnover rateE | 160% | 33% | 79% | 101% | 106% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .14%.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 9.91 | $ 7.49 | $ 9.48 | $ 8.46 | $ 7.13 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .02 F | (.01) | (.03) | (.09) | (.13) |
Net realized and unrealized gain (loss) | 1.62 | 2.43 | (1.76) | 1.11 | 1.46 |
Total from investment operations | 1.64 | 2.42 | (1.79) | 1.02 | 1.33 |
Distributions from net realized gain | - | - | (.20) | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 11.55 | $ 9.91 | $ 7.49 | $ 9.48 | $ 8.46 |
Total ReturnA, B | 16.55% | 32.31% | (19.06)% | 12.06% | 18.65% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 2.25% | 2.52% | 2.27% | 1.97% | 2.20% |
Expenses net of fee waivers, if any | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% |
Expenses net of all reductions | 1.64% | 1.62% | 1.64% | 1.64% | 1.63% |
Net investment income (loss) | .14% F | (.07)% | (.41)% | (.85)% | (1.57)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 3,995 | $ 3,342 | $ 2,843 | $ 4,607 | $ 3,273 |
Portfolio turnover rateE | 160% | 33% | 79% | 101% | 106% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.11)%.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 9.28 | $ 7.05 | $ 8.99 | $ 8.06 | $ 6.83 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.04) F | (.05) | (.07) | (.13) | (.16) |
Net realized and unrealized gain (loss) | 1.53 | 2.28 | (1.67) | 1.06 | 1.39 |
Total from investment operations | 1.49 | 2.23 | (1.74) | .93 | 1.23 |
Distributions from net realized gain | - | - | (.20) | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 10.77 | $ 9.28 | $ 7.05 | $ 8.99 | $ 8.06 |
Total ReturnA, B | 16.06% | 31.63% | (19.56)% | 11.54% | 18.01% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 2.74% | 3.00% | 2.71% | 2.47% | 2.68% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.14% | 2.13% | 2.13% | 2.14% | 2.13% |
Net investment income (loss) | (.36)% F | (.57)% | (.91)% | (1.35)% | (2.07)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 399 | $ 480 | $ 570 | $ 1,316 | $ 1,408 |
Portfolio turnover rateE | 160% | 33% | 79% | 101% | 106% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.61)%.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 9.28 | $ 7.05 | $ 8.98 | $ 8.06 | $ 6.82 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.04) F | (.05) | (.07) | (.13) | (.16) |
Net realized and unrealized gain (loss) | 1.52 | 2.28 | (1.66) | 1.05 | 1.40 |
Total from investment operations | 1.48 | 2.23 | (1.73) | .92 | 1.24 |
Distributions from net realized gain | - | - | (.20) | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 10.76 | $ 9.28 | $ 7.05 | $ 8.98 | $ 8.06 |
Total ReturnA, B | 15.95% | 31.63% | (19.47)% | 11.41% | 18.18% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 2.73% | 2.98% | 2.71% | 2.40% | 2.67% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.14% | 2.12% | 2.14% | 2.14% | 2.13% |
Net investment income (loss) | (.35)% F | (.57)% | (.91)% | (1.35)% | (2.07)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 2,744 | $ 2,334 | $ 2,142 | $ 5,866 | $ 3,029 |
Portfolio turnover rateE | 160% | 33% | 79% | 101% | 106% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.61)%.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.55 | $ 7.95 | $ 10.00 | $ 8.88 | $ 7.45 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .08 E | .04 | .01 | (.04) | (.09) |
Net realized and unrealized gain (loss) | 1.72 | 2.58 | (1.86) | 1.16 | 1.52 |
Total from investment operations | 1.80 | 2.62 | (1.85) | 1.12 | 1.43 |
Distributions from net investment income | - | (.02) | - | - | - |
Distributions from net realized gain | - | - | (.20) | - | - |
Total distributions | - | (.02) | (.20) | - | - |
Redemption fees added to paid in capital B, G | - | - | - | - | - |
Net asset value, end of period | $ 12.35 | $ 10.55 | $ 7.95 | $ 10.00 | $ 8.88 |
Total ReturnA | 17.06% | 32.92% | (18.66)% | 12.61% | 19.19% |
Ratios to Average Net Assets C, F |
|
|
|
|
|
Expenses before reductions | 1.45% | 1.93% | 1.66% | 1.22% | 1.54% |
Expenses net of fee waivers, if any | 1.15% | 1.15% | 1.15% | 1.15% | 1.15% |
Expenses net of all reductions | 1.14% | 1.12% | 1.13% | 1.14% | 1.13% |
Net investment income (loss) | .65% E | .43% | .10% | (.35)% | (1.07)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 2,592 | $ 855 | $ 721 | $ 2,855 | $ 1,717 |
Portfolio turnover rateD | 160% | 33% | 79% | 101% | 106% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .39%.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds ,including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Large, non-recurring dividends recognized by the Fund are presented separately on the Statement of Operations as "Special Dividends" and the impact of these dividends is presented in the Financial Highlights. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 2,568,670 |
Gross unrealized depreciation | (385,372) |
Net unrealized appreciation (depreciation) on securities | $ 2,183,298 |
|
|
Tax Cost | $ 12,969,274 |
Annual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 23,616 |
Capital loss carryforward | $ (575,460) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 2,183,300 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
No expiration |
|
Short-term | $ (575,460) |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ - | $ 3,925 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $21,079,675 and $19,926,735, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment advisor and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 10,291 | $ 137 |
Class T | .25% | .25% | 18,664 | - |
Class B | .75% | .25% | 4,228 | 3,171 |
Class C | .75% | .25% | 24,869 | 4,459 |
|
|
| $ 58,052 | $ 7,767 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Annual Report
Notes to Financial Statements - continued
5. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 3,542 |
Class T | 1,750 |
Class B* | 1,323 |
Class C* | 285 |
| $ 6,900 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 12,773 | .31 |
Class T | 13,022 | .35 |
Class B | 1,316 | .31 |
Class C | 7,789 | .31 |
Institutional Class | 5,660 | .17 |
| $ 40,560 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $1,773 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $24 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $8,602. During the period, there were no securities loaned to FCM.
Annual Report
8. Bank Borrowings.
The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity requirements. The Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average loan balance during the period for which loans were outstanding amounted to $6,771,400. The weighted average interest rate was .58%. The interest expense amounted to $547 under the bank borrowing program.
9. Expense Reductions.
The investment adviser voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense | Reimbursement |
Class A | 1.40% | $ 23,119 |
Class T | 1.65% | 22,382 |
Class B | 2.15% | 2,485 |
Class C | 2.15% | 14,282 |
Institutional Class | 1.15% | 9,684 |
|
| $ 71,952 |
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $1,765 for the period. In addition, through arrangements with the Fund's custodian, 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 $9.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net investment income |
|
|
Class A | $ - | $ 2,612 |
Institutional Class | - | 1,313 |
Total | $ - | $ 3,925 |
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 118,184 | 119,229 | $ 1,378,044 | $ 1,075,395 |
Reinvestment of distributions | - | 272 | - | 2,398 |
Shares redeemed | (110,145) | (194,578) | (1,218,133) | (1,739,434) |
Net increase (decrease) | 8,039 | (75,077) | $ 159,911 | $ (661,641) |
Class T |
|
|
|
|
Shares sold | 51,248 | 54,310 | $ 564,493 | $ 477,965 |
Shares redeemed | (42,610) | (96,623) | (470,057) | (817,480) |
Net increase (decrease) | 8,638 | (42,313) | $ 94,436 | $ (339,515) |
Class B |
|
|
|
|
Shares sold | 64 | 612 | $ 624 | $ 4,500 |
Shares redeemed | (14,700) | (29,754) | (144,244) | (242,910) |
Net increase (decrease) | (14,636) | (29,142) | $ (143,620) | $ (238,410) |
Class C |
|
|
|
|
Shares sold | 74,081 | 99,311 | $ 769,830 | $ 848,531 |
Shares redeemed | (70,636) | (151,640) | (715,373) | (1,232,762) |
Net increase (decrease) | 3,445 | (52,329) | $ 54,457 | $ (384,231) |
Annual Report
Notes to Financial Statements - continued
11. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Institutional Class |
|
|
|
|
Shares sold | 1,448,765 | 37,292 | $ 17,115,064 | $ 354,493 |
Reinvestment of distributions | - | 122 | - | 1,105 |
Shares redeemed | (1,319,932) | (47,116) | (15,741,172) | (440,395) |
Net increase (decrease) | 128,833 | (9,702) | $ 1,373,892 | $ (84,797) |
12. 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.
Annual Report
Fidelity Advisor Consumer Discretionary Fund - Institutional Class
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Institutional Class A | 9.61% | 20.11% | 9.01% |
A Prior to October 1, 2006, Fidelity Advisor Consumer Discretionary Fund was named Fidelity Advisor Consumer Industries Fund, and the fund operated under certain different investment policies and compared its performance to a different additional index. The fund's historical performance may not represent its current investment policies.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Consumer Discretionary Fund - Institutional Class on July 31, 2004. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Consumer Discretionary Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Peter Dixon, who became Portfolio Manager of Portfolio Manager of Fidelity Advisor® Consumer Discretionary Fund on July 1, 2014: For the year, the fund's Institutional Class shares advanced 9.61%, underperforming the 12.63% gain of the MSCI U.S. IMI Consumer Discretionary 25-50 Index and the S&P 500®. The sector tumbled after a long stretch of outperformance, as a harsh winter hindered sales for brick-and-mortar retailers. Intense competition in the industry hurt margins, which dampened the performance of many stocks in the index. Multiple factors weighed on consumers' discretionary spending, including concern over rising oil prices in the period's second half, tepid wage growth and an uptick in inflation, despite reduced personal debt loads. However, fundamentals appeared to be improving, as housing strengthened, unemployment trended lower and auto sales increased. Signs of economic improvement in the broad market, despite some volatility, also helped consumer confidence. Looking at individual stocks, it hurt the most to underweight Internet and cable provider Comcast. In January, the stock benefited from speculation that the firm would merge with another cable giant, Time Warner. Additionally, Comcast announced higher fourth-quarter revenue, raised its dividend and authorized a new share repurchase program, which pleased investors. Elsewhere, off-price retailer Ross Stores detracted, as the stock fell on weak first-quarter financial results, dampened by ongoing softness in retail foot traffic. Ross Stores was not held in the fund at period end. Conversely, an overweighting in digital cable provider DIRECTV was the fund's biggest individual contributor. The stock jumped in May when the company announced it would be acquired by telecom giant AT&T. Apparel retail was another source of strength. Here, it helped to overweight athletic footwear seller Foot Locker, as the firm reported quarterly financial results that easily surpassed analysts' expectations, benefiting from growing demand for specialty sneakers. Additionally, investors liked management's consistent stock-repurchase program, as well as recently announced plans to remodel more than 300 retail stores in 2014 - both of which drove the stock higher.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.16% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,038.40 | $ 5.86 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.04 | $ 5.81 |
Class T | 1.45% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,036.50 | $ 7.32 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.60 | $ 7.25 |
Class B | 1.97% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,033.90 | $ 9.93 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.03 | $ 9.84 |
Class C | 1.92% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,033.90 | $ 9.68 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.27 | $ 9.59 |
Institutional Class | .87% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,040.10 | $ 4.40 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.48 | $ 4.36 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Consumer Discretionary Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
The Walt Disney Co. | 6.6 | 6.1 |
Home Depot, Inc. | 5.5 | 0.0 |
priceline.com, Inc. | 3.8 | 2.4 |
TJX Companies, Inc. | 3.5 | 2.7 |
DIRECTV | 3.5 | 3.7 |
CBS Corp. Class B | 3.3 | 0.0 |
Time Warner Cable, Inc. | 3.3 | 0.0 |
NIKE, Inc. Class B | 3.2 | 0.4 |
Time Warner, Inc. | 3.1 | 3.1 |
Twenty-First Century Fox, Inc. Class A | 2.9 | 3.7 |
| 38.7 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Media | 33.0% |
|
| Specialty Retail | 19.1% |
|
| Hotels, Restaurants & Leisure | 14.8% |
|
| Textiles, Apparel & Luxury Goods | 11.1% |
|
| Internet & Catalog Retail | 5.6% |
|
| All Others* | 16.4% |
|
As of January 31, 2014 | |||
| Specialty Retail | 27.2% |
|
| Media | 22.0% |
|
| Hotels, Restaurants & Leisure | 14.8% |
|
| Multiline Retail | 11.6% |
|
| Textiles, Apparel & Luxury Goods | 9.4% |
|
| All Others* | 15.0% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Consumer Discretionary Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 97.3% | |||
Shares | Value | ||
AUTO COMPONENTS - 4.4% | |||
Auto Parts & Equipment - 4.4% | |||
Delphi Automotive PLC | 46,084 | $ 3,078,411 | |
Tenneco, Inc. (a) | 35,800 | 2,280,460 | |
| 5,358,871 | ||
AUTOMOBILES - 1.3% | |||
Automobile Manufacturers - 1.3% | |||
Ford Motor Co. | 32,951 | 560,826 | |
General Motors Co. | 7,500 | 253,650 | |
Hyundai Motor Co. | 1,568 | 371,137 | |
Tata Motors Ltd. | 51,639 | 377,741 | |
| 1,563,354 | ||
BEVERAGES - 0.5% | |||
Soft Drinks - 0.5% | |||
Monster Beverage Corp. (a) | 10,100 | 645,996 | |
COMMERCIAL SERVICES & SUPPLIES - 2.4% | |||
Diversified Support Services - 2.4% | |||
KAR Auction Services, Inc. | 100,904 | 2,957,496 | |
FOOD PRODUCTS - 0.5% | |||
Packaged Foods & Meats - 0.5% | |||
Keurig Green Mountain, Inc. | 5,600 | 667,968 | |
HOTELS, RESTAURANTS & LEISURE - 14.8% | |||
Casinos & Gaming - 2.6% | |||
Las Vegas Sands Corp. | 27,900 | 2,060,415 | |
Wynn Resorts Ltd. | 5,300 | 1,129,960 | |
| 3,190,375 | ||
Hotels, Resorts & Cruise Lines - 3.7% | |||
Marriott International, Inc. Class A | 22,250 | 1,439,798 | |
Wyndham Worldwide Corp. | 39,786 | 3,005,832 | |
| 4,445,630 | ||
Restaurants - 8.5% | |||
Fiesta Restaurant Group, Inc. (a) | 17,500 | 794,150 | |
Jubilant Foodworks Ltd. (a) | 15,613 | 322,547 | |
McDonald's Corp. | 13,677 | 1,293,297 | |
Ruth's Hospitality Group, Inc. | 47,200 | 535,720 | |
Starbucks Corp. | 46,000 | 3,573,280 | |
Texas Roadhouse, Inc. Class A | 52,041 | 1,294,780 | |
Yum! Brands, Inc. | 37,014 | 2,568,772 | |
| 10,382,546 | ||
TOTAL HOTELS, RESTAURANTS & LEISURE | 18,018,551 | ||
HOUSEHOLD DURABLES - 2.3% | |||
Homebuilding - 1.6% | |||
KB Home | 26,400 | 430,320 | |
Lennar Corp. Class A | 17,300 | 626,779 | |
PulteGroup, Inc. | 37,400 | 660,110 | |
Ryland Group, Inc. | 7,800 | 250,380 | |
| 1,967,589 | ||
| |||
Shares | Value | ||
Household Appliances - 0.7% | |||
Whirlpool Corp. | 6,100 | $ 870,104 | |
TOTAL HOUSEHOLD DURABLES | 2,837,693 | ||
INTERNET & CATALOG RETAIL - 5.6% | |||
Internet Retail - 5.6% | |||
HomeAway, Inc. (a) | 8,300 | 288,176 | |
Liberty Interactive Corp. Series A (a) | 67,468 | 1,892,477 | |
priceline.com, Inc. (a) | 3,740 | 4,646,763 | |
| 6,827,416 | ||
LEISURE PRODUCTS - 1.2% | |||
Leisure Products - 1.2% | |||
Brunswick Corp. | 36,100 | 1,455,913 | |
MEDIA - 33.0% | |||
Advertising - 0.0% | |||
MDC Partners, Inc. Class A (sub. vtg.) | 600 | 12,596 | |
Broadcasting - 6.0% | |||
CBS Corp. Class B | 71,800 | 4,080,394 | |
ITV PLC | 788,929 | 2,779,777 | |
Liberty Media Corp. (a) | 6,524 | 306,628 | |
Liberty Media Corp. Class A (a) | 3,262 | 153,477 | |
| 7,320,276 | ||
Cable & Satellite - 11.6% | |||
Cablevision Systems Corp. - NY Group Class A | 32,600 | 626,572 | |
Comcast Corp. Class A | 64,800 | 3,481,704 | |
DIRECTV (a) | 49,052 | 4,220,925 | |
Liberty Global PLC: | |||
Class A (a) | 4,979 | 207,126 | |
Class C | 39,879 | 1,594,761 | |
Time Warner Cable, Inc. | 27,500 | 3,990,250 | |
| 14,121,338 | ||
Movies & Entertainment - 15.4% | |||
The Walt Disney Co. | 93,406 | 8,021,711 | |
Time Warner, Inc. | 46,000 | 3,818,920 | |
Twenty-First Century Fox, Inc. Class A | 113,033 | 3,580,885 | |
Viacom, Inc. Class B (non-vtg.) | 41,547 | 3,434,690 | |
| 18,856,206 | ||
TOTAL MEDIA | 40,310,416 | ||
MULTILINE RETAIL - 1.1% | |||
General Merchandise Stores - 1.1% | |||
B&M European Value Retail S.A. | 11,021 | 50,517 | |
Dollar Tree, Inc. (a) | 18,509 | 1,008,185 | |
Don Quijote Holdings Co. Ltd. | 4,600 | 248,556 | |
| 1,307,258 | ||
SPECIALTY RETAIL - 19.1% | |||
Apparel Retail - 8.0% | |||
Foot Locker, Inc. | 44,851 | 2,131,768 | |
Common Stocks - continued | |||
Shares | Value | ||
SPECIALTY RETAIL - CONTINUED | |||
Apparel Retail - continued | |||
L Brands, Inc. | 57,600 | $ 3,339,072 | |
TJX Companies, Inc. | 80,308 | 4,279,613 | |
| 9,750,453 | ||
Automotive Retail - 3.4% | |||
AutoZone, Inc. (a) | 4,000 | 2,068,120 | |
O'Reilly Automotive, Inc. (a) | 13,600 | 2,040,000 | |
| 4,108,120 | ||
Home Improvement Retail - 5.8% | |||
Home Depot, Inc. | 83,200 | 6,726,720 | |
Lumber Liquidators Holdings, Inc. (a) | 7,500 | 406,650 | |
| 7,133,370 | ||
Specialty Stores - 1.9% | |||
PetSmart, Inc. | 11,989 | 816,930 | |
Tiffany & Co., Inc. | 11,355 | 1,108,362 | |
World Duty Free SpA (a) | 32,264 | 368,523 | |
| 2,293,815 | ||
TOTAL SPECIALTY RETAIL | 23,285,758 | ||
TEXTILES, APPAREL & LUXURY GOODS - 11.1% | |||
Apparel, Accessories & Luxury Goods - 7.9% | |||
Compagnie Financiere Richemont SA Series A | 12,682 | 1,209,238 | |
G-III Apparel Group Ltd. (a) | 9,500 | 737,865 | |
PVH Corp. | 28,223 | 3,109,610 | |
Ralph Lauren Corp. | 17,225 | 2,684,689 | |
| |||
Shares | Value | ||
Swatch Group AG (Bearer) (Reg.) | 7,238 | $ 726,787 | |
VF Corp. | 19,104 | 1,170,502 | |
| 9,638,691 | ||
Footwear - 3.2% | |||
NIKE, Inc. Class B | 50,917 | 3,927,228 | |
TOTAL TEXTILES, APPAREL & LUXURY GOODS | 13,565,919 | ||
TOTAL COMMON STOCKS (Cost $108,427,897) |
| ||
Money Market Funds - 1.9% | |||
|
|
|
|
Fidelity Cash Central Fund,0.11% (b) | 2,393,097 |
| |
TOTAL INVESTMENT PORTFOLIO - 99.2% (Cost $110,820,994) | 121,195,706 | ||
NET OTHER ASSETS (LIABILITIES) - 0.8% | 929,707 | ||
NET ASSETS - 100% | $ 122,125,413 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 1,753 |
Fidelity Securities Lending Cash Central Fund | 7,580 |
Total | $ 9,333 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 118,802,609 | $ 117,482,628 | $ 1,319,981 | $ - |
Money Market Funds | 2,393,097 | 2,393,097 | - | - |
Total Investments in Securities: | $ 121,195,706 | $ 119,875,725 | $ 1,319,981 | $ - |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Consumer Discretionary Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $108,427,897) | $ 118,802,609 |
|
Fidelity Central Funds (cost $2,393,097) | 2,393,097 |
|
Total Investments (cost $110,820,994) |
| $ 121,195,706 |
Receivable for investments sold | 2,088,341 | |
Receivable for fund shares sold | 1,242,249 | |
Dividends receivable | 59,439 | |
Distributions receivable from Fidelity Central Funds | 593 | |
Other receivables | 881 | |
Total assets | 124,587,209 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 2,147,977 | |
Payable for fund shares redeemed | 145,142 | |
Accrued management fee | 58,219 | |
Distribution and service plan fees payable | 40,644 | |
Other affiliated payables | 29,647 | |
Other payables and accrued expenses | 40,167 | |
Total liabilities | 2,461,796 | |
|
|
|
Net Assets | $ 122,125,413 | |
Net Assets consist of: |
| |
Paid in capital | $ 99,673,196 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 12,076,670 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 10,375,547 | |
Net Assets | $ 122,125,413 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 19.75 | |
|
|
|
Maximum offering price per share (100/94.25 of $19.75) | $ 20.95 | |
Class T: | $ 18.75 | |
|
|
|
Maximum offering price per share (100/96.50 of $18.75) | $ 19.43 | |
Class B: | $ 16.76 | |
|
|
|
Class C: | $ 16.79 | |
|
|
|
Institutional Class: | $ 21.00 | |
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.
Annual Report
Fidelity Advisor Consumer Discretionary Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 1,169,025 |
Income from Fidelity Central Funds |
| 9,333 |
Total income |
| 1,178,358 |
|
|
|
Expenses | ||
Management fee | $ 659,821 | |
Transfer agent fees | 288,052 | |
Distribution and service plan fees | 473,763 | |
Accounting and security lending fees | 47,082 | |
Custodian fees and expenses | 17,505 | |
Independent trustees' compensation | 2,852 | |
Registration fees | 68,818 | |
Audit | 55,807 | |
Legal | 1,505 | |
Miscellaneous | 1,610 | |
Total expenses before reductions | 1,616,815 | |
Expense reductions | (7,754) | 1,609,061 |
Net investment income (loss) | (430,703) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 17,601,848 | |
Foreign currency transactions | (2,180) | |
Total net realized gain (loss) |
| 17,599,668 |
Change in net unrealized appreciation (depreciation) on: Investment securities | (7,704,472) | |
Assets and liabilities in foreign currencies | 896 | |
Total change in net unrealized appreciation (depreciation) |
| (7,703,576) |
Net gain (loss) | 9,896,092 | |
Net increase (decrease) in net assets resulting from operations | $ 9,465,389 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (430,703) | $ (195,793) |
Net realized gain (loss) | 17,599,668 | 9,882,077 |
Change in net unrealized appreciation (depreciation) | (7,703,576) | 10,583,809 |
Net increase (decrease) in net assets resulting from operations | 9,465,389 | 20,270,093 |
Distributions to shareholders from net realized gain | (8,442,076) | (6,688,896) |
Share transactions - net increase (decrease) | 27,584,653 | 16,864,514 |
Redemption fees | 3,923 | 6,411 |
Total increase (decrease) in net assets | 28,611,889 | 30,452,122 |
|
|
|
Net Assets | ||
Beginning of period | 93,513,524 | 63,061,402 |
End of period | $ 122,125,413 | $ 93,513,524 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 19.59 | $ 16.22 | $ 16.00 | $ 12.75 | $ 10.26 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.04) | (.02) | .01 | (.02) | (.02) |
Net realized and unrealized gain (loss) | 1.75 | 5.04 | 1.07 | 3.27 | 2.51 |
Total from investment operations | 1.71 | 5.02 | 1.08 | 3.25 | 2.49 |
Distributions from net investment income | - | - | (.03) | - | - |
Distributions from net realized gain | (1.55) | (1.65) | (.83) | - | - |
Total distributions | (1.55) | (1.65) | (.86) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 19.75 | $ 19.59 | $ 16.22 | $ 16.00 | $ 12.75 |
Total ReturnA, B | 9.28% | 33.65% | 7.96% | 25.49% | 24.27% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.20% | 1.31% | 1.38% | 1.39% | 1.44% |
Expenses net of fee waivers, if any | 1.20% | 1.31% | 1.38% | 1.39% | 1.40% |
Expenses net of all reductions | 1.19% | 1.29% | 1.37% | 1.38% | 1.39% |
Net investment income (loss) | (.21)% | (.10)% | .04% | (.15)% | (.15)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 59,089 | $ 45,292 | $ 26,547 | $ 23,447 | $ 19,423 |
Portfolio turnover rateE | 171% | 146% | 217% | 179% | 163% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 18.68 | $ 15.57 | $ 15.43 | $ 12.32 | $ 9.94 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.10) | (.06) | (.03) | (.06) | (.05) |
Net realized and unrealized gain (loss) | 1.67 | 4.81 | 1.02 | 3.17 | 2.43 |
Total from investment operations | 1.57 | 4.75 | .99 | 3.11 | 2.38 |
Distributions from net investment income | - | - | (.02) | - | - |
Distributions from net realized gain | (1.50) | (1.64) | (.83) | - | - |
Total distributions | (1.50) | (1.64) | (.85) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 18.75 | $ 18.68 | $ 15.57 | $ 15.43 | $ 12.32 |
Total ReturnA, B | 8.94% | 33.25% | 7.62% | 25.24% | 23.94% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.50% | 1.60% | 1.64% | 1.66% | 1.71% |
Expenses net of fee waivers, if any | 1.50% | 1.60% | 1.64% | 1.65% | 1.65% |
Expenses net of all reductions | 1.49% | 1.58% | 1.63% | 1.64% | 1.64% |
Net investment income (loss) | (.51)% | (.39)% | (.23)% | (.40)% | (.40)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 18,779 | $ 15,613 | $ 10,447 | $ 9,897 | $ 8,018 |
Portfolio turnover rateE | 171% | 146% | 217% | 179% | 163% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 16.85 | $ 14.23 | $ 14.23 | $ 11.42 | $ 9.26 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.17) | (.13) | (.10) | (.12) | (.10) |
Net realized and unrealized gain (loss) | 1.49 | 4.36 | .93 | 2.93 | 2.26 |
Total from investment operations | 1.32 | 4.23 | .83 | 2.81 | 2.16 |
Distributions from net realized gain | (1.41) | (1.61) | (.83) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 16.76 | $ 16.85 | $ 14.23 | $ 14.23 | $ 11.42 |
Total ReturnA, B | 8.36% | 32.61% | 7.11% | 24.61% | 23.33% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.01% | 2.09% | 2.13% | 2.15% | 2.21% |
Expenses net of fee waivers, if any | 2.01% | 2.09% | 2.13% | 2.15% | 2.15% |
Expenses net of all reductions | 2.01% | 2.07% | 2.12% | 2.13% | 2.14% |
Net investment income (loss) | (1.02)% | (.88)% | (.72)% | (.90)% | (.90)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 1,824 | $ 2,389 | $ 2,577 | $ 3,170 | $ 3,643 |
Portfolio turnover rateE | 171% | 146% | 217% | 179% | 163% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 16.90 | $ 14.27 | $ 14.26 | $ 11.44 | $ 9.27 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.16) | (.12) | (.09) | (.12) | (.10) |
Net realized and unrealized gain (loss) | 1.49 | 4.37 | .93 | 2.94 | 2.27 |
Total from investment operations | 1.33 | 4.25 | .84 | 2.82 | 2.17 |
Distributions from net realized gain | (1.44) | (1.62) | (.83) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 16.79 | $ 16.90 | $ 14.27 | $ 14.26 | $ 11.44 |
Total ReturnA, B | 8.44% | 32.68% | 7.17% | 24.65% | 23.41% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.97% | 2.04% | 2.09% | 2.11% | 2.12% |
Expenses net of fee waivers, if any | 1.97% | 2.04% | 2.09% | 2.11% | 2.12% |
Expenses net of all reductions | 1.96% | 2.02% | 2.08% | 2.09% | 2.11% |
Net investment income (loss) | (.97)% | (.83)% | (.68)% | (.86)% | (.87)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 20,726 | $ 17,176 | $ 13,507 | $ 7,341 | $ 9,288 |
Portfolio turnover rateE | 171% | 146% | 217% | 179% | 163% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 20.72 | $ 17.04 | $ 16.72 | $ 13.27 | $ 10.66 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .02 | .04 | .07 | .03 | .02 |
Net realized and unrealized gain (loss) | 1.85 | 5.32 | 1.13 | 3.42 | 2.60 |
Total from investment operations | 1.87 | 5.36 | 1.20 | 3.45 | 2.62 |
Distributions from net investment income | - | - | (.05) | - | (.01) |
Distributions from net realized gain | (1.59) | (1.68) | (.83) | - | - |
Total distributions | (1.59) | (1.68) | (.88) | - | (.01) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 21.00 | $ 20.72 | $ 17.04 | $ 16.72 | $ 13.27 |
Total ReturnA | 9.61% | 34.06% | 8.33% | 26.00% | 24.62% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .91% | .97% | 1.00% | 1.03% | 1.09% |
Expenses net of fee waivers, if any | .91% | .97% | 1.00% | 1.03% | 1.09% |
Expenses net of all reductions | .91% | .96% | .99% | 1.01% | 1.08% |
Net investment income (loss) | .08% | .24% | .41% | .22% | .16% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 21,708 | $ 13,044 | $ 9,984 | $ 9,406 | $ 9,013 |
Portfolio turnover rateD | 171% | 146% | 217% | 179% | 163% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Annual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. 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. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, deferred trustees compensation, net operating losses and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 13,005,120 |
Gross unrealized depreciation | (2,822,694) |
Net unrealized appreciation (depreciation) on securities | $ 10,182,426 |
|
|
Tax Cost | $ 111,013,280 |
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 1,678,654 |
Undistributed long-term capital gain | $ 10,590,302 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 10,183,261 |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 3,587,518 | $ 780,691 |
Long-term Capital Gains | 4,854,558 | 5,908,205 |
Total | $ 8,442,076 | $ 6,688,896 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $217,631,782 and $200,469,634, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 148,635 | $ 4,811 |
Class T | .25% | .25% | 92,884 | - |
Class B | .75% | .25% | 22,621 | 16,970 |
Class C | .75% | .25% | 209,623 | 60,404 |
|
|
| $ 473,763 | $ 82,185 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Annual Report
5. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 51,413 |
Class T | 7,088 |
Class B* | 2,151 |
Class C* | 4,439 |
| $ 65,091 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 140,064 | .24 |
Class T | 52,468 | .28 |
Class B | 6,744 | .30 |
Class C | 52,259 | .25 |
Institutional Class | 36,517 | .20 |
| $ 288,052 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $4,239 for the period.
Other. During the period, the investment adviser reimbursed the Fund for certain losses in the amount of $11,514.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $198 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $7,580. During the period, there were no securities loaned to FCM.
Annual Report
Notes to Financial Statements - continued
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $7,754 for the period.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net realized gain |
|
|
Class A | $ 4,039,405 | $ 2,760,192 |
Class T | 1,360,265 | 1,156,068 |
Class B | 196,098 | 276,657 |
Class C | 1,615,723 | 1,553,543 |
Institutional Class | 1,230,585 | 942,436 |
Total | $ 8,442,076 | $ 6,688,896 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 1,790,947 | 1,258,652 | $ 35,353,582 | $ 22,336,491 |
Reinvestment of distributions | 185,416 | 153,097 | 3,485,073 | 2,439,799 |
Shares redeemed | (1,296,503) | (736,031) | (25,801,801) | (12,466,044) |
Net increase (decrease) | 679,860 | 675,718 | $ 13,036,854 | $ 12,310,246 |
Class T |
|
|
|
|
Shares sold | 282,329 | 212,852 | $ 5,295,701 | $ 3,581,408 |
Reinvestment of distributions | 73,668 | 73,194 | 1,316,540 | 1,114,024 |
Shares redeemed | (190,454) | (121,300) | (3,590,224) | (1,949,037) |
Net increase (decrease) | 165,543 | 164,746 | $ 3,022,017 | $ 2,746,395 |
Class B |
|
|
|
|
Shares sold | 14,978 | 14,257 | $ 248,602 | $ 220,513 |
Reinvestment of distributions | 9,369 | 16,131 | 150,012 | 223,127 |
Shares redeemed | (57,312) | (69,701) | (968,609) | (1,023,777) |
Net increase (decrease) | (32,965) | (39,313) | $ (569,995) | $ (580,137) |
Class C |
|
|
|
|
Shares sold | 472,482 | 555,264 | $ 7,968,901 | $ 8,601,818 |
Reinvestment of distributions | 89,038 | 102,005 | 1,432,315 | 1,411,723 |
Shares redeemed | (343,513) | (587,502) | (5,820,370) | (8,790,601) |
Net increase (decrease) | 218,007 | 69,767 | $ 3,580,846 | $ 1,222,940 |
Institutional Class |
|
|
|
|
Shares sold | 777,526 | 404,001 | $ 16,341,397 | $ 7,620,195 |
Reinvestment of distributions | 51,438 | 46,665 | 1,028,758 | 784,588 |
Shares redeemed | (424,690) | (407,175) | (8,855,224) | (7,239,713) |
Net increase (decrease) | 404,274 | 43,491 | $ 8,514,931 | $ 1,165,070 |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report
Fidelity Advisor Electronics Fund - Institutional Class
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Institutional Class | 34.55% | 16.42% | 8.06% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Electronics Fund - Institutional Class on July 31, 2004. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Electronics Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Stephen Barwikowski, Portfolio Manager of Fidelity Advisor® Electronics Fund: For the year, the fund's Institutional Class shares returned 34.55%, topping the 32.50% gain of the MSCI U.S. IMI Semiconductors & Semiconductor Equipment 25-50 Index and also outdistancing the S&P 500®. A combination of an improving macroeconomic environment, generally favorable earnings news, some industry catalysts and positive investor sentiment helped semiconductor stocks post a market-beating gain for the period. Steering clear of Cree, a maker of LED lights, proved timely given this MSCI index component's roughly 32% decline. A non-index position in Netherlands-based NXP Semiconductors also lifted performance. A key supplier of chips for near-field communication, which is used to make electronic payments with mobile devices, NXP rode a combination of expanding profit margins and debt reduction to robust earnings growth. A timely overweighting in LSI, a maker of high-performance storage and networking semiconductors, further bolstered our relative results. Based on the stock's favorable fundamentals, I increased the fund's stake here in advance of the mid-December 2013 offer by Avago Technologies to purchase the company at roughly a 41% premium to the stock's price at the time. I liquidated this position in advance of the deal's May 2014 completion to lock in profits. One other contributor was RF Micro Devices, a position I initiated during the period. Conversely, an out-of-benchmark position in electronic manufacturing services firm Jabil Circuit performed poorly, making this stock the fund's biggest relative detractor. Additionally, large average underweightings in two strong-performing MSCI index components, personal computer chipmaker Intel and DRAM computer manufacturer Micron, weighed on the fund's relative performance. I meaningfully increased the fund's stake in both stocks but remained underweighted here. Lastly, a cash position averaging 5% of net assets detracted in a robust market environment.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.40% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,194.80 | $ 7.62 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.85 | $ 7.00 |
Class T | 1.65% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,193.40 | $ 8.97 |
HypotheticalA |
| $ 1,000.00 | $ 1,016.61 | $ 8.25 |
Class B | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,190.00 | $ 11.67 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Class C | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,190.20 | $ 11.68 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Institutional Class | 1.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,196.50 | $ 6.26 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.09 | $ 5.76 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Electronics Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Intel Corp. | 16.9 | 10.8 |
Broadcom Corp. Class A | 7.8 | 10.2 |
Texas Instruments, Inc. | 6.7 | 0.9 |
Altera Corp. | 5.3 | 5.7 |
Micron Technology, Inc. | 4.8 | 2.4 |
Samsung Electronics Co. Ltd. | 4.1 | 2.8 |
Lam Research Corp. | 3.3 | 2.0 |
Xilinx, Inc. | 3.0 | 3.2 |
Analog Devices, Inc. | 3.0 | 6.7 |
QUALCOMM, Inc. | 2.9 | 1.1 |
| 57.8 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Semiconductors & Semiconductor Equipment | 82.4% |
|
| Communications Equipment | 4.5% |
|
| Electronic Equipment & Components | 3.7% |
|
| Internet Software & Services | 1.9% |
|
| Software | 1.3% |
|
| All Others* | 6.2% |
|
As of January 31, 2014 | |||
| Semiconductors & Semiconductor Equipment | 82.2% |
|
| Electronic Equipment & Components | 8.0% |
|
| Communications Equipment | 2.7% |
|
| Computers & Peripherals | 2.4% |
|
| Software | 0.9% |
|
| All Others* | 3.8% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Electronics Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 95.4% | |||
Shares | Value | ||
BIOTECHNOLOGY - 0.0% | |||
Biotechnology - 0.0% | |||
Arrowhead Research Corp. warrants 5/21/17 (a) | 64,879 | $ 1 | |
COMMERCIAL SERVICES & SUPPLIES - 0.4% | |||
Office Services & Supplies - 0.4% | |||
West Corp. | 8,683 | 223,761 | |
COMMUNICATIONS EQUIPMENT - 4.5% | |||
Communications Equipment - 4.5% | |||
Cisco Systems, Inc. | 6,787 | 171,236 | |
Emulex Corp. (a) | 29,160 | 171,461 | |
Ixia (a) | 5,686 | 60,840 | |
Juniper Networks, Inc. | 5,100 | 120,054 | |
NETGEAR, Inc. (a) | 1,630 | 51,035 | |
QUALCOMM, Inc. | 22,526 | 1,660,166 | |
Riverbed Technology, Inc. (a) | 17,914 | 320,661 | |
| 2,555,453 | ||
ELECTRONIC EQUIPMENT & COMPONENTS - 3.7% | |||
Electronic Components - 0.0% | |||
Corning, Inc. | 657 | 12,910 | |
Electronic Manufacturing Services - 3.2% | |||
Jabil Circuit, Inc. | 26,376 | 526,465 | |
Multi-Fineline Electronix, Inc. (a) | 6,879 | 67,139 | |
Neonode, Inc. (a) | 10,000 | 27,200 | |
TTM Technologies, Inc. (a) | 151,162 | 1,135,227 | |
Viasystems Group, Inc. (a) | 3,019 | 29,556 | |
| 1,785,587 | ||
Technology Distributors - 0.5% | |||
Avnet, Inc. | 7,100 | 300,543 | |
TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 2,099,040 | ||
INTERNET & CATALOG RETAIL - 0.0% | |||
Internet Retail - 0.0% | |||
Amazon.com, Inc. (a) | 1 | 313 | |
INTERNET SOFTWARE & SERVICES - 1.9% | |||
Internet Software & Services - 1.9% | |||
Cornerstone OnDemand, Inc. (a) | 1,638 | 68,534 | |
Demand Media, Inc. (a) | 26,987 | 146,539 | |
Google, Inc.: | |||
Class A (a) | 1,419 | 822,381 | |
Class C (a) | 5 | 2,858 | |
Rackspace Hosting, Inc. (a) | 600 | 18,174 | |
| 1,058,486 | ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 82.4% | |||
Semiconductor Equipment - 4.8% | |||
Advanced Energy Industries, Inc. (a) | 17,988 | 302,558 | |
GT Advanced Technologies, Inc. (a)(d) | 16,657 | 230,533 | |
| |||
Shares | Value | ||
Lam Research Corp. | 26,381 | $ 1,846,670 | |
PDF Solutions, Inc. (a) | 8,153 | 156,211 | |
Ultratech, Inc. (a) | 6,700 | 158,656 | |
| 2,694,628 | ||
Semiconductors - 77.6% | |||
Advanced Micro Devices, Inc. (a) | 22 | 86 | |
Altera Corp. | 90,899 | 2,974,215 | |
Analog Devices, Inc. | 33,926 | 1,683,747 | |
Applied Micro Circuits Corp. (a) | 6,434 | 53,724 | |
Atmel Corp. (a) | 50,579 | 414,748 | |
Audience, Inc. (a) | 10,725 | 102,209 | |
Broadcom Corp. Class A | 115,201 | 4,407,590 | |
Cavium, Inc. (a) | 2,779 | 129,640 | |
Cypress Semiconductor Corp. (d) | 102,246 | 1,033,707 | |
Entropic Communications, Inc. (a) | 16,659 | 46,479 | |
Exar Corp. (a) | 2,800 | 26,964 | |
Fairchild Semiconductor International, Inc. (a) | 48,277 | 734,776 | |
Freescale Semiconductor, Inc. (a)(d) | 56,014 | 1,121,400 | |
Himax Technologies, Inc. sponsored ADR (d) | 14,003 | 89,549 | |
Inphi Corp. (a) | 19,086 | 291,252 | |
Intel Corp. | 282,178 | 9,563,010 | |
Intermolecular, Inc. (a)(d) | 17,784 | 39,658 | |
International Rectifier Corp. (a) | 15,290 | 379,804 | |
Intersil Corp. Class A | 65,537 | 840,840 | |
M/A-COM Technology Solutions, Inc. (a) | 1 | 20 | |
MagnaChip Semiconductor Corp. (a) | 38,036 | 532,884 | |
Marvell Technology Group Ltd. | 84,000 | 1,120,560 | |
Maxim Integrated Products, Inc. | 37,808 | 1,108,152 | |
MaxLinear, Inc. Class A (a) | 3,849 | 36,489 | |
Micrel, Inc. | 8,912 | 93,220 | |
Micron Technology, Inc. (a) | 88,112 | 2,691,822 | |
Motech Industries, Inc. | 1 | 1 | |
NVIDIA Corp. | 60,523 | 1,059,153 | |
NXP Semiconductors NV (a) | 18,696 | 1,165,696 | |
O2Micro International Ltd. sponsored ADR (a) | 19,701 | 60,285 | |
ON Semiconductor Corp. (a) | 97,099 | 831,167 | |
Peregrine Semiconductor Corp. (a) | 29,699 | 200,171 | |
Pericom Semiconductor Corp. (a) | 2,002 | 17,678 | |
PMC-Sierra, Inc. (a) | 114,920 | 773,412 | |
RF Micro Devices, Inc. (a) | 39,336 | 438,990 | |
Samsung Electronics Co. Ltd. | 1,783 | 2,307,248 | |
Semtech Corp. (a) | 39,833 | 889,471 | |
Silicon Laboratories, Inc. (a) | 5,278 | 214,973 | |
Skyworks Solutions, Inc. | 26 | 1,320 | |
Spansion, Inc. Class A (a) | 43,083 | 817,285 | |
SunEdison Semiconductor Ltd. | 5,963 | 100,775 | |
Texas Instruments, Inc. | 81,418 | 3,765,583 | |
Common Stocks - continued | |||
Shares | Value | ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - CONTINUED | |||
Semiconductors - continued | |||
Trident Microsystems, Inc. (a) | 19 | $ 0 | |
Xilinx, Inc. | 41,736 | 1,716,602 | |
| 43,876,355 | ||
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | 46,570,983 | ||
SOFTWARE - 1.3% | |||
Application Software - 0.5% | |||
Citrix Systems, Inc. (a) | 1,060 | 71,794 | |
Comverse, Inc. (a) | 824 | 21,160 | |
Nuance Communications, Inc. (a) | 9,531 | 173,274 | |
| 266,228 | ||
Home Entertainment Software - 0.1% | |||
Zynga, Inc. (a) | 18,535 | 54,122 | |
Systems Software - 0.7% | |||
CommVault Systems, Inc. (a) | 1,300 | 62,426 | |
Gigamon, Inc. (a) | 4,400 | 50,776 | |
Imperva, Inc. (a) | 2,844 | 63,051 | |
Infoblox, Inc. (a) | 7,532 | 91,288 | |
Symantec Corp. | 4,510 | 106,707 | |
| 374,248 | ||
TOTAL SOFTWARE | 694,598 | ||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 1.2% | |||
Technology Hardware, Storage & Peripherals - 1.2% | |||
BlackBerry Ltd. (a) | 30 | 280 | |
| |||
Shares | Value | ||
EMC Corp. | 16,285 | $ 477,151 | |
QLogic Corp. (a) | 22,623 | 205,869 | |
| 683,300 | ||
TOTAL COMMON STOCKS (Cost $54,041,123) |
| ||
Money Market Funds - 7.4% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 2,656,980 | 2,656,980 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 1,535,570 | 1,535,570 | |
TOTAL MONEY MARKET FUNDS (Cost $4,192,550) |
| ||
TOTAL INVESTMENT PORTFOLIO - 102.8% (Cost $58,233,673) | 58,078,485 | ||
NET OTHER ASSETS (LIABILITIES) - (2.8)% | (1,568,840) | ||
NET ASSETS - 100% | $ 56,509,645 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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 | $ 1,537 |
Fidelity Securities Lending Cash Central Fund | 7,276 |
Total | $ 8,813 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 53,885,935 | $ 51,578,685 | $ 2,307,250 | $ - |
Money Market Funds | 4,192,550 | 4,192,550 | - | - |
Total Investments in Securities: | $ 58,078,485 | $ 55,771,235 | $ 2,307,250 | $ - |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 89.5% |
Korea (South) | 4.1% |
Bermuda | 4.0% |
Netherlands | 2.0% |
Others (Individually Less Than 1%) | 0.4% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Electronics Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $1,445,210) - See accompanying schedule: Unaffiliated issuers (cost $54,041,123) | $ 53,885,935 |
|
Fidelity Central Funds (cost $4,192,550) | 4,192,550 |
|
Total Investments (cost $58,233,673) |
| $ 58,078,485 |
Receivable for investments sold | 877,417 | |
Receivable for fund shares sold | 1,155,060 | |
Dividends receivable | 25,526 | |
Distributions receivable from Fidelity Central Funds | 831 | |
Receivable from investment adviser for expense reductions | 5,475 | |
Other receivables | 541 | |
Total assets | 60,143,335 | |
|
|
|
Liabilities | ||
Payable to custodian bank | $ 461,952 | |
Payable for investments purchased | 1,388,416 | |
Payable for fund shares redeemed | 137,150 | |
Accrued management fee | 25,335 | |
Distribution and service plan fees payable | 12,610 | |
Other affiliated payables | 11,028 | |
Other payables and accrued expenses | 61,629 | |
Collateral on securities loaned, at value | 1,535,570 | |
Total liabilities | 3,633,690 | |
|
|
|
Net Assets | $ 56,509,645 | |
Net Assets consist of: |
| |
Paid in capital | $ 59,008,222 | |
Accumulated net investment loss | (62,995) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (2,280,394) | |
Net unrealized appreciation (depreciation) on investments | (155,188) | |
Net Assets | $ 56,509,645 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 13.86 | |
|
|
|
Maximum offering price per share (100/94.25 of $13.86) | $ 14.71 | |
Class T: | $ 13.45 | |
|
|
|
Maximum offering price per share (100/96.50 of $13.45) | $ 13.94 | |
Class B: | $ 12.59 | |
|
|
|
Class C: | $ 12.58 | |
|
|
|
Institutional Class: | $ 14.37 | |
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.
Annual Report
Fidelity Advisor Electronics Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 293,508 |
Interest |
| 932 |
Income from Fidelity Central Funds |
| 8,813 |
Total income |
| 303,253 |
|
|
|
Expenses | ||
Management fee | $ 135,288 | |
Transfer agent fees | 67,539 | |
Distribution and service plan fees | 90,158 | |
Accounting and security lending fees | 9,688 | |
Custodian fees and expenses | 65,068 | |
Independent trustees' compensation | 516 | |
Registration fees | 56,777 | |
Audit | 45,704 | |
Legal | 299 | |
Miscellaneous | 572 | |
Total expenses before reductions | 471,609 | |
Expense reductions | (102,044) | 369,565 |
Net investment income (loss) | (66,312) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 5,068,614 | |
Foreign currency transactions | 2,559 | |
Total net realized gain (loss) |
| 5,071,173 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 1,173,617 | |
Assets and liabilities in foreign currencies | 7 | |
Total change in net unrealized appreciation (depreciation) |
| 1,173,624 |
Net gain (loss) | 6,244,797 | |
Net increase (decrease) in net assets resulting from operations | $ 6,178,485 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (66,312) | $ (41,761) |
Net realized gain (loss) | 5,071,173 | (680,452) |
Change in net unrealized appreciation (depreciation) | 1,173,624 | 3,203,673 |
Net increase (decrease) in net assets resulting from operations | 6,178,485 | 2,481,460 |
Share transactions - net increase (decrease) | 34,400,043 | (3,915,862) |
Redemption fees | 4,495 | 1,278 |
Total increase (decrease) in net assets | 40,583,023 | (1,433,124) |
|
|
|
Net Assets | ||
Beginning of period | 15,926,622 | 17,359,746 |
End of period (including accumulated net investment loss of $62,995 and accumulated net investment loss of $32,651, respectively) | $ 56,509,645 | $ 15,926,622 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.33 | $ 8.45 | $ 8.93 | $ 7.14 | $ 6.59 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.02) | (.01) | (.05) | (.04) | (.01) |
Net realized and unrealized gain (loss) | 3.55 | 1.89 | (.43) | 1.83 | .59 |
Total from investment operations | 3.53 | 1.88 | (.48) | 1.79 | .58 |
Distributions from net investment income | - | - | - | - | (.03) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 13.86 | $ 10.33 | $ 8.45 | $ 8.93 | $ 7.14 |
Total ReturnA, B | 34.17% | 22.25% | (5.38)% | 25.07% | 8.74% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.84% | 2.18% | 1.88% | 1.89% | 1.97% |
Expenses net of fee waivers, if any | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% |
Expenses net of all reductions | 1.39% | 1.37% | 1.39% | 1.39% | 1.39% |
Net investment income (loss) | (.16)% | (.07)% | (.53)% | (.40)% | (.15)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 16,542 | $ 5,833 | $ 6,000 | $ 7,537 | $ 5,394 |
Portfolio turnover rateE | 156% | 179% | 140% | 166% | 87% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.05 | $ 8.24 | $ 8.73 | $ 7.00 | $ 6.46 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.05) | (.03) | (.07) | (.06) | (.03) |
Net realized and unrealized gain (loss) | 3.45 | 1.84 | (.42) | 1.79 | .58 |
Total from investment operations | 3.40 | 1.81 | (.49) | 1.73 | .55 |
Distributions from net investment income | - | - | - | - | (.01) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 13.45 | $ 10.05 | $ 8.24 | $ 8.73 | $ 7.00 |
Total ReturnA, B | 33.83% | 21.97% | (5.61)% | 24.71% | 8.50% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.19% | 2.48% | 2.23% | 2.25% | 2.26% |
Expenses net of fee waivers, if any | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% |
Expenses net of all reductions | 1.64% | 1.62% | 1.64% | 1.64% | 1.64% |
Net investment income (loss) | (.42)% | (.32)% | (.78)% | (.65)% | (.40)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 7,144 | $ 3,756 | $ 3,909 | $ 4,476 | $ 3,862 |
Portfolio turnover rateE | 156% | 179% | 140% | 166% | 87% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 9.46 | $ 7.79 | $ 8.29 | $ 6.69 | $ 6.19 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.10) | (.07) | (.10) | (.09) | (.06) |
Net realized and unrealized gain (loss) | 3.23 | 1.74 | (.40) | 1.69 | .56 |
Total from investment operations | 3.13 | 1.67 | (.50) | 1.60 | .50 |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 12.59 | $ 9.46 | $ 7.79 | $ 8.29 | $ 6.69 |
Total ReturnA, B | 33.09% | 21.44% | (6.03)% | 23.92% | 8.08% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.68% | 2.95% | 2.70% | 2.76% | 2.73% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.14% | 2.12% | 2.15% | 2.14% | 2.15% |
Net investment income (loss) | (.92)% | (.82)% | (1.29)% | (1.15)% | (.90)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 392 | $ 306 | $ 459 | $ 691 | $ 1,073 |
Portfolio turnover rateE | 156% | 179% | 140% | 166% | 87% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 9.44 | $ 7.78 | $ 8.29 | $ 6.68 | $ 6.18 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.10) | (.07) | (.10) | (.09) | (.06) |
Net realized and unrealized gain (loss) | 3.24 | 1.73 | (.41) | 1.70 | .56 |
Total from investment operations | 3.14 | 1.66 | (.51) | 1.61 | .50 |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 12.58 | $ 9.44 | $ 7.78 | $ 8.29 | $ 6.68 |
Total ReturnA, B | 33.26% | 21.34% | (6.15)% | 24.10% | 8.09% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.60% | 2.93% | 2.65% | 2.70% | 2.72% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.14% | 2.12% | 2.14% | 2.14% | 2.14% |
Net investment income (loss) | (.91)% | (.82)% | (1.28)% | (1.15)% | (.90)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 7,381 | $ 3,157 | $ 3,721 | $ 3,836 | $ 3,256 |
Portfolio turnover rateE | 156% | 179% | 140% | 166% | 87% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.68 | $ 8.72 | $ 9.19 | $ 7.33 | $ 6.75 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .01 | .02 | (.02) | (.01) | .01 |
Net realized and unrealized gain (loss) | 3.68 | 1.94 | (.45) | 1.87 | .60 |
Total from investment operations | 3.69 | 1.96 | (.47) | 1.86 | .61 |
Distributions from net investment income | - | - | - | - | (.03) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 14.37 | $ 10.68 | $ 8.72 | $ 9.19 | $ 7.33 |
Total ReturnA | 34.55% | 22.48% | (5.11)% | 25.38% | 9.10% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | 1.34% | 1.86% | 1.55% | 1.42% | 1.64% |
Expenses net of fee waivers, if any | 1.15% | 1.15% | 1.15% | 1.15% | 1.15% |
Expenses net of all reductions | 1.14% | 1.12% | 1.14% | 1.14% | 1.14% |
Net investment income (loss) | .08% | .18% | (.28)% | (.15)% | .11% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 25,050 | $ 2,874 | $ 3,271 | $ 1,765 | $ 645 |
Portfolio turnover rateD | 156% | 179% | 140% | 166% | 87% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Annual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), market discount, net operating losses, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 2,943,006 |
Gross unrealized depreciation | (3,333,133) |
Net unrealized appreciation (depreciation) on securities | $ (390,127) |
|
|
Tax Cost | $ 58,468,612 |
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Capital loss carryforward | $ (2,045,455) |
Net unrealized appreciation (depreciation) on securities and other investments | $ (390,127) |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
Fiscal year of expiration |
|
2017 | $ (2,045,455) |
The Fund intends to elect to defer to its next fiscal year $62,995 of ordinary losses recognized during the period January 1, 2014 to July 31, 2014.
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $70,118,222 and $37,391,610, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 21,508 | $ 562 |
Class T | .25% | .25% | 24,030 | 114 |
Class B | .75% | .25% | 3,160 | 2,374 |
Class C | .75% | .25% | 41,460 | 8,908 |
|
|
| $ 90,158 | $ 11,958 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 17,769 |
Class T | 4,084 |
Class B* | 216 |
Class C* | 337 |
| $ 22,406 |
* 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.
Annual Report
5. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 25,244 | .29 |
Class T | 16,847 | .35 |
Class B | 970 | .31 |
Class C | 12,102 | .29 |
Institutional Class | 12,376 | .18 |
| $ 67,539 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $5,427 for the period.
Other. During the period, the investment adviser reimbursed the Fund for certain losses in the amount of $1,982.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $35 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $7,276. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
The investment adviser voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
Annual Report
Notes to Financial Statements - continued
8. Expense Reductions - continued
The following classes were in reimbursement during the period:
| Expense | Reimbursement |
Class A | 1.40% | $ 38,193 |
Class T | 1.65% | 25,950 |
Class B | 2.15% | 1,694 |
Class C | 2.15% | 19,046 |
Institutional Class | 1.15% | 13,806 |
|
| $ 98,689 |
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $3,355 for the period.
9. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 772,579 | 137,609 | $ 10,230,441 | $ 1,216,436 |
Shares redeemed | (143,457) | (283,233) | (1,810,191) | (2,448,434) |
Net increase (decrease) | 629,122 | (145,624) | $ 8,420,250 | $ (1,231,998) |
Class T |
|
|
|
|
Shares sold | 230,216 | 112,240 | $ 2,844,843 | $ 987,721 |
Shares redeemed | (72,780) | (212,855) | (817,318) | (1,812,736) |
Net increase (decrease) | 157,436 | (100,615) | $ 2,027,525 | $ (825,015) |
Class B |
|
|
|
|
Shares sold | 7,793 | 678 | $ 94,749 | $ 4,830 |
Shares redeemed | (9,002) | (27,225) | (95,467) | (220,563) |
Net increase (decrease) | (1,209) | (26,547) | $ (718) | $ (215,733) |
Class C |
|
|
|
|
Shares sold | 357,228 | 96,174 | $ 4,283,093 | $ 799,164 |
Shares redeemed | (104,588) | (240,043) | (1,156,253) | (1,893,943) |
Net increase (decrease) | 252,640 | (143,869) | $ 3,126,840 | $ (1,094,779) |
Institutional Class |
|
|
|
|
Shares sold | 1,892,867 | 228,631 | $ 26,288,223 | $ 2,347,005 |
Shares redeemed | (418,217) | (334,852) | (5,462,077) | (2,895,342) |
Net increase (decrease) | 1,474,650 | (106,221) | $ 20,826,146 | $ (548,337) |
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.
Annual Report
Fidelity Advisor Energy Fund - Institutional Class
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2014 |
| Past 1 | Past 5 | Past 10 |
Institutional Class A |
| 18.80% | 13.88% | 11.88% |
A Prior to October 1, 2006, Fidelity Advisor Energy Fund was named Fidelity Advisor Natural Resources Fund, and the fund operated under certain different investment policies and compared its performance to a different additional index. The fund's historical performance may not represent its current investment policies.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Energy Fund - Institutional Class on July 31, 2004. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Energy Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from John Dowd, Portfolio Manager of Fidelity Advisor® Energy Fund: For the year, the fund's Institutional Class shares returned 18.80%, versus 19.33% for its sector benchmark, the MSCI U.S. IMI Energy 25-50 Index, and 16.94% for the S&P 500® Index. Energy stocks fared well for the period, amid the continued boom in North America oil and natural gas production. Several industry segments enjoyed gains of more than 20%, including oil & gas storage & transport. Relative to the MSCI sector index, fund results were held back by underweighting refiners, which benefited from rapid expansion of the U.S. pipeline system that facilitates getting cheaper U.S. crude to Gulf Coast refiners. Here, we missed by not owning enough Valero Energy in the first half of the period - believing it overvalued - when the stock returned roughly 45% on increased refining volume. I moved to an overweighting in February based on a reassessment of refining margins, and it proved to be a contributor in later months, as the firm showed consistent positive earnings surprises. Among other individual stocks, Cobalt International Energy was a detractor. The share price fell to nearly a two-year low in December, and I sold the stock in February. A lighter-than-benchmark stake in Williams Companies notably detracted from results. I believed the pipeline firm was slightly overpriced, but the stock jumped in June on its plans to acquire Access Midstream Partners. Conversely, performance was helped by good picks and a sizable overweighting in domestic exploration & production (E&P) firms. Here, two of the fund's largest holdings - EOG Resources and Cimarex Energy - were the fund's top relative contributors for the period. The fund also benefited from underweighting major index constituent Exxon Mobil, which struggled amid production declines.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.10% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,167.00 | $ 5.91 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.34 | $ 5.51 |
Class T | 1.33% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,165.40 | $ 7.14 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.20 | $ 6.66 |
Class B | 1.91% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,162.10 | $ 10.24 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.32 | $ 9.54 |
Class C | 1.85% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,162.30 | $ 9.92 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.62 | $ 9.25 |
Institutional Class | .84% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,168.20 | $ 4.52 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.63 | $ 4.21 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Energy Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Exxon Mobil Corp. | 16.3 | 10.0 |
Chevron Corp. | 11.8 | 11.3 |
Schlumberger Ltd. | 9.1 | 5.8 |
Halliburton Co. | 5.9 | 2.9 |
EOG Resources, Inc. | 5.7 | 7.5 |
Anadarko Petroleum Corp. | 4.0 | 4.9 |
Cimarex Energy Co. | 3.7 | 2.9 |
Noble Energy, Inc. | 2.8 | 2.8 |
Concho Resources, Inc. | 2.7 | 0.1 |
FMC Technologies, Inc. | 2.7 | 2.2 |
| 64.7 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Oil, Gas & Consumable Fuels | 75.2% |
|
| Energy Equipment & Services | 22.8% |
|
| Independent Power Producers & Energy Traders | 0.5% |
|
| Independent Power and Renewable Electricity Producers | 0.1% |
|
| Trading Companies & Distributors | 0.1% |
|
| All Others* | 1.3% |
|
As of January 31, 2014 | |||
| Oil, Gas & Consumable Fuels | 80.0% |
|
 | Energy Equipment & Services | 18.6% |
|
 | Construction & Engineering | 0.2% |
|
| Metals & Mining | 0.1% |
|
| All Others* | 1.1% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Energy Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 98.7% | |||
Shares | Value | ||
ENERGY EQUIPMENT & SERVICES - 22.8% | |||
Oil & Gas Drilling - 1.7% | |||
Ocean Rig UDW, Inc. (United States) | 108,900 | $ 1,902,483 | |
Odfjell Drilling A/S | 567,856 | 2,917,710 | |
Pacific Drilling SA (a) | 169,749 | 1,616,010 | |
Precision Drilling Corp. (d) | 102,800 | 1,281,288 | |
Vantage Drilling Co. (a) | 1,887,530 | 3,529,681 | |
Xtreme Drilling & Coil Services Corp. (a) | 813,202 | 3,550,091 | |
| 14,797,263 | ||
Oil & Gas Equipment & Services - 21.1% | |||
Cameron International Corp. (a) | 2 | 142 | |
Dril-Quip, Inc. (a) | 46,391 | 4,674,821 | |
FMC Technologies, Inc. (a) | 381,706 | 23,207,725 | |
Halliburton Co. | 740,414 | 51,081,162 | |
National Oilwell Varco, Inc. | 93,715 | 7,594,664 | |
Oceaneering International, Inc. | 247,672 | 16,819,406 | |
Schlumberger Ltd. | 736,809 | 79,862,728 | |
Total Energy Services, Inc. | 53,200 | 1,061,219 | |
| 184,301,867 | ||
TOTAL ENERGY EQUIPMENT & SERVICES | 199,099,130 | ||
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS - 0.1% | |||
Renewable Electricity - 0.1% | |||
NextEra Energy Partners LP | 37,600 | 1,279,904 | |
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 0.5% | |||
Independent Power Producers & Energy Traders - 0.5% | |||
Dynegy, Inc. (a) | 151,622 | 4,025,564 | |
OIL, GAS & CONSUMABLE FUELS - 75.2% | |||
Coal & Consumable Fuels - 0.7% | |||
Peabody Energy Corp. | 431,618 | 6,547,645 | |
Integrated Oil & Gas - 30.5% | |||
BG Group PLC | 662,900 | 13,071,898 | |
Chevron Corp. | 801,809 | 103,625,795 | |
Exxon Mobil Corp. | 1,441,611 | 142,632,990 | |
Imperial Oil Ltd. | 116,800 | 5,993,452 | |
Occidental Petroleum Corp. | 16,600 | 1,621,986 | |
| 266,946,121 | ||
Oil & Gas Exploration & Production - 31.4% | |||
Anadarko Petroleum Corp. | 322,983 | 34,510,734 | |
Bankers Petroleum Ltd. (a) | 760,700 | 4,297,622 | |
Bonanza Creek Energy, Inc. (a) | 104,025 | 5,831,642 | |
BPZ Energy, Inc. (a) | 590,800 | 1,547,896 | |
Canadian Natural Resources Ltd. | 147,000 | 6,407,952 | |
Cimarex Energy Co. | 229,447 | 31,897,722 | |
Concho Resources, Inc. (a) | 169,300 | 23,837,440 | |
ConocoPhillips Co. | 274,736 | 22,665,720 | |
Continental Resources, Inc. (a)(d) | 62,115 | 9,117,240 | |
Devon Energy Corp. | 79,800 | 6,024,900 | |
Diamondback Energy, Inc. (a) | 11,700 | 962,091 | |
| |||
Shares | Value | ||
EOG Resources, Inc. | 457,286 | $ 50,045,380 | |
Evolution Petroleum Corp. | 60,495 | 641,852 | |
Kodiak Oil & Gas Corp. (a) | 801,963 | 12,462,505 | |
Laredo Petroleum Holdings, Inc. (a) | 64,294 | 1,744,939 | |
Memorial Resource Development Corp. (d) | 74,600 | 1,714,308 | |
Newfield Exploration Co. (a) | 53,100 | 2,139,930 | |
Noble Energy, Inc. | 364,108 | 24,209,541 | |
Northern Oil & Gas, Inc. (a) | 213,793 | 3,439,929 | |
Parsley Energy, Inc. Class A | 40,300 | 909,571 | |
PDC Energy, Inc. (a) | 115,188 | 6,250,101 | |
Peyto Exploration & Development Corp. (d) | 66,500 | 2,235,268 | |
Pioneer Natural Resources Co. | 46,416 | 10,279,287 | |
Rex Energy Corp. (a) | 85,415 | 1,177,873 | |
SM Energy Co. | 21,500 | 1,688,610 | |
Synergy Resources Corp. (a) | 115,015 | 1,209,958 | |
TAG Oil Ltd. (a) | 446,700 | 1,024,212 | |
Whiting Petroleum Corp. (a) | 65,843 | 5,826,447 | |
| 274,100,670 | ||
Oil & Gas Refining & Marketing - 5.5% | |||
Alon U.S.A. Energy, Inc. | 50,100 | 643,785 | |
Alon U.S.A. Partners LP | 10,249 | 180,177 | |
CVR Refining, LP | 33,873 | 869,181 | |
Delek U.S. Holdings, Inc. | 77,900 | 2,276,238 | |
Marathon Petroleum Corp. | 34,052 | 2,842,661 | |
Phillips 66 Co. | 186,923 | 15,161,325 | |
Tesoro Corp. | 53,200 | 3,273,928 | |
Valero Energy Corp. | 399,226 | 20,280,681 | |
Western Refining, Inc. | 18,700 | 765,952 | |
World Fuel Services Corp. | 40,833 | 1,753,777 | |
| 48,047,705 | ||
Oil & Gas Storage & Transport - 7.1% | |||
Cheniere Energy, Inc. (a) | 112,200 | 7,939,272 | |
Enable Midstream Partners LP | 42,900 | 1,021,878 | |
EnLink Midstream LLC | 13,600 | 519,656 | |
EQT Midstream Partners LP | 31,400 | 2,717,356 | |
Golar LNG Ltd. | 38,000 | 2,341,180 | |
Magellan Midstream Partners LP | 32,034 | 2,568,806 | |
MPLX LP | 88,194 | 5,005,010 | |
ONEOK, Inc. | 34,200 | 2,203,506 | |
Phillips 66 Partners LP | 95,369 | 6,098,848 | |
Plains GP Holdings LP Class A | 48,700 | 1,446,877 | |
SemGroup Corp. Class A | 25,600 | 1,973,248 | |
Targa Resources Corp. | 71,132 | 9,069,330 | |
The Williams Companies, Inc. | 196,800 | 11,144,784 | |
Valero Energy Partners LP | 175,543 | 8,159,239 | |
| 62,208,990 | ||
TOTAL OIL, GAS & CONSUMABLE FUELS | 657,851,131 | ||
Common Stocks - continued | |||
Shares | Value | ||
TRADING COMPANIES & DISTRIBUTORS - 0.1% | |||
Trading Companies & Distributors - 0.1% | |||
Now, Inc. | 23,428 | $ 754,147 | |
TOTAL COMMON STOCKS (Cost $717,358,972) |
| ||
Money Market Funds - 3.2% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 13,317,323 | 13,317,323 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 14,957,274 | 14,957,274 | |
TOTAL MONEY MARKET FUNDS (Cost $28,274,597) |
| ||
TOTAL INVESTMENT PORTFOLIO - 101.9% (Cost $745,633,569) | 891,284,473 | ||
NET OTHER ASSETS (LIABILITIES) - (1.9)% | (16,948,611) | ||
NET ASSETS - 100% | $ 874,335,862 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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 | $ 15,930 |
Fidelity Securities Lending Cash Central Fund | 56,572 |
Total | $ 72,502 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 863,009,876 | $ 849,937,978 | $ 13,071,898 | $ - |
Money Market Funds | 28,274,597 | 28,274,597 | - | - |
Total Investments in Securities: | $ 891,284,473 | $ 878,212,575 | $ 13,071,898 | $ - |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 83.6% |
Curacao | 9.1% |
Canada | 4.4% |
United Kingdom | 1.5% |
Others (Individually Less Than 1%) | 1.4% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Energy Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $14,198,835) - See accompanying schedule: Unaffiliated issuers (cost $717,358,972) | $ 863,009,876 |
|
Fidelity Central Funds (cost $28,274,597) | 28,274,597 |
|
Total Investments (cost $745,633,569) |
| $ 891,284,473 |
Receivable for investments sold | 4,064,140 | |
Receivable for fund shares sold | 1,892,628 | |
Dividends receivable | 510,902 | |
Distributions receivable from Fidelity Central Funds | 2,865 | |
Other receivables | 15,897 | |
Total assets | 897,770,905 | |
|
|
|
Liabilities | ||
Payable to custodian bank | $ 4,416 | |
Payable for investments purchased | 4,327,270 | |
Payable for fund shares redeemed | 3,164,931 | |
Accrued management fee | 413,394 | |
Distribution and service plan fees payable | 312,248 | |
Other affiliated payables | 196,723 | |
Other payables and accrued expenses | 58,787 | |
Collateral on securities loaned, at value | 14,957,274 | |
Total liabilities | 23,435,043 | |
|
|
|
Net Assets | $ 874,335,862 | |
Net Assets consist of: |
| |
Paid in capital | $ 692,751,886 | |
Undistributed net investment income | 44,776 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 35,888,376 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 145,650,824 | |
Net Assets | $ 874,335,862 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 45.71 | |
|
|
|
Maximum offering price per share (100/94.25 of $45.71) | $ 48.50 | |
Class T: | $ 46.64 | |
|
|
|
Maximum offering price per share (100/96.50 of $46.64) | $ 48.33 | |
Class B: | $ 42.08 | |
|
|
|
Class C: | $ 42.40 | |
|
|
|
Institutional Class: | $ 48.05 | |
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.
Annual Report
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 11,173,859 |
Income from Fidelity Central Funds |
| 72,502 |
Total income |
| 11,246,361 |
|
|
|
Expenses | ||
Management fee | $ 4,199,053 | |
Transfer agent fees | 1,870,783 | |
Distribution and service plan fees | 3,269,159 | |
Accounting and security lending fees | 269,434 | |
Custodian fees and expenses | 33,267 | |
Independent trustees' compensation | 18,433 | |
Registration fees | 95,125 | |
Audit | 49,609 | |
Legal | 10,926 | |
Miscellaneous | 10,619 | |
Total expenses before reductions | 9,826,408 | |
Expense reductions | (31,146) | 9,795,262 |
Net investment income (loss) | 1,451,099 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 63,932,371 | |
Foreign currency transactions | 34,182 | |
Total net realized gain (loss) |
| 63,966,553 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 60,343,732 | |
Assets and liabilities in foreign currencies | (20) | |
Total change in net unrealized appreciation (depreciation) |
| 60,343,712 |
Net gain (loss) | 124,310,265 | |
Net increase (decrease) in net assets resulting from operations | $ 125,761,364 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 1,451,099 | $ 2,837,213 |
Net realized gain (loss) | 63,966,553 | 68,491,304 |
Change in net unrealized appreciation (depreciation) | 60,343,712 | 51,387,693 |
Net increase (decrease) in net assets resulting from operations | 125,761,364 | 122,716,210 |
Distributions to shareholders from net investment income | (2,028,433) | (2,261,471) |
Distributions to shareholders from net realized gain | (32,993,983) | - |
Total distributions | (35,022,416) | (2,261,471) |
Share transactions - net increase (decrease) | 95,115,595 | (79,579,362) |
Redemption fees | 17,148 | 15,482 |
Total increase (decrease) in net assets | 185,871,691 | 40,890,859 |
|
|
|
Net Assets | ||
Beginning of period | 688,464,171 | 647,573,312 |
End of period (including undistributed net investment income of $44,776 and accumulated net investment loss of $571,396, respectively) | $ 874,335,862 | $ 688,464,171 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 40.59 | $ 33.71 | $ 40.17 | $ 27.70 | $ 25.82 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .15 | .23 | .25 | .11 | (.05) |
Net realized and unrealized gain (loss) | 7.06 | 6.81 | (6.50) | 12.47 | 1.93 |
Total from investment operations | 7.21 | 7.04 | (6.25) | 12.58 | 1.88 |
Distributions from net investment income | (.17) | (.16) | (.21) | (.11) | - |
Distributions from net realized gain | (1.93) | - | - | - | - |
Total distributions | (2.09) H | (.16) | (.21) | (.11) | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 45.71 | $ 40.59 | $ 33.71 | $ 40.17 | $ 27.70 |
Total ReturnA, B | 18.46% | 20.94% | (15.58)% | 45.46% | 7.28% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.12% | 1.16% | 1.17% | 1.16% | 1.20% |
Expenses net of fee waivers, if any | 1.12% | 1.16% | 1.17% | 1.16% | 1.20% |
Expenses net of all reductions | 1.12% | 1.15% | 1.17% | 1.16% | 1.19% |
Net investment income (loss) | .36% | .61% | .72% | .30% | (.16)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 369,400 | $ 279,798 | $ 253,332 | $ 331,120 | $ 214,407 |
Portfolio turnover rateE | 112% | 68% | 88% | 91% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
H Total distributions of $2.09 per share is comprised of distributions from net investment income of $.165 and distributions from net realized gain of $1.929 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 41.38 | $ 34.40 | $ 41.04 | $ 28.33 | $ 26.47 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .06 | .15 | .18 | .03 | (.11) |
Net realized and unrealized gain (loss) | 7.21 | 6.95 | (6.65) | 12.75 | 1.97 |
Total from investment operations | 7.27 | 7.10 | (6.47) | 12.78 | 1.86 |
Distributions from net investment income | (.08) | (.12) | (.17) | (.07) | - |
Distributions from net realized gain | (1.93) | - | - | - | - |
Total distributions | (2.01) | (.12) | (.17) | (.07) | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 46.64 | $ 41.38 | $ 34.40 | $ 41.04 | $ 28.33 |
Total ReturnA, B | 18.19% | 20.70% | (15.77)% | 45.16% | 7.03% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.34% | 1.36% | 1.38% | 1.37% | 1.41% |
Expenses net of fee waivers, if any | 1.34% | 1.36% | 1.38% | 1.37% | 1.41% |
Expenses net of all reductions | 1.34% | 1.35% | 1.38% | 1.37% | 1.41% |
Net investment income (loss) | .14% | .40% | .50% | .09% | (.37)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 245,828 | $ 223,248 | $ 215,488 | $ 290,512 | $ 219,051 |
Portfolio turnover rateE | 112% | 68% | 88% | 91% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 37.65 | $ 31.41 | $ 37.61 | $ 26.06 | $ 24.48 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.17) | (.05) | (.01) | (.15) | (.25) |
Net realized and unrealized gain (loss) | 6.52 | 6.34 | (6.09) | 11.71 | 1.83 |
Total from investment operations | 6.35 | 6.29 | (6.10) | 11.56 | 1.58 |
Distributions from net investment income | - | (.05) | (.10) | (.01) | - |
Distributions from net realized gain | (1.92) | - | - | - | - |
Total distributions | (1.92) | (.05) | (.10) | (.01) | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 42.08 | $ 37.65 | $ 31.41 | $ 37.61 | $ 26.06 |
Total ReturnA, B | 17.50% | 20.04% | (16.22)% | 44.38% | 6.45% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.91% | 1.92% | 1.92% | 1.93% | 1.96% |
Expenses net of fee waivers, if any | 1.91% | 1.92% | 1.92% | 1.93% | 1.96% |
Expenses net of all reductions | 1.91% | 1.91% | 1.92% | 1.92% | 1.95% |
Net investment income (loss) | (.44)% | (.15)% | (.03)% | (.46)% | (.92)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 17,432 | $ 20,551 | $ 28,558 | $ 49,793 | $ 44,330 |
Portfolio turnover rateE | 112% | 68% | 88% | 91% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 37.92 | $ 31.63 | $ 37.88 | $ 26.25 | $ 24.65 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.15) | (.04) | (.01) | (.15) | (.25) |
Net realized and unrealized gain (loss) | 6.57 | 6.38 | (6.13) | 11.80 | 1.85 |
Total from investment operations | 6.42 | 6.34 | (6.14) | 11.65 | 1.60 |
Distributions from net investment income | (.01) | (.05) | (.11) | (.02) | - |
Distributions from net realized gain | (1.93) | - | - | - | - |
Total distributions | (1.94) | (.05) | (.11) | (.02) | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 42.40 | $ 37.92 | $ 31.63 | $ 37.88 | $ 26.25 |
Total ReturnA, B | 17.57% | 20.08% | (16.22)% | 44.38% | 6.49% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.86% | 1.90% | 1.92% | 1.90% | 1.94% |
Expenses net of fee waivers, if any | 1.86% | 1.90% | 1.92% | 1.90% | 1.94% |
Expenses net of all reductions | 1.86% | 1.88% | 1.91% | 1.89% | 1.93% |
Net investment income (loss) | (.38)% | (.13)% | (.03)% | (.43)% | (.90)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 130,881 | $ 99,833 | $ 93,504 | $ 133,476 | $ 90,596 |
Portfolio turnover rateE | 112% | 68% | 88% | 91% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 42.55 | $ 35.28 | $ 41.95 | $ 28.87 | $ 26.83 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .28 | .35 | .37 | .23 | .04 |
Net realized and unrealized gain (loss) | 7.42 | 7.12 | (6.79) | 12.99 | 2.00 |
Total from investment operations | 7.70 | 7.47 | (6.42) | 13.22 | 2.04 |
Distributions from net investment income | (.27) | (.20) | (.25) | (.14) | - |
Distributions from net realized gain | (1.93) | - | - | - | - |
Total distributions | (2.20) | (.20) | (.25) | (.14) | - |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 48.05 | $ 42.55 | $ 35.28 | $ 41.95 | $ 28.87 |
Total ReturnA | 18.80% | 21.26% | (15.31)% | 45.87% | 7.60% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .85% | .88% | .86% | .86% | .90% |
Expenses net of fee waivers, if any | .85% | .88% | .86% | .86% | .90% |
Expenses net of all reductions | .85% | .86% | .85% | .85% | .90% |
Net investment income (loss) | .63% | .89% | 1.03% | .60% | .14% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 110,795 | $ 65,034 | $ 56,692 | $ 54,024 | $ 27,338 |
Portfolio turnover rateD | 112% | 68% | 88% | 91% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Investment Valuation - continued
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. 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. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Annual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), partnerships, deferred trustees compensation and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 157,009,768 |
Gross unrealized depreciation | (12,283,155) |
Net unrealized appreciation (depreciation) on securities | $ 144,726,613 |
|
|
Tax Cost | $ 746,557,860 |
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 11,515,204 |
Undistributed long-term capital gain | $ 25,350,408 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 144,726,533 |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 11,364,599 | $ 2,261,471 |
Long-term Capital Gains | 23,657,817 | - |
Total | $ 35,022,416 | $ 2,261,471 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $914,549,771 and $837,356,104, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 789,742 | $ 9,586 |
Class T | .25% | .25% | 1,163,792 | 2,396 |
Class B | .75% | .25% | 188,072 | 141,340 |
Class C | .75% | .25% | 1,127,553 | 180,560 |
|
|
| $ 3,269,159 | $ 333,882 |
Annual Report
Notes to Financial Statements - continued
5. Fees and Other Transactions with Affiliates - continued
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 130,781 |
Class T | 26,998 |
Class B* | 18,105 |
Class C* | 7,254 |
| $ 183,138 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 808,805 | .26 |
Class T | 531,363 | .23 |
Class B | 56,518 | .30 |
Class C | 278,663 | .25 |
Institutional Class | 195,434 | .24 |
| $ 1,870,783 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $18,503 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,262 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash
Annual Report
7. Security Lending - continued
collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $56,572. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $31,122 for the period. In addition, through arrangements with the Fund's custodian, 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 $24.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net investment income |
|
|
Class A | $ 1,151,717 | $ 1,079,554 |
Class T | 407,949 | 706,555 |
Class B | - | 36,766 |
Class C | 21,755 | 148,895 |
Institutional Class | 447,012 | 289,701 |
Total | $ 2,028,433 | $ 2,261,471 |
From net realized gain |
|
|
Class A | $ 13,468,952 | $ - |
Class T | 10,162,438 | - |
Class B | 951,726 | - |
Class C | 5,213,518 | - |
Institutional Class | 3,197,349 | - |
Total | $ 32,993,983 | $ - |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 2,566,576 | 1,740,823 | $ 110,639,298 | $ 65,442,879 |
Reinvestment of distributions | 321,215 | 27,199 | 13,089,815 | 963,658 |
Shares redeemed | (1,699,770) | (2,390,270) | (72,383,987) | (87,941,708) |
Net increase (decrease) | 1,188,021 | (622,248) | $ 51,345,126 | $ (21,535,171) |
Class T |
|
|
|
|
Shares sold | 572,893 | 467,358 | $ 25,352,574 | $ 17,841,598 |
Reinvestment of distributions | 243,465 | 18,548 | 10,134,909 | 670,876 |
Shares redeemed | (940,893) | (1,355,160) | (41,085,209) | (50,748,604) |
Net increase (decrease) | (124,535) | (869,254) | $ (5,597,726) | $ (32,236,130) |
Class B |
|
|
|
|
Shares sold | 26,300 | 13,140 | $ 1,074,846 | $ 454,110 |
Reinvestment of distributions | 22,691 | 989 | 856,078 | 32,636 |
Shares redeemed | (180,679) | (377,487) | (7,111,293) | (13,045,539) |
Net increase (decrease) | (131,688) | (363,358) | $ (5,180,369) | $ (12,558,793) |
Class C |
|
|
|
|
Shares sold | 779,598 | 525,111 | $ 31,528,558 | $ 18,433,044 |
Reinvestment of distributions | 118,310 | 3,815 | 4,495,184 | 126,850 |
Shares redeemed | (444,228) | (851,939) | (17,602,373) | (29,267,435) |
Net increase (decrease) | 453,680 | (323,013) | $ 18,421,369 | $ (10,707,541) |
Annual Report
Notes to Financial Statements - continued
10. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Institutional Class |
|
|
|
|
Shares sold | 1,344,490 | 923,636 | $ 61,641,683 | $ 35,802,942 |
Reinvestment of distributions | 75,999 | 6,056 | 3,249,427 | 224,624 |
Shares redeemed | (642,747) | (1,008,582) | (28,763,915) | (38,569,293) |
Net increase (decrease) | 777,742 | (78,890) | $ 36,127,195 | $ (2,541,727) |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report
Fidelity Advisor Financial Services Fund - Institutional Class
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Institutional Class | 12.85% | 10.40% | 0.93% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Financial Services Fund - Institutional Class on July 31, 2004. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Financial Services Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Christopher Lee, Portfolio Manager of Fidelity Advisor® Financial Services Fund: For the 12-month period, the fund's Institutional Class shares returned 12.85%, beating the 10.80% gain of the MSCI® U.S. IMI Financials 25-50 Index but lagging the S&P 500®. Financials underperformed the broader market due to declining interest rates, the overhangs of regulatory reform and depressed trading volumes. Banks were among the weaker performers, while asset management & custody banks, investment banking & brokerage and many real estate investment trust (REIT) segments stood out. Security selection drove the fund ahead of the MSCI sector index. Individual contributors included an out-of-index stake in alternative asset manager Blackstone Group, which realized sizable profits from investments made during the financial downturn. An overweighting in specialty REIT and wireless tower company American Tower also contributed, benefiting from declining interest rates, growing demand for cellular bandwidth and constrained tower supply. By contrast, an outsized stake in specialized REIT Rayonier hurt, as pricing pressure hindered its cellulose business. I sold Rayonier from the portfolio by period end.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity Advisor Financial Services Fund
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.19% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,059.40 | $ 6.08 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.89 | $ 5.96 |
Class T | 1.45% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,058.40 | $ 7.40 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.60 | $ 7.25 |
Class B | 1.95% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,055.90 | $ 9.94 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.12 | $ 9.74 |
Class C | 1.90% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,056.50 | $ 9.69 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.37 | $ 9.49 |
Institutional Class | .85% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,061.60 | $ 4.34 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.58 | $ 4.26 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Financial Services Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
JPMorgan Chase & Co. | 5.4 | 4.8 |
Bank of America Corp. | 5.1 | 5.4 |
Citigroup, Inc. | 4.8 | 4.8 |
U.S. Bancorp | 4.6 | 5.1 |
Berkshire Hathaway, Inc. Class B | 4.2 | 2.2 |
Capital One Financial Corp. | 4.1 | 3.9 |
Wells Fargo & Co. | 3.8 | 4.6 |
American Tower Corp. | 3.8 | 3.5 |
MetLife, Inc. | 2.7 | 2.8 |
Invesco Ltd. | 2.4 | 2.3 |
| 40.9 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Banks | 29.4% |
|
| Capital Markets | 14.5% |
|
| Insurance | 13.4% |
|
| Real Estate | 10.6% |
|
| Diversified Financial Services | 8.8% |
|
| All Others* | 23.3% |
|
As of January 31, 2014 | |||
| Diversified Financial Services | 22.3% |
|
| Insurance | 16.6% |
|
| Commercial Banks | 16.4% |
|
| Capital Markets | 14.2% |
|
| Real Estate | 10.2% |
|
| All Others* | 20.3% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Financial Services Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 97.7% | |||
Shares | Value | ||
BANKS - 29.4% | |||
Diversified Banks - 24.1% | |||
Bank of America Corp. | 561,856 | $ 8,568,304 | |
Citigroup, Inc. | 165,465 | 8,092,893 | |
JPMorgan Chase & Co. | 156,931 | 9,050,210 | |
PT Bank Rakyat Indonesia Tbk | 641,700 | 615,500 | |
U.S. Bancorp | 184,308 | 7,746,465 | |
Wells Fargo & Co. | 125,948 | 6,410,753 | |
| 40,484,125 | ||
Regional Banks - 5.3% | |||
CoBiz, Inc. | 58,891 | 666,646 | |
Commerce Bancshares, Inc. | 13,385 | 603,128 | |
Fifth Third Bancorp | 120,340 | 2,464,563 | |
M&T Bank Corp. (d) | 15,270 | 1,855,305 | |
Popular, Inc. (a) | 34,800 | 1,110,120 | |
SunTrust Banks, Inc. | 56,400 | 2,146,020 | |
| 8,845,782 | ||
TOTAL BANKS | 49,329,907 | ||
CAPITAL MARKETS - 14.5% | |||
Asset Management & Custody Banks - 11.5% | |||
Affiliated Managers Group, Inc. (a) | 11,264 | 2,244,352 | |
Ameriprise Financial, Inc. | 20,700 | 2,475,720 | |
Artisan Partners Asset Management, Inc. | 34,000 | 1,771,400 | |
BlackRock, Inc. Class A | 4,986 | 1,519,384 | |
Franklin Resources, Inc. | 52,650 | 2,850,998 | |
Invesco Ltd. | 105,338 | 3,963,869 | |
Oaktree Capital Group LLC Class A | 32,500 | 1,625,000 | |
The Blackstone Group LP | 86,465 | 2,825,676 | |
| 19,276,399 | ||
Diversified Capital Markets - 0.4% | |||
Close Brothers Group PLC | 33,800 | 725,290 | |
Investment Banking & Brokerage - 2.6% | |||
E*TRADE Financial Corp. (a) | 85,300 | 1,793,006 | |
FXCM, Inc. Class A (d) | 50,500 | 687,810 | |
Raymond James Financial, Inc. | 35,700 | 1,818,915 | |
| 4,299,731 | ||
TOTAL CAPITAL MARKETS | 24,301,420 | ||
CONSUMER FINANCE - 7.0% | |||
Consumer Finance - 7.0% | |||
Capital One Financial Corp. | 86,538 | 6,883,233 | |
Navient Corp. | 94,015 | 1,617,058 | |
Santander Consumer U.S.A. Holdings, Inc. | 22,900 | 438,993 | |
SLM Corp. | 120,515 | 1,067,763 | |
Springleaf Holdings, Inc. (d) | 65,500 | 1,714,790 | |
| 11,721,837 | ||
| |||
Shares | Value | ||
DIVERSIFIED CONSUMER SERVICES - 1.1% | |||
Specialized Consumer Services - 1.1% | |||
H&R Block, Inc. | 57,800 | $ 1,857,114 | |
DIVERSIFIED FINANCIAL SERVICES - 8.8% | |||
Multi-Sector Holdings - 4.2% | |||
Berkshire Hathaway, Inc. Class B (a) | 56,419 | 7,076,635 | |
Specialized Finance - 4.6% | |||
IntercontinentalExchange Group, Inc. | 20,114 | 3,866,313 | |
McGraw Hill Financial, Inc. | 41,400 | 3,321,108 | |
TPG Specialty Lending, Inc. (d) | 25,905 | 501,780 | |
| 7,689,201 | ||
TOTAL DIVERSIFIED FINANCIAL SERVICES | 14,765,836 | ||
HEALTH CARE PROVIDERS & SERVICES - 0.6% | |||
Health Care Facilities - 0.6% | |||
Brookdale Senior Living, Inc. (a) | 30,500 | 1,056,825 | |
INSURANCE - 13.4% | |||
Insurance Brokers - 2.4% | |||
Brown & Brown, Inc. | 48,900 | 1,505,142 | |
Marsh & McLennan Companies, Inc. | 48,900 | 2,482,653 | |
| 3,987,795 | ||
Life & Health Insurance - 4.4% | |||
MetLife, Inc. | 86,526 | 4,551,268 | |
Prudential PLC | 48,894 | 1,123,773 | |
Torchmark Corp. | 34,000 | 1,793,160 | |
| 7,468,201 | ||
Property & Casualty Insurance - 5.4% | |||
Allstate Corp. | 56,440 | 3,298,918 | |
FNF Group | 60,200 | 1,632,022 | |
FNFV Group | 20,497 | 335,331 | |
The Travelers Companies, Inc. | 41,592 | 3,724,980 | |
| 8,991,251 | ||
Reinsurance - 1.2% | |||
Everest Re Group Ltd. | 12,900 | 2,011,239 | |
TOTAL INSURANCE | 22,458,486 | ||
INTERNET SOFTWARE & SERVICES - 1.3% | |||
Internet Software & Services - 1.3% | |||
eBay, Inc. (a) | 41,400 | 2,185,920 | |
IT SERVICES - 5.0% | |||
Data Processing & Outsourced Services - 5.0% | |||
EVERTEC, Inc. | 60,200 | 1,346,072 | |
Fiserv, Inc. (a) | 38,166 | 2,353,697 | |
FleetCor Technologies, Inc. (a) | 9,200 | 1,221,668 | |
The Western Union Co. | 82,700 | 1,444,769 | |
Visa, Inc. Class A | 9,430 | 1,989,824 | |
| 8,356,030 | ||
Common Stocks - continued | |||
Shares | Value | ||
MEDIA - 1.0% | |||
Advertising - 1.0% | |||
CBS Outdoor Americas, Inc. | 48,900 | $ 1,627,881 | |
REAL ESTATE INVESTMENT TRUSTS - 10.6% | |||
Mortgage REITs - 3.0% | |||
Blackstone Mortgage Trust, Inc. | 45,100 | 1,283,997 | |
NorthStar Realty Finance Corp. | 39,050 | 628,705 | |
Redwood Trust, Inc. (d) | 60,200 | 1,142,596 | |
Starwood Property Trust, Inc. | 82,700 | 1,951,720 | |
| 5,007,018 | ||
Residential REITs - 2.3% | |||
Essex Property Trust, Inc. | 11,450 | 2,170,577 | |
Starwood Waypoint Residential (a) | 60,160 | 1,581,606 | |
| 3,752,183 | ||
Retail REITs - 1.5% | |||
Simon Property Group, Inc. | 7,188 | 1,208,950 | |
Washington Prime Group, Inc. (a) | 72,169 | 1,363,272 | |
| 2,572,222 | ||
Specialized REITs - 3.8% | |||
American Tower Corp. | 67,650 | 6,385,484 | |
TOTAL REAL ESTATE INVESTMENT TRUSTS | 17,716,907 | ||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 4.1% | |||
Real Estate Operating Companies - 0.5% | |||
Global Logistic Properties Ltd. | 381,000 | 848,170 | |
Real Estate Services - 3.6% | |||
Altisource Portfolio Solutions SA (a) | 7,550 | 818,269 | |
CBRE Group, Inc. (a) | 118,487 | 3,654,139 | |
Realogy Holdings Corp. (a) | 45,100 | 1,657,876 | |
| 6,130,284 | ||
TOTAL REAL ESTATE MANAGEMENT & DEVELOPMENT | 6,978,454 | ||
| |||
Shares | Value | ||
THRIFTS & MORTGAGE FINANCE - 0.9% | |||
Thrifts & Mortgage Finance - 0.9% | |||
MGIC Investment Corp. (a) | 50,000 | $ 369,500 | |
Ocwen Financial Corp. (a) | 28,850 | 870,405 | |
Radian Group, Inc. | 19,600 | 248,136 | |
| 1,488,041 | ||
TOTAL COMMON STOCKS (Cost $145,554,635) |
| ||
Money Market Funds - 4.8% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 3,871,808 | 3,871,808 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 4,239,975 | 4,239,975 | |
TOTAL MONEY MARKET FUNDS (Cost $8,111,783) |
| ||
TOTAL INVESTMENT PORTFOLIO - 102.5% (Cost $153,666,418) | 171,956,441 | ||
NET OTHER ASSETS (LIABILITIES) - (2.5)% | (4,243,037) | ||
NET ASSETS - 100% | $ 167,713,404 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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 | $ 3,308 |
Fidelity Securities Lending Cash Central Fund | 40,449 |
Total | $ 43,757 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 163,844,658 | $ 161,257,215 | $ 2,587,443 | $ - |
Money Market Funds | 8,111,783 | 8,111,783 | - | - |
Total Investments in Securities: | $ 171,956,441 | $ 169,368,998 | $ 2,587,443 | $ - |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Financial Services Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $4,042,147) - See accompanying schedule: Unaffiliated issuers (cost $145,554,635) | $ 163,844,658 |
|
Fidelity Central Funds (cost $8,111,783) | 8,111,783 |
|
Total Investments (cost $153,666,418) |
| $ 171,956,441 |
Cash |
| 1,005 |
Receivable for investments sold | 106,170 | |
Receivable for fund shares sold | 133,922 | |
Dividends receivable | 91,067 | |
Distributions receivable from Fidelity Central Funds | 22,253 | |
Other receivables | 157,775 | |
Total assets | 172,468,633 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 66,478 | |
Payable for fund shares redeemed | 220,158 | |
Accrued management fee | 78,904 | |
Distribution and service plan fees payable | 65,936 | |
Other affiliated payables | 44,061 | |
Other payables and accrued expenses | 39,717 | |
Collateral on securities loaned, at value | 4,239,975 | |
Total liabilities | 4,755,229 | |
|
|
|
Net Assets | $ 167,713,404 | |
Net Assets consist of: |
| |
Paid in capital | $ 208,707,700 | |
Undistributed net investment income | 327,058 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (59,611,679) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 18,290,325 | |
Net Assets | $ 167,713,404 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 14.97 | |
|
|
|
Maximum offering price per share (100/94.25 of $14.97) | $ 15.88 | |
Class T: | $ 14.86 | |
|
|
|
Maximum offering price per share (100/96.50 of $14.86) | $ 15.40 | |
Class B: | $ 14.35 | |
|
|
|
Class C: | $ 14.22 | |
|
|
|
Institutional Class: | $ 15.34 | |
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.
Annual Report
Fidelity Advisor Financial Services Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 2,980,098 |
Income from Fidelity Central Funds |
| 43,757 |
Total income |
| 3,023,855 |
|
|
|
Expenses | ||
Management fee | $ 876,474 | |
Transfer agent fees | 446,452 | |
Distribution and service plan fees | 742,675 | |
Accounting and security lending fees | 62,863 | |
Custodian fees and expenses | 13,750 | |
Independent trustees' compensation | 3,882 | |
Registration fees | 60,470 | |
Audit | 53,082 | |
Legal | 3,004 | |
Miscellaneous | 2,284 | |
Total expenses before reductions | 2,264,936 | |
Expense reductions | (5,268) | 2,259,668 |
Net investment income (loss) | 764,187 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 7,591,926 | |
Foreign currency transactions | 1,609 | |
Total net realized gain (loss) |
| 7,593,535 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 9,237,332 | |
Assets and liabilities in foreign currencies | 987 | |
Total change in net unrealized appreciation (depreciation) |
| 9,238,319 |
Net gain (loss) | 16,831,854 | |
Net increase (decrease) in net assets resulting from operations | $ 17,596,041 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 764,187 | $ 1,261,864 |
Net realized gain (loss) | 7,593,535 | 21,677,767 |
Change in net unrealized appreciation (depreciation) | 9,238,319 | 10,094,408 |
Net increase (decrease) in net assets resulting from operations | 17,596,041 | 33,034,039 |
Distributions to shareholders from net investment income | (647,193) | (847,180) |
Distributions to shareholders from net realized gain | (72,538) | - |
Total distributions | (719,731) | (847,180) |
Share transactions - net increase (decrease) | 10,142,137 | 4,858,599 |
Redemption fees | 8,658 | 3,052 |
Total increase (decrease) in net assets | 27,027,105 | 37,048,510 |
|
|
|
Net Assets | ||
Beginning of period | 140,686,299 | 103,637,789 |
End of period (including undistributed net investment income of $327,058 and undistributed net investment income of $426,508, respectively) | $ 167,713,404 | $ 140,686,299 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 13.41 | $ 10.18 | $ 10.06 | $ 10.35 | $ 9.53 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .10 | .15 | .07 | (.02) | (.01) |
Net realized and unrealized gain (loss) | 1.55 | 3.18 | .06 | (.27) | .93 |
Total from investment operations | 1.65 | 3.33 | .13 | (.29) | .92 |
Distributions from net investment income | (.08) | (.10) | (.01) | - | (.10) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.09) | (.10) | (.01) | - | (.10) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 14.97 | $ 13.41 | $ 10.18 | $ 10.06 | $ 10.35 |
Total ReturnA, B | 12.39% | 32.99% | 1.34% | (2.80)% | 9.61% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.22% | 1.29% | 1.28% | 1.26% | 1.27% |
Expenses net of fee waivers, if any | 1.22% | 1.29% | 1.28% | 1.26% | 1.27% |
Expenses net of all reductions | 1.22% | 1.21% | 1.20% | 1.21% | 1.22% |
Net investment income (loss) | .68% | 1.31% | .72% | (.24)% | (.09)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 77,674 | $ 64,428 | $ 47,055 | $ 63,937 | $ 69,723 |
Portfolio turnover rateE | 49% | 288% | 441% | 260% | 254% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 13.31 | $ 10.11 | $ 10.01 | $ 10.32 | $ 9.52 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .06 | .12 | .04 | (.05) | (.04) |
Net realized and unrealized gain (loss) | 1.55 | 3.16 | .06 | (.26) | .92 |
Total from investment operations | 1.61 | 3.28 | .10 | (.31) | .88 |
Distributions from net investment income | (.05) | (.08) | - G | - | (.08) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.06) | (.08) | - G | - | (.08) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 14.86 | $ 13.31 | $ 10.11 | $ 10.01 | $ 10.32 |
Total ReturnA, B | 12.10% | 32.66% | 1.03% | (3.00)% | 9.26% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.48% | 1.55% | 1.54% | 1.52% | 1.53% |
Expenses net of fee waivers, if any | 1.48% | 1.55% | 1.54% | 1.52% | 1.53% |
Expenses net of all reductions | 1.48% | 1.47% | 1.45% | 1.47% | 1.47% |
Net investment income (loss) | .42% | 1.06% | .46% | (.49)% | (.35)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 31,596 | $ 30,576 | $ 24,367 | $ 27,037 | $ 33,310 |
Portfolio turnover rateE | 49% | 288% | 441% | 260% | 254% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 12.87 | $ 9.79 | $ 9.73 | $ 10.09 | $ 9.33 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.01) | .06 | - G | (.10) | (.09) |
Net realized and unrealized gain (loss) | 1.49 | 3.06 | .06 | (.26) | .91 |
Total from investment operations | 1.48 | 3.12 | .06 | (.36) | .82 |
Distributions from net investment income | - | (.04) | - | - | (.06) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 14.35 | $ 12.87 | $ 9.79 | $ 9.73 | $ 10.09 |
Total ReturnA, B | 11.50% | 32.00% | .62% | (3.57)% | 8.78% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.98% | 2.04% | 2.03% | 2.01% | 2.02% |
Expenses net of fee waivers, if any | 1.98% | 2.04% | 2.03% | 2.01% | 2.02% |
Expenses net of all reductions | 1.98% | 1.97% | 1.94% | 1.96% | 1.97% |
Net investment income (loss) | (.08)% | .56% | (.03)% | (.98)% | (.85)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 5,540 | $ 6,511 | $ 5,745 | $ 7,480 | $ 10,992 |
Portfolio turnover rateE | 49% | 288% | 441% | 260% | 254% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 12.75 | $ 9.70 | $ 9.65 | $ 10.00 | $ 9.25 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | - G | .06 | - G | (.10) | (.09) |
Net realized and unrealized gain (loss) | 1.48 | 3.03 | .05 | (.25) | .90 |
Total from investment operations | 1.48 | 3.09 | .05 | (.35) | .81 |
Distributions from net investment income | (.01) | (.04) | - | - | (.06) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 14.22 | $ 12.75 | $ 9.70 | $ 9.65 | $ 10.00 |
Total ReturnA, B | 11.65% | 31.98% | .52% | (3.50)% | 8.79% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.94% | 2.03% | 2.03% | 2.01% | 2.02% |
Expenses net of fee waivers, if any | 1.94% | 2.03% | 2.03% | 2.01% | 2.02% |
Expenses net of all reductions | 1.93% | 1.96% | 1.94% | 1.96% | 1.96% |
Net investment income (loss) | (.03)% | .57% | (.03)% | (.99)% | (.84)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 36,740 | $ 29,897 | $ 20,875 | $ 23,196 | $ 30,804 |
Portfolio turnover rateE | 49% | 288% | 441% | 260% | 254% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 13.73 | $ 10.42 | $ 10.28 | $ 10.55 | $ 9.69 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .15 | .20 | .10 | .01 | .02 |
Net realized and unrealized gain (loss) | 1.60 | 3.25 | .06 | (.28) | .95 |
Total from investment operations | 1.75 | 3.45 | .16 | (.27) | .97 |
Distributions from net investment income | (.13) | (.14) | (.02) | - | (.11) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.14) | (.14) | (.02) | - | (.11) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 15.34 | $ 13.73 | $ 10.42 | $ 10.28 | $ 10.55 |
Total ReturnA | 12.85% | 33.45% | 1.61% | (2.56)% | 9.99% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .87% | .96% | .98% | .96% | .99% |
Expenses net of fee waivers, if any | .87% | .96% | .98% | .96% | .99% |
Expenses net of all reductions | .86% | .88% | .89% | .91% | .94% |
Net investment income (loss) | 1.04% | 1.65% | 1.02% | .07% | .19% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 16,164 | $ 9,275 | $ 5,596 | $ 8,162 | $ 5,158 |
Portfolio turnover rateD | 49% | 288% | 441% | 260% | 254% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Annual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 19,432,045 |
Gross unrealized depreciation | (1,861,572) |
Net unrealized appreciation (depreciation) on securities | $ 17,570,473 |
|
|
Tax Cost | $ 154,385,968 |
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 327,069 |
Capital loss carryforward | $ (58,892,130) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 17,570,775 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
Fiscal year of expiration |
|
2017 | $ (35,189,589) |
2018 | (23,251,884) |
2019 | (450,657) |
Total capital loss carryforward | $ (58,892,130) |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 719,731 | $ 847,180 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $84,579,700 and $75,332,273, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 179,690 | $ 4,881 |
Class T | .25% | .25% | 157,782 | 784 |
Class B | .75% | .25% | 62,815 | 47,230 |
Class C | .75% | .25% | 342,388 | 73,448 |
|
|
| $ 742,675 | $ 126,343 |
Annual Report
5. Fees and Other Transactions with Affiliates - continued
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 47,937 |
Class T | 7,810 |
Class B* | 6,232 |
Class C* | 8,195 |
| $ 70,174 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 212,843 | .30 |
Class T | 96,821 | .31 |
Class B | 19,084 | .30 |
Class C | 88,891 | .26 |
Institutional Class | 28,813 | .19 |
| $ 446,452 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $1,600 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $266 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending
Annual Report
Notes to Financial Statements - continued
7. Security Lending - continued
Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $40,449. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $5,268 for the period.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net investment income |
|
|
Class A | $ 405,756 | $ 468,043 |
Class T | 104,978 | 194,766 |
Class B | - | 25,088 |
Class C | 31,349 | 89,452 |
Institutional Class | 105,110 | 69,831 |
Total | $ 647,193 | $ 847,180 |
From net realized gain |
|
|
Class A | $ 43,910 | $ - |
Class T | 20,144 | - |
Institutional Class | 8,484 | - |
Total | $ 72,538 | $ - |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 1,697,938 | 1,230,107 | $ 24,378,496 | $ 14,721,154 |
Reinvestment of distributions | 28,780 | 36,718 | 390,562 | 401,001 |
Shares redeemed | (1,342,224) | (1,085,572) | (19,118,798) | (12,586,886) |
Net increase (decrease) | 384,494 | 181,253 | $ 5,650,260 | $ 2,535,269 |
Class T |
|
|
|
|
Shares sold | 306,863 | 446,551 | $ 4,347,352 | $ 5,238,758 |
Reinvestment of distributions | 8,794 | 16,926 | 118,136 | 183,990 |
Shares redeemed | (486,368) | (576,646) | (6,897,348) | (6,688,740) |
Net increase (decrease) | (170,711) | (113,169) | $ (2,431,860) | $ (1,265,992) |
Class B |
|
|
|
|
Shares sold | 29,215 | 117,587 | $ 390,860 | $ 1,311,553 |
Reinvestment of distributions | - | 1,943 | - | 20,652 |
Shares redeemed | (149,230) | (200,454) | (2,060,292) | (2,232,316) |
Net increase (decrease) | (120,015) | (80,924) | $ (1,669,432) | $ (900,111) |
Class C |
|
|
|
|
Shares sold | 859,537 | 769,144 | $ 11,703,173 | $ 8,857,879 |
Reinvestment of distributions | 2,148 | 7,186 | 26,657 | 75,671 |
Shares redeemed | (621,486) | (584,253) | (8,469,563) | (6,452,079) |
Net increase (decrease) | 240,199 | 192,077 | $ 3,260,267 | $ 2,481,471 |
Annual Report
10. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Institutional Class |
|
|
|
|
Shares sold | 823,593 | 490,356 | $ 12,007,905 | $ 6,177,619 |
Reinvestment of distributions | 5,144 | 5,017 | 71,934 | 55,775 |
Shares redeemed | (450,058) | (356,871) | (6,746,937) | (4,225,432) |
Net increase (decrease) | 378,679 | 138,502 | $ 5,332,902 | $ 2,007,962 |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report
Fidelity Advisor Health Care Fund - Institutional Class
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2014 |
| Past 1 | Past 5 | Past 10 |
Institutional Class |
| 35.21% | 25.67% | 13.80% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Health Care Fund - Institutional Class on July 31, 2004. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Health Care Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Edward Yoon, Portfolio Manager of Fidelity Advisor® Health Care Fund: For the year, the fund's Institutional Class shares gained 35.21%, outpacing the 21.26% advance of the MSCI U.S. IMI Health Care 25-50 Index and the S&P 500®. Strong fundamentals continued to underpin the health care sector's solid performance, and increased merger-and-acquisition activity fueled outsized gains in many stocks. Despite some volatility in higher-growth areas such as biotechnology, the sector's diversified composition, attractive valuation and defensive qualities helped it maintain its recent strong performance. Versus the MSCI sector index, exceptional stock picking drove the fund's outperformance. Choices in pharmaceuticals helped the most - although I maintained my sizable underweighting in the industry - including U.K.-based Shire, the fund's top individual contributor that benefited from multiple takeover bids by drugmaker AbbVie. I continued to add to my position, and I expect to keep AbbVie as a fund holding should the deal finalize. Life science tools & services helped, and leading the way here was genetic analysis tool maker Illumina, which I overweighted but trimmed exposure as the stock's valuation rose. Stock selection in biotechnology also added value, especially Intercept Pharmaceuticals, which strongly contributed this period despite experiencing extreme volatility. Notable relative detractors were hard to come by this period, but stock picking in health care services was weak. I also reduced exposure to this group, as I've always been generally cautious of areas sensitive to fluctuations in health policy. At the stock level, it hurt the most not to own large-cap pharma firm Allergan when its shares shot higher in April on news that Valeant Pharmaceuticals International would acquire the firm. I did establish a small stake in June, but it was too little, too late this period.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.06% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,079.60 | $ 5.47 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.54 | $ 5.31 |
Class T | 1.33% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,078.10 | $ 6.85 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.20 | $ 6.66 |
Class B | 1.89% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,075.20 | $ 9.72 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.42 | $ 9.44 |
Class C | 1.81% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,075.60 | $ 9.31 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.82 | $ 9.05 |
Institutional Class | .80% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,081.20 | $ 4.13 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.83 | $ 4.01 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Health Care Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Actavis PLC | 6.9 | 4.6 |
McKesson Corp. | 5.3 | 3.4 |
Shire PLC sponsored ADR | 4.9 | 1.8 |
Covidien PLC | 4.0 | 0.9 |
Biogen Idec, Inc. | 3.4 | 4.3 |
Agilent Technologies, Inc. | 3.4 | 1.5 |
Alexion Pharmaceuticals, Inc. | 3.3 | 4.5 |
Boston Scientific Corp. | 3.1 | 3.6 |
AbbVie, Inc. | 2.8 | 1.0 |
Allergan, Inc. | 2.8 | 0.0 |
| 39.9 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Pharmaceuticals | 30.4% |
|
| Biotechnology | 24.2% |
|
| Health Care Equipment & Supplies | 16.8% |
|
| Health Care | 14.3% |
|
| Life Sciences | 6.0% |
|
| All Others* | 8.3% |
|
As of January 31, 2014 | |||
| Biotechnology | 32.7% |
|
| Pharmaceuticals | 24.9% |
|
| Health Care Equipment & Supplies | 14.1% |
|
| Health Care | 13.0% |
|
| Life Sciences | 8.0% |
|
| All Others* | 7.3% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Health Care Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 98.0% | |||
Shares | Value | ||
BIOTECHNOLOGY - 24.2% | |||
Biotechnology - 24.2% | |||
Acceleron Pharma, Inc. | 56,538 | $ 1,674,656 | |
Actelion Ltd. | 50,892 | 6,154,642 | |
Alexion Pharmaceuticals, Inc. (a) | 285,814 | 45,441,568 | |
Alnylam Pharmaceuticals, Inc. (a) | 74,720 | 4,038,616 | |
Amgen, Inc. | 232,496 | 29,617,665 | |
Array BioPharma, Inc. (a) | 475,300 | 1,901,200 | |
Arrowhead Research Corp. (a) | 170,200 | 2,153,030 | |
Avalanche Biotechnologies, Inc. (a) | 22,209 | 621,630 | |
BioCryst Pharmaceuticals, Inc. (a) | 296,900 | 3,717,188 | |
Biogen Idec, Inc. (a) | 139,884 | 46,775,811 | |
BioMarin Pharmaceutical, Inc. (a) | 105,800 | 6,540,556 | |
Celgene Corp. (a) | 216,500 | 18,867,975 | |
Celldex Therapeutics, Inc. (a) | 55,100 | 721,259 | |
Cubist Pharmaceuticals, Inc. | 289,497 | 17,630,367 | |
Discovery Laboratories, Inc. (a) | 796,000 | 1,249,720 | |
Genomic Health, Inc. (a)(d) | 110,254 | 2,809,272 | |
Gilead Sciences, Inc. (a) | 352,886 | 32,306,713 | |
Grifols SA ADR | 201,830 | 7,401,106 | |
Innate Pharma SA (a)(d) | 268,800 | 2,667,131 | |
Insmed, Inc. (a) | 164,900 | 2,818,141 | |
Intercept Pharmaceuticals, Inc. (a) | 44,121 | 10,251,956 | |
InterMune, Inc. (a) | 440,980 | 19,345,793 | |
Kindred Biosciences, Inc. | 148,400 | 2,261,616 | |
Neurocrine Biosciences, Inc. (a) | 460,334 | 6,251,336 | |
NewLink Genetics Corp. (a) | 57,196 | 1,211,411 | |
NPS Pharmaceuticals, Inc. (a) | 80,590 | 2,251,685 | |
Prothena Corp. PLC (a) | 2,500 | 43,400 | |
PTC Therapeutics, Inc. (a) | 80,800 | 2,134,736 | |
Puma Biotechnology, Inc. (a) | 86,600 | 19,200,952 | |
Rigel Pharmaceuticals, Inc. (a) | 208,731 | 682,550 | |
Ultragenyx Pharmaceutical, Inc. | 60,805 | 2,657,179 | |
Vanda Pharmaceuticals, Inc. (a)(d) | 373,329 | 5,487,936 | |
Vertex Pharmaceuticals, Inc. (a) | 324,700 | 28,869,077 | |
ZIOPHARM Oncology, Inc. (a)(d) | 404,100 | 1,264,833 | |
| 337,022,706 | ||
DIVERSIFIED CONSUMER SERVICES - 0.2% | |||
Specialized Consumer Services - 0.2% | |||
Carriage Services, Inc. | 159,335 | 2,570,074 | |
HEALTH CARE EQUIPMENT & SUPPLIES - 16.8% | |||
Health Care Equipment - 14.9% | |||
Accuray, Inc. (a) | 208,500 | 1,640,895 | |
Boston Scientific Corp. (a) | 3,334,001 | 42,608,533 | |
Cardiovascular Systems, Inc. (a) | 107,420 | 2,900,340 | |
CONMED Corp. | 197,018 | 7,683,702 | |
Covidien PLC | 649,523 | 56,190,235 | |
Edwards Lifesciences Corp. (a) | 170,953 | 15,428,508 | |
HeartWare International, Inc. (a) | 106,331 | 8,954,134 | |
Intuitive Surgical, Inc. (a) | 11,800 | 5,399,090 | |
Lumenis Ltd. Class B | 156,400 | 1,388,832 | |
| |||
Shares | Value | ||
Masimo Corp. (a) | 230,731 | $ 5,556,002 | |
Medtronic, Inc. | 364,300 | 22,491,882 | |
NxStage Medical, Inc. (a) | 355,200 | 4,741,920 | |
ResMed, Inc. (d) | 100,900 | 5,220,566 | |
Roka Bioscience, Inc. | 124,327 | 1,122,300 | |
Roka Bioscience, Inc. (a) | 83,300 | 835,499 | |
Smith & Nephew PLC sponsored ADR | 90,963 | 7,829,185 | |
Steris Corp. | 173,184 | 8,811,602 | |
Volcano Corp. (a) | 259,000 | 4,276,090 | |
Zeltiq Aesthetics, Inc. (a) | 269,618 | 5,457,068 | |
| 208,536,383 | ||
Health Care Supplies - 1.9% | |||
Derma Sciences, Inc. (a) | 212,595 | 2,057,920 | |
Endologix, Inc. (a) | 298,823 | 4,228,345 | |
The Cooper Companies, Inc. | 124,200 | 19,981,296 | |
| 26,267,561 | ||
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | 234,803,944 | ||
HEALTH CARE PROVIDERS & SERVICES - 14.2% | |||
Health Care Distributors & Services - 6.8% | |||
Amplifon SpA | 647,495 | 3,875,616 | |
Cardinal Health, Inc. | 149,700 | 10,726,005 | |
EBOS Group Ltd. | 593,979 | 5,106,402 | |
McKesson Corp. | 389,709 | 74,769,569 | |
United Drug PLC (United Kingdom) | 182,300 | 1,093,840 | |
| 95,571,432 | ||
Health Care Facilities - 3.2% | |||
Brookdale Senior Living, Inc. (a) | 184,870 | 6,405,746 | |
HCA Holdings, Inc. (a) | 264,100 | 17,248,371 | |
NMC Health PLC | 314,500 | 2,495,561 | |
Surgical Care Affiliates, Inc. | 148,385 | 4,359,551 | |
Universal Health Services, Inc. Class B | 129,527 | 13,807,578 | |
| 44,316,807 | ||
Health Care Services - 1.4% | |||
Air Methods Corp. (a)(d) | 277,484 | 13,943,571 | |
MEDNAX, Inc. (a) | 83,320 | 4,930,878 | |
| 18,874,449 | ||
Managed Health Care - 2.8% | |||
Cigna Corp. | 194,812 | 17,540,872 | |
Humana, Inc. | 108,237 | 12,734,083 | |
UnitedHealth Group, Inc. | 106,724 | 8,649,980 | |
| 38,924,935 | ||
TOTAL HEALTH CARE PROVIDERS & SERVICES | 197,687,623 | ||
HEALTH CARE TECHNOLOGY - 3.7% | |||
Health Care Technology - 3.7% | |||
athenahealth, Inc. (a)(d) | 59,400 | 7,389,360 | |
Castlight Health, Inc. | 336,800 | 4,064,839 | |
Castlight Health, Inc. Class B (a) | 6,800 | 91,188 | |
Cerner Corp. (a) | 539,596 | 29,785,699 | |
Common Stocks - continued | |||
Shares | Value | ||
HEALTH CARE TECHNOLOGY - CONTINUED | |||
Health Care Technology - continued | |||
HealthStream, Inc. (a) | 97,512 | $ 2,433,900 | |
Medidata Solutions, Inc. (a) | 187,800 | 8,420,952 | |
| 52,185,938 | ||
INDUSTRIAL CONGLOMERATES - 1.9% | |||
Industrial Conglomerates - 1.9% | |||
Danaher Corp. | 355,023 | 26,229,099 | |
LIFE SCIENCES TOOLS & SERVICES - 6.0% | |||
Life Sciences Tools & Services - 6.0% | |||
Agilent Technologies, Inc. | 833,500 | 46,751,015 | |
Bruker BioSciences Corp. (a) | 259,553 | 5,899,640 | |
Illumina, Inc. (a) | 193,389 | 30,924,835 | |
| 83,575,490 | ||
PHARMACEUTICALS - 30.4% | |||
Pharmaceuticals - 30.4% | |||
AbbVie, Inc. | 747,480 | 39,123,103 | |
Actavis PLC (a) | 450,355 | 96,493,059 | |
Allergan, Inc. | 233,600 | 38,744,896 | |
Auxilium Pharmaceuticals, Inc. (a)(d) | 212,000 | 4,244,240 | |
Bristol-Myers Squibb Co. | 259,803 | 13,151,228 | |
Dechra Pharmaceuticals PLC | 350,100 | 4,102,052 | |
Jazz Pharmaceuticals PLC (a) | 83,426 | 11,657,115 | |
Merck & Co., Inc. | 400,933 | 22,748,938 | |
Pacira Pharmaceuticals, Inc. (a) | 55,200 | 5,078,400 | |
Perrigo Co. PLC | 216,456 | 32,565,805 | |
Prestige Brands Holdings, Inc. (a) | 271,372 | 8,358,258 | |
Salix Pharmaceuticals Ltd. (a) | 216,448 | 28,551,656 | |
Shire PLC sponsored ADR | 279,300 | 68,847,450 | |
Teva Pharmaceutical Industries Ltd. sponsored ADR | 634,983 | 33,971,591 | |
The Medicines Company (a) | 249,000 | 5,819,130 | |
TherapeuticsMD, Inc. (a) | 661,050 | 3,067,272 | |
UCB SA | 84,800 | 7,794,171 | |
| 424,318,364 | ||
PROFESSIONAL SERVICES - 0.6% | |||
Human Resource & Employment Services - 0.6% | |||
Towers Watson & Co. | 23,927 | 2,441,033 | |
WageWorks, Inc. (a) | 138,395 | 5,776,607 | |
| 8,217,640 | ||
TOTAL COMMON STOCKS (Cost $1,042,406,903) |
| ||
Convertible Preferred Stocks - 0.1% | |||
Shares | Value | ||
HEALTH CARE PROVIDERS & SERVICES - 0.1% | |||
Health Care Services - 0.1% | |||
1Life Healthcare, Inc. Series G (e) | 322,145 | $ 2,238,908 | |
Money Market Funds - 3.6% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 36,951,816 | 36,951,816 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 13,128,282 | 13,128,282 | |
TOTAL MONEY MARKET FUNDS (Cost $50,080,098) |
| ||
TOTAL INVESTMENT PORTFOLIO - 101.7% (Cost $1,094,608,584) | 1,418,929,884 | ||
NET OTHER ASSETS (LIABILITIES) - (1.7)% | (24,044,339) | ||
NET ASSETS - 100% | $ 1,394,885,545 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $2,238,908 or 0.1% of net assets. |
Additional information on each restricted holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
1Life Healthcare, Inc. Series G | 4/10/14 | $ 2,121,583 |
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 | $ 19,491 |
Fidelity Securities Lending Cash Central Fund | 281,825 |
Total | $ 301,316 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 1,366,610,878 | $ 1,361,423,739 | $ 5,187,139 | $ - |
Convertible Preferred Stocks | 2,238,908 | - | - | 2,238,908 |
Money Market Funds | 50,080,098 | 50,080,098 | - | - |
Total Investments in Securities: | $ 1,418,929,884 | $ 1,411,503,837 | $ 5,187,139 | $ 2,238,908 |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 75.1% |
Ireland | 14.1% |
Bailiwick of Jersey | 4.9% |
Israel | 2.5% |
United Kingdom | 1.1% |
Others (Individually Less Than 1%) | 2.3% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Health Care Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $12,559,019) - See accompanying schedule: Unaffiliated issuers (cost $1,044,528,486) | $ 1,368,849,786 |
|
Fidelity Central Funds (cost $50,080,098) | 50,080,098 |
|
Total Investments (cost $1,094,608,584) |
| $ 1,418,929,884 |
Receivable for investments sold | 27,126,664 | |
Receivable for fund shares sold | 5,263,502 | |
Dividends receivable | 401,785 | |
Distributions receivable from Fidelity Central Funds | 13,302 | |
Other receivables | 12,457 | |
Total assets | 1,451,747,594 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 40,053,831 | |
Payable for fund shares redeemed | 2,295,699 | |
Accrued management fee | 629,604 | |
Distribution and service plan fees payable | 441,222 | |
Other affiliated payables | 261,720 | |
Other payables and accrued expenses | 51,691 | |
Collateral on securities loaned, at value | 13,128,282 | |
Total liabilities | 56,862,049 | |
|
|
|
Net Assets | $ 1,394,885,545 | |
Net Assets consist of: |
| |
Paid in capital | $ 956,280,793 | |
Accumulated net investment loss | (4,464,030) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 118,747,574 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 324,321,208 | |
Net Assets | $ 1,394,885,545 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 37.72 | |
|
|
|
Maximum offering price per share (100/94.25 of $37.72) | $ 40.02 | |
Class T: | $ 35.87 | |
|
|
|
Maximum offering price per share (100/96.50 of $35.87) | $ 37.17 | |
Class B: | $ 32.17 | |
|
|
|
Class C: | $ 32.03 | |
|
|
|
Institutional Class: | $ 40.22 | |
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.
Annual Report
Fidelity Advisor Health Care Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 5,217,545 |
Interest |
| 4 |
Income from Fidelity Central Funds (including $281,825 from security lending) |
| 301,316 |
Total income |
| 5,518,865 |
|
|
|
Expenses | ||
Management fee | $ 5,691,350 | |
Transfer agent fees | 2,229,952 | |
Distribution and service plan fees | 4,165,648 | |
Accounting and security lending fees | 350,304 | |
Custodian fees and expenses | 59,662 | |
Independent trustees' compensation | 23,801 | |
Registration fees | 130,856 | |
Audit | 52,033 | |
Legal | 12,425 | |
Miscellaneous | 10,985 | |
Total expenses before reductions | 12,727,016 | |
Expense reductions | (50,156) | 12,676,860 |
Net investment income (loss) | (7,157,995) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 181,430,864 | |
Foreign currency transactions | 12,331 | |
Total net realized gain (loss) |
| 181,443,195 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 110,914,093 | |
Assets and liabilities in foreign currencies | 2,020 | |
Total change in net unrealized appreciation (depreciation) |
| 110,916,113 |
Net gain (loss) | 292,359,308 | |
Net increase (decrease) in net assets resulting from operations | $ 285,201,313 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (7,157,995) | $ (1,047,566) |
Net realized gain (loss) | 181,443,195 | 65,048,667 |
Change in net unrealized appreciation (depreciation) | 110,916,113 | 144,188,245 |
Net increase (decrease) in net assets resulting from operations | 285,201,313 | 208,189,346 |
Distributions to shareholders from net realized gain | (91,415,211) | (53,403,217) |
Share transactions - net increase (decrease) | 462,114,251 | 98,074,235 |
Redemption fees | 59,322 | 6,876 |
Total increase (decrease) in net assets | 655,959,675 | 252,867,240 |
|
|
|
Net Assets | ||
Beginning of period | 738,925,870 | 486,058,630 |
End of period (including accumulated net investment loss of $4,464,030 and accumulated net investment loss of $1,170,069, respectively) | $ 1,394,885,545 | $ 738,925,870 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 31.29 | $ 24.35 | $ 25.60 | $ 19.01 | $ 17.15 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.18) | - G | (.04) | (.10) | (.07) |
Net realized and unrealized gain (loss) | 10.13 | 9.53 | 1.43 | 6.69 | 1.93 |
Total from investment operations | 9.95 | 9.53 | 1.39 | 6.59 | 1.86 |
Distributions from net realized gain | (3.52) | (2.59) | (2.64) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 37.72 | $ 31.29 | $ 24.35 | $ 25.60 | $ 19.01 |
Total ReturnA, B | 34.79% | 42.77% | 7.58% | 34.67% | 10.85% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.08% | 1.14% | 1.19% | 1.19% | 1.22% |
Expenses net of fee waivers, if any | 1.08% | 1.14% | 1.19% | 1.19% | 1.22% |
Expenses net of all reductions | 1.07% | 1.13% | 1.18% | 1.18% | 1.21% |
Net investment income (loss) | (.54)% | (.01)% | (.18)% | (.43)% | (.36)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 613,995 | $ 365,416 | $ 233,188 | $ 224,704 | $ 179,586 |
Portfolio turnover rateE | 111% | 92% | 124% | 125% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 29.91 | $ 23.42 | $ 24.80 | $ 18.46 | $ 16.69 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.26) | (.07) | (.09) | (.16) | (.12) |
Net realized and unrealized gain (loss) | 9.67 | 9.13 | 1.35 | 6.50 | 1.89 |
Total from investment operations | 9.41 | 9.06 | 1.26 | 6.34 | 1.77 |
Distributions from net realized gain | (3.45) | (2.57) | (2.64) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 35.87 | $ 29.91 | $ 23.42 | $ 24.80 | $ 18.46 |
Total ReturnA, B | 34.49% | 42.39% | 7.27% | 34.34% | 10.61% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.34% | 1.39% | 1.43% | 1.44% | 1.47% |
Expenses net of fee waivers, if any | 1.34% | 1.39% | 1.43% | 1.44% | 1.47% |
Expenses net of all reductions | 1.34% | 1.38% | 1.43% | 1.43% | 1.46% |
Net investment income (loss) | (.80)% | (.26)% | (.42)% | (.69)% | (.62)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 216,973 | $ 158,611 | $ 117,969 | $ 123,606 | $ 100,883 |
Portfolio turnover rateE | 111% | 92% | 124% | 125% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 27.16 | $ 21.55 | $ 23.15 | $ 17.32 | $ 15.74 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.40) | (.18) | (.19) | (.25) | (.20) |
Net realized and unrealized gain (loss) | 8.71 | 8.31 | 1.23 | 6.08 | 1.78 |
Total from investment operations | 8.31 | 8.13 | 1.04 | 5.83 | 1.58 |
Distributions from net realized gain | (3.30) | (2.52) | (2.64) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 32.17 | $ 27.16 | $ 21.55 | $ 23.15 | $ 17.32 |
Total ReturnA, B | 33.72% | 41.61% | 6.78% | 33.66% | 10.04% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.91% | 1.93% | 1.94% | 1.94% | 1.97% |
Expenses net of fee waivers, if any | 1.91% | 1.93% | 1.94% | 1.94% | 1.97% |
Expenses net of all reductions | 1.90% | 1.91% | 1.93% | 1.93% | 1.96% |
Net investment income (loss) | (1.37)% | (.80)% | (.93)% | (1.19)% | (1.11)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 13,405 | $ 14,517 | $ 15,403 | $ 20,365 | $ 23,543 |
Portfolio turnover rateE | 111% | 92% | 124% | 125% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 27.11 | $ 21.51 | $ 23.11 | $ 17.29 | $ 15.70 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.38) | (.17) | (.18) | (.24) | (.19) |
Net realized and unrealized gain (loss) | 8.68 | 8.31 | 1.22 | 6.06 | 1.78 |
Total from investment operations | 8.30 | 8.14 | 1.04 | 5.82 | 1.59 |
Distributions from net realized gain | (3.38) | (2.54) | (2.64) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 32.03 | $ 27.11 | $ 21.51 | $ 23.11 | $ 17.29 |
Total ReturnA, B | 33.83% | 41.74% | 6.80% | 33.66% | 10.13% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.83% | 1.87% | 1.90% | 1.90% | 1.94% |
Expenses net of fee waivers, if any | 1.83% | 1.87% | 1.90% | 1.90% | 1.94% |
Expenses net of all reductions | 1.82% | 1.85% | 1.89% | 1.89% | 1.93% |
Net investment income (loss) | (1.29)% | (.74)% | (.89)% | (1.15)% | (1.08)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 257,859 | $ 125,965 | $ 78,763 | $ 77,749 | $ 60,861 |
Portfolio turnover rateE | 111% | 92% | 124% | 125% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 33.12 | $ 25.60 | $ 26.69 | $ 19.77 | $ 17.78 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | (.10) | .07 | .03 | (.03) | (.02) |
Net realized and unrealized gain (loss) | 10.80 | 10.07 | 1.52 | 6.95 | 2.01 |
Total from investment operations | 10.70 | 10.14 | 1.55 | 6.92 | 1.99 |
Distributions from net realized gain | (3.60) | (2.62) | (2.64) | - | - |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 40.22 | $ 33.12 | $ 25.60 | $ 26.69 | $ 19.77 |
Total ReturnA | 35.21% | 43.12% | 7.91% | 35.00% | 11.19% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .81% | .87% | .89% | .89% | .96% |
Expenses net of fee waivers, if any | .81% | .87% | .89% | .89% | .96% |
Expenses net of all reductions | .81% | .85% | .88% | .88% | .95% |
Net investment income (loss) | (.27)% | .26% | .12% | (.13)% | (.10)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 292,654 | $ 74,417 | $ 40,737 | $ 45,243 | $ 14,172 |
Portfolio turnover rateD | 111% | 92% | 124% | 125% | 103% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
1. Organization.
Fidelity Advisor Health Care 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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (Select Co) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Annual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. 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. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, deferred trustees compensation, net operating losses and losses deferred due to wash sales and excise tax regulations.
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 348,227,417 |
Gross unrealized depreciation | (26,094,106) |
Net unrealized appreciation (depreciation) on securities | $ 322,133,311 |
|
|
Tax Cost | $ 1,096,796,573 |
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 31,365,366 |
Undistributed long-term capital gain | $ 89,570,197 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 322,133,219 |
The Fund intends to elect to defer to its next fiscal year $4,464,013 of ordinary losses recognized during the period January 1, 2014 to July 31, 2014.
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 26,242,071 | $ 1,722,659 |
Long-term Capital Gains | 65,173,140 | 51,680,558 |
Total | $ 91,415,211 | $ 53,403,217 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,473,905,468 and $1,133,492,004, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 1,205,538 | $ 20,184 |
Class T | .25% | .25% | 951,294 | 3,110 |
Class B | .75% | .25% | 142,623 | 107,354 |
Class C | .75% | .25% | 1,866,193 | 501,935 |
|
|
| $ 4,165,648 | $ 632,583 |
Annual Report
5. Fees and Other Transactions with Affiliates - continued
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 380,868 |
Class T | 51,075 |
Class B* | 9,283 |
Class C * | 21,053 |
| $ 462,279 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 1,039,016 | .22 |
Class T | 429,879 | .23 |
Class B | 41,545 | .29 |
Class C | 399,920 | .21 |
Institutional Class | 319,592 | .20 |
| $ 2,229,952 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $15,471 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,642 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income
Annual Report
Notes to Financial Statements - continued
7. Security Lending - continued
earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $281,825. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $50,102 for the period. In addition, through arrangements with the Fund's custodian, 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 $54.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net realized gain |
|
|
Class A | $ 43,930,276 | $ 25,387,002 |
Class T | 18,842,643 | 13,085,534 |
Class B | 1,694,148 | 1,715,002 |
Class C | 17,484,352 | 9,051,114 |
Institutional Class | 9,463,792 | 4,164,565 |
Total | $ 91,415,211 | $ 53,403,217 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 7,083,573 | 3,549,260 | $ 246,500,176 | $ 93,836,372 |
Reinvestment of distributions | 1,286,052 | 942,761 | 39,516,716 | 22,474,621 |
Shares redeemed | (3,773,574) | (2,389,171) | (131,027,775) | (61,582,185) |
Net increase (decrease) | 4,596,051 | 2,102,850 | $ 154,989,117 | $ 54,728,808 |
Class T |
|
|
|
|
Shares sold | 1,019,177 | 680,868 | $ 33,380,934 | $ 17,081,065 |
Reinvestment of distributions | 618,886 | 547,411 | 18,107,896 | 12,508,788 |
Shares redeemed | (891,508) | (963,078) | (29,012,294) | (23,759,625) |
Net increase (decrease) | 746,555 | 265,201 | $ 22,476,536 | $ 5,830,228 |
Class B |
|
|
|
|
Shares sold | 52,714 | 53,093 | $ 1,492,321 | $ 1,227,477 |
Reinvestment of distributions | 57,285 | 72,420 | 1,511,205 | 1,510,947 |
Shares redeemed | (227,802) | (305,905) | (6,589,471) | (6,859,622) |
Net increase (decrease) | (117,803) | (180,392) | $ (3,585,945) | $ (4,121,198) |
Class C |
|
|
|
|
Shares sold | 3,765,135 | 1,458,495 | $ 111,711,536 | $ 33,813,707 |
Reinvestment of distributions | 567,385 | 363,077 | 14,940,641 | 7,555,835 |
Shares redeemed | (928,018) | (836,253) | (27,242,442) | (18,706,199) |
Net increase (decrease) | 3,404,502 | 985,319 | $ 99,409,735 | $ 22,663,343 |
Institutional Class |
|
|
|
|
Shares sold | 6,450,084 | 1,149,859 | $ 241,929,933 | $ 32,276,173 |
Reinvestment of distributions | 259,255 | 148,348 | 8,481,841 | 3,734,787 |
Shares redeemed | (1,678,853) | (643,078) | (61,586,966) | (17,037,906) |
Net increase (decrease) | 5,030,486 | 655,129 | $ 188,824,808 | $ 18,973,054 |
Annual Report
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report
Fidelity Advisor Industrials Fund - Institutional Class
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Institutional Class A | 12.82% | 19.18% | 11.82% |
A Prior to October 1, 2006, Fidelity Advisor Industrials Fund was named Fidelity Advisor Cyclical Industries Fund, and the fund operated under certain different investment policies and compared its performance to a different additional index. The fund's historical performance may not represent its current investment policies.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Industrials Fund - Institutional Class on July 31, 2004. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Industrials Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Tobias Welo, Portfolio Manager of Fidelity Advisor® Industrials Fund: During the year, the fund's Institutional Class shares returned 12.82%, trailing the 16.37% gain of the MSCI U.S. IMI Industrials 25-50 Index and also lagging the S&P 500®. During the period, the MSCI sector index was lifted by robust performance in airlines, construction machinery & heavy trucks, and aerospace & defense, while industrial conglomerates lagged. The fund missed out by not owning three strong-performing defense contractors in the MSCI index: Lockheed Martin, the fund's biggest relative detractor, Raytheon and Northrop Grumman. Despite shrinking orders and backlogs, these contractors were able to postpone their day of reckoning by carefully managing costs and aggressively returning capital to shareholders. We were also hurt by overweighting the lagging stock of United Technologies, the fund's largest position and an aerospace & defense company I liked because of its management team and diversified portfolio of businesses. Two aerospace & defense stocks I bought during the period, index components Boeing and General Dynamics, were both detractors from relative performance because the fund didn't own them earlier in the period when their stocks were rising. I built Boeing into the fund's third-largest holding by period end. Unfortunately, this stock's price declined modestly during the remainder of the period. Not owning strong-performing MSCI index component Southwest Airlines further held back our relative results, while Delta Air Lines was a relative detractor because I missed much of this stock's advance earlier in the period. Conversely, the top relative contributor was an out-of-benchmark stake in Golar LNG, a provider of shipping for liquefied natural gas (LNG) and a leader in the development of floating LNG facilities. Overweighting media research firm Nielsen Holdings also paid off, as did a large overweighting in Manitowoc, a manufacturer of cranes and food service equipment. American Airlines Group was the fund's seventh-largest relative contributor. American and Delta were purchased early in 2014.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.08% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,015.70 | $ 5.40 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.44 | $ 5.41 |
Class T | 1.33% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,014.50 | $ 6.64 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.20 | $ 6.66 |
Class B | 1.86% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,011.90 | $ 9.28 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.57 | $ 9.30 |
Class C | 1.82% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,011.90 | $ 9.08 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.77 | $ 9.10 |
Institutional Class | .81% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,016.90 | $ 4.05 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.78 | $ 4.06 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Industrials Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
United Technologies Corp. | 6.2 | 7.5 |
Danaher Corp. | 5.8 | 5.1 |
The Boeing Co. | 5.0 | 0.0 |
Union Pacific Corp. | 4.9 | 4.4 |
FedEx Corp. | 4.2 | 3.7 |
Caterpillar, Inc. | 4.1 | 3.8 |
Honeywell International, Inc. | 4.0 | 3.9 |
General Electric Co. | 3.8 | 6.9 |
Dun & Bradstreet Corp. | 2.9 | 1.5 |
Emerson Electric Co. | 2.7 | 2.2 |
| 43.6 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Aerospace & Defense | 22.3% |
|
| Machinery | 17.2% |
|
| Electrical Equipment | 9.7% |
|
| Industrial Conglomerates | 9.6% |
|
| Professional Services | 9.2% |
|
| All Others* | 32.0% |
|
As of January 31, 2014 | |||
| Machinery | 24.8% |
|
| Aerospace & Defense | 17.8% |
|
| Industrial Conglomerates | 12.0% |
|
| Electrical Equipment | 8.9% |
|
| Professional Services | 8.4% |
|
| All Others* | 28.1% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Industrials Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 98.1% | |||
Shares | Value | ||
AEROSPACE & DEFENSE - 22.3% | |||
Aerospace & Defense - 22.3% | |||
Alliant Techsystems, Inc. | 98,494 | $ 12,797,324 | |
General Dynamics Corp. | 191,862 | 22,403,726 | |
Honeywell International, Inc. | 380,033 | 34,898,430 | |
L-3 Communications Holdings, Inc. | 50,200 | 5,268,992 | |
Meggitt PLC | 374,741 | 3,217,154 | |
Teledyne Technologies, Inc. (a) | 79,973 | 7,293,538 | |
Textron, Inc. | 281,478 | 10,237,355 | |
The Boeing Co. | 359,929 | 43,364,246 | |
United Technologies Corp. | 519,651 | 54,641,303 | |
| 194,122,068 | ||
AIR FREIGHT & LOGISTICS - 4.2% | |||
Air Freight & Logistics - 4.2% | |||
FedEx Corp. | 252,188 | 37,041,373 | |
AIRLINES - 3.9% | |||
Airlines - 3.9% | |||
American Airlines Group, Inc. | 377,332 | 14,659,348 | |
Delta Air Lines, Inc. | 512,600 | 19,201,996 | |
| 33,861,344 | ||
AUTO COMPONENTS - 1.0% | |||
Auto Parts & Equipment - 1.0% | |||
Johnson Controls, Inc. | 184,576 | 8,719,370 | |
BUILDING PRODUCTS - 2.5% | |||
Building Products - 2.5% | |||
A.O. Smith Corp. | 314,842 | 14,703,121 | |
Lennox International, Inc. | 86,204 | 7,354,925 | |
| 22,058,046 | ||
COMMERCIAL SERVICES & SUPPLIES - 2.9% | |||
Diversified Support Services - 1.0% | |||
KAR Auction Services, Inc. | 306,700 | 8,989,377 | |
Environmental & Facility Services - 1.4% | |||
Waste Connections, Inc. | 245,700 | 11,631,438 | |
Office Services & Supplies - 0.5% | |||
West Corp. | 165,300 | 4,259,781 | |
TOTAL COMMERCIAL SERVICES & SUPPLIES | 24,880,596 | ||
CONSTRUCTION & ENGINEERING - 4.1% | |||
Construction & Engineering - 4.1% | |||
EMCOR Group, Inc. | 232,941 | 9,534,275 | |
Jacobs Engineering Group, Inc. (a) | 215,600 | 10,954,636 | |
MasTec, Inc. (a) | 316,804 | 8,613,901 | |
Tutor Perini Corp. (a) | 257,535 | 7,012,678 | |
| 36,115,490 | ||
ELECTRICAL EQUIPMENT - 9.7% | |||
Electrical Components & Equipment - 8.8% | |||
Eaton Corp. PLC | 321,260 | 21,819,979 | |
| |||
Shares | Value | ||
Emerson Electric Co. | 363,253 | $ 23,121,053 | |
EnerSys | 83,300 | 5,283,719 | |
Generac Holdings, Inc. (a)(d) | 107,744 | 4,676,090 | |
Hubbell, Inc. Class B | 71,426 | 8,352,556 | |
Rockwell Automation, Inc. | 118,345 | 13,214,403 | |
| 76,467,800 | ||
Heavy Electrical Equipment - 0.9% | |||
Babcock & Wilcox Co. | 253,600 | 7,871,744 | |
TOTAL ELECTRICAL EQUIPMENT | 84,339,544 | ||
ENERGY EQUIPMENT & SERVICES - 0.4% | |||
Oil & Gas Equipment & Services - 0.4% | |||
Aspen Aerogels, Inc. (a) | 389,214 | 3,152,633 | |
INDUSTRIAL CONGLOMERATES - 9.6% | |||
Industrial Conglomerates - 9.6% | |||
Danaher Corp. | 680,632 | 50,285,092 | |
General Electric Co. | 1,328,648 | 33,415,497 | |
| 83,700,589 | ||
MACHINERY - 17.2% | |||
Agricultural & Farm Machinery - 1.3% | |||
Deere & Co. | 129,950 | 11,060,045 | |
Construction Machinery & Heavy Trucks - 9.0% | |||
Caterpillar, Inc. | 359,053 | 36,174,590 | |
Cummins, Inc. | 126,309 | 17,606,212 | |
Manitowoc Co., Inc. | 740,156 | 19,658,543 | |
Wabtec Corp. | 63,405 | 5,115,515 | |
| 78,554,860 | ||
Industrial Machinery - 6.9% | |||
Crane Co. | 80,500 | 5,523,105 | |
Dover Corp. | 110,921 | 9,512,585 | |
Global Brass & Copper Holdings, Inc. | 106,540 | 1,617,277 | |
Hyster-Yale Materials Handling Class A | 28,800 | 2,306,880 | |
IDEX Corp. | 87,529 | 6,636,449 | |
Pall Corp. | 136,016 | 10,537,160 | |
Timken Co. | 104,707 | 4,638,520 | |
Valmont Industries, Inc. (d) | 135,009 | 19,661,361 | |
| 60,433,337 | ||
TOTAL MACHINERY | 150,048,242 | ||
OIL, GAS & CONSUMABLE FUELS - 2.1% | |||
Oil & Gas Storage & Transport - 2.1% | |||
Golar LNG Ltd. (d) | 176,800 | 10,892,648 | |
Scorpio Tankers, Inc. | 836,675 | 7,856,378 | |
| 18,749,026 | ||
PROFESSIONAL SERVICES - 9.2% | |||
Human Resource & Employment Services - 2.2% | |||
Towers Watson & Co. | 190,184 | 19,402,572 | |
Research & Consulting Services - 7.0% | |||
CRA International, Inc. (a) | 92,701 | 2,213,700 | |
Common Stocks - continued | |||
Shares | Value | ||
PROFESSIONAL SERVICES - CONTINUED | |||
Research & Consulting Services - continued | |||
Dun & Bradstreet Corp. | 225,696 | $ 24,833,331 | |
Huron Consulting Group, Inc. (a) | 178,620 | 10,795,793 | |
Nielsen Holdings B.V. | 254,012 | 11,712,493 | |
Verisk Analytics, Inc. (a) | 190,644 | 11,446,266 | |
| 61,001,583 | ||
TOTAL PROFESSIONAL SERVICES | 80,404,155 | ||
ROAD & RAIL - 7.2% | |||
Railroads - 4.9% | |||
Union Pacific Corp. | 433,228 | 42,590,645 | |
Trucking - 2.3% | |||
J.B. Hunt Transport Services, Inc. | 263,381 | 20,348,816 | |
TOTAL ROAD & RAIL | 62,939,461 | ||
TRADING COMPANIES & DISTRIBUTORS - 1.8% | |||
Trading Companies & Distributors - 1.8% | |||
W.W. Grainger, Inc. | 41,194 | 9,686,769 | |
WESCO International, Inc. (a) | 71,120 | 5,582,209 | |
| 15,268,978 | ||
TOTAL COMMON STOCKS (Cost $723,710,324) |
| ||
Money Market Funds - 4.1% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 0.11% (b) | 13,177,520 | $ 13,177,520 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 22,817,564 | 22,817,564 | |
TOTAL MONEY MARKET FUNDS (Cost $35,995,084) |
| ||
TOTAL INVESTMENT PORTFOLIO - 102.2% (Cost $759,705,408) | 891,395,999 | ||
NET OTHER ASSETS (LIABILITIES) - (2.2)% | (19,080,650) | ||
NET ASSETS - 100% | $ 872,315,349 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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 | $ 11,987 |
Fidelity Securities Lending Cash Central Fund | 23,336 |
Total | $ 35,323 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 855,400,915 | $ 852,248,282 | $ 3,152,633 | $ - |
Money Market Funds | 35,995,084 | 35,995,084 | - | - |
Total Investments in Securities: | $ 891,395,999 | $ 888,243,366 | $ 3,152,633 | $ - |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Industrials Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $21,755,840) - See accompanying schedule: Unaffiliated issuers (cost $723,710,324) | $ 855,400,915 |
|
Fidelity Central Funds (cost $35,995,084) | 35,995,084 |
|
Total Investments (cost $759,705,408) |
| $ 891,395,999 |
Cash |
| 104,679 |
Receivable for investments sold | 18,056,455 | |
Receivable for fund shares sold | 2,022,472 | |
Dividends receivable | 823,574 | |
Distributions receivable from Fidelity Central Funds | 10,246 | |
Other receivables | 5,180 | |
Total assets | 912,418,605 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 11,351,860 | |
Payable for fund shares redeemed | 4,997,274 | |
Accrued management fee | 418,920 | |
Distribution and service plan fees payable | 264,104 | |
Other affiliated payables | 180,622 | |
Other payables and accrued expenses | 72,912 | |
Collateral on securities loaned, at value | 22,817,564 | |
Total liabilities | 40,103,256 | |
|
|
|
Net Assets | $ 872,315,349 | |
Net Assets consist of: |
| |
Paid in capital | $ 691,165,665 | |
Undistributed net investment income | 853,887 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 48,604,718 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 131,691,079 | |
Net Assets | $ 872,315,349 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 36.92 | |
|
|
|
Maximum offering price per share (100/94.25 of $36.92) | $ 39.17 | |
Class T: | $ 36.29 | |
|
|
|
Maximum offering price per share (100/96.50 of $36.29) | $ 37.61 | |
Class B: | $ 34.02 | |
|
|
|
Class C: | $ 34.13 | |
|
|
|
Institutional Class: | $ 38.42 | |
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.
Annual Report
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 10,749,313 |
Interest |
| 181,995 |
Income from Fidelity Central Funds |
| 35,323 |
Total income |
| 10,966,631 |
|
|
|
Expenses | ||
Management fee | $ 4,166,182 | |
Transfer agent fees | 1,607,682 | |
Distribution and service plan fees | 2,751,687 | |
Accounting and security lending fees | 265,537 | |
Custodian fees and expenses | 26,698 | |
Independent trustees' compensation | 17,623 | |
Registration fees | 136,709 | |
Audit | 50,777 | |
Legal | 9,103 | |
Miscellaneous | 8,593 | |
Total expenses before reductions | 9,040,591 | |
Expense reductions | (22,773) | 9,017,818 |
Net investment income (loss) | 1,948,813 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 62,723,049 | |
Foreign currency transactions | (3,302) | |
Total net realized gain (loss) |
| 62,719,747 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 7,086,272 | |
Assets and liabilities in foreign currencies | 284 | |
Total change in net unrealized appreciation (depreciation) |
| 7,086,556 |
Net gain (loss) | 69,806,303 | |
Net increase (decrease) in net assets resulting from operations | $ 71,755,116 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 1,948,813 | $ 2,656,191 |
Net realized gain (loss) | 62,719,747 | 38,246,997 |
Change in net unrealized appreciation (depreciation) | 7,086,556 | 82,647,313 |
Net increase (decrease) in net assets resulting from operations | 71,755,116 | 123,550,501 |
Distributions to shareholders from net investment income | (2,130,491) | (2,791,779) |
Distributions to shareholders from net realized gain | (26,777,623) | - |
Total distributions | (28,908,114) | (2,791,779) |
Share transactions - net increase (decrease) | 286,586,081 | 36,897,765 |
Redemption fees | 23,406 | 13,370 |
Total increase (decrease) in net assets | 329,456,489 | 157,669,857 |
|
|
|
Net Assets | ||
Beginning of period | 542,858,860 | 385,189,003 |
End of period (including undistributed net investment income of $853,887 and undistributed net investment income of $768,614, respectively) | $ 872,315,349 | $ 542,858,860 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 34.50 | $ 26.18 | $ 25.73 | $ 21.54 | $ 16.87 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .13 | .23 | .20 | .09 | .06 |
Net realized and unrealized gain (loss) | 4.01 | 8.33 | .61 | 4.13 | 4.68 |
Total from investment operations | 4.14 | 8.56 | .81 | 4.22 | 4.74 |
Distributions from net investment income | (.15) | (.24) | (.11) | (.03) | (.07) |
Distributions from net realized gain | (1.58) | - | (.25) | - | - |
Total distributions | (1.72) H | (.24) | (.36) | (.03) | (.07) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 36.92 | $ 34.50 | $ 26.18 | $ 25.73 | $ 21.54 |
Total ReturnA, B | 12.52% | 32.92% | 3.42% | 19.59% | 28.13% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.09% | 1.11% | 1.14% | 1.13% | 1.18% |
Expenses net of fee waivers, if any | 1.09% | 1.11% | 1.14% | 1.13% | 1.18% |
Expenses net of all reductions | 1.09% | 1.11% | 1.14% | 1.13% | 1.17% |
Net investment income (loss) | .37% | .77% | .80% | .36% | .31% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 378,826 | $ 271,512 | $ 192,038 | $ 228,106 | $ 165,029 |
Portfolio turnover rateE | 57% | 78% | 82% | 75% | 110% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
H Total distributions of $1.72 per share is comprised of distributions from net investment income of $.146 and distributions from net realized gain of $1.577 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 33.93 | $ 25.75 | $ 25.33 | $ 21.24 | $ 16.64 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .04 | .15 | .13 | .03 | .01 |
Net realized and unrealized gain (loss) | 3.95 | 8.20 | .61 | 4.07 | 4.61 |
Total from investment operations | 3.99 | 8.35 | .74 | 4.10 | 4.62 |
Distributions from net investment income | (.06) | (.17) | (.07) | (.01) | (.02) |
Distributions from net realized gain | (1.58) | - | (.25) | - | - |
Total distributions | (1.63) H | (.17) | (.32) | (.01) | (.02) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 36.29 | $ 33.93 | $ 25.75 | $ 25.33 | $ 21.24 |
Total ReturnA, B | 12.27% | 32.60% | 3.15% | 19.28% | 27.80% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.33% | 1.37% | 1.40% | 1.39% | 1.44% |
Expenses net of fee waivers, if any | 1.33% | 1.37% | 1.40% | 1.39% | 1.44% |
Expenses net of all reductions | 1.33% | 1.36% | 1.39% | 1.38% | 1.43% |
Net investment income (loss) | .12% | .52% | .54% | .10% | .06% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 90,509 | $ 79,172 | $ 63,954 | $ 71,542 | $ 58,202 |
Portfolio turnover rateE | 57% | 78% | 82% | 75% | 110% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
H Total distributions of $1.63 per share is comprised of distributions from net investment income of $.057 and distributions from net realized gain of $1.577 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 31.97 | $ 24.29 | $ 23.99 | $ 20.22 | $ 15.90 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.14) | (.01) | - H | (.11) | (.09) |
Net realized and unrealized gain (loss) | 3.71 | 7.74 | .57 | 3.88 | 4.41 |
Total from investment operations | 3.57 | 7.73 | .57 | 3.77 | 4.32 |
Distributions from net investment income | - | (.05) | (.02) | - | - |
Distributions from net realized gain | (1.52) | - | (.25) | - | - |
Total distributions | (1.52) | (.05) | (.27) | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 34.02 | $ 31.97 | $ 24.29 | $ 23.99 | $ 20.22 |
Total ReturnA, B | 11.64% | 31.87% | 2.59% | 18.64% | 27.17% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 1.88% | 1.92% | 1.94% | 1.93% | 1.97% |
Expenses net of fee waivers, if any | 1.88% | 1.92% | 1.94% | 1.93% | 1.97% |
Expenses net of all reductions | 1.87% | 1.91% | 1.94% | 1.93% | 1.97% |
Net investment income (loss) | (.42)% | (.04)% | -% F | (.44)% | (.48)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 12,459 | $ 17,502 | $ 20,058 | $ 28,600 | $ 29,048 |
Portfolio turnover rateE | 57% | 78% | 82% | 75% | 110% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Amount represents less than .01%.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 32.08 | $ 24.38 | $ 24.07 | $ 20.28 | $ 15.94 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.13) | .01 | .01 | (.09) | (.08) |
Net realized and unrealized gain (loss) | 3.73 | 7.75 | .58 | 3.88 | 4.42 |
Total from investment operations | 3.60 | 7.76 | .59 | 3.79 | 4.34 |
Distributions from net investment income | - | (.06) | (.03) | - | - |
Distributions from net realized gain | (1.55) | - | (.25) | - | - |
Total distributions | (1.55) | (.06) | (.28) | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 34.13 | $ 32.08 | $ 24.38 | $ 24.07 | $ 20.28 |
Total ReturnA, B | 11.71% | 31.90% | 2.67% | 18.69% | 27.23% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.83% | 1.87% | 1.89% | 1.89% | 1.93% |
Expenses net of fee waivers, if any | 1.83% | 1.87% | 1.89% | 1.89% | 1.93% |
Expenses net of all reductions | 1.83% | 1.86% | 1.88% | 1.88% | 1.92% |
Net investment income (loss) | (.38)% | .02% | .05% | (.40)% | (.43)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 147,749 | $ 89,893 | $ 66,289 | $ 72,673 | $ 51,760 |
Portfolio turnover rateE | 57% | 78% | 82% | 75% | 110% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 35.83 | $ 27.18 | $ 26.69 | $ 22.30 | $ 17.45 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .25 | .33 | .28 | .17 | .13 |
Net realized and unrealized gain (loss) | 4.16 | 8.64 | .63 | 4.28 | 4.83 |
Total from investment operations | 4.41 | 8.97 | .91 | 4.45 | 4.96 |
Distributions from net investment income | (.24) | (.32) | (.17) | (.06) | (.11) |
Distributions from net realized gain | (1.58) | - | (.25) | - | - |
Total distributions | (1.82) | (.32) | (.42) | (.06) | (.11) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 38.42 | $ 35.83 | $ 27.18 | $ 26.69 | $ 22.30 |
Total ReturnA | 12.82% | 33.28% | 3.72% | 19.95% | 28.52% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .81% | .84% | .85% | .85% | .89% |
Expenses net of fee waivers, if any | .81% | .84% | .85% | .85% | .89% |
Expenses net of all reductions | .81% | .83% | .85% | .84% | .88% |
Net investment income (loss) | .64% | 1.04% | 1.08% | .65% | .61% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 242,772 | $ 84,780 | $ 42,850 | $ 68,323 | $ 29,578 |
Portfolio turnover rateD | 57% | 78% | 82% | 75% | 110% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Investment Valuation - continued
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. 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. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, original issue discount and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 146,109,784 |
Gross unrealized depreciation | (16,224,896) |
Net unrealized appreciation (depreciation) on securities | $ 129,884,888 |
|
|
Tax Cost | $ 761,511,111 |
Annual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 3,380,032 |
Undistributed long-term capital gain | $ 47,884,277 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 129,885,376 |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 6,372,762 | $ 2,791,779 |
Long-term Capital Gains | 22,535,352 | - |
Total | $ 28,908,114 | $ 2,791,779 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $671,449,261 and $419,224,664, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 887,322 | $ 12,709 |
Class T | .25% | .25% | 444,818 | 3,652 |
Class B | .75% | .25% | 155,692 | 116,923 |
Class C | .75% | .25% | 1,263,855 | 380,560 |
|
|
| $ 2,751,687 | $ 513,844 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
Annual Report
Notes to Financial Statements - continued
5. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 229,224 |
Class T | 26,327 |
Class B* | 9,555 |
Class C* | 15,004 |
| $ 280,110 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 778,043 | .22 |
Class T | 190,529 | .21 |
Class B | 39,759 | .26 |
Class C | 270,482 | .21 |
Institutional Class | 328,869 | .19 |
| $ 1,607,682 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $11,936 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,222 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $23,336. During the period, there were no securities loaned to FCM.
Annual Report
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $22,746 for the period. In addition, through arrangements with the Fund's custodian, 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 $27.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net investment income |
|
|
Class A | $ 1,245,229 | $ 1,710,170 |
Class T | 134,405 | 408,593 |
Class B | - | 36,770 |
Class C | - | 160,671 |
Institutional Class | 750,857 | 475,575 |
Total | $ 2,130,491 | $ 2,791,779 |
From net realized gain |
|
|
Class A | $ 13,069,252 | $ - |
Class T | 3,703,526 | - |
Class B | 784,693 | - |
Class C | 4,700,595 | - |
Institutional Class | 4,519,557 | - |
Total | $ 26,777,623 | $ - |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 4,772,547 | 2,574,295 | $ 175,272,457 | $ 79,657,790 |
Reinvestment of distributions | 371,629 | 53,714 | 12,577,496 | 1,500,721 |
Shares redeemed | (2,753,437) | (2,093,962) | (102,587,048) | (62,545,427) |
Net increase (decrease) | 2,390,739 | 534,047 | $ 85,262,905 | $ 18,613,084 |
Class T |
|
|
|
|
Shares sold | 488,031 | 353,347 | $ 17,620,607 | $ 10,754,227 |
Reinvestment of distributions | 111,368 | 14,180 | 3,695,039 | 390,674 |
Shares redeemed | (438,393) | (517,661) | (15,778,298) | (15,034,025) |
Net increase (decrease) | 161,006 | (150,134) | $ 5,537,348 | $ (3,889,124) |
Class B |
|
|
|
|
Shares sold | 23,437 | 24,479 | $ 779,028 | $ 701,454 |
Reinvestment of distributions | 20,842 | 1,145 | 646,413 | 30,226 |
Shares redeemed | (225,514) | (303,898) | (7,608,429) | (8,464,475) |
Net increase (decrease) | (181,235) | (278,274) | $ (6,182,988) | $ (7,732,795) |
Class C |
|
|
|
|
Shares sold | 2,035,151 | 682,170 | $ 69,252,170 | $ 19,951,920 |
Reinvestment of distributions | 122,955 | 5,091 | 3,851,644 | 134,814 |
Shares redeemed | (631,000) | (604,905) | (21,673,420) | (16,678,512) |
Net increase (decrease) | 1,527,106 | 82,356 | $ 51,430,394 | $ 3,408,222 |
Institutional Class |
|
|
|
|
Shares sold | 5,450,475 | 1,667,388 | $ 209,069,151 | $ 53,671,489 |
Reinvestment of distributions | 116,471 | 12,331 | 4,133,979 | 356,365 |
Shares redeemed | (1,614,908) | (890,195) | (62,664,708) | (27,529,476) |
Net increase (decrease) | 3,952,038 | 789,524 | $ 150,538,422 | $ 26,498,378 |
Annual Report
Notes to Financial Statements - continued
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report
Fidelity Advisor Technology Fund - Institutional Class
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Institutional Class | 22.55% | 18.26% | 10.49% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Technology Fund - Institutional Class on July 31, 2004. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Technology Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Charlie Chai, Portfolio Manager of Fidelity Advisor® Technology Fund: For the year, the fund's Institutional Class shares returned 22.55%, trailing the 26.28% gain of the MSCI U.S. IMI Information Technology 25-50 Index but topping the S&P 500®. Strong results in a variety of technology subsectors - notably, technology hardware, storage & peripherals - enabled the MSCI sector index to outpace the S&P 500® by a healthy margin. Versus the MSCI index, a rotation from growth to value stocks in March and April hurt many of the smaller-cap growth shares owned by the fund. Further, although the MSCI sector index easily outperformed the S&P 500® during the period, the best performance was concentrated in large-caps, as investors in the sector remained somewhat cautious. Consequently, the fund's underexposure to large-caps hampered performance. A resurgence of personal computer-related stocks in the index also detracted from our relative results. Specifically, the fund was hurt by a large underweighting in operating system software provider Microsoft and no stake in PC chipmaker Intel, the two biggest detractors from the fund's relative performance. An average overweighting in NCR also worked against us. When this maker of ATMs and point-of-sale payment devices missed its sales estimates for the third quarter of 2013, I sold down and eventually eliminated this position in favor of other stocks I thought had more potential. Lastly, the fund's cash position dampened its relative performance. Conversely, although my decision to underweight stocks with more than $100 billion in market capitalization hurt our relative results, security selection in this group was a positive. In particular, largely avoiding IT consulting heavyweight IBM was timely, as the share price of this slow-growing index component struggled around the break-even mark during the period. The fund did not hold IBM at period end. One theme that paid off for the fund during the period was mobile messaging. A contributor here was South Korea-based NAVER, which I built into a major position. Another important mobile messaging player that contributed was China's Tencent Holdings, with its WeChat application, which combines instant messaging and social networking capabilities. Tencent was buoyed partly by a five-for-one stock split in May, and I sold some of the position to lock in profits, as I thought the upside potential elsewhere might be better. NAVER and Tencent were non-index holdings.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.12% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,057.50 | $ 5.71 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.24 | $ 5.61 |
Class T | 1.37% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,056.40 | $ 6.99 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.00 | $ 6.85 |
Class B | 1.91% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,053.30 | $ 9.72 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.32 | $ 9.54 |
Class C | 1.86% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,053.70 | $ 9.47 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.57 | $ 9.30 |
Institutional Class | .82% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,059.00 | $ 4.19 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.73 | $ 4.11 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Technology Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Apple, Inc. | 13.6 | 4.5 |
Google, Inc. Class C | 4.9 | 0.0 |
Google, Inc. Class A | 4.4 | 10.4 |
Microsoft Corp. | 4.3 | 4.6 |
Facebook, Inc. Class A | 3.7 | 4.6 |
Fidelity National Information Services, Inc. | 2.6 | 2.4 |
NAVER Corp. | 2.5 | 2.5 |
Yahoo!, Inc. | 2.3 | 5.3 |
Baidu.com, Inc. sponsored ADR | 2.0 | 0.0 |
Ctrip.com International Ltd. sponsored ADR | 1.5 | 0.1 |
| 41.8 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Internet Software | 27.7% |
|
| Software | 17.2% |
|
| Technology Hardware, Storage & Peripherals | 17.1% |
|
| Semiconductors & Semiconductor Equipment | 9.9% |
|
| IT Services | 8.9% |
|
| All Others* | 19.2% |
|
As of January 31, 2014 | |||
| Internet Software | 32.2% |
|
| Software | 18.6% |
|
| IT Services | 12.5% |
|
| Semiconductors & Semiconductor Equipment | 9.1% |
|
| Computers & Peripherals | 8.0% |
|
| All Others* | 19.6% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Technology Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 98.0% | |||
Shares | Value | ||
AUTOMOBILES - 0.5% | |||
Automobile Manufacturers - 0.5% | |||
Tesla Motors, Inc. (a) | 24,809 | $ 5,539,850 | |
COMMUNICATIONS EQUIPMENT - 3.9% | |||
Communications Equipment - 3.9% | |||
ADVA Optical Networking SE (a) | 151,224 | 562,535 | |
F5 Networks, Inc. (a) | 32,443 | 3,652,757 | |
Ixia (a) | 203,925 | 2,181,998 | |
Juniper Networks, Inc. | 330,666 | 7,783,878 | |
Palo Alto Networks, Inc. (a) | 21,900 | 1,770,834 | |
Procera Networks, Inc. (a) | 19,700 | 197,197 | |
QUALCOMM, Inc. | 158,000 | 11,644,600 | |
Radware Ltd. (a) | 235,510 | 3,860,009 | |
Riverbed Technology, Inc. (a) | 328,955 | 5,888,295 | |
Sandvine Corp. (U.K.) (a)(f) | 278,700 | 915,069 | |
Sonus Networks, Inc. (a) | 713,653 | 2,519,195 | |
Spirent Communications PLC | 2,996,468 | 5,205,646 | |
| 46,182,013 | ||
CONSTRUCTION MATERIALS - 0.0% | |||
Construction Materials - 0.0% | |||
Universal Cement Corp. | 371,280 | 359,073 | |
DIVERSIFIED CONSUMER SERVICES - 0.2% | |||
Education Services - 0.0% | |||
TAL Education Group ADR (a) | 19,600 | 577,220 | |
Specialized Consumer Services - 0.2% | |||
LifeLock, Inc. (a) | 128,967 | 1,790,062 | |
TOTAL DIVERSIFIED CONSUMER SERVICES | 2,367,282 | ||
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.2% | |||
Alternative Carriers - 0.2% | |||
8x8, Inc. (a) | 247,500 | 1,999,800 | |
ELECTRICAL EQUIPMENT - 0.9% | |||
Electrical Components & Equipment - 0.9% | |||
Acuity Brands, Inc. | 79,000 | 8,474,330 | |
BizLink Holding, Inc. | 371,673 | 1,478,571 | |
BizLink Holding, Inc. rights 9/9/14 (a) | 9,301 | 3,032 | |
Zippy Technology Corp. | 300,000 | 477,591 | |
| 10,433,524 | ||
ELECTRONIC EQUIPMENT & COMPONENTS - 6.4% | |||
Electronic Components - 3.7% | |||
Alps Electric Co. Ltd. | 638,400 | 8,861,022 | |
Delta Electronics, Inc. | 430,000 | 2,914,993 | |
Iljin Materials Co. Ltd. (a) | 8,820 | 88,446 | |
InvenSense, Inc. (a)(d) | 354,526 | 8,157,643 | |
Largan Precision Co. Ltd. | 68,000 | 5,211,438 | |
Ledlink Optics, Inc. | 586,118 | 1,135,849 | |
LG Innotek Co. Ltd. (a) | 8,541 | 1,034,079 | |
OMRON Corp. | 119,900 | 5,317,894 | |
| |||
Shares | Value | ||
Samsung SDI Co. Ltd. | 1,973 | $ 303,760 | |
Sapphire Technology Co. Ltd. (a) | 10,342 | 312,531 | |
Sunny Optical Technology Group Co. Ltd. (d) | 3,146,000 | 4,137,588 | |
Yageo Corp. | 9,150,000 | 6,158,231 | |
Yaskawa Electric Corp. | 37,000 | 482,212 | |
| 44,115,686 | ||
Electronic Equipment & Instruments - 1.2% | |||
Chroma ATE, Inc. | 1,253,683 | 3,314,619 | |
DynaColor, Inc. | 178,000 | 439,843 | |
FEI Co. | 3,300 | 252,780 | |
PAX Global Technology Ltd. (a) | 3,389,000 | 2,597,816 | |
Posiflex Technologies, Inc. | 20,100 | 121,525 | |
TPK Holding Co. Ltd. | 1,138,000 | 7,126,163 | |
| 13,852,746 | ||
Electronic Manufacturing Services - 1.1% | |||
AIC, Inc. | 87,000 | 507,623 | |
Merry Electronics Co. Ltd. | 222,000 | 1,103,191 | |
TE Connectivity Ltd. | 78,529 | 4,860,160 | |
Trimble Navigation Ltd. (a) | 230,796 | 7,131,596 | |
| 13,602,570 | ||
Technology Distributors - 0.4% | |||
Digital China Holdings Ltd. (H Shares) | 4,302,000 | 4,233,946 | |
TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 75,804,948 | ||
HEALTH CARE EQUIPMENT & SUPPLIES - 0.3% | |||
Health Care Equipment - 0.3% | |||
Intai Technology Corp. | 439,000 | 2,441,811 | |
PW Medtech Group Ltd. (a) | 946,000 | 492,014 | |
| 2,933,825 | ||
HEALTH CARE PROVIDERS & SERVICES - 0.0% | |||
Managed Health Care - 0.0% | |||
Healthequity, Inc. (a) | 3,000 | 52,800 | |
HEALTH CARE TECHNOLOGY - 1.3% | |||
Health Care Technology - 1.3% | |||
athenahealth, Inc. (a)(d) | 36,494 | 4,539,854 | |
M3, Inc. | 222,100 | 3,584,682 | |
Medidata Solutions, Inc. (a) | 165,900 | 7,438,956 | |
| 15,563,492 | ||
HOUSEHOLD DURABLES - 0.1% | |||
Consumer Electronics - 0.0% | |||
Skyworth Digital Holdings Ltd. | 862,000 | 425,486 | |
Housewares & Specialties - 0.1% | |||
Cuckoo Electronics Co. Ltd. | 5,068 | 487,080 | |
TOTAL HOUSEHOLD DURABLES | 912,566 | ||
INTERNET & CATALOG RETAIL - 1.7% | |||
Internet Retail - 1.7% | |||
Cogobuy Group (a) | 2,292,000 | 1,137,774 | |
Common Stocks - continued | |||
Shares | Value | ||
INTERNET & CATALOG RETAIL - CONTINUED | |||
Internet Retail - continued | |||
Ctrip.com International Ltd. sponsored ADR (a) | 281,912 | $ 18,050,825 | |
HomeAway, Inc. (a) | 99 | 3,437 | |
InterPark INT Corp. | 2,302 | 42,144 | |
Jumei International Holding Ltd. sponsored ADR | 2,200 | 62,788 | |
MySale Group PLC | 5,700 | 20,016 | |
RetailMeNot, Inc. (d) | 21,800 | 533,228 | |
TripAdvisor, Inc. (a) | 4,748 | 450,300 | |
| 20,300,512 | ||
INTERNET SOFTWARE & SERVICES - 27.4% | |||
Internet Software & Services - 27.4% | |||
21Vianet Group, Inc. ADR (a) | 129,800 | 3,612,334 | |
58.com, Inc. ADR (d) | 90,400 | 4,443,160 | |
Addcn Technology Co. Ltd. | 7,000 | 87,005 | |
Amber Road, Inc. (a) | 1,000 | 13,700 | |
Autohome, Inc. ADR Class A | 53,900 | 1,996,995 | |
Baidu.com, Inc. sponsored ADR (a) | 109,200 | 23,592,660 | |
Benefitfocus, Inc. (d) | 14,400 | 554,976 | |
blinkx PLC (a) | 241,500 | 140,665 | |
ChannelAdvisor Corp. (a) | 227,092 | 5,207,220 | |
Constant Contact, Inc. (a) | 38,900 | 1,210,957 | |
Cornerstone OnDemand, Inc. (a) | 182,032 | 7,616,219 | |
Cvent, Inc. | 56,808 | 1,551,426 | |
Demandware, Inc. (a) | 29,006 | 1,747,321 | |
E2open, Inc. (a)(d) | 140,926 | 2,280,183 | |
eGain Communications Corp. (a) | 54,950 | 350,032 | |
Endurance International Group Holdings, Inc. (d) | 554,800 | 7,561,924 | |
Facebook, Inc. Class A (a) | 604,011 | 43,881,399 | |
Google, Inc.: | |||
Class A (a) | 89,187 | 51,688,326 | |
Class C (a) | 99,887 | 57,095,409 | |
Just Dial Ltd. (a) | 4,643 | 127,459 | |
LinkedIn Corp. (a) | 33,800 | 6,105,632 | |
Marketo, Inc. (a) | 96,113 | 2,628,691 | |
Move, Inc. (a) | 254,813 | 3,720,270 | |
NAVER Corp. | 41,957 | 29,954,889 | |
NIC, Inc. | 50,508 | 852,070 | |
Opower, Inc. | 34,800 | 556,800 | |
Q2 Holdings, Inc. (a) | 31,300 | 412,221 | |
Rackspace Hosting, Inc. (a) | 36,639 | 1,109,795 | |
SciQuest, Inc. (a) | 59,654 | 918,075 | |
SouFun Holdings Ltd. ADR | 12,200 | 139,934 | |
TelecityGroup PLC | 275,632 | 3,699,529 | |
Tencent Holdings Ltd. | 557,200 | 9,048,794 | |
Textura Corp. (a)(d) | 134,915 | 3,368,828 | |
Trulia, Inc. (a) | 27,700 | 1,676,681 | |
Twitter, Inc. | 114,600 | 5,178,774 | |
Web.com Group, Inc. (a) | 156,586 | 4,157,358 | |
| |||
Shares | Value | ||
Yahoo!, Inc. (a) | 741,804 | $ 26,564,001 | |
Yandex NV (a) | 115,800 | 3,506,424 | |
Yelp, Inc. (a)(d) | 39,843 | 2,675,856 | |
YY, Inc. ADR (a)(d) | 15,700 | 1,213,924 | |
| 322,247,916 | ||
IT SERVICES - 8.9% | |||
Data Processing & Outsourced Services - 7.5% | |||
Alliance Data Systems Corp. (a) | 26,000 | 6,819,540 | |
Computer Sciences Corp. | 154,800 | 9,657,972 | |
DST Systems, Inc. | 61,768 | 5,563,444 | |
Euronet Worldwide, Inc. (a) | 26,335 | 1,317,803 | |
Fidelity National Information Services, Inc. | 541,195 | 30,523,398 | |
Fiserv, Inc. (a) | 39,291 | 2,423,076 | |
Global Payments, Inc. | 33,000 | 2,285,910 | |
MasterCard, Inc. Class A | 79,500 | 5,894,925 | |
NETELLER PLC (a) | 819,150 | 6,264,858 | |
QIWI PLC Class B sponsored ADR (d) | 2,600 | 93,730 | |
Quindell PLC (d) | 382,073 | 1,322,360 | |
Total System Services, Inc. | 288,453 | 9,230,496 | |
Vantiv, Inc. (a) | 72,700 | 2,383,106 | |
Visa, Inc. Class A | 19,700 | 4,156,897 | |
| 87,937,515 | ||
IT Consulting & Other Services - 1.4% | |||
Cognizant Technology Solutions Corp. Class A (a) | 290,794 | 14,263,446 | |
EPAM Systems, Inc. (a) | 39,161 | 1,513,964 | |
Virtusa Corp. (a) | 30,400 | 950,912 | |
| 16,728,322 | ||
TOTAL IT SERVICES | 104,665,837 | ||
LEISURE PRODUCTS - 0.3% | |||
Leisure Products - 0.3% | |||
Bandai Namco Holdings, Inc. | 132,500 | 3,353,418 | |
Sega Sammy Holdings, Inc. | 31,100 | 615,205 | |
| 3,968,623 | ||
MACHINERY - 0.1% | |||
Industrial Machinery - 0.1% | |||
King Slide Works Co. Ltd. | 117,000 | 1,544,677 | |
MEDIA - 0.4% | |||
Broadcasting - 0.4% | |||
Fuji Media Holdings, Inc. | 303,600 | 4,848,568 | |
Publishing - 0.0% | |||
NEXT Co. Ltd. | 41,100 | 306,753 | |
TOTAL MEDIA | 5,155,321 | ||
PROFESSIONAL SERVICES - 0.9% | |||
Human Resource & Employment Services - 0.5% | |||
51job, Inc. sponsored ADR (a) | 1,900 | 143,564 | |
Common Stocks - continued | |||
Shares | Value | ||
PROFESSIONAL SERVICES - CONTINUED | |||
Human Resource & Employment Services - continued | |||
Paylocity Holding Corp. (a)(d) | 31,700 | $ 621,003 | |
WageWorks, Inc. (a) | 115,100 | 4,804,274 | |
| 5,568,841 | ||
Research & Consulting Services - 0.4% | |||
ICF International, Inc. (a) | 30,400 | 1,050,928 | |
Verisk Analytics, Inc. (a) | 57,968 | 3,480,399 | |
| 4,531,327 | ||
TOTAL PROFESSIONAL SERVICES | 10,100,168 | ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 9.9% | |||
Semiconductor Equipment - 1.6% | |||
Aixtron AG (a)(d) | 41,900 | 565,378 | |
ASM Pacific Technology Ltd. | 249,400 | 2,649,274 | |
Daqo New Energy Corp. ADR (a)(d) | 62,622 | 1,558,035 | |
GCL-Poly Energy Holdings Ltd. (a) | 3,419,000 | 1,103,769 | |
GT Advanced Technologies, Inc. (a)(d) | 225,683 | 3,123,453 | |
Nanometrics, Inc. (a) | 8,409 | 130,844 | |
Rubicon Technology, Inc. (a)(d) | 501,267 | 3,774,541 | |
SMA Solar Technology AG (a)(d) | 22,683 | 615,067 | |
Tessera Technologies, Inc. | 197,514 | 5,018,831 | |
Ultratech, Inc. (a) | 9,000 | 213,120 | |
| 18,752,312 | ||
Semiconductors - 8.3% | |||
Altera Corp. | 67,779 | 2,217,729 | |
Atmel Corp. (a) | 127,400 | 1,044,680 | |
Audience, Inc. (a) | 129,100 | 1,230,323 | |
Broadcom Corp. Class A | 308,522 | 11,804,052 | |
Capella Microsystems, Inc. | 125,000 | 566,070 | |
Cree, Inc. (a) | 84,445 | 3,988,337 | |
Crystalwise Technology, Inc. (a) | 227,371 | 230,235 | |
EPISTAR Corp. | 1,464,000 | 3,179,729 | |
Fairchild Semiconductor International, Inc. (a) | 36,300 | 552,486 | |
First Solar, Inc. (a) | 127,800 | 8,065,458 | |
Freescale Semiconductor, Inc. (a) | 101,399 | 2,030,008 | |
Genesis Photonics, Inc. (a) | 1,979,000 | 1,502,062 | |
Inphi Corp. (a) | 41,993 | 640,813 | |
Intermolecular, Inc. (a) | 349,254 | 778,836 | |
Intersil Corp. Class A | 75,694 | 971,154 | |
Lextar Electronics Corp. | 214,000 | 210,349 | |
M/A-COM Technology Solutions, Inc. (a) | 93,500 | 1,860,650 | |
Macronix International Co. Ltd. (a) | 484,000 | 124,448 | |
MagnaChip Semiconductor Corp. (a) | 125,454 | 1,757,611 | |
Melexis NV | 48,299 | 2,235,807 | |
Mellanox Technologies Ltd. (a)(d) | 135,152 | 5,629,081 | |
Micrel, Inc. | 51,500 | 538,690 | |
Micron Technology, Inc. (a) | 148,400 | 4,533,620 | |
Monolithic Power Systems, Inc. | 99,901 | 4,119,917 | |
NXP Semiconductors NV (a) | 81,286 | 5,068,182 | |
| |||
Shares | Value | ||
On-Bright Electronics, Inc. | 79,000 | $ 544,862 | |
Peregrine Semiconductor Corp. (a) | 397,203 | 2,677,148 | |
PixArt Imaging, Inc. (a) | 20,000 | 56,592 | |
PMC-Sierra, Inc. (a) | 392,700 | 2,642,871 | |
Power Integrations, Inc. | 31,900 | 1,717,177 | |
Radiant Opto-Electronics Corp. | 636,000 | 2,635,273 | |
RF Micro Devices, Inc. (a) | 205,011 | 2,287,923 | |
Semiconductor Manufacturing International Corp. (a) | 49,268,000 | 4,531,023 | |
Seoul Semiconductor Co. Ltd. | 170,113 | 4,694,238 | |
Silicon Laboratories, Inc. (a) | 36,800 | 1,498,864 | |
Spansion, Inc. Class A (a) | 207,000 | 3,926,790 | |
SunEdison Semiconductor Ltd. | 133,352 | 2,253,649 | |
SunPower Corp. (a)(d) | 39,500 | 1,450,835 | |
TriQuint Semiconductor, Inc. (a) | 128,000 | 2,301,440 | |
YoungTek Electronics Corp. | 34,491 | 72,154 | |
| 98,171,166 | ||
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | 116,923,478 | ||
SOFTWARE - 17.2% | |||
Application Software - 7.5% | |||
Adobe Systems, Inc. (a) | 67,116 | 4,638,387 | |
ANSYS, Inc. (a) | 15,575 | 1,198,341 | |
Aspen Technology, Inc. (a) | 88,321 | 3,836,664 | |
Autodesk, Inc. (a) | 130,200 | 6,946,170 | |
Broadleaf Co. Ltd. | 31,300 | 589,739 | |
BroadSoft, Inc. (a) | 183,630 | 4,480,572 | |
Callidus Software, Inc. (a) | 49,400 | 529,568 | |
Citrix Systems, Inc. (a) | 125,915 | 8,528,223 | |
Concur Technologies, Inc. (a)(d) | 156,951 | 14,590,165 | |
Descartes Systems Group, Inc. (a) | 101,500 | 1,367,483 | |
Guidewire Software, Inc. (a) | 208 | 8,424 | |
Interactive Intelligence Group, Inc. (a) | 126,760 | 5,751,101 | |
Jive Software, Inc. (a) | 42,898 | 339,752 | |
Kingdee International Software Group Co. Ltd. (a) | 19,791,800 | 6,834,387 | |
Linx SA | 25,000 | 595,041 | |
MicroStrategy, Inc. Class A (a) | 33,730 | 4,827,775 | |
MobileIron, Inc. | 15,400 | 138,600 | |
Paycom Software, Inc. | 1,000 | 12,780 | |
PROS Holdings, Inc. (a) | 8,633 | 221,177 | |
Qlik Technologies, Inc. (a) | 128,600 | 3,402,756 | |
salesforce.com, Inc. (a) | 297,419 | 16,134,981 | |
SolarWinds, Inc. (a) | 29,133 | 1,198,532 | |
Splunk, Inc. (a) | 27,196 | 1,278,756 | |
TIBCO Software, Inc. (a) | 533 | 10,287 | |
Ultimate Software Group, Inc. (a) | 83 | 11,198 | |
Workday, Inc. Class A (a) | 1,003 | 84,092 | |
Zendesk, Inc. | 36,900 | 641,691 | |
| 88,196,642 | ||
Home Entertainment Software - 1.0% | |||
Activision Blizzard, Inc. | 255,370 | 5,715,181 | |
Common Stocks - continued | |||
Shares | Value | ||
SOFTWARE - CONTINUED | |||
Home Entertainment Software - continued | |||
Electronic Arts, Inc. (a) | 14,946 | $ 502,186 | |
Nintendo Co. Ltd. | 32,800 | 3,643,753 | |
Nintendo Co. Ltd. ADR | 27,100 | 374,793 | |
Ourgame International Holdings Ltd. | 3,330,000 | 1,551,061 | |
| 11,786,974 | ||
Systems Software - 8.7% | |||
Allot Communications Ltd. (a) | 231,419 | 2,992,248 | |
CommVault Systems, Inc. (a) | 18,700 | 897,974 | |
Fleetmatics Group PLC (a) | 139,169 | 4,396,349 | |
Imperva, Inc. (a) | 21,000 | 465,570 | |
Infoblox, Inc. (a) | 37,600 | 455,712 | |
MICROS Systems, Inc. (a) | 18,100 | 1,224,103 | |
Microsoft Corp. | 1,158,695 | 50,009,276 | |
NetSuite, Inc. (a) | 173,877 | 14,659,570 | |
Oracle Corp. | 294,500 | 11,894,855 | |
Red Hat, Inc. (a) | 121,876 | 7,083,433 | |
ServiceNow, Inc. (a) | 143,995 | 8,466,906 | |
Varonis Systems, Inc. | 1,000 | 21,080 | |
| 102,567,076 | ||
TOTAL SOFTWARE | 202,550,692 | ||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS - 17.1% | |||
Technology Hardware, Storage & Peripherals - 17.1% | |||
ADLINK Technology, Inc. | 47,081 | 118,842 | |
Apple, Inc. | 1,673,529 | 159,939,164 | |
BlackBerry Ltd. (a) | 1,286 | 11,998 | |
Casetek Holdings | 103,000 | 590,107 | |
Catcher Technology Co. Ltd. | 462,000 | 3,767,022 | |
Cray, Inc. (a) | 285,846 | 7,580,636 | |
Hewlett-Packard Co. | 456,800 | 16,266,648 | |
Lite-On Technology Corp. | 1,338,664 | 2,240,538 | |
NEC Corp. | 1,709,000 | 6,598,212 | |
Nimble Storage, Inc. (d) | 59,300 | 1,534,684 | |
QLogic Corp. (a) | 43,800 | 398,580 | |
Silicon Graphics International Corp. (a) | 182,558 | 1,736,127 | |
| 200,782,558 | ||
WIRELESS TELECOMMUNICATION SERVICES - 0.3% | |||
Wireless Telecommunication Services - 0.3% | |||
RingCentral, Inc. (d) | 257,400 | 3,842,982 | |
TOTAL COMMON STOCKS (Cost $1,009,052,957) |
| ||
Convertible Preferred Stocks - 0.3% | |||
Shares | Value | ||
INTERNET SOFTWARE & SERVICES - 0.3% | |||
Internet Software & Services - 0.3% | |||
Uber Technologies, Inc. 8.00% (e) | 58,016 | $ 3,600,020 | |
Money Market Funds - 3.3% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 3,200,392 | 3,200,392 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 35,534,556 | 35,534,556 | |
TOTAL MONEY MARKET FUNDS (Cost $38,734,948) |
| ||
TOTAL INVESTMENT PORTFOLIO - 101.6% (Cost $1,051,387,925) | 1,196,566,905 | ||
NET OTHER ASSETS (LIABILITIES) - (1.6)% | (18,657,891) | ||
NET ASSETS - 100% | $ 1,177,909,014 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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 $3,600,020 or 0.3% of net assets. |
Additional information on each restricted holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Uber Technologies, Inc. 8.00% | 6/6/14 | $ 3,600,020 |
(f) A portion of the security sold on a delayed delivery basis. |
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 | $ 27,616 |
Fidelity Securities Lending Cash Central Fund | 436,441 |
Total | $ 464,057 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $ 1,154,231,937 | $ 989,414,025 | $ 164,330,832 | $ 487,080 |
Convertible Preferred Stocks | 3,600,020 | - | - | 3,600,020 |
Money Market Funds | 38,734,948 | 38,734,948 | - | - |
Total Investments in Securities: | $ 1,196,566,905 | $ 1,028,148,973 | $ 164,330,832 | $ 4,087,100 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended July 31, 2014. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements: |
Transfers | Total |
Level 1 to Level 2 | $ 26,207,254 |
Level 2 to Level 1 | $ 0 |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 76.9% |
Cayman Islands | 7.8% |
Taiwan | 3.3% |
Japan | 3.3% |
Korea (South) | 3.1% |
Israel | 1.1% |
Others (Individually Less Than 1%) | 4.5% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Technology Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $33,201,371) - See accompanying schedule: Unaffiliated issuers (cost $1,012,652,977) | $ 1,157,831,957 |
|
Fidelity Central Funds (cost $38,734,948) | 38,734,948 |
|
Total Investments (cost $1,051,387,925) |
| $ 1,196,566,905 |
Cash |
| 482 |
Foreign currency held at value (cost $106,335) | 106,333 | |
Receivable for investments sold: | ||
Regular delivery | 33,255,035 | |
Delayed delivery | 777,651 | |
Receivable for fund shares sold | 1,062,916 | |
Dividends receivable | 501,148 | |
Distributions receivable from Fidelity Central Funds | 73,432 | |
Other receivables | 30,862 | |
Total assets | 1,232,374,764 | |
|
|
|
Liabilities | ||
Payable for investments purchased, regular delivery | $ 16,457,006 | |
Payable for fund shares redeemed | 1,315,676 | |
Accrued management fee | 545,671 | |
Distribution and service plan fees payable | 268,339 | |
Other affiliated payables | 265,033 | |
Other payables and accrued expenses | 79,469 | |
Collateral on securities loaned, at value | 35,534,556 | |
Total liabilities | 54,465,750 | |
|
|
|
Net Assets | $ 1,177,909,014 | |
Net Assets consist of: |
| |
Paid in capital | $ 958,731,130 | |
Accumulated net investment loss | (10,080) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 74,013,894 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 145,174,070 | |
Net Assets | $ 1,177,909,014 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 36.06 | |
|
|
|
Maximum offering price per share (100/94.25 of $36.06) | $ 38.26 | |
Class T: | $ 34.66 | |
|
|
|
Maximum offering price per share (100/96.50 of $34.66) | $ 35.92 | |
Class B: | $ 31.83 | |
|
|
|
Class C: | $ 31.99 | |
|
|
|
Institutional Class: | $ 38.06 | |
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.
Annual Report
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 7,024,642 |
Interest |
| 413 |
Income from Fidelity Central Funds (including $436,441 from security lending) |
| 464,057 |
Total income |
| 7,489,112 |
|
|
|
Expenses | ||
Management fee | $ 5,357,994 | |
Transfer agent fees | 2,439,478 | |
Distribution and service plan fees | 3,034,212 | |
Accounting and security lending fees | 330,593 | |
Custodian fees and expenses | 128,621 | |
Independent trustees' compensation | 23,337 | |
Registration fees | 86,607 | |
Audit | 59,672 | |
Legal | 17,262 | |
Interest | 258 | |
Miscellaneous | 12,984 | |
Total expenses before reductions | 11,491,018 | |
Expense reductions | (131,904) | 11,359,114 |
Net investment income (loss) | (3,870,002) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 107,704,975 | |
Foreign currency transactions | (103,604) | |
Total net realized gain (loss) |
| 107,601,371 |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of increase in deferred foreign taxes of $3,197) | 87,969,355 | |
Assets and liabilities in foreign currencies | (702) | |
Total change in net unrealized appreciation (depreciation) |
| 87,968,653 |
Net gain (loss) | 195,570,024 | |
Net increase (decrease) in net assets resulting from operations | $ 191,700,022 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (3,870,002) | $ (2,608,860) |
Net realized gain (loss) | 107,601,371 | 108,122,498 |
Change in net unrealized appreciation (depreciation) | 87,968,653 | 25,685,939 |
Net increase (decrease) in net assets resulting from operations | 191,700,022 | 131,199,577 |
Distributions to shareholders from net realized gain | (11,189,247) | - |
Share transactions - net increase (decrease) | 150,832,224 | 5,042,118 |
Redemption fees | 21,186 | 41,110 |
Total increase (decrease) in net assets | 331,364,185 | 136,282,805 |
|
|
|
Net Assets | ||
Beginning of period | 846,544,829 | 710,262,024 |
End of period (including accumulated net investment loss of $10,080 and accumulated net investment loss of $1,634,632, respectively) | $ 1,177,909,014 | $ 846,544,829 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 29.90 | $ 25.25 | $ 25.14 | $ 19.83 | $ 16.03 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.12) | (.07) | (.13) | (.18) | (.16) |
Net realized and unrealized gain (loss) | 6.70 | 4.72 | .24 | 5.49 | 3.96 |
Total from investment operations | 6.58 | 4.65 | .11 | 5.31 | 3.80 |
Distributions from net realized gain | (.42) | - | - | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 36.06 | $ 29.90 | $ 25.25 | $ 25.14 | $ 19.83 |
Total ReturnA, B | 22.15% | 18.42% | .44% | 26.78% | 23.71% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.14% | 1.18% | 1.18% | 1.18% | 1.21% |
Expenses net of fee waivers, if any | 1.14% | 1.18% | 1.18% | 1.18% | 1.21% |
Expenses net of all reductions | 1.12% | 1.14% | 1.17% | 1.16% | 1.18% |
Net investment income (loss) | (.35)% | (.25)% | (.55)% | (.73)% | (.83)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 408,687 | $ 355,306 | $ 336,693 | $ 375,609 | $ 312,659 |
Portfolio turnover rateE | 186% | 142% | 201% | 167% | 115% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 28.79 | $ 24.38 | $ 24.33 | $ 19.24 | $ 15.59 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.19) | (.13) | (.19) | (.23) | (.20) |
Net realized and unrealized gain (loss) | 6.45 | 4.54 | .24 | 5.32 | 3.85 |
Total from investment operations | 6.26 | 4.41 | .05 | 5.09 | 3.65 |
Distributions from net realized gain | (.39) | - | - | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 34.66 | $ 28.79 | $ 24.38 | $ 24.33 | $ 19.24 |
Total ReturnA, B | 21.89% | 18.09% | .21% | 26.46% | 23.41% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.38% | 1.42% | 1.43% | 1.43% | 1.46% |
Expenses net of fee waivers, if any | 1.38% | 1.42% | 1.43% | 1.43% | 1.46% |
Expenses net of all reductions | 1.37% | 1.39% | 1.42% | 1.40% | 1.44% |
Net investment income (loss) | (.60)% | (.50)% | (.80)% | (.98)% | (1.09)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 196,067 | $ 173,692 | $ 172,709 | $ 196,913 | $ 169,049 |
Portfolio turnover rateE | 186% | 142% | 201% | 167% | 115% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 26.56 | $ 22.60 | $ 22.67 | $ 18.01 | $ 14.67 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.34) | (.24) | (.28) | (.33) | (.27) |
Net realized and unrealized gain (loss) | 5.94 | 4.20 | .21 | 4.99 | 3.61 |
Total from investment operations | 5.60 | 3.96 | (.07) | 4.66 | 3.34 |
Distributions from net realized gain | (.33) | - | - | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 31.83 | $ 26.56 | $ 22.60 | $ 22.67 | $ 18.01 |
Total ReturnA, B | 21.21% | 17.52% | (.31)% | 25.87% | 22.77% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.92% | 1.93% | 1.93% | 1.93% | 1.96% |
Expenses net of fee waivers, if any | 1.92% | 1.93% | 1.93% | 1.93% | 1.96% |
Expenses net of all reductions | 1.91% | 1.89% | 1.92% | 1.91% | 1.94% |
Net investment income (loss) | (1.14)% | (1.01)% | (1.30)% | (1.49)% | (1.59)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 12,043 | $ 13,745 | $ 17,476 | $ 25,508 | $ 29,176 |
Portfolio turnover rateE | 186% | 142% | 201% | 167% | 115% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 26.68 | $ 22.70 | $ 22.77 | $ 18.09 | $ 14.74 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.33) | (.24) | (.29) | (.33) | (.28) |
Net realized and unrealized gain (loss) | 5.98 | 4.22 | .22 | 5.01 | 3.63 |
Total from investment operations | 5.65 | 3.98 | (.07) | 4.68 | 3.35 |
Distributions from net realized gain | (.34) | - | - | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 31.99 | $ 26.68 | $ 22.70 | $ 22.77 | $ 18.09 |
Total ReturnA, B | 21.31% | 17.53% | (.31)% | 25.87% | 22.73% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.87% | 1.91% | 1.93% | 1.92% | 1.96% |
Expenses net of fee waivers, if any | 1.87% | 1.91% | 1.93% | 1.92% | 1.96% |
Expenses net of all reductions | 1.86% | 1.88% | 1.91% | 1.90% | 1.93% |
Net investment income (loss) | (1.09)% | (.99)% | (1.29)% | (1.48)% | (1.58)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 105,499 | $ 84,858 | $ 88,074 | $ 89,819 | $ 70,017 |
Portfolio turnover rateE | 186% | 142% | 201% | 167% | 115% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 31.47 | $ 26.50 | $ 26.30 | $ 20.68 | $ 16.67 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | (.02) | .02 | (.06) | (.11) | (.11) |
Net realized and unrealized gain (loss) | 7.06 | 4.95 | .26 | 5.73 | 4.12 |
Total from investment operations | 7.04 | 4.97 | .20 | 5.62 | 4.01 |
Distributions from net realized gain | (.45) | - | - | - | - |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 38.06 | $ 31.47 | $ 26.50 | $ 26.30 | $ 20.68 |
Total ReturnA | 22.55% | 18.75% | .76% | 27.18% | 24.06% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .83% | .86% | .86% | .87% | .92% |
Expenses net of fee waivers, if any | .83% | .86% | .86% | .87% | .92% |
Expenses net of all reductions | .82% | .83% | .85% | .85% | .90% |
Net investment income (loss) | (.05)% | .06% | (.23)% | (.43)% | (.55)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 455,612 | $ 218,944 | $ 95,310 | $ 81,350 | $ 42,277 |
Portfolio turnover rateD | 186% | 142% | 201% | 167% | 115% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Investment Valuation - continued
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2014, including information on transfers between Levels 1 and 2, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment.. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. The Fund is subject to a tax imposed on capital gains by certain countries in which it invests. An estimated deferred tax liability for net unrealized appreciation on the applicable securities is included in Other payables and accrued expenses on the Statement of Assets & Liabilities.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Annual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), deferred trustees compensation, net operating losses, and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 180,428,590 |
Gross unrealized depreciation | (38,714,298) |
Net unrealized appreciation (depreciation) on securities | $ 141,714,292 |
|
|
Tax Cost | $ 1,054,852,613 |
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 39,505,000 |
Undistributed long-term capital gain | $ 37,973,582 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 141,712,579 |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 2,941,208 | $ - |
Long-term Capital Gains | 8,248,039 | - |
Total | $ 11,189,247 | $ - |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,900,489,470 and $1,754,188,824, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Annual Report
Notes to Financial Statements - continued
5. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 983,979 | $ 20,143 |
Class T | .25% | .25% | 949,326 | 6,760 |
Class B | .75% | .25% | 132,512 | 99,860 |
Class C | .75% | .25% | 968,395 | 113,187 |
|
|
| $ 3,034,212 | $ 239,950 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 87,002 |
Class T | 19,668 |
Class B* | 9,843 |
Class C* | 8,421 |
| $ 124,934 |
* 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 the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 1,060,110 | .27 |
Class T | 493,875 | .26 |
Class B | 39,943 | .30 |
Class C | 246,914 | .26 |
Institutional Class | 598,636 | .21 |
| $ 2,439,478 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $39,244 for the period.
Annual Report
5. Fees and Other Transactions with Affiliates - continued
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 or other affiliated entities of 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 Loan | Weighted Average | Interest |
Borrower | $ 4,500,000 | .30% | $ 258 |
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,603 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $131,877 for the period. In addition, through arrangements with the Fund's custodian, 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 $27.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net realized gain |
|
|
Class A | $ 4,830,573 | $ - |
Class T | 2,285,378 | - |
Class B | 152,106 | - |
Class C | 1,068,092 | - |
Institutional Class | 2,853,098 | - |
Total | $ 11,189,247 | $ - |
Annual Report
Notes to Financial Statements - continued
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 1,967,332 | 2,023,713 | $ 66,338,054 | $ 54,950,216 |
Reinvestment of distributions | 136,812 | - | 4,412,177 | - |
Shares redeemed | (2,655,768) | (3,472,615) | (89,258,893) | (93,501,470) |
Net increase (decrease) | (551,624) | (1,448,902) | $ (18,508,662) | $ (38,551,254) |
Class T |
|
|
|
|
Shares sold | 604,269 | 649,951 | $ 19,519,431 | $ 16,942,760 |
Reinvestment of distributions | 71,453 | - | 2,218,622 | - |
Shares redeemed | (1,051,577) | (1,701,808) | (34,073,517) | (44,280,679) |
Net increase (decrease) | (375,855) | (1,051,857) | $ (12,335,464) | $ (27,337,919) |
Class B |
|
|
|
|
Shares sold | 9,706 | 13,056 | $ 287,815 | $ 310,857 |
Reinvestment of distributions | 4,834 | - | 138,293 | - |
Shares redeemed | (153,751) | (268,749) | (4,566,688) | (6,477,118) |
Net increase (decrease) | (139,211) | (255,693) | $ (4,140,580) | $ (6,166,261) |
Class C |
|
|
|
|
Shares sold | 594,192 | 460,587 | $ 17,948,827 | $ 11,287,228 |
Reinvestment of distributions | 31,647 | - | 909,547 | - |
Shares redeemed | (507,790) | (1,159,733) | (15,090,389) | (27,841,417) |
Net increase (decrease) | 118,049 | (699,146) | $ 3,767,985 | $ (16,554,189) |
Institutional Class |
|
|
|
|
Shares sold | 7,128,296 | 6,347,952 | $ 254,841,416 | $ 179,251,253 |
Reinvestment of distributions | 81,545 | - | 2,770,913 | - |
Shares redeemed | (2,196,859) | (2,987,970) | (75,563,384) | (85,599,512) |
Net increase (decrease) | 5,012,982 | 3,359,982 | $ 182,048,945 | $ 93,651,741 |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, Strategic Advisers U.S. Opportunity Fund was the owner of record of approximately 15% of the total outstanding shares of the Fund. Mutual funds managed by the investment adviser or its affiliates were the owners of record, in the aggregate, of approximately 22% of the total outstanding shares of the Fund.
Effective after the close of business on August 1, 2014, 8,219,599 shares of the Fund were delivered to the Strategic Advisers U.S. Opportunity Fund for investments with a value of $311,440,613. The Strategic Advisers U.S. Opportunity Fund's ownership in the Fund increased to approximately 40%.
Annual Report
Fidelity Advisor Utilities Fund - Institutional Class
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2014 |
| Past 1 | Past 5 | Past 10 |
Institutional Class A |
| 16.74% | 14.70% | 10.67% |
A Prior to October 1, 2006, Fidelity Advisor Utilities Fund was named Fidelity Advisor Telecommunications & Utilities Fund, and the fund operated under certain different investment policies and compared its performance to a different additional index. The fund's historical performance may not represent its current investment policies.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Utilities Fund - Institutional Class on July 31, 2004. The chart shows how the value of your investment would have changed, and also shows how the S&P 500 Index performed over the same period.
Annual Report
Fidelity Advisor Utilities Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Douglas Simmons, Portfolio Manager of Fidelity Advisor® Utilities Fund: For the year, the fund's Institutional Class shares returned 16.74%, significantly outperforming the 8.85% gain of the MSCI U.S. IMI Utilities 25-50 Index but underperforming the S&P 500® Index. Utilities stocks lagged the overall market mainly due to their sensitivity to interest rates, which most investors believe will be on the rise going forward. Superior stock selection was the main reason behind the fund's outperformance of the MSCI index, particularly very strong picks in oil & gas storage & transport companies, including the two biggest individual contributors, liquefied natural gas terminal operator Cheniere Energy and pipeline company Energy Transfer Equity, neither of which was part of the index. The fund's relative performance also was helped by underweighting North Carolina electric utility Duke Energy - which was not in the fund at period end - and not owning index components electric utility Southern Company, based in Atlanta, and New York's Consolidated Edison. On the down side, untimely ownership of Virginia-based multi-utility Dominion Resources hurt, as did an average underweighting in Chicago-based electric utility Exelon.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Fidelity 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 (February 1, 2014 to July 31, 2014).
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.
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.14% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,085.60 | $ 5.90 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.14 | $ 5.71 |
Class T | 1.42% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,083.80 | $ 7.34 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.75 | $ 7.10 |
Class B | 1.94% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,081.20 | $ 10.01 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.17 | $ 9.69 |
Class C | 1.87% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,081.20 | $ 9.65 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.52 | $ 9.35 |
Institutional Class | .84% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,087.00 | $ 4.35 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.63 | $ 4.21 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Fidelity Advisor Utilities Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Dominion Resources, Inc. | 10.4 | 9.8 |
NextEra Energy, Inc. | 10.3 | 11.7 |
Sempra Energy | 7.7 | 9.5 |
PPL Corp. | 7.1 | 0.0 |
Edison International | 6.5 | 3.8 |
Exelon Corp. | 5.9 | 1.0 |
OGE Energy Corp. | 4.9 | 5.4 |
NiSource, Inc. | 4.7 | 4.2 |
ITC Holdings Corp. | 4.0 | 2.4 |
The Williams Companies, Inc. | 3.5 | 0.0 |
| 65.0 | |
Top Industries (% of fund's net assets) | |||
As of July 31, 2014 | |||
| Electric Utilities | 44.3% |
|
| Multi-Utilities | 25.9% |
|
| Oil, Gas & Consumable Fuels | 12.0% |
|
| Independent Power Producers & Energy Traders | 8.2% |
|
| Media | 3.1% |
|
| All Others* | 6.5% |
|
As of January 31, 2014 | |||
| Multi-Utilities | 36.0% |
|
| Electric Utilities | 28.3% |
|
| Oil, Gas & Consumable Fuels | 14.4% |
|
| Independent Power Producers & Energy Traders | 10.4% |
|
| Gas Utilities | 7.1% |
|
| All Others* | 3.8% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Utilities Fund
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 99.8% | |||
Shares | Value | ||
CONSTRUCTION & ENGINEERING - 0.6% | |||
Construction & Engineering - 0.6% | |||
MasTec, Inc. (a) | 68,000 | $ 1,848,920 | |
DIVERSIFIED TELECOMMUNICATION SERVICES - 3.0% | |||
Integrated Telecommunication Services - 3.0% | |||
Verizon Communications, Inc. | 186,100 | 9,383,162 | |
ELECTRIC UTILITIES - 44.3% | |||
Electric Utilities - 44.3% | |||
Edison International | 365,002 | 20,002,110 | |
Exelon Corp. | 588,100 | 18,278,148 | |
FirstEnergy Corp. | 285,700 | 8,916,697 | |
ITC Holdings Corp. | 341,257 | 12,319,378 | |
NextEra Energy, Inc. | 338,440 | 31,776,132 | |
NRG Yield, Inc. Class A | 161,010 | 8,412,773 | |
OGE Energy Corp. | 417,323 | 15,002,762 | |
PPL Corp. | 668,800 | 22,063,712 | |
| 136,771,712 | ||
ELECTRICAL EQUIPMENT - 0.5% | |||
Heavy Electrical Equipment - 0.5% | |||
Vestas Wind Systems A/S (a) | 33,200 | 1,501,936 | |
GAS UTILITIES - 0.5% | |||
Gas Utilities - 0.5% | |||
National Fuel Gas Co. | 21,200 | 1,460,892 | |
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 8.2% | |||
Independent Power Producers & Energy Traders - 8.2% | |||
Black Hills Corp. | 39,500 | 2,082,045 | |
Calpine Corp. (a) | 308,617 | 6,801,919 | |
Drax Group PLC | 299,300 | 3,534,631 | |
Dynegy, Inc. (a) | 127,073 | 3,373,788 | |
NRG Energy, Inc. | 306,415 | 9,486,608 | |
| 25,278,991 | ||
MEDIA - 3.1% | |||
Cable & Satellite - 3.1% | |||
Comcast Corp. Class A | 177,200 | 9,520,956 | |
MULTI-UTILITIES - 25.9% | |||
Multi-Utilities - 25.9% | |||
Dominion Resources, Inc. | 476,299 | 32,216,862 | |
MDU Resources Group, Inc. | 48,400 | 1,525,084 | |
NiSource, Inc. | 388,363 | 14,633,518 | |
PG&E Corp. | 176,718 | 7,893,993 | |
Sempra Energy | 238,637 | 23,794,495 | |
| 80,063,952 | ||
| |||
Shares | Value | ||
OIL, GAS & CONSUMABLE FUELS - 12.0% | |||
Oil & Gas Exploration & Production - 1.0% | |||
Kodiak Oil & Gas Corp. (a) | 203,800 | $ 3,167,052 | |
Oil & Gas Storage & Transport - 11.0% | |||
Atlas Pipeline Partners LP | 91,408 | 3,152,662 | |
Cheniere Energy Partners LP Holdings LLC | 299,236 | 7,055,985 | |
Cheniere Energy, Inc. (a) | 81,706 | 5,781,517 | |
Energy Transfer Equity LP | 118,289 | 6,433,739 | |
Markwest Energy Partners LP | 8,721 | 608,726 | |
The Williams Companies, Inc. | 194,000 | 10,986,220 | |
| 34,018,849 | ||
TOTAL OIL, GAS & CONSUMABLE FUELS | 37,185,901 | ||
WIRELESS TELECOMMUNICATION SERVICES - 1.7% | |||
Wireless Telecommunication Services - 1.7% | |||
T-Mobile U.S., Inc. (a) | 101,300 | 3,336,822 | |
Telephone & Data Systems, Inc. | 79,044 | 1,976,100 | |
| 5,312,922 | ||
TOTAL COMMON STOCKS (Cost $288,979,009) |
| ||
Money Market Funds - 2.2% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 6,937,987 |
| |
TOTAL INVESTMENT PORTFOLIO - 102.0% (Cost $295,916,996) | 315,267,331 | ||
NET OTHER ASSETS (LIABILITIES) - (2.0)% | (6,318,109) | ||
NET ASSETS - 100% | $ 308,949,222 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 3,503 |
Fidelity Securities Lending Cash Central Fund | 15,566 |
Total | $ 19,069 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Utilities Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $288,979,009) | $ 308,329,344 |
|
Fidelity Central Funds (cost $6,937,987) | 6,937,987 |
|
Total Investments (cost $295,916,996) |
| $ 315,267,331 |
Receivable for investments sold | 1,320,660 | |
Receivable for fund shares sold | 831,736 | |
Dividends receivable | 292,340 | |
Distributions receivable from Fidelity Central Funds | 649 | |
Other receivables | 6,664 | |
Total assets | 317,719,380 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 7,692,946 | |
Payable for fund shares redeemed | 715,969 | |
Accrued management fee | 145,390 | |
Distribution and service plan fees payable | 104,761 | |
Other affiliated payables | 73,876 | |
Other payables and accrued expenses | 37,216 | |
Total liabilities | 8,770,158 | |
|
|
|
Net Assets | $ 308,949,222 | |
Net Assets consist of: |
| |
Paid in capital | $ 273,920,483 | |
Undistributed net investment income | 1,595,872 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 14,082,532 | |
Net unrealized appreciation (depreciation) on investments | 19,350,335 | |
Net Assets | $ 308,949,222 | |
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 26.77 | |
|
|
|
Maximum offering price per share (100/94.25 of $26.77) | $ 28.40 | |
Class T: | $ 26.78 | |
|
|
|
Maximum offering price per share (100/96.50 of $26.78) | $ 27.75 | |
Class B: | $ 26.51 | |
|
|
|
Class C: | $ 26.23 | |
|
|
|
Institutional Class: | $ 27.24 | |
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.
Annual Report
Fidelity Advisor Utilities Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 6,704,975 |
Income from Fidelity Central Funds |
| 19,069 |
Total income |
| 6,724,044 |
|
|
|
Expenses | ||
Management fee | $ 1,326,135 | |
Transfer agent fees | 620,567 | |
Distribution and service plan fees | 998,626 | |
Accounting and security lending fees | 94,091 | |
Custodian fees and expenses | 9,531 | |
Independent trustees' compensation | 5,696 | |
Registration fees | 80,498 | |
Audit | 46,342 | |
Legal | 3,414 | |
Miscellaneous | 3,259 | |
Total expenses before reductions | 3,188,159 | |
Expense reductions | (23,656) | 3,164,503 |
Net investment income (loss) | 3,559,541 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 27,592,467 | |
Foreign currency transactions | 10,849 | |
Total net realized gain (loss) |
| 27,603,316 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 1,611,254 | |
Assets and liabilities in foreign currencies | (991) | |
Total change in net unrealized appreciation (depreciation) |
| 1,610,263 |
Net gain (loss) | 29,213,579 | |
Net increase (decrease) in net assets resulting from operations | $ 32,773,120 | |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 3,559,541 | $ 4,068,543 |
Net realized gain (loss) | 27,603,316 | 17,517,824 |
Change in net unrealized appreciation (depreciation) | 1,610,263 | 2,065,725 |
Net increase (decrease) in net assets resulting from operations | 32,773,120 | 23,652,092 |
Distributions to shareholders from net investment income | (3,729,207) | (3,653,862) |
Distributions to shareholders from net realized gain | (88,322) | - |
Total distributions | (3,817,529) | (3,653,862) |
Share transactions - net increase (decrease) | 71,585,618 | (6,877,753) |
Redemption fees | 9,809 | 5,578 |
Total increase (decrease) in net assets | 100,551,018 | 13,126,055 |
|
|
|
Net Assets | ||
Beginning of period | 208,398,204 | 195,272,149 |
End of period (including undistributed net investment income of $1,595,872 and undistributed net investment income of $2,085,978, respectively) | $ 308,949,222 | $ 208,398,204 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 23.48 | $ 21.20 | $ 19.09 | $ 16.59 | $ 15.27 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .41 | .47 | .43 | .39 | .40 |
Net realized and unrealized gain (loss) | 3.35 | 2.24 | 2.07 | 2.50 | 1.32 |
Total from investment operations | 3.76 | 2.71 | 2.50 | 2.89 | 1.72 |
Distributions from net investment income | (.46) | (.43) | (.39) | (.39) | (.40) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.47) | (.43) | (.39) | (.39) | (.40) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 26.77 | $ 23.48 | $ 21.20 | $ 19.09 | $ 16.59 |
Total ReturnA, B | 16.38% | 13.09% | 13.40% | 17.71% | 11.42% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.16% | 1.20% | 1.23% | 1.24% | 1.26% |
Expenses net of fee waivers, if any | 1.16% | 1.20% | 1.23% | 1.24% | 1.26% |
Expenses net of all reductions | 1.15% | 1.16% | 1.22% | 1.20% | 1.22% |
Net investment income (loss) | 1.64% | 2.16% | 2.24% | 2.18% | 2.49% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 154,134 | $ 106,851 | $ 99,813 | $ 78,312 | $ 64,890 |
Portfolio turnover rateE | 112% | 154% | 195% | 201% | 216% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 23.50 | $ 21.21 | $ 19.09 | $ 16.59 | $ 15.27 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .34 | .41 | .38 | .35 | .35 |
Net realized and unrealized gain (loss) | 3.35 | 2.25 | 2.07 | 2.50 | 1.33 |
Total from investment operations | 3.69 | 2.66 | 2.45 | 2.85 | 1.68 |
Distributions from net investment income | (.40) | (.37) | (.33) | (.35) | (.36) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.41) | (.37) | (.33) | (.35) | (.36) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 26.78 | $ 23.50 | $ 21.21 | $ 19.09 | $ 16.59 |
Total ReturnA, B | 15.99% | 12.81% | 13.13% | 17.39% | 11.13% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.45% | 1.47% | 1.49% | 1.50% | 1.52% |
Expenses net of fee waivers, if any | 1.45% | 1.47% | 1.49% | 1.50% | 1.52% |
Expenses net of all reductions | 1.44% | 1.43% | 1.48% | 1.46% | 1.49% |
Net investment income (loss) | 1.35% | 1.89% | 1.98% | 1.92% | 2.23% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 49,272 | $ 41,239 | $ 38,276 | $ 35,701 | $ 33,651 |
Portfolio turnover rateE | 112% | 154% | 195% | 201% | 216% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 23.24 | $ 20.96 | $ 18.86 | $ 16.38 | $ 15.08 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .21 | .30 | .28 | .25 | .27 |
Net realized and unrealized gain (loss) | 3.33 | 2.23 | 2.05 | 2.49 | 1.31 |
Total from investment operations | 3.54 | 2.53 | 2.33 | 2.74 | 1.58 |
Distributions from net investment income | (.26) | (.25) | (.23) | (.26) | (.28) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.27) | (.25) | (.23) | (.26) | (.28) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 26.51 | $ 23.24 | $ 20.96 | $ 18.86 | $ 16.38 |
Total ReturnA, B | 15.41% | 12.24% | 12.54% | 16.87% | 10.56% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.95% | 1.96% | 1.98% | 1.99% | 2.01% |
Expenses net of fee waivers, if any | 1.95% | 1.96% | 1.98% | 1.99% | 2.01% |
Expenses net of all reductions | 1.94% | 1.92% | 1.97% | 1.95% | 1.98% |
Net investment income (loss) | .85% | 1.40% | 1.49% | 1.43% | 1.74% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 4,598 | $ 5,289 | $ 6,677 | $ 7,773 | $ 8,794 |
Portfolio turnover rateE | 112% | 154% | 195% | 201% | 216% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 23.03 | $ 20.80 | $ 18.75 | $ 16.30 | $ 15.02 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .23 | .31 | .29 | .26 | .27 |
Net realized and unrealized gain (loss) | 3.29 | 2.20 | 2.03 | 2.46 | 1.30 |
Total from investment operations | 3.52 | 2.51 | 2.32 | 2.72 | 1.57 |
Distributions from net investment income | (.31) | (.28) | (.27) | (.27) | (.29) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.32) | (.28) | (.27) | (.27) | (.29) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 26.23 | $ 23.03 | $ 20.80 | $ 18.75 | $ 16.30 |
Total ReturnA, B | 15.52% | 12.27% | 12.56% | 16.85% | 10.54% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.89% | 1.93% | 1.95% | 1.98% | 2.01% |
Expenses net of fee waivers, if any | 1.89% | 1.93% | 1.95% | 1.98% | 2.01% |
Expenses net of all reductions | 1.88% | 1.89% | 1.95% | 1.94% | 1.97% |
Net investment income (loss) | .91% | 1.43% | 1.51% | 1.43% | 1.74% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 54,810 | $ 35,457 | $ 29,942 | $ 26,915 | $ 21,415 |
Portfolio turnover rateE | 112% | 154% | 195% | 201% | 216% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 23.87 | $ 21.56 | $ 19.40 | $ 16.85 | $ 15.51 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .51 | .55 | .50 | .45 | .44 |
Net realized and unrealized gain (loss) | 3.39 | 2.26 | 2.10 | 2.54 | 1.35 |
Total from investment operations | 3.90 | 2.81 | 2.60 | 2.99 | 1.79 |
Distributions from net investment income | (.52) | (.50) | (.44) | (.44) | (.45) |
Distributions from net realized gain | (.01) | - | - | - | - |
Total distributions | (.53) | (.50) | (.44) | (.44) | (.45) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 27.24 | $ 23.87 | $ 21.56 | $ 19.40 | $ 16.85 |
Total ReturnA | 16.74% | 13.40% | 13.79% | 18.05% | 11.66% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .85% | .89% | .92% | .98% | 1.00% |
Expenses net of fee waivers, if any | .85% | .89% | .92% | .98% | 1.00% |
Expenses net of all reductions | .84% | .85% | .91% | .94% | .97% |
Net investment income (loss) | 1.95% | 2.46% | 2.55% | 2.44% | 2.75% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 46,135 | $ 19,562 | $ 20,564 | $ 10,914 | $ 6,511 |
Portfolio turnover rateD | 112% | 154% | 195% | 201% | 216% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Annual Report
3. Significant Accounting Policies - continued
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 24,885,712 |
Gross unrealized depreciation | (5,119,726) |
Net unrealized appreciation (depreciation) on securities | $ 19,765,986 |
|
|
Tax Cost | $ 295,501,345 |
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 2,660,324 |
Undistributed long-term capital gain | $ 12,900,726 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 19,765,986 |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 3,817,529 | $ 3,653,862 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $342,914,566 and $268,872,575, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 306,112 | $ 9,797 |
Class T | .25% | .25% | 222,456 | 1,646 |
Class B | .75% | .25% | 48,855 | 36,727 |
Class C | .75% | .25% | 421,203 | 80,224 |
|
|
| $ 998,626 | $ 128,394 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 107,328 |
Class T | 15,193 |
Class B* | 4,105 |
Class C* | 6,615 |
| $ 133,241 |
* 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.
Annual Report
5. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 317,942 | .26 |
Class T | 133,045 | .30 |
Class B | 14,783 | .30 |
Class C | 102,144 | .24 |
Institutional Class | 52,653 | .20 |
| $ 620,567 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $4,050 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $389 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $15,566. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $23,656 for the period.
Annual Report
Notes to Financial Statements - continued
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net investment income |
|
|
Class A | $ 2,098,780 | $ 2,004,234 |
Class T | 689,503 | 666,068 |
Class B | 54,086 | 71,622 |
Class C | 483,241 | 400,020 |
Institutional Class | 403,597 | 511,918 |
Total | $ 3,729,207 | $ 3,653,862 |
From net realized gain |
|
|
Class A | $ 45,735 | $ - |
Class T | 17,387 | - |
Class B | 2,010 | - |
Class C | 15,931 | - |
Institutional Class | 7,259 | - |
Total | $ 88,322 | $ - |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 2,276,742 | 1,274,291 | $ 59,563,163 | $ 28,192,446 |
Reinvestment of distributions | 82,514 | 85,327 | 1,888,613 | 1,751,329 |
Shares redeemed | (1,151,286) | (1,517,309) | (29,069,514) | (33,069,256) |
Net increase (decrease) | 1,207,970 | (157,691) | $ 32,382,262 | $ (3,125,481) |
Class T |
|
|
|
|
Shares sold | 365,889 | 287,114 | $ 9,445,083 | $ 6,306,381 |
Reinvestment of distributions | 29,388 | 30,843 | 673,761 | 634,437 |
Shares redeemed | (310,668) | (367,378) | (7,776,879) | (7,924,238) |
Net increase (decrease) | 84,609 | (49,421) | $ 2,341,965 | $ (983,420) |
Class B |
|
|
|
|
Shares sold | 19,626 | 17,365 | $ 511,179 | $ 386,769 |
Reinvestment of distributions | 2,105 | 3,129 | 47,986 | 63,812 |
Shares redeemed | (75,934) | (111,479) | (1,892,640) | (2,387,277) |
Net increase (decrease) | (54,203) | (90,985) | $ (1,333,475) | $ (1,936,696) |
Class C |
|
|
|
|
Shares sold | 898,033 | 509,725 | $ 23,064,197 | $ 11,190,388 |
Reinvestment of distributions | 17,647 | 15,458 | 397,963 | 312,553 |
Shares redeemed | (365,639) | (425,145) | (9,096,804) | (9,149,304) |
Net increase (decrease) | 550,041 | 100,038 | $ 14,365,356 | $ 2,353,637 |
Institutional Class |
|
|
|
|
Shares sold | 1,373,720 | 936,449 | $ 36,918,565 | $ 20,838,974 |
Reinvestment of distributions | 15,288 | 22,869 | 354,761 | 476,446 |
Shares redeemed | (514,863) | (1,093,899) | (13,443,816) | (24,501,213) |
Net increase (decrease) | 874,145 | (134,581) | $ 23,829,510 | $ (3,185,793) |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report
Report of Independent Registered Public Accounting Firm
To the Trustees of Advisor Series VII and the Shareholders of Fidelity Advisor Biotechnology Fund, Fidelity Advisor Communications Equipment Fund, Fidelity Advisor Consumer Discretionary Fund, Fidelity Advisor Electronics Fund, Fidelity Advisor Energy Fund, Fidelity Advisor Financial Services Fund, Fidelity Advisor Health Care Fund, Fidelity Advisor Industrials Fund, Fidelity Advisor Technology Fund and Fidelity Advisor Utilities Fund:
We have audited the accompanying statements of assets and liabilities of Fidelity Advisor Biotechnology Fund, Fidelity Advisor Communications Equipment Fund, Fidelity Advisor Consumer Discretionary Fund, Fidelity Advisor Electronics Fund, Fidelity Advisor Energy Fund, Fidelity Advisor Financial Services Fund, Fidelity Advisor Health Care Fund, Fidelity Advisor Industrials Fund, Fidelity Advisor Technology Fund and Fidelity Advisor Utilities Fund (collectively, the "Funds"), including the schedules of investments, as of July 31, 2014, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2014, by correspondence with the custodians and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Advisor Biotechnology Fund, Fidelity Advisor Communications Equipment Fund, Fidelity Advisor Consumer Discretionary Fund, Fidelity Advisor Electronics Fund, Fidelity Advisor Energy Fund, Fidelity Advisor Financial Services Fund, Fidelity Advisor Health Care Fund, Fidelity Advisor Industrials Fund, Fidelity Advisor Technology Fund and Fidelity Advisor Utilities Fund as of July 31, 2014, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
September 17, 2014
Annual Report
Trustees and Officers
The Trustees and officers of the trust and funds, as applicable, are listed below. The Board of Trustees governs each fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee each fund's activities, review contractual arrangements with companies that provide services to each fund, oversee management of the risks associated with such activities and contractual arrangements, and review each fund's performance. Each of the Trustees oversees 74 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. The officers hold office without limit in time, except that any officer may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
Experience, Skills, Attributes, and Qualifications of the Funds' Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing each fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the funds, is provided below.
Board Structure and Oversight Function. Brian B. Hogan is an interested person (as defined in the 1940 Act) and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the funds. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Michael E. Wiley serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity funds are overseen by different Boards of Trustees. The funds' Board oversees Fidelity's sector portfolios. Other Boards oversee Fidelity's equity and high income funds, and Fidelity's investment grade bond, money market, and asset allocation funds. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, each fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the funds' activities and associated risks. The Board, acting through its committees, has charged SelectCo and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the funds' business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the funds are carried out by or through SelectCo, its affiliates, and other service providers, the funds' exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the funds' activities, oversight is exercised primarily through the Operations and Audit Committees. Appropriate personnel, including but not limited to the funds' Chief Compliance Officer (CCO), SelectCo's internal auditor, the independent accountants, the funds' Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Funds' Trustees."
The funds' Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.
Annual Report
Interested Trustee*:
Correspondence intended for the Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+ | |
Brian B. Hogan (1964) | |
Year of Election or Appointment: 2014 Trustee Chairman of the Board of Trustees | |
| Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as President of FMR's Equity Division (2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. |
* Trustee has been determined to be an "Interested Trustee" by virtue of, among other things, his affiliation with the trust or various entities under common control with SelectCo.
+ The information above includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for each fund.
Independent Trustees:
Correspondence intended for each Independent Trustee (that is, the Trustees other than the Interested Trustee) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+ | |
David A. Rosow (1942) | |
Year of Election or Appointment: 2013 Trustee | |
| Mr. Rosow also serves as Trustee of other Fidelity funds. Mr. Rosow is Chairman and Chief Executive Officer of International Golf Group, Inc. (golf course development, 1989-present). Previously, Mr. Rosow served as Chairman and Chief Executive Officer of Rosow & Company, Inc. (private investment company, 1989-2011), a Lead Director of Hudson United Bancorp (2001-2006) and as a Director of TD Banknorth (1996-2006). In addition, Mr. Rosow is a member (2008-present) and President (2009-present) of the Town Council of Palm Beach, Florida. Mr. Rosow served as a Member of the Advisory Board of other Fidelity funds (2012-2013). |
Garnett A. Smith (1947) | |
Year of Election or Appointment: 2013 Trustee | |
| Mr. Smith also serves as Trustee of other Fidelity funds. Prior to Mr. Smith's retirement, he served as Chairman and Chief Executive Officer of Inbrand Corp. (manufacturer of personal absorbent products, 1990-1997). He also served as President (1986-1990) of Inbrand Corp. Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank. In addition, Mr. Smith served as a Member of the Advisory Board of other Fidelity funds (2012-2013) and as a board member of the Jackson Hole Land Trust (2009-2012). |
Michael E. Wiley (1950) | |
Year of Election or Appointment: 2008 Trustee Chairman of the Independent Trustees | |
| Mr. Wiley also serves as Trustee of other Fidelity funds. Mr. Wiley serves as a Director of Tesoro Corporation (independent oil refiner and marketer, 2005-present), and a Director of Bill Barrett Corporation (exploration and production, 2005-present). In addition, Mr. Wiley also serves as a Director of Post Oak Bank (privately-held bank, 2004-present). Previously, Mr. Wiley served as a Trustee of other Fidelity funds (2008-2013), as a Director of Asia Pacific Exploration Consolidated (international oil and gas exploration and productions, 2008-2013), as a member of the Board of Trustees of the University of Tulsa (2000-2006; 2007-2010), as a Senior Energy Advisor of Katzenbach Partners, LLC (consulting, 2006-2007), as an Advisory Director of Riverstone Holdings (private investment), Chairman, President, and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004), and as Director of Spinnaker Exploration Company (exploration and production, 2001-2005). |
Annual Report
Trustees and Officers - continued
+ The information above includes each Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to each Trustee's qualifications to serve as a Trustee, which led to the conclusion that each Trustee should serve as a Trustee for each fund.
Officers:
Except for Anthony R. Rochte, correspondence intended for each officer may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Correspondence intended for Mr. Rochte may be sent to SelectCo, 1225 17th Street, Denver, Colorado 80202-5541. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation | |
Christopher S. Bartel (1971) | |
Year of Election or Appointment: 2009 Vice President | |
| Mr. Bartel also serves as Vice President of other funds. Mr. Bartel serves as a Director, President, and Chief Executive Officer of Fidelity Management & Research (Japan) Inc. (2012-present), a Director of Fidelity Management & Research (Hong Kong) (2012-present), and Senior Vice President of Global Equity Research (2010-present). Previously, Mr. Bartel served as Senior Vice President of Equity Research (2009-2010), Managing Director of Research (2006-2009), and an analyst and portfolio manager (2000-2006). |
Elizabeth Paige Baumann (1968) | |
Year of Election or Appointment: 2012 Anti-Money Laundering (AML) Officer | |
| Ms. Baumann also serves as AML Officer of other funds. She is Chief AML Officer of FMR LLC (2012-present) and is an employee of Fidelity Investments. Previously, Ms. Baumann served as Vice President and Deputy Anti-Money Laundering Officer (2007-2012). |
Marc Bryant (1966) | |
Year of Election or Appointment: 2013 Secretary | |
| Mr. Bryant also serves as an officer of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC. Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006). |
William C. Coffey (1969) | |
Year of Election or Appointment: 2009 Assistant Secretary | |
| Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009). |
Jonathan Davis (1968) | |
Year of Election or Appointment: 2010 Assistant Treasurer | |
| Mr. Davis also serves as Assistant Treasurer of other funds. Mr. Davis is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (2003-2010). |
Adrien E. Deberghes (1967) | |
Year of Election or Appointment: 2013 President and Treasurer | |
| Mr. Deberghes also serves as an officer of other funds. He is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). |
Stephanie J. Dorsey (1969) | |
Year of Election or Appointment: 2010 Assistant Treasurer | |
| Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank. |
Howard J. Galligan III (1966) | |
Year of Election or Appointment: 2014 Chief Financial Officer | |
| Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011). |
James D. Gryglewicz (1972) | |
Year of Election or Appointment: 2014 Chief Compliance Officer | |
| Mr. Gryglewicz also serves as Chief Compliance Officer of other funds. Mr. Gryglewicz serves as Vice President of Asset Management Compliance (2009-present) and is an employee of Fidelity Investments (2004-present). |
Brian B. Hogan (1964) | |
Year of Election or Appointment: 2009 Vice President | |
| Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as President of FMR's Equity Division (2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. |
Chris Maher (1972) | |
Year of Election or Appointment: 2013 Assistant Treasurer | |
| Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of FMR's Program Management Group (2010-2013), and Vice President of Valuation Oversight (2008-2010). |
Kenneth B. Robins (1969) | |
Year of Election or Appointment: 2013 Deputy Treasurer | |
| Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (2013-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served in other fund officer roles. |
Anthony R. Rochte (1968) | |
Year of Election or Appointment: 2013 Vice President | |
| Mr. Rochte also serves as Vice President of other funds. Mr. Rochte serves as President of Fidelity SelectCo, LLC (2012-present) and is an employee of Fidelity Investments (2012-present). Prior to joining Fidelity Investments, Mr. Rochte served as Senior Managing Director and head of State Street Global Advisors' North American Intermediary Business Group (2006-2012). |
Stacie M. Smith (1974) | |
Year of Election or Appointment: 2013 Assistant Treasurer | |
| Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). |
Renee Stagnone (1975) | |
Year of Election or Appointment: 2013 Deputy Treasurer | |
| Ms. Stagnone also serves as Deputy Treasurer of other funds. Ms. Stagnone is an employee of Fidelity Investments. |
Joseph F. Zambello (1957) | |
Year of Election or Appointment: 2011 Deputy Treasurer | |
| Mr. Zambello also serves as Deputy Treasurer of other funds. Mr. Zambello is an employee of Fidelity Investments. Previously, Mr. Zambello served as Vice President of FMR's Program Management Group (2009-2011) and Vice President of the Transfer Agent Oversight Group (2005-2009). |
Annual Report
Distributions (Unaudited)
The Board of Trustees of each fund voted to pay to shareholders of record at the opening of business on record date the following distributions per share derived from capital gains realized from sales of portfolio securities and dividends derived from net investment income:
| Pay Date | Record Date | Dividends | Capital Gains |
Fidelity Advisor Biotechnology Fund |
|
|
|
|
Institutional Class | 09/08/14 | 09/05/14 | $0.003 | $0.184 |
Fidelity Advisor Communications Equipment Fund |
|
|
|
|
Institutional Class | 09/15/14 | 09/12/14 | $0.058 | $0.000 |
Fidelity Advisor Consumer Discretionary Fund |
|
|
|
|
Institutional Class | 09/08/14 | 09/05/14 | $0.000 | $2.060 |
Fidelity Advisor Electronics Fund |
|
|
|
|
Institutional Class | 09/15/14 | 09/12/14 | $0.000 | $0.000 |
Fidelity Advisor Energy Fund |
|
|
|
|
Institutional Class | 09/08/14 | 09/05/14 | $0.024 | $2.067 |
Fidelity Advisor Financial Services Fund |
|
|
|
|
Institutional Class | 09/08/14 | 09/05/14 | $0.071 | $0.000 |
Fidelity Advisor Health Care Fund |
|
|
|
|
Institutional Class | 09/08/14 | 09/05/14 | $0.000 | $3.103 |
Fidelity Advisor Industrials Fund |
|
|
|
|
Institutional Class | 09/08/14 | 09/05/14 | $0.096 | $2.178 |
Fidelity Advisor Technology Fund |
|
|
|
|
Institutional Class | 09/08/14 | 09/05/14 | $0.000 | $2.085 |
Fidelity Advisor Utilities Fund |
|
|
|
|
Institutional Class | 09/08/14 | 09/05/14 | $0.236 | $1.219 |
The funds hereby designate as capital gain dividend the amounts noted below for the taxable year ended July 31, 2014, or, if subsequently determined to be different, the net capital gain of such year.
Fidelity Advisor Biotechnology Fund | $17,445,492 |
Fidelity Advisor Consumer Discretionary Fund | $13,097,425 |
Fidelity Advisor Energy Fund | $40,725,007 |
Fidelity Advisor Health Care Fund | $125,111,262 |
Fidelity Advisor Industrials Fund | $49,916,446 |
Fidelity Advisor Technology Fund | $46,221,621 |
Fidelity Advisor Utilities Fund | $12,900,726 |
A percentage of the dividends distributed during the fiscal year for the following funds qualify for the dividends-received deduction for corporate shareholders:
| September 2013 | December 2013 |
Fidelity Advisor Consumer Discretionary Fund |
|
|
Institutional Class | 11% | 56% |
Fidelity Advisor Energy Fund |
|
|
Institutional Class | 90% | 34% |
Fidelity Advisor Financial Services Fund |
|
|
Institutional Class | 72% | 100% |
Fidelity Advisor Health Care Fund |
|
|
Institutional Class | 17% | 13% |
Fidelity Advisor Industrials Fund |
|
|
Institutional Class | 98% | 59% |
Fidelity Advisor Technology Fund |
|
|
Institutional Class | 0% | 52% |
Fidelity Advisor Utilities Fund |
|
|
Institutional Class | 100% | 100% |
Annual Report
A percentage of the dividends distributed during the fiscal year for the following funds may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
| September 2013 | December 2013 |
Fidelity Advisor Consumer Discretionary Fund |
|
|
Institutional Class | 12% | 61% |
Fidelity Advisor Energy Fund |
|
|
Institutional Class | 92% | 39% |
Fidelity Advisor Financial Services Fund |
|
|
Institutional Class | 100% | 100% |
Fidelity Advisor Health Care Fund |
|
|
Institutional Class | 21% | 14% |
Fidelity Advisor Industrials Fund |
|
|
Institutional Class | 98% | 55% |
Fidelity Advisor Technology Fund |
|
|
Institutional Class | 0% | 54% |
Fidelity Advisor Utilities Fund |
|
|
Institutional Class | 100% | 100% |
The funds will notify shareholders in January 2015 of amounts for use in preparing 2014 income tax returns.
Annual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Advisor Focus Funds
In connection with separate internal corporate reorganizations involving Fidelity Management & Research (U.K.) Inc. (FMR U.K.) and Fidelity Management & Research (Japan) Inc. (FMR Japan), the Board approved certain non-material amendments to the funds' subadvisory agreements with FMR U.K. and FMR Japan to reflect that, after these reorganizations, FMR Investment Management (UK) Limited and Fidelity Management & Research (Japan) Limited will carry on the business of FMR U.K. and FMR Japan, respectively. The Board noted that no changes to the portfolio managers or to the foreign research or investment advisory services provided to the funds were expected in connection with either reorganization and that the same personnel and resources will be available to the funds with the new entities. After considering all of the factors it believed relevant, the Board concluded that the amended sub-advisory agreements should be approved.
Annual Report
Investment Adviser
Fidelity SelectCo, LLC
Denver, CO
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research (U.K.) Inc.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
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. ††
Boston, MA
State Street Bank and Trust †††
Quincy, MA
† Custodian for Fidelity Advisor Consumer Discretionary Fund, Fidelity Advisor Financial Services Fund, Fidelity Advisor Health Care Fund, Fidelity Advisor Industrials Fund, Fidelity Advisor Technology Fund, and Fidelity Advisor Utilities Fund.
†† Custodian for Fidelity Advisor Energy Fund.
††† Custodian for Fidelity Advisor Biotechnology Fund, Fidelity Advisor
Communications Equipment Fund, and Fidelity Advisor Electronics Fund.
(Fidelity Cover Art)
AFOCI-UANNPRO-0914
1.789242.110
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor®
Real Estate
Fund - Class A, Class T, Class B
and Class C
Annual Report
July 31, 2014
(Fidelity Cover Art)
Contents
Performance | How the fund has done over time. | |
Management's Discussion of Fund Performance | The Portfolio Manager's review of fund performance and strategy. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to financial statements. | |
Report of Independent Registered Public Accounting Firm |
| |
Trustees and Officers |
| |
Distributions |
| |
Board Approval of Investment Advisory Contracts and Management Fees |
|
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2014 FMR LLC. All rights reserved.
Annual Report
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Annual Report
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow. Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) | 5.88% | 20.59% | 9.42% |
Class T (incl. 3.50% sales charge) | 8.15% | 20.86% | 9.41% |
Class B (incl. contingent deferred sales charge) A | 6.45% | 20.91% | 9.48% |
Class C (incl. contingent deferred sales charge)B | 10.52% | 21.13% | 9.25% |
A Class B shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 5%, 2%, and 0%, respectively.
B Class C shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 1%, 0%, and 0%, respectively.
Annual Report
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Real Estate Fund - Class A on July 31, 2004, and the current 5.75% sales charge was paid. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
Annual Report
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Samuel Wald, Portfolio Manager of Fidelity Advisor® Real Estate Fund: For the year, the fund's Class A, Class T, Class B and Class C shares gained 12.34%, 12.07%, 11.45% and 11.52%, respectively (excluding sales charges), versus 12.61% for the benchmark Dow Jones U.S. Select Real Estate Securities IndexSM and 16.94% for the S&P 500® Index. The fund was hampered by subpar stock picking among residential and diversified real estate investment trusts (REITs), although security selection among industrial/office REITs and in the so-called real estate related category (primarily health care REITs) was very strong. The fund's biggest individual detractor was Vornado Realty Trust, in which the fund was significantly underweighted. Another notable detractor was mall operator Glimcher Realty Trust, which I ultimately sold in June. Equity One also weighed on results and was no longer in the fund at period end. On the positive side, Digital Realty Trust, which owns data centers, was the top contributor, benefiting from a recovery off a very low valuation and the easing of investor concerns surrounding oversupply in its industry. Another notable contributor was Essex Property Trust, an apartment REIT. I liked Essex partly for its solid management and exposure to West Coast apartments.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual 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 (February 1, 2014 to July 31, 2014).
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.
Annual Report
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.13% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,135.60 | $ 5.98 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.19 | $ 5.66 |
Class T | 1.35% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,134.30 | $ 7.14 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.10 | $ 6.76 |
Class B | 1.91% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,131.00 | $ 10.09 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.32 | $ 9.54 |
Class C | 1.88% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,131.30 | $ 9.93 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.47 | $ 9.39 |
Institutional Class | .87% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,137.20 | $ 4.61 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.48 | $ 4.36 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Simon Property Group, Inc. | 12.5 | 13.3 |
Boston Properties, Inc. | 5.8 | 5.7 |
Public Storage | 5.1 | 6.8 |
Essex Property Trust, Inc. | 4.8 | 4.8 |
HCP, Inc. | 4.2 | 2.7 |
SL Green Realty Corp. | 4.1 | 4.1 |
Federal Realty Investment Trust (SBI) | 3.7 | 1.6 |
Digital Realty Trust, Inc. | 3.7 | 0.0 |
Alexandria Real Estate Equities, Inc. | 3.6 | 3.8 |
Taubman Centers, Inc. | 3.4 | 1.3 |
| 50.9 | |
Top Five REIT Sectors as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
REITs - Office Buildings | 19.1 | 19.1 |
REITs - Apartments | 16.8 | 17.0 |
REITs - Malls | 15.9 | 15.0 |
REITs - Industrial Buildings | 12.5 | 16.1 |
REITs - Health Care Facilities | 10.4 | 11.2 |
Asset Allocation (% of fund's net assets) | |||||||
As of July 31, 2014 | As of January 31, 2014 | ||||||
 | Stocks 99.0% |
| | Stocks 99.0% |
| ||
 | Short-Term |
| | Short-Term |
| ||
Annual Report
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 99.0% | |||
Shares | Value | ||
HOTELS, RESTAURANTS & LEISURE - 0.2% | |||
Hotels, Resorts & Cruise Lines - 0.2% | |||
Starwood Hotels & Resorts Worldwide, Inc. | 15,200 | $ 1,167,968 | |
REAL ESTATE INVESTMENT TRUSTS - 97.4% | |||
REITs - Apartments - 16.8% | |||
AvalonBay Communities, Inc. | 60,240 | 8,920,339 | |
Equity Residential (SBI) | 278,409 | 17,999,142 | |
Essex Property Trust, Inc. | 198,815 | 37,689,360 | |
Mid-America Apartment Communities, Inc. | 355,814 | 24,878,515 | |
Post Properties, Inc. | 402,300 | 21,804,660 | |
UDR, Inc. | 705,300 | 20,510,124 | |
TOTAL REITS - APARTMENTS | 131,802,140 | ||
REITs - Health Care Facilities - 10.4% | |||
HCP, Inc. | 792,295 | 32,904,011 | |
Health Care REIT, Inc. | 156,569 | 9,962,485 | |
Senior Housing Properties Trust (SBI) | 646,400 | 14,776,704 | |
Ventas, Inc. | 369,005 | 23,431,818 | |
TOTAL REITS - HEALTH CARE FACILITIES | 81,075,018 | ||
REITs - Hotels - 6.7% | |||
Ashford Hospitality Prime, Inc. | 307,400 | 5,118,210 | |
FelCor Lodging Trust, Inc. | 1,543,948 | 16,165,136 | |
Host Hotels & Resorts, Inc. | 589,334 | 12,812,121 | |
LaSalle Hotel Properties (SBI) | 522,100 | 18,163,859 | |
TOTAL REITS - HOTELS | 52,259,326 | ||
REITs - Industrial Buildings - 12.5% | |||
DCT Industrial Trust, Inc. | 2,359,000 | 18,470,970 | |
Duke Realty LP | 130,800 | 2,353,092 | |
Extra Space Storage, Inc. | 220,400 | 11,401,292 | |
Prologis, Inc. | 540,877 | 22,073,190 | |
Public Storage | 233,350 | 40,045,194 | |
Terreno Realty Corp. | 206,400 | 3,859,680 | |
TOTAL REITS - INDUSTRIAL BUILDINGS | 98,203,418 | ||
Common Stocks - continued | |||
Shares | Value | ||
REAL ESTATE INVESTMENT TRUSTS - CONTINUED | |||
REITs - Malls - 15.9% | |||
Simon Property Group, Inc. | 584,650 | $ 98,332,282 | |
Taubman Centers, Inc. | 360,500 | 26,518,380 | |
TOTAL REITS - MALLS | 124,850,662 | ||
REITs - Management/Investment - 6.1% | |||
Digital Realty Trust, Inc. (d) | 443,800 | 28,576,282 | |
Equity Lifestyle Properties, Inc. | 284,241 | 12,589,034 | |
Weyerhaeuser Co. (d) | 200,200 | 6,270,264 | |
TOTAL REITS - MANAGEMENT/INVESTMENT | 47,435,580 | ||
REITs - Mobile Home Parks - 0.8% | |||
Sun Communities, Inc. | 115,722 | 6,090,449 | |
REITs - Office Buildings - 19.1% | |||
Alexandria Real Estate Equities, Inc. | 362,333 | 28,479,374 | |
Boston Properties, Inc. | 381,647 | 45,587,734 | |
Cousins Properties, Inc. | 595,300 | 7,369,814 | |
CyrusOne, Inc. | 24,191 | 601,146 | |
Douglas Emmett, Inc. | 409,400 | 11,663,806 | |
Piedmont Office Realty Trust, Inc. Class A (d) | 1,219,400 | 23,717,330 | |
SL Green Realty Corp. | 294,765 | 31,775,667 | |
TOTAL REITS - OFFICE BUILDINGS | 149,194,871 | ||
REITs - Shopping Centers - 8.9% | |||
Acadia Realty Trust (SBI) | 86,300 | 2,436,249 | |
Cedar Shopping Centers, Inc. | 918,775 | 5,788,283 | |
Excel Trust, Inc. | 247,325 | 3,202,859 | |
Federal Realty Investment Trust (SBI) | 237,302 | 28,974,574 | |
Kite Realty Group Trust | 1,180,531 | 7,201,239 | |
Ramco-Gershenson Properties Trust (SBI) | 94,800 | 1,573,680 | |
Vornado Realty Trust | 95,383 | 10,112,506 | |
Washington Prime Group, Inc. (a) | 547,275 | 10,338,025 | |
TOTAL REITS - SHOPPING CENTERS | 69,627,415 | ||
Common Stocks - continued | |||
Shares | Value | ||
REAL ESTATE INVESTMENT TRUSTS - CONTINUED | |||
REITs - Single Tenant - 0.2% | |||
Select Income (REIT) | 64,200 | $ 1,781,550 | |
TOTAL REAL ESTATE INVESTMENT TRUSTS | 762,320,429 | ||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.4% | |||
Real Estate Operating Companies - 1.4% | |||
Forest City Enterprises, Inc. Class A (a) | 571,767 | 10,960,773 | |
TOTAL COMMON STOCKS (Cost $607,334,180) |
| ||
Money Market Funds - 5.8% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 14,136,441 | 14,136,441 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 30,894,125 | 30,894,125 | |
TOTAL MONEY MARKET FUNDS (Cost $45,030,566) |
| ||
TOTAL INVESTMENT PORTFOLIO - 104.8% (Cost $652,364,746) | 819,479,736 | ||
NET OTHER ASSETS (LIABILITIES) - (4.8)% | (37,175,899) | ||
NET ASSETS - 100% | $ 782,303,837 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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 | $ 12,006 |
Fidelity Securities Lending Cash Central Fund | 49,969 |
Total | $ 61,975 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $29,983,504) - See accompanying schedule: Unaffiliated issuers (cost $607,334,180) | $ 774,449,170 |
|
Fidelity Central Funds (cost $45,030,566) | 45,030,566 |
|
Total Investments (cost $652,364,746) |
| $ 819,479,736 |
Receivable for investments sold | 5,722,017 | |
Receivable for fund shares sold | 1,422,137 | |
Dividends receivable | 286,695 | |
Distributions receivable from Fidelity Central Funds | 10,951 | |
Other receivables | 25,596 | |
Total assets | 826,947,132 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 11,690,040 | |
Payable for fund shares redeemed | 1,245,274 | |
Accrued management fee | 363,048 | |
Distribution and service plan fees payable | 173,982 | |
Other affiliated payables | 188,689 | |
Other payables and accrued expenses | 88,137 | |
Collateral on securities loaned, at value | 30,894,125 | |
Total liabilities | 44,643,295 | |
|
|
|
Net Assets | $ 782,303,837 | |
Net Assets consist of: |
| |
Paid in capital | $ 577,815,282 | |
Undistributed net investment income | 2,093,231 | |
Accumulated undistributed net realized gain (loss) on investments | 35,280,334 | |
Net unrealized appreciation (depreciation) on investments | 167,114,990 | |
Net Assets | $ 782,303,837 | |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
Calculation of Maximum Offering Price Class A: | $ 22.57 | |
|
|
|
Maximum offering price per share (100/94.25 of $22.57) | $ 23.95 | |
Class T: | $ 22.55 | |
|
|
|
Maximum offering price per share (100/96.50 of $22.55) | $ 23.37 | |
Class B: | $ 22.28 | |
|
|
|
Class C: | $ 22.23 | |
|
|
|
Institutional Class: | $ 22.74 | |
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.
Annual Report
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 18,762,254 |
Income from Fidelity Central Funds |
| 61,975 |
Total income |
| 18,824,229 |
|
|
|
Expenses | ||
Management fee | $ 3,960,078 | |
Transfer agent fees | 1,928,905 | |
Distribution and service plan fees | 1,897,204 | |
Accounting and security lending fees | 256,508 | |
Custodian fees and expenses | 45,335 | |
Independent trustees' compensation | 17,736 | |
Registration fees | 126,909 | |
Audit | 51,522 | |
Legal | 10,949 | |
Interest | 748 | |
Miscellaneous | 11,660 | |
Total expenses before reductions | 8,307,554 | |
Expense reductions | (62,626) | 8,244,928 |
Net investment income (loss) | 10,579,301 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers |
| 45,747,977 |
Change in net unrealized appreciation (depreciation) on investment securities | 22,594,134 | |
Net gain (loss) | 68,342,111 | |
Net increase (decrease) in net assets resulting from operations | $ 78,921,412 | |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 10,579,301 | $ 7,647,889 |
Net realized gain (loss) | 45,747,977 | 29,947,480 |
Change in net unrealized appreciation (depreciation) | 22,594,134 | 6,004,617 |
Net increase (decrease) in net assets resulting from operations | 78,921,412 | 43,599,986 |
Distributions to shareholders from net investment income | (9,317,425) | (7,604,308) |
Distributions to shareholders from net realized gain | (17,838,487) | (5,306,125) |
Total distributions | (27,155,912) | (12,910,433) |
Share transactions - net increase (decrease) | (20,280,229) | 86,239,926 |
Total increase (decrease) in net assets | 31,485,271 | 116,929,479 |
|
|
|
Net Assets | ||
Beginning of period | 750,818,566 | 633,889,087 |
End of period (including undistributed net investment income of $2,093,231 and undistributed net investment income of $1,355,965, respectively) | $ 782,303,837 | $ 750,818,566 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 20.92 | $ 19.83 | $ 18.24 | $ 14.88 | $ 9.41 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .31 | .22 | .17 | .12 | .19 |
Net realized and unrealized gain (loss) | 2.13 | 1.27 | 2.02 | 3.37 | 5.46 |
Total from investment operations | 2.44 | 1.49 | 2.19 | 3.49 | 5.65 |
Distributions from net investment income | (.27) | (.23) | (.13) | (.13) | (.18) |
Distributions from net realized gain | (.52) | (.17) | (.47) | - | - |
Total distributions | (.79) | (.40) | (.60) | (.13) | (.18) |
Net asset value, end of period | $ 22.57 | $ 20.92 | $ 19.83 | $ 18.24 | $ 14.88 |
Total ReturnA, B | 12.34% | 7.66% | 12.81% | 23.63% | 60.38% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.16% | 1.17% | 1.19% | 1.19% | 1.23% |
Expenses net of fee waivers, if any | 1.16% | 1.17% | 1.19% | 1.19% | 1.23% |
Expenses net of all reductions | 1.15% | 1.16% | 1.18% | 1.18% | 1.22% |
Net investment income (loss) | 1.47% | 1.06% | .98% | .69% | 1.45% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 274,136 | $ 246,323 | $ 199,303 | $ 178,978 | $ 117,929 |
Portfolio turnover rateE | 83% | 63% | 48% | 63% | 60% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 20.91 | $ 19.82 | $ 18.24 | $ 14.90 | $ 9.42 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .26 | .17 | .13 | .07 | .15 |
Net realized and unrealized gain (loss) | 2.13 | 1.28 | 2.02 | 3.38 | 5.47 |
Total from investment operations | 2.39 | 1.45 | 2.15 | 3.45 | 5.62 |
Distributions from net investment income | (.23) | (.19) | (.10) | (.11) | (.14) |
Distributions from net realized gain | (.52) | (.17) | (.47) | - | - |
Total distributions | (.75) | (.36) | (.57) | (.11) | (.14) |
Net asset value, end of period | $ 22.55 | $ 20.91 | $ 19.82 | $ 18.24 | $ 14.90 |
Total ReturnA, B | 12.07% | 7.43% | 12.52% | 23.28% | 60.02% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.37% | 1.38% | 1.43% | 1.44% | 1.49% |
Expenses net of fee waivers, if any | 1.37% | 1.38% | 1.43% | 1.44% | 1.49% |
Expenses net of all reductions | 1.36% | 1.38% | 1.43% | 1.44% | 1.48% |
Net investment income (loss) | 1.26% | .85% | .73% | .43% | 1.19% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 138,783 | $ 114,717 | $ 86,987 | $ 76,785 | $ 59,529 |
Portfolio turnover rateE | 83% | 63% | 48% | 63% | 60% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 20.66 | $ 19.59 | $ 18.05 | $ 14.77 | $ 9.35 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .14 | .06 | .04 | (.01) | .09 |
Net realized and unrealized gain (loss) | 2.10 | 1.26 | 2.00 | 3.35 | 5.42 |
Total from investment operations | 2.24 | 1.32 | 2.04 | 3.34 | 5.51 |
Distributions from net investment income | (.11) | (.08) | (.03) | (.06) | (.09) |
Distributions from net realized gain | (.52) | (.17) | (.47) | - | - |
Total distributions | (.62) G | (.25) | (.50) | (.06) | (.09) |
Net asset value, end of period | $ 22.28 | $ 20.66 | $ 19.59 | $ 18.05 | $ 14.77 |
Total ReturnA, B | 11.45% | 6.84% | 11.99% | 22.69% | 59.14% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.92% | 1.92% | 1.93% | 1.94% | 1.98% |
Expenses net of fee waivers, if any | 1.92% | 1.92% | 1.93% | 1.94% | 1.98% |
Expenses net of all reductions | 1.91% | 1.91% | 1.93% | 1.93% | 1.97% |
Net investment income (loss) | .70% | .31% | .23% | (.07)% | .70% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 5,631 | $ 8,697 | $ 9,481 | $ 11,542 | $ 12,078 |
Portfolio turnover rateE | 83% | 63% | 48% | 63% | 60% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Total distributions of $.62 per share is comprised of distributions from net investment income of $.106 and distributions from net realized gain of $.518 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 20.61 | $ 19.55 | $ 18.03 | $ 14.76 | $ 9.34 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .15 | .07 | .04 | (.01) | .09 |
Net realized and unrealized gain (loss) | 2.10 | 1.26 | 1.98 | 3.35 | 5.43 |
Total from investment operations | 2.25 | 1.33 | 2.02 | 3.34 | 5.52 |
Distributions from net investment income | (.11) | (.10) | (.03) | (.07) | (.10) |
Distributions from net realized gain | (.52) | (.17) | (.47) | - | - |
Total distributions | (.63) | (.27) | (.50) | (.07) | (.10) |
Net asset value, end of period | $ 22.23 | $ 20.61 | $ 19.55 | $ 18.03 | $ 14.76 |
Total ReturnA, B | 11.52% | 6.89% | 11.92% | 22.69% | 59.28% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.90% | 1.90% | 1.93% | 1.94% | 1.98% |
Expenses net of fee waivers, if any | 1.90% | 1.90% | 1.93% | 1.94% | 1.98% |
Expenses net of all reductions | 1.89% | 1.89% | 1.93% | 1.93% | 1.97% |
Net investment income (loss) | .73% | .33% | .23% | (.07)% | .71% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 64,822 | $ 75,461 | $ 55,064 | $ 47,406 | $ 31,204 |
Portfolio turnover rateE | 83% | 63% | 48% | 63% | 60% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 21.07 | $ 19.97 | $ 18.36 | $ 14.96 | $ 9.46 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .36 | .28 | .22 | .16 | .23 |
Net realized and unrealized gain (loss) | 2.15 | 1.27 | 2.03 | 3.39 | 5.47 |
Total from investment operations | 2.51 | 1.55 | 2.25 | 3.55 | 5.70 |
Distributions from net investment income | (.32) | (.28) | (.17) | (.15) | (.20) |
Distributions from net realized gain | (.52) | (.17) | (.47) | - | - |
Total distributions | (.84) | (.45) | (.64) | (.15) | (.20) |
Net asset value, end of period | $ 22.74 | $ 21.07 | $ 19.97 | $ 18.36 | $ 14.96 |
Total ReturnA | 12.64% | 7.92% | 13.12% | 23.92% | 60.75% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .89% | .90% | .93% | .93% | .97% |
Expenses net of fee waivers, if any | .89% | .90% | .93% | .93% | .97% |
Expenses net of all reductions | .88% | .89% | .93% | .92% | .96% |
Net investment income (loss) | 1.74% | 1.33% | 1.23% | .94% | 1.71% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 298,932 | $ 305,619 | $ 283,054 | $ 174,655 | $ 167,699 |
Portfolio turnover rateD | 83% | 63% | 48% | 63% | 60% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs)and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are
Annual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. 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. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to deferred trustees compensation and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 166,756,324 |
Gross unrealized depreciation | (2,764,308) |
Net unrealized appreciation (depreciation) on securities | $ 163,992,016 |
|
|
Tax Cost | $ 655,487,720 |
Annual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 2,100,791 |
Undistributed long-term capital gain | $ 38,403,308 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 163,992,016 |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 9,317,425 | $ 7,604,308 |
Long-term Capital Gains | 17,838,487 | 5,306,125 |
Total | $ 27,155,912 | $ 12,910,433 |
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $590,132,887 and $614,297,640, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services.
Annual Report
Notes to Financial Statements - continued
5. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan Fees - continued
For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 603,397 | $ 14,402 |
Class T | .25% | .25% | 592,456 | 512 |
Class B | .75% | .25% | 66,148 | 49,681 |
Class C | .75% | .25% | 635,203 | 133,491 |
|
|
| $ 1,897,204 | $ 198,086 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 73,245 |
Class T | 13,868 |
Class B* | 7,364 |
Class C* | 10,632 |
| $ 105,109 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
Annual Report
5. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 682,835 | .28 |
Class T | 287,873 | .24 |
Class B | 19,924 | .30 |
Class C | 175,451 | .28 |
Institutional Class | 762,822 | .26 |
| $ 1,928,905 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $7,646 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 or other affiliated entities of 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 Loan | Weighted Average Interest Rate | Interest Expense |
Borrower | $ 12,132,857 | .32% | $ 748 |
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity
Annual Report
Notes to Financial Statements - continued
6. Committed Line of Credit - continued
purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,225 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $49,969. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $62,615 for the period. In addition, through arrangements with the Fund's custodian, 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 $11.
Annual Report
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net investment income |
|
|
Class A | $ 3,106,444 | $ 2,470,657 |
Class T | 1,272,835 | 882,131 |
Class B | 37,346 | 35,157 |
Class C | 367,021 | 295,037 |
Institutional Class | 4,533,779 | 3,921,326 |
Total | $ 9,317,425 | $ 7,604,308 |
From net realized gain |
|
|
Class A | $ 5,987,252 | $ 1,782,636 |
Class T | 2,831,247 | 780,775 |
Class B | 199,888 | 76,216 |
Class C | 1,765,927 | 516,924 |
Institutional Class | 7,054,173 | 2,149,574 |
Total | $ 17,838,487 | $ 5,306,125 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 4,612,676 | 5,439,337 | $ 96,531,161 | $ 112,236,960 |
Reinvestment of distributions | 447,921 | 203,180 | 8,629,179 | 3,981,426 |
Shares redeemed | (4,687,177) | (3,918,883) | (96,076,538) | (80,333,991) |
Net increase (decrease) | 373,420 | 1,723,634 | $ 9,083,802 | $ 35,884,395 |
Class T |
|
|
|
|
Shares sold | 2,099,117 | 2,359,748 | $ 43,800,189 | $ 48,593,378 |
Reinvestment of distributions | 210,229 | 82,685 | 4,035,945 | 1,616,132 |
Shares redeemed | (1,641,944) | (1,344,901) | (33,718,920) | (27,286,441) |
Net increase (decrease) | 667,402 | 1,097,532 | $ 14,117,214 | $ 22,923,069 |
Class B |
|
|
|
|
Shares sold | 10,023 | 112,710 | $ 207,585 | $ 2,287,362 |
Reinvestment of distributions | 10,943 | 5,188 | 205,776 | 98,861 |
Shares redeemed | (189,250) | (180,971) | (3,819,153) | (3,674,862) |
Net increase (decrease) | (168,284) | (63,073) | $ (3,405,792) | $ (1,288,639) |
Annual Report
Notes to Financial Statements - continued
10. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class C |
|
|
|
|
Shares sold | 717,656 | 1,545,715 | $ 14,827,663 | $ 31,572,252 |
Reinvestment of distributions | 103,592 | 39,180 | 1,942,789 | 747,349 |
Shares redeemed | (1,565,975) | (739,815) | (31,183,633) | (14,971,358) |
Net increase (decrease) | (744,727) | 845,080 | $ (14,413,181) | $ 17,348,243 |
Institutional Class |
|
|
|
|
Shares sold | 9,124,799 | 10,230,645 | $ 190,381,315 | $ 215,528,191 |
Reinvestment of distributions | 444,680 | 177,841 | 8,636,132 | 3,543,243 |
Shares redeemed | (10,926,683) | (10,081,938) | (224,679,719) | (207,698,576) |
Net increase (decrease) | (1,357,204) | 326,548 | $ (25,662,272) | $ 11,372,858 |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Advisor Series VII and Shareholders of Fidelity Advisor Real Estate Fund:
We have audited the accompanying statement of assets and liabilities of Fidelity Advisor Real Estate Fund (the Fund), a fund of Fidelity Advisor Series VII, including the schedule of investments, as of July 31, 2014, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2014, by correspondence with the custodians and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Advisor Real Estate Fund as of July 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
September 11, 2014
Annual Report
Trustees and Officers
The Trustees and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Each of the Trustees oversees 74 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. The officers hold office without limit in time, except that any officer may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
Experience, Skills, Attributes, and Qualifications of the Fund's Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Annual Report
Board Structure and Oversight Function. Brian B. Hogan is an interested person (as defined in the 1940 Act) and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Michael E. Wiley serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's sector portfolios. Other Boards oversee Fidelity's equity and high income funds, and Fidelity's investment grade bond, money market, and asset allocation funds. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged SelectCo and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through SelectCo, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations and Audit Committees. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), SelectCo's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Fund's Trustees."
Annual Report
Trustees and Officers - continued
The fund's Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.
Interested Trustee*:
Correspondence intended for the Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+ | |
Brian B. Hogan (1964) | |
Year of Election or Appointment: 2014 Trustee Chairman of the Board of Trustees | |
| Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as President of FMR's Equity Division (2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. |
* Trustee has been determined to be an "Interested Trustee" by virtue of, among other things, his affiliation with the trust or various entities under common control with SelectCo.
+ The information above includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Annual Report
Independent Trustees:
Correspondence intended for each Independent Trustee (that is, the Trustees other than the Interested Trustee) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+ | |
David A. Rosow (1942) | |
Year of Election or Appointment: 2013 Trustee | |
| Mr. Rosow also serves as Trustee of other Fidelity funds. Mr. Rosow is Chairman and Chief Executive Officer of International Golf Group, Inc. (golf course development, 1989-present). Previously, Mr. Rosow served as Chairman and Chief Executive Officer of Rosow & Company, Inc. (private investment company, 1989-2011), a Lead Director of Hudson United Bancorp (2001-2006) and as a Director of TD Banknorth (1996-2006). In addition, Mr. Rosow is a member (2008-present) and President (2009-present) of the Town Council of Palm Beach, Florida. Mr. Rosow served as a Member of the Advisory Board of other Fidelity funds (2012-2013). |
Garnett A. Smith (1947) | |
Year of Election or Appointment: 2013 Trustee | |
| Mr. Smith also serves as Trustee of other Fidelity funds. Prior to Mr. Smith's retirement, he served as Chairman and Chief Executive Officer of Inbrand Corp. (manufacturer of personal absorbent products, 1990-1997). He also served as President (1986-1990) of Inbrand Corp. Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank. In addition, Mr. Smith served as a Member of the Advisory Board of other Fidelity funds (2012-2013) and as a board member of the Jackson Hole Land Trust (2009-2012). |
Michael E. Wiley (1950) | |
Year of Election or Appointment: 2008 Trustee Chairman of the Independent Trustees | |
| Mr. Wiley also serves as Trustee of other Fidelity funds. Mr. Wiley serves as a Director of Tesoro Corporation (independent oil refiner and marketer, 2005-present), and a Director of Bill Barrett Corporation (exploration and production, 2005-present). In addition, Mr. Wiley also serves as a Director of Post Oak Bank (privately-held bank, 2004-present). Previously, Mr. Wiley served as a Trustee of other Fidelity funds (2008-2013), as a Director of Asia Pacific Exploration Consolidated (international oil and gas exploration and production, 2008-2013), as a member of the Board of Trustees of the University of Tulsa (2000-2006; 2007-2010), as a Senior Energy Advisor of Katzenbach Partners, LLC (consulting, 2006-2007), as an Advisory Director of Riverstone Holdings (private investment), Chairman, President, and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004), and as Director of Spinnaker Exploration Company (exploration and production, 2001-2005). |
+ The information above includes each Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to each Trustee's qualifications to serve as a Trustee, which led to the conclusion that each Trustee should serve as a Trustee for the fund.
Annual Report
Officers:
Except for Anthony R. Rochte, correspondence intended for each officer may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Correspondence intended for Mr. Rochte may be sent to SelectCo, 1225 17th Street, Denver, Colorado 80202-5541. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation | |
Christopher S. Bartel (1971) | |
Year of Election or Appointment: 2009 Vice President | |
| Mr. Bartel also serves as Vice President of other funds. Mr. Bartel serves as a Director, President, and Chief Executive Officer of Fidelity Management & Research (Japan) Inc. (2012-present), a Director of Fidelity Management & Research (Hong Kong) (2012-present), and Senior Vice President of Global Equity Research (2010-present). Previously, Mr. Bartel served as Senior Vice President of Equity Research (2009-2010), Managing Director of Research (2006-2009), and an analyst and portfolio manager (2000-2006). |
Elizabeth Paige Baumann (1968) | |
Year of Election or Appointment: 2012 Anti-Money Laundering (AML) Officer | |
| Ms. Baumann also serves as AML Officer of other funds. She is Chief AML Officer of FMR LLC (2012-present) and is an employee of Fidelity Investments. Previously, Ms. Baumann served as Vice President and Deputy Anti-Money Laundering Officer (2007-2012). |
Marc Bryant (1966) | |
Year of Election or Appointment: 2013 Secretary | |
| Mr. Bryant also serves as an officer of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC. Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006). |
William C. Coffey (1969) | |
Year of Election or Appointment: 2009 Assistant Secretary | |
| Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009). |
Jonathan Davis (1968) | |
Year of Election or Appointment: 2010 Assistant Treasurer | |
| Mr. Davis also serves as Assistant Treasurer of other funds. Mr. Davis is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (2003-2010). |
Adrien E. Deberghes (1967) | |
Year of Election or Appointment: 2013 President and Treasurer | |
| Mr. Deberghes also serves as an officer of other funds. He is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). |
Stephanie J. Dorsey (1969) | |
Year of Election or Appointment: 2010 Assistant Treasurer | |
| Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank. |
Howard J. Galligan III (1966) | |
Year of Election or Appointment: 2014 Chief Financial Officer | |
| Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011). |
James D. Gryglewicz (1972) | |
Year of Election or Appointment: 2014 Chief Compliance Officer | |
| Mr. Gryglewicz also serves as Chief Compliance Officer of other funds. Mr. Gryglewicz serves as Vice President of Asset Management Compliance (2009-present) and is an employee of Fidelity Investments (2004-present). |
Brian B. Hogan (1964) | |
Year of Election or Appointment: 2009 Vice President | |
| Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as President of FMR's Equity Division (2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. |
Chris Maher (1972) | |
Year of Election or Appointment: 2013 Assistant Treasurer | |
| Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of FMR's Program Management Group (2010-2013), and Vice President of Valuation Oversight (2008-2010). |
Kenneth B. Robins (1969) | |
Year of Election or Appointment: 2013 Deputy Treasurer | |
| Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (2013-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served in other fund officer roles. |
Anthony R. Rochte (1968) | |
Year of Election or Appointment: 2013 Vice President | |
| Mr. Rochte also serves as Vice President of other funds. Mr. Rochte serves as President of Fidelity SelectCo, LLC (2012-present) and is an employee of Fidelity Investments (2012-present). Prior to joining Fidelity Investments, Mr. Rochte served as Senior Managing Director and head of State Street Global Advisors' North American Intermediary Business Group (2006-2012). |
Stacie M. Smith (1974) | |
Year of Election or Appointment: 2013 Assistant Treasurer | |
| Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). |
Renee Stagnone (1975) | |
Year of Election or Appointment: 2013 Deputy Treasurer | |
| Ms. Stagnone also serves as Deputy Treasurer of other funds. Ms. Stagnone is an employee of Fidelity Investments. |
Joseph F. Zambello (1957) | |
Year of Election or Appointment: 2011 Deputy Treasurer | |
| Mr. Zambello also serves as Deputy Treasurer of other funds. Mr. Zambello is an employee of Fidelity Investments. Previously, Mr. Zambello served as Vice President of FMR's Program Management Group (2009-2011) and Vice President of the Transfer Agent Oversight Group (2005-2009). |
Annual Report
Distributions (Unaudited)
The Board of Trustees of Fidelity Advisor Real Estate Fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities, and dividends derived from net investment income:
| Pay Date | Record Date | Dividends | Capital Gains |
Class A | 09/08/14 | 09/05/14 | $0.086 | $1.095 |
Class T | 09/08/14 | 09/05/14 | $0.073 | $1.095 |
Class B | 09/08/14 | 09/05/14 | $0.038 | $1.095 |
Class C | 09/08/14 | 09/05/14 | $0.044 | $1.095 |
The fund hereby designates as a capital gain dividend with respect to the taxable year ended July 31, 2014, $44,763,555, or, if subsequently determined to be different, the net capital gain of such year.
A total of 0.02% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax.
The fund will notify shareholders in January 2015 of amounts for use in preparing 2014 income tax returns.
Annual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Advisor Real Estate Fund
In connection with separate internal corporate reorganizations involving Fidelity Management & Research (U.K.) Inc. (FMR U.K.) and Fidelity Management & Research (Japan) Inc. (FMR Japan), the Board approved certain non-material amendments to the fund's subadvisory agreements with FMR U.K. and FMR Japan to reflect that, after these reorganizations, FMR Investment Management (UK) Limited and Fidelity Management & Research (Japan) Limited will carry on the business of FMR U.K. and FMR Japan, respectively. The Board noted that no changes to the portfolio managers or to the foreign research or investment advisory services provided to the funds were expected in connection with either reorganization and that the same personnel and resources will be available to the funds with the new entities. After considering all of the factors it believed relevant, the Board concluded that the amended sub-advisory agreements should be approved.
Annual Report
Investment Adviser
Fidelity SelectCo, LLC
Denver, CO
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
Fidelity Management & Research
(U.K.) Inc.
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Bank of New York Mellon
New York, NY
(Fidelity Investment logo)(registered trademark)
ARE-UANN-0914 1.789707.111
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor®
Real Estate
Fund - Institutional Class
Annual Report
July 31, 2014
(Fidelity Cover Art)
Contents
Performance | How the fund has done over time. | |
Management's Discussion of Fund Performance | The Portfolio Manager's review of fund performance and strategy. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to financial statements. | |
Report of Independent Registered Public Accounting Firm |
| |
Trustees and Officers |
| |
Distributions |
| |
Board Approval of Investment Advisory Contracts and Management Fees |
|
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2014 FMR LLC. All rights reserved.
Annual Report
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Annual Report
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2014 | Past 1 | Past 5 | Past 10 |
Institutional Class | 12.64% | 22.33% | 10.37% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Real Estate Fund - Institutional Class on July 31, 2004. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
Annual Report
Management's Discussion of Fund Performance
Market Recap: U.S. stocks overcame a slowing economy early in 2014 to post a strong gain for the 12-month period ending July 31, 2014, supported by corporate profits and continued low interest rates. The S&P 500® Index rose 16.94%, reaching an all-time high near period end. The technology-heavy Nasdaq Composite Index® gained 22.00%. The Russell 2000® Index returned 8.56%, reflecting the relatively lackluster performance of small-cap stocks. Information technology (+28%) was the top-performing sector within the S&P 500®, driven by strong semiconductor and computer hardware sales. Materials (+23%) gained amid higher prices for many commodity products. Health care (+21%) rose, driven by gains in pharmaceuticals, biotechnology & life sciences companies. Energy stocks (+19%) advanced in the latter part of the period amid healthy U.S. output and the threat of supply disruptions in Iraq. Conversely, most defensive sectors, including consumer staples, utilities and telecommunication services, lagged the broader market. Volatility remained tame throughout most of the period, with markets supported by declining unemployment, near-record profit margins for companies, muted cost inflation and fairly low corporate debt levels. Geopolitical tension remained a concern at period end, with conflict in Ukraine and strained relations between Russia and the West posing a potential threat to global growth.
Comments from Samuel Wald, Portfolio Manager of Fidelity Advisor® Real Estate Fund: For the year, the fund's Institutional Class shares gained 12.64%, versus 12.61% for the benchmark Dow Jones U.S. Select Real Estate Securities IndexSM and 16.94% for the S&P 500® Index. The fund was hampered by subpar stock picking among residential and diversified real estate investment trusts (REITs), although security selection among industrial/office REITs and in the so-called real estate related category (primarily health care REITs) was very strong. The fund's biggest individual detractor was Vornado Realty Trust, in which the fund was significantly underweighted. Another notable detractor was mall operator Glimcher Realty Trust, which I ultimately sold in June. Equity One also weighed on results and was not in the portfolio at period end. On the positive side, Digital Realty Trust, which owns data centers, was the top contributor, benefiting from a recovery off a very low valuation and the easing of investor concerns surrounding oversupply in its industry. Another notable contributor was Essex Property Trust, an apartment REIT. I liked Essex partly for its solid management and exposure to West Coast apartments.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual 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 (February 1, 2014 to July 31, 2014).
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.
Annual Report
Shareholder Expense Example - continued
| Annualized | Beginning | Ending | Expenses Paid |
Class A | 1.13% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,135.60 | $ 5.98 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.19 | $ 5.66 |
Class T | 1.35% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,134.30 | $ 7.14 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.10 | $ 6.76 |
Class B | 1.91% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,131.00 | $ 10.09 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.32 | $ 9.54 |
Class C | 1.88% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,131.30 | $ 9.93 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.47 | $ 9.39 |
Institutional Class | .87% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,137.20 | $ 4.61 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.48 | $ 4.36 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Annual Report
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
Simon Property Group, Inc. | 12.5 | 13.3 |
Boston Properties, Inc. | 5.8 | 5.7 |
Public Storage | 5.1 | 6.8 |
Essex Property Trust, Inc. | 4.8 | 4.8 |
HCP, Inc. | 4.2 | 2.7 |
SL Green Realty Corp. | 4.1 | 4.1 |
Federal Realty Investment Trust (SBI) | 3.7 | 1.6 |
Digital Realty Trust, Inc. | 3.7 | 0.0 |
Alexandria Real Estate Equities, Inc. | 3.6 | 3.8 |
Taubman Centers, Inc. | 3.4 | 1.3 |
| 50.9 | |
Top Five REIT Sectors as of July 31, 2014 | ||
| % of fund's | % of fund's net assets |
REITs - Office Buildings | 19.1 | 19.1 |
REITs - Apartments | 16.8 | 17.0 |
REITs - Malls | 15.9 | 15.0 |
REITs - Industrial Buildings | 12.5 | 16.1 |
REITs - Health Care Facilities | 10.4 | 11.2 |
Asset Allocation (% of fund's net assets) | |||||||
As of July 31, 2014 | As of January 31, 2014 | ||||||
 | Stocks 99.0% |
| | Stocks 99.0% |
| ||
 | Short-Term |
| | Short-Term |
| ||
Annual Report
Investments July 31, 2014
Showing Percentage of Net Assets
Common Stocks - 99.0% | |||
Shares | Value | ||
HOTELS, RESTAURANTS & LEISURE - 0.2% | |||
Hotels, Resorts & Cruise Lines - 0.2% | |||
Starwood Hotels & Resorts Worldwide, Inc. | 15,200 | $ 1,167,968 | |
REAL ESTATE INVESTMENT TRUSTS - 97.4% | |||
REITs - Apartments - 16.8% | |||
AvalonBay Communities, Inc. | 60,240 | 8,920,339 | |
Equity Residential (SBI) | 278,409 | 17,999,142 | |
Essex Property Trust, Inc. | 198,815 | 37,689,360 | |
Mid-America Apartment Communities, Inc. | 355,814 | 24,878,515 | |
Post Properties, Inc. | 402,300 | 21,804,660 | |
UDR, Inc. | 705,300 | 20,510,124 | |
TOTAL REITS - APARTMENTS | 131,802,140 | ||
REITs - Health Care Facilities - 10.4% | |||
HCP, Inc. | 792,295 | 32,904,011 | |
Health Care REIT, Inc. | 156,569 | 9,962,485 | |
Senior Housing Properties Trust (SBI) | 646,400 | 14,776,704 | |
Ventas, Inc. | 369,005 | 23,431,818 | |
TOTAL REITS - HEALTH CARE FACILITIES | 81,075,018 | ||
REITs - Hotels - 6.7% | |||
Ashford Hospitality Prime, Inc. | 307,400 | 5,118,210 | |
FelCor Lodging Trust, Inc. | 1,543,948 | 16,165,136 | |
Host Hotels & Resorts, Inc. | 589,334 | 12,812,121 | |
LaSalle Hotel Properties (SBI) | 522,100 | 18,163,859 | |
TOTAL REITS - HOTELS | 52,259,326 | ||
REITs - Industrial Buildings - 12.5% | |||
DCT Industrial Trust, Inc. | 2,359,000 | 18,470,970 | |
Duke Realty LP | 130,800 | 2,353,092 | |
Extra Space Storage, Inc. | 220,400 | 11,401,292 | |
Prologis, Inc. | 540,877 | 22,073,190 | |
Public Storage | 233,350 | 40,045,194 | |
Terreno Realty Corp. | 206,400 | 3,859,680 | |
TOTAL REITS - INDUSTRIAL BUILDINGS | 98,203,418 | ||
Common Stocks - continued | |||
Shares | Value | ||
REAL ESTATE INVESTMENT TRUSTS - CONTINUED | |||
REITs - Malls - 15.9% | |||
Simon Property Group, Inc. | 584,650 | $ 98,332,282 | |
Taubman Centers, Inc. | 360,500 | 26,518,380 | |
TOTAL REITS - MALLS | 124,850,662 | ||
REITs - Management/Investment - 6.1% | |||
Digital Realty Trust, Inc. (d) | 443,800 | 28,576,282 | |
Equity Lifestyle Properties, Inc. | 284,241 | 12,589,034 | |
Weyerhaeuser Co. (d) | 200,200 | 6,270,264 | |
TOTAL REITS - MANAGEMENT/INVESTMENT | 47,435,580 | ||
REITs - Mobile Home Parks - 0.8% | |||
Sun Communities, Inc. | 115,722 | 6,090,449 | |
REITs - Office Buildings - 19.1% | |||
Alexandria Real Estate Equities, Inc. | 362,333 | 28,479,374 | |
Boston Properties, Inc. | 381,647 | 45,587,734 | |
Cousins Properties, Inc. | 595,300 | 7,369,814 | |
CyrusOne, Inc. | 24,191 | 601,146 | |
Douglas Emmett, Inc. | 409,400 | 11,663,806 | |
Piedmont Office Realty Trust, Inc. Class A (d) | 1,219,400 | 23,717,330 | |
SL Green Realty Corp. | 294,765 | 31,775,667 | |
TOTAL REITS - OFFICE BUILDINGS | 149,194,871 | ||
REITs - Shopping Centers - 8.9% | |||
Acadia Realty Trust (SBI) | 86,300 | 2,436,249 | |
Cedar Shopping Centers, Inc. | 918,775 | 5,788,283 | |
Excel Trust, Inc. | 247,325 | 3,202,859 | |
Federal Realty Investment Trust (SBI) | 237,302 | 28,974,574 | |
Kite Realty Group Trust | 1,180,531 | 7,201,239 | |
Ramco-Gershenson Properties Trust (SBI) | 94,800 | 1,573,680 | |
Vornado Realty Trust | 95,383 | 10,112,506 | |
Washington Prime Group, Inc. (a) | 547,275 | 10,338,025 | |
TOTAL REITS - SHOPPING CENTERS | 69,627,415 | ||
Common Stocks - continued | |||
Shares | Value | ||
REAL ESTATE INVESTMENT TRUSTS - CONTINUED | |||
REITs - Single Tenant - 0.2% | |||
Select Income (REIT) | 64,200 | $ 1,781,550 | |
TOTAL REAL ESTATE INVESTMENT TRUSTS | 762,320,429 | ||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.4% | |||
Real Estate Operating Companies - 1.4% | |||
Forest City Enterprises, Inc. Class A (a) | 571,767 | 10,960,773 | |
TOTAL COMMON STOCKS (Cost $607,334,180) |
| ||
Money Market Funds - 5.8% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 14,136,441 | 14,136,441 | |
Fidelity Securities Lending Cash Central Fund, 0.11% (b)(c) | 30,894,125 | 30,894,125 | |
TOTAL MONEY MARKET FUNDS (Cost $45,030,566) |
| ||
TOTAL INVESTMENT PORTFOLIO - 104.8% (Cost $652,364,746) | 819,479,736 | ||
NET OTHER ASSETS (LIABILITIES) - (4.8)% | (37,175,899) | ||
NET ASSETS - 100% | $ 782,303,837 | ||
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(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 | $ 12,006 |
Fidelity Securities Lending Cash Central Fund | 49,969 |
Total | $ 61,975 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements
Statement of Assets and Liabilities
| July 31, 2014 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $29,983,504) - See accompanying schedule: Unaffiliated issuers (cost $607,334,180) | $ 774,449,170 |
|
Fidelity Central Funds (cost $45,030,566) | 45,030,566 |
|
Total Investments (cost $652,364,746) |
| $ 819,479,736 |
Receivable for investments sold | 5,722,017 | |
Receivable for fund shares sold | 1,422,137 | |
Dividends receivable | 286,695 | |
Distributions receivable from Fidelity Central Funds | 10,951 | |
Other receivables | 25,596 | |
Total assets | 826,947,132 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 11,690,040 | |
Payable for fund shares redeemed | 1,245,274 | |
Accrued management fee | 363,048 | |
Distribution and service plan fees payable | 173,982 | |
Other affiliated payables | 188,689 | |
Other payables and accrued expenses | 88,137 | |
Collateral on securities loaned, at value | 30,894,125 | |
Total liabilities | 44,643,295 | |
|
|
|
Net Assets | $ 782,303,837 | |
Net Assets consist of: |
| |
Paid in capital | $ 577,815,282 | |
Undistributed net investment income | 2,093,231 | |
Accumulated undistributed net realized gain (loss) on investments | 35,280,334 | |
Net unrealized appreciation (depreciation) on investments | 167,114,990 | |
Net Assets | $ 782,303,837 | |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Assets and Liabilities - continued
| July 31, 2014 | |
Calculation of Maximum Offering Price Class A: | $ 22.57 | |
|
|
|
Maximum offering price per share (100/94.25 of $22.57) | $ 23.95 | |
Class T: | $ 22.55 | |
|
|
|
Maximum offering price per share (100/96.50 of $22.55) | $ 23.37 | |
Class B: | $ 22.28 | |
|
|
|
Class C: | $ 22.23 | |
|
|
|
Institutional Class: | $ 22.74 | |
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.
Annual Report
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2014 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 18,762,254 |
Income from Fidelity Central Funds |
| 61,975 |
Total income |
| 18,824,229 |
|
|
|
Expenses | ||
Management fee | $ 3,960,078 | |
Transfer agent fees | 1,928,905 | |
Distribution and service plan fees | 1,897,204 | |
Accounting and security lending fees | 256,508 | |
Custodian fees and expenses | 45,335 | |
Independent trustees' compensation | 17,736 | |
Registration fees | 126,909 | |
Audit | 51,522 | |
Legal | 10,949 | |
Interest | 748 | |
Miscellaneous | 11,660 | |
Total expenses before reductions | 8,307,554 | |
Expense reductions | (62,626) | 8,244,928 |
Net investment income (loss) | 10,579,301 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers |
| 45,747,977 |
Change in net unrealized appreciation (depreciation) on investment securities | 22,594,134 | |
Net gain (loss) | 68,342,111 | |
Net increase (decrease) in net assets resulting from operations | $ 78,921,412 | |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 10,579,301 | $ 7,647,889 |
Net realized gain (loss) | 45,747,977 | 29,947,480 |
Change in net unrealized appreciation (depreciation) | 22,594,134 | 6,004,617 |
Net increase (decrease) in net assets resulting from operations | 78,921,412 | 43,599,986 |
Distributions to shareholders from net investment income | (9,317,425) | (7,604,308) |
Distributions to shareholders from net realized gain | (17,838,487) | (5,306,125) |
Total distributions | (27,155,912) | (12,910,433) |
Share transactions - net increase (decrease) | (20,280,229) | 86,239,926 |
Total increase (decrease) in net assets | 31,485,271 | 116,929,479 |
|
|
|
Net Assets | ||
Beginning of period | 750,818,566 | 633,889,087 |
End of period (including undistributed net investment income of $2,093,231 and undistributed net investment income of $1,355,965, respectively) | $ 782,303,837 | $ 750,818,566 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 20.92 | $ 19.83 | $ 18.24 | $ 14.88 | $ 9.41 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .31 | .22 | .17 | .12 | .19 |
Net realized and unrealized gain (loss) | 2.13 | 1.27 | 2.02 | 3.37 | 5.46 |
Total from investment operations | 2.44 | 1.49 | 2.19 | 3.49 | 5.65 |
Distributions from net investment income | (.27) | (.23) | (.13) | (.13) | (.18) |
Distributions from net realized gain | (.52) | (.17) | (.47) | - | - |
Total distributions | (.79) | (.40) | (.60) | (.13) | (.18) |
Net asset value, end of period | $ 22.57 | $ 20.92 | $ 19.83 | $ 18.24 | $ 14.88 |
Total ReturnA, B | 12.34% | 7.66% | 12.81% | 23.63% | 60.38% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.16% | 1.17% | 1.19% | 1.19% | 1.23% |
Expenses net of fee waivers, if any | 1.16% | 1.17% | 1.19% | 1.19% | 1.23% |
Expenses net of all reductions | 1.15% | 1.16% | 1.18% | 1.18% | 1.22% |
Net investment income (loss) | 1.47% | 1.06% | .98% | .69% | 1.45% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 274,136 | $ 246,323 | $ 199,303 | $ 178,978 | $ 117,929 |
Portfolio turnover rateE | 83% | 63% | 48% | 63% | 60% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class T
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 20.91 | $ 19.82 | $ 18.24 | $ 14.90 | $ 9.42 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .26 | .17 | .13 | .07 | .15 |
Net realized and unrealized gain (loss) | 2.13 | 1.28 | 2.02 | 3.38 | 5.47 |
Total from investment operations | 2.39 | 1.45 | 2.15 | 3.45 | 5.62 |
Distributions from net investment income | (.23) | (.19) | (.10) | (.11) | (.14) |
Distributions from net realized gain | (.52) | (.17) | (.47) | - | - |
Total distributions | (.75) | (.36) | (.57) | (.11) | (.14) |
Net asset value, end of period | $ 22.55 | $ 20.91 | $ 19.82 | $ 18.24 | $ 14.90 |
Total ReturnA, B | 12.07% | 7.43% | 12.52% | 23.28% | 60.02% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.37% | 1.38% | 1.43% | 1.44% | 1.49% |
Expenses net of fee waivers, if any | 1.37% | 1.38% | 1.43% | 1.44% | 1.49% |
Expenses net of all reductions | 1.36% | 1.38% | 1.43% | 1.44% | 1.48% |
Net investment income (loss) | 1.26% | .85% | .73% | .43% | 1.19% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 138,783 | $ 114,717 | $ 86,987 | $ 76,785 | $ 59,529 |
Portfolio turnover rateE | 83% | 63% | 48% | 63% | 60% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the sales charges.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class B
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 20.66 | $ 19.59 | $ 18.05 | $ 14.77 | $ 9.35 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .14 | .06 | .04 | (.01) | .09 |
Net realized and unrealized gain (loss) | 2.10 | 1.26 | 2.00 | 3.35 | 5.42 |
Total from investment operations | 2.24 | 1.32 | 2.04 | 3.34 | 5.51 |
Distributions from net investment income | (.11) | (.08) | (.03) | (.06) | (.09) |
Distributions from net realized gain | (.52) | (.17) | (.47) | - | - |
Total distributions | (.62) G | (.25) | (.50) | (.06) | (.09) |
Net asset value, end of period | $ 22.28 | $ 20.66 | $ 19.59 | $ 18.05 | $ 14.77 |
Total ReturnA, B | 11.45% | 6.84% | 11.99% | 22.69% | 59.14% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.92% | 1.92% | 1.93% | 1.94% | 1.98% |
Expenses net of fee waivers, if any | 1.92% | 1.92% | 1.93% | 1.94% | 1.98% |
Expenses net of all reductions | 1.91% | 1.91% | 1.93% | 1.93% | 1.97% |
Net investment income (loss) | .70% | .31% | .23% | (.07)% | .70% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 5,631 | $ 8,697 | $ 9,481 | $ 11,542 | $ 12,078 |
Portfolio turnover rateE | 83% | 63% | 48% | 63% | 60% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Total distributions of $.62 per share is comprised of distributions from net investment income of $.106 and distributions from net realized gain of $.518 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class C
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 20.61 | $ 19.55 | $ 18.03 | $ 14.76 | $ 9.34 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .15 | .07 | .04 | (.01) | .09 |
Net realized and unrealized gain (loss) | 2.10 | 1.26 | 1.98 | 3.35 | 5.43 |
Total from investment operations | 2.25 | 1.33 | 2.02 | 3.34 | 5.52 |
Distributions from net investment income | (.11) | (.10) | (.03) | (.07) | (.10) |
Distributions from net realized gain | (.52) | (.17) | (.47) | - | - |
Total distributions | (.63) | (.27) | (.50) | (.07) | (.10) |
Net asset value, end of period | $ 22.23 | $ 20.61 | $ 19.55 | $ 18.03 | $ 14.76 |
Total ReturnA, B | 11.52% | 6.89% | 11.92% | 22.69% | 59.28% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.90% | 1.90% | 1.93% | 1.94% | 1.98% |
Expenses net of fee waivers, if any | 1.90% | 1.90% | 1.93% | 1.94% | 1.98% |
Expenses net of all reductions | 1.89% | 1.89% | 1.93% | 1.93% | 1.97% |
Net investment income (loss) | .73% | .33% | .23% | (.07)% | .71% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 64,822 | $ 75,461 | $ 55,064 | $ 47,406 | $ 31,204 |
Portfolio turnover rateE | 83% | 63% | 48% | 63% | 60% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Total returns do not include the effect of the contingent deferred sales charge.
C Calculated based on average shares outstanding during the period.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Institutional Class
Years ended July 31, | 2014 | 2013 | 2012 | 2011 | 2010 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 21.07 | $ 19.97 | $ 18.36 | $ 14.96 | $ 9.46 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .36 | .28 | .22 | .16 | .23 |
Net realized and unrealized gain (loss) | 2.15 | 1.27 | 2.03 | 3.39 | 5.47 |
Total from investment operations | 2.51 | 1.55 | 2.25 | 3.55 | 5.70 |
Distributions from net investment income | (.32) | (.28) | (.17) | (.15) | (.20) |
Distributions from net realized gain | (.52) | (.17) | (.47) | - | - |
Total distributions | (.84) | (.45) | (.64) | (.15) | (.20) |
Net asset value, end of period | $ 22.74 | $ 21.07 | $ 19.97 | $ 18.36 | $ 14.96 |
Total ReturnA | 12.64% | 7.92% | 13.12% | 23.92% | 60.75% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .89% | .90% | .93% | .93% | .97% |
Expenses net of fee waivers, if any | .89% | .90% | .93% | .93% | .97% |
Expenses net of all reductions | .88% | .89% | .93% | .92% | .96% |
Net investment income (loss) | 1.74% | 1.33% | 1.23% | .94% | 1.71% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 298,932 | $ 305,619 | $ 283,054 | $ 174,655 | $ 167,699 |
Portfolio turnover rateD | 83% | 63% | 48% | 63% | 60% |
A Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
B Calculated based on average shares outstanding during the period.
C Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2014
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 C and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. 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.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs)and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are
Annual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2014, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. 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. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to deferred trustees compensation and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 166,756,324 |
Gross unrealized depreciation | (2,764,308) |
Net unrealized appreciation (depreciation) on securities | $ 163,992,016 |
|
|
Tax Cost | $ 655,487,720 |
Annual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 2,100,791 |
Undistributed long-term capital gain | $ 38,403,308 |
Net unrealized appreciation (depreciation) on securities and other investments | $ 163,992,016 |
The tax character of distributions paid was as follows:
| July 31, 2014 | July 31, 2013 |
Ordinary Income | $ 9,317,425 | $ 7,604,308 |
Long-term Capital Gains | 17,838,487 | 5,306,125 |
Total | $ 27,155,912 | $ 12,910,433 |
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $590,132,887 and $614,297,640, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Effective August 1, 2013, SelectCo replaced Fidelity Management & Research Company (FMR), an affiliate of SelectCo, as investment adviser to the Fund. The investment adviser and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services.
Annual Report
Notes to Financial Statements - continued
5. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan Fees - continued
For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 603,397 | $ 14,402 |
Class T | .25% | .25% | 592,456 | 512 |
Class B | .75% | .25% | 66,148 | 49,681 |
Class C | .75% | .25% | 635,203 | 133,491 |
|
|
| $ 1,897,204 | $ 198,086 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained |
Class A | $ 73,245 |
Class T | 13,868 |
Class B* | 7,364 |
Class C* | 10,632 |
| $ 105,109 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
Annual Report
5. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 682,835 | .28 |
Class T | 287,873 | .24 |
Class B | 19,924 | .30 |
Class C | 175,451 | .28 |
Institutional Class | 762,822 | .26 |
| $ 1,928,905 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $7,646 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 or other affiliated entities of 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 Loan | Weighted Average Interest Rate | Interest Expense |
Borrower | $ 12,132,857 | .32% | $ 748 |
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity
Annual Report
Notes to Financial Statements - continued
6. Committed Line of Credit - continued
purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,225 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, which prior to August 1, 2013 included Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $49,969. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $62,615 for the period. In addition, through arrangements with the Fund's custodian, 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 $11.
Annual Report
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2014 | 2013 |
From net investment income |
|
|
Class A | $ 3,106,444 | $ 2,470,657 |
Class T | 1,272,835 | 882,131 |
Class B | 37,346 | 35,157 |
Class C | 367,021 | 295,037 |
Institutional Class | 4,533,779 | 3,921,326 |
Total | $ 9,317,425 | $ 7,604,308 |
From net realized gain |
|
|
Class A | $ 5,987,252 | $ 1,782,636 |
Class T | 2,831,247 | 780,775 |
Class B | 199,888 | 76,216 |
Class C | 1,765,927 | 516,924 |
Institutional Class | 7,054,173 | 2,149,574 |
Total | $ 17,838,487 | $ 5,306,125 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class A |
|
|
|
|
Shares sold | 4,612,676 | 5,439,337 | $ 96,531,161 | $ 112,236,960 |
Reinvestment of distributions | 447,921 | 203,180 | 8,629,179 | 3,981,426 |
Shares redeemed | (4,687,177) | (3,918,883) | (96,076,538) | (80,333,991) |
Net increase (decrease) | 373,420 | 1,723,634 | $ 9,083,802 | $ 35,884,395 |
Class T |
|
|
|
|
Shares sold | 2,099,117 | 2,359,748 | $ 43,800,189 | $ 48,593,378 |
Reinvestment of distributions | 210,229 | 82,685 | 4,035,945 | 1,616,132 |
Shares redeemed | (1,641,944) | (1,344,901) | (33,718,920) | (27,286,441) |
Net increase (decrease) | 667,402 | 1,097,532 | $ 14,117,214 | $ 22,923,069 |
Class B |
|
|
|
|
Shares sold | 10,023 | 112,710 | $ 207,585 | $ 2,287,362 |
Reinvestment of distributions | 10,943 | 5,188 | 205,776 | 98,861 |
Shares redeemed | (189,250) | (180,971) | (3,819,153) | (3,674,862) |
Net increase (decrease) | (168,284) | (63,073) | $ (3,405,792) | $ (1,288,639) |
Annual Report
Notes to Financial Statements - continued
10. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2014 | 2013 | 2014 | 2013 |
Class C |
|
|
|
|
Shares sold | 717,656 | 1,545,715 | $ 14,827,663 | $ 31,572,252 |
Reinvestment of distributions | 103,592 | 39,180 | 1,942,789 | 747,349 |
Shares redeemed | (1,565,975) | (739,815) | (31,183,633) | (14,971,358) |
Net increase (decrease) | (744,727) | 845,080 | $ (14,413,181) | $ 17,348,243 |
Institutional Class |
|
|
|
|
Shares sold | 9,124,799 | 10,230,645 | $ 190,381,315 | $ 215,528,191 |
Reinvestment of distributions | 444,680 | 177,841 | 8,636,132 | 3,543,243 |
Shares redeemed | (10,926,683) | (10,081,938) | (224,679,719) | (207,698,576) |
Net increase (decrease) | (1,357,204) | 326,548 | $ (25,662,272) | $ 11,372,858 |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Advisor Series VII and Shareholders of Fidelity Advisor Real Estate Fund:
We have audited the accompanying statement of assets and liabilities of Fidelity Advisor Real Estate Fund (the Fund), a fund of Fidelity Advisor Series VII, including the schedule of investments, as of July 31, 2014, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2014, by correspondence with the custodians and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Advisor Real Estate Fund as of July 31, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
September 11, 2014
Annual Report
Trustees and Officers
The Trustees and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Each of the Trustees oversees 74 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. The officers hold office without limit in time, except that any officer may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
Experience, Skills, Attributes, and Qualifications of the Fund's Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Annual Report
Board Structure and Oversight Function. Brian B. Hogan is an interested person (as defined in the 1940 Act) and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Michael E. Wiley serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's sector portfolios. Other Boards oversee Fidelity's equity and high income funds, and Fidelity's investment grade bond, money market, and asset allocation funds. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged SelectCo and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through SelectCo, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations and Audit Committees. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), SelectCo's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Fund's Trustees."
Annual Report
Trustees and Officers - continued
The fund's Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.
Interested Trustee*:
Correspondence intended for the Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+ | |
Brian B. Hogan (1964) | |
Year of Election or Appointment: 2014 Trustee Chairman of the Board of Trustees | |
| Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as President of FMR's Equity Division (2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. |
* Trustee has been determined to be an "Interested Trustee" by virtue of, among other things, his affiliation with the trust or various entities under common control with SelectCo.
+ The information above includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Annual Report
Independent Trustees:
Correspondence intended for each Independent Trustee (that is, the Trustees other than the Interested Trustee) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+ | |
David A. Rosow (1942) | |
Year of Election or Appointment: 2013 Trustee | |
| Mr. Rosow also serves as Trustee of other Fidelity funds. Mr. Rosow is Chairman and Chief Executive Officer of International Golf Group, Inc. (golf course development, 1989-present). Previously, Mr. Rosow served as Chairman and Chief Executive Officer of Rosow & Company, Inc. (private investment company, 1989-2011), a Lead Director of Hudson United Bancorp (2001-2006) and as a Director of TD Banknorth (1996-2006). In addition, Mr. Rosow is a member (2008-present) and President (2009-present) of the Town Council of Palm Beach, Florida. Mr. Rosow served as a Member of the Advisory Board of other Fidelity funds (2012-2013). |
Garnett A. Smith (1947) | |
Year of Election or Appointment: 2013 Trustee | |
| Mr. Smith also serves as Trustee of other Fidelity funds. Prior to Mr. Smith's retirement, he served as Chairman and Chief Executive Officer of Inbrand Corp. (manufacturer of personal absorbent products, 1990-1997). He also served as President (1986-1990) of Inbrand Corp. Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank. In addition, Mr. Smith served as a Member of the Advisory Board of other Fidelity funds (2012-2013) and as a board member of the Jackson Hole Land Trust (2009-2012). |
Michael E. Wiley (1950) | |
Year of Election or Appointment: 2008 Trustee Chairman of the Independent Trustees | |
| Mr. Wiley also serves as Trustee of other Fidelity funds. Mr. Wiley serves as a Director of Tesoro Corporation (independent oil refiner and marketer, 2005-present), and a Director of Bill Barrett Corporation (exploration and production, 2005-present). In addition, Mr. Wiley also serves as a Director of Post Oak Bank (privately-held bank, 2004-present). Previously, Mr. Wiley served as a Trustee of other Fidelity funds (2008-2013), as a Director of Asia Pacific Exploration Consolidated (international oil and gas exploration and production, 2008-2013), as a member of the Board of Trustees of the University of Tulsa (2000-2006; 2007-2010), as a Senior Energy Advisor of Katzenbach Partners, LLC (consulting, 2006-2007), as an Advisory Director of Riverstone Holdings (private investment), Chairman, President, and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004), and as Director of Spinnaker Exploration Company (exploration and production, 2001-2005). |
+ The information above includes each Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to each Trustee's qualifications to serve as a Trustee, which led to the conclusion that each Trustee should serve as a Trustee for the fund.
Annual Report
Officers:
Except for Anthony R. Rochte, correspondence intended for each officer may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Correspondence intended for Mr. Rochte may be sent to SelectCo, 1225 17th Street, Denver, Colorado 80202-5541. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation | |
Christopher S. Bartel (1971) | |
Year of Election or Appointment: 2009 Vice President | |
| Mr. Bartel also serves as Vice President of other funds. Mr. Bartel serves as a Director, President, and Chief Executive Officer of Fidelity Management & Research (Japan) Inc. (2012-present), a Director of Fidelity Management & Research (Hong Kong) (2012-present), and Senior Vice President of Global Equity Research (2010-present). Previously, Mr. Bartel served as Senior Vice President of Equity Research (2009-2010), Managing Director of Research (2006-2009), and an analyst and portfolio manager (2000-2006). |
Elizabeth Paige Baumann (1968) | |
Year of Election or Appointment: 2012 Anti-Money Laundering (AML) Officer | |
| Ms. Baumann also serves as AML Officer of other funds. She is Chief AML Officer of FMR LLC (2012-present) and is an employee of Fidelity Investments. Previously, Ms. Baumann served as Vice President and Deputy Anti-Money Laundering Officer (2007-2012). |
Marc Bryant (1966) | |
Year of Election or Appointment: 2013 Secretary | |
| Mr. Bryant also serves as an officer of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC. Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006). |
William C. Coffey (1969) | |
Year of Election or Appointment: 2009 Assistant Secretary | |
| Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009). |
Jonathan Davis (1968) | |
Year of Election or Appointment: 2010 Assistant Treasurer | |
| Mr. Davis also serves as Assistant Treasurer of other funds. Mr. Davis is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (2003-2010). |
Adrien E. Deberghes (1967) | |
Year of Election or Appointment: 2013 President and Treasurer | |
| Mr. Deberghes also serves as an officer of other funds. He is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). |
Stephanie J. Dorsey (1969) | |
Year of Election or Appointment: 2010 Assistant Treasurer | |
| Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank. |
Howard J. Galligan III (1966) | |
Year of Election or Appointment: 2014 Chief Financial Officer | |
| Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011). |
James D. Gryglewicz (1972) | |
Year of Election or Appointment: 2014 Chief Compliance Officer | |
| Mr. Gryglewicz also serves as Chief Compliance Officer of other funds. Mr. Gryglewicz serves as Vice President of Asset Management Compliance (2009-present) and is an employee of Fidelity Investments (2004-present). |
Brian B. Hogan (1964) | |
Year of Election or Appointment: 2009 Vice President | |
| Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as President of FMR's Equity Division (2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager. |
Chris Maher (1972) | |
Year of Election or Appointment: 2013 Assistant Treasurer | |
| Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of FMR's Program Management Group (2010-2013), and Vice President of Valuation Oversight (2008-2010). |
Kenneth B. Robins (1969) | |
Year of Election or Appointment: 2013 Deputy Treasurer | |
| Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (2013-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served in other fund officer roles. |
Anthony R. Rochte (1968) | |
Year of Election or Appointment: 2013 Vice President | |
| Mr. Rochte also serves as Vice President of other funds. Mr. Rochte serves as President of Fidelity SelectCo, LLC (2012-present) and is an employee of Fidelity Investments (2012-present). Prior to joining Fidelity Investments, Mr. Rochte served as Senior Managing Director and head of State Street Global Advisors' North American Intermediary Business Group (2006-2012). |
Stacie M. Smith (1974) | |
Year of Election or Appointment: 2013 Assistant Treasurer | |
| Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). |
Renee Stagnone (1975) | |
Year of Election or Appointment: 2013 Deputy Treasurer | |
| Ms. Stagnone also serves as Deputy Treasurer of other funds. Ms. Stagnone is an employee of Fidelity Investments. |
Joseph F. Zambello (1957) | |
Year of Election or Appointment: 2011 Deputy Treasurer | |
| Mr. Zambello also serves as Deputy Treasurer of other funds. Mr. Zambello is an employee of Fidelity Investments. Previously, Mr. Zambello served as Vice President of FMR's Program Management Group (2009-2011) and Vice President of the Transfer Agent Oversight Group (2005-2009). |
Annual Report
Distributions (Unaudited)
The Board of Trustees of Fidelity Advisor Real Estate Fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities, and dividends derived from net investment income:
| Pay Date | Record Date | Dividends | Capital Gains |
Institutional Class | 09/08/14 | 09/05/14 | $0.100 | $1.095 |
The fund hereby designates as a capital gain dividend with respect to the taxable year ended July 31, 2014, $44,763,555, or, if subsequently determined to be different, the net capital gain of such year.
A total of 0.02% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax.
The fund will notify shareholders in January 2015 of amounts for use in preparing 2014 income tax returns.
Annual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Advisor Real Estate Fund
In connection with separate internal corporate reorganizations involving Fidelity Management & Research (U.K.) Inc. (FMR U.K.) and Fidelity Management & Research (Japan) Inc. (FMR Japan), the Board approved certain non-material amendments to the fund's subadvisory agreements with FMR U.K. and FMR Japan to reflect that, after these reorganizations, FMR Investment Management (UK) Limited and Fidelity Management & Research (Japan) Limited will carry on the business of FMR U.K. and FMR Japan, respectively. The Board noted that no changes to the portfolio managers or to the foreign research or investment advisory services provided to the funds were expected in connection with either reorganization and that the same personnel and resources will be available to the funds with the new entities. After considering all of the factors it believed relevant, the Board concluded that the amended sub-advisory agreements should be approved.
Annual Report
Investment Adviser
Fidelity SelectCo, LLC
Denver, CO
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
Fidelity Management & Research
(U.K.) Inc.
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Bank of New York Mellon
New York, NY
(Fidelity Investment logo)(registered trademark)
AREI-UANN-0914 1.789708.111
Item 2. Code of Ethics
As of the end of the period, July 31, 2014, Fidelity Advisor Series VII (the trust) has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its President and Treasurer and its Chief Financial Officer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
Item 3. Audit Committee Financial Expert
The Board of Trustees of the trust has determined that David A. Rosow is an audit committee financial expert, as defined in Item 3 of Form N-CSR. Mr. Rosow is independent for purposes of Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services
Fees and Services
The following table presents fees billed by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, "Deloitte Entities") in each of the last two fiscal years for services rendered to Fidelity Advisor Biotechnology Fund, Fidelity Advisor Communications Equipment Fund, Fidelity Advisor Consumer Discretionary Fund, Fidelity Advisor Electronics Fund, Fidelity Advisor Energy Fund, Fidelity Advisor Financial Services Fund, Fidelity Advisor Health Care Fund, Fidelity Advisor Industrials Fund, Fidelity Advisor Real Estate Fund, Fidelity Advisor Technology Fund, and Fidelity Advisor Utilities Fund (the "Funds"):
Services Billed by Deloitte Entities
July 31, 2014 FeesA
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Advisor Biotechnology Fund | $36,000 | $- | $4,700 | $800 |
Fidelity Advisor Communications Equipment Fund | $37,000 | $- | $4,700 | $600 |
Fidelity Advisor Consumer Discretionary Fund | $35,000 | $- | $5,800 | $600 |
Fidelity Advisor Electronics Fund | $35,000 | $- | $4,700 | $600 |
Fidelity Advisor Energy Fund | $37,000 | $- | $6,800 | $700 |
Fidelity Advisor Financial Services Fund | $37,000 | $- | $6,600 | $600 |
Fidelity Advisor Health Care Fund | $37,000 | $- | $5,800 | $800 |
Fidelity Advisor Industrials Fund | $36,000 | $- | $5,800 | $700 |
Fidelity Advisor Real Estate Fund | $40,000 | $- | $5,800 | $700 |
Fidelity Advisor Technology Fund | $38,000 | $- | $5,800 | $800 |
Fidelity Advisor Utilities Fund | $35,000 | $- | $6,000 | $600 |
July 31, 2013 FeesA
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Advisor Biotechnology Fund | $35,000 | $- | $4,700 | $500 |
Fidelity Advisor Communications Equipment Fund | $36,000 | $- | $4,700 | $500 |
Fidelity Advisor Consumer Discretionary Fund | $36,000 | $- | $5,800 | $500 |
Fidelity Advisor Electronics Fund | $34,000 | $- | $4,700 | $500 |
Fidelity Advisor Energy Fund | $36,000 | $- | $6,800 | $600 |
Fidelity Advisor Financial Services Fund | $36,000 | $- | $6,800 | $500 |
Fidelity Advisor Health Care Fund | $36,000 | $- | $5,800 | $500 |
Fidelity Advisor Industrials Fund | $35,000 | $- | $5,800 | $500 |
Fidelity Advisor Real Estate Fund | $39,000 | $- | $5,800 | $600 |
Fidelity Advisor Technology Fund | $37,000 | $- | $5,800 | $600 |
Fidelity Advisor Utilities Fund | $34,000 | $- | $5,900 | $500 |
A Amounts may reflect rounding.
The following table presents fees billed by Deloitte Entities that were required to be approved by the Audit Committee for services that relate directly to the operations and financial reporting of the Funds and that are rendered on behalf of Fidelity Management & Research Company ("FMR") and entities controlling, controlled by, or under common control with FMR (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Funds ("Fund Service Providers"):
Services Billed by Deloitte Entities
| July 31, 2014A | July 31, 2013A |
Audit-Related Fees | $355,000 | $915,000 |
Tax Fees | $- | $- |
All Other Fees | $745,000 | $765,000 |
A Amounts may reflect rounding.
"Audit-Related Fees" represent fees billed for assurance and related services that are reasonably related to the performance of the fund audit or the review of the fund's financial statements and that are not reported under Audit Fees.
"Tax Fees" represent fees billed for tax compliance, tax advice or tax planning that relate directly to the operations and financial reporting of the fund.
"All Other Fees" represent fees billed for services provided to the fund or Fund Service Provider, a significant portion of which are assurance related, that relate directly to the operations and financial reporting of the fund, excluding those services that are reported under Audit Fees, Audit-Related Fees or Tax Fees.
Assurance services must be performed by an independent public accountant.
* * *
The aggregate non-audit fees billed by Deloitte Entities for services rendered to the Funds, FMR (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any Fund Service Provider for each of the last two fiscal years of the Funds are as follows:
Billed By | July 31, 2014 A | July 31, 2013 A |
Deloitte Entities | $2,005,000 | $1,845,000 |
A Amounts may reflect rounding.
The trust's Audit Committee has considered non-audit services that were not pre-approved that were provided by Deloitte Entities to Fund Service Providers to be compatible with maintaining the independence of Deloitte Entities in its audit of the Funds, taking into account representations from Deloitte Entities, in accordance with Public Company Accounting Oversight Board rules, regarding its independence from the Funds and their related entities and FMR's review of the appropriateness and permissibility under applicable law of such non-audit services prior to their provision to the Fund Service Providers.
Audit Committee Pre-Approval Policies and Procedures
The trust's Audit Committee must pre-approve all audit and non-audit services provided by a fund's independent registered public accounting firm relating to the operations or financial reporting of the fund. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.
The Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee's consideration of non-audit services by the audit firms that audit the Fidelity funds. The policies and procedures require that any non-audit service provided by a fund audit firm to a Fidelity fund and any non-audit service provided by a fund auditor to a Fund Service Provider that relates directly to the operations and financial reporting of a Fidelity fund ("Covered Service") are subject to approval by the Audit Committee before such service is provided.
All Covered Services must be approved in advance of provision of the service either: (i) by formal resolution of the Audit Committee, or (ii) by oral or written approval of the service by the Chair of the Audit Committee (or if the Chair is unavailable, such other member of the Audit Committee as may be designated by the Chair to act in the Chair's absence). The approval contemplated by (ii) above is permitted where the Treasurer determines that action on such an engagement is necessary before the next meeting of the Audit Committee.
Non-audit services provided by a fund audit firm to a Fund Service Provider that do not relate directly to the operations and financial reporting of a Fidelity fund are reported to the Audit Committee on a periodic basis.
Non-Audit Services Approved Pursuant to Rule 2-01(c)(7)(i)(C) and (ii) of Regulation S-X ("De Minimis Exception")
There were no non-audit services approved or required to be approved by the Audit Committee pursuant to the De Minimis Exception during the Funds' last two fiscal years relating to services provided to (i) the Funds or (ii) any Fund Service Provider that relate directly to the operations and financial reporting of the Funds.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Investments
(a) Not applicable.
(b) Not applicable
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the trust's Board of Trustees.
Item 11. Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the trust's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the trust's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the trust's internal control over financial reporting.
Item 12. Exhibits
(a) | (1) | Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(a) | (3) | Not applicable. |
(b) |
| Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Advisor Series VII
By: | /s/Adrien E. Deberghes |
| Adrien E. Deberghes |
| President and Treasurer |
|
|
Date: | September 25, 2014 |
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/Adrien E. Deberghes |
| Adrien E. Deberghes |
| President and Treasurer |
|
|
Date: | September 25, 2014 |
By: | /s/Howard J. Galligan III |
| Howard J. Galligan III |
| Chief Financial Officer |
|
|
Date: | September 25, 2014 |