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)
Scott C. Goebel, 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, 2013 |
Item 1. Reports to Stockholders
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor®
Real Estate
Fund - Class A, Class T, Class B
and Class C
Annual Report
July 31, 2013
(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 |
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Trustees and Officers |
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Distributions |
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Proxy Voting Results |
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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. © 2013 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, 2013 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) | 1.47% | 6.30% | 10.20% |
Class T (incl. 3.50% sales charge) | 3.67% | 6.55% | 10.17% |
Class B (incl. contingent deferred sales charge) A | 1.84% | 6.46% | 10.26% |
Class C (incl. contingent deferred sales charge)B | 5.89% | 6.77% | 10.02% |
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, 2003, 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
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 7.66%, 7.43%, 6.84% and 6.89%, respectively (excluding sales charges), versus 6.53% for the benchmark Dow Jones U.S. Select Real Estate Securities IndexSM and 25.00% for the S&P 500®. REITs trended upward until May, when higher interest rates began weighing heavily on the market. My investment approach seeks to generate repeatable outperformance over time via individual security selection. Relative to the Dow Jones index, one notable source of strength was the fund's position in senior housing operators - such as Brookdale Senior Living, Sunrise Senior Living and Emeritus, all of which were out-of-benchmark names - whose valuation and appreciation potential struck me as more attractive than those offered by health care REITs. I added to the fund's Brookdale position during the period and maintained my Emeritus stake, while I sold Sunrise in August. In contrast, the fund's biggest individual detractor was Education Realty Trust, an operator of student housing facilities that was hampered this period by poor industry supply/demand trends. A sizable underweighting in retail strip center REIT Kimco Realty - no longer held at period end - also limited results.
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, 2013 to July 31, 2013).
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 Expense RatioB | Beginning | Ending | Expenses Paid |
Class A | 1.15% |
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Actual |
| $ 1,000.00 | $ 1,028.40 | $ 5.78 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.09 | $ 5.76 |
Class T | 1.36% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,027.50 | $ 6.84 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.05 | $ 6.81 |
Class B | 1.91% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,024.70 | $ 9.59 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.32 | $ 9.54 |
Class C | 1.88% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,025.00 | $ 9.44 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.47 | $ 9.39 |
Institutional Class | .88% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,029.80 | $ 4.43 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.43 | $ 4.41 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Simon Property Group, Inc. | 12.2 | 12.0 |
Public Storage | 7.2 | 7.8 |
Ventas, Inc. | 6.8 | 7.6 |
Prologis, Inc. | 6.1 | 6.8 |
SL Green Realty Corp. | 4.6 | 4.1 |
Boston Properties, Inc. | 4.4 | 3.5 |
Camden Property Trust (SBI) | 3.8 | 4.1 |
Essex Property Trust, Inc. | 3.5 | 3.3 |
HCP, Inc. | 2.9 | 3.6 |
Alexandria Real Estate Equities, Inc. | 2.8 | 1.1 |
| 54.3 | |
Top Five REIT Sectors as of July 31, 2013 | ||
| % of fund's | % of fund's net assets |
REITs - Office Buildings | 17.6 | 14.4 |
REITs - Apartments | 16.6 | 16.9 |
REITs - Industrial Buildings | 16.0 | 16.3 |
REITs - Malls | 15.6 | 16.7 |
REITs - Health Care Facilities | 11.9 | 13.2 |
Asset Allocation (% of fund's net assets) | |||||||
As of July 31, 2013 | As of January 31, 2013 | ||||||
![]() | Stocks 98.1% |
| ![]() | Stocks 96.7% |
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![]() | Short-Term |
| ![]() | Short-Term |
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Annual Report
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 98.1% | |||
Shares | Value | ||
HEALTH CARE PROVIDERS & SERVICES - 2.7% | |||
Health Care Facilities - 2.7% | |||
Brookdale Senior Living, Inc. (a) | 377,685 | $ 10,998,187 | |
Emeritus Corp. (a) | 391,467 | 9,078,120 | |
TOTAL HEALTH CARE FACILITIES | 20,076,307 | ||
REAL ESTATE INVESTMENT TRUSTS - 94.4% | |||
REITs - Apartments - 16.6% | |||
AvalonBay Communities, Inc. | 122,482 | 16,576,714 | |
Camden Property Trust (SBI) | 398,774 | 28,129,518 | |
Education Realty Trust, Inc. | 1,175,076 | 11,080,967 | |
Equity Residential (SBI) | 295,309 | 16,537,304 | |
Essex Property Trust, Inc. | 164,303 | 26,500,431 | |
Home Properties, Inc. | 297,470 | 18,981,561 | |
Mid-America Apartment Communities, Inc. | 101,921 | 6,884,764 | |
TOTAL REITS - APARTMENTS | 124,691,259 | ||
REITs - Health Care Facilities - 11.9% | |||
HCP, Inc. | 499,695 | 21,921,620 | |
Health Care REIT, Inc. | 260,369 | 16,791,197 | |
Ventas, Inc. | 772,905 | 50,810,775 | |
TOTAL REITS - HEALTH CARE FACILITIES | 89,523,592 | ||
REITs - Hotels - 5.5% | |||
Chesapeake Lodging Trust | 634,067 | 14,526,475 | |
Host Hotels & Resorts, Inc. | 919,634 | 16,424,663 | |
Sunstone Hotel Investors, Inc. (a) | 786,691 | 10,179,782 | |
TOTAL REITS - HOTELS | 41,130,920 | ||
REITs - Industrial Buildings - 16.0% | |||
DuPont Fabros Technology, Inc. (d) | 339,200 | 7,771,072 | |
First Industrial Realty Trust, Inc. | 474,839 | 7,768,366 | |
First Potomac Realty Trust | 250,570 | 3,400,235 | |
Prologis, Inc. | 1,197,757 | 45,945,959 | |
Public Storage | 336,694 | 53,608,419 | |
Terreno Realty Corp. | 70,000 | 1,283,800 | |
TOTAL REITS - INDUSTRIAL BUILDINGS | 119,777,851 | ||
Common Stocks - continued | |||
Shares | Value | ||
REAL ESTATE INVESTMENT TRUSTS - CONTINUED | |||
REITs - Malls - 15.6% | |||
CBL & Associates Properties, Inc. | 256,600 | $ 5,842,782 | |
General Growth Properties, Inc. | 952,900 | 19,763,146 | |
Simon Property Group, Inc. | 570,978 | 91,390,736 | |
TOTAL REITS - MALLS | 116,996,664 | ||
REITs - Management/Investment - 2.4% | |||
Coresite Realty Corp. | 194,645 | 6,610,144 | |
Digital Realty Trust, Inc. | 20,000 | 1,105,800 | |
Equity Lifestyle Properties, Inc. | 122,400 | 4,711,176 | |
Retail Properties America, Inc. | 367,250 | 5,174,553 | |
Weyerhaeuser Co. | 27,100 | 769,640 | |
TOTAL REITS - MANAGEMENT/INVESTMENT | 18,371,313 | ||
REITs - Mobile Home Parks - 0.7% | |||
Sun Communities, Inc. | 111,522 | 5,399,895 | |
REITs - Office Buildings - 17.6% | |||
Alexandria Real Estate Equities, Inc. | 304,684 | 20,870,854 | |
Boston Properties, Inc. | 305,549 | 32,678,466 | |
Cousins Properties, Inc. | 1,619,500 | 16,599,875 | |
Douglas Emmett, Inc. | 582,900 | 14,578,329 | |
Highwoods Properties, Inc. (SBI) | 7,143 | 259,148 | |
Piedmont Office Realty Trust, Inc. Class A | 707,000 | 12,789,630 | |
SL Green Realty Corp. | 379,165 | 34,371,307 | |
TOTAL REITS - OFFICE BUILDINGS | 132,147,609 | ||
REITs - Shopping Centers - 7.9% | |||
Acadia Realty Trust (SBI) | 308,754 | 7,959,678 | |
Cedar Shopping Centers, Inc. | 700,273 | 3,879,512 | |
Equity One, Inc. | 713,095 | 16,501,018 | |
Excel Trust, Inc. | 86,725 | 1,125,691 | |
Glimcher Realty Trust | 1,574,734 | 17,700,010 | |
Kite Realty Group Trust | 672,131 | 3,878,196 | |
Vornado Realty Trust | 95,516 | 8,100,712 | |
TOTAL REITS - SHOPPING CENTERS | 59,144,817 | ||
Common Stocks - continued | |||
Shares | Value | ||
REAL ESTATE INVESTMENT TRUSTS - CONTINUED | |||
REITs - Storage - 0.2% | |||
Chambers Street Properties (d) | 162,347 | $ 1,313,387 | |
TOTAL REAL ESTATE INVESTMENT TRUSTS | 708,497,307 | ||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.0% | |||
Real Estate Operating Companies - 1.0% | |||
Forest City Enterprises, Inc. Class A (a) | 448,567 | 7,858,894 | |
TOTAL COMMON STOCKS (Cost $591,911,652) |
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Money Market Funds - 1.9% | |||
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Fidelity Cash Central Fund, 0.11% (b) | 11,958,331 | 11,958,331 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 2,718,825 | 2,718,825 | |
TOTAL MONEY MARKET FUNDS (Cost $14,677,156) |
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TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $606,588,808) | 751,109,664 | ||
NET OTHER ASSETS (LIABILITIES) - 0.0% | (291,098) | ||
NET ASSETS - 100% | $ 750,818,566 |
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 | $ 33,245 |
Fidelity Securities Lending Cash Central Fund | 16,368 |
Total | $ 49,613 |
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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $2,593,808) - See accompanying schedule: Unaffiliated issuers (cost $591,911,652) | $ 736,432,508 |
|
Fidelity Central Funds (cost $14,677,156) | 14,677,156 |
|
Total Investments (cost $606,588,808) |
| $ 751,109,664 |
Receivable for investments sold | 10,091,215 | |
Receivable for fund shares sold | 1,778,256 | |
Dividends receivable | 132,096 | |
Distributions receivable from Fidelity Central Funds | 14,076 | |
Other receivables | 6,518 | |
Total assets | 763,131,825 | |
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|
|
Liabilities | ||
Payable for investments purchased | $ 5,722,921 | |
Payable for fund shares redeemed | 3,099,023 | |
Accrued management fee | 355,058 | |
Distribution and service plan fees payable | 172,039 | |
Other affiliated payables | 195,520 | |
Other payables and accrued expenses | 49,873 | |
Collateral on securities loaned, at value | 2,718,825 | |
Total liabilities | 12,313,259 | |
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|
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Net Assets | $ 750,818,566 | |
Net Assets consist of: |
| |
Paid in capital | $ 596,225,594 | |
Undistributed net investment income | 1,355,965 | |
Accumulated undistributed net realized gain (loss) on investments | 8,716,151 | |
Net unrealized appreciation (depreciation) on investments | 144,520,856 | |
Net Assets | $ 750,818,566 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
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Calculation of Maximum Offering Price Class A: | $ 20.92 | |
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|
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Maximum offering price per share (100/94.25 of $20.92) | $ 22.20 | |
Class T: | $ 20.91 | |
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Maximum offering price per share (100/96.50 of $20.91) | $ 21.67 | |
Class B: | $ 20.66 | |
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Class C: | $ 20.61 | |
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Institutional Class: | $ 21.07 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 15,760,117 |
Income from Fidelity Central Funds |
| 49,613 |
Total income |
| 15,809,730 |
|
|
|
Expenses | ||
Management fee | $ 3,945,202 | |
Transfer agent fees | 2,002,916 | |
Distribution and service plan fees | 1,808,991 | |
Accounting and security lending fees | 253,054 | |
Custodian fees and expenses | 41,817 | |
Independent trustees' compensation | 5,017 | |
Registration fees | 107,682 | |
Audit | 50,732 | |
Legal | 2,051 | |
Interest | 784 | |
Miscellaneous | 6,244 | |
Total expenses before reductions | 8,224,490 | |
Expense reductions | (62,649) | 8,161,841 |
Net investment income (loss) | 7,647,889 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 29,947,480 | |
Change in net unrealized appreciation (depreciation) on investment securities | 6,004,617 | |
Net gain (loss) | 35,952,097 | |
Net increase (decrease) in net assets resulting from operations | $ 43,599,986 |
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) | $ 7,647,889 | $ 5,003,577 |
Net realized gain (loss) | 29,947,480 | (3,803,276) |
Change in net unrealized appreciation (depreciation) | 6,004,617 | 70,218,055 |
Net increase (decrease) in net assets resulting | 43,599,986 | 71,418,356 |
Distributions to shareholders from net investment income | (7,604,308) | (3,900,509) |
Distributions to shareholders from net realized gain | (5,306,125) | (12,354,208) |
Total distributions | (12,910,433) | (16,254,717) |
Share transactions - net increase (decrease) | 86,239,926 | 89,359,376 |
Total increase (decrease) in net assets | 116,929,479 | 144,523,015 |
|
|
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Net Assets | ||
Beginning of period | 633,889,087 | 489,366,072 |
End of period (including undistributed net investment income of $1,355,965 and undistributed net investment income of $1,437,270, respectively) | $ 750,818,566 | $ 633,889,087 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
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|
|
|
|
Net asset value, beginning of period | $ 19.83 | $ 18.24 | $ 14.88 | $ 9.41 | $ 16.39 |
Income from Investment Operations |
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|
|
Net investment income (loss) C | .22 | .17 | .12 | .19 | .27 |
Net realized and unrealized gain (loss) | 1.27 | 2.02 | 3.37 | 5.46 | (6.86) |
Total from investment operations | 1.49 | 2.19 | 3.49 | 5.65 | (6.59) |
Distributions from net investment income | (.23) | (.13) | (.13) | (.18) | (.36) |
Distributions from net realized gain | (.17) | (.47) | - | - | (.03) |
Total distributions | (.40) | (.60) | (.13) | (.18) | (.39) |
Net asset value, end of period | $ 20.92 | $ 19.83 | $ 18.24 | $ 14.88 | $ 9.41 |
Total ReturnA,B | 7.66% | 12.81% | 23.63% | 60.38% | (40.19)% |
Ratios to Average Net AssetsD,F |
|
|
|
|
|
Expenses before reductions | 1.17% | 1.19% | 1.19% | 1.23% | 1.27% |
Expenses net of fee waivers, if any | 1.17% | 1.19% | 1.19% | 1.23% | 1.25% |
Expenses net of all reductions | 1.16% | 1.18% | 1.18% | 1.22% | 1.25% |
Net investment income (loss) | 1.06% | .98% | .69% | 1.45% | 2.73% |
Supplemental Data |
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Net assets, end of period (000 omitted) | $ 246,323 | $ 199,303 | $ 178,978 | $ 117,929 | $ 62,422 |
Portfolio turnover rateE | 63% | 48% | 63% | 60% | 98% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
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|
|
Net asset value, beginning of period | $ 19.82 | $ 18.24 | $ 14.90 | $ 9.42 | $ 16.40 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss)C | .17 | .13 | .07 | .15 | .25 |
Net realized and unrealized gain (loss) | 1.28 | 2.02 | 3.38 | 5.47 | (6.87) |
Total from investment operations | 1.45 | 2.15 | 3.45 | 5.62 | (6.62) |
Distributions from net investment income | (.19) | (.10) | (.11) | (.14) | (.33) |
Distributions from net realized gain | (.17) | (.47) | - | - | (.03) |
Total distributions | (.36) | (.57) | (.11) | (.14) | (.36) |
Net asset value, end of period | $ 20.91 | $ 19.82 | $ 18.24 | $ 14.90 | $ 9.42 |
Total ReturnA,B | 7.43% | 12.52% | 23.28% | 60.02% | (40.33)% |
Ratios to Average Net AssetsD,F |
|
|
|
|
|
Expenses before reductions | 1.38% | 1.43% | 1.44% | 1.49% | 1.54% |
Expenses net of fee waivers, if any | 1.38% | 1.43% | 1.44% | 1.49% | 1.50% |
Expenses net of all reductions | 1.38% | 1.43% | 1.44% | 1.48% | 1.50% |
Net investment income (loss) | .85% | .73% | .43% | 1.19% | 2.48% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 114,717 | $ 86,987 | $ 76,785 | $ 59,529 | $ 40,276 |
Portfolio turnover rateE | 63% | 48% | 63% | 60% | 98% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 19.59 | $ 18.05 | $ 14.77 | $ 9.35 | $ 16.26 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss)C | .06 | .04 | (.01) | .09 | .20 |
Net realized and unrealized gain (loss) | 1.26 | 2.00 | 3.35 | 5.42 | (6.81) |
Total from investment operations | 1.32 | 2.04 | 3.34 | 5.51 | (6.61) |
Distributions from net investment income | (.08) | (.03) | (.06) | (.09) | (.27) |
Distributions from net realized gain | (.17) | (.47) | - | - | (.03) |
Total distributions | (.25) | (.50) | (.06) | (.09) | (.30) |
Net asset value, end of period | $ 20.66 | $ 19.59 | $ 18.05 | $ 14.77 | $ 9.35 |
Total ReturnA,B | 6.84% | 11.99% | 22.69% | 59.14% | (40.60)% |
Ratios to Average Net AssetsD,F |
|
|
|
|
|
Expenses before reductions | 1.92% | 1.93% | 1.94% | 1.98% | 2.04% |
Expenses net of fee waivers, if any | 1.92% | 1.93% | 1.94% | 1.98% | 2.00% |
Expenses net of all reductions | 1.91% | 1.93% | 1.93% | 1.97% | 2.00% |
Net investment income (loss) | .31% | .23% | (.07)% | .70% | 1.98% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 8,697 | $ 9,481 | $ 11,542 | $ 12,078 | $ 7,933 |
Portfolio turnover rateE | 63% | 48% | 63% | 60% | 98% |
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 - Class C
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 19.55 | $ 18.03 | $ 14.76 | $ 9.34 | $ 16.26 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss)C | .07 | .04 | (.01) | .09 | .19 |
Net realized and unrealized gain (loss) | 1.26 | 1.98 | 3.35 | 5.43 | (6.81) |
Total from investment operations | 1.33 | 2.02 | 3.34 | 5.52 | (6.62) |
Distributions from net investment income | (.10) | (.03) | (.07) | (.10) | (.27) |
Distributions from net realized gain | (.17) | (.47) | - | - | (.03) |
Total distributions | (.27) | (.50) | (.07) | (.10) | (.30) |
Net asset value, end of period | $ 20.61 | $ 19.55 | $ 18.03 | $ 14.76 | $ 9.34 |
Total ReturnA,B | 6.89% | 11.92% | 22.69% | 59.28% | (40.64)% |
Ratios to Average Net AssetsD,F |
|
|
|
|
|
Expenses before reductions | 1.90% | 1.93% | 1.94% | 1.98% | 2.01% |
Expenses net of fee waivers, if any | 1.90% | 1.93% | 1.94% | 1.98% | 2.00% |
Expenses net of all reductions | 1.89% | 1.93% | 1.93% | 1.97% | 2.00% |
Net investment income (loss) | .33% | .23% | (.07)% | .71% | 1.98% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 75,461 | $ 55,064 | $ 47,406 | $ 31,204 | $ 13,226 |
Portfolio turnover rateE | 63% | 48% | 63% | 60% | 98% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 19.97 | $ 18.36 | $ 14.96 | $ 9.46 | $ 16.47 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss)B | .28 | .22 | .16 | .23 | .30 |
Net realized and unrealized gain (loss) | 1.27 | 2.03 | 3.39 | 5.47 | (6.90) |
Total from investment operations | 1.55 | 2.25 | 3.55 | 5.70 | (6.60) |
Distributions from net investment income | (.28) | (.17) | (.15) | (.20) | (.38) |
Distributions from net realized gain | (.17) | (.47) | - | - | (.03) |
Total distributions | (.45) | (.64) | (.15) | (.20) | (.41) |
Net asset value, end of period | $ 21.07 | $ 19.97 | $ 18.36 | $ 14.96 | $ 9.46 |
Total ReturnA | 7.92% | 13.12% | 23.92% | 60.75% | (40.03)% |
Ratios to Average Net AssetsC,E |
|
|
|
|
|
Expenses before reductions | .90% | .93% | .93% | .97% | 1.01% |
Expenses net of fee waivers, if any | .90% | .93% | .93% | .97% | 1.00% |
Expenses net of all reductions | .89% | .93% | .92% | .96% | 1.00% |
Net investment income (loss) | 1.33% | 1.23% | .94% | 1.71% | 2.98% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 305,619 | $ 283,054 | $ 174,655 | $ 167,699 | $ 55,177 |
Portfolio turnover rateD | 63% | 48% | 63% | 60% | 98% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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:
Annual Report
3. Significant Accounting Policies - continued
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 FMR 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.
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
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. 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 and distributions from the Fidelity Central Funds are accrued as earned.
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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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.
Annual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to 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 | $ 146,749,070 |
Gross unrealized depreciation | (6,335,610) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 140,413,460 |
Tax Cost | $ 610,696,204 |
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 1,355,965 |
Undistributed long-term capital gain | $ 12,823,548 |
Net unrealized appreciation (depreciation) | $ 140,413,460 |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 7,604,308 | $ 3,900,509 |
Long-term Capital Gains | 5,306,125 | 12,354,208 |
Total | $ 12,910,433 | $ 16,254,717 |
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $525,007,892 and $431,905,395, respectively.
Annual Report
Notes to Financial Statements - continued
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .55% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 561,697 | $ 15,789 |
Class T | .25% | .25% | 499,754 | 3,800 |
Class B | .75% | .25% | 90,614 | 68,728 |
Class C | .75% | .25% | 656,926 | 143,805 |
|
|
| $ 1,808,991 | $ 232,122 |
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 | $ 99,757 |
Class T | 17,289 |
Class B* | 7,400 |
Class C* | 8,028 |
| $ 132,474 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 665,085 | .30 |
Class T | 264,061 | .26 |
Class B | 27,272 | .30 |
Class C | 181,508 | .28 |
Institutional Class | 864,990 | .28 |
| $ 2,002,916 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $12,084 for the period.
Annual Report
Notes to Financial Statements - continued
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, 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 | $ 19,528,000 | .36% | $ 784 |
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $1,625 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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
Annual Report
7. Security Lending - continued
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 $16,368. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $62,617 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 $32.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net investment income |
|
|
Class A | $ 2,470,657 | $ 1,233,446 |
Class T | 882,131 | 395,519 |
Class B | 35,157 | 17,337 |
Class C | 295,037 | 91,538 |
Institutional Class | 3,921,326 | 2,162,669 |
Total | $ 7,604,308 | $ 3,900,509 |
From net realized gain |
|
|
Class A | $ 1,782,636 | $ 4,374,052 |
Class T | 780,775 | 1,941,846 |
Class B | 76,216 | 284,191 |
Class C | 516,924 | 1,220,926 |
Institutional Class | 2,149,574 | 4,533,193 |
Total | $ 5,306,125 | $ 12,354,208 |
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, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 5,439,337 | 4,390,323 | $ 112,236,960 | $ 77,870,328 |
Reinvestment of distributions | 203,180 | 330,295 | 3,981,426 | 5,307,780 |
Shares redeemed | (3,918,883) | (4,481,644) | (80,333,991) | (76,348,944) |
Net increase (decrease) | 1,723,634 | 238,974 | $ 35,884,395 | $ 6,829,164 |
Class T |
|
|
|
|
Shares sold | 2,359,748 | 1,486,467 | $ 48,593,378 | $ 26,569,039 |
Reinvestment of distributions | 82,685 | 143,406 | 1,616,132 | 2,295,629 |
Shares redeemed | (1,344,901) | (1,450,832) | (27,286,441) | (25,262,634) |
Net increase (decrease) | 1,097,532 | 179,041 | $ 22,923,069 | $ 3,602,034 |
Class B |
|
|
|
|
Shares sold | 112,710 | 71,396 | $ 2,287,362 | $ 1,224,427 |
Reinvestment of distributions | 5,188 | 17,389 | 98,861 | 272,976 |
Shares redeemed | (180,971) | (244,068) | (3,674,862) | (4,157,648) |
Net increase (decrease) | (63,073) | (155,283) | $ (1,288,639) | $ (2,660,245) |
Class C |
|
|
|
|
Shares sold | 1,545,715 | 701,378 | $ 31,572,252 | $ 12,249,173 |
Reinvestment of distributions | 39,180 | 76,897 | 747,349 | 1,206,065 |
Shares redeemed | (739,815) | (591,840) | (14,971,358) | (10,136,308) |
Net increase (decrease) | 845,080 | 186,435 | $ 17,348,243 | $ 3,318,930 |
Institutional Class |
|
|
|
|
Shares sold | 10,230,645 | 7,861,392 | $ 215,528,191 | $ 135,053,241 |
Reinvestment of distributions | 177,841 | 250,120 | 3,543,243 | 4,059,507 |
Shares redeemed | (10,081,938) | (3,446,764) | (207,698,576) | (60,843,255) |
Net increase (decrease) | 326,548 | 4,664,748 | $ 11,372,858 | $ 78,269,493 |
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, 2013, 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, 2013, 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, 2013, 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 16, 2013
Annual Report
Trustees and Officers
The Trustees and executive 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. Ned C. Lautenbach, Ronald P. O'Hanley, and William S. Stavropoulos each oversees 230 Fidelity funds. David A. Rosow, Garnett A. Smith, and Michael E. Wiley each oversees 64 Fidelity 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 executive 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. Ronald P. O'Hanley 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+ | |
Ronald P. O'Hanley (1957) | |
| Year of Election or Appointment: 2013 Mr. O'Hanley is Trustee and Chairman of the Board of Trustees of certain funds. Mr. O'Hanley also serves as a Trustee of other Fidelity funds (2011-present), and is Director of FMR Co., Inc. (2010-present), Director of Fidelity Investments Money Management, Inc. (2010-present), Director of Fidelity Research & Analysis Company (2010-present), President of Fidelity Asset Management and Corporate Services and a Member of Fidelity's Executive Committee (2010-present). Previously, Mr. O'Hanley served as President and Chief Executive Officer of BNY Mellon Asset Management (2007-2010). Mr. O'Hanley also served as Vice Chairman of Bank New York Mellon Corp. and a member of that firm's Executive Committee. Prior to the 2007 merger of The Bank of New York and Mellon Financial Corporation, he was Vice Chairman of Mellon Financial Corporation and President and Chief Executive Officer of Mellon Asset Management. He joined Mellon in February 1997. Mr. O'Hanley currently serves as Chairman of the Boston Public Library Foundation Board of Directors and sits on the Board of Directors of Beth Israel Deaconess Medical Center, the Board of Trustees of the Marine Biological Laboratory and the Advisory Board of the Maxwell School of Citizenship and Public Administration at Syracuse University. Mr. O'Hanley also chairs the Council on Asset Management for the Financial Services Roundtable and is a member of the Board of Directors of Institutional Investor's U.S. Institute. |
* 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+ | |
Ned C. Lautenbach (1944) | |
| Year of Election or Appointment: 2013 Mr. Lautenbach serves as Chairman of the Independent Trustees of other Fidelity funds (2006-present). Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of the Philharmonic Center for the Arts in Naples, Florida (2012-present) and a member of the Council on Foreign Relations (1994-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007). |
David A. Rosow (1942) | |
| Year of Election or Appointment: 2013 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 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 is a board member of the Jackson Hole Land Trust (2009-present). Mr. Smith served as a Member of the Advisory Board of other Fidelity funds (2012-2013). |
William S. Stavropoulos (1939) | |
| Year of Election or Appointment: 2013 Mr. Stavropoulos serves as Vice Chairman of the Independent Trustees of other Fidelity funds (2006-present). Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012). |
Michael E. Wiley (1950) | |
| Year of Election or Appointment: 2013 Mr. Wiley serves as Chairman of the Independent Trustees of Fidelity's Sector Portfolios (2013-present). Mr. Wiley also serves as a Director of Asia Pacific Exploration Consolidated (international oil and gas exploration and production, 2008-present). 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 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
Executive Officers:
Correspondence intended for each executive officer may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupation | |
Kenneth B. Robins (1969) | |
| Year of Election or Appointment: 2008 President and Treasurer of Fidelity's Sector Portfolios. Mr. Robins also serves as President and Treasurer (2008-present) and Assistant Treasurer (2009-present) of other Fidelity funds and is an employee of Fidelity Investments (2004-present). Mr. Robins serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (2013-present). Previously, Mr. Robins served as Deputy Treasurer of the Fidelity funds (2005-2008) and Treasurer and Chief Financial Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2006-2008). |
Brian B. Hogan (1964) | |
| Year of Election or Appointment: 2009 Vice President of Fidelity's Sector Portfolios. Mr. Hogan also serves as Vice President of other Fidelity funds (2009-present) and 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. |
Christopher S. Bartel (1971) | |
| Year of Election or Appointment: 2009 Vice President of Fidelity's Sector and Real Estate Equity Funds. Mr. Bartel also 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). |
Scott C. Goebel (1968) | |
| Year of Election or Appointment: 2008 Secretary and Chief Legal Officer (CLO) of the Fidelity funds. Mr. Goebel also serves as Secretary of Fidelity Investments Money Management, Inc. (FIMM) (2010-present) and Fidelity Research and Analysis Company (FRAC) (2010-present); Secretary and CLO of The North Carolina Capital Management Trust: Cash and Term Portfolios (2008-present); General Counsel, Secretary, and Senior Vice President of FMR (2008-present) and FMR Co., Inc. (2008-present); employed by FMR LLC or an affiliate (2001-present); Chief Legal Officer of Fidelity Management & Research (Hong Kong) Limited (2008-present) and Assistant Secretary of Fidelity Management & Research (Japan) Inc. (2008-present), and Fidelity Management & Research (U.K.) Inc. (2008-present). Previously, Mr. Goebel served as Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and the Funds (2007-2008) and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007). |
William C. Coffey (1969) | |
| Year of Election or Appointment: 2009 Assistant Secretary of Fidelity's Sector Portfolios. Mr. Coffey also serves as Assistant Secretary of other Fidelity funds (2009-present), 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). |
Elizabeth Paige Baumann (1968) | |
| Year of Election or Appointment: 2012 Anti-Money Laundering (AML) Officer of the Fidelity funds. Ms. Baumann also serves as AML Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2012-present), 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). |
Christine Reynolds (1958) | |
| Year of Election or Appointment: 2008 Chief Financial Officer of the Fidelity funds. Ms. Reynolds became President of Fidelity Pricing and Cash Management Services (FPCMS) in August 2008. Ms. Reynolds served as Chief Operating Officer of FPCMS (2007-2008). Previously, Ms. Reynolds served as President, Treasurer, and Anti-Money Laundering officer of the Fidelity funds (2004-2007). |
Joseph A. Hanlon (1968) | |
| Year of Election or Appointment: 2012 Chief Compliance Officer of Fidelity's Sector Portfolios. Mr. Hanlon also serves as Chief Compliance Officer of other Fidelity funds (2012-present). Mr. Hanlon serves as Compliance Officer of FMR, FMR Co., Inc., Fidelity Investments Money Management, Inc. (FIMM), Fidelity Research and Analysis Company (FRAC), and Fidelity Management & Research (Hong Kong) (2009-present), as Senior Vice President of the Fidelity Asset Management Division (2009-present), and is an employee of Fidelity Investments. Previously, Mr. Hanlon served as Compliance Officer of Fidelity Management & Research (Japan) Inc. (2009-2013), Strategic Advisers, Inc. (2009-2013), and Fidelity Management & Research (U.K.) Inc. (2009-2013). |
Joseph F. Zambello (1957) | |
| Year of Election or Appointment: 2011 Deputy Treasurer of the Fidelity 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). |
Adrien E. Deberghes (1967) | |
| Year of Election or Appointment: 2008 Deputy Treasurer of Fidelity's Sector Portfolios. Mr. Deberghes also serves as Vice President (2011-present), Deputy Treasurer (2008-present), and Assistant Treasurer (2010-present) of other Fidelity funds, and is an employee of Fidelity Investments (2008-present). Previously, Mr. Deberghes served as 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). |
Stephen Sadoski (1971) | |
| Year of Election or Appointment: 2012 Deputy Treasurer of Fidelity's Sector Portfolios. Mr. Sadoski also serves as Deputy Treasurer of other Fidelity funds (2012-present) and is an employee of Fidelity Investments (2012-present). Previously, Mr. Sadoski served as Assistant Treasurer of Fidelity's Fixed Income and Asset Allocation Funds (2012-2013), an assistant chief accountant in the Division of Investment Management of the Securities and Exchange Commission (SEC) (2009-2012) and as a senior manager at Deloitte & Touche LLP (1997-2009). |
Stacie M. Smith (1974) | |
| Year of Election or Appointment: 2013 Deputy Treasurer of Fidelity's Sector Portfolios. Ms. Smith also serves as Deputy Treasurer of other Fidelity funds (2013-present) and is an employee of Fidelity Investments (2009-present). Previously, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). |
Stephanie J. Dorsey (1969) | |
| Year of Election or Appointment: 2010 Assistant Treasurer of Fidelity's Sector Portfolios. Ms. Dorsey also serves as President and Treasurer (2013-present) and Assistant Treasurer (2010-present) of other Fidelity funds, Treasurer and Chief Financial Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2013-present), and is an employee of Fidelity Investments (2008-present). Previously, Ms. Dorsey served as Deputy Treasurer of Fidelity's Fixed Income and Asset Allocation Funds (2008-2013), Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank. |
Gary W. Ryan (1958) | |
| Year of Election or Appointment: 2005 Assistant Treasurer of the Fidelity funds. Mr. Ryan is an employee of Fidelity Investments. Previously, Mr. Ryan served as Vice President of Fund Reporting in Fidelity Pricing and Cash Management Services (FPCMS) (1999-2005). |
Jonathan Davis (1968) | |
| Year of Election or Appointment: 2010 Assistant Treasurer of the Fidelity funds. Mr. Davis is also Assistant Treasurer of Fidelity Rutland Square Trust II and Fidelity Commonwealth Trust II. Mr. Davis is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (2003-2010). |
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 | 09/09/13 | 09/06/13 | $0.057 | $0.378 |
Class T | 09/09/13 | 09/06/13 | $0.047 | $0.378 |
Class B | 09/09/13 | 09/06/13 | $0.016 | $0.378 |
Class C | 09/09/13 | 09/06/13 | $0.019 | $0.378 |
The fund hereby designates as a capital gain dividend with respect to the taxable year ended July 31, 2013, $19,890,238, or, if subsequently determined to be different, the net capital gain of such year.
A total of 0.05% 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 2014 of amounts for use in preparing 2013 income tax returns.
Annual Report
Proxy Voting Results
A special meeting of Fidelity Advisor Real Estate Fund's shareholders was held on June 18, 2013. The results of votes taken among shareholders on the proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.
PROPOSAL 1 | ||
To elect a Board of Trustees.A | ||
| # of | % of |
Ned C. Lautenbach | ||
Affirmative | 2,198,660,066.13 | 95.750 |
Withheld | 97,591,697.03 | 4.250 |
TOTAL | 2,296,251,763.16 | 100.000 |
Ronald P. O'Hanley | ||
Affirmative | 2,202,691,976.72 | 95.926 |
Withheld | 93,559,786.44 | 4.074 |
TOTAL | 2,296,251,763.16 | 100.000 |
David A. Rosow | ||
Affirmative | 2,198,765,612.76 | 95.755 |
Withheld | 97,486,150.40 | 4.245 |
TOTAL | 2,296,251,763.16 | 100.000 |
Garnett A. Smith | ||
Affirmative | 2,201,945,782.92 | 95.894 |
Withheld | 94,305,980.24 | 4.106 |
TOTAL | 2,296,251,763.16 | 100.000 |
William S. Stavropoulos | ||
Affirmative | 2,196,127,224.90 | 95.640 |
Withheld | 100,124,538.26 | 4.360 |
TOTAL | 2,296,251,763.16 | 100.000 |
Michael E. Wiley | ||
Affirmative | 2,201,986,460.61 | 95.895 |
Withheld | 94,265,302.55 | 4.105 |
TOTAL | 2,296,251,763.16 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between the fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 317,284,411.56 | 74.301 |
Against | 11,210,904.77 | 2.626 |
Abstain | 21,999,154.19 | 5.151 |
Broker Non-Votes | 76,533,745.65 | 17.922 |
TOTAL | 427,028,216.17 | 100.000 |
A Denotes trust-wide proposal and voting results. |
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-0913 1.789707.110
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor®
Real Estate
Fund - Institutional Class
Annual Report
July 31, 2013
(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 |
| |
Proxy Voting Results |
|
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. © 2013 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, 2013 | Past 1 | Past 5 | Past 10 |
Institutional Class | 7.92% | 7.84% | 11.17% |
$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, 2003. 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
Comments from Samuel Wald, Portfolio Manager of Fidelity Advisor® Real Estate Fund: For the year, the fund's Institutional Class gained 7.92%, versus 6.53% for the benchmark Dow Jones U.S. Select Real Estate Securities IndexSM and 25.00% for the S&P 500®. REITs trended upward until May, when higher interest rates began weighing heavily on the market. My investment approach seeks to generate repeatable outperformance over time via individual security selection, as opposed to through sector allocation or market timing. Relative to the Dow Jones index, one notable source of strength was the fund's position in senior housing operators - such as Brookdale Senior Living, Sunrise Senior Living and Emeritus, all of which were out-of-benchmark names - whose valuation and appreciation potential struck me as more attractive than those offered by health care REITs. I added to the fund's Brookdale position during the period and maintained my Emeritus stake, while I sold Sunrise in August. In contrast, the fund's biggest individual detractor was Education Realty Trust, an operator of student housing facilities that was hampered this period by poor industry supply/demand trends. A sizable underweighting in retail strip center REIT Kimco Realty - no longer held at period end - also limited results.
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, 2013 to July 31, 2013).
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 Expense RatioB | Beginning | Ending | Expenses Paid |
Class A | 1.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,028.40 | $ 5.78 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.09 | $ 5.76 |
Class T | 1.36% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,027.50 | $ 6.84 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.05 | $ 6.81 |
Class B | 1.91% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,024.70 | $ 9.59 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.32 | $ 9.54 |
Class C | 1.88% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,025.00 | $ 9.44 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.47 | $ 9.39 |
Institutional Class | .88% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,029.80 | $ 4.43 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.43 | $ 4.41 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Simon Property Group, Inc. | 12.2 | 12.0 |
Public Storage | 7.2 | 7.8 |
Ventas, Inc. | 6.8 | 7.6 |
Prologis, Inc. | 6.1 | 6.8 |
SL Green Realty Corp. | 4.6 | 4.1 |
Boston Properties, Inc. | 4.4 | 3.5 |
Camden Property Trust (SBI) | 3.8 | 4.1 |
Essex Property Trust, Inc. | 3.5 | 3.3 |
HCP, Inc. | 2.9 | 3.6 |
Alexandria Real Estate Equities, Inc. | 2.8 | 1.1 |
| 54.3 | |
Top Five REIT Sectors as of July 31, 2013 | ||
| % of fund's | % of fund's net assets |
REITs - Office Buildings | 17.6 | 14.4 |
REITs - Apartments | 16.6 | 16.9 |
REITs - Industrial Buildings | 16.0 | 16.3 |
REITs - Malls | 15.6 | 16.7 |
REITs - Health Care Facilities | 11.9 | 13.2 |
Asset Allocation (% of fund's net assets) | |||||||
As of July 31, 2013 | As of January 31, 2013 | ||||||
![]() | Stocks 98.1% |
| ![]() | Stocks 96.7% |
| ||
![]() | Short-Term |
| ![]() | Short-Term |
|
Annual Report
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 98.1% | |||
Shares | Value | ||
HEALTH CARE PROVIDERS & SERVICES - 2.7% | |||
Health Care Facilities - 2.7% | |||
Brookdale Senior Living, Inc. (a) | 377,685 | $ 10,998,187 | |
Emeritus Corp. (a) | 391,467 | 9,078,120 | |
TOTAL HEALTH CARE FACILITIES | 20,076,307 | ||
REAL ESTATE INVESTMENT TRUSTS - 94.4% | |||
REITs - Apartments - 16.6% | |||
AvalonBay Communities, Inc. | 122,482 | 16,576,714 | |
Camden Property Trust (SBI) | 398,774 | 28,129,518 | |
Education Realty Trust, Inc. | 1,175,076 | 11,080,967 | |
Equity Residential (SBI) | 295,309 | 16,537,304 | |
Essex Property Trust, Inc. | 164,303 | 26,500,431 | |
Home Properties, Inc. | 297,470 | 18,981,561 | |
Mid-America Apartment Communities, Inc. | 101,921 | 6,884,764 | |
TOTAL REITS - APARTMENTS | 124,691,259 | ||
REITs - Health Care Facilities - 11.9% | |||
HCP, Inc. | 499,695 | 21,921,620 | |
Health Care REIT, Inc. | 260,369 | 16,791,197 | |
Ventas, Inc. | 772,905 | 50,810,775 | |
TOTAL REITS - HEALTH CARE FACILITIES | 89,523,592 | ||
REITs - Hotels - 5.5% | |||
Chesapeake Lodging Trust | 634,067 | 14,526,475 | |
Host Hotels & Resorts, Inc. | 919,634 | 16,424,663 | |
Sunstone Hotel Investors, Inc. (a) | 786,691 | 10,179,782 | |
TOTAL REITS - HOTELS | 41,130,920 | ||
REITs - Industrial Buildings - 16.0% | |||
DuPont Fabros Technology, Inc. (d) | 339,200 | 7,771,072 | |
First Industrial Realty Trust, Inc. | 474,839 | 7,768,366 | |
First Potomac Realty Trust | 250,570 | 3,400,235 | |
Prologis, Inc. | 1,197,757 | 45,945,959 | |
Public Storage | 336,694 | 53,608,419 | |
Terreno Realty Corp. | 70,000 | 1,283,800 | |
TOTAL REITS - INDUSTRIAL BUILDINGS | 119,777,851 | ||
Common Stocks - continued | |||
Shares | Value | ||
REAL ESTATE INVESTMENT TRUSTS - CONTINUED | |||
REITs - Malls - 15.6% | |||
CBL & Associates Properties, Inc. | 256,600 | $ 5,842,782 | |
General Growth Properties, Inc. | 952,900 | 19,763,146 | |
Simon Property Group, Inc. | 570,978 | 91,390,736 | |
TOTAL REITS - MALLS | 116,996,664 | ||
REITs - Management/Investment - 2.4% | |||
Coresite Realty Corp. | 194,645 | 6,610,144 | |
Digital Realty Trust, Inc. | 20,000 | 1,105,800 | |
Equity Lifestyle Properties, Inc. | 122,400 | 4,711,176 | |
Retail Properties America, Inc. | 367,250 | 5,174,553 | |
Weyerhaeuser Co. | 27,100 | 769,640 | |
TOTAL REITS - MANAGEMENT/INVESTMENT | 18,371,313 | ||
REITs - Mobile Home Parks - 0.7% | |||
Sun Communities, Inc. | 111,522 | 5,399,895 | |
REITs - Office Buildings - 17.6% | |||
Alexandria Real Estate Equities, Inc. | 304,684 | 20,870,854 | |
Boston Properties, Inc. | 305,549 | 32,678,466 | |
Cousins Properties, Inc. | 1,619,500 | 16,599,875 | |
Douglas Emmett, Inc. | 582,900 | 14,578,329 | |
Highwoods Properties, Inc. (SBI) | 7,143 | 259,148 | |
Piedmont Office Realty Trust, Inc. Class A | 707,000 | 12,789,630 | |
SL Green Realty Corp. | 379,165 | 34,371,307 | |
TOTAL REITS - OFFICE BUILDINGS | 132,147,609 | ||
REITs - Shopping Centers - 7.9% | |||
Acadia Realty Trust (SBI) | 308,754 | 7,959,678 | |
Cedar Shopping Centers, Inc. | 700,273 | 3,879,512 | |
Equity One, Inc. | 713,095 | 16,501,018 | |
Excel Trust, Inc. | 86,725 | 1,125,691 | |
Glimcher Realty Trust | 1,574,734 | 17,700,010 | |
Kite Realty Group Trust | 672,131 | 3,878,196 | |
Vornado Realty Trust | 95,516 | 8,100,712 | |
TOTAL REITS - SHOPPING CENTERS | 59,144,817 | ||
Common Stocks - continued | |||
Shares | Value | ||
REAL ESTATE INVESTMENT TRUSTS - CONTINUED | |||
REITs - Storage - 0.2% | |||
Chambers Street Properties (d) | 162,347 | $ 1,313,387 | |
TOTAL REAL ESTATE INVESTMENT TRUSTS | 708,497,307 | ||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 1.0% | |||
Real Estate Operating Companies - 1.0% | |||
Forest City Enterprises, Inc. Class A (a) | 448,567 | 7,858,894 | |
TOTAL COMMON STOCKS (Cost $591,911,652) |
| ||
Money Market Funds - 1.9% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 11,958,331 | 11,958,331 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 2,718,825 | 2,718,825 | |
TOTAL MONEY MARKET FUNDS (Cost $14,677,156) |
| ||
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $606,588,808) | 751,109,664 | ||
NET OTHER ASSETS (LIABILITIES) - 0.0% | (291,098) | ||
NET ASSETS - 100% | $ 750,818,566 |
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 | $ 33,245 |
Fidelity Securities Lending Cash Central Fund | 16,368 |
Total | $ 49,613 |
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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $2,593,808) - See accompanying schedule: Unaffiliated issuers (cost $591,911,652) | $ 736,432,508 |
|
Fidelity Central Funds (cost $14,677,156) | 14,677,156 |
|
Total Investments (cost $606,588,808) |
| $ 751,109,664 |
Receivable for investments sold | 10,091,215 | |
Receivable for fund shares sold | 1,778,256 | |
Dividends receivable | 132,096 | |
Distributions receivable from Fidelity Central Funds | 14,076 | |
Other receivables | 6,518 | |
Total assets | 763,131,825 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 5,722,921 | |
Payable for fund shares redeemed | 3,099,023 | |
Accrued management fee | 355,058 | |
Distribution and service plan fees payable | 172,039 | |
Other affiliated payables | 195,520 | |
Other payables and accrued expenses | 49,873 | |
Collateral on securities loaned, at value | 2,718,825 | |
Total liabilities | 12,313,259 | |
|
|
|
Net Assets | $ 750,818,566 | |
Net Assets consist of: |
| |
Paid in capital | $ 596,225,594 | |
Undistributed net investment income | 1,355,965 | |
Accumulated undistributed net realized gain (loss) on investments | 8,716,151 | |
Net unrealized appreciation (depreciation) on investments | 144,520,856 | |
Net Assets | $ 750,818,566 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 20.92 | |
|
|
|
Maximum offering price per share (100/94.25 of $20.92) | $ 22.20 | |
Class T: | $ 20.91 | |
|
|
|
Maximum offering price per share (100/96.50 of $20.91) | $ 21.67 | |
Class B: | $ 20.66 | |
|
|
|
Class C: | $ 20.61 | |
|
|
|
Institutional Class: | $ 21.07 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Operations
| Year ended July 31, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 15,760,117 |
Income from Fidelity Central Funds |
| 49,613 |
Total income |
| 15,809,730 |
|
|
|
Expenses | ||
Management fee | $ 3,945,202 | |
Transfer agent fees | 2,002,916 | |
Distribution and service plan fees | 1,808,991 | |
Accounting and security lending fees | 253,054 | |
Custodian fees and expenses | 41,817 | |
Independent trustees' compensation | 5,017 | |
Registration fees | 107,682 | |
Audit | 50,732 | |
Legal | 2,051 | |
Interest | 784 | |
Miscellaneous | 6,244 | |
Total expenses before reductions | 8,224,490 | |
Expense reductions | (62,649) | 8,161,841 |
Net investment income (loss) | 7,647,889 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 29,947,480 | |
Change in net unrealized appreciation (depreciation) on investment securities | 6,004,617 | |
Net gain (loss) | 35,952,097 | |
Net increase (decrease) in net assets resulting from operations | $ 43,599,986 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements - continued
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 7,647,889 | $ 5,003,577 |
Net realized gain (loss) | 29,947,480 | (3,803,276) |
Change in net unrealized appreciation (depreciation) | 6,004,617 | 70,218,055 |
Net increase (decrease) in net assets resulting | 43,599,986 | 71,418,356 |
Distributions to shareholders from net investment income | (7,604,308) | (3,900,509) |
Distributions to shareholders from net realized gain | (5,306,125) | (12,354,208) |
Total distributions | (12,910,433) | (16,254,717) |
Share transactions - net increase (decrease) | 86,239,926 | 89,359,376 |
Total increase (decrease) in net assets | 116,929,479 | 144,523,015 |
|
|
|
Net Assets | ||
Beginning of period | 633,889,087 | 489,366,072 |
End of period (including undistributed net investment income of $1,355,965 and undistributed net investment income of $1,437,270, respectively) | $ 750,818,566 | $ 633,889,087 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 19.83 | $ 18.24 | $ 14.88 | $ 9.41 | $ 16.39 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .22 | .17 | .12 | .19 | .27 |
Net realized and unrealized gain (loss) | 1.27 | 2.02 | 3.37 | 5.46 | (6.86) |
Total from investment operations | 1.49 | 2.19 | 3.49 | 5.65 | (6.59) |
Distributions from net investment income | (.23) | (.13) | (.13) | (.18) | (.36) |
Distributions from net realized gain | (.17) | (.47) | - | - | (.03) |
Total distributions | (.40) | (.60) | (.13) | (.18) | (.39) |
Net asset value, end of period | $ 20.92 | $ 19.83 | $ 18.24 | $ 14.88 | $ 9.41 |
Total ReturnA,B | 7.66% | 12.81% | 23.63% | 60.38% | (40.19)% |
Ratios to Average Net AssetsD,F |
|
|
|
|
|
Expenses before reductions | 1.17% | 1.19% | 1.19% | 1.23% | 1.27% |
Expenses net of fee waivers, if any | 1.17% | 1.19% | 1.19% | 1.23% | 1.25% |
Expenses net of all reductions | 1.16% | 1.18% | 1.18% | 1.22% | 1.25% |
Net investment income (loss) | 1.06% | .98% | .69% | 1.45% | 2.73% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 246,323 | $ 199,303 | $ 178,978 | $ 117,929 | $ 62,422 |
Portfolio turnover rateE | 63% | 48% | 63% | 60% | 98% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 19.82 | $ 18.24 | $ 14.90 | $ 9.42 | $ 16.40 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss)C | .17 | .13 | .07 | .15 | .25 |
Net realized and unrealized gain (loss) | 1.28 | 2.02 | 3.38 | 5.47 | (6.87) |
Total from investment operations | 1.45 | 2.15 | 3.45 | 5.62 | (6.62) |
Distributions from net investment income | (.19) | (.10) | (.11) | (.14) | (.33) |
Distributions from net realized gain | (.17) | (.47) | - | - | (.03) |
Total distributions | (.36) | (.57) | (.11) | (.14) | (.36) |
Net asset value, end of period | $ 20.91 | $ 19.82 | $ 18.24 | $ 14.90 | $ 9.42 |
Total ReturnA,B | 7.43% | 12.52% | 23.28% | 60.02% | (40.33)% |
Ratios to Average Net AssetsD,F |
|
|
|
|
|
Expenses before reductions | 1.38% | 1.43% | 1.44% | 1.49% | 1.54% |
Expenses net of fee waivers, if any | 1.38% | 1.43% | 1.44% | 1.49% | 1.50% |
Expenses net of all reductions | 1.38% | 1.43% | 1.44% | 1.48% | 1.50% |
Net investment income (loss) | .85% | .73% | .43% | 1.19% | 2.48% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 114,717 | $ 86,987 | $ 76,785 | $ 59,529 | $ 40,276 |
Portfolio turnover rateE | 63% | 48% | 63% | 60% | 98% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 19.59 | $ 18.05 | $ 14.77 | $ 9.35 | $ 16.26 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss)C | .06 | .04 | (.01) | .09 | .20 |
Net realized and unrealized gain (loss) | 1.26 | 2.00 | 3.35 | 5.42 | (6.81) |
Total from investment operations | 1.32 | 2.04 | 3.34 | 5.51 | (6.61) |
Distributions from net investment income | (.08) | (.03) | (.06) | (.09) | (.27) |
Distributions from net realized gain | (.17) | (.47) | - | - | (.03) |
Total distributions | (.25) | (.50) | (.06) | (.09) | (.30) |
Net asset value, end of period | $ 20.66 | $ 19.59 | $ 18.05 | $ 14.77 | $ 9.35 |
Total ReturnA,B | 6.84% | 11.99% | 22.69% | 59.14% | (40.60)% |
Ratios to Average Net AssetsD,F |
|
|
|
|
|
Expenses before reductions | 1.92% | 1.93% | 1.94% | 1.98% | 2.04% |
Expenses net of fee waivers, if any | 1.92% | 1.93% | 1.94% | 1.98% | 2.00% |
Expenses net of all reductions | 1.91% | 1.93% | 1.93% | 1.97% | 2.00% |
Net investment income (loss) | .31% | .23% | (.07)% | .70% | 1.98% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 8,697 | $ 9,481 | $ 11,542 | $ 12,078 | $ 7,933 |
Portfolio turnover rateE | 63% | 48% | 63% | 60% | 98% |
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 - Class C
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 19.55 | $ 18.03 | $ 14.76 | $ 9.34 | $ 16.26 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss)C | .07 | .04 | (.01) | .09 | .19 |
Net realized and unrealized gain (loss) | 1.26 | 1.98 | 3.35 | 5.43 | (6.81) |
Total from investment operations | 1.33 | 2.02 | 3.34 | 5.52 | (6.62) |
Distributions from net investment income | (.10) | (.03) | (.07) | (.10) | (.27) |
Distributions from net realized gain | (.17) | (.47) | - | - | (.03) |
Total distributions | (.27) | (.50) | (.07) | (.10) | (.30) |
Net asset value, end of period | $ 20.61 | $ 19.55 | $ 18.03 | $ 14.76 | $ 9.34 |
Total ReturnA,B | 6.89% | 11.92% | 22.69% | 59.28% | (40.64)% |
Ratios to Average Net AssetsD,F |
|
|
|
|
|
Expenses before reductions | 1.90% | 1.93% | 1.94% | 1.98% | 2.01% |
Expenses net of fee waivers, if any | 1.90% | 1.93% | 1.94% | 1.98% | 2.00% |
Expenses net of all reductions | 1.89% | 1.93% | 1.93% | 1.97% | 2.00% |
Net investment income (loss) | .33% | .23% | (.07)% | .71% | 1.98% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 75,461 | $ 55,064 | $ 47,406 | $ 31,204 | $ 13,226 |
Portfolio turnover rateE | 63% | 48% | 63% | 60% | 98% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 19.97 | $ 18.36 | $ 14.96 | $ 9.46 | $ 16.47 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss)B | .28 | .22 | .16 | .23 | .30 |
Net realized and unrealized gain (loss) | 1.27 | 2.03 | 3.39 | 5.47 | (6.90) |
Total from investment operations | 1.55 | 2.25 | 3.55 | 5.70 | (6.60) |
Distributions from net investment income | (.28) | (.17) | (.15) | (.20) | (.38) |
Distributions from net realized gain | (.17) | (.47) | - | - | (.03) |
Total distributions | (.45) | (.64) | (.15) | (.20) | (.41) |
Net asset value, end of period | $ 21.07 | $ 19.97 | $ 18.36 | $ 14.96 | $ 9.46 |
Total ReturnA | 7.92% | 13.12% | 23.92% | 60.75% | (40.03)% |
Ratios to Average Net AssetsC,E |
|
|
|
|
|
Expenses before reductions | .90% | .93% | .93% | .97% | 1.01% |
Expenses net of fee waivers, if any | .90% | .93% | .93% | .97% | 1.00% |
Expenses net of all reductions | .89% | .93% | .92% | .96% | 1.00% |
Net investment income (loss) | 1.33% | 1.23% | .94% | 1.71% | 2.98% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 305,619 | $ 283,054 | $ 174,655 | $ 167,699 | $ 55,177 |
Portfolio turnover rateD | 63% | 48% | 63% | 60% | 98% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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:
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
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 FMR 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.
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
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. 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 and distributions from the Fidelity Central Funds are accrued as earned.
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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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.
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to 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 | $ 146,749,070 |
Gross unrealized depreciation | (6,335,610) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 140,413,460 |
Tax Cost | $ 610,696,204 |
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 1,355,965 |
Undistributed long-term capital gain | $ 12,823,548 |
Net unrealized appreciation (depreciation) | $ 140,413,460 |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 7,604,308 | $ 3,900,509 |
Long-term Capital Gains | 5,306,125 | 12,354,208 |
Total | $ 12,910,433 | $ 16,254,717 |
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $525,007,892 and $431,905,395, respectively.
Annual Report
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .55% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 561,697 | $ 15,789 |
Class T | .25% | .25% | 499,754 | 3,800 |
Class B | .75% | .25% | 90,614 | 68,728 |
Class C | .75% | .25% | 656,926 | 143,805 |
|
|
| $ 1,808,991 | $ 232,122 |
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 | $ 99,757 |
Class T | 17,289 |
Class B* | 7,400 |
Class C* | 8,028 |
| $ 132,474 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 665,085 | .30 |
Class T | 264,061 | .26 |
Class B | 27,272 | .30 |
Class C | 181,508 | .28 |
Institutional Class | 864,990 | .28 |
| $ 2,002,916 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $12,084 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, 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 | $ 19,528,000 | .36% | $ 784 |
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $1,625 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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
Annual Report
Notes to Financial Statements - continued
7. Security Lending - continued
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 $16,368. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $62,617 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 $32.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net investment income |
|
|
Class A | $ 2,470,657 | $ 1,233,446 |
Class T | 882,131 | 395,519 |
Class B | 35,157 | 17,337 |
Class C | 295,037 | 91,538 |
Institutional Class | 3,921,326 | 2,162,669 |
Total | $ 7,604,308 | $ 3,900,509 |
From net realized gain |
|
|
Class A | $ 1,782,636 | $ 4,374,052 |
Class T | 780,775 | 1,941,846 |
Class B | 76,216 | 284,191 |
Class C | 516,924 | 1,220,926 |
Institutional Class | 2,149,574 | 4,533,193 |
Total | $ 5,306,125 | $ 12,354,208 |
Annual Report
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 5,439,337 | 4,390,323 | $ 112,236,960 | $ 77,870,328 |
Reinvestment of distributions | 203,180 | 330,295 | 3,981,426 | 5,307,780 |
Shares redeemed | (3,918,883) | (4,481,644) | (80,333,991) | (76,348,944) |
Net increase (decrease) | 1,723,634 | 238,974 | $ 35,884,395 | $ 6,829,164 |
Class T |
|
|
|
|
Shares sold | 2,359,748 | 1,486,467 | $ 48,593,378 | $ 26,569,039 |
Reinvestment of distributions | 82,685 | 143,406 | 1,616,132 | 2,295,629 |
Shares redeemed | (1,344,901) | (1,450,832) | (27,286,441) | (25,262,634) |
Net increase (decrease) | 1,097,532 | 179,041 | $ 22,923,069 | $ 3,602,034 |
Class B |
|
|
|
|
Shares sold | 112,710 | 71,396 | $ 2,287,362 | $ 1,224,427 |
Reinvestment of distributions | 5,188 | 17,389 | 98,861 | 272,976 |
Shares redeemed | (180,971) | (244,068) | (3,674,862) | (4,157,648) |
Net increase (decrease) | (63,073) | (155,283) | $ (1,288,639) | $ (2,660,245) |
Class C |
|
|
|
|
Shares sold | 1,545,715 | 701,378 | $ 31,572,252 | $ 12,249,173 |
Reinvestment of distributions | 39,180 | 76,897 | 747,349 | 1,206,065 |
Shares redeemed | (739,815) | (591,840) | (14,971,358) | (10,136,308) |
Net increase (decrease) | 845,080 | 186,435 | $ 17,348,243 | $ 3,318,930 |
Institutional Class |
|
|
|
|
Shares sold | 10,230,645 | 7,861,392 | $ 215,528,191 | $ 135,053,241 |
Reinvestment of distributions | 177,841 | 250,120 | 3,543,243 | 4,059,507 |
Shares redeemed | (10,081,938) | (3,446,764) | (207,698,576) | (60,843,255) |
Net increase (decrease) | 326,548 | 4,664,748 | $ 11,372,858 | $ 78,269,493 |
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, 2013, 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, 2013, 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, 2013, 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 16, 2013
Annual Report
Trustees and Officers
The Trustees and executive 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. Ned C. Lautenbach, Ronald P. O'Hanley, and William S. Stavropoulos each oversees 230 Fidelity funds. David A. Rosow, Garnett A. Smith, and Michael E. Wiley each oversees 64 Fidelity 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 executive 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. Ronald P. O'Hanley 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+ | |
Ronald P. O'Hanley (1957) | |
| Year of Election or Appointment: 2013 Mr. O'Hanley is Trustee and Chairman of the Board of Trustees of certain funds. Mr. O'Hanley also serves as a Trustee of other Fidelity funds (2011-present), and is Director of FMR Co., Inc. (2010-present), Director of Fidelity Investments Money Management, Inc. (2010-present), Director of Fidelity Research & Analysis Company (2010-present), President of Fidelity Asset Management and Corporate Services and a Member of Fidelity's Executive Committee (2010-present). Previously, Mr. O'Hanley served as President and Chief Executive Officer of BNY Mellon Asset Management (2007-2010). Mr. O'Hanley also served as Vice Chairman of Bank New York Mellon Corp. and a member of that firm's Executive Committee. Prior to the 2007 merger of The Bank of New York and Mellon Financial Corporation, he was Vice Chairman of Mellon Financial Corporation and President and Chief Executive Officer of Mellon Asset Management. He joined Mellon in February 1997. Mr. O'Hanley currently serves as Chairman of the Boston Public Library Foundation Board of Directors and sits on the Board of Directors of Beth Israel Deaconess Medical Center, the Board of Trustees of the Marine Biological Laboratory and the Advisory Board of the Maxwell School of Citizenship and Public Administration at Syracuse University. Mr. O'Hanley also chairs the Council on Asset Management for the Financial Services Roundtable and is a member of the Board of Directors of Institutional Investor's U.S. Institute. |
* 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+ | |
Ned C. Lautenbach (1944) | |
| Year of Election or Appointment: 2013 Mr. Lautenbach serves as Chairman of the Independent Trustees of other Fidelity funds (2006-present). Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of the Philharmonic Center for the Arts in Naples, Florida (2012-present) and a member of the Council on Foreign Relations (1994-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007). |
David A. Rosow (1942) | |
| Year of Election or Appointment: 2013 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 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 is a board member of the Jackson Hole Land Trust (2009-present). Mr. Smith served as a Member of the Advisory Board of other Fidelity funds (2012-2013). |
William S. Stavropoulos (1939) | |
| Year of Election or Appointment: 2013 Mr. Stavropoulos serves as Vice Chairman of the Independent Trustees of other Fidelity funds (2006-present). Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012). |
Michael E. Wiley (1950) | |
| Year of Election or Appointment: 2013 Mr. Wiley serves as Chairman of the Independent Trustees of Fidelity's Sector Portfolios (2013-present). Mr. Wiley also serves as a Director of Asia Pacific Exploration Consolidated (international oil and gas exploration and production, 2008-present). 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 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
Executive Officers:
Correspondence intended for each executive officer may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupation | |
Kenneth B. Robins (1969) | |
| Year of Election or Appointment: 2008 President and Treasurer of Fidelity's Sector Portfolios. Mr. Robins also serves as President and Treasurer (2008-present) and Assistant Treasurer (2009-present) of other Fidelity funds and is an employee of Fidelity Investments (2004-present). Mr. Robins serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (2013-present). Previously, Mr. Robins served as Deputy Treasurer of the Fidelity funds (2005-2008) and Treasurer and Chief Financial Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2006-2008). |
Brian B. Hogan (1964) | |
| Year of Election or Appointment: 2009 Vice President of Fidelity's Sector Portfolios. Mr. Hogan also serves as Vice President of other Fidelity funds (2009-present) and 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. |
Christopher S. Bartel (1971) | |
| Year of Election or Appointment: 2009 Vice President of Fidelity's Sector and Real Estate Equity Funds. Mr. Bartel also 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). |
Scott C. Goebel (1968) | |
| Year of Election or Appointment: 2008 Secretary and Chief Legal Officer (CLO) of the Fidelity funds. Mr. Goebel also serves as Secretary of Fidelity Investments Money Management, Inc. (FIMM) (2010-present) and Fidelity Research and Analysis Company (FRAC) (2010-present); Secretary and CLO of The North Carolina Capital Management Trust: Cash and Term Portfolios (2008-present); General Counsel, Secretary, and Senior Vice President of FMR (2008-present) and FMR Co., Inc. (2008-present); employed by FMR LLC or an affiliate (2001-present); Chief Legal Officer of Fidelity Management & Research (Hong Kong) Limited (2008-present) and Assistant Secretary of Fidelity Management & Research (Japan) Inc. (2008-present), and Fidelity Management & Research (U.K.) Inc. (2008-present). Previously, Mr. Goebel served as Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and the Funds (2007-2008) and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007). |
William C. Coffey (1969) | |
| Year of Election or Appointment: 2009 Assistant Secretary of Fidelity's Sector Portfolios. Mr. Coffey also serves as Assistant Secretary of other Fidelity funds (2009-present), 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). |
Elizabeth Paige Baumann (1968) | |
| Year of Election or Appointment: 2012 Anti-Money Laundering (AML) Officer of the Fidelity funds. Ms. Baumann also serves as AML Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2012-present), 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). |
Christine Reynolds (1958) | |
| Year of Election or Appointment: 2008 Chief Financial Officer of the Fidelity funds. Ms. Reynolds became President of Fidelity Pricing and Cash Management Services (FPCMS) in August 2008. Ms. Reynolds served as Chief Operating Officer of FPCMS (2007-2008). Previously, Ms. Reynolds served as President, Treasurer, and Anti-Money Laundering officer of the Fidelity funds (2004-2007). |
Joseph A. Hanlon (1968) | |
| Year of Election or Appointment: 2012 Chief Compliance Officer of Fidelity's Sector Portfolios. Mr. Hanlon also serves as Chief Compliance Officer of other Fidelity funds (2012-present). Mr. Hanlon serves as Compliance Officer of FMR, FMR Co., Inc., Fidelity Investments Money Management, Inc. (FIMM), Fidelity Research and Analysis Company (FRAC), and Fidelity Management & Research (Hong Kong) (2009-present), as Senior Vice President of the Fidelity Asset Management Division (2009-present), and is an employee of Fidelity Investments. Previously, Mr. Hanlon served as Compliance Officer of Fidelity Management & Research (Japan) Inc. (2009-2013), Strategic Advisers, Inc. (2009-2013), and Fidelity Management & Research (U.K.) Inc. (2009-2013). |
Joseph F. Zambello (1957) | |
| Year of Election or Appointment: 2011 Deputy Treasurer of the Fidelity 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). |
Adrien E. Deberghes (1967) | |
| Year of Election or Appointment: 2008 Deputy Treasurer of Fidelity's Sector Portfolios. Mr. Deberghes also serves as Vice President (2011-present), Deputy Treasurer (2008-present), and Assistant Treasurer (2010-present) of other Fidelity funds, and is an employee of Fidelity Investments (2008-present). Previously, Mr. Deberghes served as 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). |
Stephen Sadoski (1971) | |
| Year of Election or Appointment: 2012 Deputy Treasurer of Fidelity's Sector Portfolios. Mr. Sadoski also serves as Deputy Treasurer of other Fidelity funds (2012-present) and is an employee of Fidelity Investments (2012-present). Previously, Mr. Sadoski served as Assistant Treasurer of Fidelity's Fixed Income and Asset Allocation Funds (2012-2013), an assistant chief accountant in the Division of Investment Management of the Securities and Exchange Commission (SEC) (2009-2012) and as a senior manager at Deloitte & Touche LLP (1997-2009). |
Stacie M. Smith (1974) | |
| Year of Election or Appointment: 2013 Deputy Treasurer of Fidelity's Sector Portfolios. Ms. Smith also serves as Deputy Treasurer of other Fidelity funds (2013-present) and is an employee of Fidelity Investments (2009-present). Previously, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). |
Stephanie J. Dorsey (1969) | |
| Year of Election or Appointment: 2010 Assistant Treasurer of Fidelity's Sector Portfolios. Ms. Dorsey also serves as President and Treasurer (2013-present) and Assistant Treasurer (2010-present) of other Fidelity funds, Treasurer and Chief Financial Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2013-present), and is an employee of Fidelity Investments (2008-present). Previously, Ms. Dorsey served as Deputy Treasurer of Fidelity's Fixed Income and Asset Allocation Funds (2008-2013), Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank. |
Gary W. Ryan (1958) | |
| Year of Election or Appointment: 2005 Assistant Treasurer of the Fidelity funds. Mr. Ryan is an employee of Fidelity Investments. Previously, Mr. Ryan served as Vice President of Fund Reporting in Fidelity Pricing and Cash Management Services (FPCMS) (1999-2005). |
Jonathan Davis (1968) | |
| Year of Election or Appointment: 2010 Assistant Treasurer of the Fidelity funds. Mr. Davis is also Assistant Treasurer of Fidelity Rutland Square Trust II and Fidelity Commonwealth Trust II. Mr. Davis is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (2003-2010). |
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 | 09/09/13 | 09/06/13 | $0.070 | $0.378 |
The fund hereby designates as a capital gain dividend with respect to the taxable year ended July 31, 2013, $19,890,238, or, if subsequently determined to be different, the net capital gain of such year.
A total of 0.05% 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 2014 of amounts for use in preparing 2013 income tax returns.
Annual Report
Proxy Voting Results
A special meeting of Fidelity Advisor Real Estate Fund's shareholders was held on June 18, 2013. The results of votes taken among shareholders on the proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.
PROPOSAL 1 | ||
To elect a Board of Trustees.A | ||
| # of | % of |
Ned C. Lautenbach | ||
Affirmative | 2,198,660,066.13 | 95.750 |
Withheld | 97,591,697.03 | 4.250 |
TOTAL | 2,296,251,763.16 | 100.000 |
Ronald P. O'Hanley | ||
Affirmative | 2,202,691,976.72 | 95.926 |
Withheld | 93,559,786.44 | 4.074 |
TOTAL | 2,296,251,763.16 | 100.000 |
David A. Rosow | ||
Affirmative | 2,198,765,612.76 | 95.755 |
Withheld | 97,486,150.40 | 4.245 |
TOTAL | 2,296,251,763.16 | 100.000 |
Garnett A. Smith | ||
Affirmative | 2,201,945,782.92 | 95.894 |
Withheld | 94,305,980.24 | 4.106 |
TOTAL | 2,296,251,763.16 | 100.000 |
William S. Stavropoulos | ||
Affirmative | 2,196,127,224.90 | 95.640 |
Withheld | 100,124,538.26 | 4.360 |
TOTAL | 2,296,251,763.16 | 100.000 |
Michael E. Wiley | ||
Affirmative | 2,201,986,460.61 | 95.895 |
Withheld | 94,265,302.55 | 4.105 |
TOTAL | 2,296,251,763.16 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between the fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 317,284,411.56 | 74.301 |
Against | 11,210,904.77 | 2.626 |
Abstain | 21,999,154.19 | 5.151 |
Broker Non-Votes | 76,533,745.65 | 17.922 |
TOTAL | 427,028,216.17 | 100.000 |
A Denotes trust-wide proposal and voting results. |
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-0913 1.789708.110
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, 2013
(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 |
| |
Proxy Voting Results |
|
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. © 2013 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, 2013 | Past 1 | Past 5 | Past 10 years |
Class A (incl. 5.75% sales charge) | 46.03% | 17.13% | 12.02% |
Class T (incl. 3.50% sales charge) | 49.10% | 17.35% | 11.98% |
Class B (incl. contingent deferred sales charge) A | 48.76% | 17.42% | 12.08% |
Class C (incl. contingent deferred sales charge) B | 52.71% | 17.64% | 11.84% |
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, 2003, 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
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 54.94%, 54.50%, 53.76% and 53.71%, respectively (excluding sales charges), slightly trailing the 55.75% advance of the MSCI® U.S. IMI Biotechnology 25-50 Index but more than doubling the gain of the S&P 500®. Biotech was one of the stock market's best-performing industry groups, as investors favored companies with earnings growth that was less dependent on the broader economy, which featured subdued growth during the period. I believe biotechnology is an area where intensive research tends to yield particularly favorable results. My team and I look at a company's product pipeline relative to consensus estimates, the size of the potential market for various medicines and a stock's valuation in the context of the underlying company's growth opportunities. I also spend a lot of time in meetings with corporate executives, doctors, scientists, customers and competitors to get an accurate read on the prospects for any given drug. Since I'm searching for companies with meaningful revenue and earnings-growth prospects, I tend to overweight small- and mid-cap stocks, and underweight large-caps. However, while smaller-cap stocks normally outperform when the biotech group is strong, this was not the case during the reporting period, perhaps because investors were looking for a combination of growth and relative safety. Consequently, versus the MSCI index, the fund's tilt toward smaller-cap stocks and lighter exposure to the larger end of the market-capitalization spectrum hurt during the period. A modest cash position also was a drawback in a soaring market. Fortunately, these negatives were mostly offset by strong stock picking, especially among small-caps. The fund's top relative contributor was Aegerion Pharmaceuticals. Following the January 2013 commercial launch of JUXTAPIDTM, the firm's oral treatment for a rare but potentially fatal disease that causes high cholesterol, sales and earnings came in above expectations, bolstering the position. I'd begun buying this stock in August, based on JUXTAPID's benefits and the lack of a credible alternative treatment. Moreover, I added aggressively to this position, as I thought the story had further to play out. Also bolstering the fund's results were ACADIA Pharmaceuticals and an underweighting in Alexion Pharmaceuticals, a lagging benchmark constituent. Conversely, Celgene was one of the soaring large-caps in the MSCI index that detracted because the fund was underweighted here. I added to this position, and the stock ended the period as the fund's third-largest holding. Gilead Sciences was another underweighted large-cap index component that hurt relative performance. Like Celgene, Gilead saw its share price more than double during the period. I increased our stake here, making Gilead the fund's largest holding at period end. One overweighted stock that detracted was Spectrum Pharmaceuticals, which lost more than a third of its value on March 13, after the firm drastically reduced its 2013 revenue and earnings estimates in response to disappointing sales of Fusilev®, its colorectal cancer drug. I determined this was likely a temporary inventory problem and added to the position.
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, 2013 to July 31, 2013).
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 | 1.11% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,393.40 | $ 6.59 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.29 | $ 5.56 |
Class T | 1.42% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,391.60 | $ 8.42 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.75 | $ 7.10 |
Class B | 1.89% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,388.20 | $ 11.19 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.42 | $ 9.44 |
Class C | 1.84% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,387.80 | $ 10.89 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.67 | $ 9.20 |
Institutional Class | .82% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,395.20 | $ 4.87 |
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 Biotechnology Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2013 | ||
| % of fund's | % of fund's net assets |
Gilead Sciences, Inc. | 14.7 | 10.7 |
Amgen, Inc. | 12.3 | 14.6 |
Celgene Corp. | 7.2 | 7.2 |
Biogen Idec, Inc. | 6.0 | 5.9 |
Alexion Pharmaceuticals, Inc. | 4.6 | 4.1 |
Regeneron Pharmaceuticals, Inc. | 3.9 | 4.5 |
Vertex Pharmaceuticals, Inc. | 3.9 | 3.1 |
Aegerion Pharmaceuticals, Inc. | 2.8 | 1.6 |
Onyx Pharmaceuticals, Inc. | 2.4 | 3.0 |
Pharmacyclics, Inc. | 2.4 | 1.5 |
| 60.2 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Biotechnology | 96.8% |
|
![]() | Pharmaceuticals | 1.9% |
|
![]() | Health Care Equipment & Supplies | 0.1% |
|
![]() | Life Sciences Tools & Services | 0.0% |
|
![]() | Personal Products | 0.0% |
|
![]() | All Others* | 1.2% |
|
As of January 31, 2013 | |||
![]() | Biotechnology | 95.1% |
|
![]() | Pharmaceuticals | 1.5% |
|
![]() | Health Care Equipment & Supplies | 0.1% |
|
![]() | Health Care Providers & Services | 0.1% |
|
![]() | Life Sciences Tools & Services | 0.1% |
|
![]() | All Others* | 3.1% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Biotechnology Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 98.6% | |||
Shares | Value | ||
BIOTECHNOLOGY - 96.7% | |||
Biotechnology - 96.7% | |||
ACADIA Pharmaceuticals, Inc. (a)(d) | 379,586 | $ 7,477,844 | |
Achillion Pharmaceuticals, Inc. (a) | 142,589 | 1,018,085 | |
Acorda Therapeutics, Inc. (a) | 142,905 | 5,426,103 | |
Aegerion Pharmaceuticals, Inc. (a) | 206,302 | 18,895,200 | |
Affymax, Inc. (a)(d) | 5,087 | 8,801 | |
Agenus, Inc. (a)(d) | 9,425 | 36,286 | |
Agenus, Inc. warrants 6/9/18 (a) | 452,000 | 17,472 | |
Agios Pharmaceuticals, Inc. | 4,800 | 139,968 | |
Agios Pharmaceuticals, Inc. | 5,087 | 133,503 | |
Alexion Pharmaceuticals, Inc. (a) | 270,744 | 31,468,575 | |
Alkermes PLC (a) | 186,925 | 6,276,942 | |
Alnylam Pharmaceuticals, Inc. (a) | 156,898 | 7,243,981 | |
AMAG Pharmaceuticals, Inc. (a) | 69,911 | 1,572,998 | |
Ambit Biosciences Corp. | 72,750 | 1,080,338 | |
Amgen, Inc. | 778,573 | 84,311,670 | |
Arena Pharmaceuticals, Inc. (a)(d) | 84,937 | 590,312 | |
ARIAD Pharmaceuticals, Inc. (a) | 343,477 | 6,381,803 | |
ArQule, Inc. (a) | 192,550 | 514,109 | |
Biogen Idec, Inc. (a) | 189,726 | 41,384,932 | |
BioMarin Pharmaceutical, Inc. (a) | 195,438 | 12,635,067 | |
Bionovo, Inc. warrants 2/2/16 (a) | 56,850 | 93 | |
BioTime, Inc. (a)(d) | 111,305 | 437,429 | |
Bluebird Bio, Inc. | 3,385 | 105,375 | |
Bluebird Bio, Inc. | 1,864 | 52,224 | |
Catalyst Pharmaceutical Partners, Inc.: | |||
warrants 5/2/17 (a) | 8,557 | 1,081 | |
warrants 5/30/17 (a) | 17,900 | 5,591 | |
Celgene Corp. (a) | 339,168 | 49,810,212 | |
Cell Therapeutics, Inc. | 473,147 | 534,656 | |
Cell Therapeutics, Inc. warrants 7/6/16 (a) | 46,404 | 115 | |
Celldex Therapeutics, Inc. (a) | 279,038 | 5,714,698 | |
Cepheid, Inc. (a) | 55,200 | 1,924,824 | |
Chimerix, Inc. | 3,400 | 77,316 | |
Clovis Oncology, Inc. (a) | 73,488 | 5,723,245 | |
Coronado Biosciences, Inc. (a)(d) | 118,128 | 924,942 | |
Cubist Pharmaceuticals, Inc. (a) | 132,592 | 8,264,459 | |
Curis, Inc. (a)(d) | 335,272 | 1,391,379 | |
Cytokinetics, Inc. (a) | 67,916 | 844,875 | |
Cytokinetics, Inc. warrants 6/25/17 (a) | 244,500 | 180,670 | |
Dendreon Corp. (a)(d) | 190,903 | 876,245 | |
Dyax Corp. (a) | 414,791 | 1,671,608 | |
Dynavax Technologies Corp. (a) | 5,369 | 7,141 | |
Elan Corp. PLC sponsored ADR (a) | 652 | 10,041 | |
Emergent BioSolutions, Inc. (a) | 17,500 | 309,575 | |
Enzon Pharmaceuticals, Inc. | 8,434 | 16,868 | |
Epizyme, Inc. | 99,938 | 3,607,762 | |
Esperion Therapeutics, Inc. | 18,400 | 328,256 | |
Exact Sciences Corp. (a) | 146,859 | 2,014,905 | |
Exelixis, Inc. (a)(d) | 139,102 | 705,247 | |
Fibrocell Science, Inc. | 174,200 | 867,516 | |
| |||
Shares | Value | ||
Genomic Health, Inc. (a) | 54,120 | $ 1,928,837 | |
Geron Corp. (a) | 427,965 | 560,634 | |
Gilead Sciences, Inc. (a) | 1,645,774 | 101,132,810 | |
Halozyme Therapeutics, Inc. (a) | 225,117 | 1,915,746 | |
Hyperion Therapeutics, Inc. | 167,347 | 4,192,042 | |
Idenix Pharmaceuticals, Inc. (a)(d) | 208,861 | 820,824 | |
ImmunoGen, Inc. (a) | 141,948 | 2,704,109 | |
Immunomedics, Inc. (a)(d) | 317,033 | 1,803,918 | |
Incyte Corp. (a)(d) | 253,974 | 5,945,531 | |
Infinity Pharmaceuticals, Inc. (a) | 90,634 | 1,919,628 | |
Intercept Pharmaceuticals, Inc. | 74,125 | 3,469,791 | |
InterMune, Inc. (a) | 352,418 | 5,466,003 | |
Ironwood Pharmaceuticals, Inc. Class A (a) | 433,251 | 5,302,992 | |
Isis Pharmaceuticals, Inc. (a) | 165,977 | 4,788,436 | |
KaloBios Pharmaceuticals, Inc. | 17,700 | 106,554 | |
KaloBios Pharmaceuticals, Inc. (e) | 13,602 | 81,884 | |
KYTHERA Biopharmaceuticals, Inc. | 37,309 | 1,028,236 | |
Lexicon Pharmaceuticals, Inc. (a) | 546,735 | 1,355,903 | |
Ligand Pharmaceuticals, Inc. Class B (a) | 140,142 | 6,639,928 | |
MannKind Corp. (a)(d) | 728,508 | 5,624,082 | |
Medivation, Inc. (a) | 200,648 | 11,611,500 | |
Merrimack Pharmaceuticals, Inc. (a) | 2,800 | 13,384 | |
Momenta Pharmaceuticals, Inc. (a) | 121,037 | 2,089,099 | |
Myriad Genetics, Inc. (a) | 164,382 | 4,877,214 | |
Neurocrine Biosciences, Inc. (a) | 194,998 | 2,728,022 | |
NeurogesX, Inc. (a) | 187,202 | 1,123 | |
NewLink Genetics Corp. (a)(d) | 117,435 | 2,109,133 | |
Novavax, Inc. (a)(d) | 853,126 | 2,294,909 | |
Novelos Therapeutics, Inc. (a) | 137,600 | 57,792 | |
Novelos Therapeutics, Inc. warrants 12/6/16 (a) | 137,600 | 183 | |
NPS Pharmaceuticals, Inc. (a) | 218,125 | 3,928,431 | |
OncoMed Pharmaceuticals, Inc. | 18,700 | 377,366 | |
Onconova Therapeutics, Inc. | 30,810 | 671,350 | |
Onyx Pharmaceuticals, Inc. (a) | 125,887 | 16,528,963 | |
Opko Health, Inc. (a)(d) | 159,000 | 1,184,550 | |
Oragenics, Inc. | 108,608 | 339,943 | |
Orexigen Therapeutics, Inc. (a) | 504,566 | 3,834,702 | |
Osiris Therapeutics, Inc. (a) | 95,408 | 1,092,422 | |
OvaScience, Inc. (a) | 12,800 | 162,432 | |
PDL BioPharma, Inc. (d) | 99,788 | 810,279 | |
Pharmacyclics, Inc. (a) | 151,333 | 16,439,304 | |
PolyMedix, Inc. (a) | 7,142 | 1,371 | |
PolyMedix, Inc. warrants 4/10/16 (a) | 163,833 | 2 | |
Portola Pharmaceuticals, Inc. | 92,113 | 2,116,757 | |
Progenics Pharmaceuticals, Inc. (a) | 1,018,309 | 6,099,671 | |
Prosensa Holding BV (a) | 32,968 | 1,015,414 | |
Protalix BioTherapeutics, Inc. (a) | 90,943 | 486,545 | |
PTC Therapeutics, Inc. (a)(d) | 85,984 | 1,346,509 | |
Puma Biotechnology, Inc. (a) | 59,011 | 3,016,052 | |
Raptor Pharmaceutical Corp. (a) | 245,273 | 2,445,372 | |
Receptos, Inc. | 11,600 | 230,724 | |
Common Stocks - continued | |||
Shares | Value | ||
BIOTECHNOLOGY - CONTINUED | |||
Biotechnology - continued | |||
Regeneron Pharmaceuticals, Inc. (a) | 100,437 | $ 27,124,016 | |
Regulus Therapeutics, Inc. | 164,970 | 1,672,796 | |
Rigel Pharmaceuticals, Inc. (a) | 1,572 | 5,989 | |
Sangamo Biosciences, Inc. (a)(d) | 265,970 | 2,593,208 | |
Sarepta Therapeutics, Inc. (a)(d) | 72,692 | 2,691,058 | |
Savient Pharmaceuticals, Inc. (a) | 10,307 | 6,368 | |
Seattle Genetics, Inc. (a)(d) | 196,850 | 7,976,362 | |
SIGA Technologies, Inc. (a) | 6,969 | 22,231 | |
Sophiris Bio, Inc. (a) | 138,000 | 33,590 | |
Sorrento Therapeutics, Inc. (a) | 720,000 | 216,000 | |
Spectrum Pharmaceuticals, Inc. | 363,247 | 3,065,805 | |
Stemline Therapeutics, Inc. | 128,093 | 3,604,537 | |
Sunesis Pharmaceuticals, Inc. (a) | 159,517 | 810,346 | |
Synageva BioPharma Corp. (a) | 19,200 | 923,520 | |
Synergy Pharmaceuticals, Inc. (a) | 242,484 | 1,091,178 | |
Synergy Pharmaceuticals, Inc. warrants 11/14/16 (a) | 20,600 | 36,050 | |
Synta Pharmaceuticals Corp. (a)(d) | 159,002 | 1,066,903 | |
Synthetic Biologics, Inc. (a) | 100 | 150 | |
Targacept, Inc. (a) | 201,703 | 1,008,515 | |
TESARO, Inc. (a) | 148,477 | 5,066,035 | |
Theravance, Inc. (a)(d) | 165,336 | 6,375,356 | |
Threshold Pharmaceuticals, Inc. (a) | 92,584 | 501,805 | |
Threshold Pharmaceuticals, Inc. warrants 3/16/16 (a) | 35,146 | 112,913 | |
Trius Therapeutics, Inc. (a)(d) | 223,488 | 3,151,181 | |
United Therapeutics Corp. (a) | 84,052 | 6,290,452 | |
Verastem, Inc. (a) | 92,465 | 1,412,865 | |
Vertex Pharmaceuticals, Inc. (a) | 337,530 | 26,934,894 | |
Vical, Inc. (a)(d) | 659,862 | 2,547,067 | |
ZIOPHARM Oncology, Inc. (a)(d) | 227,379 | 677,589 | |
| 664,739,522 | ||
HEALTH CARE EQUIPMENT & SUPPLIES - 0.1% | |||
Health Care Equipment - 0.1% | |||
Alsius Corp. (a) | 14,200 | 0 | |
Aradigm Corp. (a) | 351,440 | 64,806 | |
InVivo Therapeutics Holdings Corp. (a) | 98,300 | 433,503 | |
| 498,309 | ||
LIFE SCIENCES TOOLS & SERVICES - 0.0% | |||
Life Sciences Tools & Services - 0.0% | |||
BG Medicine, Inc. (a) | 75,570 | 92,195 | |
ChromaDex, Inc. (a) | 143,866 | 110,057 | |
| |||
Shares | Value | ||
Transgenomic, Inc. (a) | 195,100 | $ 87,795 | |
Transgenomic, Inc. warrants 2/3/17 (a) | 81,000 | 1 | |
| 290,048 | ||
PERSONAL PRODUCTS - 0.0% | |||
Personal Products - 0.0% | |||
MYOS Corp. | 333,300 | 39,996 | |
PHARMACEUTICALS - 1.8% | |||
Pharmaceuticals - 1.8% | |||
AcelRx Pharmaceuticals, Inc. (a) | 52,410 | 610,577 | |
Auxilium Pharmaceuticals, Inc. (a) | 46,358 | 851,133 | |
AVANIR Pharmaceuticals Class A (a)(d) | 655,315 | 3,086,534 | |
Horizon Pharma, Inc. (a)(d) | 116,600 | 293,832 | |
Horizon Pharma, Inc.: | |||
warrants 2/28/17 (a) | 18,737 | 15 | |
warrants 9/25/17 (a) | 55,250 | 43 | |
Jazz Pharmaceuticals PLC (a) | 36,220 | 2,734,972 | |
Pacira Pharmaceuticals, Inc. (a) | 104,160 | 3,534,149 | |
TherapeuticsMD, Inc. (a) | 113,400 | 261,954 | |
XenoPort, Inc. (a) | 81 | 437 | |
Zogenix, Inc. (a)(d) | 461,039 | 714,610 | |
Zogenix, Inc. warrants 7/27/17 (a) | 32,985 | 31 | |
| 12,088,287 | ||
TOTAL COMMON STOCKS (Cost $473,011,067) |
| ||
Preferred Stocks - 0.2% | |||
|
|
|
|
Convertible Preferred Stocks - 0.2% | |||
BIOTECHNOLOGY - 0.1% | |||
Biotechnology - 0.1% | |||
Intrexon Corp. Series F, 6.00% (f) | 19,884 | 143,165 | |
PHARMACEUTICALS - 0.1% | |||
Pharmaceuticals - 0.1% | |||
aTyr Pharma, Inc. 8.00% (f) | 282,494 | 714,427 | |
TOTAL CONVERTIBLE PREFERRED STOCKS | 857,592 | ||
Nonconvertible Preferred Stocks - 0.0% | |||
PHARMACEUTICALS - 0.0% | |||
Pharmaceuticals - 0.0% | |||
Equilibrate Asia Therapeutics Series D (f) | 299,320 | 4,885 | |
Equilibrate Worldwide Therapeutics Series D (f) | 299,320 | 12,024 | |
Neuropathic Worldwide Therapeutics Series D (f) | 299,320 | 2,254 | |
Oculus Worldwide Therapeutics Series D (f) | 299,320 | 3,756 | |
Preferred Stocks - continued | |||
Shares | Value | ||
Nonconvertible Preferred Stocks - continued | |||
PHARMACEUTICALS - CONTINUED | |||
Pharmaceuticals - continued | |||
Orchestrate U.S. Therapeutics, Inc. Series D (f) | 299,320 | $ 5,259 | |
Orchestrate Worldwide Therapeutics Series D (f) | 299,320 | 9,393 | |
| 37,571 | ||
TOTAL PREFERRED STOCKS (Cost $908,585) |
| ||
Money Market Funds - 5.2% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 7,146,955 | 7,146,955 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 28,791,821 | 28,791,821 | |
TOTAL MONEY MARKET FUNDS (Cost $35,938,776) |
|
TOTAL INVESTMENT PORTFOLIO - 104.0% (Cost $509,858,428) | 714,490,101 |
NET OTHER ASSETS (LIABILITIES) - (4.0)% | (27,163,213) | ||
NET ASSETS - 100% | $ 687,326,888 |
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) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $81,884 or 0.0% of net assets. |
(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 $895,163 or 0.2% 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 |
Equilibrate Asia Therapeutics Series D | 5/17/13 | $ 4,885 |
Equilibrate Worldwide Therapeutics Series D | 5/17/13 | $ 12,024 |
Intrexon Corp. Series F, 6.00% | 4/30/13 | $ 156,587 |
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 |
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 | $ 12,009 |
Fidelity Securities Lending Cash Central Fund | 830,133 |
Total | $ 842,142 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2013, 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 | $ 677,656,162 | $ 677,152,225 | $ 503,937 | $ - |
Preferred Stocks | 895,163 | - | 143,165 | 751,998 |
Money Market Funds | 35,938,776 | 35,938,776 | - | - |
Total Investments in Securities: | $ 714,490,101 | $ 713,091,001 | $ 647,102 | $ 751,998 |
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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $28,881,711) - See accompanying schedule: Unaffiliated issuers (cost $473,919,652) | $ 678,551,325 |
|
Fidelity Central Funds (cost $35,938,776) | 35,938,776 |
|
Total Investments (cost $509,858,428) |
| $ 714,490,101 |
Receivable for investments sold | 1,201,271 | |
Receivable for fund shares sold | 7,620,439 | |
Distributions receivable from Fidelity Central Funds | 79,901 | |
Other receivables | 2,478 | |
Total assets | 723,394,190 | |
|
|
|
Liabilities | ||
Payable to custodian bank | $ 292,243 | |
Payable for investments purchased | 5,765,712 | |
Payable for fund shares redeemed | 577,700 | |
Accrued management fee | 283,924 | |
Distribution and service plan fees payable | 195,032 | |
Other affiliated payables | 119,172 | |
Other payables and accrued expenses | 41,698 | |
Collateral on securities loaned, at value | 28,791,821 | |
Total liabilities | 36,067,302 | |
|
|
|
Net Assets | $ 687,326,888 | |
Net Assets consist of: |
| |
Paid in capital | $ 488,934,543 | |
Accumulated net investment loss | (1,831,365) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (4,407,963) | |
Net unrealized appreciation (depreciation) on investments | 204,631,673 | |
Net Assets | $ 687,326,888 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 17.25 | |
|
|
|
Maximum offering price per share (100/94.25 of $17.25) | $ 18.30 | |
Class T: | $ 16.63 | |
|
|
|
Maximum offering price per share (100/96.50 of $16.63) | $ 17.23 | |
Class B: | $ 15.52 | |
|
|
|
Class C: | $ 15.53 | |
|
|
|
Institutional Class: | $ 17.97 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Operations
| Year ended July 31, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 760,374 |
Income from Fidelity Central Funds (including $830,133 from security lending) |
| 842,142 |
Total income |
| 1,602,516 |
|
|
|
Expenses | ||
Management fee | $ 1,719,560 | |
Transfer agent fees | 766,300 | |
Distribution and service plan fees | 1,243,043 | |
Accounting and security lending fees | 123,006 | |
Custodian fees and expenses | 22,520 | |
Independent trustees' compensation | 1,981 | |
Registration fees | 97,598 | |
Audit | 45,072 | |
Legal | 558 | |
Miscellaneous | 1,564 | |
Total expenses before reductions | 4,021,202 | |
Expense reductions | (18,379) | 4,002,823 |
Net investment income (loss) | (2,400,307) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | (3,418,105) | |
Foreign currency transactions | (1) | |
Total net realized gain (loss) |
| (3,418,106) |
Change in net unrealized appreciation (depreciation) on investment securities | 172,587,152 | |
Net gain (loss) | 169,169,046 | |
Net increase (decrease) in net assets resulting from operations | $ 166,768,739 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (2,400,307) | $ (910,602) |
Net realized gain (loss) | (3,418,106) | 13,076,201 |
Change in net unrealized appreciation (depreciation) | 172,587,152 | 17,166,425 |
Net increase (decrease) in net assets resulting from operations | 166,768,739 | 29,332,024 |
Distributions to shareholders from net realized gain | (10,422,000) | - |
Share transactions - net increase (decrease) | 368,981,342 | 58,002,416 |
Redemption fees | 20,216 | 11,011 |
Total increase (decrease) in net assets | 525,348,297 | 87,345,451 |
|
|
|
Net Assets | ||
Beginning of period | 161,978,591 | 74,633,140 |
End of period (including accumulated net investment loss of $1,831,365 and $0, respectively) | $ 687,326,888 | $ 161,978,591 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 11.79 | $ 8.81 | $ 6.67 | $ 6.94 | $ 7.81 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.09) | (.07) | (.07) F | (.08) G | (.08) |
Net realized and unrealized gain (loss) | 6.24 | 3.05 | 2.21 | (.19) | (.79) |
Total from investment operations | 6.15 | 2.98 | 2.14 | (.27) | (.87) |
Distributions from net realized gain | (.69) | - | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 17.25 | $ 11.79 | $ 8.81 | $ 6.67 | $ 6.94 |
Total Return A, B | 54.94% | 33.83% | 32.08% | (3.89)% | (11.14)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.15% | 1.27% | 1.35% | 1.39% | 1.40% |
Expenses net of fee waivers, if any | 1.15% | 1.27% | 1.35% | 1.39% | 1.40% |
Expenses net of all reductions | 1.14% | 1.27% | 1.34% | 1.38% | 1.40% |
Net investment income (loss) | (.63)% | (.73)% | (.91)% F | (1.15)% G | (1.27)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 286,695 | $ 68,993 | $ 30,639 | $ 20,154 | $ 19,858 |
Portfolio turnover rate E | 22% | 82% | 99% | 130% | 73% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 11.42 | $ 8.56 | $ 6.50 | $ 6.78 | $ 7.65 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.12) | (.10) | (.09) F | (.09) G | (.09) |
Net realized and unrealized gain (loss) | 6.02 | 2.96 | 2.15 | (.19) | (.78) |
Total from investment operations | 5.90 | 2.86 | 2.06 | (.28) | (.87) |
Distributions from net realized gain | (.69) | - | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 16.63 | $ 11.42 | $ 8.56 | $ 6.50 | $ 6.78 |
Total Return A, B | 54.50% | 33.41% | 31.69% | (4.13)% | (11.37)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.46% | 1.56% | 1.64% | 1.69% | 1.71% |
Expenses net of fee waivers, if any | 1.46% | 1.56% | 1.64% | 1.65% | 1.65% |
Expenses net of all reductions | 1.46% | 1.56% | 1.64% | 1.64% | 1.65% |
Net investment income (loss) | (.94)% | (1.02)% | (1.21)% F | (1.41)% G | (1.52)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 67,887 | $ 28,154 | $ 16,454 | $ 11,684 | $ 13,356 |
Portfolio turnover rate E | 22% | 82% | 99% | 130% | 73% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.75 | $ 8.09 | $ 6.17 | $ 6.47 | $ 7.34 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.17) | (.13) | (.12) F | (.12) G | (.12) |
Net realized and unrealized gain (loss) | 5.63 | 2.79 | 2.04 | (.18) | (.75) |
Total from investment operations | 5.46 | 2.66 | 1.92 | (.30) | (.87) |
Distributions from net realized gain | (.69) | - | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 15.52 | $ 10.75 | $ 8.09 | $ 6.17 | $ 6.47 |
Total Return A, B | 53.76% | 32.88% | 31.12% | (4.64)% | (11.85)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.94% | 2.03% | 2.10% | 2.14% | 2.15% |
Expenses net of fee waivers, if any | 1.94% | 2.03% | 2.10% | 2.14% | 2.15% |
Expenses net of all reductions | 1.94% | 2.02% | 2.09% | 2.13% | 2.15% |
Net investment income (loss) | (1.42)% | (1.49)% | (1.66)% F | (1.90)% G | (2.02)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 8,136 | $ 6,349 | $ 5,849 | $ 6,297 | $ 7,377 |
Portfolio turnover rate E | 22% | 82% | 99% | 130% | 73% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.76 | $ 8.10 | $ 6.18 | $ 6.47 | $ 7.34 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.17) | (.13) | (.12) F | (.12) G | (.12) |
Net realized and unrealized gain (loss) | 5.63 | 2.79 | 2.04 | (.17) | (.75) |
Total from investment operations | 5.46 | 2.66 | 1.92 | (.29) | (.87) |
Distributions from net realized gain | (.69) | - | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 15.53 | $ 10.76 | $ 8.10 | $ 6.18 | $ 6.47 |
Total Return A, B | 53.71% | 32.84% | 31.07% | (4.48)% | (11.85)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.88% | 2.01% | 2.10% | 2.14% | 2.15% |
Expenses net of fee waivers, if any | 1.88% | 2.01% | 2.10% | 2.14% | 2.15% |
Expenses net of all reductions | 1.87% | 2.01% | 2.09% | 2.13% | 2.15% |
Net investment income (loss) | (1.36)% | (1.47)% | (1.66)% F | (1.90)% G | (2.02)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 146,684 | $ 31,710 | $ 15,787 | $ 11,421 | $ 12,426 |
Portfolio turnover rate E | 22% | 82% | 99% | 130% | 73% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 12.22 | $ 9.10 | $ 6.87 | $ 7.12 | $ 8.00 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | (.05) | (.04) | (.05) E | (.06) F | (.06) |
Net realized and unrealized gain (loss) | 6.49 | 3.16 | 2.28 | (.19) | (.82) |
Total from investment operations | 6.44 | 3.12 | 2.23 | (.25) | (.88) |
Distributions from net realized gain | (.69) | - | - | - | - |
Redemption fees added to paid in capital B, H | - | - | - | - | - |
Net asset value, end of period | $ 17.97 | $ 12.22 | $ 9.10 | $ 6.87 | $ 7.12 |
Total Return A | 55.39% | 34.29% | 32.46% | (3.51)% | (11.00)% |
Ratios to Average Net Assets C, G |
|
|
|
|
|
Expenses before reductions | .85% | .95% | 1.04% | 1.07% | 1.11% |
Expenses net of fee waivers, if any | .85% | .95% | 1.04% | 1.07% | 1.11% |
Expenses net of all reductions | .84% | .94% | 1.03% | 1.06% | 1.11% |
Net investment income (loss) | (.32)% | (.40)% | (.60)% E | (.83)% F | (.98)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 177,926 | $ 26,772 | $ 5,903 | $ 3,008 | $ 1,901 |
Portfolio turnover rate D | 22% | 82% | 99% | 130% | 73% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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 restricted equity securities and private placements where observable inputs are limited, assumptions about market activity and risk are used and these securities are generally 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, 2013 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. 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 and distributions from the Fidelity Central Funds are accrued as earned. 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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, net operating losses, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 214,125,973 |
Gross unrealized depreciation | (12,168,332) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 201,957,641 |
|
|
Tax Cost | $ 512,532,460 |
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:
Capital loss carryforward | $ (1,733,930) |
Net unrealized appreciation (depreciation) | $ 201,957,641 |
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 | $ (1,733,930) |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Long-term Capital Gains | $ 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 net asset value 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 $420,093,692 and $68,170,133, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .55% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 317,602 | $ 20,682 |
Class T | .25% | .25% | 206,230 | 3,134 |
Class B | .75% | .25% | 63,552 | 48,133 |
Class C | .75% | .25% | 655,659 | 323,734 |
|
|
| $ 1,243,043 | $ 395,683 |
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 | $ 413,119 |
Class T | 32,641 |
Class B* | 10,218 |
Class C* | 16,781 |
| $ 472,759 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 320,632 | .25 |
Class T | 130,453 | .32 |
Class B | 18,983 | .30 |
Class C | 156,750 | .24 |
Institutional Class | 139,482 | .20 |
| $ 766,300 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $6,039 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $602 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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
Annual Report
7. Security Lending - continued
end are disclosed on the Fund's Statement of Assets and Liabilities. At period end, there were no security loans outstanding with FCM. 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 and includes $80,981 from securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $18,379 for the period.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net realized gain |
|
|
Class A | $ 4,291,683 | $ - |
Class T | 1,771,667 | - |
Class B | 386,626 | - |
Class C | 2,278,583 | - |
Institutional Class | 1,693,441 | - |
Total | $ 10,422,000 | $ - |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 13,694,524 | 4,301,187 | $ 191,221,226 | $ 43,628,166 |
Reinvestment of distributions | 314,111 | - | 3,649,967 | - |
Shares redeemed | (3,240,220) | (1,928,092) | (42,003,741) | (17,472,965) |
Net increase (decrease) | 10,768,415 | 2,373,095 | $ 152,867,452 | $ 26,155,201 |
Class T |
|
|
|
|
Shares sold | 2,069,871 | 976,676 | $ 26,930,551 | $ 9,361,129 |
Reinvestment of distributions | 149,494 | - | 1,678,816 | - |
Shares redeemed | (601,268) | (434,679) | (7,670,183) | (3,953,170) |
Net increase (decrease) | 1,618,097 | 541,997 | $ 20,939,184 | $ 5,407,959 |
Class B |
|
|
|
|
Shares sold | 144,734 | 165,361 | $ 1,825,757 | $ 1,482,467 |
Reinvestment of distributions | 32,327 | - | 340,408 | - |
Shares redeemed | (243,257) | (297,605) | (2,832,185) | (2,590,187) |
Net increase (decrease) | (66,196) | (132,244) | $ (666,020) | $ (1,107,720) |
Class C |
|
|
|
|
Shares sold | 7,472,327 | 1,520,333 | $ 93,824,317 | $ 14,380,183 |
Reinvestment of distributions | 172,010 | - | 1,812,981 | - |
Shares redeemed | (1,149,639) | (522,745) | (13,555,676) | (4,501,065) |
Net increase (decrease) | 6,494,698 | 997,588 | $ 82,081,622 | $ 9,879,118 |
Institutional Class |
|
|
|
|
Shares sold | 9,398,986 | 2,252,478 | $ 138,330,404 | $ 24,903,066 |
Reinvestment of distributions | 114,710 | - | 1,385,697 | - |
Shares redeemed | (1,804,114) | (710,454) | (25,956,997) | (7,235,208) |
Net increase (decrease) | 7,709,582 | 1,542,024 | $ 113,759,104 | $ 17,667,858 |
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 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, 2013 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) C | 25.02% | 4.76% | 6.03% |
Class T (incl. 3.50% sales charge) C | 27.68% | 4.99% | 6.02% |
Class B (incl. contingent deferred sales charge)A,C | 26.63% | 4.87% | 6.09% |
Class C (incl. contingent deferred sales charge)B,C | 30.63% | 5.22% | 5.85% |
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, 2003, 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 Communications Equipment Fund
Management's Discussion of Fund Performance
Market Recap: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
Comments from Ali Khan, who became sole Portfolio Manager of Fidelity Advisor® Communications Equipment Fund on October 1, 2012, after serving as Co-Manager: For the year, the fund's Class A, Class T, Class B and Class C shares returned 32.65%, 32.31%, 31.63% and 31.63%, respectively (excluding sales charges), trailing the 33.29% return of the S&P® Custom Communications Equipment Index but handily beating the S&P 500®. Versus the broader market, communications equipment stocks benefited from signs of a rebound in capital expenditures by telecommunication services providers, spurred in part by industry consolidation. Because I tend to buy stocks that register higher on various quality measures - as a group - than those in the S&P® custom index, the fund tends to lag its benchmark when stocks are advancing and speculative favorites are leading the market to higher ground. For example, the fund's largest detractor versus our industry benchmark was a sizable underweighting in beleaguered handset maker and index component Nokia, whose stock rallied smartly despite negligible signs of improving fundamentals for the company. A large overweighting in Polycom, a provider of high-definition videoconferencing software and equipment, also worked against the fund, as the stock posted a gain but significantly lagged the benchmark. Strong-performing index heavyweight Cisco Systems detracted due to an underweighting, although in absolute terms it was easily our biggest contributor and by far the fund's largest position at period end. Another negative factor was cash, which was a drag on performance in a rising market. Conversely, the fund's top relative contributor was Aruba Networks, a provider of network access solutions for mobile enterprise networks, in large part because of the fund's timely ownership here. Similarly, underweighting F5 Networks for most of the period and then boosting it to an overweighting in April was timely, as the shares of this provider of hardware and software for networking and security purposes delivered a nice rally in the final month of the period. During the period, I selectively added to the fund's exposure to suppliers of telecom equipment. To fund these purchases, I trimmed the portfolio's weightings in electronic manufacturing services, semiconductors, and other out-of-benchmark groups.
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, 2013 to July 31, 2013).
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 | $ 1,090.70 | $ 7.26 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.85 | $ 7.00 |
Class T | 1.65% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,090.20 | $ 8.55 |
HypotheticalA |
| $ 1,000.00 | $ 1,016.61 | $ 8.25 |
Class B | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,086.70 | $ 11.12 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Class C | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,087.90 | $ 11.13 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Institutional Class | 1.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,093.30 | $ 5.97 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Cisco Systems, Inc. | 22.1 | 15.6 |
QUALCOMM, Inc. | 15.0 | 15.9 |
Juniper Networks, Inc. | 6.0 | 6.2 |
F5 Networks, Inc. | 4.5 | 2.5 |
Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 4.5 | 6.1 |
Alcatel-Lucent SA sponsored ADR | 3.2 | 2.3 |
Motorola Solutions, Inc. | 2.7 | 3.6 |
Polycom, Inc. | 2.6 | 3.0 |
Nokia Corp. sponsored ADR | 2.6 | 1.8 |
Riverbed Technology, Inc. | 2.2 | 1.8 |
| 65.4 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Communications Equipment | 83.2% |
|
![]() | Computers & Peripherals | 2.5% |
|
![]() | Semiconductors & Semiconductor Equipment | 2.4% |
|
![]() | Electronic Equipment & Components | 1.9% |
|
![]() | IT Services | 1.8% |
|
![]() | All Others* | 8.2% |
|
As of January 31, 2013 | |||
![]() | Communications Equipment | 83.6% |
|
![]() | Electronic Equipment & Components | 4.5% |
|
![]() | Semiconductors & Semiconductor Equipment | 3.2% |
|
![]() | Computers & Peripherals | 1.3% |
|
![]() | IT Services | 1.0% |
|
![]() | All Others* | 6.4% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Communications Equipment Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 93.2% | |||
Shares | Value | ||
COMMUNICATIONS EQUIPMENT - 83.2% | |||
Communications Equipment - 83.2% | |||
ADTRAN, Inc. | 5,700 | $ 150,651 | |
ADVA AG Optical Networking (a) | 8,228 | 44,660 | |
Alcatel-Lucent SA sponsored ADR (a)(d) | 139,257 | 353,713 | |
Anaren, Inc. (a) | 4,400 | 103,004 | |
Aruba Networks, Inc. (a) | 12,640 | 224,739 | |
BlackBerry Ltd. (a)(d) | 22,100 | 195,143 | |
Brocade Communications Systems, Inc. (a) | 31,659 | 210,849 | |
Cisco Systems, Inc. | 94,824 | 2,422,753 | |
Comtech Telecommunications Corp. | 3,100 | 83,948 | |
F5 Networks, Inc. (a) | 5,665 | 497,160 | |
Finisar Corp. (a) | 9,159 | 177,043 | |
Infinera Corp. (a) | 10,400 | 113,464 | |
InterDigital, Inc. | 1,700 | 67,541 | |
Juniper Networks, Inc. (a) | 30,488 | 660,675 | |
Motorola Solutions, Inc. | 5,447 | 298,659 | |
NETGEAR, Inc. (a) | 5,900 | 175,879 | |
Nokia Corp. sponsored ADR (a)(d) | 71,105 | 280,154 | |
Plantronics, Inc. | 1,200 | 55,788 | |
Polycom, Inc. (a) | 29,799 | 284,878 | |
QUALCOMM, Inc. | 25,481 | 1,644,799 | |
Radware Ltd. (a) | 6,100 | 83,570 | |
Riverbed Technology, Inc. (a) | 15,358 | 240,199 | |
Sonus Networks, Inc. (a) | 29,700 | 101,574 | |
Spirent Communications PLC | 15,000 | 30,144 | |
Symmetricom, Inc. (a) | 14,700 | 75,558 | |
Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 42,320 | 496,414 | |
Wi-Lan, Inc. | 16,800 | 60,520 | |
| 9,133,479 | ||
COMPUTERS & PERIPHERALS - 2.5% | |||
Computer Hardware - 2.5% | |||
Apple, Inc. | 400 | 181,000 | |
Super Micro Computer, Inc. (a) | 7,600 | 88,084 | |
| 269,084 | ||
ELECTRONIC EQUIPMENT & COMPONENTS - 1.9% | |||
Electronic Manufacturing Services - 1.3% | |||
Fabrinet (a) | 2,000 | 29,620 | |
TE Connectivity Ltd. | 2,100 | 107,184 | |
| 136,804 | ||
Technology Distributors - 0.6% | |||
Arrow Electronics, Inc. (a) | 1,500 | 68,475 | |
TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 205,279 | ||
HEALTH CARE TECHNOLOGY - 0.4% | |||
Health Care Technology - 0.4% | |||
Vocera Communications, Inc. (a) | 2,800 | 40,544 | |
| |||
Shares | Value | ||
INTERNET SOFTWARE & SERVICES - 0.8% | |||
Internet Software & Services - 0.8% | |||
Google, Inc. Class A (a) | 100 | $ 88,760 | |
IT SERVICES - 1.8% | |||
IT Consulting & Other Services - 1.8% | |||
Amdocs Ltd. | 5,200 | 200,044 | |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.4% | |||
Semiconductors - 2.4% | |||
Altera Corp. | 4,400 | 156,464 | |
Broadcom Corp. Class A | 2,600 | 71,682 | |
GSI Technology, Inc. (a) | 1,000 | 6,950 | |
Skyworks Solutions, Inc. (a) | 1,200 | 28,824 | |
| 263,920 | ||
SOFTWARE - 0.2% | |||
Systems Software - 0.2% | |||
Allot Communications Ltd. (a) | 1,700 | 24,871 | |
TOTAL COMMON STOCKS (Cost $9,108,012) |
| ||
Money Market Funds - 13.8% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 727,682 | 727,682 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 790,725 | 790,725 | |
TOTAL MONEY MARKET FUNDS (Cost $1,518,407) |
|
TOTAL INVESTMENT PORTFOLIO - 107.0% (Cost $10,626,419) | 11,744,388 |
NET OTHER ASSETS (LIABILITIES) - (7.0)% | (772,129) | ||
NET ASSETS - 100% | $ 10,972,259 |
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 | $ 662 |
Fidelity Securities Lending Cash Central Fund | 13,459 |
Total | $ 14,121 |
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 | 82.5% |
Sweden | 4.5% |
France | 3.2% |
Finland | 2.6% |
Canada | 2.4% |
Bailiwick of Guernsey | 1.8% |
Israel | 1.0% |
Switzerland | 1.0% |
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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $735,976) - See accompanying schedule: Unaffiliated issuers (cost $9,108,012) | $ 10,225,981 |
|
Fidelity Central Funds (cost $1,518,407) | 1,518,407 |
|
Total Investments (cost $10,626,419) |
| $ 11,744,388 |
Cash |
| 35,784 |
Receivable for investments sold | 71,050 | |
Receivable for fund shares sold | 3,534 | |
Dividends receivable | 1,402 | |
Distributions receivable from Fidelity Central Funds | 1,111 | |
Receivable from investment adviser for expense reductions | 2,430 | |
Other receivables | 151 | |
Total assets | 11,859,850 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 33,551 | |
Payable for fund shares redeemed | 14,044 | |
Accrued management fee | 5,002 | |
Distribution and service plan fees payable | 4,525 | |
Other affiliated payables | 2,963 | |
Other payables and accrued expenses | 36,781 | |
Collateral on securities loaned, at value | 790,725 | |
Total liabilities | 887,591 | |
|
|
|
Net Assets | $ 10,972,259 | |
Net Assets consist of: |
| |
Paid in capital | $ 11,283,041 | |
Accumulated net investment loss | (8,844) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (1,419,907) | |
Net unrealized appreciation (depreciation) on investments | 1,117,969 | |
Net Assets | $ 10,972,259 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 10.22 | |
|
|
|
Maximum offering price per share (100/94.25 of $10.22) | $ 10.84 | |
Class T: | $ 9.91 | |
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|
|
Maximum offering price per share (100/96.50 of $9.91) | $ 10.27 | |
Class B: | $ 9.28 | |
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|
Class C: | $ 9.28 | |
|
|
|
Institutional Class: | $ 10.55 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Operations
| Year ended July 31, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 147,100 |
Income from Fidelity Central Funds (including $13,459 from security lending) |
| 14,121 |
Total income |
| 161,221 |
|
|
|
Expenses | ||
Management fee | $ 57,620 | |
Transfer agent fees | 33,764 | |
Distribution and service plan fees | 51,889 | |
Accounting and security lending fees | 4,138 | |
Custodian fees and expenses | 5,020 | |
Independent trustees' compensation | 72 | |
Registration fees | 55,363 | |
Audit | 49,433 | |
Legal | 84 | |
Miscellaneous | 63 | |
Total expenses before reductions | 257,446 | |
Expense reductions | (89,179) | 168,267 |
Net investment income (loss) | (7,046) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 329,802 | |
Foreign currency transactions | (118) | |
Total net realized gain (loss) |
| 329,684 |
Change in net unrealized appreciation (depreciation) on investment securities | 2,517,574 | |
Net gain (loss) | 2,847,258 | |
Net increase (decrease) in net assets resulting from operations | $ 2,840,212 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (7,046) | $ (57,189) |
Net realized gain (loss) | 329,684 | (1,571,979) |
Change in net unrealized appreciation (depreciation) | 2,517,574 | (2,005,379) |
Net increase (decrease) in net assets resulting from operations | 2,840,212 | (3,634,547) |
Distributions to shareholders from net investment income | (3,925) | - |
Distributions to shareholders from net realized gain | - | (401,208) |
Total distributions | (3,925) | (401,208) |
Share transactions - net increase (decrease) | (1,708,594) | (9,551,912) |
Redemption fees | 1,030 | 639 |
Total increase (decrease) in net assets | 1,128,723 | (13,587,028) |
|
|
|
Net Assets | ||
Beginning of period | 9,843,536 | 23,430,564 |
End of period (including accumulated net investment loss of $8,844 and accumulated net investment loss of $10,185, respectively) | $ 10,972,259 | $ 9,843,536 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 7.71 | $ 9.73 | $ 8.67 | $ 7.28 | $ 7.82 |
Income from Investment Operations |
|
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|
|
|
Net investment income (loss) C | .02 | (.01) | (.06) | (.11) | .02 F |
Net realized and unrealized gain (loss) | 2.50 | (1.81) | 1.12 | 1.50 | (.56) |
Total from investment operations | 2.52 | (1.82) | 1.06 | 1.39 | (.54) |
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 | $ 10.22 | $ 7.71 | $ 9.73 | $ 8.67 | $ 7.28 |
Total Return A, B | 32.65% | (18.88)% | 12.23% | 19.09% | (6.91)% |
Ratios to Average Net Assets D, G |
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|
Expenses before reductions | 2.22% | 1.96% | 1.64% | 1.90% | 3.15% |
Expenses net of fee waivers, if any | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% |
Expenses net of all reductions | 1.37% | 1.39% | 1.39% | 1.38% | 1.40% |
Net investment income (loss) | .18% | (.16)% | (.60)% | (1.32)% | .26% F |
Supplemental Data |
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|
|
Net assets, end of period (000 omitted) | $ 3,962 | $ 3,568 | $ 8,787 | $ 4,860 | $ 3,476 |
Portfolio turnover rate E | 33% | 79% | 101% | 106% | 97% |
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 $.07 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.88)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
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|
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|
|
Net asset value, beginning of period | $ 7.49 | $ 9.48 | $ 8.46 | $ 7.13 | $ 7.68 |
Income from Investment Operations |
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|
Net investment income (loss) C | (.01) | (.03) | (.09) | (.13) | - F, H |
Net realized and unrealized gain (loss) | 2.43 | (1.76) | 1.11 | 1.46 | (.55) |
Total from investment operations | 2.42 | (1.79) | 1.02 | 1.33 | (.55) |
Distributions from net realized gain | - | (.20) | - | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 9.91 | $ 7.49 | $ 9.48 | $ 8.46 | $ 7.13 |
Total Return A, B | 32.31% | (19.06)% | 12.06% | 18.65% | (7.16)% |
Ratios to Average Net Assets D, G |
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|
Expenses before reductions | 2.52% | 2.27% | 1.97% | 2.20% | 3.52% |
Expenses net of fee waivers, if any | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% |
Expenses net of all reductions | 1.62% | 1.64% | 1.64% | 1.63% | 1.65% |
Net investment income (loss) | (.07)% | (.41)% | (.85)% | (1.57)% | .01% F |
Supplemental Data |
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|
Net assets, end of period (000 omitted) | $ 3,342 | $ 2,843 | $ 4,607 | $ 3,273 | $ 2,396 |
Portfolio turnover rate E | 33% | 79% | 101% | 106% | 97% |
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 $.06 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.13)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
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|
|
Net asset value, beginning of period | $ 7.05 | $ 8.99 | $ 8.06 | $ 6.83 | $ 7.39 |
Income from Investment Operations |
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|
Net investment income (loss) C | (.05) | (.07) | (.13) | (.16) | (.03) F |
Net realized and unrealized gain (loss) | 2.28 | (1.67) | 1.06 | 1.39 | (.53) |
Total from investment operations | 2.23 | (1.74) | .93 | 1.23 | (.56) |
Distributions from net realized gain | - | (.20) | - | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 9.28 | $ 7.05 | $ 8.99 | $ 8.06 | $ 6.83 |
Total Return A, B | 31.63% | (19.56)% | 11.54% | 18.01% | (7.58)% |
Ratios to Average Net Assets D, G |
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Expenses before reductions | 3.00% | 2.71% | 2.47% | 2.68% | 3.98% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.13% | 2.13% | 2.14% | 2.13% | 2.15% |
Net investment income (loss) | (.57)% | (.91)% | (1.35)% | (2.07)% | (.49)% F |
Supplemental Data |
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Net assets, end of period (000 omitted) | $ 480 | $ 570 | $ 1,316 | $ 1,408 | $ 1,281 |
Portfolio turnover rate E | 33% | 79% | 101% | 106% | 97% |
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 $.06 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.63)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
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|
Net asset value, beginning of period | $ 7.05 | $ 8.98 | $ 8.06 | $ 6.82 | $ 7.38 |
Income from Investment Operations |
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|
Net investment income (loss) C | (.05) | (.07) | (.13) | (.16) | (.03) F |
Net realized and unrealized gain (loss) | 2.28 | (1.66) | 1.05 | 1.40 | (.53) |
Total from investment operations | 2.23 | (1.73) | .92 | 1.24 | (.56) |
Distributions from net realized gain | - | (.20) | - | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 9.28 | $ 7.05 | $ 8.98 | $ 8.06 | $ 6.82 |
Total Return A, B | 31.63% | (19.47)% | 11.41% | 18.18% | (7.59)% |
Ratios to Average Net Assets D, G |
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|
|
Expenses before reductions | 2.98% | 2.71% | 2.40% | 2.67% | 3.63% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.12% | 2.14% | 2.14% | 2.13% | 2.15% |
Net investment income (loss) | (.57)% | (.91)% | (1.35)% | (2.07)% | (.49)% F |
Supplemental Data |
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|
Net assets, end of period (000 omitted) | $ 2,334 | $ 2,142 | $ 5,866 | $ 3,029 | $ 2,792 |
Portfolio turnover rate E | 33% | 79% | 101% | 106% | 97% |
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 $.06 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.63)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
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|
|
Net asset value, beginning of period | $ 7.95 | $ 10.00 | $ 8.88 | $ 7.45 | $ 7.98 |
Income from Investment Operations |
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|
Net investment income (loss) B | .04 | .01 | (.04) | (.09) | .03 E |
Net realized and unrealized gain (loss) | 2.58 | (1.86) | 1.16 | 1.52 | (.56) |
Total from investment operations | 2.62 | (1.85) | 1.12 | 1.43 | (.53) |
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 | $ 10.55 | $ 7.95 | $ 10.00 | $ 8.88 | $ 7.45 |
Total Return A | 32.92% | (18.66)% | 12.61% | 19.19% | (6.64)% |
Ratios to Average Net Assets C, F |
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|
Expenses before reductions | 1.93% | 1.66% | 1.22% | 1.54% | 2.44% |
Expenses net of fee waivers, if any | 1.15% | 1.15% | 1.15% | 1.15% | 1.15% |
Expenses net of all reductions | 1.12% | 1.13% | 1.14% | 1.13% | 1.15% |
Net investment income (loss) | .43% | .10% | (.35)% | (1.07)% | .51% E |
Supplemental Data |
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Net assets, end of period (000 omitted) | $ 855 | $ 721 | $ 2,855 | $ 1,717 | $ 957 |
Portfolio turnover rate D | 33% | 79% | 101% | 106% | 97% |
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 $.07 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.63)%.
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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.
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. 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 and distributions from the Fidelity Central Funds are accrued as earned. 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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, net operating losses, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 1,668,866 |
Gross unrealized depreciation | (619,487) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 1,049,379 |
|
|
Tax Cost | $ 10,695,009 |
The tax-based components of distributable earnings as of period end were as follows:
Capital loss carryforward | $ (1,351,318) |
Net unrealized appreciation (depreciation) | $ 1,049,379 |
Annual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
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 | $ (1,351,318) |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 3,925 | $ - |
Long-term Capital Gains | - | 401,208 |
Total | $ 3,925 | $ 401,208 |
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 net asset value 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 $3,240,722 and $5,449,241, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .56% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 9,527 | $ 303 |
Class T | .25% | .25% | 15,156 | 118 |
Class B | .75% | .25% | 5,248 | 3,957 |
Class C | .75% | .25% | 21,958 | 4,425 |
|
|
| $ 51,889 | $ 8,803 |
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 | $ 2,023 |
Class T | 1,638 |
Class B* | 1,479 |
Class C* | 166 |
| $ 5,306 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 11,863 | .31 |
Class T | 10,932 | .36 |
Class B | 1,625 | .31 |
Class C | 6,923 | .32 |
Institutional Class | 2,421 | .30 |
| $ 33,764 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $419 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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, there were no borrowings 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, including 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. At period end, there were no security loans outstanding with FCM. 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, and includes $329 from securities loaned to FCM.
Annual Report
8. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense | Reimbursement |
Class A | 1.40% | $ 31,312 |
Class T | 1.65% | 26,258 |
Class B | 2.15% | 4,449 |
Class C | 2.15% | 18,188 |
Institutional Class | 1.15% | 6,313 |
|
| $ 86,520 |
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $2,659 for the period.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net investment income |
|
|
Class A | $ 2,612 | $ - |
Institutional Class | 1,313 | - |
Total | $ 3,925 | $ - |
From net realized gain |
|
|
Class A | $ - | $ 136,672 |
Class T | - | 94,407 |
Class B | - | 23,930 |
Class C | - | 101,740 |
Institutional Class | - | 44,459 |
Total | $ - | $ 401,208 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 119,229 | 95,217 | $ 1,075,395 | $ 825,716 |
Reinvestment of distributions | 272 | 15,026 | 2,398 | 125,915 |
Shares redeemed | (194,578) | (550,285) | (1,739,434) | (4,678,484) |
Net increase (decrease) | (75,077) | (440,042) | $ (661,641) | $ (3,726,853) |
Class T |
|
|
|
|
Shares sold | 54,310 | 99,348 | $ 477,965 | $ 845,573 |
Reinvestment of distributions | - | 11,468 | - | 93,466 |
Shares redeemed | (96,623) | (217,086) | (817,480) | (1,833,154) |
Net increase (decrease) | (42,313) | (106,270) | $ (339,515) | $ (894,115) |
Class B |
|
|
|
|
Shares sold | 612 | 1,631 | $ 4,500 | $ 14,069 |
Reinvestment of distributions | - | 3,015 | - | 23,244 |
Shares redeemed | (29,754) | (70,313) | (242,910) | (498,813) |
Net increase (decrease) | (29,142) | (65,667) | $ (238,410) | $ (461,500) |
Class C |
|
|
|
|
Shares sold | 99,311 | 45,249 | $ 848,531 | $ 356,072 |
Reinvestment of distributions | - | 10,744 | - | 82,834 |
Shares redeemed | (151,640) | (405,119) | (1,232,762) | (3,174,312) |
Net increase (decrease) | (52,329) | (349,126) | $ (384,231) | $ (2,735,406) |
Annual Report
Notes to Financial Statements - continued
10. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Institutional Class |
|
|
|
|
Shares sold | 37,292 | 32,975 | $ 354,493 | $ 287,948 |
Reinvestment of distributions | 122 | 2,747 | 1,105 | 23,680 |
Shares redeemed | (47,116) | (230,453) | (440,395) | (2,045,666) |
Net increase (decrease) | (9,702) | (194,731) | $ (84,797) | $ (1,734,038) |
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 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, 2013 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge)C | 25.97% | 13.85% | 7.71% |
Class T (incl. 3.50% sales charge)C | 28.58% | 14.08% | 7.70% |
Class B (incl. contingent deferred sales charge) A, C | 27.61% | 14.09% | 7.78% |
Class C (incl. contingent deferred sales charge) B, C | 31.68% | 14.35% | 7.56% |
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, 2003, 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
Comments from Gordon Scott, Portfolio Manager of Fidelity Advisor® Consumer Discretionary Fund: The fund participated in the sector's strength, but even its solid double-digit return couldn't keep pace with the index. For the year, the fund's Class A, Class T, Class B and Class C shares rose 33.65%, 33.25%, 32.61% and 32.68%, respectively (excluding sales charges), trailing the 40.85% gain of the MSCI® U.S. IMI Consumer Discretionary 25-50 Index, but outpacing the broad-based S&P 500®. Versus the broader market, consumer discretionary stocks were buoyed by improving economic fundamentals in the U.S. and a recovery in housing. In managing the fund, I focus on high-quality companies whose earnings growth I believe can surpass the average earnings growth of companies in the sector longer term. In traditional Fidelity investment style, I conduct fundamental, bottom-up analysis of the sector on a company-by-company basis. I use my research to find reasonably valued companies that have defendable competitive positions, the ability to gain market share and capable management teams. Stocks that hurt relative performance included Ford Motor, a major auto maker and strong-performing index name I avoided. Discount retailers Dollar Tree and Dollar General struggled during the period, but I'm taking a multiyear view here, since I see a future market-share opportunity in mass retail. The stock of Yum! Brands, owner of Taco Bell and other fast-food chains, also didn't fare well, but I like the firm's long-duration growth prospects and increased my stake. On the plus side, it helped to overweight outdoor equipment retailer Cabela's. During the past year, a proactive management team opened smaller, more-productive stores and turned around the company's retail and online operations - all of which drew me to the stock. It also helped to underweight fast-food giant McDonald's and overweight Domino's Pizza, which experienced strong revenue growth this period. McDonald's and Domino's were not held at 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 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, 2013 to July 31, 2013).
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 | 1.26% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,185.10 | $ 6.83 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.55 | $ 6.31 |
Class T | 1.55% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,183.00 | $ 8.39 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.11 | $ 7.75 |
Class B | 2.03% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,180.00 | $ 10.97 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.73 | $ 10.14 |
Class C | 1.99% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,180.20 | $ 10.76 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.93 | $ 9.94 |
Institutional Class | .93% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,186.70 | $ 5.04 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.18 | $ 4.66 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Comcast Corp. Class A | 4.8 | 8.0 |
The Walt Disney Co. | 4.7 | 5.0 |
Twenty-First Century Fox, Inc. Class A | 4.3 | 4.2 |
Time Warner, Inc. | 3.5 | 3.4 |
Lowe's Companies, Inc. | 3.5 | 4.2 |
Yum! Brands, Inc. | 3.1 | 2.6 |
Dollar General Corp. | 2.9 | 2.0 |
TJX Companies, Inc. | 2.7 | 1.7 |
O'Reilly Automotive, Inc. | 2.5 | 1.9 |
NIKE, Inc. Class B | 2.5 | 2.7 |
| 34.5 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Specialty Retail | 32.4% |
|
![]() | Media | 26.6% |
|
![]() | Hotels, Restaurants & Leisure | 10.8% |
|
![]() | Textiles, Apparel & Luxury Goods | 9.5% |
|
![]() | Multiline Retail | 5.2% |
|
![]() | All Others* | 15.5% |
|
As of January 31, 2013 | |||
![]() | Specialty Retail | 32.6% |
|
![]() | Media | 25.2% |
|
![]() | Hotels, Restaurants & Leisure | 10.8% |
|
![]() | Textiles, Apparel & Luxury Goods | 9.8% |
|
![]() | Internet & Catalog Retail | 5.0% |
|
![]() | All Others* | 16.6% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Consumer Discretionary Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 98.1% | |||
Shares | Value | ||
AUTO COMPONENTS - 2.6% | |||
Auto Parts & Equipment - 2.6% | |||
Delphi Automotive PLC | 29,818 | $ 1,601,823 | |
TRW Automotive Holdings Corp. (a) | 11,300 | 828,403 | |
| 2,430,226 | ||
DISTRIBUTORS - 1.7% | |||
Distributors - 1.7% | |||
LKQ Corp. (a) | 61,100 | 1,592,877 | |
HOTELS, RESTAURANTS & LEISURE - 10.8% | |||
Hotels, Resorts & Cruise Lines - 2.0% | |||
Marriott International, Inc. Class A | 12,000 | 498,840 | |
Wyndham Worldwide Corp. | 22,149 | 1,379,883 | |
| 1,878,723 | ||
Restaurants - 8.8% | |||
Bloomin' Brands, Inc. | 60,142 | 1,419,351 | |
Buffalo Wild Wings, Inc. (a) | 6,840 | 708,487 | |
Panera Bread Co. Class A (a) | 3,983 | 665,360 | |
Starbucks Corp. | 28,099 | 2,001,773 | |
Texas Roadhouse, Inc. Class A | 21,967 | 536,873 | |
Yum! Brands, Inc. | 40,108 | 2,924,675 | |
| 8,256,519 | ||
TOTAL HOTELS, RESTAURANTS & LEISURE | 10,135,242 | ||
HOUSEHOLD DURABLES - 1.4% | |||
Homebuilding - 0.4% | |||
NVR, Inc. (a) | 463 | 428,553 | |
Housewares & Specialties - 1.0% | |||
Jarden Corp. (a) | 19,923 | 905,899 | |
TOTAL HOUSEHOLD DURABLES | 1,334,452 | ||
INTERNET & CATALOG RETAIL - 4.7% | |||
Internet Retail - 4.7% | |||
Expedia, Inc. | 9,891 | 466,163 | |
Liberty Media Corp. Interactive | 79,868 | 1,953,571 | |
priceline.com, Inc. (a) | 2,300 | 2,014,041 | |
| 4,433,775 | ||
INTERNET SOFTWARE & SERVICES - 0.6% | |||
Internet Software & Services - 0.6% | |||
eBay, Inc. (a) | 10,500 | 542,745 | |
LEISURE EQUIPMENT & PRODUCTS - 1.8% | |||
Leisure Products - 1.8% | |||
Brunswick Corp. | 38,500 | 1,453,375 | |
Mattel, Inc. | 5,085 | 213,723 | |
| 1,667,098 | ||
MEDIA - 26.6% | |||
Broadcasting - 3.9% | |||
Discovery Communications, Inc. (a) | 16,300 | 1,299,436 | |
| |||
Shares | Value | ||
Liberty Media Corp. Class A (a) | 12,281 | $ 1,765,148 | |
Sinclair Broadcast Group, Inc. Class A | 22,100 | 623,441 | |
| 3,688,025 | ||
Cable & Satellite - 9.1% | |||
Comcast Corp. Class A | 100,343 | 4,523,462 | |
DIRECTV (a) | 24,728 | 1,564,541 | |
DISH Network Corp. Class A | 8,000 | 357,200 | |
Liberty Global PLC Class A (a) | 20,600 | 1,671,072 | |
Time Warner Cable, Inc. | 3,100 | 353,617 | |
| 8,469,892 | ||
Movies & Entertainment - 13.1% | |||
The Walt Disney Co. | 67,706 | 4,377,193 | |
Time Warner, Inc. | 53,190 | 3,311,609 | |
Twenty-First Century Fox, Inc. Class A | 134,230 | 4,010,792 | |
Viacom, Inc. Class B (non-vtg.) | 7,246 | 527,291 | |
| 12,226,885 | ||
Publishing - 0.5% | |||
News Corp. Class A (a) | 30,907 | 492,349 | |
TOTAL MEDIA | 24,877,151 | ||
MULTILINE RETAIL - 5.2% | |||
General Merchandise Stores - 5.2% | |||
Dollar General Corp. (a) | 49,964 | 2,731,532 | |
Dollar Tree, Inc. (a) | 38,821 | 2,082,747 | |
| 4,814,279 | ||
PROFESSIONAL SERVICES - 0.8% | |||
Research & Consulting Services - 0.8% | |||
Nielsen Holdings B.V. | 20,820 | 695,804 | |
SPECIALTY RETAIL - 32.4% | |||
Apparel Retail - 10.9% | |||
Abercrombie & Fitch Co. Class A | 22,302 | 1,112,201 | |
American Eagle Outfitters, Inc. | 76,510 | 1,502,656 | |
DSW, Inc. Class A | 11,000 | 833,690 | |
Foot Locker, Inc. | 29,155 | 1,053,370 | |
L Brands, Inc. | 32,601 | 1,818,158 | |
Ross Stores, Inc. | 20,538 | 1,385,699 | |
TJX Companies, Inc. | 48,408 | 2,519,152 | |
| 10,224,926 | ||
Automotive Retail - 3.6% | |||
AutoZone, Inc. (a) | 2,300 | 1,031,734 | |
O'Reilly Automotive, Inc. (a) | 18,813 | 2,356,516 | |
| 3,388,250 | ||
Home Improvement Retail - 3.8% | |||
Home Depot, Inc. | 2,485 | 196,390 | |
Lowe's Companies, Inc. | 74,151 | 3,305,652 | |
| 3,502,042 | ||
Common Stocks - continued | |||
Shares | Value | ||
SPECIALTY RETAIL - CONTINUED | |||
Homefurnishing Retail - 3.0% | |||
Bed Bath & Beyond, Inc. (a) | 15,754 | $ 1,204,708 | |
Williams-Sonoma, Inc. | 27,058 | 1,592,634 | |
| 2,797,342 | ||
Specialty Stores - 11.1% | |||
Cabela's, Inc. Class A (a) | 22,604 | 1,551,539 | |
Dick's Sporting Goods, Inc. | 39,763 | 2,044,216 | |
PetSmart, Inc. | 26,589 | 1,946,847 | |
Sally Beauty Holdings, Inc. (a) | 38,900 | 1,186,839 | |
Staples, Inc. | 56,300 | 958,226 | |
Tractor Supply Co. | 14,471 | 1,752,872 | |
Ulta Salon, Cosmetics & Fragrance, Inc. (a) | 9,444 | 952,900 | |
| 10,393,439 | ||
TOTAL SPECIALTY RETAIL | 30,305,999 | ||
TEXTILES, APPAREL & LUXURY GOODS - 9.5% | |||
Apparel, Accessories & Luxury Goods - 5.3% | |||
Michael Kors Holdings Ltd. (a) | 9,765 | 657,575 | |
PVH Corp. | 8,500 | 1,120,215 | |
Swatch Group AG (Bearer) (Reg.) | 9,186 | 948,428 | |
Vera Bradley, Inc. (a)(d) | 26,841 | 650,626 | |
VF Corp. | 8,114 | 1,598,458 | |
| 4,975,302 | ||
Footwear - 4.2% | |||
NIKE, Inc. Class B | 36,732 | 2,311,177 | |
Steven Madden Ltd. (a) | 9,391 | 482,885 | |
Wolverine World Wide, Inc. | 19,948 | 1,147,209 | |
| 3,941,271 | ||
TOTAL TEXTILES, APPAREL & LUXURY GOODS | 8,916,573 | ||
TOTAL COMMON STOCKS (Cost $73,667,037) |
| ||
Money Market Funds - 3.8% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 0.11% (b) | 3,075,914 | $ 3,075,914 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 477,500 | 477,500 | |
TOTAL MONEY MARKET FUNDS (Cost $3,553,414) |
|
TOTAL INVESTMENT PORTFOLIO - 101.9% (Cost $77,220,451) | 95,299,635 |
NET OTHER ASSETS (LIABILITIES) - (1.9)% | (1,786,111) | ||
NET ASSETS - 100% | $ 93,513,524 |
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 | $ 1,345 |
Fidelity Securities Lending Cash Central Fund | 2,902 |
Total | $ 4,247 |
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 Consumer Discretionary Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $462,984) - See accompanying schedule: Unaffiliated issuers (cost $73,667,037) | $ 91,746,221 |
|
Fidelity Central Funds (cost $3,553,414) | 3,553,414 |
|
Total Investments (cost $77,220,451) |
| $ 95,299,635 |
Receivable for investments sold | 829,855 | |
Receivable for fund shares sold | 572,237 | |
Dividends receivable | 45,126 | |
Distributions receivable from Fidelity Central Funds | 1,908 | |
Other receivables | 601 | |
Total assets | 96,749,362 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 2,555,024 | |
Payable for fund shares redeemed | 75,820 | |
Accrued management fee | 39,764 | |
Distribution and service plan fees payable | 30,226 | |
Other affiliated payables | 19,194 | |
Other payables and accrued expenses | 38,310 | |
Collateral on securities loaned, at value | 477,500 | |
Total liabilities | 3,235,838 | |
|
|
|
Net Assets | $ 93,513,524 | |
Net Assets consist of: |
| |
Paid in capital | $ 70,345,155 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 5,089,246 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 18,079,123 | |
Net Assets | $ 93,513,524 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 19.59 | |
|
|
|
Maximum offering price per share (100/94.25 of $19.59) | $ 20.79 | |
Class T: | $ 18.68 | |
|
|
|
Maximum offering price per share (100/96.50 of $18.68) | $ 19.36 | |
Class B: | $ 16.85 | |
|
|
|
Class C: | $ 16.90 | |
|
|
|
Institutional Class: | $ 20.72 |
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, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 835,687 |
Income from Fidelity Central Funds |
| 4,247 |
Total income |
| 839,934 |
|
|
|
Expenses | ||
Management fee | $ 390,461 | |
Transfer agent fees | 184,656 | |
Distribution and service plan fees | 307,946 | |
Accounting and security lending fees | 27,508 | |
Custodian fees and expenses | 14,882 | |
Independent trustees' compensation | 491 | |
Registration fees | 61,430 | |
Audit | 58,188 | |
Legal | 222 | |
Interest | 264 | |
Miscellaneous | 564 | |
Total expenses before reductions | 1,046,612 | |
Expense reductions | (10,885) | 1,035,727 |
Net investment income (loss) | (195,793) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 9,881,485 | |
Foreign currency transactions | 592 | |
Total net realized gain (loss) |
| 9,882,077 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 10,583,773 | |
Assets and liabilities in foreign currencies | 36 | |
Total change in net unrealized appreciation (depreciation) |
| 10,583,809 |
Net gain (loss) | 20,465,886 | |
Net increase (decrease) in net assets resulting from operations | $ 20,270,093 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (195,793) | $ (44,525) |
Net realized gain (loss) | 9,882,077 | 3,542,404 |
Change in net unrealized appreciation (depreciation) | 10,583,809 | 762,372 |
Net increase (decrease) in net assets resulting from operations | 20,270,093 | 4,260,251 |
Distributions to shareholders from net investment income | - | (82,290) |
Distributions to shareholders from net realized gain | (6,688,896) | (2,716,672) |
Total distributions | (6,688,896) | (2,798,962) |
Share transactions - net increase (decrease) | 16,864,514 | 8,335,613 |
Redemption fees | 6,411 | 3,533 |
Total increase (decrease) in net assets | 30,452,122 | 9,800,435 |
|
|
|
Net Assets | ||
Beginning of period | 63,061,402 | 53,260,967 |
End of period (including accumulated net investment loss of $0 and $149,267, respectively) | $ 93,513,524 | $ 63,061,402 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 16.22 | $ 16.00 | $ 12.75 | $ 10.26 | $ 11.41 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.02) | .01 | (.02) | (.02) | .04 |
Net realized and unrealized gain (loss) | 5.04 | 1.07 | 3.27 | 2.51 | (1.16) |
Total from investment operations | 5.02 | 1.08 | 3.25 | 2.49 | (1.12) |
Distributions from net investment income | - | (.03) | - | - | (.03) |
Distributions from net realized gain | (1.65) | (.83) | - | - | - |
Total distributions | (1.65) | (.86) | - | - | (.03) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 19.59 | $ 16.22 | $ 16.00 | $ 12.75 | $ 10.26 |
Total Return A, B | 33.65% | 7.96% | 25.49% | 24.27% | (9.81)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.31% | 1.38% | 1.39% | 1.44% | 1.62% |
Expenses net of fee waivers, if any | 1.31% | 1.38% | 1.39% | 1.40% | 1.40% |
Expenses net of all reductions | 1.29% | 1.37% | 1.38% | 1.39% | 1.40% |
Net investment income (loss) | (.10)% | .04% | (.15)% | (.15)% | .42% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 45,292 | $ 26,547 | $ 23,447 | $ 19,423 | $ 13,010 |
Portfolio turnover rate E | 146% | 217% | 179% | 163% | 99% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 15.57 | $ 15.43 | $ 12.32 | $ 9.94 | $ 11.07 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.06) | (.03) | (.06) | (.05) | .01 |
Net realized and unrealized gain (loss) | 4.81 | 1.02 | 3.17 | 2.43 | (1.12) |
Total from investment operations | 4.75 | .99 | 3.11 | 2.38 | (1.11) |
Distributions from net investment income | - | (.02) | - | - | (.02) |
Distributions from net realized gain | (1.64) | (.83) | - | - | - |
Total distributions | (1.64) | (.85) | - | - | (.02) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 18.68 | $ 15.57 | $ 15.43 | $ 12.32 | $ 9.94 |
Total Return A, B | 33.25% | 7.62% | 25.24% | 23.94% | (10.04)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.60% | 1.64% | 1.66% | 1.71% | 1.89% |
Expenses net of fee waivers, if any | 1.60% | 1.64% | 1.65% | 1.65% | 1.65% |
Expenses net of all reductions | 1.58% | 1.63% | 1.64% | 1.64% | 1.65% |
Net investment income (loss) | (.39)% | (.23)% | (.40)% | (.40)% | .17% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 15,613 | $ 10,447 | $ 9,897 | $ 8,018 | $ 6,738 |
Portfolio turnover rate E | 146% | 217% | 179% | 163% | 99% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 14.23 | $ 14.23 | $ 11.42 | $ 9.26 | $ 10.35 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.13) | (.10) | (.12) | (.10) | (.03) |
Net realized and unrealized gain (loss) | 4.36 | .93 | 2.93 | 2.26 | (1.06) |
Total from investment operations | 4.23 | .83 | 2.81 | 2.16 | (1.09) |
Distributions from net realized gain | (1.61) | (.83) | - | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 16.85 | $ 14.23 | $ 14.23 | $ 11.42 | $ 9.26 |
Total Return A, B | 32.61% | 7.11% | 24.61% | 23.33% | (10.53)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.09% | 2.13% | 2.15% | 2.21% | 2.38% |
Expenses net of fee waivers, if any | 2.09% | 2.13% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.07% | 2.12% | 2.13% | 2.14% | 2.15% |
Net investment income (loss) | (.88)% | (.72)% | (.90)% | (.90)% | (.33)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 2,389 | $ 2,577 | $ 3,170 | $ 3,643 | $ 3,550 |
Portfolio turnover rate E | 146% | 217% | 179% | 163% | 99% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 14.27 | $ 14.26 | $ 11.44 | $ 9.27 | $ 10.37 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.12) | (.09) | (.12) | (.10) | (.03) |
Net realized and unrealized gain (loss) | 4.37 | .93 | 2.94 | 2.27 | (1.07) |
Total from investment operations | 4.25 | .84 | 2.82 | 2.17 | (1.10) |
Distributions from net realized gain | (1.62) | (.83) | - | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 16.90 | $ 14.27 | $ 14.26 | $ 11.44 | $ 9.27 |
Total Return A, B | 32.68% | 7.17% | 24.65% | 23.41% | (10.61)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.04% | 2.09% | 2.11% | 2.12% | 2.38% |
Expenses net of fee waivers, if any | 2.04% | 2.09% | 2.11% | 2.12% | 2.15% |
Expenses net of all reductions | 2.02% | 2.08% | 2.09% | 2.11% | 2.15% |
Net investment income (loss) | (.83)% | (.68)% | (.86)% | (.87)% | (.33)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 17,176 | $ 13,507 | $ 7,341 | $ 9,288 | $ 2,955 |
Portfolio turnover rate E | 146% | 217% | 179% | 163% | 99% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 17.04 | $ 16.72 | $ 13.27 | $ 10.66 | $ 11.84 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .04 | .07 | .03 | .02 | .06 |
Net realized and unrealized gain (loss) | 5.32 | 1.13 | 3.42 | 2.60 | (1.20) |
Total from investment operations | 5.36 | 1.20 | 3.45 | 2.62 | (1.14) |
Distributions from net investment income | - | (.05) | - | (.01) | (.04) |
Distributions from net realized gain | (1.68) | (.83) | - | - | - |
Total distributions | (1.68) | (.88) | - | (.01) | (.04) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 20.72 | $ 17.04 | $ 16.72 | $ 13.27 | $ 10.66 |
Total Return A | 34.06% | 8.33% | 26.00% | 24.62% | (9.59)% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .97% | 1.00% | 1.03% | 1.09% | 1.15% |
Expenses net of fee waivers, if any | .97% | 1.00% | 1.03% | 1.09% | 1.15% |
Expenses net of all reductions | .96% | .99% | 1.01% | 1.08% | 1.15% |
Net investment income (loss) | .24% | .41% | .22% | .16% | .67% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 13,044 | $ 9,984 | $ 9,406 | $ 9,013 | $ 5,990 |
Portfolio turnover rate D | 146% | 217% | 179% | 163% | 99% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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.
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. 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 and distributions from the Fidelity Central Funds are accrued as earned. 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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, 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 | $ 18,161,487 |
Gross unrealized depreciation | (389,193) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 17,772,294 |
|
|
Tax Cost | $ 77,527,341 |
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 | $ 3,048,702 |
Undistributed long-term capital gain | $ 2,347,434 |
Net unrealized appreciation (depreciation) | $ 17,772,233 |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 780,691 | $ 82,290 |
Long-term Capital Gains | 5,908,205 | 2,716,672 |
Total | $ 6,688,896 | $ 2,798,962 |
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 net asset value 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 $110,509,724 and $101,562,267, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .55% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 77,885 | $ 3,866 |
Class T | .25% | .25% | 61,512 | 1,386 |
Class B | .75% | .25% | 23,988 | 18,176 |
Class C | .75% | .25% | 144,561 | 31,768 |
|
|
| $ 307,946 | $ 55,196 |
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 | $ 28,360 |
Class T | 6,367 |
Class B* | 1,558 |
Class C* | 1,611 |
| $ 37,896 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 84,940 | .27 |
Class T | 38,120 | .31 |
Class B | 7,230 | .30 |
Class C | 35,745 | .25 |
Institutional Class | 18,621 | .19 |
| $ 184,656 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $3,020 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $161 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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 $2,902. 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 $2,473,333. The weighted average interest rate was .64%. The interest expense amounted to $264 under the bank borrowing program. At period end, there were no bank borrowings outstanding.
9. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $10,885 for the period.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net investment income |
|
|
Class A | $ - | $ 44,402 |
Class T | - | 11,934 |
Institutional Class | - | 25,954 |
Total | $ - | $ 82,290 |
From net realized gain |
|
|
Class A | $ 2,760,192 | $ 1,117,697 |
Class T | 1,156,068 | 525,372 |
Class B | 276,657 | 185,641 |
Class C | 1,553,543 | 423,815 |
Institutional Class | 942,436 | 464,147 |
Total | $ 6,688,896 | $ 2,716,672 |
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 1,258,652 | 717,075 | $ 22,336,491 | $ 11,323,395 |
Reinvestment of distributions | 153,097 | 76,740 | 2,439,799 | 1,020,698 |
Shares redeemed | (736,031) | (622,172) | (12,466,044) | (9,280,575) |
Net increase (decrease) | 675,718 | 171,643 | $ 12,310,246 | $ 3,063,518 |
Class T |
|
|
|
|
Shares sold | 212,852 | 117,936 | $ 3,581,408 | $ 1,759,305 |
Reinvestment of distributions | 73,194 | 40,961 | 1,114,024 | 523,233 |
Shares redeemed | (121,300) | (129,403) | (1,949,037) | (1,880,946) |
Net increase (decrease) | 164,746 | 29,494 | $ 2,746,395 | $ 401,592 |
Class B |
|
|
|
|
Shares sold | 14,257 | 21,180 | $ 220,513 | $ 276,635 |
Reinvestment of distributions | 16,131 | 13,190 | 223,127 | 154,193 |
Shares redeemed | (69,701) | (76,089) | (1,023,777) | (1,037,384) |
Net increase (decrease) | (39,313) | (41,719) | $ (580,137) | $ (606,556) |
Class C |
|
|
|
|
Shares sold | 555,264 | 581,986 | $ 8,601,818 | $ 8,055,378 |
Reinvestment of distributions | 102,005 | 33,472 | 1,411,723 | 392,295 |
Shares redeemed | (587,502) | (183,759) | (8,790,601) | (2,469,033) |
Net increase (decrease) | 69,767 | 431,699 | $ 1,222,940 | $ 5,978,640 |
Annual Report
Notes to Financial Statements - continued
11. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Institutional Class |
|
|
|
|
Shares sold | 404,001 | 1,043,471 | $ 7,620,195 | $ 16,050,433 |
Reinvestment of distributions | 46,665 | 13,483 | 784,588 | 188,283 |
Shares redeemed | (407,175) | (1,033,551) | (7,239,713) | (16,740,297) |
Net increase (decrease) | 43,491 | 23,403 | $ 1,165,070 | $ (501,581) |
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 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, 2013 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) | 15.22% | 7.55% | 4.02% |
Class T (incl. 3.50% sales charge) | 17.70% | 7.80% | 4.00% |
Class B (incl. contingent deferred | 16.44% | 7.73% | 4.09% |
Class C (incl. contingent deferred | 20.34% | 8.02% | 3.85% |
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, 2003, 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
Comments from Stephen Barwikowski, who became sole Portfolio Manager of Fidelity Advisor® Electronics Fund on January 30, 2013: For the year, the fund's Class A, Class T, Class B and Class C shares returned 22.25%, 21.97%, 21.44% and 21.34%, respectively (excluding sales charges), about in line with the 21.44% return of the MSCI® U.S. IMI Semiconductors & Semiconductor Equipment 25-50 Index but lagging the S&P 500®. While chip stocks, which make up the vast majority of the MSCI index, did well on an absolute basis during the period, there were pockets of weakness in some major components, resulting in the industry's underperformance versus the broader market. Stocks in the semiconductor and semi equipment space are extremely cyclical and react strongly to shifting supply and demand, so a lot of my work is focused on determining where we are with respect to the cyclical forces affecting these industries. Beyond that, I want to identify which companies have the products and management teams that best position them to take advantage of broader industry cycles. During the period, I was correct in my view that companies tied to the personal computer industry would remain challenged by longer-term erosion of PC demand. In fact, the fund's biggest contributor versus the MSCI index by a wide margin was benchmark heavyweight Intel, the dominant supplier of PC chips. Intel aided our results because it performed poorly and the fund carried a large underweighting here. With that said, later in the period, as the stock market pushed higher and valuations became relatively rich, in my view, I added to the fund's exposure to higher-quality companies and raised its cash level. As part of this tilt toward quality, I significantly increased the fund's stake in Intel, making it the fund's largest holding at period end, although it remained a sizable underweighting versus the MSCI index. Other relative contributors included a large overweighting in Freescale Semiconductor - a position I scaled back considerably - and a non-index stake in Dutch holding NXP Semiconductors. Conversely, I'd say the most disappointing aspect of the fund's positioning was its emphasis on stocks tied to the mobile communications industry. In particular, the high end of the smartphone market appeared to be getting saturated, and this was reflected in slower earnings and revenue growth at companies that make components for these phones - including Broadcom, the fund's largest holding during the period. Although Broadcom's stock plummeted in July on disappointing quarterly sales, I remained bullish on its longer-term prospects. Elsewhere, not owning strong-performing benchmark component Cree, which manufactures semiconductors used in light-emitting diode (LED) products, worked against us. This stock seemed expensive to me from the start, and even more so as it kept climbing during the period. A sizable underweighting in leading semiconductor equipment maker and index component Applied Materials, which I sold in February, hurt as well. I thought the market overvalued this stock and chip equipment stocks in general, but I was wrong in both cases.
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, 2013 to July 31, 2013).
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 | $ 1,165.90 | $ 7.52 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.85 | $ 7.00 |
Class T | 1.65% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,164.50 | $ 8.86 |
HypotheticalA |
| $ 1,000.00 | $ 1,016.61 | $ 8.25 |
Class B | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,162.20 | $ 11.53 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Class C | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,161.10 | $ 11.52 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Institutional Class | 1.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,167.20 | $ 6.18 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Intel Corp. | 10.0 | 8.4 |
Broadcom Corp. Class A | 8.5 | 9.6 |
Intersil Corp. Class A | 4.7 | 4.8 |
Altera Corp. | 4.6 | 7.7 |
QUALCOMM, Inc. | 4.3 | 1.6 |
Texas Instruments, Inc. | 3.7 | 2.7 |
Jabil Circuit, Inc. | 3.7 | 2.9 |
Maxim Integrated Products, Inc. | 3.5 | 0.5 |
ON Semiconductor Corp. | 3.4 | 2.9 |
Analog Devices, Inc. | 3.2 | 1.0 |
| 49.6 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Semiconductors & Semiconductor Equipment | 71.3% |
|
![]() | Electronic Equipment & Components | 8.8% |
|
![]() | Communications Equipment | 7.6% |
|
![]() | Computers & Peripherals | 3.8% |
|
![]() | Internet Software & Services | 0.9% |
|
![]() | All Others* | 7.6% |
|
As of January 31, 2013 | |||
![]() | Semiconductors & Semiconductor Equipment | 78.6% |
|
![]() | Electronic Equipment & Components | 10.6% |
|
![]() | Computers & Peripherals | 4.7% |
|
![]() | Communications Equipment | 2.8% |
|
![]() | Software | 0.1% |
|
![]() | All Others* | 3.2% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Electronics Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 92.7% | |||
Shares | Value | ||
BIOTECHNOLOGY - 0.0% | |||
Biotechnology - 0.0% | |||
Arrowhead Research Corp. warrants 5/21/17 (a) | 64,879 | $ 1 | |
COMMERCIAL SERVICES & SUPPLIES - 0.3% | |||
Office Services & Supplies - 0.3% | |||
West Corp. | 2,298 | 50,464 | |
COMMUNICATIONS EQUIPMENT - 7.6% | |||
Communications Equipment - 7.6% | |||
Aruba Networks, Inc. (a) | 3,422 | 60,843 | |
BlackBerry Ltd. (a) | 5,352 | 47,258 | |
F5 Networks, Inc. (a) | 672 | 58,975 | |
Juniper Networks, Inc. (a) | 4,787 | 103,734 | |
NETGEAR, Inc. (a) | 1,600 | 47,696 | |
Polycom, Inc. (a) | 4,422 | 42,274 | |
QUALCOMM, Inc. | 10,714 | 691,589 | |
Radware Ltd. (a) | 4,266 | 58,444 | |
Riverbed Technology, Inc. (a) | 6,705 | 104,866 | |
| 1,215,679 | ||
COMPUTERS & PERIPHERALS - 3.8% | |||
Computer Hardware - 2.2% | |||
Apple, Inc. | 657 | 297,293 | |
Dell, Inc. | 3,800 | 48,146 | |
| 345,439 | ||
Computer Storage & Peripherals - 1.6% | |||
EMC Corp. | 6,248 | 163,385 | |
Fusion-io, Inc. (a) | 2,889 | 41,659 | |
SanDisk Corp. | 865 | 47,679 | |
| 252,723 | ||
TOTAL COMPUTERS & PERIPHERALS | 598,162 | ||
ELECTRONIC EQUIPMENT & COMPONENTS - 8.8% | |||
Electronic Components - 1.5% | |||
Aeroflex Holding Corp. (a) | 27,902 | 209,823 | |
Corning, Inc. | 374 | 5,681 | |
Universal Display Corp. (a) | 800 | 23,160 | |
| 238,664 | ||
Electronic Manufacturing Services - 5.8% | |||
Flextronics International Ltd. (a) | 6,412 | 55,528 | |
Jabil Circuit, Inc. | 25,389 | 583,693 | |
TTM Technologies, Inc. (a) | 30,644 | 283,151 | |
Viasystems Group, Inc. (a) | 12 | 178 | |
| 922,550 | ||
Technology Distributors - 1.5% | |||
Arrow Electronics, Inc. (a) | 3,328 | 151,923 | |
Avnet, Inc. (a) | 2,185 | 82,309 | |
| 234,232 | ||
TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 1,395,446 | ||
| |||
Shares | Value | ||
INTERNET SOFTWARE & SERVICES - 0.9% | |||
Internet Software & Services - 0.9% | |||
Demand Media, Inc. (a) | 7,770 | $ 50,816 | |
Google, Inc. Class A (a) | 53 | 47,043 | |
Rackspace Hosting, Inc. (a) | 868 | 39,312 | |
Velti PLC (a) | 7,870 | 8,893 | |
| 146,064 | ||
IT SERVICES - 0.7% | |||
Data Processing & Outsourced Services - 0.7% | |||
EVERTEC, Inc. | 1,651 | 39,459 | |
VeriFone Systems, Inc. (a) | 3,843 | 73,286 | |
| 112,745 | ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 70.0% | |||
Semiconductor Equipment - 0.6% | |||
GT Advanced Technologies, Inc. (a)(d) | 8,481 | 44,016 | |
Lam Research Corp. (a) | 342 | 16,833 | |
Teradyne, Inc. (a) | 2,437 | 40,186 | |
| 101,035 | ||
Semiconductors - 69.4% | |||
Advanced Micro Devices, Inc. (a)(d) | 27,506 | 103,698 | |
Altera Corp. | 20,760 | 738,226 | |
Analog Devices, Inc. | 10,476 | 517,095 | |
Avago Technologies Ltd. | 11,480 | 421,086 | |
Broadcom Corp. Class A | 49,364 | 1,360,965 | |
Cypress Semiconductor Corp. | 12,500 | 159,625 | |
Entropic Communications, Inc. (a) | 6,904 | 30,585 | |
EZchip Semiconductor Ltd. (a) | 1,326 | 41,968 | |
Freescale Semiconductor Holdings I Ltd. (a)(d) | 7,351 | 115,411 | |
Inphi Corp. (a) | 7,530 | 87,800 | |
Intel Corp. | 68,108 | 1,586,915 | |
Intermolecular, Inc. (a) | 6,205 | 39,216 | |
Intersil Corp. Class A | 72,865 | 743,952 | |
LSI Corp. | 31,832 | 247,653 | |
M/A-COM Technology Solutions, Inc. (a) | 1,812 | 29,046 | |
Marvell Technology Group Ltd. | 19,391 | 251,501 | |
Maxim Integrated Products, Inc. | 19,256 | 550,722 | |
MediaTek, Inc. | 4,000 | 48,008 | |
Microchip Technology, Inc. (d) | 6,464 | 256,879 | |
Micron Technology, Inc. (a) | 30,231 | 400,561 | |
Motech Industries, Inc. (a) | 1 | 1 | |
NVIDIA Corp. | 22,583 | 325,873 | |
NXP Semiconductors NV (a) | 7,118 | 232,403 | |
O2Micro International Ltd. sponsored ADR (a) | 9,835 | 31,669 | |
Omnivision Technologies, Inc. (a) | 5,960 | 96,910 | |
ON Semiconductor Corp. (a) | 65,035 | 535,888 | |
PMC-Sierra, Inc. (a) | 41,906 | 276,789 | |
RDA Microelectronics, Inc. sponsored ADR | 4,409 | 49,645 | |
Samsung Electronics Co. Ltd. | 78 | 88,849 | |
Skyworks Solutions, Inc. (a) | 20,428 | 490,681 | |
Common Stocks - continued | |||
Shares | Value | ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - CONTINUED | |||
Semiconductors - continued | |||
Spansion, Inc. Class A (a) | 700 | $ 8,260 | |
Texas Instruments, Inc. | 15,091 | 591,567 | |
Trident Microsystems, Inc. (a) | 19 | 0 | |
Volterra Semiconductor Corp. (a) | 4,731 | 71,296 | |
Xilinx, Inc. | 10,970 | 512,189 | |
| 11,042,932 | ||
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | 11,143,967 | ||
SOFTWARE - 0.6% | |||
Application Software - 0.3% | |||
Nuance Communications, Inc. (a) | 3,075 | 57,687 | |
Systems Software - 0.3% | |||
Allot Communications Ltd. (a) | 3,157 | 46,187 | |
TOTAL SOFTWARE | 103,874 | ||
TOTAL COMMON STOCKS (Cost $16,164,095) |
|
Convertible Bonds - 1.3% | ||||
| Principal |
| ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 1.3% | ||||
Semiconductors - 1.3% | ||||
Micron Technology, Inc.: | ||||
1.625% 2/15/33 (e) | $ 30,000 | 41,250 | ||
1.875% 8/1/31 | 83,000 | 121,803 | ||
3.125% 5/1/32 | 25,000 | 37,547 | ||
TOTAL CONVERTIBLE BONDS (Cost $131,712) | 200,600 |
Money Market Funds - 8.3% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 0.11% (b) | 926,280 | $ 926,280 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 402,720 | 402,720 | |
TOTAL MONEY MARKET FUNDS (Cost $1,329,000) |
| ||
TOTAL INVESTMENT PORTFOLIO - 102.3% (Cost $17,624,807) | 16,296,002 | ||
NET OTHER ASSETS (LIABILITIES) - (2.3)% | (369,380) | ||
NET ASSETS - 100% | $ 15,926,622 |
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) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $41,250 or 0.3% of net assets. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 781 |
Fidelity Securities Lending Cash Central Fund | 3,699 |
Total | $ 4,480 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2013, 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 | $ 14,766,402 | $ 14,766,401 | $ 1 | $ - |
Convertible Bonds | 200,600 | - | 200,600 | - |
Money Market Funds | 1,329,000 | 1,329,000 | - | - |
Total Investments in Securities: | $ 16,296,002 | $ 16,095,401 | $ 200,601 | $ - |
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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $397,490) - See accompanying schedule: Unaffiliated issuers (cost $16,295,807) | $ 14,967,002 |
|
Fidelity Central Funds (cost $1,329,000) | 1,329,000 |
|
Total Investments (cost $17,624,807) |
| $ 16,296,002 |
Cash |
| 42,495 |
Receivable for investments sold | 274,579 | |
Receivable for fund shares sold | 8,429 | |
Dividends receivable | 5,432 | |
Interest receivable | 1,202 | |
Distributions receivable from Fidelity Central Funds | 206 | |
Receivable from investment adviser for expense reductions | 8,221 | |
Other receivables | 376 | |
Total assets | 16,636,942 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 230,507 | |
Payable for fund shares redeemed | 13,808 | |
Accrued management fee | 6,750 | |
Distribution and service plan fees payable | 5,606 | |
Other affiliated payables | 3,779 | |
Audit fees payable | 33,556 | |
Custodian fees payable | 13,594 | |
Collateral on securities loaned, at value | 402,720 | |
Total liabilities | 710,320 | |
|
|
|
Net Assets | $ 15,926,622 | |
Net Assets consist of: |
| |
Paid in capital | $ 24,626,150 | |
Accumulated net investment loss | (32,651) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (7,338,065) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (1,328,812) | |
Net Assets | $ 15,926,622 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 10.33 | |
|
|
|
Maximum offering price per share (100/94.25 of $10.33) | $ 10.96 | |
Class T: | $ 10.05 | |
|
|
|
Maximum offering price per share (100/96.50 of $10.05) | $ 10.41 | |
Class B: | $ 9.46 | |
|
|
|
Class C: | $ 9.44 | |
|
|
|
Institutional Class: | $ 10.68 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Electronics Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 173,006 |
Interest |
| 4,420 |
Income from Fidelity Central Funds |
| 4,480 |
Total income |
| 181,906 |
|
|
|
Expenses | ||
Management fee | $ 77,667 | |
Transfer agent fees | 43,691 | |
Distribution and service plan fees | 66,485 | |
Accounting and security lending fees | 5,562 | |
Custodian fees and expenses | 42,407 | |
Independent trustees' compensation | 100 | |
Registration fees | 55,940 | |
Audit | 45,012 | |
Legal | 95 | |
Miscellaneous | 143 | |
Total expenses before reductions | 337,102 | |
Expense reductions | (113,435) | 223,667 |
Net investment income (loss) | (41,761) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | (680,074) | |
Foreign currency transactions | (378) | |
Total net realized gain (loss) |
| (680,452) |
Change in net unrealized appreciation (depreciation) on: Investment securities | 3,203,680 | |
Assets and liabilities in foreign currencies | (7) | |
Total change in net unrealized appreciation (depreciation) |
| 3,203,673 |
Net gain (loss) | 2,523,221 | |
Net increase (decrease) in net assets resulting from operations | $ 2,481,460 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (41,761) | $ (132,080) |
Net realized gain (loss) | (680,452) | (811,690) |
Change in net unrealized appreciation (depreciation) | 3,203,673 | (927,864) |
Net increase (decrease) in net assets resulting from operations | 2,481,460 | (1,871,634) |
Share transactions - net increase (decrease) | (3,915,862) | 925,003 |
Redemption fees | 1,278 | 775 |
Total increase (decrease) in net assets | (1,433,124) | (945,856) |
|
|
|
Net Assets | ||
Beginning of period | 17,359,746 | 18,305,602 |
End of period (including accumulated net investment loss of $32,651 and accumulated net investment loss of $91,150, respectively) | $ 15,926,622 | $ 17,359,746 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 8.45 | $ 8.93 | $ 7.14 | $ 6.59 | $ 6.79 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.01) | (.05) | (.04) | (.01) | .04 |
Net realized and unrealized gain (loss) | 1.89 | (.43) | 1.83 | .59 | (.24) |
Total from investment operations | 1.88 | (.48) | 1.79 | .58 | (.20) |
Distributions from net investment income | - | - | - | (.03) | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 10.33 | $ 8.45 | $ 8.93 | $ 7.14 | $ 6.59 |
Total Return A, B | 22.25% | (5.38)% | 25.07% | 8.74% | (2.95)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.18% | 1.88% | 1.89% | 1.97% | 2.44% |
Expenses net of fee waivers, if any | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% |
Expenses net of all reductions | 1.37% | 1.39% | 1.39% | 1.39% | 1.40% |
Net investment income (loss) | (.07)% | (.53)% | (.40)% | (.15)% | .69% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 5,833 | $ 6,000 | $ 7,537 | $ 5,394 | $ 5,433 |
Portfolio turnover rate E | 179% | 140% | 166% | 87% | 92% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 8.24 | $ 8.73 | $ 7.00 | $ 6.46 | $ 6.67 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.03) | (.07) | (.06) | (.03) | .02 |
Net realized and unrealized gain (loss) | 1.84 | (.42) | 1.79 | .58 | (.23) |
Total from investment operations | 1.81 | (.49) | 1.73 | .55 | (.21) |
Distributions from net investment income | - | - | - | (.01) | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 10.05 | $ 8.24 | $ 8.73 | $ 7.00 | $ 6.46 |
Total Return A, B | 21.97% | (5.61)% | 24.71% | 8.50% | (3.15)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.48% | 2.23% | 2.25% | 2.26% | 2.77% |
Expenses net of fee waivers, if any | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% |
Expenses net of all reductions | 1.62% | 1.64% | 1.64% | 1.64% | 1.65% |
Net investment income (loss) | (.32)% | (.78)% | (.65)% | (.40)% | .44% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 3,756 | $ 3,909 | $ 4,476 | $ 3,862 | $ 4,195 |
Portfolio turnover rate E | 179% | 140% | 166% | 87% | 92% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 7.79 | $ 8.29 | $ 6.69 | $ 6.19 | $ 6.43 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.07) | (.10) | (.09) | (.06) | - G |
Net realized and unrealized gain (loss) | 1.74 | (.40) | 1.69 | .56 | (.24) |
Total from investment operations | 1.67 | (.50) | 1.60 | .50 | (.24) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 9.46 | $ 7.79 | $ 8.29 | $ 6.69 | $ 6.19 |
Total Return A, B | 21.44% | (6.03)% | 23.92% | 8.08% | (3.73)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.95% | 2.70% | 2.76% | 2.73% | 3.22% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.12% | 2.15% | 2.14% | 2.15% | 2.15% |
Net investment income (loss) | (.82)% | (1.29)% | (1.15)% | (.90)% | (.06)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 306 | $ 459 | $ 691 | $ 1,073 | $ 1,197 |
Portfolio turnover rate E | 179% | 140% | 166% | 87% | 92% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 7.78 | $ 8.29 | $ 6.68 | $ 6.18 | $ 6.42 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.07) | (.10) | (.09) | (.06) | - G |
Net realized and unrealized gain (loss) | 1.73 | (.41) | 1.70 | .56 | (.24) |
Total from investment operations | 1.66 | (.51) | 1.61 | .50 | (.24) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 9.44 | $ 7.78 | $ 8.29 | $ 6.68 | $ 6.18 |
Total Return A, B | 21.34% | (6.15)% | 24.10% | 8.09% | (3.74)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.93% | 2.65% | 2.70% | 2.72% | 3.21% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.12% | 2.14% | 2.14% | 2.14% | 2.15% |
Net investment income (loss) | (.82)% | (1.28)% | (1.15)% | (.90)% | (.06)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 3,157 | $ 3,721 | $ 3,836 | $ 3,256 | $ 3,016 |
Portfolio turnover rate E | 179% | 140% | 166% | 87% | 92% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 8.72 | $ 9.19 | $ 7.33 | $ 6.75 | $ 6.94 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .02 | (.02) | (.01) | .01 | .05 |
Net realized and unrealized gain (loss) | 1.94 | (.45) | 1.87 | .60 | (.24) |
Total from investment operations | 1.96 | (.47) | 1.86 | .61 | (.19) |
Distributions from net investment income | - | - | - | (.03) | - |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 10.68 | $ 8.72 | $ 9.19 | $ 7.33 | $ 6.75 |
Total Return A | 22.48% | (5.11)% | 25.38% | 9.10% | (2.74)% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | 1.86% | 1.55% | 1.42% | 1.64% | 2.16% |
Expenses net of fee waivers, if any | 1.15% | 1.15% | 1.15% | 1.15% | 1.15% |
Expenses net of all reductions | 1.12% | 1.14% | 1.14% | 1.14% | 1.15% |
Net investment income (loss) | .18% | (.28)% | (.15)% | .11% | .94% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 2,874 | $ 3,271 | $ 1,765 | $ 645 | $ 367 |
Portfolio turnover rate D | 179% | 140% | 166% | 87% | 92% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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, changes in interest rates and credit quality. 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.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. For corporate bonds, pricing vendors utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type as well as broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Investment Valuation - continued
valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
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, 2013, 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. 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 and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to market discount, net operating losses, capital loss carryforwards, expiring capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
Annual Report
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 | $ 602,294 |
Gross unrealized depreciation | (2,171,412) |
Net unrealized appreciation (depreciation) on securities and other investments | $ (1,569,118) |
|
|
Tax Cost | $ 17,865,120 |
The tax-based components of distributable earnings as of period end were as follows:
Capital loss carryforward | $ (6,174,503) |
Net unrealized appreciation (depreciation) | $ (1,569,125) |
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 |
|
2016 | $ (310,663) |
2017 | (5,202,838) |
Total with expiration | $ (5,513,501) |
No expiration |
|
Long-term | (661,002) |
Total capital loss carryforward | $ (6,174,503) |
The Fund intends to elect to defer to its fiscal year ending July 31, 2014, approximately $922,950 of capital losses recognized during the period November 1, 2012 to July 31, 2013.
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 net asset value 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 $24,578,957 and $29,174,943, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .55% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the
Annual Report
Notes to Financial Statements - continued
5. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan Fees - continued
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% | $ 13,542 | $ 583 |
Class T | .25% | .25% | 17,534 | 368 |
Class B | .75% | .25% | 3,638 | 2,751 |
Class C | .75% | .25% | 31,771 | 4,778 |
|
|
| $ 66,485 | $ 8,480 |
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 | $ 3,703 |
Class T | 1,953 |
Class B* | 1,547 |
Class C* | 300 |
| $ 7,503 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 16,578 | .31 |
Class T | 12,936 | .37 |
Class B | 1,121 | .31 |
Class C | 9,864 | .31 |
Institutional Class | 3,192 | .21 |
| $ 43,691 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $2,980 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $34 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
Annual Report
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, including 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 $3,699. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense | Reimbursement |
Class A | 1.40% | $ 42,211 |
Class T | 1.65% | 29,046 |
Class B | 2.15% | 2,922 |
Class C | 2.15% | 24,636 |
Institutional Class | 1.15% | 10,839 |
|
| $ 109,654 |
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $3,781 for the period.
9. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 137,609 | 461,275 | $ 1,216,436 | $ 4,417,052 |
Shares redeemed | (283,233) | (595,271) | (2,448,434) | (4,948,629) |
Net increase (decrease) | (145,624) | (133,996) | $ (1,231,998) | $ (531,577) |
Class T |
|
|
|
|
Shares sold | 112,240 | 90,140 | $ 987,721 | $ 795,072 |
Shares redeemed | (212,855) | (128,587) | (1,812,736) | (1,079,505) |
Net increase (decrease) | (100,615) | (38,447) | $ (825,015) | $ (284,433) |
Class B |
|
|
|
|
Shares sold | 678 | 10,206 | $ 4,830 | $ 91,605 |
Shares redeemed | (27,225) | (34,653) | (220,563) | (276,903) |
Net increase (decrease) | (26,547) | (24,447) | $ (215,733) | $ (185,298) |
Class C |
|
|
|
|
Shares sold | 96,174 | 171,249 | $ 799,164 | $ 1,492,502 |
Shares redeemed | (240,043) | (156,060) | (1,893,943) | (1,218,105) |
Net increase (decrease) | (143,869) | 15,189 | $ (1,094,779) | $ 274,397 |
Institutional Class |
|
|
|
|
Shares sold | 228,631 | 380,436 | $ 2,347,005 | $ 3,355,122 |
Shares redeemed | (334,852) | (197,302) | (2,895,342) | (1,703,208) |
Net increase (decrease) | (106,221) | 183,134 | $ (548,337) | $ 1,651,914 |
Annual Report
Notes to Financial Statements - continued
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
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, 2013 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) C | 13.99% | -1.69% | 12.34% |
Class T (incl. 3.50% sales charge) C | 16.48% | -1.44% | 12.37% |
Class B (incl. contingent deferred sales charge) A,C | 15.04% | -1.60% | 12.41% |
Class C (incl. contingent deferred sales charge) B,C | 19.08% | -1.26% | 12.19% |
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, 2003, 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
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 20.94%, 20.70%, 20.04% and 20.08%, respectively (excluding sales charges), outpacing the 19.36% return of the MSCI® U.S. IMI Energy 25-50 Index but falling short of the S&P 500®. The boom in domestic production of oil and natural gas brought about by successful new drilling techniques in North American shale beds continued to positively affect the energy sector. As part of my investment approach, I've been concentrating on owning companies I believe can help bring about U.S. energy independence, including specific firms in the domestic drilling, pipeline and refinery businesses. I look to own companies with some kind of competitive advantage that also are growing earnings and whose stock is selling at a reasonable value. Relative to the MSCI sector benchmark, stock picking was the primary driver of the fund's outperformance. I did well with investments in the outperforming E&P group, where firms such as Pioneer Natural Resources and Cabot Oil & Gas both posted gains of more than 70% and strongly contributed to relative performance. Although I held a sizable position in Exxon Mobil in an effort to maintain balanced risk characteristics in the fund, I remained significantly underweighted there, and the stock underperformed, making it the fund's largest relative contributor for the year. Among refiners, Tesoro was a big plus, as its stock price doubled on a smart acquisition and strong profit margins. Conversely, the fund was hurt by picks in oil/gas equipment and services, where National Oilwell Varco - one of the fund's largest holdings - fell under profit pressure. A non-index stake in Canada-based integrated oil/gas firm Suncor Energy and an overweighting in E&P firm Concho Resources also detracted.
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, 2013 to July 31, 2013).
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 | 1.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,067.90 | $ 5.90 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.09 | $ 5.76 |
Class T | 1.35% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,066.80 | $ 6.92 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.10 | $ 6.76 |
Class B | 1.92% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,063.90 | $ 9.83 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.27 | $ 9.59 |
Class C | 1.88% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,064.00 | $ 9.62 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.47 | $ 9.39 |
Institutional Class | .88% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,069.10 | $ 4.51 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.43 | $ 4.41 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Exxon Mobil Corp. | 14.8 | 9.7 |
Chevron Corp. | 7.9 | 9.7 |
Halliburton Co. | 5.4 | 3.5 |
National Oilwell Varco, Inc. | 4.1 | 4.2 |
EOG Resources, Inc. | 4.0 | 3.1 |
Anadarko Petroleum Corp. | 3.9 | 3.4 |
Schlumberger Ltd. | 3.8 | 2.9 |
Occidental Petroleum Corp. | 3.5 | 6.2 |
Continental Resources, Inc. | 2.8 | 0.4 |
Suncor Energy, Inc. | 2.7 | 2.4 |
| 52.9 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Oil, Gas & Consumable Fuels | 74.5% |
|
![]() | Energy Equipment & Services | 21.8% |
|
![]() | Hotels, Restaurants & Leisure | 0.0% |
|
![]() | All Others* | 3.7% |
|
As of January 31, 2013 | |||
![]() | Oil, Gas & Consumable Fuels | 74.6% |
|
![]() | Energy Equipment & Services | 23.2% |
|
![]() | Chemicals | 1.0% |
|
![]() | Metals & Mining | 0.3% |
|
![]() | Hotels, Restaurants & Leisure | 0.0% |
|
![]() | All Others* | 0.9% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Energy Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 96.3% | |||
Shares | Value | ||
ENERGY EQUIPMENT & SERVICES - 21.8% | |||
Oil & Gas Drilling - 3.7% | |||
Atwood Oceanics, Inc. (a) | 12,300 | $ 692,982 | |
Ensco PLC Class A | 321,735 | 18,448,285 | |
Noble Corp. | 109,898 | 4,198,104 | |
Northern Offshore Ltd. | 328,887 | 469,934 | |
Vantage Drilling Co. (a) | 1,049,730 | 1,931,503 | |
| 25,740,808 | ||
Oil & Gas Equipment & Services - 18.1% | |||
Cameron International Corp. (a) | 225,041 | 13,344,931 | |
Core Laboratories NV | 37,382 | 5,592,347 | |
Dril-Quip, Inc. (a) | 37,000 | 3,363,670 | |
FMC Technologies, Inc. (a) | 55,100 | 2,936,830 | |
Geospace Technologies Corp. (a) | 11,032 | 820,891 | |
Halliburton Co. | 825,567 | 37,307,373 | |
National Oilwell Varco, Inc. | 400,707 | 28,117,610 | |
Oceaneering International, Inc. | 24,473 | 1,984,516 | |
Schlumberger Ltd. | 322,164 | 26,201,598 | |
Superior Energy Services, Inc. (a) | 83,484 | 2,138,860 | |
Total Energy Services, Inc. | 53,200 | 788,858 | |
Weatherford International Ltd. (a) | 117,390 | 1,638,764 | |
| 124,236,248 | ||
TOTAL ENERGY EQUIPMENT & SERVICES | 149,977,056 | ||
HOTELS, RESTAURANTS & LEISURE - 0.0% | |||
Casinos & Gaming - 0.0% | |||
Icahn Enterprises LP rights (a) | 66,553 | 1 | |
OIL, GAS & CONSUMABLE FUELS - 74.5% | |||
Coal & Consumable Fuels - 0.6% | |||
Alpha Natural Resources, Inc. (a) | 95,000 | 516,800 | |
Peabody Energy Corp. | 204,914 | 3,393,376 | |
| 3,910,176 | ||
Integrated Oil & Gas - 34.4% | |||
Chevron Corp. | 430,970 | 54,254,813 | |
Exxon Mobil Corp. | 1,089,641 | 102,153,842 | |
Hess Corp. | 217,261 | 16,177,254 | |
InterOil Corp. (a)(d) | 40,000 | 3,428,000 | |
Murphy Oil Corp. | 273,112 | 18,495,145 | |
Occidental Petroleum Corp. | 270,348 | 24,074,489 | |
Suncor Energy, Inc. | 585,860 | 18,515,252 | |
| 237,098,795 | ||
Oil & Gas Exploration & Production - 30.6% | |||
Anadarko Petroleum Corp. | 299,429 | 26,505,455 | |
Bankers Petroleum Ltd. (a) | 966,600 | 2,804,467 | |
| |||
Shares | Value | ||
Bonanza Creek Energy, Inc. (a) | 84,482 | $ 3,441,797 | |
BPZ Energy, Inc. (a) | 221,964 | 534,933 | |
Cabot Oil & Gas Corp. | 172,486 | 13,077,889 | |
Canadian Natural Resources Ltd. | 53,900 | 1,670,370 | |
Cimarex Energy Co. | 182,233 | 13,928,068 | |
Cobalt International Energy, Inc. (a) | 248,967 | 7,182,698 | |
Concho Resources, Inc. (a) | 58,894 | 5,282,203 | |
Continental Resources, Inc. (a) | 209,279 | 19,316,452 | |
EOG Resources, Inc. | 186,729 | 27,167,202 | |
EPL Oil & Gas, Inc. (a) | 72,660 | 2,336,746 | |
EQT Corp. | 167,046 | 14,449,479 | |
Gulfport Energy Corp. (a) | 94,325 | 5,018,090 | |
Halcon Resources Corp. (a) | 300,000 | 1,644,000 | |
Kosmos Energy Ltd. (a) | 60,000 | 633,600 | |
Marathon Oil Corp. | 444,497 | 16,161,911 | |
Noble Energy, Inc. | 286,108 | 17,878,889 | |
Northern Oil & Gas, Inc. (a) | 204,993 | 2,707,958 | |
Oasis Petroleum, Inc. (a) | 165,777 | 6,969,265 | |
Painted Pony Petroleum Ltd. Class A (a) | 142,700 | 1,035,065 | |
PDC Energy, Inc. (a) | 46,603 | 2,570,155 | |
Pioneer Natural Resources Co. | 101,019 | 15,633,700 | |
Range Resources Corp. | 11,300 | 893,830 | |
Rosetta Resources, Inc. (a) | 17,081 | 779,064 | |
TAG Oil Ltd. (a)(d) | 77,800 | 290,112 | |
Whiting Petroleum Corp. (a) | 13,900 | 715,433 | |
| 210,628,831 | ||
Oil & Gas Refining & Marketing - 3.6% | |||
Calumet Specialty Products Partners LP | 80,391 | 2,639,237 | |
Marathon Petroleum Corp. | 139,787 | 10,250,581 | |
Northern Tier Energy LP Class A | 44,772 | 1,126,016 | |
Phillips 66 | 132,965 | 8,177,348 | |
Tesoro Corp. | 24,033 | 1,366,276 | |
Valero Energy Corp. | 36,955 | 1,321,880 | |
| 24,881,338 | ||
Oil & Gas Storage & Transport - 5.3% | |||
Atlas Energy LP | 102,750 | 5,421,090 | |
Atlas Pipeline Partners LP | 96,400 | 3,653,560 | |
Magellan Midstream Partners LP | 63,586 | 3,476,882 | |
Markwest Energy Partners LP | 32,400 | 2,274,804 | |
Phillips 66 Partners LP | 9,300 | 301,041 | |
Targa Resources Corp. | 46,147 | 3,145,841 | |
Tesoro Logistics LP | 62,024 | 3,317,664 | |
The Williams Companies, Inc. | 426,351 | 14,568,414 | |
| 36,159,296 | ||
TOTAL OIL, GAS & CONSUMABLE FUELS | 512,678,436 | ||
TOTAL COMMON STOCKS (Cost $577,348,321) |
| ||
Money Market Funds - 3.9% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 0.11% (b) | 24,709,280 | $ 24,709,280 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 2,238,215 | 2,238,215 | |
TOTAL MONEY MARKET FUNDS (Cost $26,947,495) |
| ||
TOTAL INVESTMENT PORTFOLIO - 100.2% (Cost $604,295,816) | 689,602,988 | ||
NET OTHER ASSETS (LIABILITIES) - (0.2)% | (1,138,817) | ||
NET ASSETS - 100% | $ 688,464,171 |
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 | $ 8,692 |
Fidelity Securities Lending Cash Central Fund | 312,654 |
Total | $ 321,346 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2013, 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 | $ 662,655,493 | $ 662,655,492 | $ - | $ 1 |
Money Market Funds | 26,947,495 | 26,947,495 | - | - |
Total Investments in Securities: | $ 689,602,988 | $ 689,602,987 | $ - | $ 1 |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows. (Unaudited) |
United States of America | 87.3% |
Canada | 4.1% |
Curacao | 3.8% |
United Kingdom | 2.7% |
Others (Individually Less Than 1%) | 2.1% |
| 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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $2,191,678) - See accompanying schedule: Unaffiliated issuers (cost $577,348,321) | $ 662,655,493 |
|
Fidelity Central Funds (cost $26,947,495) | 26,947,495 |
|
Total Investments (cost $604,295,816) |
| $ 689,602,988 |
Receivable for investments sold | 10,778,929 | |
Receivable for fund shares sold | 971,435 | |
Dividends receivable | 131,109 | |
Distributions receivable from Fidelity Central Funds | 21,688 | |
Other receivables | 7,472 | |
Total assets | 701,513,621 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 8,926,289 | |
Payable for fund shares redeemed | 1,109,873 | |
Accrued management fee | 314,844 | |
Distribution and service plan fees payable | 249,455 | |
Other affiliated payables | 168,694 | |
Other payables and accrued expenses | 42,080 | |
Collateral on securities loaned, at value | 2,238,215 | |
Total liabilities | 13,049,450 | |
|
|
|
Net Assets | $ 688,464,171 | |
Net Assets consist of: |
| |
Paid in capital | $ 596,636,074 | |
Accumulated net investment loss | (571,396) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 7,092,381 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 85,307,112 | |
Net Assets | $ 688,464,171 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 40.59 | |
|
|
|
Maximum offering price per share (100/94.25 of $40.59) | $ 43.07 | |
Class T: | $ 41.38 | |
|
|
|
Maximum offering price per share (100/96.50 of $41.38) | $ 42.88 | |
Class B: | $ 37.65 | |
|
|
|
Class C: | $ 37.92 | |
|
|
|
Institutional Class: | $ 42.55 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Operations
| Year ended July 31, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 11,241,598 |
Interest |
| 32 |
Income from Fidelity Central Funds |
| 321,346 |
Total income |
| 11,562,976 |
|
|
|
Expenses | ||
Management fee | $ 3,654,426 | |
Transfer agent fees | 1,795,877 | |
Distribution and service plan fees | 2,946,270 | |
Accounting and security lending fees | 239,551 | |
Custodian fees and expenses | 18,612 | |
Independent trustees' compensation | 4,677 | |
Registration fees | 83,931 | |
Audit | 48,976 | |
Legal | 2,389 | |
Interest | 178 | |
Miscellaneous | 5,798 | |
Total expenses before reductions | 8,800,685 | |
Expense reductions | (74,922) | 8,725,763 |
Net investment income (loss) | 2,837,213 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 68,498,795 | |
Foreign currency transactions | (7,491) | |
Total net realized gain (loss) |
| 68,491,304 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 51,387,414 | |
Assets and liabilities in foreign currencies | 279 | |
Total change in net unrealized appreciation (depreciation) |
| 51,387,693 |
Net gain (loss) | 119,878,997 | |
Net increase (decrease) in net assets resulting from operations | $ 122,716,210 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 2,837,213 | $ 3,591,237 |
Net realized gain (loss) | 68,491,304 | (47,752,015) |
Change in net unrealized appreciation (depreciation) | 51,387,693 | (91,975,369) |
Net increase (decrease) in net assets resulting from operations | 122,716,210 | (136,136,147) |
Distributions to shareholders from net investment income | (2,261,471) | (3,625,437) |
Share transactions - net increase (decrease) | (79,579,362) | (71,627,600) |
Redemption fees | 15,482 | 37,255 |
Total increase (decrease) in net assets | 40,890,859 | (211,351,929) |
|
|
|
Net Assets | ||
Beginning of period | 647,573,312 | 858,925,241 |
End of period (including accumulated net investment loss of $571,396 and accumulated net investment loss of $503,083, respectively) | $ 688,464,171 | $ 647,573,312 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 33.71 | $ 40.17 | $ 27.70 | $ 25.82 | $ 50.24 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .23 | .25 | .11 | (.05) | (.04) |
Net realized and unrealized gain (loss) | 6.81 | (6.50) | 12.47 | 1.93 | (17.48) |
Total from investment operations | 7.04 | (6.25) | 12.58 | 1.88 | (17.52) |
Distributions from net investment income | (.16) | (.21) | (.11) | - | - |
Distributions from net realized gain | - | - | - | - | (6.90) |
Total distributions | (.16) | (.21) | (.11) | - | (6.90) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 40.59 | $ 33.71 | $ 40.17 | $ 27.70 | $ 25.82 |
Total Return A, B | 20.94% | (15.58)% | 45.46% | 7.28% | (38.86)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.16% | 1.17% | 1.16% | 1.20% | 1.22% |
Expenses net of fee waivers, if any | 1.16% | 1.17% | 1.16% | 1.20% | 1.22% |
Expenses net of all reductions | 1.15% | 1.17% | 1.16% | 1.19% | 1.21% |
Net investment income (loss) | .61% | .72% | .30% | (.16)% | (.14)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 279,798 | $ 253,332 | $ 331,120 | $ 214,407 | $ 216,595 |
Portfolio turnover rate E | 68% | 88% | 91% | 103% | 148% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 34.40 | $ 41.04 | $ 28.33 | $ 26.47 | $ 51.40 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .15 | .18 | .03 | (.11) | (.10) |
Net realized and unrealized gain (loss) | 6.95 | (6.65) | 12.75 | 1.97 | (17.93) |
Total from investment operations | 7.10 | (6.47) | 12.78 | 1.86 | (18.03) |
Distributions from net investment income | (.12) | (.17) | (.07) | - | - |
Distributions from net realized gain | - | - | - | - | (6.90) |
Total distributions | (.12) | (.17) | (.07) | - | (6.90) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 41.38 | $ 34.40 | $ 41.04 | $ 28.33 | $ 26.47 |
Total Return A, B | 20.70% | (15.77)% | 45.16% | 7.03% | (38.99)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.36% | 1.38% | 1.37% | 1.41% | 1.45% |
Expenses net of fee waivers, if any | 1.36% | 1.38% | 1.37% | 1.41% | 1.45% |
Expenses net of all reductions | 1.35% | 1.38% | 1.37% | 1.41% | 1.45% |
Net investment income (loss) | .40% | .50% | .09% | (.37)% | (.38)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 223,248 | $ 215,488 | $ 290,512 | $ 219,051 | $ 224,376 |
Portfolio turnover rate E | 68% | 88% | 91% | 103% | 148% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 31.41 | $ 37.61 | $ 26.06 | $ 24.48 | $ 48.35 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.05) | (.01) | (.15) | (.25) | (.22) |
Net realized and unrealized gain (loss) | 6.34 | (6.09) | 11.71 | 1.83 | (16.75) |
Total from investment operations | 6.29 | (6.10) | 11.56 | 1.58 | (16.97) |
Distributions from net investment income | (.05) | (.10) | (.01) | - | - |
Distributions from net realized gain | - | - | - | - | (6.90) |
Total distributions | (.05) | (.10) | (.01) | - | (6.90) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 37.65 | $ 31.41 | $ 37.61 | $ 26.06 | $ 24.48 |
Total Return A, B | 20.04% | (16.22)% | 44.38% | 6.45% | (39.31)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.92% | 1.92% | 1.93% | 1.96% | 1.96% |
Expenses net of fee waivers, if any | 1.92% | 1.92% | 1.93% | 1.96% | 1.96% |
Expenses net of all reductions | 1.91% | 1.92% | 1.92% | 1.95% | 1.96% |
Net investment income (loss) | (.15)% | (.03)% | (.46)% | (.92)% | (.89)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 20,551 | $ 28,558 | $ 49,793 | $ 44,330 | $ 47,795 |
Portfolio turnover rate E | 68% | 88% | 91% | 103% | 148% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 31.63 | $ 37.88 | $ 26.25 | $ 24.65 | $ 48.63 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.04) | (.01) | (.15) | (.25) | (.21) |
Net realized and unrealized gain (loss) | 6.38 | (6.13) | 11.80 | 1.85 | (16.87) |
Total from investment operations | 6.34 | (6.14) | 11.65 | 1.60 | (17.08) |
Distributions from net investment income | (.05) | (.11) | (.02) | - | - |
Distributions from net realized gain | - | - | - | - | (6.90) |
Total distributions | (.05) | (.11) | (.02) | - | (6.90) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 37.92 | $ 31.63 | $ 37.88 | $ 26.25 | $ 24.65 |
Total Return A, B | 20.08% | (16.22)% | 44.38% | 6.49% | (39.31)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.90% | 1.92% | 1.90% | 1.94% | 1.96% |
Expenses net of fee waivers, if any | 1.90% | 1.92% | 1.90% | 1.94% | 1.96% |
Expenses net of all reductions | 1.88% | 1.91% | 1.89% | 1.93% | 1.95% |
Net investment income (loss) | (.13)% | (.03)% | (.43)% | (.90)% | (.88)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 99,833 | $ 93,504 | $ 133,476 | $ 90,596 | $ 86,650 |
Portfolio turnover rate E | 68% | 88% | 91% | 103% | 148% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 35.28 | $ 41.95 | $ 28.87 | $ 26.83 | $ 51.76 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .35 | .37 | .23 | .04 | .03 |
Net realized and unrealized gain (loss) | 7.12 | (6.79) | 12.99 | 2.00 | (18.06) |
Total from investment operations | 7.47 | (6.42) | 13.22 | 2.04 | (18.03) |
Distributions from net investment income | (.20) | (.25) | (.14) | - | - |
Distributions from net realized gain | - | - | - | - | (6.90) |
Total distributions | (.20) | (.25) | (.14) | - | (6.90) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 42.55 | $ 35.28 | $ 41.95 | $ 28.87 | $ 26.83 |
Total Return A | 21.26% | (15.31)% | 45.87% | 7.60% | (38.68)% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .88% | .86% | .86% | .90% | .95% |
Expenses net of fee waivers, if any | .88% | .86% | .86% | .90% | .95% |
Expenses net of all reductions | .86% | .85% | .85% | .90% | .94% |
Net investment income (loss) | .89% | 1.03% | .60% | .14% | .13% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 65,034 | $ 56,692 | $ 54,024 | $ 27,338 | $ 18,631 |
Portfolio turnover rate D | 68% | 88% | 91% | 103% | 148% |
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, 2013
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.
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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.
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, 2013, is included at the end of the Fund's Schedule of Investments.
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. 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 and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), partnerships, deferred trustees compensation, 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 | $ 96,455,756 |
Gross unrealized depreciation | (12,514,959) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 83,940,797 |
|
|
Tax Cost | $ 605,662,191 |
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 | $ 448,988 |
Undistributed long-term capital gain | $ 8,458,755 |
Net unrealized appreciation (depreciation) | $ 83,940,737 |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 2,261,471 | $ 3,625,437 |
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 net asset value 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 $439,597,034 and $530,735,853, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .56% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 652,181 | $ 26,074 |
Class T | .25% | .25% | 1,086,030 | 31,960 |
Class B | .75% | .25% | 248,405 | 188,161 |
Class C | .75% | .25% | 959,654 | 132,283 |
|
|
| $ 2,946,270 | $ 378,478 |
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 | $ 97,668 |
Class T | 19,281 |
Class B* | 31,798 |
Class C* | 6,955 |
| $ 155,702 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 762,709 | .29 |
Class T | 537,672 | .25 |
Class B | 75,017 | .30 |
Class C | 267,056 | .28 |
Institutional Class | 153,423 | .26 |
| $ 1,795,877 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $10,294 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Loan | Weighted Average | Interest |
Borrower | $ 7,352,000 | .44% | $ 178 |
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $1,545 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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
Annual Report
7. Security Lending - continued
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. At period end, there were no security loans outstanding with FCM. 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 $312,654, including $11,612 from securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $74,922 for the period.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net investment income |
|
|
Class A | $ 1,079,554 | $ 1,638,737 |
Class T | 706,555 | 1,147,864 |
Class B | 36,766 | 121,615 |
Class C | 148,895 | 359,185 |
Institutional Class | 289,701 | 358,036 |
Total | $ 2,261,471 | $ 3,625,437 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 1,740,823 | 1,965,815 | $ 65,442,879 | $ 67,878,173 |
Reinvestment of distributions | 27,199 | 41,823 | 963,658 | 1,442,046 |
Shares redeemed | (2,390,270) | (2,734,716) | (87,941,708) | (93,508,870) |
Net increase (decrease) | (622,248) | (727,078) | $ (21,535,171) | $ (24,188,651) |
Class T |
|
|
|
|
Shares sold | 467,358 | 716,955 | $ 17,841,598 | $ 25,119,936 |
Reinvestment of distributions | 18,548 | 30,771 | 670,876 | 1,084,070 |
Shares redeemed | (1,355,160) | (1,562,534) | (50,748,604) | (54,290,373) |
Net increase (decrease) | (869,254) | (814,808) | $ (32,236,130) | $ (28,086,367) |
Class B |
|
|
|
|
Shares sold | 13,140 | 77,487 | $ 454,110 | $ 2,508,867 |
Reinvestment of distributions | 989 | 3,337 | 32,636 | 107,704 |
Shares redeemed | (377,487) | (495,555) | (13,045,539) | (15,865,000) |
Net increase (decrease) | (363,358) | (414,731) | $ (12,558,793) | $ (13,248,429) |
Class C |
|
|
|
|
Shares sold | 525,111 | 443,617 | $ 18,433,044 | $ 14,508,195 |
Reinvestment of distributions | 3,815 | 9,390 | 126,850 | 305,281 |
Shares redeemed | (851,939) | (1,020,680) | (29,267,435) | (32,456,638) |
Net increase (decrease) | (323,013) | (567,673) | $ (10,707,541) | $ (17,643,162) |
Institutional Class |
|
|
|
|
Shares sold | 923,636 | 947,827 | $ 35,802,942 | $ 33,843,047 |
Reinvestment of distributions | 6,056 | 7,770 | 224,624 | 279,800 |
Shares redeemed | (1,008,582) | (636,276) | (38,569,293) | (22,583,838) |
Net increase (decrease) | (78,890) | 319,321 | $ (2,541,727) | $ 11,539,009 |
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 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, 2013 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) | 25.34% | 0.06% | -0.05% |
Class T (incl. 3.50% sales charge) | 28.02% | 0.28% | -0.06% |
Class B (incl. contingent deferred sales charge) A | 27.00% | 0.12% | 0.02% |
Class C (incl. contingent deferred sales charge) B | 30.98% | 0.50% | -0.19% |
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, 2003, 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
Comments from Christopher Lee, who became Portfolio Manager of Fidelity Advisor® Financial Services Fund on May 21, 2013: For the 12-month period, the fund's Class A, Class T, Class B and Class C shares returned 32.99%, 32.66%, 32.00% and 31.98%, respectively (excluding sales charges), lagging the 38.04% gain of the MSCI® U.S. IMI Financials 25-50 Index and beating the S&P 500®. Increases in capital markets activity and rising asset values helped to fuel huge gains for several industries within the MSCI index. Exposure to the out-of-index data processing/outsourced services segment was the fund's biggest detractor versus the sector benchmark, mainly because of a large stake in VeriFone Systems, which makes electronic payment systems. Its shares plunged because of weak economic growth overseas, a management change and concern over competitive threats. Not owning enough of diversified financials firms Bank of America and JPMorgan Chase also hurt, as the shares of both these major index components rallied sharply. Lastly, a small cash position detracted. By contrast, stock picks in the thrifts/mortgage finance segment, positioning in diversified capital markets and an overweighting in diversified banks helped. Standouts included timely ownership of government-controlled mortgage giant Fannie Mae. I sold VeriFone and Fannie Mae, which were not in the sector index, from the portfolio. By period end, I had reduced total holdings from roughly 300 to about 70 names, while also significantly reducing our out-of-index and foreign exposure.
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, 2013 to July 31, 2013).
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 | 1.28% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,128.80 | $ 6.76 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.45 | $ 6.41 |
Class T | 1.53% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,127.00 | $ 8.07 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.21 | $ 7.65 |
Class B | 2.03% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,125.00 | $ 10.70 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.73 | $ 10.14 |
Class C | 2.02% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,124.30 | $ 10.64 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.78 | $ 10.09 |
Institutional Class | .94% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,130.00 | $ 4.96 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.13 | $ 4.71 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Bank of America Corp. | 5.3 | 0.0 |
JPMorgan Chase & Co. | 5.0 | 0.6 |
Citigroup, Inc. | 5.0 | 5.0 |
U.S. Bancorp | 4.8 | 1.3 |
Capital One Financial Corp. | 4.2 | 1.8 |
Wells Fargo & Co. | 4.2 | 0.0 |
American Tower Corp. | 2.8 | 0.0 |
MetLife, Inc. | 2.7 | 0.2 |
Simon Property Group, Inc. | 2.6 | 0.0 |
PNC Financial Services Group, Inc. | 2.3 | 1.3 |
| 38.9 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Commercial Banks | 19.9% |
|
![]() | Insurance | 19.4% |
|
![]() | Diversified Financial Services | 18.9% |
|
![]() | Capital Markets | 12.0% |
|
![]() | Real Estate Investment Trusts | 10.1% |
|
![]() | All Others* | 19.7% |
|
As of January 31, 2013 | |||
![]() | Real Estate Investment Trusts | 29.0% |
|
![]() | Commercial Banks | 24.0% |
|
![]() | Insurance | 13.2% |
|
![]() | Capital Markets | 12.1% |
|
![]() | Diversified Financial Services | 9.2% |
|
![]() | All Others* | 12.5% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Financial Services Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 98.2% | |||
Shares | Value | ||
CAPITAL MARKETS - 12.0% | |||
Asset Management & Custody Banks - 8.8% | |||
Affiliated Managers Group, Inc. (a) | 11,514 | $ 2,076,550 | |
Ameriprise Financial, Inc. | 21,000 | 1,869,000 | |
BlackRock, Inc. Class A | 4,306 | 1,214,120 | |
Carlyle Group LP | 32,600 | 912,474 | |
Invesco Ltd. | 99,038 | 3,188,033 | |
Oaktree Capital Group LLC Class A | 21,900 | 1,182,381 | |
The Blackstone Group LP | 82,365 | 1,857,331 | |
| 12,299,889 | ||
Diversified Capital Markets - 1.0% | |||
Deutsche Bank AG (NY Shares) | 7,700 | 346,423 | |
UBS AG (NY Shares) | 55,303 | 1,087,810 | |
| 1,434,233 | ||
Investment Banking & Brokerage - 2.2% | |||
FXCM, Inc. Class A (d) | 43,600 | 719,400 | |
Raymond James Financial, Inc. | 54,400 | 2,397,408 | |
| 3,116,808 | ||
TOTAL CAPITAL MARKETS | 16,850,930 | ||
COMMERCIAL BANKS - 19.9% | |||
Diversified Banks - 9.8% | |||
Comerica, Inc. | 25,495 | 1,084,557 | |
U.S. Bancorp | 181,308 | 6,766,415 | |
Wells Fargo & Co. | 134,948 | 5,870,238 | |
| 13,721,210 | ||
Regional Banks - 10.1% | |||
CIT Group, Inc. (a) | 21,500 | 1,077,365 | |
CoBiz, Inc. | 57,191 | 574,198 | |
Commerce Bancshares, Inc. | 23,200 | 1,058,616 | |
East West Bancorp, Inc. | 43,100 | 1,328,773 | |
Fifth Third Bancorp | 111,540 | 2,144,914 | |
First Horizon National Corp. | 64,400 | 794,052 | |
M&T Bank Corp. (d) | 19,400 | 2,267,084 | |
PNC Financial Services Group, Inc. | 43,470 | 3,305,894 | |
Popular, Inc. (a) | 28,800 | 947,520 | |
Texas Capital Bancshares, Inc. (a) | 16,150 | 734,664 | |
| 14,233,080 | ||
TOTAL COMMERCIAL BANKS | 27,954,290 | ||
CONSUMER FINANCE - 5.7% | |||
Consumer Finance - 5.7% | |||
Capital One Financial Corp. | 85,238 | 5,883,127 | |
Regional Management Corp. (a) | 7,100 | 219,461 | |
SLM Corp. | 79,765 | 1,970,993 | |
| 8,073,581 | ||
| |||
Shares | Value | ||
DIVERSIFIED CONSUMER SERVICES - 0.6% | |||
Specialized Consumer Services - 0.6% | |||
H&R Block, Inc. | 28,300 | $ 889,469 | |
DIVERSIFIED FINANCIAL SERVICES - 18.9% | |||
Other Diversified Financial Services - 15.3% | |||
Bank of America Corp. | 512,156 | 7,477,476 | |
Citigroup, Inc. | 133,665 | 6,969,293 | |
JPMorgan Chase & Co. | 125,281 | 6,981,910 | |
| 21,428,679 | ||
Specialized Finance - 3.6% | |||
IntercontinentalExchange, Inc. (a)(d) | 13,004 | 2,372,580 | |
McGraw-Hill Companies, Inc. | 29,000 | 1,793,940 | |
MSCI, Inc. Class A (a) | 26,382 | 924,689 | |
| 5,091,209 | ||
TOTAL DIVERSIFIED FINANCIAL SERVICES | 26,519,888 | ||
HEALTH CARE PROVIDERS & SERVICES - 0.9% | |||
Health Care Facilities - 0.9% | |||
Brookdale Senior Living, Inc. (a) | 45,100 | 1,313,312 | |
INSURANCE - 19.4% | |||
Insurance Brokers - 1.9% | |||
Marsh & McLennan Companies, Inc. | 65,300 | 2,734,111 | |
Life & Health Insurance - 4.0% | |||
MetLife, Inc. | 79,226 | 3,836,123 | |
Prudential PLC | 36,839 | 654,253 | |
Torchmark Corp. | 15,700 | 1,115,956 | |
| 5,606,332 | ||
Multi-Line Insurance - 2.2% | |||
American International Group, Inc. | 29,030 | 1,321,155 | |
Hartford Financial Services Group, Inc. | 55,800 | 1,721,988 | |
| 3,043,143 | ||
Property & Casualty Insurance - 10.1% | |||
ACE Ltd. | 30,149 | 2,755,016 | |
Allied World Assurance Co. Holdings Ltd. | 19,000 | 1,798,350 | |
Allstate Corp. | 50,440 | 2,571,431 | |
Axis Capital Holdings Ltd. | 5,400 | 235,224 | |
Berkshire Hathaway, Inc. Class B (a) | 16,649 | 1,929,120 | |
ProAssurance Corp. | 32,600 | 1,745,078 | |
The Travelers Companies, Inc. | 37,792 | 3,157,522 | |
| 14,191,741 | ||
Reinsurance - 1.2% | |||
Everest Re Group Ltd. | 13,000 | 1,735,890 | |
TOTAL INSURANCE | 27,311,217 | ||
IT SERVICES - 3.8% | |||
Data Processing & Outsourced Services - 3.8% | |||
Fiserv, Inc. (a) | 14,433 | 1,389,032 | |
FleetCor Technologies, Inc. (a) | 13,300 | 1,193,941 | |
Common Stocks - continued | |||
Shares | Value | ||
IT SERVICES - CONTINUED | |||
Data Processing & Outsourced Services - continued | |||
Global Payments, Inc. | 13,861 | $ 641,903 | |
The Western Union Co. | 60,500 | 1,086,580 | |
Visa, Inc. Class A | 5,430 | 961,164 | |
| 5,272,620 | ||
PROFESSIONAL SERVICES - 1.1% | |||
Research & Consulting Services - 1.1% | |||
Dun & Bradstreet Corp. | 6,100 | 632,143 | |
Equifax, Inc. | 13,270 | 839,062 | |
| 1,471,205 | ||
REAL ESTATE INVESTMENT TRUSTS - 10.1% | |||
Mortgage REITs - 0.9% | |||
Blackstone Mortgage Trust, Inc. | 25,300 | 639,584 | |
Redwood Trust, Inc. | 40,500 | 686,070 | |
| 1,325,654 | ||
Retail REITs - 3.9% | |||
Pennsylvania Real Estate Investment Trust (SBI) | 37,600 | 778,320 | |
Retail Properties America, Inc. | 67,000 | 944,030 | |
Simon Property Group, Inc. | 23,238 | 3,719,474 | |
| 5,441,824 | ||
Specialized REITs - 5.3% | |||
American Tower Corp. | 55,500 | 3,928,845 | |
Rayonier, Inc. | 36,000 | 2,103,840 | |
Ventas, Inc. | 22,235 | 1,461,729 | |
| 7,494,414 | ||
TOTAL REAL ESTATE INVESTMENT TRUSTS | 14,261,892 | ||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 3.7% | |||
Real Estate Operating Companies - 0.7% | |||
Forest City Enterprises, Inc. Class A (a) | 54,000 | 946,080 | |
Real Estate Services - 3.0% | |||
Altisource Portfolio Solutions SA | 19,800 | 2,441,538 | |
CBRE Group, Inc. (a) | 78,687 | 1,823,178 | |
| 4,264,716 | ||
TOTAL REAL ESTATE MANAGEMENT & DEVELOPMENT | 5,210,796 | ||
| |||
Shares | Value | ||
THRIFTS & MORTGAGE FINANCE - 2.1% | |||
Thrifts & Mortgage Finance - 2.1% | |||
MGIC Investment Corp. (a) | 50,000 | $ 382,000 | |
Ocwen Financial Corp. (a) | 49,400 | 2,352,428 | |
Radian Group, Inc. | 19,600 | 275,380 | |
| 3,009,808 | ||
TOTAL COMMON STOCKS (Cost $129,086,317) |
| ||
Money Market Funds - 4.7% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 3,539,309 | 3,539,309 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 3,150,375 | 3,150,375 | |
TOTAL MONEY MARKET FUNDS (Cost $6,689,684) |
| ||
TOTAL INVESTMENT PORTFOLIO - 102.9% (Cost $135,776,001) | 144,828,692 | ||
NET OTHER ASSETS (LIABILITIES) - (2.9)% | (4,142,393) | ||
NET ASSETS - 100% | $ 140,686,299 |
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 | $ 4,437 |
Fidelity Securities Lending Cash Central Fund | 18,741 |
Total | $ 23,178 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2013, 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 | $ 138,139,008 | $ 137,484,755 | $ 654,253 | $ - |
Money Market Funds | 6,689,684 | 6,689,684 | - | - |
Total Investments in Securities: | $ 144,828,692 | $ 144,174,439 | $ 654,253 | $ - |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows. (Unaudited) |
United States of America | 89.1% |
Switzerland | 4.1% |
Bermuda | 3.7% |
Luxembourg | 1.7% |
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 Financial Services Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $3,094,905) - See accompanying schedule: Unaffiliated issuers (cost $129,086,317) | $ 138,139,008 |
|
Fidelity Central Funds (cost $6,689,684) | 6,689,684 |
|
Total Investments (cost $135,776,001) |
| $ 144,828,692 |
Receivable for investments sold | 51,386 | |
Receivable for fund shares sold | 187,965 | |
Dividends receivable | 83,991 | |
Distributions receivable from Fidelity Central Funds | 811 | |
Other receivables | 16,611 | |
Total assets | 145,169,456 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 953,384 | |
Payable for fund shares redeemed | 160,131 | |
Accrued management fee | 62,729 | |
Distribution and service plan fees payable | 54,820 | |
Other affiliated payables | 35,770 | |
Other payables and accrued expenses | 65,948 | |
Collateral on securities loaned, at value | 3,150,375 | |
Total liabilities | 4,483,157 | |
|
|
|
Net Assets | $ 140,686,299 | |
Net Assets consist of: |
| |
Paid in capital | $ 198,556,989 | |
Undistributed net investment income | 426,508 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (67,349,204) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 9,052,006 | |
Net Assets | $ 140,686,299 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 13.41 | |
|
|
|
Maximum offering price per share (100/94.25 of $13.41) | $ 14.23 | |
Class T: | $ 13.31 | |
|
|
|
Maximum offering price per share (100/96.50 of $13.31) | $ 13.79 | |
Class B: | $ 12.87 | |
|
|
|
Class C: | $ 12.75 | |
|
|
|
Institutional Class: | $ 13.73 |
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, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 2,932,548 |
Income from Fidelity Central Funds |
| 23,178 |
Total income |
| 2,955,726 |
|
|
|
Expenses | ||
Management fee | $ 648,792 | |
Transfer agent fees | 348,201 | |
Distribution and service plan fees | 570,504 | |
Accounting and security lending fees | 46,168 | |
Custodian fees and expenses | 43,138 | |
Independent trustees' compensation | 860 | |
Registration fees | 62,156 | |
Audit | 58,040 | |
Legal | 973 | |
Miscellaneous | 926 | |
Total expenses before reductions | 1,779,758 | |
Expense reductions | (85,896) | 1,693,862 |
Net investment income (loss) | 1,261,864 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 21,693,220 | |
Foreign currency transactions | (15,453) | |
Total net realized gain (loss) |
| 21,677,767 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 10,093,311 | |
Assets and liabilities in foreign currencies | 1,097 | |
Total change in net unrealized appreciation (depreciation) |
| 10,094,408 |
Net gain (loss) | 31,772,175 | |
Net increase (decrease) in net assets resulting from operations | $ 33,034,039 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 1,261,864 | $ 574,514 |
Net realized gain (loss) | 21,677,767 | (5,662,549) |
Change in net unrealized appreciation (depreciation) | 10,094,408 | 6,136,917 |
Net increase (decrease) in net assets resulting from operations | 33,034,039 | 1,048,882 |
Distributions to shareholders from net investment income | (847,180) | (107,549) |
Share transactions - net increase (decrease) | 4,858,599 | (27,119,342) |
Redemption fees | 3,052 | 4,119 |
Total increase (decrease) in net assets | 37,048,510 | (26,173,890) |
|
|
|
Net Assets | ||
Beginning of period | 103,637,789 | 129,811,679 |
End of period (including undistributed net investment income of $426,508 and undistributed net investment income of $195,946, respectively) | $ 140,686,299 | $ 103,637,789 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.18 | $ 10.06 | $ 10.35 | $ 9.53 | $ 13.18 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .15 | .07 | (.02) | (.01) | .19 |
Net realized and unrealized gain (loss) | 3.18 | .06 | (.27) | .93 | (3.58) |
Total from investment operations | 3.33 | .13 | (.29) | .92 | (3.39) |
Distributions from net investment income | (.10) | (.01) | - | (.10) | (.24) |
Distributions from net realized gain | - | - | - | - | (.02) |
Total distributions | (.10) | (.01) | - | (.10) | (.26) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 13.41 | $ 10.18 | $ 10.06 | $ 10.35 | $ 9.53 |
Total Return A, B | 32.99% | 1.34% | (2.80)% | 9.61% | (25.87)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.29% | 1.28% | 1.26% | 1.27% | 1.29% |
Expenses net of fee waivers, if any | 1.29% | 1.28% | 1.26% | 1.27% | 1.29% |
Expenses net of all reductions | 1.21% | 1.20% | 1.21% | 1.22% | 1.28% |
Net investment income (loss) | 1.31% | .72% | (.24)% | (.09)% | 2.12% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 64,428 | $ 47,055 | $ 63,937 | $ 69,723 | $ 68,245 |
Portfolio turnover rate E | 288% | 441% | 260% | 254% | 269% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.11 | $ 10.01 | $ 10.32 | $ 9.52 | $ 13.14 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .12 | .04 | (.05) | (.04) | .16 |
Net realized and unrealized gain (loss) | 3.16 | .06 | (.26) | .92 | (3.56) |
Total from investment operations | 3.28 | .10 | (.31) | .88 | (3.40) |
Distributions from net investment income | (.08) | - G | - | (.08) | (.20) |
Distributions from net realized gain | - | - | - | - | (.02) |
Total distributions | (.08) | - G | - | (.08) | (.22) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 13.31 | $ 10.11 | $ 10.01 | $ 10.32 | $ 9.52 |
Total Return A, B | 32.66% | 1.03% | (3.00)% | 9.26% | (26.00)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.55% | 1.54% | 1.52% | 1.53% | 1.55% |
Expenses net of fee waivers, if any | 1.55% | 1.54% | 1.52% | 1.53% | 1.55% |
Expenses net of all reductions | 1.47% | 1.45% | 1.47% | 1.47% | 1.54% |
Net investment income (loss) | 1.06% | .46% | (.49)% | (.35)% | 1.86% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 30,576 | $ 24,367 | $ 27,037 | $ 33,310 | $ 34,927 |
Portfolio turnover rate E | 288% | 441% | 260% | 254% | 269% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 9.79 | $ 9.73 | $ 10.09 | $ 9.33 | $ 12.85 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .06 | - G | (.10) | (.09) | .12 |
Net realized and unrealized gain (loss) | 3.06 | .06 | (.26) | .91 | (3.50) |
Total from investment operations | 3.12 | .06 | (.36) | .82 | (3.38) |
Distributions from net investment income | (.04) | - | - | (.06) | (.12) |
Distributions from net realized gain | - | - | - | - | (.02) |
Total distributions | (.04) | - | - | (.06) | (.14) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 12.87 | $ 9.79 | $ 9.73 | $ 10.09 | $ 9.33 |
Total Return A, B | 32.00% | .62% | (3.57)% | 8.78% | (26.35)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.04% | 2.03% | 2.01% | 2.02% | 2.04% |
Expenses net of fee waivers, if any | 2.04% | 2.03% | 2.01% | 2.02% | 2.04% |
Expenses net of all reductions | 1.97% | 1.94% | 1.96% | 1.97% | 2.03% |
Net investment income (loss) | .56% | (.03)% | (.98)% | (.85)% | 1.38% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 6,511 | $ 5,745 | $ 7,480 | $ 10,992 | $ 12,477 |
Portfolio turnover rate E | 288% | 441% | 260% | 254% | 269% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 9.70 | $ 9.65 | $ 10.00 | $ 9.25 | $ 12.78 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .06 | - G | (.10) | (.09) | .12 |
Net realized and unrealized gain (loss) | 3.03 | .05 | (.25) | .90 | (3.48) |
Total from investment operations | 3.09 | .05 | (.35) | .81 | (3.36) |
Distributions from net investment income | (.04) | - | - | (.06) | (.15) |
Distributions from net realized gain | - | - | - | - | (.02) |
Total distributions | (.04) | - | - | (.06) | (.17) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 12.75 | $ 9.70 | $ 9.65 | $ 10.00 | $ 9.25 |
Total Return A, B | 31.98% | .52% | (3.50)% | 8.79% | (26.38)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.03% | 2.03% | 2.01% | 2.02% | 2.04% |
Expenses net of fee waivers, if any | 2.03% | 2.03% | 2.01% | 2.02% | 2.04% |
Expenses net of all reductions | 1.96% | 1.94% | 1.96% | 1.96% | 2.03% |
Net investment income (loss) | .57% | (.03)% | (.99)% | (.84)% | 1.37% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 29,897 | $ 20,875 | $ 23,196 | $ 30,804 | $ 29,849 |
Portfolio turnover rate E | 288% | 441% | 260% | 254% | 269% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.42 | $ 10.28 | $ 10.55 | $ 9.69 | $ 13.38 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .20 | .10 | .01 | .02 | .21 |
Net realized and unrealized gain (loss) | 3.25 | .06 | (.28) | .95 | (3.63) |
Total from investment operations | 3.45 | .16 | (.27) | .97 | (3.42) |
Distributions from net investment income | (.14) | (.02) | - | (.11) | (.25) |
Distributions from net realized gain | - | - | - | - | (.02) |
Total distributions | (.14) | (.02) | - | (.11) | (.27) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 13.73 | $ 10.42 | $ 10.28 | $ 10.55 | $ 9.69 |
Total Return A | 33.45% | 1.61% | (2.56)% | 9.99% | (25.68)% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .96% | .98% | .96% | .99% | 1.04% |
Expenses net of fee waivers, if any | .96% | .98% | .96% | .99% | 1.04% |
Expenses net of all reductions | .88% | .89% | .91% | .94% | 1.03% |
Net investment income (loss) | 1.65% | 1.02% | .07% | .19% | 2.37% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 9,275 | $ 5,596 | $ 8,162 | $ 5,158 | $ 3,797 |
Portfolio turnover rate D | 288% | 441% | 260% | 254% | 269% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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.
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, 2013, 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. 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 and distributions from the Fidelity Central Funds are accrued as earned. 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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), equity-debt classifications, partnerships, deferred trustees compensation, 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 | $ 9,578,130 |
Gross unrealized depreciation | (1,689,070) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 7,889,060 |
|
|
Tax Cost | $ 136,939,632 |
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 | $ 426,519 |
Capital loss carryforward | $ (66,185,572) |
Net unrealized appreciation (depreciation) | $ 7,888,375 |
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 | $ (42,483,031) |
2018 | (23,251,884) |
2019 | (450,657) |
Total capital loss carryforward | $ (66,185,572) |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 847,180 | $ 107,549 |
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 net asset value 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 $337,387,321 and $327,222,913, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .56% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 133,805 | $ 7,689 |
Class T | .25% | .25% | 135,484 | 4,200 |
Class B | .75% | .25% | 61,049 | 46,235 |
Class C | .75% | .25% | 240,166 | 42,054 |
|
|
| $ 570,504 | $ 100,178 |
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 | $ 28,479 |
Class T | 6,588 |
Class B* | 8,636 |
Class C* | 2,355 |
| $ 46,058 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 161,359 | .30 |
Class T | 83,600 | .31 |
Class B | 18,377 | .30 |
Class C | 71,478 | .30 |
Institutional Class | 13,387 | .22 |
| $ 348,201 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $13,118 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $268 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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,
Annual Report
7. Security Lending - continued
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 $18,741. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $85,876 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 $20.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net investment income |
|
|
Class A | $ 468,043 | $ 83,840 |
Class T | 194,766 | 7,542 |
Class B | 25,088 | - |
Class C | 89,452 | - |
Institutional Class | 69,831 | 16,167 |
Total | $ 847,180 | $ 107,549 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 1,230,107 | 1,565,665 | $ 14,721,154 | $ 14,397,253 |
Reinvestment of distributions | 36,718 | 8,251 | 401,001 | 73,682 |
Shares redeemed | (1,085,572) | (3,304,887) | (12,586,886) | (32,600,547) |
Net increase (decrease) | 181,253 | (1,730,971) | $ 2,535,269 | $ (18,129,612) |
Class T |
|
|
|
|
Shares sold | 446,551 | 376,369 | $ 5,238,758 | $ 3,652,534 |
Reinvestment of distributions | 16,926 | 806 | 183,990 | 7,158 |
Shares redeemed | (576,646) | (668,164) | (6,688,740) | (6,208,120) |
Net increase (decrease) | (113,169) | (290,989) | $ (1,265,992) | $ (2,548,428) |
Class B |
|
|
|
|
Shares sold | 117,587 | 18,960 | $ 1,311,553 | $ 183,629 |
Reinvestment of distributions | 1,943 | - | 20,652 | - |
Shares redeemed | (200,454) | (200,436) | (2,232,316) | (1,817,467) |
Net increase (decrease) | (80,924) | (181,476) | $ (900,111) | $ (1,633,838) |
Class C |
|
|
|
|
Shares sold | 769,144 | 373,577 | $ 8,857,879 | $ 3,534,293 |
Reinvestment of distributions | 7,186 | - | 75,671 | - |
Shares redeemed | (584,253) | (625,998) | (6,452,079) | (5,580,570) |
Net increase (decrease) | 192,077 | (252,421) | $ 2,481,471 | $ (2,046,277) |
Institutional Class |
|
|
|
|
Shares sold | 490,356 | 366,163 | $ 6,177,619 | $ 3,659,590 |
Reinvestment of distributions | 5,017 | 1,570 | 55,775 | 14,317 |
Shares redeemed | (356,871) | (624,705) | (4,225,432) | (6,435,094) |
Net increase (decrease) | 138,502 | (256,972) | $ 2,007,962 | $ (2,761,187) |
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 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, 2013 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) | 34.56% | 13.88% | 9.83% |
Class T (incl. 3.50% sales charge) | 37.40% | 14.11% | 9.81% |
Class B (incl. contingent deferred sales charge) A | 36.61% | 14.12% | 9.90% |
Class C (incl. contingent deferred sales charge) B | 40.74% | 14.39% | 9.69% |
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, 2003, 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
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 42.77%, 42.39%, 41.61% and 41.74%, respectively (excluding sales charges), solidly outpacing the 36.49% advance of the MSCI® U.S. IMI Health Care 25-50 Index and the S&P 500®. Health care stocks did well, as investors flocked to the stability of the sector amid a broader move into more-defensive areas of the market given ongoing weakness in the global economy. I believe health care is a space where active management really makes sense, and one of my core beliefs is that if you do better research you can uncover new innovations and business trends before other market participants. I utilize Fidelity's deep global health care research team to supplement my own bottom-up approach, which I believe gives us an edge in finding high-quality stocks that can create long-term value for shareholders. I'm focused on the earnings power and secular-growth rates of companies, and aim to keep volatility low in the fund by investing a large portion of assets in firms that are highly diversified and can thrive over the long run regardless of near-term economic uncertainty. During the period, a substantial overweighting in biotechnology provided a lift. Biotech was among the best-performing areas in the index, thanks to a strong and diverse pipeline of new treatments and the launch of multiple novel products across many disease categories. The fund's biggest relative contributor was biotech firm and hepatitis C drugmaker Gilead Sciences, which I view as one of the best large-cap growth firms out there. Positioning in health care equipment also helped overall, and we captured a nice gain with medical device maker Boston Scientific, whose share price doubled over the period. Conversely, it hurt to avoid index name Celgene, a large-cap biotech name that specializes in cancer therapies and outperformed, and underweight large-cap pharmaceuticals firm Johnson & Johnson, which I sold from the fund in April. Finally, even a small cash stake hurt the fund in a rising market.
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, 2013 to July 31, 2013).
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 | $ 1,254.60 | $ 6.26 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.24 | $ 5.61 |
Class T | 1.37% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,252.50 | $ 7.65 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.00 | $ 6.85 |
Class B | 1.91% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,249.30 | $ 10.65 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.32 | $ 9.54 |
Class C | 1.85% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,249.90 | $ 10.32 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.62 | $ 9.25 |
Institutional Class | .85% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,256.00 | $ 4.75 |
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 Health Care Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2013 | ||
| % of fund's | % of fund's net assets |
Gilead Sciences, Inc. | 8.0 | 6.8 |
Amgen, Inc. | 7.0 | 7.9 |
Actavis, Inc. | 4.4 | 2.6 |
Boston Scientific Corp. | 3.7 | 2.1 |
Alexion Pharmaceuticals, Inc. | 3.7 | 1.5 |
McKesson Corp. | 3.4 | 1.8 |
Cerner Corp. | 3.2 | 2.4 |
Perrigo Co. | 2.9 | 0.0 |
Catamaran Corp. | 2.6 | 2.7 |
Merck & Co., Inc. | 2.6 | 8.1 |
| 41.5 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Biotechnology | 33.2% |
|
![]() | Pharmaceuticals | 27.6% |
|
![]() | Health Care Providers & Services | 17.1% |
|
![]() | Health Care Equipment & Supplies | 10.4% |
|
![]() | Health Care Technology | 5.2% |
|
![]() | All Others* | 6.5% |
|
As of January 31, 2013 | |||
![]() | Biotechnology | 33.6% |
|
![]() | Pharmaceuticals | 29.1% |
|
![]() | Health Care Providers & Services | 16.7% |
|
![]() | Health Care Equipment & Supplies | 8.6% |
|
![]() | Health Care Technology | 4.1% |
|
![]() | All Others* | 7.9% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Health Care Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 99.3% | |||
Shares | Value | ||
BIOTECHNOLOGY - 33.2% | |||
Biotechnology - 33.2% | |||
Acorda Therapeutics, Inc. (a) | 40,845 | $ 1,550,885 | |
Alexion Pharmaceuticals, Inc. (a) | 234,586 | 27,265,931 | |
Amgen, Inc. | 478,300 | 51,795,107 | |
Biogen Idec, Inc. (a) | 54,128 | 11,806,941 | |
BioMarin Pharmaceutical, Inc. (a) | 169,297 | 10,945,051 | |
Biovitrum AB (a) | 330,900 | 2,482,454 | |
Cubist Pharmaceuticals, Inc. (a) | 118,100 | 7,361,173 | |
Discovery Laboratories, Inc. (a)(d) | 488,938 | 787,190 | |
Genomic Health, Inc. (a) | 100,000 | 3,564,000 | |
Gilead Sciences, Inc. (a) | 962,934 | 59,172,292 | |
Grifols SA ADR | 218,087 | 6,922,081 | |
Infinity Pharmaceuticals, Inc. (a) | 87,200 | 1,846,896 | |
Insmed, Inc. (a) | 53,900 | 598,829 | |
Intercept Pharmaceuticals, Inc. | 35,900 | 1,680,479 | |
InterMune, Inc. (a) | 234,400 | 3,635,544 | |
Lexicon Pharmaceuticals, Inc. (a) | 724,111 | 1,795,795 | |
Medivation, Inc. (a) | 150,000 | 8,680,500 | |
Merrimack Pharmaceuticals, Inc. (a)(d) | 88,673 | 423,857 | |
Momenta Pharmaceuticals, Inc. (a) | 170,000 | 2,934,200 | |
Neurocrine Biosciences, Inc. (a) | 294,271 | 4,116,851 | |
NPS Pharmaceuticals, Inc. (a) | 171,000 | 3,079,710 | |
Onyx Pharmaceuticals, Inc. (a) | 48,069 | 6,311,460 | |
Puma Biotechnology, Inc. (a) | 80,000 | 4,088,800 | |
Regeneron Pharmaceuticals, Inc. (a) | 57,329 | 15,482,270 | |
Spectrum Pharmaceuticals, Inc. | 179,500 | 1,514,980 | |
Theravance, Inc. (a) | 68,100 | 2,625,936 | |
Vanda Pharmaceuticals, Inc. (a) | 143,208 | 1,669,805 | |
ZIOPHARM Oncology, Inc. (a)(d) | 404,100 | 1,204,218 | |
| 245,343,235 | ||
DIVERSIFIED CONSUMER SERVICES - 0.5% | |||
Specialized Consumer Services - 0.5% | |||
Carriage Services, Inc. | 180,955 | 3,394,716 | |
FOOD & STAPLES RETAILING - 1.2% | |||
Drug Retail - 1.2% | |||
CVS Caremark Corp. | 140,746 | 8,654,472 | |
HEALTH CARE EQUIPMENT & SUPPLIES - 10.4% | |||
Health Care Equipment - 8.9% | |||
Boston Scientific Corp. (a) | 2,520,801 | 27,527,147 | |
C.R. Bard, Inc. | 19,922 | 2,283,061 | |
Cardiovascular Systems, Inc. (a) | 97,620 | 2,009,996 | |
CONMED Corp. | 130,000 | 4,264,000 | |
Covidien PLC | 37,623 | 2,318,705 | |
Genmark Diagnostics, Inc. (a) | 11,000 | 104,500 | |
HeartWare International, Inc. (a) | 17,605 | 1,627,054 | |
Insulet Corp. (a) | 89,100 | 2,841,399 | |
Intuitive Surgical, Inc. (a) | 11,000 | 4,268,000 | |
Stryker Corp. | 139,705 | 9,843,614 | |
Volcano Corp. (a) | 242,700 | 4,846,719 | |
| |||
Shares | Value | ||
Zeltiq Aesthetics, Inc. (a) | 228,400 | $ 1,379,536 | |
Zimmer Holdings, Inc. | 24,800 | 2,070,304 | |
| 65,384,035 | ||
Health Care Supplies - 1.5% | |||
Derma Sciences, Inc. (a) | 190,000 | 2,699,900 | |
The Cooper Companies, Inc. | 68,350 | 8,704,373 | |
| 11,404,273 | ||
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | 76,788,308 | ||
HEALTH CARE PROVIDERS & SERVICES - 17.1% | |||
Health Care Distributors & Services - 3.6% | |||
Amplifon SpA | 300,263 | 1,502,749 | |
McKesson Corp. | 201,155 | 24,673,672 | |
| 26,176,421 | ||
Health Care Facilities - 2.4% | |||
Brookdale Senior Living, Inc. (a) | 140,801 | 4,100,125 | |
Emeritus Corp. (a) | 118,100 | 2,738,739 | |
Hanger, Inc. (a) | 61,265 | 2,261,904 | |
HCA Holdings, Inc. | 131,200 | 5,116,800 | |
NMC Health PLC | 341,800 | 1,541,691 | |
Ramsay Health Care Ltd. | 67,936 | 2,248,997 | |
| 18,008,256 | ||
Health Care Services - 6.3% | |||
BioScrip, Inc. (a) | 350,100 | 5,689,125 | |
Catamaran Corp. (a) | 371,700 | 19,578,395 | |
MEDNAX, Inc. (a) | 120,700 | 11,758,594 | |
Quest Diagnostics, Inc. | 160,848 | 9,379,047 | |
| 46,405,161 | ||
Managed Health Care - 4.8% | |||
Aetna, Inc. | 28,400 | 1,822,428 | |
CIGNA Corp. | 201,300 | 15,667,179 | |
Humana, Inc. | 127,857 | 11,668,230 | |
UnitedHealth Group, Inc. | 90,464 | 6,590,302 | |
| 35,748,139 | ||
TOTAL HEALTH CARE PROVIDERS & SERVICES | 126,337,977 | ||
HEALTH CARE TECHNOLOGY - 4.9% | |||
Health Care Technology - 4.9% | |||
athenahealth, Inc. (a)(d) | 54,065 | 6,052,577 | |
Cerner Corp. (a) | 478,398 | 23,441,502 | |
HealthStream, Inc. (a) | 140,808 | 4,435,452 | |
HMS Holdings Corp. (a) | 101,300 | 2,450,447 | |
| 36,379,978 | ||
IT SERVICES - 0.5% | |||
Data Processing & Outsourced Services - 0.5% | |||
Maximus, Inc. | 101,640 | 3,822,680 | |
LIFE SCIENCES TOOLS & SERVICES - 2.5% | |||
Life Sciences Tools & Services - 2.5% | |||
Bruker BioSciences Corp. (a) | 98,800 | 1,770,496 | |
Common Stocks - continued | |||
Shares | Value | ||
LIFE SCIENCES TOOLS & SERVICES - CONTINUED | |||
Life Sciences Tools & Services - continued | |||
Illumina, Inc. (a)(d) | 200,440 | $ 15,999,121 | |
Nanostring Technologies, Inc. | 71,000 | 646,810 | |
| 18,416,427 | ||
PERSONAL PRODUCTS - 0.8% | |||
Personal Products - 0.8% | |||
Prestige Brands Holdings, Inc. (a) | 171,172 | 5,804,443 | |
PHARMACEUTICALS - 27.6% | |||
Pharmaceuticals - 27.6% | |||
AbbVie, Inc. | 107,299 | 4,879,959 | |
Actavis, Inc. (a) | 240,922 | 32,348,597 | |
Bayer AG | 60,300 | 7,007,226 | |
Bristol-Myers Squibb Co. | 117,639 | 5,086,710 | |
Cadence Pharmaceuticals, Inc. (a) | 149,019 | 1,113,172 | |
Endo Health Solutions, Inc. (a) | 90,369 | 3,475,592 | |
Hi-Tech Pharmacal Co., Inc. | 57,395 | 2,062,776 | |
Impax Laboratories, Inc. (a) | 142,000 | 2,945,080 | |
Jazz Pharmaceuticals PLC (a) | 50,900 | 3,843,459 | |
Meda AB (A Shares) | 196,400 | 2,294,495 | |
Merck & Co., Inc. | 398,333 | 19,187,701 | |
Mylan, Inc. (a) | 302,292 | 10,144,920 | |
Optimer Pharmaceuticals, Inc. (a) | 218,554 | 2,734,111 | |
Pacira Pharmaceuticals, Inc. (a)(d) | 88,200 | 2,992,626 | |
Perrigo Co. | 170,797 | 21,245,439 | |
Pfizer, Inc. | 336,198 | 9,827,068 | |
Salix Pharmaceuticals Ltd. (a) | 82,500 | 6,096,750 | |
Sanofi SA | 160,884 | 16,841,943 | |
Shire PLC sponsored ADR | 56,300 | 6,156,405 | |
The Medicines Company (a) | 78,900 | 2,438,010 | |
UCB SA | 56,200 | 3,239,223 | |
Valeant Pharmaceuticals International, Inc. (Canada) (a) | 150,504 | 13,964,591 | |
ViroPharma, Inc. (a) | 300,000 | 10,296,000 | |
Warner Chilcott PLC | 655,000 | 13,958,050 | |
| 204,179,903 | ||
PROFESSIONAL SERVICES - 0.3% | |||
Human Resource & Employment Services - 0.3% | |||
Towers Watson & Co. | 29,750 | 2,505,843 | |
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.3% | |||
Real Estate Development - 0.3% | |||
PT Lippo Karawaci Tbk | 15,620,000 | 1,945,377 | |
TOTAL COMMON STOCKS (Cost $520,813,967) |
| ||
Convertible Preferred Stocks - 0.3% | |||
Shares | Value | ||
HEALTH CARE TECHNOLOGY - 0.3% | |||
Health Care Technology - 0.3% | |||
Castlight Health, Inc. Series D (a)(e) | 336,800 | $ 2,680,928 | |
Money Market Funds - 3.9% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 9,002,235 | 9,002,235 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 19,893,415 | 19,893,415 | |
TOTAL MONEY MARKET FUNDS (Cost $28,895,650) |
| ||
TOTAL INVESTMENT PORTFOLIO - 103.5% (Cost $551,742,730) | 765,149,937 | ||
NET OTHER ASSETS (LIABILITIES) - (3.5)% | (26,224,067) | ||
NET ASSETS - 100% | $ 738,925,870 |
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 $2,680,928 or 0.3% of net assets. |
Additional information on each restricted holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Castlight Health, Inc. Series D | 4/25/12 | $ 2,033,113 |
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 | $ 13,980 |
Fidelity Securities Lending Cash Central Fund | 194,466 |
Total | $ 208,446 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2013, 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 | $ 733,573,359 | $ 716,731,416 | $ 16,841,943 | $ - |
Convertible Preferred Stocks | 2,680,928 | - | - | 2,680,928 |
Money Market Funds | 28,895,650 | 28,895,650 | - | - |
Total Investments in Securities: | $ 765,149,937 | $ 745,627,066 | $ 16,841,943 | $ 2,680,928 |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows. (Unaudited) |
United States of America | 85.9% |
Canada | 4.5% |
Ireland | 2.7% |
France | 2.3% |
Others (Individually Less Than 1%) | 4.6% |
| 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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $19,233,737) - See accompanying schedule: Unaffiliated issuers (cost $522,847,080) | $ 736,254,287 |
|
Fidelity Central Funds (cost $28,895,650) | 28,895,650 |
|
Total Investments (cost $551,742,730) |
| $ 765,149,937 |
Cash |
| 261,886 |
Receivable for investments sold | 9,890,147 | |
Receivable for fund shares sold | 1,417,280 | |
Dividends receivable | 222,418 | |
Distributions receivable from Fidelity Central Funds | 11,875 | |
Other receivables | 11,337 | |
Total assets | 776,964,880 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 16,852,153 | |
Payable for fund shares redeemed | 518,872 | |
Accrued management fee | 324,216 | |
Distribution and service plan fees payable | 246,937 | |
Other affiliated payables | 154,437 | |
Other payables and accrued expenses | 48,980 | |
Collateral on securities loaned, at value | 19,893,415 | |
Total liabilities | 38,039,010 | |
|
|
|
Net Assets | $ 738,925,870 | |
Net Assets consist of: |
| |
Paid in capital | $ 480,483,207 | |
Accumulated net investment loss | (1,170,069) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 46,207,637 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 213,405,095 | |
Net Assets | $ 738,925,870 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 31.29 | |
|
|
|
Maximum offering price per share (100/94.25 of $31.29) | $ 33.20 | |
Class T: | $ 29.91 | |
|
|
|
Maximum offering price per share (100/96.50 of $29.91) | $ 30.99 | |
Class B: | $ 27.16 | |
|
|
|
Class C: | $ 27.11 | |
|
|
|
Institutional Class: | $ 33.12 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Operations
| Year ended July 31, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 6,095,055 |
Income from Fidelity Central Funds |
| 208,446 |
Total income |
| 6,303,501 |
|
|
|
Expenses | ||
Management fee | $ 3,139,289 | |
Transfer agent fees | 1,471,178 | |
Distribution and service plan fees | 2,412,069 | |
Accounting and security lending fees | 215,424 | |
Custodian fees and expenses | 43,092 | |
Independent trustees' compensation | 3,982 | |
Registration fees | 90,605 | |
Audit | 53,068 | |
Legal | 2,013 | |
Miscellaneous | 4,057 | |
Total expenses before reductions | 7,434,777 | |
Expense reductions | (83,710) | 7,351,067 |
Net investment income (loss) | (1,047,566) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 65,104,626 | |
Foreign currency transactions | (55,959) | |
Total net realized gain (loss) |
| 65,048,667 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 144,189,583 | |
Assets and liabilities in foreign currencies | (1,338) | |
Total change in net unrealized appreciation (depreciation) |
| 144,188,245 |
Net gain (loss) | 209,236,912 | |
Net increase (decrease) in net assets resulting from operations | $ 208,189,346 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (1,047,566) | $ (1,625,002) |
Net realized gain (loss) | 65,048,667 | 42,565,605 |
Change in net unrealized appreciation (depreciation) | 144,188,245 | (11,616,324) |
Net increase (decrease) in net assets resulting from operations | 208,189,346 | 29,324,279 |
Distributions to shareholders from net realized gain | (53,403,217) | (49,973,824) |
Share transactions - net increase (decrease) | 98,074,235 | 14,972,155 |
Redemption fees | 6,876 | 69,585 |
Total increase (decrease) in net assets | 252,867,240 | (5,607,805) |
|
|
|
Net Assets | ||
Beginning of period | 486,058,630 | 491,666,435 |
End of period (including accumulated net investment loss of $1,170,069 and accumulated net investment loss of $849,653, respectively) | $ 738,925,870 | $ 486,058,630 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 24.35 | $ 25.60 | $ 19.01 | $ 17.15 | $ 19.72 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | - G | (.04) | (.10) | (.07) | .02 |
Net realized and unrealized gain (loss) | 9.53 | 1.43 | 6.69 | 1.93 | (2.22) |
Total from investment operations | 9.53 | 1.39 | 6.59 | 1.86 | (2.20) |
Distributions from net realized gain | (2.59) | (2.64) | - | - | (.37) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 31.29 | $ 24.35 | $ 25.60 | $ 19.01 | $ 17.15 |
Total Return A, B | 42.77% | 7.58% | 34.67% | 10.85% | (11.37)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.14% | 1.19% | 1.19% | 1.22% | 1.23% |
Expenses net of fee waivers, if any | 1.14% | 1.19% | 1.19% | 1.22% | 1.23% |
Expenses net of all reductions | 1.13% | 1.18% | 1.18% | 1.21% | 1.23% |
Net investment income (loss) | (.01)% | (.18)% | (.43)% | (.36)% | .11% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 365,416 | $ 233,188 | $ 224,704 | $ 179,586 | $ 177,890 |
Portfolio turnover rate E | 92% | 124% | 125% | 103% | 172% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 23.42 | $ 24.80 | $ 18.46 | $ 16.69 | $ 19.26 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.07) | (.09) | (.16) | (.12) | (.02) |
Net realized and unrealized gain (loss) | 9.13 | 1.35 | 6.50 | 1.89 | (2.18) |
Total from investment operations | 9.06 | 1.26 | 6.34 | 1.77 | (2.20) |
Distributions from net realized gain | (2.57) | (2.64) | - | - | (.37) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 29.91 | $ 23.42 | $ 24.80 | $ 18.46 | $ 16.69 |
Total Return A, B | 42.39% | 7.27% | 34.34% | 10.61% | (11.65)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.39% | 1.43% | 1.44% | 1.47% | 1.49% |
Expenses net of fee waivers, if any | 1.39% | 1.43% | 1.44% | 1.47% | 1.49% |
Expenses net of all reductions | 1.38% | 1.43% | 1.43% | 1.46% | 1.49% |
Net investment income (loss) | (.26)% | (.42)% | (.69)% | (.62)% | (.15)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 158,611 | $ 117,969 | $ 123,606 | $ 100,883 | $ 103,772 |
Portfolio turnover rate E | 92% | 124% | 125% | 103% | 172% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 21.55 | $ 23.15 | $ 17.32 | $ 15.74 | $ 18.27 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.18) | (.19) | (.25) | (.20) | (.09) |
Net realized and unrealized gain (loss) | 8.31 | 1.23 | 6.08 | 1.78 | (2.07) |
Total from investment operations | 8.13 | 1.04 | 5.83 | 1.58 | (2.16) |
Distributions from net realized gain | (2.52) | (2.64) | - | - | (.37) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 27.16 | $ 21.55 | $ 23.15 | $ 17.32 | $ 15.74 |
Total Return A, B | 41.61% | 6.78% | 33.66% | 10.04% | (12.07)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.93% | 1.94% | 1.94% | 1.97% | 1.98% |
Expenses net of fee waivers, if any | 1.93% | 1.94% | 1.94% | 1.97% | 1.98% |
Expenses net of all reductions | 1.91% | 1.93% | 1.93% | 1.96% | 1.98% |
Net investment income (loss) | (.80)% | (.93)% | (1.19)% | (1.11)% | (.64)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 14,517 | $ 15,403 | $ 20,365 | $ 23,543 | $ 29,381 |
Portfolio turnover rate E | 92% | 124% | 125% | 103% | 172% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 21.51 | $ 23.11 | $ 17.29 | $ 15.70 | $ 18.23 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.17) | (.18) | (.24) | (.19) | (.09) |
Net realized and unrealized gain (loss) | 8.31 | 1.22 | 6.06 | 1.78 | (2.07) |
Total from investment operations | 8.14 | 1.04 | 5.82 | 1.59 | (2.16) |
Distributions from net realized gain | (2.54) | (2.64) | - | - | (.37) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 27.11 | $ 21.51 | $ 23.11 | $ 17.29 | $ 15.70 |
Total Return A, B | 41.74% | 6.80% | 33.66% | 10.13% | (12.09)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.87% | 1.90% | 1.90% | 1.94% | 1.98% |
Expenses net of fee waivers, if any | 1.87% | 1.90% | 1.90% | 1.94% | 1.98% |
Expenses net of all reductions | 1.85% | 1.89% | 1.89% | 1.93% | 1.98% |
Net investment income (loss) | (.74)% | (.89)% | (1.15)% | (1.08)% | (.64)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 125,965 | $ 78,763 | $ 77,749 | $ 60,861 | $ 64,002 |
Portfolio turnover rate E | 92% | 124% | 125% | 103% | 172% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 25.60 | $ 26.69 | $ 19.77 | $ 17.78 | $ 20.39 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .07 | .03 | (.03) | (.02) | .06 |
Net realized and unrealized gain (loss) | 10.07 | 1.52 | 6.95 | 2.01 | (2.30) |
Total from investment operations | 10.14 | 1.55 | 6.92 | 1.99 | (2.24) |
Distributions from net realized gain | (2.62) | (2.64) | - | - | (.37) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 33.12 | $ 25.60 | $ 26.69 | $ 19.77 | $ 17.78 |
Total Return A | 43.12% | 7.91% | 35.00% | 11.19% | (11.19)% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .87% | .89% | .89% | .96% | .98% |
Expenses net of fee waivers, if any | .87% | .89% | .89% | .96% | .98% |
Expenses net of all reductions | .85% | .88% | .88% | .95% | .98% |
Net investment income (loss) | .26% | .12% | (.13)% | (.10)% | .36% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 74,417 | $ 40,737 | $ 45,243 | $ 14,172 | $ 13,452 |
Portfolio turnover rate D | 92% | 124% | 125% | 103% | 172% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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 restricted equity securities and private placements where observable inputs are limited, assumptions about market activity and risk are used and these securities are generally 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, 2013, 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. 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 and distributions from the Fidelity Central Funds are accrued as earned. 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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, deferred trustees compensation, net operating losses and losses deferred due to wash sales 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 | $ 218,966,846 |
Gross unrealized depreciation | (6,357,419) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 212,609,427 |
|
|
Tax Cost | $ 552,540,510 |
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 | $ 17,373,342 |
Undistributed long-term capital gain | $ 29,632,075 |
Net unrealized appreciation (depreciation) | $ 212,607,315 |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 1,722,659 | $ - |
Long-term Capital Gains | 51,680,558 | 49,973,824 |
Total | $ 53,403,217 | $ 49,973,824 |
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 net asset value 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 $562,636,788 and $514,461,115, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .55% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 692,782 | $ 32,011 |
Class T | .25% | .25% | 661,234 | 16,450 |
Class B | .75% | .25% | 143,170 | 108,559 |
Class C | .75% | .25% | 914,883 | 142,951 |
|
|
| $ 2,412,069 | $ 299,971 |
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 | $ 120,253 |
Class T | 23,083 |
Class B* | 10,011 |
Class C * | 3,453 |
| $ 156,800 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 736,231 | .27 |
Class T | 349,517 | .26 |
Class B | 42,982 | .30 |
Class C | 222,499 | .24 |
Institutional Class | 119,949 | .24 |
| $ 1,471,178 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $7,115 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $1,280 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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. At period end, there were no security loans outstanding with FCM. 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 $194,466, including $20,558 from securities loaned to FCM.
Annual Report
8. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $83,586 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 $124.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net realized gain |
|
|
Class A | $ 25,387,002 | $ 22,638,273 |
Class T | 13,085,534 | 12,838,928 |
Class B | 1,715,002 | 2,229,080 |
Class C | 9,051,114 | 8,852,071 |
Institutional Class | 4,164,565 | 3,415,472 |
Total | $ 53,403,217 | $ 49,973,824 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 3,549,260 | 2,109,585 | $ 93,836,372 | $ 48,063,125 |
Reinvestment of distributions | 942,761 | 974,579 | 22,474,621 | 19,679,030 |
Shares redeemed | (2,389,171) | (2,283,119) | (61,582,185) | (51,867,480) |
Net increase (decrease) | 2,102,850 | 801,045 | $ 54,728,808 | $ 15,874,675 |
Class T |
|
|
|
|
Shares sold | 680,868 | 517,207 | $ 17,081,065 | $ 11,288,178 |
Reinvestment of distributions | 547,411 | 626,615 | 12,508,788 | 12,200,296 |
Shares redeemed | (963,078) | (1,091,618) | (23,759,625) | (23,806,614) |
Net increase (decrease) | 265,201 | 52,204 | $ 5,830,228 | $ (318,140) |
Class B |
|
|
|
|
Shares sold | 53,093 | 73,881 | $ 1,227,477 | $ 1,480,151 |
Reinvestment of distributions | 72,420 | 107,208 | 1,510,947 | 1,929,279 |
Shares redeemed | (305,905) | (345,800) | (6,859,622) | (6,952,570) |
Net increase (decrease) | (180,392) | (164,711) | $ (4,121,198) | $ (3,543,140) |
Class C |
|
|
|
|
Shares sold | 1,458,495 | 610,790 | $ 33,813,707 | $ 12,332,347 |
Reinvestment of distributions | 363,077 | 406,182 | 7,555,835 | 7,293,865 |
Shares redeemed | (836,253) | (719,664) | (18,706,199) | (14,281,889) |
Net increase (decrease) | 985,319 | 297,308 | $ 22,663,343 | $ 5,344,323 |
Institutional Class |
|
|
|
|
Shares sold | 1,149,859 | 969,515 | $ 32,276,173 | $ 23,079,181 |
Reinvestment of distributions | 148,348 | 134,306 | 3,734,787 | 2,842,866 |
Shares redeemed | (643,078) | (1,207,175) | (17,037,906) | (28,307,610) |
Net increase (decrease) | 655,129 | (103,354) | $ 18,973,054 | $ (2,385,563) |
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, 2013 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge)C | 25.28% | 9.00% | 12.27% |
Class T (incl. 3.50% sales charge)C | 27.96% | 9.24% | 12.26% |
Class B (incl. contingent deferred sales charge) A, C | 26.87% | 9.16% | 12.32% |
Class C (incl. contingent deferred sales charge) B, C | 30.90% | 9.48% | 12.10% |
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, 2003, 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
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 32.92%, 32.60%, 31.87% and 31.90%, respectively (excluding sales charges), about in line with the 32.81% gain of the MSCI® U.S. IMI Industrials 25-50 Index but significantly ahead of the S&P 500®. Versus the broader market, the MSCI index was particularly aided by strong results in aerospace and defense and in industrial machinery. In managing the fund, I try to take advantage of recurring patterns within different segments of the industrials sector as they cycle between boom and bust. With that said, stock selection in the construction/farm machinery/heavy trucks segment - where demand had been unevenly improving from a deep cyclical base during the 2007-2009 recession - provided the biggest boost to performance versus the MSCI sector index. In particular, not owning weak-performing index component Caterpillar for most of the period was beneficial. While continued sluggishness in China's economy hurt the stock of this heavy-equipment manufacturer beginning in February, I thought investors became overly pessimistic, and so I built Cat into a significant position by period end. The fund also was rewarded for exiting a position in lagging index component Deere, another maker of heavy equipment, because I thought it was fully valued. Elsewhere, our results were lifted by overweighted positions in human resources consultant Towers Watson and business information provider Dun & Bradstreet, both of which outperformed. Conversely, one industry that stood out as a significant detractor from performance versus the MSCI index was aerospace and defense. In part, the problem here was our underweighted exposure to major defense contractors, whose stocks performed surprisingly well during the period. However, an overweighting in regional jet manufacturer Textron made this stock the fund's biggest relative detractor. My confidence that demand for regional jets would materially improve during the period was not rewarded, and I reduced our overweighting here. Additionally, the fund was hurt by not owning index stock Boeing, which is a hybrid play on commercial aerospace and defense. While this stock handily outperformed the broader market during the final five months of the period, I continued to favor investing in its suppliers rather than the company itself. Carrying no positions in airlines, the MSCI benchmark's best-performing segment, also dampened performance. Here, not owning index stock Delta Air Lines detracted. Maintaining a relatively modest cash position in a strongly rising market also curbed our gain.
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, 2013 to July 31, 2013).
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 | $ 1,139.70 | $ 5.84 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.34 | $ 5.51 |
Class T | 1.35% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,138.20 | $ 7.16 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.10 | $ 6.76 |
Class B | 1.90% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,135.30 | $ 10.06 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.37 | $ 9.49 |
Class C | 1.85% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,135.20 | $ 9.79 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.62 | $ 9.25 |
Institutional Class | .84% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,141.40 | $ 4.46 |
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 Industrials Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2013 | ||
| % of fund's | % of fund's net assets |
General Electric Co. | 12.2 | 13.4 |
United Technologies Corp. | 7.0 | 6.5 |
Danaher Corp. | 5.7 | 3.9 |
Union Pacific Corp. | 4.5 | 1.9 |
Honeywell International, Inc. | 4.0 | 3.1 |
Caterpillar, Inc. | 3.2 | 0.0 |
Eaton Corp. PLC | 2.8 | 2.8 |
Precision Castparts Corp. | 2.7 | 1.9 |
Cummins, Inc. | 2.1 | 3.1 |
Parker Hannifin Corp. | 2.0 | 1.7 |
| 46.2 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Machinery | 29.7% |
|
![]() | Industrial Conglomerates | 17.9% |
|
![]() | Aerospace & Defense | 16.3% |
|
![]() | Electrical Equipment | 7.8% |
|
![]() | Professional Services | 6.8% |
|
![]() | All Others* | 21.5% |
|
As of January 31, 2013 | |||
![]() | Machinery | 25.3% |
|
![]() | Industrial Conglomerates | 21.8% |
|
![]() | Aerospace & Defense | 16.4% |
|
![]() | Electrical Equipment | 8.8% |
|
![]() | Professional Services | 6.3% |
|
![]() | All Others* | 21.4% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Industrials Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 97.8% | |||
Shares | Value | ||
AEROSPACE & DEFENSE - 16.3% | |||
Aerospace & Defense - 16.3% | |||
Honeywell International, Inc. | 263,792 | $ 21,889,460 | |
Precision Castparts Corp. | 67,182 | 14,895,593 | |
Teledyne Technologies, Inc. (a) | 91,531 | 7,338,040 | |
Textron, Inc. | 231,318 | 6,333,487 | |
United Technologies Corp. | 360,732 | 38,082,477 | |
| 88,539,057 | ||
AIR FREIGHT & LOGISTICS - 0.9% | |||
Air Freight & Logistics - 0.9% | |||
C.H. Robinson Worldwide, Inc. | 85,363 | 5,089,342 | |
AUTO COMPONENTS - 1.8% | |||
Auto Parts & Equipment - 1.8% | |||
Johnson Controls, Inc. | 239,592 | 9,633,994 | |
BUILDING PRODUCTS - 1.3% | |||
Building Products - 1.3% | |||
A.O. Smith Corp. | 172,665 | 7,134,518 | |
Aspen Aerogels, Inc. warrants 3/28/23 (a) | 3,499,903 | 35 | |
| 7,134,553 | ||
COMMERCIAL SERVICES & SUPPLIES - 2.9% | |||
Environmental & Facility Services - 2.9% | |||
Republic Services, Inc. | 148,136 | 5,023,292 | |
Stericycle, Inc. (a) | 33,524 | 3,886,773 | |
Waste Connections, Inc. | 151,900 | 6,571,194 | |
| 15,481,259 | ||
CONSTRUCTION & ENGINEERING - 2.2% | |||
Construction & Engineering - 2.2% | |||
EMCOR Group, Inc. | 109,285 | 4,511,285 | |
URS Corp. | 163,749 | 7,614,329 | |
| 12,125,614 | ||
ELECTRICAL EQUIPMENT - 7.8% | |||
Electrical Components & Equipment - 7.8% | |||
AMETEK, Inc. | 121,700 | 5,632,276 | |
Eaton Corp. PLC | 220,260 | 15,186,927 | |
Generac Holdings, Inc. | 106,544 | 4,618,682 | |
Hubbell, Inc. Class B | 95,934 | 10,298,515 | |
Rockwell Automation, Inc. | 70,800 | 6,856,980 | |
| 42,593,380 | ||
INDUSTRIAL CONGLOMERATES - 17.9% | |||
Industrial Conglomerates - 17.9% | |||
Danaher Corp. | 458,977 | 30,907,511 | |
General Electric Co. | 2,711,267 | 66,073,578 | |
| 96,981,089 | ||
LIFE SCIENCES TOOLS & SERVICES - 0.5% | |||
Life Sciences Tools & Services - 0.5% | |||
Eurofins Scientific SA | 12,638 | 2,774,139 | |
| |||
Shares | Value | ||
MACHINERY - 29.7% | |||
Construction & Farm Machinery & Heavy Trucks - 11.4% | |||
Caterpillar, Inc. | 211,474 | $ 17,533,309 | |
Cummins, Inc. | 91,854 | 11,131,786 | |
Manitowoc Co., Inc. | 430,846 | 8,845,268 | |
Oshkosh Truck Corp. (a) | 86,544 | 3,878,902 | |
PACCAR, Inc. | 133,215 | 7,496,008 | |
Toro Co. | 92,800 | 4,573,184 | |
Wabtec Corp. | 140,200 | 8,140,012 | |
| 61,598,469 | ||
Industrial Machinery - 18.3% | |||
Donaldson Co., Inc. | 103,451 | 3,750,099 | |
Dover Corp. | 93,291 | 7,989,441 | |
GEA Group AG | 135,577 | 5,594,016 | |
Graco, Inc. | 92,826 | 6,477,398 | |
Harsco Corp. | 215,181 | 5,543,063 | |
IDEX Corp. | 112,369 | 6,702,811 | |
Ingersoll-Rand PLC | 120,787 | 7,374,046 | |
ITT Corp. | 18,700 | 584,188 | |
Nordson Corp. | 40,193 | 2,900,327 | |
Pall Corp. | 103,767 | 7,259,539 | |
Parker Hannifin Corp. | 103,794 | 10,719,844 | |
Pentair Ltd. | 143,296 | 8,752,520 | |
Stanley Black & Decker, Inc. | 101,802 | 8,614,485 | |
Timken Co. | 119,883 | 7,003,565 | |
TriMas Corp. (a) | 150,183 | 5,561,276 | |
Valmont Industries, Inc. | 32,899 | 4,594,016 | |
| 99,420,634 | ||
TOTAL MACHINERY | 161,019,103 | ||
PROFESSIONAL SERVICES - 6.8% | |||
Human Resource & Employment Services - 1.8% | |||
Towers Watson & Co. | 117,584 | 9,904,100 | |
Research & Consulting Services - 5.0% | |||
Bureau Veritas SA | 56,212 | 1,668,378 | |
Dun & Bradstreet Corp. | 98,865 | 10,245,380 | |
Nielsen Holdings B.V. | 261,312 | 8,733,047 | |
Verisk Analytics, Inc. (a) | 100,974 | 6,498,687 | |
| 27,145,492 | ||
TOTAL PROFESSIONAL SERVICES | 37,049,592 | ||
ROAD & RAIL - 5.9% | |||
Railroads - 4.5% | |||
Union Pacific Corp. | 154,088 | 24,436,816 | |
Trucking - 1.4% | |||
Con-way, Inc. | 27,753 | 1,150,362 | |
J.B. Hunt Transport Services, Inc. | 85,244 | 6,387,333 | |
| 7,537,695 | ||
TOTAL ROAD & RAIL | 31,974,511 | ||
Common Stocks - continued | |||
Shares | Value | ||
TRADING COMPANIES & DISTRIBUTORS - 3.8% | |||
Trading Companies & Distributors - 3.8% | |||
Applied Industrial Technologies, Inc. | 36,041 | $ 1,879,899 | |
W.W. Grainger, Inc. | 24,944 | 6,538,820 | |
Watsco, Inc. | 58,771 | 5,486,273 | |
WESCO International, Inc. (a) | 89,056 | 6,748,664 | |
| 20,653,656 | ||
TOTAL COMMON STOCKS (Cost $406,445,005) |
|
Convertible Bonds - 0.4% | ||||
| Principal Amount |
| ||
BUILDING PRODUCTS - 0.4% | ||||
Building Products - 0.4% | ||||
Aspen Aerogels, Inc.: | ||||
8% 6/1/14 (c) | $ 1,177,234 | 1,177,234 | ||
8% 12/6/14 (c) | 1,114,117 | 1,114,117 | ||
8% 3/28/16 (c) | 90,496 | 90,496 | ||
TOTAL CONVERTIBLE BONDS (Cost $2,381,812) |
|
Money Market Funds - 1.7% | |||
Shares |
| ||
Fidelity Cash Central Fund, 0.11% (b) | 9,075,166 |
| |
TOTAL INVESTMENT PORTFOLIO - 99.9% (Cost $417,901,983) | 542,506,302 | ||
NET OTHER ASSETS (LIABILITIES) - 0.1% | 352,558 | ||
NET ASSETS - 100% | $ 542,858,860 |
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) 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 $2,381,847 or 0.4% of net assets. |
Additional information on each restricted holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Aspen Aerogels, Inc. 8% 6/1/14 | 6/14/11 - 12/31/12 | $ 1,177,234 |
Aspen Aerogels, Inc. 8% 12/6/14 | 12/6/11 - 12/31/12 | $ 1,114,117 |
Aspen Aerogels, Inc. 8% 3/28/16 | 5/6/13 | $ 90,461 |
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 | $ 18,729 |
Fidelity Securities Lending Cash Central Fund | 2,912 |
Total | $ 21,641 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2013, 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 | $ 531,049,289 | $ 531,049,254 | $ - | $ 35 |
Convertible Bonds | 2,381,847 | - | - | 2,381,847 |
Money Market Funds | 9,075,166 | 9,075,166 | - | - |
Total Investments in Securities: | $ 542,506,302 | $ 540,124,420 | $ - | $ 2,381,882 |
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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $408,826,817) | $ 533,431,136 |
|
Fidelity Central Funds (cost $9,075,166) | 9,075,166 |
|
Total Investments (cost $417,901,983) |
| $ 542,506,302 |
Receivable for fund shares sold | 1,977,474 | |
Dividends receivable | 296,511 | |
Interest receivable | 109,148 | |
Distributions receivable from Fidelity Central Funds | 1,184 | |
Other receivables | 3,345 | |
Total assets | 544,893,964 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 520,232 | |
Payable for fund shares redeemed | 946,789 | |
Accrued management fee | 242,587 | |
Distribution and service plan fees payable | 173,922 | |
Transfer agent fees payable | 94,550 | |
Other affiliated payables | 16,792 | |
Other payables and accrued expenses | 40,232 | |
Total liabilities | 2,035,104 | |
|
|
|
Net Assets | $ 542,858,860 | |
Net Assets consist of: |
| |
Paid in capital | $ 398,667,156 | |
Undistributed net investment income | 768,614 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 18,818,567 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 124,604,523 | |
Net Assets | $ 542,858,860 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 34.50 | |
|
|
|
Maximum offering price per share (100/94.25 of $34.50) | $ 36.60 | |
Class T: | $ 33.93 | |
|
|
|
Maximum offering price per share (100/96.50 of $33.93) | $ 35.16 | |
Class B: | $ 31.97 | |
|
|
|
Class C: | $ 32.08 | |
|
|
|
Institutional Class: | $ 35.83 |
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, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 8,027,432 |
Interest |
| 185,735 |
Income from Fidelity Central Funds |
| 21,641 |
Total income |
| 8,234,808 |
|
|
|
Expenses | ||
Management fee | $ 2,436,049 | |
Transfer agent fees | 1,024,771 | |
Distribution and service plan fees | 1,823,035 | |
Accounting and security lending fees | 170,530 | |
Custodian fees and expenses | 18,825 | |
Independent trustees' compensation | 3,043 | |
Registration fees | 82,863 | |
Audit | 53,823 | |
Legal | 1,349 | |
Miscellaneous | 3,394 | |
Total expenses before reductions | 5,617,682 | |
Expense reductions | (39,065) | 5,578,617 |
Net investment income (loss) | 2,656,191 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 37,642,029 | |
Foreign currency transactions | 9,764 | |
Futures contracts | 595,204 | |
Total net realized gain (loss) |
| 38,246,997 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 82,841,114 | |
Assets and liabilities in foreign currencies | 1,260 | |
Futures contracts | (195,061) | |
Total change in net unrealized appreciation (depreciation) |
| 82,647,313 |
Net gain (loss) | 120,894,310 | |
Net increase (decrease) in net assets resulting from operations | $ 123,550,501 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 2,656,191 | $ 2,427,938 |
Net realized gain (loss) | 38,246,997 | (16,401,175) |
Change in net unrealized appreciation (depreciation) | 82,647,313 | 18,503,016 |
Net increase (decrease) in net assets resulting from operations | 123,550,501 | 4,529,779 |
Distributions to shareholders from net investment income | (2,791,779) | (1,437,740) |
Distributions to shareholders from net realized gain | - | (4,219,307) |
Total distributions | (2,791,779) | (5,657,047) |
Share transactions - net increase (decrease) | 36,897,765 | (82,942,475) |
Redemption fees | 13,370 | 15,881 |
Total increase (decrease) in net assets | 157,669,857 | (84,053,862) |
|
|
|
Net Assets | ||
Beginning of period | 385,189,003 | 469,242,865 |
End of period (including undistributed net investment income of $768,614 and undistributed net investment income of $1,084,983, respectively) | $ 542,858,860 | $ 385,189,003 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 26.18 | $ 25.73 | $ 21.54 | $ 16.87 | $ 21.97 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .23 | .20 | .09 | .06 | .13 |
Net realized and unrealized gain (loss) | 8.33 | .61 | 4.13 | 4.68 | (5.08) |
Total from investment operations | 8.56 | .81 | 4.22 | 4.74 | (4.95) |
Distributions from net investment income | (.24) | (.11) | (.03) | (.07) | (.13) |
Distributions from net realized gain | - | (.25) | - | - | (.02) |
Total distributions | (.24) | (.36) | (.03) | (.07) | (.15) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 34.50 | $ 26.18 | $ 25.73 | $ 21.54 | $ 16.87 |
Total Return A, B | 32.92% | 3.42% | 19.59% | 28.13% | (22.49)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.11% | 1.14% | 1.13% | 1.18% | 1.23% |
Expenses net of fee waivers, if any | 1.11% | 1.14% | 1.13% | 1.18% | 1.23% |
Expenses net of all reductions | 1.11% | 1.14% | 1.13% | 1.17% | 1.23% |
Net investment income (loss) | .77% | .80% | .36% | .31% | .89% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 271,512 | $ 192,038 | $ 228,106 | $ 165,029 | $ 130,860 |
Portfolio turnover rate E | 78% | 82% | 75% | 110% | 135% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 25.75 | $ 25.33 | $ 21.24 | $ 16.64 | $ 21.67 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .15 | .13 | .03 | .01 | .10 |
Net realized and unrealized gain (loss) | 8.20 | .61 | 4.07 | 4.61 | (5.03) |
Total from investment operations | 8.35 | .74 | 4.10 | 4.62 | (4.93) |
Distributions from net investment income | (.17) | (.07) | (.01) | (.02) | (.08) |
Distributions from net realized gain | - | (.25) | - | - | (.02) |
Total distributions | (.17) | (.32) | (.01) | (.02) | (.10) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 33.93 | $ 25.75 | $ 25.33 | $ 21.24 | $ 16.64 |
Total Return A, B | 32.60% | 3.15% | 19.28% | 27.80% | (22.68)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.37% | 1.40% | 1.39% | 1.44% | 1.48% |
Expenses net of fee waivers, if any | 1.37% | 1.40% | 1.39% | 1.44% | 1.48% |
Expenses net of all reductions | 1.36% | 1.39% | 1.38% | 1.43% | 1.48% |
Net investment income (loss) | .52% | .54% | .10% | .06% | .63% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 79,172 | $ 63,954 | $ 71,542 | $ 58,202 | $ 48,054 |
Portfolio turnover rate E | 78% | 82% | 75% | 110% | 135% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 24.29 | $ 23.99 | $ 20.22 | $ 15.90 | $ 20.74 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.01) | - H | (.11) | (.09) | .02 |
Net realized and unrealized gain (loss) | 7.74 | .57 | 3.88 | 4.41 | (4.82) |
Total from investment operations | 7.73 | .57 | 3.77 | 4.32 | (4.80) |
Distributions from net investment income | (.05) | (.02) | - | - | (.04) |
Distributions from net realized gain | - | (.25) | - | - | - |
Total distributions | (.05) | (.27) | - | - | (.04) |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 31.97 | $ 24.29 | $ 23.99 | $ 20.22 | $ 15.90 |
Total Return A, B | 31.87% | 2.59% | 18.64% | 27.17% | (23.10)% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 1.92% | 1.94% | 1.93% | 1.97% | 1.98% |
Expenses net of fee waivers, if any | 1.92% | 1.94% | 1.93% | 1.97% | 1.98% |
Expenses net of all reductions | 1.91% | 1.94% | 1.93% | 1.97% | 1.98% |
Net investment income (loss) | (.04)% | -% F | (.44)% | (.48)% | .13% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 17,502 | $ 20,058 | $ 28,600 | $ 29,048 | $ 25,212 |
Portfolio turnover rate E | 78% | 82% | 75% | 110% | 135% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 24.38 | $ 24.07 | $ 20.28 | $ 15.94 | $ 20.79 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .01 | .01 | (.09) | (.08) | .02 |
Net realized and unrealized gain (loss) | 7.75 | .58 | 3.88 | 4.42 | (4.83) |
Total from investment operations | 7.76 | .59 | 3.79 | 4.34 | (4.81) |
Distributions from net investment income | (.06) | (.03) | - | - | (.04) |
Distributions from net realized gain | - | (.25) | - | - | - |
Total distributions | (.06) | (.28) | - | - | (.04) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 32.08 | $ 24.38 | $ 24.07 | $ 20.28 | $ 15.94 |
Total Return A, B | 31.90% | 2.67% | 18.69% | 27.23% | (23.09)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.87% | 1.89% | 1.89% | 1.93% | 1.98% |
Expenses net of fee waivers, if any | 1.87% | 1.89% | 1.89% | 1.93% | 1.98% |
Expenses net of all reductions | 1.86% | 1.88% | 1.88% | 1.92% | 1.98% |
Net investment income (loss) | .02% | .05% | (.40)% | (.43)% | .14% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 89,893 | $ 66,289 | $ 72,673 | $ 51,760 | $ 37,862 |
Portfolio turnover rate E | 78% | 82% | 75% | 110% | 135% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 27.18 | $ 26.69 | $ 22.30 | $ 17.45 | $ 22.72 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .33 | .28 | .17 | .13 | .19 |
Net realized and unrealized gain (loss) | 8.64 | .63 | 4.28 | 4.83 | (5.27) |
Total from investment operations | 8.97 | .91 | 4.45 | 4.96 | (5.08) |
Distributions from net investment income | (.32) | (.17) | (.06) | (.11) | (.17) |
Distributions from net realized gain | - | (.25) | - | - | (.02) |
Total distributions | (.32) | (.42) | (.06) | (.11) | (.19) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 35.83 | $ 27.18 | $ 26.69 | $ 22.30 | $ 17.45 |
Total Return A | 33.28% | 3.72% | 19.95% | 28.52% | (22.31)% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .84% | .85% | .85% | .89% | .96% |
Expenses net of fee waivers, if any | .84% | .85% | .85% | .89% | .96% |
Expenses net of all reductions | .83% | .85% | .84% | .88% | .95% |
Net investment income (loss) | 1.04% | 1.08% | .65% | .61% | 1.16% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 84,780 | $ 42,850 | $ 68,323 | $ 29,578 | $ 12,762 |
Portfolio turnover rate D | 78% | 82% | 75% | 110% | 135% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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, changes in interest rates and credit quality. 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 restricted equity securities and private placements where observable inputs are limited, assumptions about market activity and risk are used and these securities are generally categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. For corporate bonds, pricing vendors utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type as well as broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Investment Valuation - continued
valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
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, 2013, 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. 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 and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to futures contracts, foreign currency transactions, equity-debt classifications, capital loss carryforwards and losses deferred due to wash sales.
Annual Report
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 | $ 123,912,594 |
Gross unrealized depreciation | (1,338,720) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 122,573,874 |
|
|
Tax Cost | $ 419,932,428 |
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 1,115,984 |
Undistributed long-term capital gain | $ 20,501,642 |
Net unrealized appreciation (depreciation) | $ 122,574,078 |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 2,791,779 | $ 1,437,740 |
Long-term Capital Gains | - | 4,219,307 |
Total | $ 2,791,779 | $ 5,657,047 |
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 net asset value 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.
New Accounting Pronouncement. The Financial Accounting Standards Board issued in December 2011, Accounting Standard Update No. 2011-11, Disclosures about Offsetting Assets and Liabilities, and in January 2013, Accounting Standards Update No. 2013-1 Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. These updates create new disclosure requirements requiring entities to disclose both gross and net information for derivatives and other financial instruments that are either offset in the Statement of Assets and Liabilities or subject to an enforceable master netting arrangement or similar agreement. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Management expects that the impact of the update's adoption will be limited to additional financial statement disclosures as applicable.
4. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including futures contracts. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment. |
Annual Report
Notes to Financial Statements - continued
4. Derivative Instruments - continued
Risk Exposures and the Use of Derivative Instruments - continued
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Counterparty credit risk related to exchange-traded futures contracts may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Futures Contracts. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. The Fund used futures contracts to manage its exposure to the stock market.
Upon entering into a futures contract, a fund is required to deposit either cash or securities (initial margin) with a clearing broker in an amount equal to a certain percentage of the face value of the contract. Futures contracts are marked-to-market daily and subsequent daily payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contracts and are recorded as unrealized appreciation or (depreciation). This receivable and/or payable, if any, is included in daily variation margin for derivative instruments in the Statement of Assets and Liabilities. Realized gain or (loss) is recorded upon the expiration or closing of a futures contract.
Any open futures contracts at period end are presented in the Schedule of Investments under the caption "Futures Contracts." The underlying face amount at value reflects each contract's exposure to the underlying instrument or index at period end. Securities deposited to meet initial margin requirements are identified in the Schedule of Investments.
During the period the Fund recognized net realized gain (loss) of $595,204 and a change in net unrealized appreciation (depreciation) of $(195,061) related to its investment in futures contracts. These amounts are included in the Statement of Operations.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $379,874,110 and $331,865,021, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .56% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 550,485 | $ 17,945 |
Class T | .25% | .25% | 346,384 | 12,278 |
Class B | .75% | .25% | 189,880 | 143,886 |
Class C | .75% | .25% | 736,286 | 100,966 |
|
|
| $ 1,823,035 | $ 275,075 |
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
Annual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
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 | $ 96,176 |
Class T | 12,796 |
Class B* | 19,584 |
Class C* | 4,573 |
| $ 133,129 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 512,890 | .23 |
Class T | 163,549 | .24 |
Class B | 55,201 | .29 |
Class C | 172,760 | .23 |
Institutional Class | 120,371 | .21 |
| $ 1,024,771 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $5,799 for the period.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $997 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities 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, including 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. At period end, there were no security loans outstanding
Annual Report
Notes to Financial Statements - continued
8. Security Lending - continued
with FCM. 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 $2,912, including $175 from securities loaned to FCM.
9. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $39,059 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 $6.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net investment income |
|
|
Class A | $ 1,710,170 | $ 896,458 |
Class T | 408,593 | 170,680 |
Class B | 36,770 | 16,830 |
Class C | 160,671 | 70,972 |
Institutional Class | 475,575 | 282,800 |
Total | $ 2,791,779 | $ 1,437,740 |
From net realized gain |
|
|
Class A | $ - | $ 2,092,354 |
Class T | - | 659,892 |
Class B | - | 286,480 |
Class C | - | 731,497 |
Institutional Class | - | 449,084 |
Total | $ - | $ 4,219,307 |
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 2,574,295 | 1,757,163 | $ 79,657,790 | $ 44,013,667 |
Reinvestment of distributions | 53,714 | 118,075 | 1,500,721 | 2,609,664 |
Shares redeemed | (2,093,962) | (3,404,053) | (62,545,427) | (83,950,843) |
Net increase (decrease) | 534,047 | (1,528,815) | $ 18,613,084 | $ (37,327,512) |
Class T |
|
|
|
|
Shares sold | 353,347 | 369,147 | $ 10,754,227 | $ 9,058,222 |
Reinvestment of distributions | 14,180 | 36,910 | 390,674 | 800,817 |
Shares redeemed | (517,661) | (746,452) | (15,034,025) | (17,604,399) |
Net increase (decrease) | (150,134) | (340,395) | $ (3,889,124) | $ (7,745,360) |
Class B |
|
|
|
|
Shares sold | 24,479 | 62,276 | $ 701,454 | $ 1,371,568 |
Reinvestment of distributions | 1,145 | 12,641 | 30,226 | 255,322 |
Shares redeemed | (303,898) | (441,128) | (8,464,475) | (10,119,054) |
Net increase (decrease) | (278,274) | (366,211) | $ (7,732,795) | $ (8,492,164) |
Class C |
|
|
|
|
Shares sold | 682,170 | 457,163 | $ 19,951,920 | $ 10,854,816 |
Reinvestment of distributions | 5,091 | 31,555 | 134,814 | 641,832 |
Shares redeemed | (604,905) | (787,971) | (16,678,512) | (18,054,638) |
Net increase (decrease) | 82,356 | (299,253) | $ 3,408,222 | $ (6,557,990) |
Annual Report
11. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Institutional Class |
|
|
|
|
Shares sold | 1,667,388 | 806,817 | $ 53,671,489 | $ 21,049,427 |
Reinvestment of distributions | 12,331 | 22,926 | 356,365 | 525,598 |
Shares redeemed | (890,195) | (1,812,880) | (27,529,476) | (44,394,474) |
Net increase (decrease) | 789,524 | (983,137) | $ 26,498,378 | $ (22,819,449) |
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 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, 2013 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) | 11.61% | 10.59% | 7.81% |
Class T (incl. 3.50% sales charge) | 13.96% | 10.82% | 7.80% |
Class B (incl. contingent deferred sales charge) A | 12.52% | 10.80% | 7.87% |
Class C (incl. contingent deferred sales charge) B | 16.53% | 11.06% | 7.65% |
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, 2003, 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
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 18.42%, 18.09%, 17.52% and 17.53%, respectively (excluding sales charges), topping the 14.25% gain of the MSCI® U.S. IMI Information Technology 25-50 Index but trailing the S&P 500®. Versus the overall market, the technology sector was particularly weighed down by weak results in computer hardware stocks. I look for situations where a company's future earnings power is not reflected in its valuation, whether due to underestimated long-term growth, a misunderstood turnaround story or an unanticipated cyclical rebound. Typically, I find the most compelling investment candidates in the mid-cap and small-cap areas of the market, because that's where the fastest growth tends to be. Given this bias, it was nice to see the fund's relative performance meaningfully bolstered by a sizable underweighting in companies with market capitalizations above $100 billion, and overweightings in mid-caps and especially small-caps. For example, in the semiconductor space, where I nearly halved the fund's weighting because I thought I saw better opportunities elsewhere, the fund benefited from not owning weak-performing Intel, the leading maker of chips for personal computers and a sizable component of the MSCI sector index. On the other hand, the fund had a large overweighting in Cree, a mid-cap stock whose price nearly tripled during the period. This company manufactures semiconductors used in light-emitting diode (LED) products. With that said, as Cree's share price climbed, I significantly reduced this position to manage risk and lock in profits. However, the fund's largest relative contributor was Apple. We started the period with essentially a market weighting here, but early in the year I decreased the position to a large underweighting, which - based on this stock's weak showing - was the right call. That said, Apple remained a huge part of our MSCI benchmark, and it was the fund's largest position at period end. Additionally, Apple was by far the fund's biggest detractor in absolute terms. Elsewhere, communications equipment was an area in which I boosted the fund's weighting, because I expected it to benefit from increasing enterprise IT spending. Stock selection in this group had a positive impact on the fund's relative results, led by Juniper Networks, in which I built a large position during the period, and Acme Packet, which I sold in the spring for a healthy profit, after the stock spiked higher on enterprise database maker Oracle's February announcement that it planned to purchase the company. On the flip side, I was late in bringing up our allocation to strong-performing index stock Cisco Systems, a large-cap provider of network equipment that was our biggest relative detractor because of underweighted exposure here early in the period. Stock picking in systems software was also a negative, mainly due to two stocks: Oracle and VMware. Although we began the period with a large underweighting in Oracle, I eventually built this position into the fund's third-largest holding by period end. However, the shares have been volatile so far in 2013, as the company has been uncharacteristically unreliable at hitting its sales and earnings targets. Meanwhile, VMware, a provider of hardware and software enabling corporate clients to operate virtual, cloud-based servers and related applications, saw its stock plummet in late January, after the firm unveiled a disappointing outlook for 2013 and announced plans to cut 900 jobs. I sold all but a token position here.
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, 2013 to July 31, 2013).
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 | 1.17% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,115.30 | $ 6.14 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.99 | $ 5.86 |
Class T | 1.41% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,113.70 | $ 7.39 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.80 | $ 7.05 |
Class B | 1.92% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,110.80 | $ 10.05 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.27 | $ 9.59 |
Class C | 1.91% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,110.70 | $ 10.00 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.32 | $ 9.54 |
Institutional Class | .86% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,116.70 | $ 4.51 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.53 | $ 4.31 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Apple, Inc. | 10.0 | 11.4 |
Google, Inc. Class A | 9.0 | 8.3 |
Oracle Corp. | 6.4 | 3.6 |
Microsoft Corp. | 5.6 | 0.0 |
Cisco Systems, Inc. | 4.1 | 0.5 |
salesforce.com, Inc. | 3.6 | 3.4 |
Visa, Inc. Class A | 3.3 | 3.3 |
Juniper Networks, Inc. | 3.0 | 1.2 |
F5 Networks, Inc. | 2.3 | 1.2 |
Fidelity National Information Services, Inc. | 1.6 | 0.2 |
| 48.9 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Software | 27.7% |
|
![]() | Internet Software & Services | 16.2% |
|
![]() | Computers & Peripherals | 13.4% |
|
![]() | Communications Equipment | 12.5% |
|
![]() | IT Services | 9.5% |
|
![]() | All Others* | 20.7% |
|
As of January 31, 2013 | |||
![]() | Software | 19.9% |
|
![]() | Internet Software & Services | 17.6% |
|
![]() | Computers & Peripherals | 17.1% |
|
![]() | Semiconductors & Semiconductor Equipment | 15.1% |
|
![]() | Communications Equipment | 9.7% |
|
![]() | All Others* | 20.6% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Technology Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 96.9% | |||
Shares | Value | ||
AEROSPACE & DEFENSE - 0.0% | |||
Aerospace & Defense - 0.0% | |||
DigitalGlobe, Inc. (a) | 236 | $ 7,646 | |
AUTOMOBILES - 0.3% | |||
Automobile Manufacturers - 0.3% | |||
Tesla Motors, Inc. (a) | 16,400 | 2,202,192 | |
COMMUNICATIONS EQUIPMENT - 12.5% | |||
Communications Equipment - 12.5% | |||
AAC Acoustic Technology Holdings, Inc. | 16,500 | 76,803 | |
ADTRAN, Inc. | 27,686 | 731,741 | |
ADVA AG Optical Networking (a) | 92,560 | 502,400 | |
Alcatel-Lucent SA (a)(d) | 289,353 | 730,359 | |
Alcatel-Lucent SA sponsored ADR (a) | 926,388 | 2,353,026 | |
Aruba Networks, Inc. (a) | 146,044 | 2,596,662 | |
BlackBerry Ltd. (a) | 300 | 2,649 | |
Brocade Communications Systems, Inc. (a) | 14,000 | 93,240 | |
Ciena Corp. (a) | 129,912 | 2,865,859 | |
Cisco Systems, Inc. | 1,361,717 | 34,791,869 | |
Comba Telecom Systems Holdings Ltd. (a) | 66,000 | 23,658 | |
F5 Networks, Inc. (a) | 223,468 | 19,611,552 | |
Finisar Corp. (a) | 4,863 | 94,002 | |
HTC Corp. | 10,000 | 53,176 | |
Infinera Corp. (a)(d) | 271,890 | 2,966,320 | |
Ixia (a) | 26,400 | 366,960 | |
JDS Uniphase Corp. (a) | 28,981 | 425,151 | |
Juniper Networks, Inc. (a) | 1,180,748 | 25,586,809 | |
Motorola Solutions, Inc. | 1,318 | 72,266 | |
Palo Alto Networks, Inc. | 9,633 | 471,439 | |
Polycom, Inc. (a) | 119 | 1,138 | |
QUALCOMM, Inc. | 1,360 | 87,788 | |
Radware Ltd. (a) | 128,480 | 1,760,176 | |
Riverbed Technology, Inc. (a) | 470 | 7,351 | |
Sandvine Corp. (U.K.) (a) | 1,305,800 | 2,466,412 | |
SerComm Corp. | 273,000 | 351,319 | |
Sonus Networks, Inc. (a) | 1,685,784 | 5,765,381 | |
Spirent Communications PLC | 296,600 | 596,039 | |
ZTE Corp. (H Shares) | 220,800 | 383,772 | |
| 105,835,317 | ||
COMPUTERS & PERIPHERALS - 13.4% | |||
Computer Hardware - 12.2% | |||
3D Systems Corp. (a) | 4,990 | 235,678 | |
Advantech Co. Ltd. | 176,000 | 850,808 | |
Apple, Inc. | 185,757 | 84,055,032 | |
Hewlett-Packard Co. | 590 | 15,151 | |
Lenovo Group Ltd. | 13,986,000 | 12,749,629 | |
NCR Corp. (a) | 122,240 | 4,400,640 | |
Stratasys Ltd. (a) | 9,741 | 863,540 | |
Wistron Corp. | 81,200 | 77,424 | |
| 103,247,902 | ||
| |||
Shares | Value | ||
Computer Storage & Peripherals - 1.2% | |||
ADLINK Technology, Inc. | 2,300 | $ 3,435 | |
Catcher Technology Co. Ltd. | 1,000 | 4,334 | |
Chicony Electronics Co. Ltd. | 29,290 | 70,112 | |
EMC Corp. | 335,605 | 8,776,071 | |
Gemalto NV | 940 | 98,292 | |
NetApp, Inc. | 32,046 | 1,317,732 | |
SanDisk Corp. | 1,414 | 77,940 | |
Synaptics, Inc. (a) | 181 | 7,240 | |
Wacom Co. Ltd. | 7,400 | 59,859 | |
| 10,415,015 | ||
TOTAL COMPUTERS & PERIPHERALS | 113,662,917 | ||
DIVERSIFIED CONSUMER SERVICES - 0.0% | |||
Education Services - 0.0% | |||
Educomp Solutions Ltd. | 16,123 | 6,584 | |
New Oriental Education & Technology Group, Inc. sponsored ADR | 3,974 | 88,183 | |
| 94,767 | ||
Specialized Consumer Services - 0.0% | |||
LifeLock, Inc. | 15,000 | 170,550 | |
TOTAL DIVERSIFIED CONSUMER SERVICES | 265,317 | ||
ELECTRICAL EQUIPMENT - 0.1% | |||
Electrical Components & Equipment - 0.1% | |||
Dynapack International Technology Corp. | 14,000 | 39,627 | |
TECO Electric & Machinery Co. Ltd. | 471,000 | 513,476 | |
| 553,103 | ||
ELECTRONIC EQUIPMENT & COMPONENTS - 4.5% | |||
Electronic Components - 2.0% | |||
Aeroflex Holding Corp. (a) | 13,464 | 101,249 | |
Amphenol Corp. Class A | 20,108 | 1,579,684 | |
AU Optronics Corp. (a) | 9,000 | 3,241 | |
Delta Electronics, Inc. | 86,000 | 417,170 | |
InvenSense, Inc. (a)(d) | 117,037 | 2,069,214 | |
Kyocera Corp. | 700 | 71,137 | |
Ledlink Optics, Inc. | 379,000 | 1,259,753 | |
Omron Corp. | 48,800 | 1,512,695 | |
Sapphire Technology Co. Ltd. (a) | 4,685 | 149,051 | |
Sunny Optical Technology Group Co. Ltd. | 92,000 | 92,052 | |
Taiyo Yuden Co. Ltd. | 129,300 | 1,733,948 | |
Tong Hsing Electronics Industries Ltd. | 1,128,000 | 5,490,515 | |
TXC Corp. | 776,000 | 1,041,307 | |
Universal Display Corp. (a)(d) | 2,827 | 81,842 | |
Yaskawa Electric Corp. | 130,000 | 1,554,795 | |
| 17,157,653 | ||
Electronic Equipment & Instruments - 0.6% | |||
Chroma ATE, Inc. | 358,683 | 749,772 | |
FEI Co. | 3,300 | 255,585 | |
Common Stocks - continued | |||
Shares | Value | ||
ELECTRONIC EQUIPMENT & COMPONENTS - CONTINUED | |||
Electronic Equipment & Instruments - continued | |||
Keyence Corp. | 7,850 | $ 2,565,621 | |
National Instruments Corp. | 29,793 | 839,865 | |
RealD, Inc. (a) | 12,949 | 137,907 | |
Test Research, Inc. | 20,366 | 27,227 | |
TPK Holding Co. Ltd. GDR (Reg. S) | 904 | 10,624 | |
| 4,586,601 | ||
Electronic Manufacturing Services - 1.3% | |||
Benchmark Electronics, Inc. (a) | 1,200 | 26,544 | |
Fabrinet (a) | 10,766 | 159,444 | |
IPG Photonics Corp. | 2,200 | 133,980 | |
Jabil Circuit, Inc. | 4,037 | 92,811 | |
Ju Teng International Holdings Ltd. | 5,014,000 | 2,437,307 | |
KEMET Corp. (a) | 1,417 | 6,178 | |
TE Connectivity Ltd. | 118,085 | 6,027,058 | |
Trimble Navigation Ltd. (a) | 75,867 | 2,165,244 | |
| 11,048,566 | ||
Technology Distributors - 0.6% | |||
Arrow Electronics, Inc. (a) | 53 | 2,419 | |
Digital China Holdings Ltd. (H Shares) | 4,073,000 | 4,474,439 | |
Redington India Ltd. | 57,478 | 53,034 | |
VST Holdings Ltd. | 1,176,000 | 197,122 | |
WPG Holding Co. Ltd. | 328,975 | 409,642 | |
WT Microelectronics Co. Ltd. | 17,509 | 19,000 | |
| 5,155,656 | ||
TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 37,948,476 | ||
HEALTH CARE EQUIPMENT & SUPPLIES - 0.1% | |||
Health Care Equipment - 0.1% | |||
Biosensors International Group Ltd. | 1,223,000 | 1,000,842 | |
HEALTH CARE TECHNOLOGY - 0.7% | |||
Health Care Technology - 0.7% | |||
athenahealth, Inc. (a) | 7,866 | 880,599 | |
Cerner Corp. (a) | 49,354 | 2,418,346 | |
So-net M3, Inc. | 1,041 | 2,870,697 | |
| 6,169,642 | ||
HOUSEHOLD DURABLES - 0.7% | |||
Consumer Electronics - 0.7% | |||
Alpine Electronics, Inc. | 236,500 | 2,326,111 | |
Sony Corp. | 4,500 | 94,477 | |
Sony Corp. sponsored ADR (d) | 167,000 | 3,513,680 | |
| 5,934,268 | ||
Household Appliances - 0.0% | |||
Haier Electronics Group Co. Ltd. | 17,000 | 30,644 | |
TOTAL HOUSEHOLD DURABLES | 5,964,912 | ||
| |||
Shares | Value | ||
HOUSEHOLD PRODUCTS - 0.0% | |||
Household Products - 0.0% | |||
NVC Lighting Holdings Ltd. | 180,000 | $ 47,579 | |
INDUSTRIAL CONGLOMERATES - 0.0% | |||
Industrial Conglomerates - 0.0% | |||
Samsung Techwin Co. Ltd. | 196 | 12,279 | |
Toshiba Corp. | 3,000 | 13,022 | |
| 25,301 | ||
INTERNET & CATALOG RETAIL - 0.6% | |||
Internet Retail - 0.6% | |||
Amazon.com, Inc. (a) | 6,801 | 2,048,597 | |
Ctrip.com International Ltd. sponsored ADR (a) | 25,100 | 919,413 | |
E-Commerce China Dangdang, Inc. ADR (a) | 260 | 2,452 | |
Expedia, Inc. | 29 | 1,367 | |
Groupon, Inc. Class A (a) | 47,355 | 419,565 | |
priceline.com, Inc. (a) | 69 | 60,421 | |
Rakuten, Inc. | 1,300 | 17,566 | |
Start Today Co. Ltd. | 48,200 | 997,377 | |
TripAdvisor, Inc. (a) | 2,394 | 179,598 | |
| 4,646,356 | ||
INTERNET SOFTWARE & SERVICES - 16.2% | |||
Internet Software & Services - 16.2% | |||
Active Network, Inc. (a) | 64,340 | 548,820 | |
Akamai Technologies, Inc. (a) | 1,994 | 94,117 | |
Angie's List, Inc. (a)(d) | 100,360 | 2,209,927 | |
Baidu.com, Inc. sponsored ADR (a) | 51 | 6,748 | |
Bankrate, Inc. (a) | 80,285 | 1,439,510 | |
Bazaarvoice, Inc. (a) | 2,800 | 29,344 | |
Cornerstone OnDemand, Inc. (a) | 65,665 | 2,891,887 | |
DealerTrack Holdings, Inc. (a) | 31,770 | 1,188,198 | |
Demandware, Inc. (a) | 54,814 | 2,434,838 | |
E2open, Inc. | 54,993 | 1,093,261 | |
eBay, Inc. (a) | 1,579 | 81,619 | |
Facebook, Inc. Class A (a) | 29,758 | 1,095,987 | |
Google, Inc. Class A (a) | 86,067 | 76,393,069 | |
INFO Edge India Ltd. | 35,836 | 185,555 | |
IntraLinks Holdings, Inc. (a) | 13,467 | 127,937 | |
Kakaku.com, Inc. | 2,200 | 76,284 | |
LinkedIn Corp. (a) | 46,740 | 9,525,145 | |
LogMeIn, Inc. (a) | 347 | 10,313 | |
Mail.Ru Group Ltd. GDR (e) | 1,800 | 57,510 | |
Marketo, Inc. | 1,100 | 34,573 | |
MercadoLibre, Inc. | 134 | 15,736 | |
Millennial Media, Inc. (a)(d) | 141,724 | 1,404,485 | |
NHN Corp. | 8,407 | 2,195,830 | |
Qihoo 360 Technology Co. Ltd. ADR (a) | 9,200 | 598,552 | |
Rackspace Hosting, Inc. (a) | 25,504 | 1,155,076 | |
Renren, Inc. ADR (a)(d) | 5,900 | 19,647 | |
Responsys, Inc. (a) | 224,130 | 3,247,644 | |
Common Stocks - continued | |||
Shares | Value | ||
INTERNET SOFTWARE & SERVICES - CONTINUED | |||
Internet Software & Services - continued | |||
SciQuest, Inc. (a) | 89,627 | $ 2,210,202 | |
SINA Corp. (a) | 31,341 | 2,161,589 | |
SouFun Holdings Ltd. ADR | 157 | 5,457 | |
TelecityGroup PLC | 63,300 | 856,064 | |
Tencent Holdings Ltd. | 173,100 | 7,851,950 | |
Velti PLC (a) | 10,736 | 12,132 | |
VeriSign, Inc. (a) | 1,630 | 77,979 | |
Vocus, Inc. (a) | 117,715 | 1,203,047 | |
Web.com Group, Inc. (a) | 31,450 | 817,071 | |
XO Group, Inc. (a) | 5,200 | 62,192 | |
Yahoo!, Inc. (a) | 400,857 | 11,260,073 | |
Yandex NV (a) | 82,276 | 2,673,970 | |
Youku Tudou, Inc. ADR (a) | 404 | 8,961 | |
| 137,362,299 | ||
IT SERVICES - 9.5% | |||
Data Processing & Outsourced Services - 8.4% | |||
Automatic Data Processing, Inc. | 1,366 | 98,475 | |
EVERTEC, Inc. | 10,100 | 241,390 | |
Fidelity National Information Services, Inc. | 310,100 | 13,383,916 | |
Fiserv, Inc. (a) | 13,912 | 1,338,891 | |
FleetCor Technologies, Inc. (a) | 42,106 | 3,779,856 | |
Global Payments, Inc. | 202 | 9,355 | |
Jack Henry & Associates, Inc. | 20,492 | 989,764 | |
MasterCard, Inc. Class A | 21,270 | 12,987,675 | |
Paychex, Inc. | 54,004 | 2,129,918 | |
QIWI PLC Class B sponsored ADR | 10,200 | 292,740 | |
Syntel, Inc. | 1,100 | 78,958 | |
The Western Union Co. | 74,542 | 1,338,774 | |
Total System Services, Inc. | 168,155 | 4,609,129 | |
VeriFone Systems, Inc. (a) | 44 | 839 | |
Visa, Inc. Class A | 155,848 | 27,586,654 | |
WEX, Inc. (a) | 26,253 | 2,282,436 | |
| 71,148,770 | ||
IT Consulting & Other Services - 1.1% | |||
Accenture PLC Class A | 22,243 | 1,641,756 | |
Bit-isle, Inc. | 1,600 | 14,413 | |
Camelot Information Systems, Inc. ADR (a) | 145 | 255 | |
ChinaSoft International Ltd. (a) | 20,000 | 5,390 | |
Cognizant Technology Solutions Corp. Class A (a) | 44,828 | 3,245,099 | |
EPAM Systems, Inc. (a) | 44,400 | 1,285,380 | |
IBM Corp. | 375 | 73,140 | |
InterXion Holding N.V. (a) | 30,700 | 772,719 | |
Pactera Technology International Ltd. ADR | 94,096 | 630,443 | |
ServiceSource International, Inc. (a) | 82,288 | 878,013 | |
| |||
Shares | Value | ||
Teradata Corp. (a) | 1,536 | $ 90,808 | |
Virtusa Corp. (a) | 16,100 | 415,058 | |
| 9,052,474 | ||
TOTAL IT SERVICES | 80,201,244 | ||
LIFE SCIENCES TOOLS & SERVICES - 0.1% | |||
Life Sciences Tools & Services - 0.1% | |||
Illumina, Inc. (a)(d) | 1,406 | 112,227 | |
WuXi PharmaTech Cayman, Inc. sponsored ADR (a) | 27,300 | 606,060 | |
| 718,287 | ||
MACHINERY - 0.4% | |||
Industrial Machinery - 0.4% | |||
Airtac International Group | 13,910 | 78,836 | |
Fanuc Corp. | 15,400 | 2,337,289 | |
Mirle Automation Corp. | 95,738 | 70,858 | |
Shin Zu Shing Co. Ltd. | 154,000 | 346,558 | |
SMC Corp. | 3,400 | 721,254 | |
| 3,554,795 | ||
MEDIA - 0.1% | |||
Advertising - 0.0% | |||
Dentsu, Inc. | 200 | 6,394 | |
ReachLocal, Inc. (a) | 658 | 8,495 | |
| 14,889 | ||
Cable & Satellite - 0.0% | |||
DIRECTV (a) | 190 | 12,021 | |
Movies & Entertainment - 0.1% | |||
IMAX Corp. (a) | 29,830 | 751,119 | |
TOTAL MEDIA | 778,029 | ||
OFFICE ELECTRONICS - 0.0% | |||
Office Electronics - 0.0% | |||
Xerox Corp. | 8,333 | 80,830 | |
PHARMACEUTICALS - 0.0% | |||
Pharmaceuticals - 0.0% | |||
China Medical System Holdings Ltd. | 95,250 | 85,970 | |
PROFESSIONAL SERVICES - 0.0% | |||
Research & Consulting Services - 0.0% | |||
Acacia Research Corp. | 300 | 6,846 | |
IHS, Inc. Class A (a) | 850 | 93,313 | |
| 100,159 | ||
REAL ESTATE INVESTMENT TRUSTS - 0.2% | |||
Specialized REITs - 0.2% | |||
American Tower Corp. | 23,574 | 1,668,803 | |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 9.3% | |||
Semiconductor Equipment - 2.6% | |||
Advanced Energy Industries, Inc. (a) | 5,757 | 124,697 | |
Aixtron AG (a)(d) | 169,719 | 2,664,864 | |
Common Stocks - continued | |||
Shares | Value | ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - CONTINUED | |||
Semiconductor Equipment - continued | |||
Amkor Technology, Inc. (a)(d) | 1,594 | $ 6,727 | |
Applied Materials, Inc. | 524 | 8,546 | |
ASM International NV (depositary receipt) | 2,330 | 73,162 | |
ASML Holding NV | 78 | 7,012 | |
Entegris, Inc. (a) | 8,857 | 84,407 | |
FormFactor, Inc. (a) | 50,000 | 363,500 | |
GCL-Poly Energy Holdings Ltd. | 7,410,000 | 1,891,769 | |
GT Advanced Technologies, Inc. (a)(d) | 256,511 | 1,331,292 | |
ICD Co. Ltd. (a) | 5,573 | 73,153 | |
Lam Research Corp. (a) | 8,289 | 407,985 | |
Nanometrics, Inc. (a) | 8,409 | 129,162 | |
Rubicon Technology, Inc. (a)(d) | 303,671 | 2,556,910 | |
Teradyne, Inc. (a) | 4,232 | 69,786 | |
Tessera Technologies, Inc. | 324,314 | 6,508,982 | |
Ultratech, Inc. (a) | 69,227 | 2,022,813 | |
Veeco Instruments, Inc. (a)(d) | 102,272 | 3,554,975 | |
| 21,879,742 | ||
Semiconductors - 6.7% | |||
Advanced Micro Devices, Inc. (a) | 1,157 | 4,362 | |
Alpha & Omega Semiconductor Ltd. (a) | 8,432 | 64,505 | |
Altera Corp. | 326,668 | 11,616,314 | |
Analog Devices, Inc. | 1,758 | 86,775 | |
Applied Micro Circuits Corp. (a) | 106,225 | 1,260,891 | |
ARM Holdings PLC sponsored ADR | 19 | 763 | |
Atmel Corp. (a) | 11,952 | 94,421 | |
Avago Technologies Ltd. | 2,238 | 82,090 | |
Broadcom Corp. Class A | 313,377 | 8,639,804 | |
Canadian Solar, Inc. (a) | 32 | 473 | |
Cavium, Inc. (a) | 69,229 | 2,531,012 | |
Chipbond Technology Corp. | 228,000 | 503,204 | |
ChipMOS TECHNOLOGIES (Bermuda) Ltd. | 10,042 | 150,931 | |
Cirrus Logic, Inc. (a) | 3,406 | 65,668 | |
Cree, Inc. (a) | 43,287 | 3,025,761 | |
Crystalwise Technology, Inc. (a) | 200,000 | 185,698 | |
Cypress Semiconductor Corp. | 172,228 | 2,199,352 | |
Dialog Semiconductor PLC (a) | 3,866 | 63,903 | |
Diodes, Inc. (a) | 370 | 10,142 | |
Epistar Corp. | 35,000 | 58,343 | |
EZchip Semiconductor Ltd. (a)(d) | 31,915 | 1,010,110 | |
Fairchild Semiconductor International, Inc. (a) | 565 | 7,130 | |
Freescale Semiconductor Holdings I Ltd. (a) | 66,458 | 1,043,391 | |
Himax Technologies, Inc. sponsored ADR | 46,500 | 302,715 | |
Hittite Microwave Corp. (a) | 147 | 9,185 | |
Infineon Technologies AG | 1,000 | 8,826 | |
Inotera Memories, Inc. (a) | 8,360,000 | 3,135,523 | |
Inphi Corp. (a) | 126,857 | 1,479,153 | |
Intermolecular, Inc. (a) | 303,054 | 1,915,301 | |
| |||
Shares | Value | ||
International Rectifier Corp. (a) | 3,569 | $ 86,049 | |
Intersil Corp. Class A | 96,094 | 981,120 | |
JA Solar Holdings Co. Ltd. ADR (a)(d) | 8,186 | 76,294 | |
Linear Technology Corp. | 185 | 7,504 | |
LSI Corp. | 11,127 | 86,568 | |
MagnaChip Semiconductor Corp. (a) | 64 | 1,316 | |
Marvell Technology Group Ltd. | 566 | 7,341 | |
MediaTek, Inc. | 1,522 | 18,267 | |
Mellanox Technologies Ltd. (a) | 64,752 | 2,955,929 | |
Micron Technology, Inc. (a) | 631 | 8,361 | |
Microsemi Corp. (a) | 4,100 | 101,106 | |
Mindspeed Technologies, Inc. (a)(d) | 161,476 | 495,731 | |
Monolithic Power Systems, Inc. | 32,001 | 837,786 | |
Novatek Microelectronics Corp. | 383,000 | 1,691,865 | |
NVIDIA Corp. | 6,070 | 87,590 | |
NXP Semiconductors NV (a) | 2,533 | 82,702 | |
O2Micro International Ltd. sponsored ADR (a) | 14,600 | 47,012 | |
Omnivision Technologies, Inc. (a) | 113,282 | 1,841,965 | |
ON Semiconductor Corp. (a) | 9,535 | 78,568 | |
Phison Electronics Corp. | 8,000 | 59,743 | |
PMC-Sierra, Inc. (a) | 212,399 | 1,402,895 | |
Power Integrations, Inc. | 1,654 | 91,218 | |
Radiant Opto-Electronics Corp. | 2,626 | 8,238 | |
Rambus, Inc. (a) | 105 | 1,024 | |
RDA Microelectronics, Inc. sponsored ADR | 15,172 | 170,837 | |
RF Micro Devices, Inc. (a) | 1,611 | 8,361 | |
Samsung Electronics Co. Ltd. | 2 | 2,278 | |
Semtech Corp. (a) | 2,703 | 81,766 | |
Silicon Laboratories, Inc. (a) | 1,700 | 66,402 | |
Silicon Motion Technology Corp. sponsored ADR | 66 | 788 | |
Siliconware Precision Industries Co. Ltd. sponsored ADR | 53,700 | 306,090 | |
SK Hynix, Inc. (a) | 270 | 6,536 | |
Skyworks Solutions, Inc. (a) | 3,767 | 90,483 | |
Spreadtrum Communications, Inc. ADR | 277 | 8,266 | |
STMicroelectronics NV (NY Shares) unit | 1,000 | 8,530 | |
Texas Instruments, Inc. | 2,850 | 111,720 | |
Trina Solar Ltd. (a) | 10,094 | 74,897 | |
Xilinx, Inc. | 116,844 | 5,455,446 | |
YoungTek Electronics Corp. | 34,156 | 75,839 | |
| 57,080,177 | ||
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | 78,959,919 | ||
SOFTWARE - 27.7% | |||
Application Software - 11.6% | |||
Adobe Systems, Inc. (a) | 194,099 | 9,177,001 | |
ANSYS, Inc. (a) | 47,662 | 3,805,334 | |
Aspen Technology, Inc. (a) | 124,921 | 4,064,929 | |
Autodesk, Inc. (a) | 2,307 | 81,645 | |
Common Stocks - continued | |||
Shares | Value | ||
SOFTWARE - CONTINUED | |||
Application Software - continued | |||
Blackbaud, Inc. | 2,435 | $ 85,444 | |
BroadSoft, Inc. (a) | 102,777 | 3,066,866 | |
Citrix Systems, Inc. (a) | 124,785 | 8,987,016 | |
Compuware Corp. | 230,453 | 2,613,337 | |
Comverse, Inc. | 4,710 | 147,517 | |
Concur Technologies, Inc. (a) | 19,698 | 1,750,955 | |
Descartes Systems Group, Inc. (a) | 219,300 | 2,538,679 | |
Ellie Mae, Inc. (a) | 3,074 | 72,393 | |
Guidewire Software, Inc. (a) | 62,200 | 2,721,872 | |
Informatica Corp. (a) | 2,233 | 85,234 | |
Intuit, Inc. | 104,746 | 6,695,364 | |
Jive Software, Inc. (a) | 78,998 | 1,060,153 | |
Kingdee International Software Group Co. Ltd. (a) | 14,498,800 | 3,047,223 | |
Manhattan Associates, Inc. (a) | 97 | 8,569 | |
MicroStrategy, Inc. Class A (a) | 17,560 | 1,668,376 | |
Nuance Communications, Inc. (a) | 4,581 | 85,940 | |
Open Text Corp. | 100 | 7,067 | |
Parametric Technology Corp. (a) | 47,220 | 1,278,718 | |
Pegasystems, Inc. | 23,421 | 840,814 | |
PROS Holdings, Inc. (a) | 8,633 | 283,335 | |
QLIK Technologies, Inc. (a) | 53,287 | 1,668,949 | |
RealPage, Inc. (a) | 4,600 | 92,736 | |
salesforce.com, Inc. (a) | 690,703 | 30,218,256 | |
SAP AG | 125 | 9,159 | |
SAP AG sponsored ADR | 1,100 | 80,179 | |
SolarWinds, Inc. (a) | 15,283 | 542,394 | |
Splunk, Inc. (a) | 200 | 10,002 | |
Synchronoss Technologies, Inc. (a) | 12,887 | 444,473 | |
Synopsys, Inc. (a) | 2,500 | 92,600 | |
TIBCO Software, Inc. (a) | 264,833 | 6,604,935 | |
TiVo, Inc. (a) | 8,000 | 88,400 | |
Ultimate Software Group, Inc. (a) | 20,100 | 2,719,530 | |
Verint Systems, Inc. (a) | 215 | 7,693 | |
Workday, Inc. Class A | 12,692 | 866,737 | |
| 97,619,824 | ||
Home Entertainment Software - 2.2% | |||
Activision Blizzard, Inc. | 360,570 | 6,483,049 | |
Capcom Co. Ltd. | 1,400 | 24,909 | |
Nintendo Co. Ltd. | 41,300 | 5,261,959 | |
Nintendo Co. Ltd. ADR | 34,827 | 550,267 | |
Perfect World Co. Ltd. sponsored ADR Class B | 258,432 | 5,439,994 | |
Take-Two Interactive Software, Inc. (a) | 53,923 | 945,270 | |
| 18,705,448 | ||
Systems Software - 13.9% | |||
Allot Communications Ltd. (a) | 20,200 | 295,526 | |
BMC Software, Inc. (a) | 1,824 | 83,849 | |
Check Point Software Technologies Ltd. (a) | 13 | 732 | |
CommVault Systems, Inc. (a) | 16,715 | 1,411,247 | |
| |||
Shares | Value | ||
Fortinet, Inc. (a) | 442 | $ 9,393 | |
Imperva, Inc. (a) | 11,600 | 587,192 | |
Infoblox, Inc. (a) | 3,000 | 98,100 | |
Insyde Software Corp. | 304,000 | 443,914 | |
Microsoft Corp. | 1,496,275 | 47,626,433 | |
NetSuite, Inc. (a) | 39,404 | 3,699,642 | |
Oracle Corp. | 1,685,450 | 54,524,308 | |
Red Hat, Inc. (a) | 107,751 | 5,578,269 | |
ServiceNow, Inc. (a) | 47,700 | 2,078,766 | |
Symantec Corp. | 584 | 15,581 | |
Tableau Software, Inc. | 1,400 | 77,560 | |
Totvs SA | 72,900 | 1,150,371 | |
VMware, Inc. Class A (a) | 1,046 | 85,971 | |
| 117,766,854 | ||
TOTAL SOFTWARE | 234,092,126 | ||
WIRELESS TELECOMMUNICATION SERVICES - 0.5% | |||
Wireless Telecommunication Services - 0.5% | |||
SBA Communications Corp. Class A (a) | 61,807 | 4,579,281 | |
TOTAL COMMON STOCKS (Cost $763,304,914) |
| ||
Money Market Funds - 4.2% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 18,978,148 | 18,978,148 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 16,714,477 | 16,714,477 | |
TOTAL MONEY MARKET FUNDS (Cost $35,692,625) |
| ||
TOTAL INVESTMENT PORTFOLIO - 101.1% (Cost $798,997,539) | 856,203,967 | ||
NET OTHER ASSETS (LIABILITIES) - (1.1)% | (9,659,138) | ||
NET ASSETS - 100% | $ 846,544,829 |
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) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $57,510 or 0.0% of net assets. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 61,392 |
Fidelity Securities Lending Cash Central Fund | 268,641 |
Total | $ 330,033 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2013, 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 | $ 820,511,342 | $ 809,551,453 | $ 8,764,059 | $ 2,195,830 |
Money Market Funds | 35,692,625 | 35,692,625 | - | - |
Total Investments in Securities: | $ 856,203,967 | $ 845,244,078 | $ 8,764,059 | $ 2,195,830 |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows. (Unaudited) |
United States of America | 85.2% |
Cayman Islands | 3.1% |
Japan | 3.1% |
Taiwan | 2.2% |
Hong Kong | 1.5% |
Others (Individually Less Than 1%) | 4.9% |
| 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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $16,100,221) - See accompanying schedule: Unaffiliated issuers (cost $763,304,914) | $ 820,511,342 |
|
Fidelity Central Funds (cost $35,692,625) | 35,692,625 |
|
Total Investments (cost $798,997,539) |
| $ 856,203,967 |
Receivable for investments sold | 41,084,127 | |
Receivable for fund shares sold | 531,751 | |
Dividends receivable | 573,201 | |
Distributions receivable from Fidelity Central Funds | 16,406 | |
Other receivables | 55,274 | |
Total assets | 898,464,726 | |
|
|
|
Liabilities | ||
Payable to custodian bank | $ 318 | |
Payable for investments purchased | 33,497,081 | |
Payable for fund shares redeemed | 824,199 | |
Accrued management fee | 387,028 | |
Distribution and service plan fees payable | 225,409 | |
Other affiliated payables | 204,593 | |
Other payables and accrued expenses | 66,792 | |
Collateral on securities loaned, at value | 16,714,477 | |
Total liabilities | 51,919,897 | |
|
|
|
Net Assets | $ 846,544,829 | |
Net Assets consist of: |
| |
Paid in capital | $ 807,879,942 | |
Accumulated net investment loss | (1,634,632) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (16,905,898) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 57,205,417 | |
Net Assets | $ 846,544,829 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 29.90 | |
|
|
|
Maximum offering price per share (100/94.25 of $29.90) | $ 31.72 | |
Class T: | $ 28.79 | |
|
|
|
Maximum offering price per share (100/96.50 of $28.79) | $ 29.83 | |
Class B: | $ 26.56 | |
|
|
|
Class C: | $ 26.68 | |
|
|
|
Institutional Class: | $ 31.47 |
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, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 6,293,285 |
Interest |
| 378,202 |
Income from Fidelity Central Funds |
| 330,033 |
Total income |
| 7,001,520 |
|
|
|
Expenses | ||
Management fee | $ 4,379,157 | |
Transfer agent fees | 2,219,558 | |
Distribution and service plan fees | 2,710,907 | |
Accounting and security lending fees | 278,733 | |
Custodian fees and expenses | 115,866 | |
Independent trustees' compensation | 5,595 | |
Registration fees | 76,946 | |
Audit | 61,076 | |
Legal | 5,479 | |
Miscellaneous | 6,989 | |
Total expenses before reductions | 9,860,306 | |
Expense reductions | (249,926) | 9,610,380 |
Net investment income (loss) | (2,608,860) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 108,252,317 | |
Foreign currency transactions | (129,819) | |
Total net realized gain (loss) |
| 108,122,498 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 25,688,069 | |
Assets and liabilities in foreign currencies | (2,130) | |
Total change in net unrealized appreciation (depreciation) |
| 25,685,939 |
Net gain (loss) | 133,808,437 | |
Net increase (decrease) in net assets resulting from operations | $ 131,199,577 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (2,608,860) | $ (4,886,076) |
Net realized gain (loss) | 108,122,498 | 13,565,652 |
Change in net unrealized appreciation (depreciation) | 25,685,939 | (12,835,203) |
Net increase (decrease) in net assets resulting from operations | 131,199,577 | (4,155,627) |
Share transactions - net increase (decrease) | 5,042,118 | (54,812,282) |
Redemption fees | 41,110 | 30,293 |
Total increase (decrease) in net assets | 136,282,805 | (58,937,616) |
|
|
|
Net Assets | ||
Beginning of period | 710,262,024 | 769,199,640 |
End of period (including accumulated net investment loss of $1,634,632 and accumulated net investment loss of $2,745,337, respectively) | $ 846,544,829 | $ 710,262,024 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 25.25 | $ 25.14 | $ 19.83 | $ 16.03 | $ 17.04 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.07) | (.13) | (.18) | (.16) | .02 F |
Net realized and unrealized gain (loss) | 4.72 | .24 | 5.49 | 3.96 | (1.03) |
Total from investment operations | 4.65 | .11 | 5.31 | 3.80 | (1.01) |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 29.90 | $ 25.25 | $ 25.14 | $ 19.83 | $ 16.03 |
Total Return A, B | 18.42% | .44% | 26.78% | 23.71% | (5.93)% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 1.18% | 1.18% | 1.18% | 1.21% | 1.23% |
Expenses net of fee waivers, if any | 1.18% | 1.18% | 1.18% | 1.21% | 1.23% |
Expenses net of all reductions | 1.14% | 1.17% | 1.16% | 1.18% | 1.22% |
Net investment income (loss) | (.25)% | (.55)% | (.73)% | (.83)% | .17% F |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 355,306 | $ 336,693 | $ 375,609 | $ 312,659 | $ 258,433 |
Portfolio turnover rate E | 142% | 201% | 167% | 115% | 225% |
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 $.04 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.18)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 24.38 | $ 24.33 | $ 19.24 | $ 15.59 | $ 16.62 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.13) | (.19) | (.23) | (.20) | (.01) F |
Net realized and unrealized gain (loss) | 4.54 | .24 | 5.32 | 3.85 | (1.02) |
Total from investment operations | 4.41 | .05 | 5.09 | 3.65 | (1.03) |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 28.79 | $ 24.38 | $ 24.33 | $ 19.24 | $ 15.59 |
Total Return A, B | 18.09% | .21% | 26.46% | 23.41% | (6.20)% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 1.42% | 1.43% | 1.43% | 1.46% | 1.49% |
Expenses net of fee waivers, if any | 1.42% | 1.43% | 1.43% | 1.46% | 1.49% |
Expenses net of all reductions | 1.39% | 1.42% | 1.40% | 1.44% | 1.48% |
Net investment income (loss) | (.50)% | (.80)% | (.98)% | (1.09)% | (.09)% F |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 173,692 | $ 172,709 | $ 196,913 | $ 169,049 | $ 151,170 |
Portfolio turnover rate E | 142% | 201% | 167% | 115% | 225% |
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 $.04 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.44)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 22.60 | $ 22.67 | $ 18.01 | $ 14.67 | $ 15.72 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.24) | (.28) | (.33) | (.27) | (.07) F |
Net realized and unrealized gain (loss) | 4.20 | .21 | 4.99 | 3.61 | (.98) |
Total from investment operations | 3.96 | (.07) | 4.66 | 3.34 | (1.05) |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 26.56 | $ 22.60 | $ 22.67 | $ 18.01 | $ 14.67 |
Total Return A, B | 17.52% | (.31)% | 25.87% | 22.77% | (6.68)% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 1.93% | 1.93% | 1.93% | 1.96% | 1.98% |
Expenses net of fee waivers, if any | 1.93% | 1.93% | 1.93% | 1.96% | 1.98% |
Expenses net of all reductions | 1.89% | 1.92% | 1.91% | 1.94% | 1.97% |
Net investment income (loss) | (1.01)% | (1.30)% | (1.49)% | (1.59)% | (.58)% F |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 13,745 | $ 17,476 | $ 25,508 | $ 29,176 | $ 30,580 |
Portfolio turnover rate E | 142% | 201% | 167% | 115% | 225% |
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 $.04 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.93)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 22.70 | $ 22.77 | $ 18.09 | $ 14.74 | $ 15.79 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.24) | (.29) | (.33) | (.28) | (.07) F |
Net realized and unrealized gain (loss) | 4.22 | .22 | 5.01 | 3.63 | (.98) |
Total from investment operations | 3.98 | (.07) | 4.68 | 3.35 | (1.05) |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 26.68 | $ 22.70 | $ 22.77 | $ 18.09 | $ 14.74 |
Total Return A, B | 17.53% | (.31)% | 25.87% | 22.73% | (6.65)% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 1.91% | 1.93% | 1.92% | 1.96% | 1.98% |
Expenses net of fee waivers, if any | 1.91% | 1.93% | 1.92% | 1.96% | 1.98% |
Expenses net of all reductions | 1.88% | 1.91% | 1.90% | 1.93% | 1.97% |
Net investment income (loss) | (.99)% | (1.29)% | (1.48)% | (1.58)% | (.58)% F |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 84,858 | $ 88,074 | $ 89,819 | $ 70,017 | $ 55,645 |
Portfolio turnover rate E | 142% | 201% | 167% | 115% | 225% |
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 $.04 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.93)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 26.50 | $ 26.30 | $ 20.68 | $ 16.67 | $ 17.68 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .02 | (.06) | (.11) | (.11) | .06 E |
Net realized and unrealized gain (loss) | 4.95 | .26 | 5.73 | 4.12 | (1.07) |
Total from investment operations | 4.97 | .20 | 5.62 | 4.01 | (1.01) |
Redemption fees added to paid in capital B, G | - | - | - | - | - |
Net asset value, end of period | $ 31.47 | $ 26.50 | $ 26.30 | $ 20.68 | $ 16.67 |
Total Return A | 18.75% | .76% | 27.18% | 24.06% | (5.71)% |
Ratios to Average Net Assets C, F |
|
|
|
|
|
Expenses before reductions | .86% | .86% | .87% | .92% | .98% |
Expenses net of fee waivers, if any | .86% | .86% | .87% | .92% | .98% |
Expenses net of all reductions | .83% | .85% | .85% | .90% | .97% |
Net investment income (loss) | .06% | (.23)% | (.43)% | (.55)% | .42% E |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 218,944 | $ 95,310 | $ 81,350 | $ 42,277 | $ 26,285 |
Portfolio turnover rate D | 142% | 201% | 167% | 115% | 225% |
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 $.04 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .07%.
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, 2013
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.
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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.
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, 2013, 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. 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 and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, market discounts, deferred trustees compensation, 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 | $ 94,978,316 |
Gross unrealized depreciation | (41,304,263) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 53,674,053 |
|
|
Tax Cost | $ 802,529,914 |
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:
Capital loss carryforward | $ (13,373,523) |
Net unrealized appreciation (depreciation) | $ 53,673,042 |
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 | $ (13,373,523) |
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 net asset value 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 $1,100,570,826 and $1,063,843,921, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .56% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 848,707 | $ 33,831 |
Class T | .25% | .25% | 851,550 | 20,642 |
Class B | .75% | .25% | 154,203 | 116,994 |
Class C | .75% | .25% | 856,447 | 101,027 |
|
|
| $ 2,710,907 | $ 272,494 |
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 | $ 57,057 |
Class T | 15,893 |
Class B* | 22,798 |
Class C* | 4,089 |
| $ 99,837 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 1,016,946 | .30 |
Class T | 501,293 | .29 |
Class B | 46,281 | .30 |
Class C | 241,397 | .28 |
Institutional Class | 413,641 | .23 |
| $ 2,219,558 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $31,496 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $1,838 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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. At period end, there were no security loans outstanding with FCM. 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 $268,641, including $35,374 from securities loaned to FCM.
Annual Report
8. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $249,774 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 $152.
9. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 2,023,713 | 2,592,933 | $ 54,950,216 | $ 63,934,256 |
Shares redeemed | (3,472,615) | (4,198,134) | (93,501,470) | (101,495,361) |
Net increase (decrease) | (1,448,902) | (1,605,201) | $ (38,551,254) | $ (37,561,105) |
Class T |
|
|
|
|
Shares sold | 649,951 | 978,762 | $ 16,942,760 | $ 23,400,718 |
Shares redeemed | (1,701,808) | (1,986,110) | (44,280,679) | (46,751,109) |
Net increase (decrease) | (1,051,857) | (1,007,348) | $ (27,337,919) | $ (23,350,391) |
Class B |
|
|
|
|
Shares sold | 13,056 | 50,311 | $ 310,857 | $ 1,085,625 |
Shares redeemed | (268,749) | (402,080) | (6,477,118) | (8,778,422) |
Net increase (decrease) | (255,693) | (351,769) | $ (6,166,261) | $ (7,692,797) |
Class C |
|
|
|
|
Shares sold | 460,587 | 840,429 | $ 11,287,228 | $ 19,233,850 |
Shares redeemed | (1,159,733) | (904,947) | (27,841,417) | (19,636,815) |
Net increase (decrease) | (699,146) | (64,518) | $ (16,554,189) | $ (402,965) |
Institutional Class |
|
|
|
|
Shares sold | 6,347,952 | 2,443,052 | $ 179,251,253 | $ 63,798,153 |
Shares redeemed | (2,987,970) | (1,939,243) | (85,599,512) | (49,603,177) |
Net increase (decrease) | 3,359,982 | 503,809 | $ 93,651,741 | $ 14,194,976 |
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 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, 2013 | Past 1 | Past 5 | Past 10 |
Class A (incl. 5.75% sales charge) C | 6.58% | 3.95% | 9.79% |
Class T (incl. 3.50% sales charge) C | 8.86% | 4.18% | 9.76% |
Class B (incl. contingent deferred sales charge) A,C | 7.24% | 4.07% | 9.86% |
Class C (incl. contingent deferred sales charge) B,C | 11.27% | 4.41% | 9.65% |
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, 2003, 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
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 13.09%, 12.81%, 12.24% and 12.27%, respectively (excluding sales charges), outperforming the 10.82% gain of the MSCI® U.S. IMI Utilities 20-50 Index, but underperforming the S&P 500®. Utilities underperformed the broad market partly due to concerns about higher tax rates on dividends. I favor stocks offering above-average dividend growth with significant investment opportunities that can earn timely and above-average returns on their investments. The two areas I've focused on are utilities with large pipeline operations focused on transporting natural gas, and utilities constructing electric transmission infrastructure. Top individual contributors versus the index included San Diego-based multi-utility Sempra Energy; an out-of-benchmark stake in Houston-based oil/gas storage/transport firm Cheniere Energy; and an underweighting in electric utility and underperforming index component Exelon, which has headquarters in Chicago, and which I sold from the fund before period end. On the down side, my positioning in gas utilities detracted, including untimely ownership of Oklahoma-based ONEOK. An overweighting in Ohio electric utility FirstEnergy also hurt the fund's relative performance.
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, 2013 to July 31, 2013).
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 | 1.17% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,090.10 | $ 6.06 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.99 | $ 5.86 |
Class T | 1.45% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,089.00 | $ 7.51 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.60 | $ 7.25 |
Class B | 1.94% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,086.00 | $ 10.03 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.17 | $ 9.69 |
Class C | 1.90% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,086.30 | $ 9.83 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.37 | $ 9.49 |
Institutional Class | .86% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,091.90 | $ 4.46 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.53 | $ 4.31 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Duke Energy Corp. | 10.7 | 13.7 |
Sempra Energy | 7.8 | 8.8 |
NextEra Energy, Inc. | 6.9 | 3.5 |
CenterPoint Energy, Inc. | 5.6 | 4.3 |
OGE Energy Corp. | 5.6 | 1.5 |
NRG Energy, Inc. | 5.4 | 4.4 |
Edison International | 5.0 | 6.5 |
Ameren Corp. | 4.5 | 1.4 |
PG&E Corp. | 4.3 | 3.8 |
NiSource, Inc. | 4.2 | 4.5 |
| 60.0 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Electric Utilities | 38.6% |
|
![]() | Multi-Utilities | 26.4% |
|
![]() | Oil, Gas & Consumable Fuels | 15.2% |
|
![]() | Independent Power Producers & Energy Traders | 13.6% |
|
![]() | Gas Utilities | 4.7% |
|
![]() | All Others* | 1.5% |
|
As of January 31, 2013 | |||
![]() | Electric Utilities | 42.5% |
|
![]() | Multi-Utilities | 24.9% |
|
![]() | Independent Power Producers & Energy Traders | 13.2% |
|
![]() | Oil, Gas & Consumable Fuels | 8.1% |
|
![]() | Gas Utilities | 4.7% |
|
![]() | All Others* | 6.6% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Utilities Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 98.5% | |||
Shares | Value | ||
ELECTRIC UTILITIES - 38.6% | |||
Electric Utilities - 38.6% | |||
Companhia Energetica de Minas Gerais (CEMIG) (PN) sponsored ADR (non-vtg.) (d) | 23,911 | $ 221,416 | |
Duke Energy Corp. | 315,691 | 22,414,061 | |
EDF SA | 22,400 | 657,235 | |
Edison International | 209,623 | 10,449,707 | |
Entergy Corp. | 85,200 | 5,751,000 | |
FirstEnergy Corp. | 81,282 | 3,094,406 | |
ITC Holdings Corp. | 35,580 | 3,265,177 | |
NextEra Energy, Inc. | 166,640 | 14,432,690 | |
OGE Energy Corp. | 311,670 | 11,656,458 | |
PPL Corp. | 268,057 | 8,516,171 | |
| 80,458,321 | ||
GAS UTILITIES - 4.7% | |||
Gas Utilities - 4.7% | |||
National Fuel Gas Co. | 27,570 | 1,787,363 | |
ONEOK, Inc. | 68,903 | 3,648,414 | |
Questar Corp. | 182,733 | 4,360,009 | |
| 9,795,786 | ||
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 13.6% | |||
Independent Power Producers & Energy Traders - 13.6% | |||
Calpine Corp. (a) | 390,717 | 7,818,247 | |
Drax Group PLC | 114,700 | 1,119,337 | |
NRG Energy, Inc. | 418,615 | 11,227,254 | |
The AES Corp. | 657,567 | 8,180,133 | |
| 28,344,971 | ||
MULTI-UTILITIES - 26.4% | |||
Multi-Utilities - 26.4% | |||
Ameren Corp. | 263,600 | 9,439,516 | |
CenterPoint Energy, Inc. | 473,019 | 11,740,332 | |
NiSource, Inc. | 286,863 | 8,812,431 | |
PG&E Corp. | 192,418 | 8,830,062 | |
Sempra Energy | 185,437 | 16,249,844 | |
| 55,072,185 | ||
OIL, GAS & CONSUMABLE FUELS - 15.2% | |||
Oil & Gas Exploration & Production - 3.4% | |||
Energen Corp. | 118,543 | 7,099,540 | |
| |||
Shares | Value | ||
Oil & Gas Storage & Transport - 11.8% | |||
Cheniere Energy, Inc. (a) | 110,689 | $ 3,162,385 | |
Enbridge, Inc. | 143,800 | 6,380,066 | |
Spectra Energy Corp. | 110,176 | 3,965,234 | |
The Williams Companies, Inc. | 167,866 | 5,735,981 | |
TransCanada Corp. (d) | 115,000 | 5,254,552 | |
| 24,498,218 | ||
TOTAL OIL, GAS & CONSUMABLE FUELS | 31,597,758 | ||
TOTAL COMMON STOCKS (Cost $187,529,940) |
| ||
Money Market Funds - 2.5% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 398,653 | 398,653 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 4,902,575 | 4,902,575 | |
TOTAL MONEY MARKET FUNDS (Cost $5,301,228) |
| ||
TOTAL INVESTMENT PORTFOLIO - 101.0% (Cost $192,831,168) | 210,570,249 | ||
NET OTHER ASSETS (LIABILITIES) - (1.0)% | (2,172,045) | ||
NET ASSETS - 100% | $ 208,398,204 |
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 | $ 4,287 |
Fidelity Securities Lending Cash Central Fund | 5,947 |
Total | $ 10,234 |
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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $4,643,762) - See accompanying schedule: Unaffiliated issuers (cost $187,529,940) | $ 205,269,021 |
|
Fidelity Central Funds (cost $5,301,228) | 5,301,228 |
|
Total Investments (cost $192,831,168) |
| $ 210,570,249 |
Receivable for investments sold | 8,744,107 | |
Receivable for fund shares sold | 220,982 | |
Dividends receivable | 192,031 | |
Distributions receivable from Fidelity Central Funds | 1,590 | |
Other receivables | 10,611 | |
Total assets | 219,739,570 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 5,740,666 | |
Payable for fund shares redeemed | 439,230 | |
Accrued management fee | 95,216 | |
Distribution and service plan fees payable | 72,499 | |
Other affiliated payables | 54,482 | |
Other payables and accrued expenses | 36,698 | |
Collateral on securities loaned, at value | 4,902,575 | |
Total liabilities | 11,341,366 | |
|
|
|
Net Assets | $ 208,398,204 | |
Net Assets consist of: |
| |
Paid in capital | $ 202,325,056 | |
Undistributed net investment income | 2,085,978 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (13,752,902) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 17,740,072 | |
Net Assets | $ 208,398,204 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 23.48 | |
|
|
|
Maximum offering price per share (100/94.25 of $23.48) | $ 24.91 | |
Class T: | $ 23.50 | |
|
|
|
Maximum offering price per share (100/96.50 of $23.50) | $ 24.35 | |
Class B: | $ 23.24 | |
|
|
|
Class C: | $ 23.03 | |
|
|
|
Institutional Class: | $ 23.87 |
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, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 6,712,298 |
Income from Fidelity Central Funds |
| 10,234 |
Total income |
| 6,722,532 |
|
|
|
Expenses | ||
Management fee | $ 1,124,419 | |
Transfer agent fees | 578,038 | |
Distribution and service plan fees | 820,392 | |
Accounting and security lending fees | 78,978 | |
Custodian fees and expenses | 7,783 | |
Independent trustees' compensation | 1,457 | |
Registration fees | 66,778 | |
Audit | 45,568 | |
Legal | 778 | |
Interest | 238 | |
Miscellaneous | 1,666 | |
Total expenses before reductions | 2,726,095 | |
Expense reductions | (72,106) | 2,653,989 |
Net investment income (loss) | 4,068,543 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 17,530,623 | |
Foreign currency transactions | (12,799) | |
Total net realized gain (loss) |
| 17,517,824 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 2,064,734 | |
Assets and liabilities in foreign currencies | 991 | |
Total change in net unrealized appreciation (depreciation) |
| 2,065,725 |
Net gain (loss) | 19,583,549 | |
Net increase (decrease) in net assets resulting from operations | $ 23,652,092 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 4,068,543 | $ 3,499,951 |
Net realized gain (loss) | 17,517,824 | 12,574,840 |
Change in net unrealized appreciation (depreciation) | 2,065,725 | 5,997,904 |
Net increase (decrease) in net assets resulting from operations | 23,652,092 | 22,072,695 |
Distributions to shareholders from net investment income | (3,653,862) | (3,107,112) |
Share transactions - net increase (decrease) | (6,877,753) | 16,682,706 |
Redemption fees | 5,578 | 8,157 |
Total increase (decrease) in net assets | 13,126,055 | 35,656,446 |
|
|
|
Net Assets | ||
Beginning of period | 195,272,149 | 159,615,703 |
End of period (including undistributed net investment income of $2,085,978 and undistributed net investment income of $1,693,797, respectively) | $ 208,398,204 | $ 195,272,149 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 21.20 | $ 19.09 | $ 16.59 | $ 15.27 | $ 20.28 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .47 | .43 | .39 | .40 | .35 |
Net realized and unrealized gain (loss) | 2.24 | 2.07 | 2.50 | 1.32 | (5.10) |
Total from investment operations | 2.71 | 2.50 | 2.89 | 1.72 | (4.75) |
Distributions from net investment income | (.43) | (.39) | (.39) | (.40) | (.26) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 23.48 | $ 21.20 | $ 19.09 | $ 16.59 | $ 15.27 |
Total Return A, B | 13.09% | 13.40% | 17.71% | 11.42% | (23.44)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.20% | 1.23% | 1.24% | 1.26% | 1.26% |
Expenses net of fee waivers, if any | 1.20% | 1.23% | 1.24% | 1.26% | 1.26% |
Expenses net of all reductions | 1.16% | 1.22% | 1.20% | 1.22% | 1.26% |
Net investment income (loss) | 2.16% | 2.24% | 2.18% | 2.49% | 2.37% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 106,851 | $ 99,813 | $ 78,312 | $ 64,890 | $ 66,064 |
Portfolio turnover rate E | 154% | 195% | 201% | 216% | 247% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 21.21 | $ 19.09 | $ 16.59 | $ 15.27 | $ 20.26 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .41 | .38 | .35 | .35 | .31 |
Net realized and unrealized gain (loss) | 2.25 | 2.07 | 2.50 | 1.33 | (5.10) |
Total from investment operations | 2.66 | 2.45 | 2.85 | 1.68 | (4.79) |
Distributions from net investment income | (.37) | (.33) | (.35) | (.36) | (.20) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 23.50 | $ 21.21 | $ 19.09 | $ 16.59 | $ 15.27 |
Total Return A, B | 12.81% | 13.13% | 17.39% | 11.13% | (23.61)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.47% | 1.49% | 1.50% | 1.52% | 1.52% |
Expenses net of fee waivers, if any | 1.47% | 1.49% | 1.50% | 1.52% | 1.52% |
Expenses net of all reductions | 1.43% | 1.48% | 1.46% | 1.49% | 1.52% |
Net investment income (loss) | 1.89% | 1.98% | 1.92% | 2.23% | 2.11% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 41,239 | $ 38,276 | $ 35,701 | $ 33,651 | $ 33,989 |
Portfolio turnover rate E | 154% | 195% | 201% | 216% | 247% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 20.96 | $ 18.86 | $ 16.38 | $ 15.08 | $ 20.01 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .30 | .28 | .25 | .27 | .24 |
Net realized and unrealized gain (loss) | 2.23 | 2.05 | 2.49 | 1.31 | (5.04) |
Total from investment operations | 2.53 | 2.33 | 2.74 | 1.58 | (4.80) |
Distributions from net investment income | (.25) | (.23) | (.26) | (.28) | (.13) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 23.24 | $ 20.96 | $ 18.86 | $ 16.38 | $ 15.08 |
Total Return A, B | 12.24% | 12.54% | 16.87% | 10.56% | (23.97)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.96% | 1.98% | 1.99% | 2.01% | 2.01% |
Expenses net of fee waivers, if any | 1.96% | 1.98% | 1.99% | 2.01% | 2.01% |
Expenses net of all reductions | 1.92% | 1.97% | 1.95% | 1.98% | 2.01% |
Net investment income (loss) | 1.40% | 1.49% | 1.43% | 1.74% | 1.62% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 5,289 | $ 6,677 | $ 7,773 | $ 8,794 | $ 10,634 |
Portfolio turnover rate E | 154% | 195% | 201% | 216% | 247% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 20.80 | $ 18.75 | $ 16.30 | $ 15.02 | $ 19.93 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .31 | .29 | .26 | .27 | .24 |
Net realized and unrealized gain (loss) | 2.20 | 2.03 | 2.46 | 1.30 | (5.02) |
Total from investment operations | 2.51 | 2.32 | 2.72 | 1.57 | (4.78) |
Distributions from net investment income | (.28) | (.27) | (.27) | (.29) | (.13) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 23.03 | $ 20.80 | $ 18.75 | $ 16.30 | $ 15.02 |
Total Return A, B | 12.27% | 12.56% | 16.85% | 10.54% | (23.96)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.93% | 1.95% | 1.98% | 2.01% | 2.01% |
Expenses net of fee waivers, if any | 1.93% | 1.95% | 1.98% | 2.01% | 2.01% |
Expenses net of all reductions | 1.89% | 1.95% | 1.94% | 1.97% | 2.01% |
Net investment income (loss) | 1.43% | 1.51% | 1.43% | 1.74% | 1.62% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 35,457 | $ 29,942 | $ 26,915 | $ 21,415 | $ 22,352 |
Portfolio turnover rate E | 154% | 195% | 201% | 216% | 247% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 21.56 | $ 19.40 | $ 16.85 | $ 15.51 | $ 20.52 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .55 | .50 | .45 | .44 | .39 |
Net realized and unrealized gain (loss) | 2.26 | 2.10 | 2.54 | 1.35 | (5.17) |
Total from investment operations | 2.81 | 2.60 | 2.99 | 1.79 | (4.78) |
Distributions from net investment income | (.50) | (.44) | (.44) | (.45) | (.23) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 23.87 | $ 21.56 | $ 19.40 | $ 16.85 | $ 15.51 |
Total Return A | 13.40% | 13.79% | 18.05% | 11.66% | (23.24)% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .89% | .92% | .98% | 1.00% | 1.00% |
Expenses net of fee waivers, if any | .89% | .92% | .98% | 1.00% | 1.00% |
Expenses net of all reductions | .85% | .91% | .94% | .97% | 1.00% |
Net investment income (loss) | 2.46% | 2.55% | 2.44% | 2.75% | 2.63% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 19,562 | $ 20,564 | $ 10,914 | $ 6,511 | $ 4,373 |
Portfolio turnover rate D | 154% | 195% | 201% | 216% | 247% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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.
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. 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 and distributions from the Fidelity Central Funds are accrued as earned. 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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences 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 | $ 19,254,170 |
Gross unrealized depreciation | (1,722,646) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 17,531,524 |
|
|
Tax Cost | $ 193,038,725 |
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 2,085,982 |
Capital loss carryforward | $ (13,545,345) |
Net unrealized appreciation (depreciation) | $ 17,532,515 |
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
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 |
|
2018 | $ (13,545,345) |
Total capital loss carryforward | $ (13,545,345) |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 3,653,862 | $ 3,107,112 |
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 net asset value 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 $307,684,612 and $311,753,007, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .55% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 254,923 | $ 11,679 |
Class T | .25% | .25% | 193,134 | 4,958 |
Class B | .75% | .25% | 57,706 | 45,047 |
Class C | .75% | .25% | 314,629 | 59,965 |
|
|
| $ 820,392 | $ 121,649 |
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 | $ 65,568 |
Class T | 8,376 |
Class B* | 7,419 |
Class C* | 2,444 |
| $ 83,807 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 297,076 | .29 |
Class T | 120,247 | .31 |
Class B | 17,416 | .30 |
Class C | 85,688 | .27 |
Institutional Class | 57,611 | .23 |
| $ 578,038 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $4,537 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Loan | Weighted Average | Interest |
Borrower | $ 5,621,600 | .30% | $ 238 |
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $471 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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
Annual Report
Notes to Financial Statements - continued
7. Security Lending - continued
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 $5,947. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $72,102 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 $4.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net investment income |
|
|
Class A | $ 2,004,234 | $ 1,654,303 |
Class T | 666,068 | 639,462 |
Class B | 71,622 | 91,242 |
Class C | 400,020 | 419,210 |
Institutional Class | 511,918 | 302,895 |
Total | $ 3,653,862 | $ 3,107,112 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 1,274,291 | 1,455,060 | $ 28,192,446 | $ 28,046,781 |
Reinvestment of distributions | 85,327 | 77,893 | 1,751,329 | 1,433,959 |
Shares redeemed | (1,517,309) | (926,992) | (33,069,256) | (17,830,196) |
Net increase (decrease) | (157,691) | 605,961 | $ (3,125,481) | $ 11,650,544 |
Class T |
|
|
|
|
Shares sold | 287,114 | 428,140 | $ 6,306,381 | $ 8,180,543 |
Reinvestment of distributions | 30,843 | 32,850 | 634,437 | 606,115 |
Shares redeemed | (367,378) | (526,129) | (7,924,238) | (10,126,088) |
Net increase (decrease) | (49,421) | (65,139) | $ (983,420) | $ (1,339,430) |
Class B |
|
|
|
|
Shares sold | 17,365 | 59,712 | $ 386,769 | $ 1,111,703 |
Reinvestment of distributions | 3,129 | 4,324 | 63,812 | 79,307 |
Shares redeemed | (111,479) | (157,671) | (2,387,277) | (2,989,895) |
Net increase (decrease) | (90,985) | (93,635) | $ (1,936,696) | $ (1,798,885) |
Class C |
|
|
|
|
Shares sold | 509,725 | 518,655 | $ 11,190,388 | $ 9,682,101 |
Reinvestment of distributions | 15,458 | 18,237 | 312,553 | 332,155 |
Shares redeemed | (425,145) | (533,137) | (9,149,304) | (10,002,257) |
Net increase (decrease) | 100,038 | 3,755 | $ 2,353,637 | $ 11,999 |
Institutional Class |
|
|
|
|
Shares sold | 936,449 | 988,603 | $ 20,838,974 | $ 19,698,436 |
Reinvestment of distributions | 22,869 | 14,596 | 476,446 | 273,126 |
Shares redeemed | (1,093,899) | (611,715) | (24,501,213) | (11,813,084) |
Net increase (decrease) | (134,581) | 391,484 | $ (3,185,793) | $ 8,158,478 |
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
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, 2013, 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, 2013, 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, 2013, 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, 2013
Annual Report
Trustees and Officers
The Trustees and executive 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. Ned C. Lautenbach, Ronald P. O'Hanley, and William S. Stavropoulos each oversees 230 Fidelity funds. David A. Rosow, Garnett A. Smith, and Michael E. Wiley each oversees 64 Fidelity 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 executive 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. Ronald P. O'Hanley 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+ | |
Ronald P. O'Hanley (1957) | |
| Year of Election or Appointment: 2013 Mr. O'Hanley is Trustee and Chairman of the Board of Trustees of certain funds. Mr. O'Hanley also serves as a Trustee of other Fidelity funds (2011-present), and is Director of FMR Co., Inc. (2010-present), Director of Fidelity Investments Money Management, Inc. (2010-present), Director of Fidelity Research & Analysis Company (2010-present), President of Fidelity Asset Management and Corporate Services and a Member of Fidelity's Executive Committee (2010-present). Previously, Mr. O'Hanley served as President and Chief Executive Officer of BNY Mellon Asset Management (2007-2010). Mr. O'Hanley also served as Vice Chairman of Bank New York Mellon Corp. and a member of that firm's Executive Committee. Prior to the 2007 merger of The Bank of New York and Mellon Financial Corporation, he was Vice Chairman of Mellon Financial Corporation and President and Chief Executive Officer of Mellon Asset Management. He joined Mellon in February 1997. Mr. O'Hanley currently serves as Chairman of the Boston Public Library Foundation Board of Directors and sits on the Board of Directors of Beth Israel Deaconess Medical Center, the Board of Trustees of the Marine Biological Laboratory and the Advisory Board of the Maxwell School of Citizenship and Public Administration at Syracuse University. Mr. O'Hanley also chairs the Council on Asset Management for the Financial Services Roundtable and is a member of the Board of Directors of Institutional Investor's U.S. Institute. |
* 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+ | |
Ned C. Lautenbach (1944) | |
| Year of Election or Appointment: 2013 Mr. Lautenbach serves as Chairman of the Independent Trustees of other Fidelity funds (2006-present). Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of the Philharmonic Center for the Arts in Naples, Florida (2012-present) and a member of the Council on Foreign Relations (1994-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007). |
David A. Rosow (1942) | |
| Year of Election or Appointment: 2013 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 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 is a board member of the Jackson Hole Land Trust (2009-present). Mr. Smith served as a Member of the Advisory Board of other Fidelity funds (2012-2013). |
William S. Stavropoulos (1939) | |
| Year of Election or Appointment: 2013 Mr. Stavropoulos serves as Vice Chairman of the Independent Trustees of other Fidelity funds (2006-present). Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012). |
Michael E. Wiley (1950) | |
| Year of Election or Appointment: 2013 Mr. Wiley serves as Chairman of the Independent Trustees of Fidelity's Sector Portfolios (2013-present). Mr. Wiley also serves as a Director of Asia Pacific Exploration Consolidated (international oil and gas exploration and production, 2008-present). 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 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 each fund.
Executive Officers:
Correspondence intended for each executive officer may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupation | |
Kenneth B. Robins (1969) | |
| Year of Election or Appointment: 2008 President and Treasurer of Fidelity's Sector Portfolios. Mr. Robins also serves as President and Treasurer (2008-present) and Assistant Treasurer (2009-present) of other Fidelity funds and is an employee of Fidelity Investments (2004-present). Mr. Robins serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (2013-present). Previously, Mr. Robins served as Deputy Treasurer of the Fidelity funds (2005-2008) and Treasurer and Chief Financial Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2006-2008). |
Brian B. Hogan (1964) | |
| Year of Election or Appointment: 2009 Vice President of Fidelity's Sector Portfolios. Mr. Hogan also serves as Vice President of other Fidelity funds (2009-present) and 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. |
Christopher S. Bartel (1971) | |
| Year of Election or Appointment: 2009 Vice President of Fidelity's Sector and Real Estate Equity Funds. Mr. Bartel also 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). |
Scott C. Goebel (1968) | |
| Year of Election or Appointment: 2008 Secretary and Chief Legal Officer (CLO) of the Fidelity funds. Mr. Goebel also serves as Secretary of Fidelity Investments Money Management, Inc. (FIMM) (2010-present) and Fidelity Research and Analysis Company (FRAC) (2010-present); Secretary and CLO of The North Carolina Capital Management Trust: Cash and Term Portfolios (2008-present); General Counsel, Secretary, and Senior Vice President of FMR (2008-present) and FMR Co., Inc. (2008-present); employed by FMR LLC or an affiliate (2001-present); Chief Legal Officer of Fidelity Management & Research (Hong Kong) Limited (2008-present) and Assistant Secretary of Fidelity Management & Research (Japan) Inc. (2008-present), and Fidelity Management & Research (U.K.) Inc. (2008-present). Previously, Mr. Goebel served as Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and the Funds (2007-2008) and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007). |
William C. Coffey (1969) | |
| Year of Election or Appointment: 2009 Assistant Secretary of Fidelity's Sector Portfolios. Mr. Coffey also serves as Assistant Secretary of other Fidelity funds (2009-present), 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). |
Elizabeth Paige Baumann (1968) | |
| Year of Election or Appointment: 2012 Anti-Money Laundering (AML) Officer of the Fidelity funds. Ms. Baumann also serves as AML Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2012-present), 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). |
Christine Reynolds (1958) | |
| Year of Election or Appointment: 2008 Chief Financial Officer of the Fidelity funds. Ms. Reynolds became President of Fidelity Pricing and Cash Management Services (FPCMS) in August 2008. Ms. Reynolds served as Chief Operating Officer of FPCMS (2007-2008). Previously, Ms. Reynolds served as President, Treasurer, and Anti-Money Laundering officer of the Fidelity funds (2004-2007). |
Joseph A. Hanlon (1968) | |
| Year of Election or Appointment: 2012 Chief Compliance Officer of Fidelity's Sector Portfolios. Mr. Hanlon also serves as Chief Compliance Officer of other Fidelity funds (2012-present). Mr. Hanlon serves as Compliance Officer of FMR, FMR Co., Inc., Fidelity Investments Money Management, Inc. (FIMM), Fidelity Research and Analysis Company (FRAC), and Fidelity Management & Research (Hong Kong) (2009-present), as Senior Vice President of the Fidelity Asset Management Division (2009-present), and is an employee of Fidelity Investments. Previously, Mr. Hanlon served as Compliance Officer of Fidelity Management & Research (Japan) Inc. (2009-2013), Strategic Advisers, Inc. (2009-2013), and Fidelity Management & Research (U.K.) Inc. (2009-2013). |
Joseph F. Zambello (1957) | |
| Year of Election or Appointment: 2011 Deputy Treasurer of the Fidelity 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). |
Adrien E. Deberghes (1967) | |
| Year of Election or Appointment: 2008 Deputy Treasurer of Fidelity's Sector Portfolios. Mr. Deberghes also serves as Vice President (2011-present), Deputy Treasurer (2008-present), and Assistant Treasurer (2010-present) of other Fidelity funds, and is an employee of Fidelity Investments (2008-present). Previously, Mr. Deberghes served as 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). |
Stephen Sadoski (1971) | |
| Year of Election or Appointment: 2012 Deputy Treasurer of Fidelity's Sector Portfolios. Mr. Sadoski also serves as Deputy Treasurer of other Fidelity funds (2012-present) and is an employee of Fidelity Investments (2012-present). Previously, Mr. Sadoski served as Assistant Treasurer of Fidelity's Fixed Income and Asset Allocation Funds (2012-2013), an assistant chief accountant in the Division of Investment Management of the Securities and Exchange Commission (SEC) (2009-2012) and as a senior manager at Deloitte & Touche LLP (1997-2009). |
Stacie M. Smith (1974) | |
| Year of Election or Appointment: 2013 Deputy Treasurer of Fidelity's Sector Portfolios. Ms. Smith also serves as Deputy Treasurer of other Fidelity funds (2013-present) and is an employee of Fidelity Investments (2009-present). Previously, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). |
Stephanie J. Dorsey (1969) | |
| Year of Election or Appointment: 2010 Assistant Treasurer of Fidelity's Sector Portfolios. Ms. Dorsey also serves as President and Treasurer (2013-present) and Assistant Treasurer (2010-present) of other Fidelity funds, Treasurer and Chief Financial Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2013-present), and is an employee of Fidelity Investments (2008-present). Previously, Ms. Dorsey served as Deputy Treasurer of Fidelity's Fixed Income and Asset Allocation Funds (2008-2013), Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank. |
Gary W. Ryan (1958) | |
| Year of Election or Appointment: 2005 Assistant Treasurer of the Fidelity funds. Mr. Ryan is an employee of Fidelity Investments. Previously, Mr. Ryan served as Vice President of Fund Reporting in Fidelity Pricing and Cash Management Services (FPCMS) (1999-2005). |
Jonathan Davis (1968) | |
| Year of Election or Appointment: 2010 Assistant Treasurer of the Fidelity funds. Mr. Davis is also Assistant Treasurer of Fidelity Rutland Square Trust II and Fidelity Commonwealth Trust II. Mr. Davis is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (2003-2010). |
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 | 09/09/13 | 09/06/13 | $0.000 | $0.000 |
Class T | 09/09/13 | 09/06/13 | $0.000 | $0.000 |
Class B | 09/09/13 | 09/06/13 | $0.000 | $0.000 |
Class C | 09/09/13 | 09/06/13 | $0.000 | $0.000 |
Fidelity Advisor Communications Equipment Fund |
|
|
|
|
Class A | 09/16/13 | 09/13/13 | $0.000 | $0.000 |
Class T | 09/16/13 | 09/13/13 | $0.000 | $0.000 |
Class B | 09/16/13 | 09/13/13 | $0.000 | $0.000 |
Class C | 09/16/13 | 09/13/13 | $0.000 | $0.000 |
Fidelity Advisor Consumer Discretionary Fund |
|
|
|
|
Class A | 09/09/13 | 09/06/13 | $0.000 | $1.046 |
Class T | 09/09/13 | 09/06/13 | $0.000 | $1.017 |
Class B | 09/09/13 | 09/06/13 | $0.000 | $0.963 |
Class C | 09/09/13 | 09/06/13 | $0.000 | $0.986 |
Fidelity Advisor Electronics Fund |
|
|
|
|
Class A | 09/16/13 | 09/13/13 | $0.000 | $0.000 |
Class T | 09/16/13 | 09/13/13 | $0.000 | $0.000 |
Class B | 09/16/13 | 09/13/13 | $0.000 | $0.000 |
Class C | 09/16/13 | 09/13/13 | $0.000 | $0.000 |
Fidelity Advisor Energy Fund |
|
|
|
|
Class A | 09/09/13 | 09/06/13 | $0.045 | $0.497 |
Class T | 09/09/13 | 09/06/13 | $0.000 | $0.497 |
Class B | 09/09/13 | 09/06/13 | $0.000 | $0.497 |
Class C | 09/09/13 | 09/06/13 | $0.000 | $0.497 |
Fidelity Advisor Financial Services Fund |
|
|
|
|
Class A | 09/09/13 | 09/06/13 | $0.056 | $0.000 |
Class T | 09/09/13 | 09/06/13 | $0.035 | $0.000 |
Class B | 09/09/13 | 09/06/13 | $0.000 | $0.000 |
Class C | 09/09/13 | 09/06/13 | $0.013 | $0.000 |
Fidelity Advisor Health Care Fund |
|
|
|
|
Class A | 09/09/13 | 09/06/13 | $0.000 | $1.925 |
Class T | 09/09/13 | 09/06/13 | $0.000 | $1.884 |
Class B | 09/09/13 | 09/06/13 | $0.000 | $1.797 |
Class C | 09/09/13 | 09/06/13 | $0.000 | $1.849 |
Fidelity Advisor Industrials Fund |
|
|
|
|
Class A | 09/09/13 | 09/06/13 | $0.087 | $1.250 |
Class T | 09/09/13 | 09/06/13 | $0.038 | $1.250 |
Class B | 09/09/13 | 09/06/13 | $0.000 | $1.250 |
Class C | 09/09/13 | 09/06/13 | $0.000 | $1.250 |
Fidelity Advisor Technology Fund |
|
|
|
|
Class A | 09/09/13 | 09/06/13 | $0.000 | $0.000 |
Class T | 09/09/13 | 09/06/13 | $0.000 | $0.000 |
Class B | 09/09/13 | 09/06/13 | $0.000 | $0.000 |
Class C | 09/09/13 | 09/06/13 | $0.000 | $0.000 |
| Pay Date | Record Date | Dividends | Capital Gains |
Fidelity Advisor Utilities Fund |
|
|
|
|
Class A | 09/09/13 | 09/06/13 | $0.260 | $0.000 |
Class T | 09/09/13 | 09/06/13 | $0.225 | $0.000 |
Class B | 09/09/13 | 09/06/13 | $0.138 | $0.000 |
Class C | 09/09/13 | 09/06/13 | $0.174 | $0.000 |
The funds hereby designate as capital gain dividend the amounts noted below for the taxable year ended July 31, 2013, or, if subsequently determined to be different, the net capital gain of such year.
Fidelity Advisor Consumer Discretionary Fund | $4,929,534 |
Fidelity Advisor Energy Fund | $8,461,408 |
Fidelity Advisor Health Care Fund | $42,015,500 |
Fidelity Advisor Industrials Fund | $21,494,783 |
A percentage of the dividends distributed during the fiscal year for the following funds qualify for the dividends-received deduction for corporate shareholders:
| September 2012 | December 2012 |
Fidelity Advisor Consumer Discretionary Fund |
|
|
Class A | 0% | 52% |
Class T | 0% | 56% |
Class B | 0% | 66% |
Class C | 0% | 63% |
Fidelity Advisor Energy Fund |
|
|
Class A | 0% | 100% |
Class T | 0% | 100% |
Class B | 0% | 100% |
Class C | 0% | 100% |
Fidelity Advisor Financial Services Fund |
|
|
Class A | 100% | 66% |
Class T | 100% | 77% |
Class B | 0% | 100% |
Class C | 0% | 100% |
Fidelity Advisor Health Care Fund |
|
|
Class A | 0% | 100% |
Class T | 0% | 100% |
Class B | 0% | 100% |
Class C | 0% | 100% |
Fidelity Advisor Industrials Fund |
|
|
Class A | 100% | 100% |
Class T | 100% | 100% |
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% |
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 2012 | December 2012 |
Fidelity Advisor Consumer Discretionary Fund |
|
|
Class A | 0% | 53% |
Class T | 0% | 56% |
Class B | 0% | 67% |
Class C | 0% | 63% |
Fidelity Advisor Energy Fund |
|
|
Class A | 0% | 100% |
Class T | 0% | 100% |
Class B | 0% | 100% |
Class C | 0% | 100% |
Fidelity Advisor Financial Services Fund |
|
|
Class A | 100% | 100% |
Class T | 100% | 100% |
Class B | 0% | 100% |
Class C | 0% | 100% |
Fidelity Advisor Health Care Fund |
|
|
Class A | 0% | 100% |
Class T | 0% | 100% |
Class B | 0% | 100% |
Class C | 0% | 100% |
Fidelity Advisor Industrials Fund |
|
|
Class A | 100% | 100% |
Class T | 100% | 100% |
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 2014 of amounts for use in preparing 2013 income tax returns.
Annual Report
Proxy Voting Results
A special meeting of each fund's shareholders was held on June 18, 2013. The results of votes taken among shareholders on the proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.
PROPOSAL 1 | ||
To elect a Board of Trustees.A | ||
| # of | % of |
Ned C. Lautenbach | ||
Affirmative | 2,198,660,066.13 | 95.750 |
Withheld | 97,591,697.03 | 4.250 |
TOTAL | 2,296,251,763.16 | 100.000 |
Ronald P. O'Hanley | ||
Affirmative | 2,202,691,976.72 | 95.926 |
Withheld | 93,559,786.44 | 4.074 |
TOTAL | 2,296,251,763.16 | 100.000 |
David A. Rosow | ||
Affirmative | 2,198,765,612.76 | 95.755 |
Withheld | 97,486,150.40 | 4.245 |
TOTAL | 2,296,251,763.16 | 100.000 |
Garnett A. Smith | ||
Affirmative | 2,201,945,782.92 | 95.894 |
Withheld | 94,305,980.24 | 4.106 |
TOTAL | 2,296,251,763.16 | 100.000 |
William S. Stavropoulos | ||
Affirmative | 2,196,127,224.90 | 95.640 |
Withheld | 100,124,538.26 | 4.360 |
TOTAL | 2,296,251,763.16 | 100.000 |
Michael E. Wiley | ||
Affirmative | 2,201,986,460.61 | 95.895 |
Withheld | 94,265,302.55 | 4.105 |
TOTAL | 2,296,251,763.16 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Biotechnology Fund and Fidelity SelectCo, LLC. | ||
Affirmative | 137,116,305.19 | 73.359 |
Against | 6,359,191.13 | 3.403 |
Abstain | 7,177,117.61 | 3.839 |
Broker Non-Votes | 36,260,149.42 | 19.399 |
TOTAL | 186,912,763.35 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Communications Equipment Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 5,233,693.93 | 72.464 |
Against | 34,215.90 | 0.474 |
Abstain | 833,046.86 | 11.534 |
Broker Non-Votes | 1,121,564.98 | 15.528 |
TOTAL | 7,222,521.67 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Consumer Discretionary Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 33,211,831.52 | 75.349 |
Against | 776,267.96 | 1.761 |
Abstain | 2,119,724.81 | 4.809 |
Broker Non-Votes | 7,970,040.80 | 18.081 |
TOTAL | 44,077,865.09 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Electronics Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 6,301,924.59 | 74.665 |
Against | 207,963.13 | 2.464 |
Abstain | 701,419.52 | 8.310 |
Broker Non-Votes | 1,229,019.77 | 14.561 |
TOTAL | 8,440,327.01 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Energy Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 275,558,564.89 | 70.351 |
Against | 13,248,744.01 | 3.383 |
Abstain | 18,657,642.59 | 4.763 |
Broker Non-Votes | 84,229,792.26 | 21.503 |
TOTAL | 391,694,743.75 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Financial Services Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 51,207,192.54 | 69.108 |
Against | 3,941,419.25 | 5.320 |
Abstain | 3,198,203.57 | 4.316 |
Broker Non-Votes | 15,750,658.72 | 21.256 |
TOTAL | 74,097,474.08 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Health Care Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 223,297,798.07 | 70.835 |
Against | 12,190,538.03 | 3.868 |
Abstain | 16,814,461.94 | 5.333 |
Broker Non-Votes | 62,934,963.61 | 19.964 |
TOTAL | 315,237,761.65 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Industrials Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 184,060,135.52 | 70.555 |
Against | 9,949,332.48 | 3.814 |
Abstain | 11,643,900.90 | 4.463 |
Broker Non-Votes | 55,223,136.22 | 21.168 |
TOTAL | 260,876,505.12 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Technology Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 321,976,700.64 | 71.695 |
Against | 19,581,003.61 | 4.361 |
Abstain | 27,788,990.72 | 6.187 |
Broker Non-Votes | 79,749,011.61 | 17.757 |
TOTAL | 449,095,706.58 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Utilities Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 94,643,508.86 | 71.936 |
Against | 5,510,188.26 | 4.188 |
Abstain | 6,002,394.12 | 4.562 |
Broker Non-Votes | 25,411,787.41 | 19.314 |
TOTAL | 131,567,878.65 | 100.000 |
A Denotes trust-wide proposal and voting results. |
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.
AFOC-UANNPRO-0913
1.789241.109
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, 2013
(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 |
| |
Proxy Voting Results |
|
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. © 2013 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, 2013 | Past 1 | Past 5 | Past 10 |
Institutional Class | 55.39% | 18.87% | 13.05% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Biotechnology Fund - Institutional Class on July 31, 2003. 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
Comments from Rajiv Kaul, Portfolio Manager of Fidelity Advisor® Biotechnology Fund: For the year, the fund's Institutional Class shares returned 55.39%, slightly trailing the 55.75% advance of the MSCI® U.S. IMI Biotechnology 25-50 Index but more than doubling the gain of the S&P 500®. Biotech was one of the stock market's best-performing industry groups, as investors favored companies with earnings growth that was less dependent on the broader economy, which featured subdued growth during the period. I believe biotechnology is an area where intensive research tends to yield particularly favorable results. My team and I look at a company's product pipeline relative to consensus estimates, the size of the potential market for various medicines and a stock's valuation in the context of the underlying company's growth opportunities. I also spend a lot of time in meetings with corporate executives, doctors, scientists, customers and competitors to get an accurate read on the prospects for any given drug. Since I'm searching for companies with meaningful revenue and earnings-growth prospects, I tend to overweight small- and mid-cap stocks, and underweight large-caps. However, while smaller-cap stocks normally outperform when the biotech group is strong, this was not the case during the reporting period, perhaps because investors were looking for a combination of growth and relative safety. Consequently, versus the MSCI index, the fund's tilt toward smaller-cap stocks and lighter exposure to the larger end of the market-capitalization spectrum hurt during the period. A modest cash position also was a drawback in a soaring market. Fortunately, these negatives were mostly offset by strong stock picking, especially among small-caps. The fund's top relative contributor was Aegerion Pharmaceuticals. Following the January 2013 commercial launch of JUXTAPIDTM, the firm's oral treatment for a rare but potentially fatal disease that causes high cholesterol, sales and earnings came in above expectations, bolstering the position. I'd begun buying this stock in August, based on JUXTAPID's benefits and the lack of a credible alternative treatment. Moreover, I added aggressively to this position, as I thought the story had further to play out. Also bolstering the fund's results were ACADIA Pharmaceuticals and an underweighting in Alexion Pharmaceuticals, a lagging benchmark constituent. Conversely, Celgene was one of the soaring large-caps in the MSCI index that detracted because the fund was underweighted here. I added to this position, and the stock ended the period as the fund's third-largest holding. Gilead Sciences was another underweighted large-cap index component that hurt relative performance. Like Celgene, Gilead saw its share price more than double during the period. I increased our stake here, making Gilead the fund's largest holding at period end. One overweighted stock that detracted was Spectrum Pharmaceuticals, which lost more than a third of its value on March 13, after the firm drastically reduced its 2013 revenue and earnings estimates in response to disappointing sales of Fusilev®, its colorectal cancer drug. I determined this was likely a temporary inventory problem and added to the position.
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, 2013 to July 31, 2013).
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 | 1.11% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,393.40 | $ 6.59 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.29 | $ 5.56 |
Class T | 1.42% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,391.60 | $ 8.42 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.75 | $ 7.10 |
Class B | 1.89% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,388.20 | $ 11.19 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.42 | $ 9.44 |
Class C | 1.84% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,387.80 | $ 10.89 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.67 | $ 9.20 |
Institutional Class | .82% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,395.20 | $ 4.87 |
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 Biotechnology Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2013 | ||
| % of fund's | % of fund's net assets |
Gilead Sciences, Inc. | 14.7 | 10.7 |
Amgen, Inc. | 12.3 | 14.6 |
Celgene Corp. | 7.2 | 7.2 |
Biogen Idec, Inc. | 6.0 | 5.9 |
Alexion Pharmaceuticals, Inc. | 4.6 | 4.1 |
Regeneron Pharmaceuticals, Inc. | 3.9 | 4.5 |
Vertex Pharmaceuticals, Inc. | 3.9 | 3.1 |
Aegerion Pharmaceuticals, Inc. | 2.8 | 1.6 |
Onyx Pharmaceuticals, Inc. | 2.4 | 3.0 |
Pharmacyclics, Inc. | 2.4 | 1.5 |
| 60.2 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Biotechnology | 96.8% |
|
![]() | Pharmaceuticals | 1.9% |
|
![]() | Health Care Equipment & Supplies | 0.1% |
|
![]() | Life Sciences Tools & Services | 0.0% |
|
![]() | Personal Products | 0.0% |
|
![]() | All Others* | 1.2% |
|
As of January 31, 2013 | |||
![]() | Biotechnology | 95.1% |
|
![]() | Pharmaceuticals | 1.5% |
|
![]() | Health Care Equipment & Supplies | 0.1% |
|
![]() | Health Care Providers & Services | 0.1% |
|
![]() | Life Sciences Tools & Services | 0.1% |
|
![]() | All Others* | 3.1% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Biotechnology Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 98.6% | |||
Shares | Value | ||
BIOTECHNOLOGY - 96.7% | |||
Biotechnology - 96.7% | |||
ACADIA Pharmaceuticals, Inc. (a)(d) | 379,586 | $ 7,477,844 | |
Achillion Pharmaceuticals, Inc. (a) | 142,589 | 1,018,085 | |
Acorda Therapeutics, Inc. (a) | 142,905 | 5,426,103 | |
Aegerion Pharmaceuticals, Inc. (a) | 206,302 | 18,895,200 | |
Affymax, Inc. (a)(d) | 5,087 | 8,801 | |
Agenus, Inc. (a)(d) | 9,425 | 36,286 | |
Agenus, Inc. warrants 6/9/18 (a) | 452,000 | 17,472 | |
Agios Pharmaceuticals, Inc. | 4,800 | 139,968 | |
Agios Pharmaceuticals, Inc. | 5,087 | 133,503 | |
Alexion Pharmaceuticals, Inc. (a) | 270,744 | 31,468,575 | |
Alkermes PLC (a) | 186,925 | 6,276,942 | |
Alnylam Pharmaceuticals, Inc. (a) | 156,898 | 7,243,981 | |
AMAG Pharmaceuticals, Inc. (a) | 69,911 | 1,572,998 | |
Ambit Biosciences Corp. | 72,750 | 1,080,338 | |
Amgen, Inc. | 778,573 | 84,311,670 | |
Arena Pharmaceuticals, Inc. (a)(d) | 84,937 | 590,312 | |
ARIAD Pharmaceuticals, Inc. (a) | 343,477 | 6,381,803 | |
ArQule, Inc. (a) | 192,550 | 514,109 | |
Biogen Idec, Inc. (a) | 189,726 | 41,384,932 | |
BioMarin Pharmaceutical, Inc. (a) | 195,438 | 12,635,067 | |
Bionovo, Inc. warrants 2/2/16 (a) | 56,850 | 93 | |
BioTime, Inc. (a)(d) | 111,305 | 437,429 | |
Bluebird Bio, Inc. | 3,385 | 105,375 | |
Bluebird Bio, Inc. | 1,864 | 52,224 | |
Catalyst Pharmaceutical Partners, Inc.: | |||
warrants 5/2/17 (a) | 8,557 | 1,081 | |
warrants 5/30/17 (a) | 17,900 | 5,591 | |
Celgene Corp. (a) | 339,168 | 49,810,212 | |
Cell Therapeutics, Inc. | 473,147 | 534,656 | |
Cell Therapeutics, Inc. warrants 7/6/16 (a) | 46,404 | 115 | |
Celldex Therapeutics, Inc. (a) | 279,038 | 5,714,698 | |
Cepheid, Inc. (a) | 55,200 | 1,924,824 | |
Chimerix, Inc. | 3,400 | 77,316 | |
Clovis Oncology, Inc. (a) | 73,488 | 5,723,245 | |
Coronado Biosciences, Inc. (a)(d) | 118,128 | 924,942 | |
Cubist Pharmaceuticals, Inc. (a) | 132,592 | 8,264,459 | |
Curis, Inc. (a)(d) | 335,272 | 1,391,379 | |
Cytokinetics, Inc. (a) | 67,916 | 844,875 | |
Cytokinetics, Inc. warrants 6/25/17 (a) | 244,500 | 180,670 | |
Dendreon Corp. (a)(d) | 190,903 | 876,245 | |
Dyax Corp. (a) | 414,791 | 1,671,608 | |
Dynavax Technologies Corp. (a) | 5,369 | 7,141 | |
Elan Corp. PLC sponsored ADR (a) | 652 | 10,041 | |
Emergent BioSolutions, Inc. (a) | 17,500 | 309,575 | |
Enzon Pharmaceuticals, Inc. | 8,434 | 16,868 | |
Epizyme, Inc. | 99,938 | 3,607,762 | |
Esperion Therapeutics, Inc. | 18,400 | 328,256 | |
Exact Sciences Corp. (a) | 146,859 | 2,014,905 | |
Exelixis, Inc. (a)(d) | 139,102 | 705,247 | |
Fibrocell Science, Inc. | 174,200 | 867,516 | |
| |||
Shares | Value | ||
Genomic Health, Inc. (a) | 54,120 | $ 1,928,837 | |
Geron Corp. (a) | 427,965 | 560,634 | |
Gilead Sciences, Inc. (a) | 1,645,774 | 101,132,810 | |
Halozyme Therapeutics, Inc. (a) | 225,117 | 1,915,746 | |
Hyperion Therapeutics, Inc. | 167,347 | 4,192,042 | |
Idenix Pharmaceuticals, Inc. (a)(d) | 208,861 | 820,824 | |
ImmunoGen, Inc. (a) | 141,948 | 2,704,109 | |
Immunomedics, Inc. (a)(d) | 317,033 | 1,803,918 | |
Incyte Corp. (a)(d) | 253,974 | 5,945,531 | |
Infinity Pharmaceuticals, Inc. (a) | 90,634 | 1,919,628 | |
Intercept Pharmaceuticals, Inc. | 74,125 | 3,469,791 | |
InterMune, Inc. (a) | 352,418 | 5,466,003 | |
Ironwood Pharmaceuticals, Inc. Class A (a) | 433,251 | 5,302,992 | |
Isis Pharmaceuticals, Inc. (a) | 165,977 | 4,788,436 | |
KaloBios Pharmaceuticals, Inc. | 17,700 | 106,554 | |
KaloBios Pharmaceuticals, Inc. (e) | 13,602 | 81,884 | |
KYTHERA Biopharmaceuticals, Inc. | 37,309 | 1,028,236 | |
Lexicon Pharmaceuticals, Inc. (a) | 546,735 | 1,355,903 | |
Ligand Pharmaceuticals, Inc. Class B (a) | 140,142 | 6,639,928 | |
MannKind Corp. (a)(d) | 728,508 | 5,624,082 | |
Medivation, Inc. (a) | 200,648 | 11,611,500 | |
Merrimack Pharmaceuticals, Inc. (a) | 2,800 | 13,384 | |
Momenta Pharmaceuticals, Inc. (a) | 121,037 | 2,089,099 | |
Myriad Genetics, Inc. (a) | 164,382 | 4,877,214 | |
Neurocrine Biosciences, Inc. (a) | 194,998 | 2,728,022 | |
NeurogesX, Inc. (a) | 187,202 | 1,123 | |
NewLink Genetics Corp. (a)(d) | 117,435 | 2,109,133 | |
Novavax, Inc. (a)(d) | 853,126 | 2,294,909 | |
Novelos Therapeutics, Inc. (a) | 137,600 | 57,792 | |
Novelos Therapeutics, Inc. warrants 12/6/16 (a) | 137,600 | 183 | |
NPS Pharmaceuticals, Inc. (a) | 218,125 | 3,928,431 | |
OncoMed Pharmaceuticals, Inc. | 18,700 | 377,366 | |
Onconova Therapeutics, Inc. | 30,810 | 671,350 | |
Onyx Pharmaceuticals, Inc. (a) | 125,887 | 16,528,963 | |
Opko Health, Inc. (a)(d) | 159,000 | 1,184,550 | |
Oragenics, Inc. | 108,608 | 339,943 | |
Orexigen Therapeutics, Inc. (a) | 504,566 | 3,834,702 | |
Osiris Therapeutics, Inc. (a) | 95,408 | 1,092,422 | |
OvaScience, Inc. (a) | 12,800 | 162,432 | |
PDL BioPharma, Inc. (d) | 99,788 | 810,279 | |
Pharmacyclics, Inc. (a) | 151,333 | 16,439,304 | |
PolyMedix, Inc. (a) | 7,142 | 1,371 | |
PolyMedix, Inc. warrants 4/10/16 (a) | 163,833 | 2 | |
Portola Pharmaceuticals, Inc. | 92,113 | 2,116,757 | |
Progenics Pharmaceuticals, Inc. (a) | 1,018,309 | 6,099,671 | |
Prosensa Holding BV (a) | 32,968 | 1,015,414 | |
Protalix BioTherapeutics, Inc. (a) | 90,943 | 486,545 | |
PTC Therapeutics, Inc. (a)(d) | 85,984 | 1,346,509 | |
Puma Biotechnology, Inc. (a) | 59,011 | 3,016,052 | |
Raptor Pharmaceutical Corp. (a) | 245,273 | 2,445,372 | |
Receptos, Inc. | 11,600 | 230,724 | |
Common Stocks - continued | |||
Shares | Value | ||
BIOTECHNOLOGY - CONTINUED | |||
Biotechnology - continued | |||
Regeneron Pharmaceuticals, Inc. (a) | 100,437 | $ 27,124,016 | |
Regulus Therapeutics, Inc. | 164,970 | 1,672,796 | |
Rigel Pharmaceuticals, Inc. (a) | 1,572 | 5,989 | |
Sangamo Biosciences, Inc. (a)(d) | 265,970 | 2,593,208 | |
Sarepta Therapeutics, Inc. (a)(d) | 72,692 | 2,691,058 | |
Savient Pharmaceuticals, Inc. (a) | 10,307 | 6,368 | |
Seattle Genetics, Inc. (a)(d) | 196,850 | 7,976,362 | |
SIGA Technologies, Inc. (a) | 6,969 | 22,231 | |
Sophiris Bio, Inc. (a) | 138,000 | 33,590 | |
Sorrento Therapeutics, Inc. (a) | 720,000 | 216,000 | |
Spectrum Pharmaceuticals, Inc. | 363,247 | 3,065,805 | |
Stemline Therapeutics, Inc. | 128,093 | 3,604,537 | |
Sunesis Pharmaceuticals, Inc. (a) | 159,517 | 810,346 | |
Synageva BioPharma Corp. (a) | 19,200 | 923,520 | |
Synergy Pharmaceuticals, Inc. (a) | 242,484 | 1,091,178 | |
Synergy Pharmaceuticals, Inc. warrants 11/14/16 (a) | 20,600 | 36,050 | |
Synta Pharmaceuticals Corp. (a)(d) | 159,002 | 1,066,903 | |
Synthetic Biologics, Inc. (a) | 100 | 150 | |
Targacept, Inc. (a) | 201,703 | 1,008,515 | |
TESARO, Inc. (a) | 148,477 | 5,066,035 | |
Theravance, Inc. (a)(d) | 165,336 | 6,375,356 | |
Threshold Pharmaceuticals, Inc. (a) | 92,584 | 501,805 | |
Threshold Pharmaceuticals, Inc. warrants 3/16/16 (a) | 35,146 | 112,913 | |
Trius Therapeutics, Inc. (a)(d) | 223,488 | 3,151,181 | |
United Therapeutics Corp. (a) | 84,052 | 6,290,452 | |
Verastem, Inc. (a) | 92,465 | 1,412,865 | |
Vertex Pharmaceuticals, Inc. (a) | 337,530 | 26,934,894 | |
Vical, Inc. (a)(d) | 659,862 | 2,547,067 | |
ZIOPHARM Oncology, Inc. (a)(d) | 227,379 | 677,589 | |
| 664,739,522 | ||
HEALTH CARE EQUIPMENT & SUPPLIES - 0.1% | |||
Health Care Equipment - 0.1% | |||
Alsius Corp. (a) | 14,200 | 0 | |
Aradigm Corp. (a) | 351,440 | 64,806 | |
InVivo Therapeutics Holdings Corp. (a) | 98,300 | 433,503 | |
| 498,309 | ||
LIFE SCIENCES TOOLS & SERVICES - 0.0% | |||
Life Sciences Tools & Services - 0.0% | |||
BG Medicine, Inc. (a) | 75,570 | 92,195 | |
ChromaDex, Inc. (a) | 143,866 | 110,057 | |
| |||
Shares | Value | ||
Transgenomic, Inc. (a) | 195,100 | $ 87,795 | |
Transgenomic, Inc. warrants 2/3/17 (a) | 81,000 | 1 | |
| 290,048 | ||
PERSONAL PRODUCTS - 0.0% | |||
Personal Products - 0.0% | |||
MYOS Corp. | 333,300 | 39,996 | |
PHARMACEUTICALS - 1.8% | |||
Pharmaceuticals - 1.8% | |||
AcelRx Pharmaceuticals, Inc. (a) | 52,410 | 610,577 | |
Auxilium Pharmaceuticals, Inc. (a) | 46,358 | 851,133 | |
AVANIR Pharmaceuticals Class A (a)(d) | 655,315 | 3,086,534 | |
Horizon Pharma, Inc. (a)(d) | 116,600 | 293,832 | |
Horizon Pharma, Inc.: | |||
warrants 2/28/17 (a) | 18,737 | 15 | |
warrants 9/25/17 (a) | 55,250 | 43 | |
Jazz Pharmaceuticals PLC (a) | 36,220 | 2,734,972 | |
Pacira Pharmaceuticals, Inc. (a) | 104,160 | 3,534,149 | |
TherapeuticsMD, Inc. (a) | 113,400 | 261,954 | |
XenoPort, Inc. (a) | 81 | 437 | |
Zogenix, Inc. (a)(d) | 461,039 | 714,610 | |
Zogenix, Inc. warrants 7/27/17 (a) | 32,985 | 31 | |
| 12,088,287 | ||
TOTAL COMMON STOCKS (Cost $473,011,067) |
| ||
Preferred Stocks - 0.2% | |||
|
|
|
|
Convertible Preferred Stocks - 0.2% | |||
BIOTECHNOLOGY - 0.1% | |||
Biotechnology - 0.1% | |||
Intrexon Corp. Series F, 6.00% (f) | 19,884 | 143,165 | |
PHARMACEUTICALS - 0.1% | |||
Pharmaceuticals - 0.1% | |||
aTyr Pharma, Inc. 8.00% (f) | 282,494 | 714,427 | |
TOTAL CONVERTIBLE PREFERRED STOCKS | 857,592 | ||
Nonconvertible Preferred Stocks - 0.0% | |||
PHARMACEUTICALS - 0.0% | |||
Pharmaceuticals - 0.0% | |||
Equilibrate Asia Therapeutics Series D (f) | 299,320 | 4,885 | |
Equilibrate Worldwide Therapeutics Series D (f) | 299,320 | 12,024 | |
Neuropathic Worldwide Therapeutics Series D (f) | 299,320 | 2,254 | |
Oculus Worldwide Therapeutics Series D (f) | 299,320 | 3,756 | |
Preferred Stocks - continued | |||
Shares | Value | ||
Nonconvertible Preferred Stocks - continued | |||
PHARMACEUTICALS - CONTINUED | |||
Pharmaceuticals - continued | |||
Orchestrate U.S. Therapeutics, Inc. Series D (f) | 299,320 | $ 5,259 | |
Orchestrate Worldwide Therapeutics Series D (f) | 299,320 | 9,393 | |
| 37,571 | ||
TOTAL PREFERRED STOCKS (Cost $908,585) |
| ||
Money Market Funds - 5.2% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 7,146,955 | 7,146,955 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 28,791,821 | 28,791,821 | |
TOTAL MONEY MARKET FUNDS (Cost $35,938,776) |
|
TOTAL INVESTMENT PORTFOLIO - 104.0% (Cost $509,858,428) | 714,490,101 |
NET OTHER ASSETS (LIABILITIES) - (4.0)% | (27,163,213) | ||
NET ASSETS - 100% | $ 687,326,888 |
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) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $81,884 or 0.0% of net assets. |
(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 $895,163 or 0.2% 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 |
Equilibrate Asia Therapeutics Series D | 5/17/13 | $ 4,885 |
Equilibrate Worldwide Therapeutics Series D | 5/17/13 | $ 12,024 |
Intrexon Corp. Series F, 6.00% | 4/30/13 | $ 156,587 |
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 |
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 | $ 12,009 |
Fidelity Securities Lending Cash Central Fund | 830,133 |
Total | $ 842,142 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2013, 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 | $ 677,656,162 | $ 677,152,225 | $ 503,937 | $ - |
Preferred Stocks | 895,163 | - | 143,165 | 751,998 |
Money Market Funds | 35,938,776 | 35,938,776 | - | - |
Total Investments in Securities: | $ 714,490,101 | $ 713,091,001 | $ 647,102 | $ 751,998 |
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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $28,881,711) - See accompanying schedule: Unaffiliated issuers (cost $473,919,652) | $ 678,551,325 |
|
Fidelity Central Funds (cost $35,938,776) | 35,938,776 |
|
Total Investments (cost $509,858,428) |
| $ 714,490,101 |
Receivable for investments sold | 1,201,271 | |
Receivable for fund shares sold | 7,620,439 | |
Distributions receivable from Fidelity Central Funds | 79,901 | |
Other receivables | 2,478 | |
Total assets | 723,394,190 | |
|
|
|
Liabilities | ||
Payable to custodian bank | $ 292,243 | |
Payable for investments purchased | 5,765,712 | |
Payable for fund shares redeemed | 577,700 | |
Accrued management fee | 283,924 | |
Distribution and service plan fees payable | 195,032 | |
Other affiliated payables | 119,172 | |
Other payables and accrued expenses | 41,698 | |
Collateral on securities loaned, at value | 28,791,821 | |
Total liabilities | 36,067,302 | |
|
|
|
Net Assets | $ 687,326,888 | |
Net Assets consist of: |
| |
Paid in capital | $ 488,934,543 | |
Accumulated net investment loss | (1,831,365) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (4,407,963) | |
Net unrealized appreciation (depreciation) on investments | 204,631,673 | |
Net Assets | $ 687,326,888 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 17.25 | |
|
|
|
Maximum offering price per share (100/94.25 of $17.25) | $ 18.30 | |
Class T: | $ 16.63 | |
|
|
|
Maximum offering price per share (100/96.50 of $16.63) | $ 17.23 | |
Class B: | $ 15.52 | |
|
|
|
Class C: | $ 15.53 | |
|
|
|
Institutional Class: | $ 17.97 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Biotechnology Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 760,374 |
Income from Fidelity Central Funds (including $830,133 from security lending) |
| 842,142 |
Total income |
| 1,602,516 |
|
|
|
Expenses | ||
Management fee | $ 1,719,560 | |
Transfer agent fees | 766,300 | |
Distribution and service plan fees | 1,243,043 | |
Accounting and security lending fees | 123,006 | |
Custodian fees and expenses | 22,520 | |
Independent trustees' compensation | 1,981 | |
Registration fees | 97,598 | |
Audit | 45,072 | |
Legal | 558 | |
Miscellaneous | 1,564 | |
Total expenses before reductions | 4,021,202 | |
Expense reductions | (18,379) | 4,002,823 |
Net investment income (loss) | (2,400,307) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | (3,418,105) | |
Foreign currency transactions | (1) | |
Total net realized gain (loss) |
| (3,418,106) |
Change in net unrealized appreciation (depreciation) on investment securities | 172,587,152 | |
Net gain (loss) | 169,169,046 | |
Net increase (decrease) in net assets resulting from operations | $ 166,768,739 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (2,400,307) | $ (910,602) |
Net realized gain (loss) | (3,418,106) | 13,076,201 |
Change in net unrealized appreciation (depreciation) | 172,587,152 | 17,166,425 |
Net increase (decrease) in net assets resulting from operations | 166,768,739 | 29,332,024 |
Distributions to shareholders from net realized gain | (10,422,000) | - |
Share transactions - net increase (decrease) | 368,981,342 | 58,002,416 |
Redemption fees | 20,216 | 11,011 |
Total increase (decrease) in net assets | 525,348,297 | 87,345,451 |
|
|
|
Net Assets | ||
Beginning of period | 161,978,591 | 74,633,140 |
End of period (including accumulated net investment loss of $1,831,365 and $0, respectively) | $ 687,326,888 | $ 161,978,591 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 11.79 | $ 8.81 | $ 6.67 | $ 6.94 | $ 7.81 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.09) | (.07) | (.07) F | (.08) G | (.08) |
Net realized and unrealized gain (loss) | 6.24 | 3.05 | 2.21 | (.19) | (.79) |
Total from investment operations | 6.15 | 2.98 | 2.14 | (.27) | (.87) |
Distributions from net realized gain | (.69) | - | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 17.25 | $ 11.79 | $ 8.81 | $ 6.67 | $ 6.94 |
Total Return A, B | 54.94% | 33.83% | 32.08% | (3.89)% | (11.14)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.15% | 1.27% | 1.35% | 1.39% | 1.40% |
Expenses net of fee waivers, if any | 1.15% | 1.27% | 1.35% | 1.39% | 1.40% |
Expenses net of all reductions | 1.14% | 1.27% | 1.34% | 1.38% | 1.40% |
Net investment income (loss) | (.63)% | (.73)% | (.91)% F | (1.15)% G | (1.27)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 286,695 | $ 68,993 | $ 30,639 | $ 20,154 | $ 19,858 |
Portfolio turnover rate E | 22% | 82% | 99% | 130% | 73% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 11.42 | $ 8.56 | $ 6.50 | $ 6.78 | $ 7.65 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.12) | (.10) | (.09) F | (.09) G | (.09) |
Net realized and unrealized gain (loss) | 6.02 | 2.96 | 2.15 | (.19) | (.78) |
Total from investment operations | 5.90 | 2.86 | 2.06 | (.28) | (.87) |
Distributions from net realized gain | (.69) | - | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 16.63 | $ 11.42 | $ 8.56 | $ 6.50 | $ 6.78 |
Total Return A, B | 54.50% | 33.41% | 31.69% | (4.13)% | (11.37)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.46% | 1.56% | 1.64% | 1.69% | 1.71% |
Expenses net of fee waivers, if any | 1.46% | 1.56% | 1.64% | 1.65% | 1.65% |
Expenses net of all reductions | 1.46% | 1.56% | 1.64% | 1.64% | 1.65% |
Net investment income (loss) | (.94)% | (1.02)% | (1.21)% F | (1.41)% G | (1.52)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 67,887 | $ 28,154 | $ 16,454 | $ 11,684 | $ 13,356 |
Portfolio turnover rate E | 22% | 82% | 99% | 130% | 73% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.75 | $ 8.09 | $ 6.17 | $ 6.47 | $ 7.34 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.17) | (.13) | (.12) F | (.12) G | (.12) |
Net realized and unrealized gain (loss) | 5.63 | 2.79 | 2.04 | (.18) | (.75) |
Total from investment operations | 5.46 | 2.66 | 1.92 | (.30) | (.87) |
Distributions from net realized gain | (.69) | - | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 15.52 | $ 10.75 | $ 8.09 | $ 6.17 | $ 6.47 |
Total Return A, B | 53.76% | 32.88% | 31.12% | (4.64)% | (11.85)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.94% | 2.03% | 2.10% | 2.14% | 2.15% |
Expenses net of fee waivers, if any | 1.94% | 2.03% | 2.10% | 2.14% | 2.15% |
Expenses net of all reductions | 1.94% | 2.02% | 2.09% | 2.13% | 2.15% |
Net investment income (loss) | (1.42)% | (1.49)% | (1.66)% F | (1.90)% G | (2.02)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 8,136 | $ 6,349 | $ 5,849 | $ 6,297 | $ 7,377 |
Portfolio turnover rate E | 22% | 82% | 99% | 130% | 73% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.76 | $ 8.10 | $ 6.18 | $ 6.47 | $ 7.34 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.17) | (.13) | (.12) F | (.12) G | (.12) |
Net realized and unrealized gain (loss) | 5.63 | 2.79 | 2.04 | (.17) | (.75) |
Total from investment operations | 5.46 | 2.66 | 1.92 | (.29) | (.87) |
Distributions from net realized gain | (.69) | - | - | - | - |
Redemption fees added to paid in capital C, I | - | - | - | - | - |
Net asset value, end of period | $ 15.53 | $ 10.76 | $ 8.10 | $ 6.18 | $ 6.47 |
Total Return A, B | 53.71% | 32.84% | 31.07% | (4.48)% | (11.85)% |
Ratios to Average Net Assets D, H |
|
|
|
|
|
Expenses before reductions | 1.88% | 2.01% | 2.10% | 2.14% | 2.15% |
Expenses net of fee waivers, if any | 1.88% | 2.01% | 2.10% | 2.14% | 2.15% |
Expenses net of all reductions | 1.87% | 2.01% | 2.09% | 2.13% | 2.15% |
Net investment income (loss) | (1.36)% | (1.47)% | (1.66)% F | (1.90)% G | (2.02)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 146,684 | $ 31,710 | $ 15,787 | $ 11,421 | $ 12,426 |
Portfolio turnover rate E | 22% | 82% | 99% | 130% | 73% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 12.22 | $ 9.10 | $ 6.87 | $ 7.12 | $ 8.00 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | (.05) | (.04) | (.05) E | (.06) F | (.06) |
Net realized and unrealized gain (loss) | 6.49 | 3.16 | 2.28 | (.19) | (.82) |
Total from investment operations | 6.44 | 3.12 | 2.23 | (.25) | (.88) |
Distributions from net realized gain | (.69) | - | - | - | - |
Redemption fees added to paid in capital B, H | - | - | - | - | - |
Net asset value, end of period | $ 17.97 | $ 12.22 | $ 9.10 | $ 6.87 | $ 7.12 |
Total Return A | 55.39% | 34.29% | 32.46% | (3.51)% | (11.00)% |
Ratios to Average Net Assets C, G |
|
|
|
|
|
Expenses before reductions | .85% | .95% | 1.04% | 1.07% | 1.11% |
Expenses net of fee waivers, if any | .85% | .95% | 1.04% | 1.07% | 1.11% |
Expenses net of all reductions | .84% | .94% | 1.03% | 1.06% | 1.11% |
Net investment income (loss) | (.32)% | (.40)% | (.60)% E | (.83)% F | (.98)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 177,926 | $ 26,772 | $ 5,903 | $ 3,008 | $ 1,901 |
Portfolio turnover rate D | 22% | 82% | 99% | 130% | 73% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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 restricted equity securities and private placements where observable inputs are limited, assumptions about market activity and risk are used and these securities are generally 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, 2013 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. 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 and distributions from the Fidelity Central Funds are accrued as earned. 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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, net operating losses, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 214,125,973 |
Gross unrealized depreciation | (12,168,332) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 201,957,641 |
|
|
Tax Cost | $ 512,532,460 |
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 | $ (1,733,930) |
Net unrealized appreciation (depreciation) | $ 201,957,641 |
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 | $ (1,733,930) |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Long-term Capital Gains | $ 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 net asset value 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 $420,093,692 and $68,170,133, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .55% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 317,602 | $ 20,682 |
Class T | .25% | .25% | 206,230 | 3,134 |
Class B | .75% | .25% | 63,552 | 48,133 |
Class C | .75% | .25% | 655,659 | 323,734 |
|
|
| $ 1,243,043 | $ 395,683 |
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 | $ 413,119 |
Class T | 32,641 |
Class B* | 10,218 |
Class C* | 16,781 |
| $ 472,759 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 320,632 | .25 |
Class T | 130,453 | .32 |
Class B | 18,983 | .30 |
Class C | 156,750 | .24 |
Institutional Class | 139,482 | .20 |
| $ 766,300 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $6,039 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $602 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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
Annual Report
Notes to Financial Statements - continued
7. Security Lending - continued
end are disclosed on the Fund's Statement of Assets and Liabilities. At period end, there were no security loans outstanding with FCM. 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 and includes $80,981 from securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $18,379 for the period.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net realized gain |
|
|
Class A | $ 4,291,683 | $ - |
Class T | 1,771,667 | - |
Class B | 386,626 | - |
Class C | 2,278,583 | - |
Institutional Class | 1,693,441 | - |
Total | $ 10,422,000 | $ - |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 13,694,524 | 4,301,187 | $ 191,221,226 | $ 43,628,166 |
Reinvestment of distributions | 314,111 | - | 3,649,967 | - |
Shares redeemed | (3,240,220) | (1,928,092) | (42,003,741) | (17,472,965) |
Net increase (decrease) | 10,768,415 | 2,373,095 | $ 152,867,452 | $ 26,155,201 |
Class T |
|
|
|
|
Shares sold | 2,069,871 | 976,676 | $ 26,930,551 | $ 9,361,129 |
Reinvestment of distributions | 149,494 | - | 1,678,816 | - |
Shares redeemed | (601,268) | (434,679) | (7,670,183) | (3,953,170) |
Net increase (decrease) | 1,618,097 | 541,997 | $ 20,939,184 | $ 5,407,959 |
Class B |
|
|
|
|
Shares sold | 144,734 | 165,361 | $ 1,825,757 | $ 1,482,467 |
Reinvestment of distributions | 32,327 | - | 340,408 | - |
Shares redeemed | (243,257) | (297,605) | (2,832,185) | (2,590,187) |
Net increase (decrease) | (66,196) | (132,244) | $ (666,020) | $ (1,107,720) |
Class C |
|
|
|
|
Shares sold | 7,472,327 | 1,520,333 | $ 93,824,317 | $ 14,380,183 |
Reinvestment of distributions | 172,010 | - | 1,812,981 | - |
Shares redeemed | (1,149,639) | (522,745) | (13,555,676) | (4,501,065) |
Net increase (decrease) | 6,494,698 | 997,588 | $ 82,081,622 | $ 9,879,118 |
Institutional Class |
|
|
|
|
Shares sold | 9,398,986 | 2,252,478 | $ 138,330,404 | $ 24,903,066 |
Reinvestment of distributions | 114,710 | - | 1,385,697 | - |
Shares redeemed | (1,804,114) | (710,454) | (25,956,997) | (7,235,208) |
Net increase (decrease) | 7,709,582 | 1,542,024 | $ 113,759,104 | $ 17,667,858 |
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 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, 2013 | Past 1 | Past 5 | Past 10 |
Institutional Class A | 32.92% | 6.26% | 6.93% |
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, 2003. 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
Comments from Ali Khan, who became sole Portfolio Manager of Fidelity Advisor® Communications Equipment Fund on October 1, 2012, after serving as Co-Manager: For the year, the fund's Institutional Class shares returned 32.92%, slightly trailing the 33.29% return of the S&P® Custom Communications Equipment Index but handily beating the S&P 500®. Versus the broader market, communications equipment stocks benefited from signs of a rebound in capital expenditures by telecommunication services providers, spurred in part by industry consolidation. Because I tend to buy stocks that register higher on various quality measures - as a group - than those in the S&P® custom index, the fund tends to lag this benchmark when stocks are advancing and speculative favorites are leading the market to higher ground. For example, the fund's largest detractor versus our industry benchmark was a sizable underweighting in beleaguered handset maker and index component Nokia, whose stock rallied smartly despite negligible signs of improving fundamentals for the company. A large overweighting in Polycom, a provider of high-definition videoconferencing software and equipment, also worked against the fund, as the stock posted a gain but significantly lagged the benchmark. Strong-performing index heavyweight Cisco Systems detracted due to an underweighting, although in absolute terms it was easily our biggest contributor and by far the fund's largest position at period end. Another negative factor was cash, which was a drag on performance in a rising market. Conversely, the fund's top relative contributor was Aruba Networks, a provider of network access solutions for mobile enterprise networks, in large part because of the fund's timely ownership here. Similarly, underweighting F5 Networks for most of the period and then boosting it to an overweighting in April was timely, as the shares of this provider of hardware and software for networking and security purposes delivered a nice rally in the final month of the period. During the period, I selectively added to the fund's exposure to suppliers of telecom equipment. To fund these purchases, I trimmed the portfolio's weightings in electronic manufacturing services, semiconductors, and other out-of-benchmark groups.
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, 2013 to July 31, 2013).
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 | $ 1,090.70 | $ 7.26 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.85 | $ 7.00 |
Class T | 1.65% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,090.20 | $ 8.55 |
HypotheticalA |
| $ 1,000.00 | $ 1,016.61 | $ 8.25 |
Class B | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,086.70 | $ 11.12 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Class C | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,087.90 | $ 11.13 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Institutional Class | 1.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,093.30 | $ 5.97 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Cisco Systems, Inc. | 22.1 | 15.6 |
QUALCOMM, Inc. | 15.0 | 15.9 |
Juniper Networks, Inc. | 6.0 | 6.2 |
F5 Networks, Inc. | 4.5 | 2.5 |
Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 4.5 | 6.1 |
Alcatel-Lucent SA sponsored ADR | 3.2 | 2.3 |
Motorola Solutions, Inc. | 2.7 | 3.6 |
Polycom, Inc. | 2.6 | 3.0 |
Nokia Corp. sponsored ADR | 2.6 | 1.8 |
Riverbed Technology, Inc. | 2.2 | 1.8 |
| 65.4 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Communications Equipment | 83.2% |
|
![]() | Computers & Peripherals | 2.5% |
|
![]() | Semiconductors & Semiconductor Equipment | 2.4% |
|
![]() | Electronic Equipment & Components | 1.9% |
|
![]() | IT Services | 1.8% |
|
![]() | All Others* | 8.2% |
|
As of January 31, 2013 | |||
![]() | Communications Equipment | 83.6% |
|
![]() | Electronic Equipment & Components | 4.5% |
|
![]() | Semiconductors & Semiconductor Equipment | 3.2% |
|
![]() | Computers & Peripherals | 1.3% |
|
![]() | IT Services | 1.0% |
|
![]() | All Others* | 6.4% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Communications Equipment Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 93.2% | |||
Shares | Value | ||
COMMUNICATIONS EQUIPMENT - 83.2% | |||
Communications Equipment - 83.2% | |||
ADTRAN, Inc. | 5,700 | $ 150,651 | |
ADVA AG Optical Networking (a) | 8,228 | 44,660 | |
Alcatel-Lucent SA sponsored ADR (a)(d) | 139,257 | 353,713 | |
Anaren, Inc. (a) | 4,400 | 103,004 | |
Aruba Networks, Inc. (a) | 12,640 | 224,739 | |
BlackBerry Ltd. (a)(d) | 22,100 | 195,143 | |
Brocade Communications Systems, Inc. (a) | 31,659 | 210,849 | |
Cisco Systems, Inc. | 94,824 | 2,422,753 | |
Comtech Telecommunications Corp. | 3,100 | 83,948 | |
F5 Networks, Inc. (a) | 5,665 | 497,160 | |
Finisar Corp. (a) | 9,159 | 177,043 | |
Infinera Corp. (a) | 10,400 | 113,464 | |
InterDigital, Inc. | 1,700 | 67,541 | |
Juniper Networks, Inc. (a) | 30,488 | 660,675 | |
Motorola Solutions, Inc. | 5,447 | 298,659 | |
NETGEAR, Inc. (a) | 5,900 | 175,879 | |
Nokia Corp. sponsored ADR (a)(d) | 71,105 | 280,154 | |
Plantronics, Inc. | 1,200 | 55,788 | |
Polycom, Inc. (a) | 29,799 | 284,878 | |
QUALCOMM, Inc. | 25,481 | 1,644,799 | |
Radware Ltd. (a) | 6,100 | 83,570 | |
Riverbed Technology, Inc. (a) | 15,358 | 240,199 | |
Sonus Networks, Inc. (a) | 29,700 | 101,574 | |
Spirent Communications PLC | 15,000 | 30,144 | |
Symmetricom, Inc. (a) | 14,700 | 75,558 | |
Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 42,320 | 496,414 | |
Wi-Lan, Inc. | 16,800 | 60,520 | |
| 9,133,479 | ||
COMPUTERS & PERIPHERALS - 2.5% | |||
Computer Hardware - 2.5% | |||
Apple, Inc. | 400 | 181,000 | |
Super Micro Computer, Inc. (a) | 7,600 | 88,084 | |
| 269,084 | ||
ELECTRONIC EQUIPMENT & COMPONENTS - 1.9% | |||
Electronic Manufacturing Services - 1.3% | |||
Fabrinet (a) | 2,000 | 29,620 | |
TE Connectivity Ltd. | 2,100 | 107,184 | |
| 136,804 | ||
Technology Distributors - 0.6% | |||
Arrow Electronics, Inc. (a) | 1,500 | 68,475 | |
TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 205,279 | ||
HEALTH CARE TECHNOLOGY - 0.4% | |||
Health Care Technology - 0.4% | |||
Vocera Communications, Inc. (a) | 2,800 | 40,544 | |
| |||
Shares | Value | ||
INTERNET SOFTWARE & SERVICES - 0.8% | |||
Internet Software & Services - 0.8% | |||
Google, Inc. Class A (a) | 100 | $ 88,760 | |
IT SERVICES - 1.8% | |||
IT Consulting & Other Services - 1.8% | |||
Amdocs Ltd. | 5,200 | 200,044 | |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.4% | |||
Semiconductors - 2.4% | |||
Altera Corp. | 4,400 | 156,464 | |
Broadcom Corp. Class A | 2,600 | 71,682 | |
GSI Technology, Inc. (a) | 1,000 | 6,950 | |
Skyworks Solutions, Inc. (a) | 1,200 | 28,824 | |
| 263,920 | ||
SOFTWARE - 0.2% | |||
Systems Software - 0.2% | |||
Allot Communications Ltd. (a) | 1,700 | 24,871 | |
TOTAL COMMON STOCKS (Cost $9,108,012) |
| ||
Money Market Funds - 13.8% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 727,682 | 727,682 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 790,725 | 790,725 | |
TOTAL MONEY MARKET FUNDS (Cost $1,518,407) |
|
TOTAL INVESTMENT PORTFOLIO - 107.0% (Cost $10,626,419) | 11,744,388 |
NET OTHER ASSETS (LIABILITIES) - (7.0)% | (772,129) | ||
NET ASSETS - 100% | $ 10,972,259 |
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 | $ 662 |
Fidelity Securities Lending Cash Central Fund | 13,459 |
Total | $ 14,121 |
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 | 82.5% |
Sweden | 4.5% |
France | 3.2% |
Finland | 2.6% |
Canada | 2.4% |
Bailiwick of Guernsey | 1.8% |
Israel | 1.0% |
Switzerland | 1.0% |
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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $735,976) - See accompanying schedule: Unaffiliated issuers (cost $9,108,012) | $ 10,225,981 |
|
Fidelity Central Funds (cost $1,518,407) | 1,518,407 |
|
Total Investments (cost $10,626,419) |
| $ 11,744,388 |
Cash |
| 35,784 |
Receivable for investments sold | 71,050 | |
Receivable for fund shares sold | 3,534 | |
Dividends receivable | 1,402 | |
Distributions receivable from Fidelity Central Funds | 1,111 | |
Receivable from investment adviser for expense reductions | 2,430 | |
Other receivables | 151 | |
Total assets | 11,859,850 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 33,551 | |
Payable for fund shares redeemed | 14,044 | |
Accrued management fee | 5,002 | |
Distribution and service plan fees payable | 4,525 | |
Other affiliated payables | 2,963 | |
Other payables and accrued expenses | 36,781 | |
Collateral on securities loaned, at value | 790,725 | |
Total liabilities | 887,591 | |
|
|
|
Net Assets | $ 10,972,259 | |
Net Assets consist of: |
| |
Paid in capital | $ 11,283,041 | |
Accumulated net investment loss | (8,844) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (1,419,907) | |
Net unrealized appreciation (depreciation) on investments | 1,117,969 | |
Net Assets | $ 10,972,259 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 10.22 | |
|
|
|
Maximum offering price per share (100/94.25 of $10.22) | $ 10.84 | |
Class T: | $ 9.91 | |
|
|
|
Maximum offering price per share (100/96.50 of $9.91) | $ 10.27 | |
Class B: | $ 9.28 | |
|
|
|
Class C: | $ 9.28 | |
|
|
|
Institutional Class: | $ 10.55 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Communications Equipment Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 147,100 |
Income from Fidelity Central Funds (including $13,459 from security lending) |
| 14,121 |
Total income |
| 161,221 |
|
|
|
Expenses | ||
Management fee | $ 57,620 | |
Transfer agent fees | 33,764 | |
Distribution and service plan fees | 51,889 | |
Accounting and security lending fees | 4,138 | |
Custodian fees and expenses | 5,020 | |
Independent trustees' compensation | 72 | |
Registration fees | 55,363 | |
Audit | 49,433 | |
Legal | 84 | |
Miscellaneous | 63 | |
Total expenses before reductions | 257,446 | |
Expense reductions | (89,179) | 168,267 |
Net investment income (loss) | (7,046) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 329,802 | |
Foreign currency transactions | (118) | |
Total net realized gain (loss) |
| 329,684 |
Change in net unrealized appreciation (depreciation) on investment securities | 2,517,574 | |
Net gain (loss) | 2,847,258 | |
Net increase (decrease) in net assets resulting from operations | $ 2,840,212 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (7,046) | $ (57,189) |
Net realized gain (loss) | 329,684 | (1,571,979) |
Change in net unrealized appreciation (depreciation) | 2,517,574 | (2,005,379) |
Net increase (decrease) in net assets resulting from operations | 2,840,212 | (3,634,547) |
Distributions to shareholders from net investment income | (3,925) | - |
Distributions to shareholders from net realized gain | - | (401,208) |
Total distributions | (3,925) | (401,208) |
Share transactions - net increase (decrease) | (1,708,594) | (9,551,912) |
Redemption fees | 1,030 | 639 |
Total increase (decrease) in net assets | 1,128,723 | (13,587,028) |
|
|
|
Net Assets | ||
Beginning of period | 9,843,536 | 23,430,564 |
End of period (including accumulated net investment loss of $8,844 and accumulated net investment loss of $10,185, respectively) | $ 10,972,259 | $ 9,843,536 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 7.71 | $ 9.73 | $ 8.67 | $ 7.28 | $ 7.82 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .02 | (.01) | (.06) | (.11) | .02 F |
Net realized and unrealized gain (loss) | 2.50 | (1.81) | 1.12 | 1.50 | (.56) |
Total from investment operations | 2.52 | (1.82) | 1.06 | 1.39 | (.54) |
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 | $ 10.22 | $ 7.71 | $ 9.73 | $ 8.67 | $ 7.28 |
Total Return A, B | 32.65% | (18.88)% | 12.23% | 19.09% | (6.91)% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 2.22% | 1.96% | 1.64% | 1.90% | 3.15% |
Expenses net of fee waivers, if any | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% |
Expenses net of all reductions | 1.37% | 1.39% | 1.39% | 1.38% | 1.40% |
Net investment income (loss) | .18% | (.16)% | (.60)% | (1.32)% | .26% F |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 3,962 | $ 3,568 | $ 8,787 | $ 4,860 | $ 3,476 |
Portfolio turnover rate E | 33% | 79% | 101% | 106% | 97% |
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 $.07 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.88)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 7.49 | $ 9.48 | $ 8.46 | $ 7.13 | $ 7.68 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.01) | (.03) | (.09) | (.13) | - F, H |
Net realized and unrealized gain (loss) | 2.43 | (1.76) | 1.11 | 1.46 | (.55) |
Total from investment operations | 2.42 | (1.79) | 1.02 | 1.33 | (.55) |
Distributions from net realized gain | - | (.20) | - | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 9.91 | $ 7.49 | $ 9.48 | $ 8.46 | $ 7.13 |
Total Return A, B | 32.31% | (19.06)% | 12.06% | 18.65% | (7.16)% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 2.52% | 2.27% | 1.97% | 2.20% | 3.52% |
Expenses net of fee waivers, if any | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% |
Expenses net of all reductions | 1.62% | 1.64% | 1.64% | 1.63% | 1.65% |
Net investment income (loss) | (.07)% | (.41)% | (.85)% | (1.57)% | .01% F |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 3,342 | $ 2,843 | $ 4,607 | $ 3,273 | $ 2,396 |
Portfolio turnover rate E | 33% | 79% | 101% | 106% | 97% |
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 $.06 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.13)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 7.05 | $ 8.99 | $ 8.06 | $ 6.83 | $ 7.39 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.05) | (.07) | (.13) | (.16) | (.03) F |
Net realized and unrealized gain (loss) | 2.28 | (1.67) | 1.06 | 1.39 | (.53) |
Total from investment operations | 2.23 | (1.74) | .93 | 1.23 | (.56) |
Distributions from net realized gain | - | (.20) | - | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 9.28 | $ 7.05 | $ 8.99 | $ 8.06 | $ 6.83 |
Total Return A, B | 31.63% | (19.56)% | 11.54% | 18.01% | (7.58)% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 3.00% | 2.71% | 2.47% | 2.68% | 3.98% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.13% | 2.13% | 2.14% | 2.13% | 2.15% |
Net investment income (loss) | (.57)% | (.91)% | (1.35)% | (2.07)% | (.49)% F |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 480 | $ 570 | $ 1,316 | $ 1,408 | $ 1,281 |
Portfolio turnover rate E | 33% | 79% | 101% | 106% | 97% |
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 $.06 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.63)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 7.05 | $ 8.98 | $ 8.06 | $ 6.82 | $ 7.38 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.05) | (.07) | (.13) | (.16) | (.03) F |
Net realized and unrealized gain (loss) | 2.28 | (1.66) | 1.05 | 1.40 | (.53) |
Total from investment operations | 2.23 | (1.73) | .92 | 1.24 | (.56) |
Distributions from net realized gain | - | (.20) | - | - | - |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 9.28 | $ 7.05 | $ 8.98 | $ 8.06 | $ 6.82 |
Total Return A, B | 31.63% | (19.47)% | 11.41% | 18.18% | (7.59)% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 2.98% | 2.71% | 2.40% | 2.67% | 3.63% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.12% | 2.14% | 2.14% | 2.13% | 2.15% |
Net investment income (loss) | (.57)% | (.91)% | (1.35)% | (2.07)% | (.49)% F |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 2,334 | $ 2,142 | $ 5,866 | $ 3,029 | $ 2,792 |
Portfolio turnover rate E | 33% | 79% | 101% | 106% | 97% |
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 $.06 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (1.63)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 7.95 | $ 10.00 | $ 8.88 | $ 7.45 | $ 7.98 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .04 | .01 | (.04) | (.09) | .03 E |
Net realized and unrealized gain (loss) | 2.58 | (1.86) | 1.16 | 1.52 | (.56) |
Total from investment operations | 2.62 | (1.85) | 1.12 | 1.43 | (.53) |
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 | $ 10.55 | $ 7.95 | $ 10.00 | $ 8.88 | $ 7.45 |
Total Return A | 32.92% | (18.66)% | 12.61% | 19.19% | (6.64)% |
Ratios to Average Net Assets C, F |
|
|
|
|
|
Expenses before reductions | 1.93% | 1.66% | 1.22% | 1.54% | 2.44% |
Expenses net of fee waivers, if any | 1.15% | 1.15% | 1.15% | 1.15% | 1.15% |
Expenses net of all reductions | 1.12% | 1.13% | 1.14% | 1.13% | 1.15% |
Net investment income (loss) | .43% | .10% | (.35)% | (1.07)% | .51% E |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 855 | $ 721 | $ 2,855 | $ 1,717 | $ 957 |
Portfolio turnover rate D | 33% | 79% | 101% | 106% | 97% |
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 $.07 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.63)%.
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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.
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. 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 and distributions from the Fidelity Central Funds are accrued as earned. 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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, net operating losses, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 1,668,866 |
Gross unrealized depreciation | (619,487) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 1,049,379 |
|
|
Tax Cost | $ 10,695,009 |
The tax-based components of distributable earnings as of period end were as follows:
Capital loss carryforward | $ (1,351,318) |
Net unrealized appreciation (depreciation) | $ 1,049,379 |
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
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 | $ (1,351,318) |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 3,925 | $ - |
Long-term Capital Gains | - | 401,208 |
Total | $ 3,925 | $ 401,208 |
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 net asset value 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 $3,240,722 and $5,449,241, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .56% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 9,527 | $ 303 |
Class T | .25% | .25% | 15,156 | 118 |
Class B | .75% | .25% | 5,248 | 3,957 |
Class C | .75% | .25% | 21,958 | 4,425 |
|
|
| $ 51,889 | $ 8,803 |
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 | $ 2,023 |
Class T | 1,638 |
Class B* | 1,479 |
Class C* | 166 |
| $ 5,306 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 11,863 | .31 |
Class T | 10,932 | .36 |
Class B | 1,625 | .31 |
Class C | 6,923 | .32 |
Institutional Class | 2,421 | .30 |
| $ 33,764 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $419 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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, there were no borrowings 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, including 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. At period end, there were no security loans outstanding with FCM. 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, and includes $329 from securities loaned to FCM.
Annual Report
Notes to Financial Statements - continued
8. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense | Reimbursement |
Class A | 1.40% | $ 31,312 |
Class T | 1.65% | 26,258 |
Class B | 2.15% | 4,449 |
Class C | 2.15% | 18,188 |
Institutional Class | 1.15% | 6,313 |
|
| $ 86,520 |
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $2,659 for the period.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net investment income |
|
|
Class A | $ 2,612 | $ - |
Institutional Class | 1,313 | - |
Total | $ 3,925 | $ - |
From net realized gain |
|
|
Class A | $ - | $ 136,672 |
Class T | - | 94,407 |
Class B | - | 23,930 |
Class C | - | 101,740 |
Institutional Class | - | 44,459 |
Total | $ - | $ 401,208 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 119,229 | 95,217 | $ 1,075,395 | $ 825,716 |
Reinvestment of distributions | 272 | 15,026 | 2,398 | 125,915 |
Shares redeemed | (194,578) | (550,285) | (1,739,434) | (4,678,484) |
Net increase (decrease) | (75,077) | (440,042) | $ (661,641) | $ (3,726,853) |
Class T |
|
|
|
|
Shares sold | 54,310 | 99,348 | $ 477,965 | $ 845,573 |
Reinvestment of distributions | - | 11,468 | - | 93,466 |
Shares redeemed | (96,623) | (217,086) | (817,480) | (1,833,154) |
Net increase (decrease) | (42,313) | (106,270) | $ (339,515) | $ (894,115) |
Class B |
|
|
|
|
Shares sold | 612 | 1,631 | $ 4,500 | $ 14,069 |
Reinvestment of distributions | - | 3,015 | - | 23,244 |
Shares redeemed | (29,754) | (70,313) | (242,910) | (498,813) |
Net increase (decrease) | (29,142) | (65,667) | $ (238,410) | $ (461,500) |
Class C |
|
|
|
|
Shares sold | 99,311 | 45,249 | $ 848,531 | $ 356,072 |
Reinvestment of distributions | - | 10,744 | - | 82,834 |
Shares redeemed | (151,640) | (405,119) | (1,232,762) | (3,174,312) |
Net increase (decrease) | (52,329) | (349,126) | $ (384,231) | $ (2,735,406) |
Annual Report
10. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Institutional Class |
|
|
|
|
Shares sold | 37,292 | 32,975 | $ 354,493 | $ 287,948 |
Reinvestment of distributions | 122 | 2,747 | 1,105 | 23,680 |
Shares redeemed | (47,116) | (230,453) | (440,395) | (2,045,666) |
Net increase (decrease) | (9,702) | (194,731) | $ (84,797) | $ (1,734,038) |
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 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, 2013 | Past 1 | Past 5 | Past 10 |
Institutional Class A | 34.06% | 15.57% | 8.66% |
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, 2003. 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
Comments from Gordon Scott, Portfolio Manager of Fidelity Advisor® Consumer Discretionary Fund: The fund participated in the sector's strength and produced solid double-digit returns on an absolute basis, but couldn't keep pace with the index. For the year, the fund's Institutional Class shares rose 34.06%, trailing the 40.85% gain of the MSCI® U.S. IMI Consumer Discretionary 25-50 Index, but outpacing the broad-based S&P 500®. Versus the broader market, consumer discretionary stocks were buoyed by improving economic fundamentals in the U.S. and a recovery in housing. In managing the fund, I focus on high-quality companies whose earnings growth I believe can surpass the average earnings growth of companies in the sector longer term. In traditional Fidelity investment style, I conduct fundamental, bottom-up analysis of the sector on a company-by-company basis. I use my research to find reasonably valued companies that have defendable competitive positions, the ability to gain market share and capable management teams. Stocks that hurt relative performance included Ford Motor, a major auto maker and strong-performing index name I avoided. Discount retailers Dollar Tree and Dollar General struggled during the period, but I'm taking a multiyear view here, since I see a future market-share opportunity in mass retail. The stock of Yum! Brands, owner of Taco Bell and other fast-food chains, also didn't fare well, but I like the firm's long-duration growth prospects and increased my stake. On the plus side, it helped to overweight outdoor equipment retailer Cabela's. During the past year, a proactive management team opened smaller, more-productive stores and turned around the company's retail and online operations - all of which drew me to the stock. It also helped to underweight fast-food giant McDonald's and overweight Domino's Pizza, which experienced strong revenue growth this period. McDonald's and Domino's were not held at 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 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, 2013 to July 31, 2013).
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 | 1.26% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,185.10 | $ 6.83 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.55 | $ 6.31 |
Class T | 1.55% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,183.00 | $ 8.39 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.11 | $ 7.75 |
Class B | 2.03% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,180.00 | $ 10.97 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.73 | $ 10.14 |
Class C | 1.99% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,180.20 | $ 10.76 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.93 | $ 9.94 |
Institutional Class | .93% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,186.70 | $ 5.04 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.18 | $ 4.66 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Comcast Corp. Class A | 4.8 | 8.0 |
The Walt Disney Co. | 4.7 | 5.0 |
Twenty-First Century Fox, Inc. Class A | 4.3 | 4.2 |
Time Warner, Inc. | 3.5 | 3.4 |
Lowe's Companies, Inc. | 3.5 | 4.2 |
Yum! Brands, Inc. | 3.1 | 2.6 |
Dollar General Corp. | 2.9 | 2.0 |
TJX Companies, Inc. | 2.7 | 1.7 |
O'Reilly Automotive, Inc. | 2.5 | 1.9 |
NIKE, Inc. Class B | 2.5 | 2.7 |
| 34.5 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Specialty Retail | 32.4% |
|
![]() | Media | 26.6% |
|
![]() | Hotels, Restaurants & Leisure | 10.8% |
|
![]() | Textiles, Apparel & Luxury Goods | 9.5% |
|
![]() | Multiline Retail | 5.2% |
|
![]() | All Others* | 15.5% |
|
As of January 31, 2013 | |||
![]() | Specialty Retail | 32.6% |
|
![]() | Media | 25.2% |
|
![]() | Hotels, Restaurants & Leisure | 10.8% |
|
![]() | Textiles, Apparel & Luxury Goods | 9.8% |
|
![]() | Internet & Catalog Retail | 5.0% |
|
![]() | All Others* | 16.6% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Consumer Discretionary Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 98.1% | |||
Shares | Value | ||
AUTO COMPONENTS - 2.6% | |||
Auto Parts & Equipment - 2.6% | |||
Delphi Automotive PLC | 29,818 | $ 1,601,823 | |
TRW Automotive Holdings Corp. (a) | 11,300 | 828,403 | |
| 2,430,226 | ||
DISTRIBUTORS - 1.7% | |||
Distributors - 1.7% | |||
LKQ Corp. (a) | 61,100 | 1,592,877 | |
HOTELS, RESTAURANTS & LEISURE - 10.8% | |||
Hotels, Resorts & Cruise Lines - 2.0% | |||
Marriott International, Inc. Class A | 12,000 | 498,840 | |
Wyndham Worldwide Corp. | 22,149 | 1,379,883 | |
| 1,878,723 | ||
Restaurants - 8.8% | |||
Bloomin' Brands, Inc. | 60,142 | 1,419,351 | |
Buffalo Wild Wings, Inc. (a) | 6,840 | 708,487 | |
Panera Bread Co. Class A (a) | 3,983 | 665,360 | |
Starbucks Corp. | 28,099 | 2,001,773 | |
Texas Roadhouse, Inc. Class A | 21,967 | 536,873 | |
Yum! Brands, Inc. | 40,108 | 2,924,675 | |
| 8,256,519 | ||
TOTAL HOTELS, RESTAURANTS & LEISURE | 10,135,242 | ||
HOUSEHOLD DURABLES - 1.4% | |||
Homebuilding - 0.4% | |||
NVR, Inc. (a) | 463 | 428,553 | |
Housewares & Specialties - 1.0% | |||
Jarden Corp. (a) | 19,923 | 905,899 | |
TOTAL HOUSEHOLD DURABLES | 1,334,452 | ||
INTERNET & CATALOG RETAIL - 4.7% | |||
Internet Retail - 4.7% | |||
Expedia, Inc. | 9,891 | 466,163 | |
Liberty Media Corp. Interactive | 79,868 | 1,953,571 | |
priceline.com, Inc. (a) | 2,300 | 2,014,041 | |
| 4,433,775 | ||
INTERNET SOFTWARE & SERVICES - 0.6% | |||
Internet Software & Services - 0.6% | |||
eBay, Inc. (a) | 10,500 | 542,745 | |
LEISURE EQUIPMENT & PRODUCTS - 1.8% | |||
Leisure Products - 1.8% | |||
Brunswick Corp. | 38,500 | 1,453,375 | |
Mattel, Inc. | 5,085 | 213,723 | |
| 1,667,098 | ||
MEDIA - 26.6% | |||
Broadcasting - 3.9% | |||
Discovery Communications, Inc. (a) | 16,300 | 1,299,436 | |
| |||
Shares | Value | ||
Liberty Media Corp. Class A (a) | 12,281 | $ 1,765,148 | |
Sinclair Broadcast Group, Inc. Class A | 22,100 | 623,441 | |
| 3,688,025 | ||
Cable & Satellite - 9.1% | |||
Comcast Corp. Class A | 100,343 | 4,523,462 | |
DIRECTV (a) | 24,728 | 1,564,541 | |
DISH Network Corp. Class A | 8,000 | 357,200 | |
Liberty Global PLC Class A (a) | 20,600 | 1,671,072 | |
Time Warner Cable, Inc. | 3,100 | 353,617 | |
| 8,469,892 | ||
Movies & Entertainment - 13.1% | |||
The Walt Disney Co. | 67,706 | 4,377,193 | |
Time Warner, Inc. | 53,190 | 3,311,609 | |
Twenty-First Century Fox, Inc. Class A | 134,230 | 4,010,792 | |
Viacom, Inc. Class B (non-vtg.) | 7,246 | 527,291 | |
| 12,226,885 | ||
Publishing - 0.5% | |||
News Corp. Class A (a) | 30,907 | 492,349 | |
TOTAL MEDIA | 24,877,151 | ||
MULTILINE RETAIL - 5.2% | |||
General Merchandise Stores - 5.2% | |||
Dollar General Corp. (a) | 49,964 | 2,731,532 | |
Dollar Tree, Inc. (a) | 38,821 | 2,082,747 | |
| 4,814,279 | ||
PROFESSIONAL SERVICES - 0.8% | |||
Research & Consulting Services - 0.8% | |||
Nielsen Holdings B.V. | 20,820 | 695,804 | |
SPECIALTY RETAIL - 32.4% | |||
Apparel Retail - 10.9% | |||
Abercrombie & Fitch Co. Class A | 22,302 | 1,112,201 | |
American Eagle Outfitters, Inc. | 76,510 | 1,502,656 | |
DSW, Inc. Class A | 11,000 | 833,690 | |
Foot Locker, Inc. | 29,155 | 1,053,370 | |
L Brands, Inc. | 32,601 | 1,818,158 | |
Ross Stores, Inc. | 20,538 | 1,385,699 | |
TJX Companies, Inc. | 48,408 | 2,519,152 | |
| 10,224,926 | ||
Automotive Retail - 3.6% | |||
AutoZone, Inc. (a) | 2,300 | 1,031,734 | |
O'Reilly Automotive, Inc. (a) | 18,813 | 2,356,516 | |
| 3,388,250 | ||
Home Improvement Retail - 3.8% | |||
Home Depot, Inc. | 2,485 | 196,390 | |
Lowe's Companies, Inc. | 74,151 | 3,305,652 | |
| 3,502,042 | ||
Common Stocks - continued | |||
Shares | Value | ||
SPECIALTY RETAIL - CONTINUED | |||
Homefurnishing Retail - 3.0% | |||
Bed Bath & Beyond, Inc. (a) | 15,754 | $ 1,204,708 | |
Williams-Sonoma, Inc. | 27,058 | 1,592,634 | |
| 2,797,342 | ||
Specialty Stores - 11.1% | |||
Cabela's, Inc. Class A (a) | 22,604 | 1,551,539 | |
Dick's Sporting Goods, Inc. | 39,763 | 2,044,216 | |
PetSmart, Inc. | 26,589 | 1,946,847 | |
Sally Beauty Holdings, Inc. (a) | 38,900 | 1,186,839 | |
Staples, Inc. | 56,300 | 958,226 | |
Tractor Supply Co. | 14,471 | 1,752,872 | |
Ulta Salon, Cosmetics & Fragrance, Inc. (a) | 9,444 | 952,900 | |
| 10,393,439 | ||
TOTAL SPECIALTY RETAIL | 30,305,999 | ||
TEXTILES, APPAREL & LUXURY GOODS - 9.5% | |||
Apparel, Accessories & Luxury Goods - 5.3% | |||
Michael Kors Holdings Ltd. (a) | 9,765 | 657,575 | |
PVH Corp. | 8,500 | 1,120,215 | |
Swatch Group AG (Bearer) (Reg.) | 9,186 | 948,428 | |
Vera Bradley, Inc. (a)(d) | 26,841 | 650,626 | |
VF Corp. | 8,114 | 1,598,458 | |
| 4,975,302 | ||
Footwear - 4.2% | |||
NIKE, Inc. Class B | 36,732 | 2,311,177 | |
Steven Madden Ltd. (a) | 9,391 | 482,885 | |
Wolverine World Wide, Inc. | 19,948 | 1,147,209 | |
| 3,941,271 | ||
TOTAL TEXTILES, APPAREL & LUXURY GOODS | 8,916,573 | ||
TOTAL COMMON STOCKS (Cost $73,667,037) |
| ||
Money Market Funds - 3.8% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 0.11% (b) | 3,075,914 | $ 3,075,914 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 477,500 | 477,500 | |
TOTAL MONEY MARKET FUNDS (Cost $3,553,414) |
|
TOTAL INVESTMENT PORTFOLIO - 101.9% (Cost $77,220,451) | 95,299,635 |
NET OTHER ASSETS (LIABILITIES) - (1.9)% | (1,786,111) | ||
NET ASSETS - 100% | $ 93,513,524 |
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 | $ 1,345 |
Fidelity Securities Lending Cash Central Fund | 2,902 |
Total | $ 4,247 |
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 Consumer Discretionary Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $462,984) - See accompanying schedule: Unaffiliated issuers (cost $73,667,037) | $ 91,746,221 |
|
Fidelity Central Funds (cost $3,553,414) | 3,553,414 |
|
Total Investments (cost $77,220,451) |
| $ 95,299,635 |
Receivable for investments sold | 829,855 | |
Receivable for fund shares sold | 572,237 | |
Dividends receivable | 45,126 | |
Distributions receivable from Fidelity Central Funds | 1,908 | |
Other receivables | 601 | |
Total assets | 96,749,362 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 2,555,024 | |
Payable for fund shares redeemed | 75,820 | |
Accrued management fee | 39,764 | |
Distribution and service plan fees payable | 30,226 | |
Other affiliated payables | 19,194 | |
Other payables and accrued expenses | 38,310 | |
Collateral on securities loaned, at value | 477,500 | |
Total liabilities | 3,235,838 | |
|
|
|
Net Assets | $ 93,513,524 | |
Net Assets consist of: |
| |
Paid in capital | $ 70,345,155 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 5,089,246 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 18,079,123 | |
Net Assets | $ 93,513,524 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 19.59 | |
|
|
|
Maximum offering price per share (100/94.25 of $19.59) | $ 20.79 | |
Class T: | $ 18.68 | |
|
|
|
Maximum offering price per share (100/96.50 of $18.68) | $ 19.36 | |
Class B: | $ 16.85 | |
|
|
|
Class C: | $ 16.90 | |
|
|
|
Institutional Class: | $ 20.72 |
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, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 835,687 |
Income from Fidelity Central Funds |
| 4,247 |
Total income |
| 839,934 |
|
|
|
Expenses | ||
Management fee | $ 390,461 | |
Transfer agent fees | 184,656 | |
Distribution and service plan fees | 307,946 | |
Accounting and security lending fees | 27,508 | |
Custodian fees and expenses | 14,882 | |
Independent trustees' compensation | 491 | |
Registration fees | 61,430 | |
Audit | 58,188 | |
Legal | 222 | |
Interest | 264 | |
Miscellaneous | 564 | |
Total expenses before reductions | 1,046,612 | |
Expense reductions | (10,885) | 1,035,727 |
Net investment income (loss) | (195,793) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 9,881,485 | |
Foreign currency transactions | 592 | |
Total net realized gain (loss) |
| 9,882,077 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 10,583,773 | |
Assets and liabilities in foreign currencies | 36 | |
Total change in net unrealized appreciation (depreciation) |
| 10,583,809 |
Net gain (loss) | 20,465,886 | |
Net increase (decrease) in net assets resulting from operations | $ 20,270,093 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (195,793) | $ (44,525) |
Net realized gain (loss) | 9,882,077 | 3,542,404 |
Change in net unrealized appreciation (depreciation) | 10,583,809 | 762,372 |
Net increase (decrease) in net assets resulting from operations | 20,270,093 | 4,260,251 |
Distributions to shareholders from net investment income | - | (82,290) |
Distributions to shareholders from net realized gain | (6,688,896) | (2,716,672) |
Total distributions | (6,688,896) | (2,798,962) |
Share transactions - net increase (decrease) | 16,864,514 | 8,335,613 |
Redemption fees | 6,411 | 3,533 |
Total increase (decrease) in net assets | 30,452,122 | 9,800,435 |
|
|
|
Net Assets | ||
Beginning of period | 63,061,402 | 53,260,967 |
End of period (including accumulated net investment loss of $0 and $149,267, respectively) | $ 93,513,524 | $ 63,061,402 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 16.22 | $ 16.00 | $ 12.75 | $ 10.26 | $ 11.41 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.02) | .01 | (.02) | (.02) | .04 |
Net realized and unrealized gain (loss) | 5.04 | 1.07 | 3.27 | 2.51 | (1.16) |
Total from investment operations | 5.02 | 1.08 | 3.25 | 2.49 | (1.12) |
Distributions from net investment income | - | (.03) | - | - | (.03) |
Distributions from net realized gain | (1.65) | (.83) | - | - | - |
Total distributions | (1.65) | (.86) | - | - | (.03) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 19.59 | $ 16.22 | $ 16.00 | $ 12.75 | $ 10.26 |
Total Return A, B | 33.65% | 7.96% | 25.49% | 24.27% | (9.81)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.31% | 1.38% | 1.39% | 1.44% | 1.62% |
Expenses net of fee waivers, if any | 1.31% | 1.38% | 1.39% | 1.40% | 1.40% |
Expenses net of all reductions | 1.29% | 1.37% | 1.38% | 1.39% | 1.40% |
Net investment income (loss) | (.10)% | .04% | (.15)% | (.15)% | .42% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 45,292 | $ 26,547 | $ 23,447 | $ 19,423 | $ 13,010 |
Portfolio turnover rate E | 146% | 217% | 179% | 163% | 99% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 15.57 | $ 15.43 | $ 12.32 | $ 9.94 | $ 11.07 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.06) | (.03) | (.06) | (.05) | .01 |
Net realized and unrealized gain (loss) | 4.81 | 1.02 | 3.17 | 2.43 | (1.12) |
Total from investment operations | 4.75 | .99 | 3.11 | 2.38 | (1.11) |
Distributions from net investment income | - | (.02) | - | - | (.02) |
Distributions from net realized gain | (1.64) | (.83) | - | - | - |
Total distributions | (1.64) | (.85) | - | - | (.02) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 18.68 | $ 15.57 | $ 15.43 | $ 12.32 | $ 9.94 |
Total Return A, B | 33.25% | 7.62% | 25.24% | 23.94% | (10.04)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.60% | 1.64% | 1.66% | 1.71% | 1.89% |
Expenses net of fee waivers, if any | 1.60% | 1.64% | 1.65% | 1.65% | 1.65% |
Expenses net of all reductions | 1.58% | 1.63% | 1.64% | 1.64% | 1.65% |
Net investment income (loss) | (.39)% | (.23)% | (.40)% | (.40)% | .17% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 15,613 | $ 10,447 | $ 9,897 | $ 8,018 | $ 6,738 |
Portfolio turnover rate E | 146% | 217% | 179% | 163% | 99% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 14.23 | $ 14.23 | $ 11.42 | $ 9.26 | $ 10.35 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.13) | (.10) | (.12) | (.10) | (.03) |
Net realized and unrealized gain (loss) | 4.36 | .93 | 2.93 | 2.26 | (1.06) |
Total from investment operations | 4.23 | .83 | 2.81 | 2.16 | (1.09) |
Distributions from net realized gain | (1.61) | (.83) | - | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 16.85 | $ 14.23 | $ 14.23 | $ 11.42 | $ 9.26 |
Total Return A, B | 32.61% | 7.11% | 24.61% | 23.33% | (10.53)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.09% | 2.13% | 2.15% | 2.21% | 2.38% |
Expenses net of fee waivers, if any | 2.09% | 2.13% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.07% | 2.12% | 2.13% | 2.14% | 2.15% |
Net investment income (loss) | (.88)% | (.72)% | (.90)% | (.90)% | (.33)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 2,389 | $ 2,577 | $ 3,170 | $ 3,643 | $ 3,550 |
Portfolio turnover rate E | 146% | 217% | 179% | 163% | 99% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 14.27 | $ 14.26 | $ 11.44 | $ 9.27 | $ 10.37 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.12) | (.09) | (.12) | (.10) | (.03) |
Net realized and unrealized gain (loss) | 4.37 | .93 | 2.94 | 2.27 | (1.07) |
Total from investment operations | 4.25 | .84 | 2.82 | 2.17 | (1.10) |
Distributions from net realized gain | (1.62) | (.83) | - | - | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 16.90 | $ 14.27 | $ 14.26 | $ 11.44 | $ 9.27 |
Total Return A, B | 32.68% | 7.17% | 24.65% | 23.41% | (10.61)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.04% | 2.09% | 2.11% | 2.12% | 2.38% |
Expenses net of fee waivers, if any | 2.04% | 2.09% | 2.11% | 2.12% | 2.15% |
Expenses net of all reductions | 2.02% | 2.08% | 2.09% | 2.11% | 2.15% |
Net investment income (loss) | (.83)% | (.68)% | (.86)% | (.87)% | (.33)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 17,176 | $ 13,507 | $ 7,341 | $ 9,288 | $ 2,955 |
Portfolio turnover rate E | 146% | 217% | 179% | 163% | 99% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 17.04 | $ 16.72 | $ 13.27 | $ 10.66 | $ 11.84 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .04 | .07 | .03 | .02 | .06 |
Net realized and unrealized gain (loss) | 5.32 | 1.13 | 3.42 | 2.60 | (1.20) |
Total from investment operations | 5.36 | 1.20 | 3.45 | 2.62 | (1.14) |
Distributions from net investment income | - | (.05) | - | (.01) | (.04) |
Distributions from net realized gain | (1.68) | (.83) | - | - | - |
Total distributions | (1.68) | (.88) | - | (.01) | (.04) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 20.72 | $ 17.04 | $ 16.72 | $ 13.27 | $ 10.66 |
Total Return A | 34.06% | 8.33% | 26.00% | 24.62% | (9.59)% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .97% | 1.00% | 1.03% | 1.09% | 1.15% |
Expenses net of fee waivers, if any | .97% | 1.00% | 1.03% | 1.09% | 1.15% |
Expenses net of all reductions | .96% | .99% | 1.01% | 1.08% | 1.15% |
Net investment income (loss) | .24% | .41% | .22% | .16% | .67% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 13,044 | $ 9,984 | $ 9,406 | $ 9,013 | $ 5,990 |
Portfolio turnover rate D | 146% | 217% | 179% | 163% | 99% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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.
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. 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 and distributions from the Fidelity Central Funds are accrued as earned. 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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, 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 | $ 18,161,487 |
Gross unrealized depreciation | (389,193) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 17,772,294 |
|
|
Tax Cost | $ 77,527,341 |
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 | $ 3,048,702 |
Undistributed long-term capital gain | $ 2,347,434 |
Net unrealized appreciation (depreciation) | $ 17,772,233 |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 780,691 | $ 82,290 |
Long-term Capital Gains | 5,908,205 | 2,716,672 |
Total | $ 6,688,896 | $ 2,798,962 |
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 net asset value 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 $110,509,724 and $101,562,267, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .55% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 77,885 | $ 3,866 |
Class T | .25% | .25% | 61,512 | 1,386 |
Class B | .75% | .25% | 23,988 | 18,176 |
Class C | .75% | .25% | 144,561 | 31,768 |
|
|
| $ 307,946 | $ 55,196 |
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 | $ 28,360 |
Class T | 6,367 |
Class B* | 1,558 |
Class C* | 1,611 |
| $ 37,896 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 84,940 | .27 |
Class T | 38,120 | .31 |
Class B | 7,230 | .30 |
Class C | 35,745 | .25 |
Institutional Class | 18,621 | .19 |
| $ 184,656 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $3,020 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $161 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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 $2,902. 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 $2,473,333. The weighted average interest rate was .64%. The interest expense amounted to $264 under the bank borrowing program. At period end, there were no bank borrowings outstanding.
9. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $10,885 for the period.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net investment income |
|
|
Class A | $ - | $ 44,402 |
Class T | - | 11,934 |
Institutional Class | - | 25,954 |
Total | $ - | $ 82,290 |
From net realized gain |
|
|
Class A | $ 2,760,192 | $ 1,117,697 |
Class T | 1,156,068 | 525,372 |
Class B | 276,657 | 185,641 |
Class C | 1,553,543 | 423,815 |
Institutional Class | 942,436 | 464,147 |
Total | $ 6,688,896 | $ 2,716,672 |
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 1,258,652 | 717,075 | $ 22,336,491 | $ 11,323,395 |
Reinvestment of distributions | 153,097 | 76,740 | 2,439,799 | 1,020,698 |
Shares redeemed | (736,031) | (622,172) | (12,466,044) | (9,280,575) |
Net increase (decrease) | 675,718 | 171,643 | $ 12,310,246 | $ 3,063,518 |
Class T |
|
|
|
|
Shares sold | 212,852 | 117,936 | $ 3,581,408 | $ 1,759,305 |
Reinvestment of distributions | 73,194 | 40,961 | 1,114,024 | 523,233 |
Shares redeemed | (121,300) | (129,403) | (1,949,037) | (1,880,946) |
Net increase (decrease) | 164,746 | 29,494 | $ 2,746,395 | $ 401,592 |
Class B |
|
|
|
|
Shares sold | 14,257 | 21,180 | $ 220,513 | $ 276,635 |
Reinvestment of distributions | 16,131 | 13,190 | 223,127 | 154,193 |
Shares redeemed | (69,701) | (76,089) | (1,023,777) | (1,037,384) |
Net increase (decrease) | (39,313) | (41,719) | $ (580,137) | $ (606,556) |
Class C |
|
|
|
|
Shares sold | 555,264 | 581,986 | $ 8,601,818 | $ 8,055,378 |
Reinvestment of distributions | 102,005 | 33,472 | 1,411,723 | 392,295 |
Shares redeemed | (587,502) | (183,759) | (8,790,601) | (2,469,033) |
Net increase (decrease) | 69,767 | 431,699 | $ 1,222,940 | $ 5,978,640 |
Annual Report
Notes to Financial Statements - continued
11. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Institutional Class |
|
|
|
|
Shares sold | 404,001 | 1,043,471 | $ 7,620,195 | $ 16,050,433 |
Reinvestment of distributions | 46,665 | 13,483 | 784,588 | 188,283 |
Shares redeemed | (407,175) | (1,033,551) | (7,239,713) | (16,740,297) |
Net increase (decrease) | 43,491 | 23,403 | $ 1,165,070 | $ (501,581) |
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 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, 2013 | Past 1 | Past 5 | Past 10 |
Institutional Class | 22.48% | 9.11% | 4.92% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Electronics Fund - Institutional Class on July 31, 2003. 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
Comments from Stephen Barwikowski, who became sole Portfolio Manager of Fidelity Advisor® Electronics Fund on January 30, 2013: For the year, the fund's Institutional Class shares returned 22.48%, topping the 21.44% return of the MSCI® U.S. IMI Semiconductors & Semiconductor Equipment 25-50 Index but lagging the S&P 500®. While chip stocks, which make up the vast majority of the MSCI index, did well on an absolute basis during the period, there were pockets of weakness in some major components, resulting in the industry's underperformance versus the broader market. Stocks in the semiconductor and semi equipment space are extremely cyclical and react strongly to shifting supply and demand, so a lot of my work is focused on determining where we are with respect to the cyclical forces affecting these industries. Beyond that, I want to identify which companies have the products and management teams that best position them to take advantage of broader industry cycles. During the period, I was correct in my view that companies tied to the personal computer industry would remain challenged by longer-term erosion of PC demand. In fact, the fund's biggest contributor versus the MSCI index by a wide margin was benchmark heavyweight Intel, the dominant supplier of PC chips. Intel aided our results because it performed poorly and the fund carried a large underweighting here. With that said, later in the period, as the stock market pushed higher and valuations became relatively rich, in my view, I added to the fund's exposure to higher-quality companies and raised its cash level. As part of this tilt toward quality, I significantly increased the fund's stake in Intel, making it the fund's largest holding at period end, although it remained a sizable underweighting versus the MSCI index. Other relative contributors included a large overweighting in Freescale Semiconductor - a position I scaled back considerably - and a non-index stake in Dutch holding NXP Semiconductors. Conversely, I'd say the most disappointing aspect of the fund's positioning was its emphasis on stocks tied to the mobile communications industry. In particular, the high end of the smartphone market appeared to be getting saturated, and this was reflected in slower earnings and revenue growth at companies that make components for these phones - including Broadcom, the fund's largest holding during the period. Although Broadcom's stock plummeted in July on disappointing quarterly sales, I remained bullish on its longer-term prospects. Elsewhere, not owning strong-performing benchmark component Cree, which manufactures semiconductors used in light-emitting diode (LED) products, worked against us. This stock seemed expensive to me from the start, and even more so as it kept climbing during the period. A sizable underweighting in leading semiconductor equipment maker and index component Applied Materials, which I sold in February, hurt as well. I thought the market overvalued this stock and chip equipment stocks in general, but I was wrong in both cases.
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, 2013 to July 31, 2013).
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 | $ 1,165.90 | $ 7.52 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.85 | $ 7.00 |
Class T | 1.65% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,164.50 | $ 8.86 |
HypotheticalA |
| $ 1,000.00 | $ 1,016.61 | $ 8.25 |
Class B | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,162.20 | $ 11.53 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Class C | 2.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,161.10 | $ 11.52 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.13 | $ 10.74 |
Institutional Class | 1.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,167.20 | $ 6.18 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Intel Corp. | 10.0 | 8.4 |
Broadcom Corp. Class A | 8.5 | 9.6 |
Intersil Corp. Class A | 4.7 | 4.8 |
Altera Corp. | 4.6 | 7.7 |
QUALCOMM, Inc. | 4.3 | 1.6 |
Texas Instruments, Inc. | 3.7 | 2.7 |
Jabil Circuit, Inc. | 3.7 | 2.9 |
Maxim Integrated Products, Inc. | 3.5 | 0.5 |
ON Semiconductor Corp. | 3.4 | 2.9 |
Analog Devices, Inc. | 3.2 | 1.0 |
| 49.6 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Semiconductors & Semiconductor Equipment | 71.3% |
|
![]() | Electronic Equipment & Components | 8.8% |
|
![]() | Communications Equipment | 7.6% |
|
![]() | Computers & Peripherals | 3.8% |
|
![]() | Internet Software & Services | 0.9% |
|
![]() | All Others* | 7.6% |
|
As of January 31, 2013 | |||
![]() | Semiconductors & Semiconductor Equipment | 78.6% |
|
![]() | Electronic Equipment & Components | 10.6% |
|
![]() | Computers & Peripherals | 4.7% |
|
![]() | Communications Equipment | 2.8% |
|
![]() | Software | 0.1% |
|
![]() | All Others* | 3.2% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Electronics Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 92.7% | |||
Shares | Value | ||
BIOTECHNOLOGY - 0.0% | |||
Biotechnology - 0.0% | |||
Arrowhead Research Corp. warrants 5/21/17 (a) | 64,879 | $ 1 | |
COMMERCIAL SERVICES & SUPPLIES - 0.3% | |||
Office Services & Supplies - 0.3% | |||
West Corp. | 2,298 | 50,464 | |
COMMUNICATIONS EQUIPMENT - 7.6% | |||
Communications Equipment - 7.6% | |||
Aruba Networks, Inc. (a) | 3,422 | 60,843 | |
BlackBerry Ltd. (a) | 5,352 | 47,258 | |
F5 Networks, Inc. (a) | 672 | 58,975 | |
Juniper Networks, Inc. (a) | 4,787 | 103,734 | |
NETGEAR, Inc. (a) | 1,600 | 47,696 | |
Polycom, Inc. (a) | 4,422 | 42,274 | |
QUALCOMM, Inc. | 10,714 | 691,589 | |
Radware Ltd. (a) | 4,266 | 58,444 | |
Riverbed Technology, Inc. (a) | 6,705 | 104,866 | |
| 1,215,679 | ||
COMPUTERS & PERIPHERALS - 3.8% | |||
Computer Hardware - 2.2% | |||
Apple, Inc. | 657 | 297,293 | |
Dell, Inc. | 3,800 | 48,146 | |
| 345,439 | ||
Computer Storage & Peripherals - 1.6% | |||
EMC Corp. | 6,248 | 163,385 | |
Fusion-io, Inc. (a) | 2,889 | 41,659 | |
SanDisk Corp. | 865 | 47,679 | |
| 252,723 | ||
TOTAL COMPUTERS & PERIPHERALS | 598,162 | ||
ELECTRONIC EQUIPMENT & COMPONENTS - 8.8% | |||
Electronic Components - 1.5% | |||
Aeroflex Holding Corp. (a) | 27,902 | 209,823 | |
Corning, Inc. | 374 | 5,681 | |
Universal Display Corp. (a) | 800 | 23,160 | |
| 238,664 | ||
Electronic Manufacturing Services - 5.8% | |||
Flextronics International Ltd. (a) | 6,412 | 55,528 | |
Jabil Circuit, Inc. | 25,389 | 583,693 | |
TTM Technologies, Inc. (a) | 30,644 | 283,151 | |
Viasystems Group, Inc. (a) | 12 | 178 | |
| 922,550 | ||
Technology Distributors - 1.5% | |||
Arrow Electronics, Inc. (a) | 3,328 | 151,923 | |
Avnet, Inc. (a) | 2,185 | 82,309 | |
| 234,232 | ||
TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 1,395,446 | ||
| |||
Shares | Value | ||
INTERNET SOFTWARE & SERVICES - 0.9% | |||
Internet Software & Services - 0.9% | |||
Demand Media, Inc. (a) | 7,770 | $ 50,816 | |
Google, Inc. Class A (a) | 53 | 47,043 | |
Rackspace Hosting, Inc. (a) | 868 | 39,312 | |
Velti PLC (a) | 7,870 | 8,893 | |
| 146,064 | ||
IT SERVICES - 0.7% | |||
Data Processing & Outsourced Services - 0.7% | |||
EVERTEC, Inc. | 1,651 | 39,459 | |
VeriFone Systems, Inc. (a) | 3,843 | 73,286 | |
| 112,745 | ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 70.0% | |||
Semiconductor Equipment - 0.6% | |||
GT Advanced Technologies, Inc. (a)(d) | 8,481 | 44,016 | |
Lam Research Corp. (a) | 342 | 16,833 | |
Teradyne, Inc. (a) | 2,437 | 40,186 | |
| 101,035 | ||
Semiconductors - 69.4% | |||
Advanced Micro Devices, Inc. (a)(d) | 27,506 | 103,698 | |
Altera Corp. | 20,760 | 738,226 | |
Analog Devices, Inc. | 10,476 | 517,095 | |
Avago Technologies Ltd. | 11,480 | 421,086 | |
Broadcom Corp. Class A | 49,364 | 1,360,965 | |
Cypress Semiconductor Corp. | 12,500 | 159,625 | |
Entropic Communications, Inc. (a) | 6,904 | 30,585 | |
EZchip Semiconductor Ltd. (a) | 1,326 | 41,968 | |
Freescale Semiconductor Holdings I Ltd. (a)(d) | 7,351 | 115,411 | |
Inphi Corp. (a) | 7,530 | 87,800 | |
Intel Corp. | 68,108 | 1,586,915 | |
Intermolecular, Inc. (a) | 6,205 | 39,216 | |
Intersil Corp. Class A | 72,865 | 743,952 | |
LSI Corp. | 31,832 | 247,653 | |
M/A-COM Technology Solutions, Inc. (a) | 1,812 | 29,046 | |
Marvell Technology Group Ltd. | 19,391 | 251,501 | |
Maxim Integrated Products, Inc. | 19,256 | 550,722 | |
MediaTek, Inc. | 4,000 | 48,008 | |
Microchip Technology, Inc. (d) | 6,464 | 256,879 | |
Micron Technology, Inc. (a) | 30,231 | 400,561 | |
Motech Industries, Inc. (a) | 1 | 1 | |
NVIDIA Corp. | 22,583 | 325,873 | |
NXP Semiconductors NV (a) | 7,118 | 232,403 | |
O2Micro International Ltd. sponsored ADR (a) | 9,835 | 31,669 | |
Omnivision Technologies, Inc. (a) | 5,960 | 96,910 | |
ON Semiconductor Corp. (a) | 65,035 | 535,888 | |
PMC-Sierra, Inc. (a) | 41,906 | 276,789 | |
RDA Microelectronics, Inc. sponsored ADR | 4,409 | 49,645 | |
Samsung Electronics Co. Ltd. | 78 | 88,849 | |
Skyworks Solutions, Inc. (a) | 20,428 | 490,681 | |
Common Stocks - continued | |||
Shares | Value | ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - CONTINUED | |||
Semiconductors - continued | |||
Spansion, Inc. Class A (a) | 700 | $ 8,260 | |
Texas Instruments, Inc. | 15,091 | 591,567 | |
Trident Microsystems, Inc. (a) | 19 | 0 | |
Volterra Semiconductor Corp. (a) | 4,731 | 71,296 | |
Xilinx, Inc. | 10,970 | 512,189 | |
| 11,042,932 | ||
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | 11,143,967 | ||
SOFTWARE - 0.6% | |||
Application Software - 0.3% | |||
Nuance Communications, Inc. (a) | 3,075 | 57,687 | |
Systems Software - 0.3% | |||
Allot Communications Ltd. (a) | 3,157 | 46,187 | |
TOTAL SOFTWARE | 103,874 | ||
TOTAL COMMON STOCKS (Cost $16,164,095) |
|
Convertible Bonds - 1.3% | ||||
| Principal |
| ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 1.3% | ||||
Semiconductors - 1.3% | ||||
Micron Technology, Inc.: | ||||
1.625% 2/15/33 (e) | $ 30,000 | 41,250 | ||
1.875% 8/1/31 | 83,000 | 121,803 | ||
3.125% 5/1/32 | 25,000 | 37,547 | ||
TOTAL CONVERTIBLE BONDS (Cost $131,712) | 200,600 |
Money Market Funds - 8.3% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 0.11% (b) | 926,280 | $ 926,280 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 402,720 | 402,720 | |
TOTAL MONEY MARKET FUNDS (Cost $1,329,000) |
| ||
TOTAL INVESTMENT PORTFOLIO - 102.3% (Cost $17,624,807) | 16,296,002 | ||
NET OTHER ASSETS (LIABILITIES) - (2.3)% | (369,380) | ||
NET ASSETS - 100% | $ 15,926,622 |
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) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $41,250 or 0.3% of net assets. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 781 |
Fidelity Securities Lending Cash Central Fund | 3,699 |
Total | $ 4,480 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2013, 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 | $ 14,766,402 | $ 14,766,401 | $ 1 | $ - |
Convertible Bonds | 200,600 | - | 200,600 | - |
Money Market Funds | 1,329,000 | 1,329,000 | - | - |
Total Investments in Securities: | $ 16,296,002 | $ 16,095,401 | $ 200,601 | $ - |
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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $397,490) - See accompanying schedule: Unaffiliated issuers (cost $16,295,807) | $ 14,967,002 |
|
Fidelity Central Funds (cost $1,329,000) | 1,329,000 |
|
Total Investments (cost $17,624,807) |
| $ 16,296,002 |
Cash |
| 42,495 |
Receivable for investments sold | 274,579 | |
Receivable for fund shares sold | 8,429 | |
Dividends receivable | 5,432 | |
Interest receivable | 1,202 | |
Distributions receivable from Fidelity Central Funds | 206 | |
Receivable from investment adviser for expense reductions | 8,221 | |
Other receivables | 376 | |
Total assets | 16,636,942 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 230,507 | |
Payable for fund shares redeemed | 13,808 | |
Accrued management fee | 6,750 | |
Distribution and service plan fees payable | 5,606 | |
Other affiliated payables | 3,779 | |
Audit fees payable | 33,556 | |
Custodian fees payable | 13,594 | |
Collateral on securities loaned, at value | 402,720 | |
Total liabilities | 710,320 | |
|
|
|
Net Assets | $ 15,926,622 | |
Net Assets consist of: |
| |
Paid in capital | $ 24,626,150 | |
Accumulated net investment loss | (32,651) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (7,338,065) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (1,328,812) | |
Net Assets | $ 15,926,622 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 10.33 | |
|
|
|
Maximum offering price per share (100/94.25 of $10.33) | $ 10.96 | |
Class T: | $ 10.05 | |
|
|
|
Maximum offering price per share (100/96.50 of $10.05) | $ 10.41 | |
Class B: | $ 9.46 | |
|
|
|
Class C: | $ 9.44 | |
|
|
|
Institutional Class: | $ 10.68 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Fidelity Advisor Electronics Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 173,006 |
Interest |
| 4,420 |
Income from Fidelity Central Funds |
| 4,480 |
Total income |
| 181,906 |
|
|
|
Expenses | ||
Management fee | $ 77,667 | |
Transfer agent fees | 43,691 | |
Distribution and service plan fees | 66,485 | |
Accounting and security lending fees | 5,562 | |
Custodian fees and expenses | 42,407 | |
Independent trustees' compensation | 100 | |
Registration fees | 55,940 | |
Audit | 45,012 | |
Legal | 95 | |
Miscellaneous | 143 | |
Total expenses before reductions | 337,102 | |
Expense reductions | (113,435) | 223,667 |
Net investment income (loss) | (41,761) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | (680,074) | |
Foreign currency transactions | (378) | |
Total net realized gain (loss) |
| (680,452) |
Change in net unrealized appreciation (depreciation) on: Investment securities | 3,203,680 | |
Assets and liabilities in foreign currencies | (7) | |
Total change in net unrealized appreciation (depreciation) |
| 3,203,673 |
Net gain (loss) | 2,523,221 | |
Net increase (decrease) in net assets resulting from operations | $ 2,481,460 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (41,761) | $ (132,080) |
Net realized gain (loss) | (680,452) | (811,690) |
Change in net unrealized appreciation (depreciation) | 3,203,673 | (927,864) |
Net increase (decrease) in net assets resulting from operations | 2,481,460 | (1,871,634) |
Share transactions - net increase (decrease) | (3,915,862) | 925,003 |
Redemption fees | 1,278 | 775 |
Total increase (decrease) in net assets | (1,433,124) | (945,856) |
|
|
|
Net Assets | ||
Beginning of period | 17,359,746 | 18,305,602 |
End of period (including accumulated net investment loss of $32,651 and accumulated net investment loss of $91,150, respectively) | $ 15,926,622 | $ 17,359,746 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 8.45 | $ 8.93 | $ 7.14 | $ 6.59 | $ 6.79 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.01) | (.05) | (.04) | (.01) | .04 |
Net realized and unrealized gain (loss) | 1.89 | (.43) | 1.83 | .59 | (.24) |
Total from investment operations | 1.88 | (.48) | 1.79 | .58 | (.20) |
Distributions from net investment income | - | - | - | (.03) | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 10.33 | $ 8.45 | $ 8.93 | $ 7.14 | $ 6.59 |
Total Return A, B | 22.25% | (5.38)% | 25.07% | 8.74% | (2.95)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.18% | 1.88% | 1.89% | 1.97% | 2.44% |
Expenses net of fee waivers, if any | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% |
Expenses net of all reductions | 1.37% | 1.39% | 1.39% | 1.39% | 1.40% |
Net investment income (loss) | (.07)% | (.53)% | (.40)% | (.15)% | .69% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 5,833 | $ 6,000 | $ 7,537 | $ 5,394 | $ 5,433 |
Portfolio turnover rate E | 179% | 140% | 166% | 87% | 92% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 8.24 | $ 8.73 | $ 7.00 | $ 6.46 | $ 6.67 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.03) | (.07) | (.06) | (.03) | .02 |
Net realized and unrealized gain (loss) | 1.84 | (.42) | 1.79 | .58 | (.23) |
Total from investment operations | 1.81 | (.49) | 1.73 | .55 | (.21) |
Distributions from net investment income | - | - | - | (.01) | - |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 10.05 | $ 8.24 | $ 8.73 | $ 7.00 | $ 6.46 |
Total Return A, B | 21.97% | (5.61)% | 24.71% | 8.50% | (3.15)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.48% | 2.23% | 2.25% | 2.26% | 2.77% |
Expenses net of fee waivers, if any | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% |
Expenses net of all reductions | 1.62% | 1.64% | 1.64% | 1.64% | 1.65% |
Net investment income (loss) | (.32)% | (.78)% | (.65)% | (.40)% | .44% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 3,756 | $ 3,909 | $ 4,476 | $ 3,862 | $ 4,195 |
Portfolio turnover rate E | 179% | 140% | 166% | 87% | 92% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 7.79 | $ 8.29 | $ 6.69 | $ 6.19 | $ 6.43 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.07) | (.10) | (.09) | (.06) | - G |
Net realized and unrealized gain (loss) | 1.74 | (.40) | 1.69 | .56 | (.24) |
Total from investment operations | 1.67 | (.50) | 1.60 | .50 | (.24) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 9.46 | $ 7.79 | $ 8.29 | $ 6.69 | $ 6.19 |
Total Return A, B | 21.44% | (6.03)% | 23.92% | 8.08% | (3.73)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.95% | 2.70% | 2.76% | 2.73% | 3.22% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.12% | 2.15% | 2.14% | 2.15% | 2.15% |
Net investment income (loss) | (.82)% | (1.29)% | (1.15)% | (.90)% | (.06)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 306 | $ 459 | $ 691 | $ 1,073 | $ 1,197 |
Portfolio turnover rate E | 179% | 140% | 166% | 87% | 92% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 7.78 | $ 8.29 | $ 6.68 | $ 6.18 | $ 6.42 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.07) | (.10) | (.09) | (.06) | - G |
Net realized and unrealized gain (loss) | 1.73 | (.41) | 1.70 | .56 | (.24) |
Total from investment operations | 1.66 | (.51) | 1.61 | .50 | (.24) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 9.44 | $ 7.78 | $ 8.29 | $ 6.68 | $ 6.18 |
Total Return A, B | 21.34% | (6.15)% | 24.10% | 8.09% | (3.74)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.93% | 2.65% | 2.70% | 2.72% | 3.21% |
Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
Expenses net of all reductions | 2.12% | 2.14% | 2.14% | 2.14% | 2.15% |
Net investment income (loss) | (.82)% | (1.28)% | (1.15)% | (.90)% | (.06)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 3,157 | $ 3,721 | $ 3,836 | $ 3,256 | $ 3,016 |
Portfolio turnover rate E | 179% | 140% | 166% | 87% | 92% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 8.72 | $ 9.19 | $ 7.33 | $ 6.75 | $ 6.94 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .02 | (.02) | (.01) | .01 | .05 |
Net realized and unrealized gain (loss) | 1.94 | (.45) | 1.87 | .60 | (.24) |
Total from investment operations | 1.96 | (.47) | 1.86 | .61 | (.19) |
Distributions from net investment income | - | - | - | (.03) | - |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 10.68 | $ 8.72 | $ 9.19 | $ 7.33 | $ 6.75 |
Total Return A | 22.48% | (5.11)% | 25.38% | 9.10% | (2.74)% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | 1.86% | 1.55% | 1.42% | 1.64% | 2.16% |
Expenses net of fee waivers, if any | 1.15% | 1.15% | 1.15% | 1.15% | 1.15% |
Expenses net of all reductions | 1.12% | 1.14% | 1.14% | 1.14% | 1.15% |
Net investment income (loss) | .18% | (.28)% | (.15)% | .11% | .94% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 2,874 | $ 3,271 | $ 1,765 | $ 645 | $ 367 |
Portfolio turnover rate D | 179% | 140% | 166% | 87% | 92% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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, changes in interest rates and credit quality. 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.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. For corporate bonds, pricing vendors utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type as well as broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Investment Valuation - continued
valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
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, 2013, 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. 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 and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to market discount, net operating losses, capital loss carryforwards, expiring capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
Annual Report
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 | $ 602,294 |
Gross unrealized depreciation | (2,171,412) |
Net unrealized appreciation (depreciation) on securities and other investments | $ (1,569,118) |
|
|
Tax Cost | $ 17,865,120 |
The tax-based components of distributable earnings as of period end were as follows:
Capital loss carryforward | $ (6,174,503) |
Net unrealized appreciation (depreciation) | $ (1,569,125) |
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 |
|
2016 | $ (310,663) |
2017 | (5,202,838) |
Total with expiration | $ (5,513,501) |
No expiration |
|
Long-term | (661,002) |
Total capital loss carryforward | $ (6,174,503) |
The Fund intends to elect to defer to its fiscal year ending July 31, 2014, approximately $922,950 of capital losses recognized during the period November 1, 2012 to July 31, 2013.
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 net asset value 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 $24,578,957 and $29,174,943, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .55% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the
Annual Report
Notes to Financial Statements - continued
5. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan Fees - continued
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% | $ 13,542 | $ 583 |
Class T | .25% | .25% | 17,534 | 368 |
Class B | .75% | .25% | 3,638 | 2,751 |
Class C | .75% | .25% | 31,771 | 4,778 |
|
|
| $ 66,485 | $ 8,480 |
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 | $ 3,703 |
Class T | 1,953 |
Class B* | 1,547 |
Class C* | 300 |
| $ 7,503 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 16,578 | .31 |
Class T | 12,936 | .37 |
Class B | 1,121 | .31 |
Class C | 9,864 | .31 |
Institutional Class | 3,192 | .21 |
| $ 43,691 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $2,980 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $34 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
Annual Report
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, including 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 $3,699. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense | Reimbursement |
Class A | 1.40% | $ 42,211 |
Class T | 1.65% | 29,046 |
Class B | 2.15% | 2,922 |
Class C | 2.15% | 24,636 |
Institutional Class | 1.15% | 10,839 |
|
| $ 109,654 |
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $3,781 for the period.
9. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 137,609 | 461,275 | $ 1,216,436 | $ 4,417,052 |
Shares redeemed | (283,233) | (595,271) | (2,448,434) | (4,948,629) |
Net increase (decrease) | (145,624) | (133,996) | $ (1,231,998) | $ (531,577) |
Class T |
|
|
|
|
Shares sold | 112,240 | 90,140 | $ 987,721 | $ 795,072 |
Shares redeemed | (212,855) | (128,587) | (1,812,736) | (1,079,505) |
Net increase (decrease) | (100,615) | (38,447) | $ (825,015) | $ (284,433) |
Class B |
|
|
|
|
Shares sold | 678 | 10,206 | $ 4,830 | $ 91,605 |
Shares redeemed | (27,225) | (34,653) | (220,563) | (276,903) |
Net increase (decrease) | (26,547) | (24,447) | $ (215,733) | $ (185,298) |
Class C |
|
|
|
|
Shares sold | 96,174 | 171,249 | $ 799,164 | $ 1,492,502 |
Shares redeemed | (240,043) | (156,060) | (1,893,943) | (1,218,105) |
Net increase (decrease) | (143,869) | 15,189 | $ (1,094,779) | $ 274,397 |
Institutional Class |
|
|
|
|
Shares sold | 228,631 | 380,436 | $ 2,347,005 | $ 3,355,122 |
Shares redeemed | (334,852) | (197,302) | (2,895,342) | (1,703,208) |
Net increase (decrease) | (106,221) | 183,134 | $ (548,337) | $ 1,651,914 |
Annual Report
Notes to Financial Statements - continued
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
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, 2013 |
| Past 1 | Past 5 | Past 10 |
Institutional Class A |
| 21.26% | -0.23% | 13.37% |
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, 2003. 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
Comments from John Dowd, Portfolio Manager of Fidelity Advisor® Energy Fund: For the year, the fund's Institutional Class shares returned 21.26%, outpacing the 19.36% gain of the MSCI® U.S. IMI Energy 25-50 Index but falling short of the broad-based S&P 500®. The boom in domestic production of oil and natural gas brought about by successful new drilling techniques in North American shale beds continued to positively affect the energy sector. As part of my investment approach, I've been concentrating on owning companies I believe can help bring about U.S. energy independence, including specific firms in the domestic drilling, pipeline and refinery businesses. I look to own companies with some kind of competitive advantage that also are growing earnings and whose stock is selling at a reasonable value. Relative to the MSCI sector benchmark, stock picking was the primary driver of the fund's performance. I did well with investments in the outperforming E&P group, where firms such as Pioneer Natural Resources and Cabot Oil & Gas both posted gains of more than 70% and strongly contributed to relative performance. Although I held a sizable position in Exxon Mobil in an effort to maintain balanced risk characteristics in the fund, I remained significantly underweighted there, and the stock underperformed, making it the fund's largest relative contributor for the year. Among refiners, Tesoro was a big plus, as its stock price doubled on a smart acquisition and strong profit margins. Conversely, the fund was hurt by picks in oil/gas equipment and services, where National Oilwell Varco - one of the fund's largest holdings - fell under profit pressure. A non-index stake in Canada-based integrated oil/gas firm Suncor Energy and an overweighting in E&P firm Concho Resources also detracted.
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, 2013 to July 31, 2013).
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 | 1.15% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,067.90 | $ 5.90 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.09 | $ 5.76 |
Class T | 1.35% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,066.80 | $ 6.92 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.10 | $ 6.76 |
Class B | 1.92% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,063.90 | $ 9.83 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.27 | $ 9.59 |
Class C | 1.88% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,064.00 | $ 9.62 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.47 | $ 9.39 |
Institutional Class | .88% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,069.10 | $ 4.51 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.43 | $ 4.41 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Exxon Mobil Corp. | 14.8 | 9.7 |
Chevron Corp. | 7.9 | 9.7 |
Halliburton Co. | 5.4 | 3.5 |
National Oilwell Varco, Inc. | 4.1 | 4.2 |
EOG Resources, Inc. | 4.0 | 3.1 |
Anadarko Petroleum Corp. | 3.9 | 3.4 |
Schlumberger Ltd. | 3.8 | 2.9 |
Occidental Petroleum Corp. | 3.5 | 6.2 |
Continental Resources, Inc. | 2.8 | 0.4 |
Suncor Energy, Inc. | 2.7 | 2.4 |
| 52.9 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Oil, Gas & Consumable Fuels | 74.5% |
|
![]() | Energy Equipment & Services | 21.8% |
|
![]() | Hotels, Restaurants & Leisure | 0.0% |
|
![]() | All Others* | 3.7% |
|
As of January 31, 2013 | |||
![]() | Oil, Gas & Consumable Fuels | 74.6% |
|
![]() | Energy Equipment & Services | 23.2% |
|
![]() | Chemicals | 1.0% |
|
![]() | Metals & Mining | 0.3% |
|
![]() | Hotels, Restaurants & Leisure | 0.0% |
|
![]() | All Others* | 0.9% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Energy Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 96.3% | |||
Shares | Value | ||
ENERGY EQUIPMENT & SERVICES - 21.8% | |||
Oil & Gas Drilling - 3.7% | |||
Atwood Oceanics, Inc. (a) | 12,300 | $ 692,982 | |
Ensco PLC Class A | 321,735 | 18,448,285 | |
Noble Corp. | 109,898 | 4,198,104 | |
Northern Offshore Ltd. | 328,887 | 469,934 | |
Vantage Drilling Co. (a) | 1,049,730 | 1,931,503 | |
| 25,740,808 | ||
Oil & Gas Equipment & Services - 18.1% | |||
Cameron International Corp. (a) | 225,041 | 13,344,931 | |
Core Laboratories NV | 37,382 | 5,592,347 | |
Dril-Quip, Inc. (a) | 37,000 | 3,363,670 | |
FMC Technologies, Inc. (a) | 55,100 | 2,936,830 | |
Geospace Technologies Corp. (a) | 11,032 | 820,891 | |
Halliburton Co. | 825,567 | 37,307,373 | |
National Oilwell Varco, Inc. | 400,707 | 28,117,610 | |
Oceaneering International, Inc. | 24,473 | 1,984,516 | |
Schlumberger Ltd. | 322,164 | 26,201,598 | |
Superior Energy Services, Inc. (a) | 83,484 | 2,138,860 | |
Total Energy Services, Inc. | 53,200 | 788,858 | |
Weatherford International Ltd. (a) | 117,390 | 1,638,764 | |
| 124,236,248 | ||
TOTAL ENERGY EQUIPMENT & SERVICES | 149,977,056 | ||
HOTELS, RESTAURANTS & LEISURE - 0.0% | |||
Casinos & Gaming - 0.0% | |||
Icahn Enterprises LP rights (a) | 66,553 | 1 | |
OIL, GAS & CONSUMABLE FUELS - 74.5% | |||
Coal & Consumable Fuels - 0.6% | |||
Alpha Natural Resources, Inc. (a) | 95,000 | 516,800 | |
Peabody Energy Corp. | 204,914 | 3,393,376 | |
| 3,910,176 | ||
Integrated Oil & Gas - 34.4% | |||
Chevron Corp. | 430,970 | 54,254,813 | |
Exxon Mobil Corp. | 1,089,641 | 102,153,842 | |
Hess Corp. | 217,261 | 16,177,254 | |
InterOil Corp. (a)(d) | 40,000 | 3,428,000 | |
Murphy Oil Corp. | 273,112 | 18,495,145 | |
Occidental Petroleum Corp. | 270,348 | 24,074,489 | |
Suncor Energy, Inc. | 585,860 | 18,515,252 | |
| 237,098,795 | ||
Oil & Gas Exploration & Production - 30.6% | |||
Anadarko Petroleum Corp. | 299,429 | 26,505,455 | |
Bankers Petroleum Ltd. (a) | 966,600 | 2,804,467 | |
| |||
Shares | Value | ||
Bonanza Creek Energy, Inc. (a) | 84,482 | $ 3,441,797 | |
BPZ Energy, Inc. (a) | 221,964 | 534,933 | |
Cabot Oil & Gas Corp. | 172,486 | 13,077,889 | |
Canadian Natural Resources Ltd. | 53,900 | 1,670,370 | |
Cimarex Energy Co. | 182,233 | 13,928,068 | |
Cobalt International Energy, Inc. (a) | 248,967 | 7,182,698 | |
Concho Resources, Inc. (a) | 58,894 | 5,282,203 | |
Continental Resources, Inc. (a) | 209,279 | 19,316,452 | |
EOG Resources, Inc. | 186,729 | 27,167,202 | |
EPL Oil & Gas, Inc. (a) | 72,660 | 2,336,746 | |
EQT Corp. | 167,046 | 14,449,479 | |
Gulfport Energy Corp. (a) | 94,325 | 5,018,090 | |
Halcon Resources Corp. (a) | 300,000 | 1,644,000 | |
Kosmos Energy Ltd. (a) | 60,000 | 633,600 | |
Marathon Oil Corp. | 444,497 | 16,161,911 | |
Noble Energy, Inc. | 286,108 | 17,878,889 | |
Northern Oil & Gas, Inc. (a) | 204,993 | 2,707,958 | |
Oasis Petroleum, Inc. (a) | 165,777 | 6,969,265 | |
Painted Pony Petroleum Ltd. Class A (a) | 142,700 | 1,035,065 | |
PDC Energy, Inc. (a) | 46,603 | 2,570,155 | |
Pioneer Natural Resources Co. | 101,019 | 15,633,700 | |
Range Resources Corp. | 11,300 | 893,830 | |
Rosetta Resources, Inc. (a) | 17,081 | 779,064 | |
TAG Oil Ltd. (a)(d) | 77,800 | 290,112 | |
Whiting Petroleum Corp. (a) | 13,900 | 715,433 | |
| 210,628,831 | ||
Oil & Gas Refining & Marketing - 3.6% | |||
Calumet Specialty Products Partners LP | 80,391 | 2,639,237 | |
Marathon Petroleum Corp. | 139,787 | 10,250,581 | |
Northern Tier Energy LP Class A | 44,772 | 1,126,016 | |
Phillips 66 | 132,965 | 8,177,348 | |
Tesoro Corp. | 24,033 | 1,366,276 | |
Valero Energy Corp. | 36,955 | 1,321,880 | |
| 24,881,338 | ||
Oil & Gas Storage & Transport - 5.3% | |||
Atlas Energy LP | 102,750 | 5,421,090 | |
Atlas Pipeline Partners LP | 96,400 | 3,653,560 | |
Magellan Midstream Partners LP | 63,586 | 3,476,882 | |
Markwest Energy Partners LP | 32,400 | 2,274,804 | |
Phillips 66 Partners LP | 9,300 | 301,041 | |
Targa Resources Corp. | 46,147 | 3,145,841 | |
Tesoro Logistics LP | 62,024 | 3,317,664 | |
The Williams Companies, Inc. | 426,351 | 14,568,414 | |
| 36,159,296 | ||
TOTAL OIL, GAS & CONSUMABLE FUELS | 512,678,436 | ||
TOTAL COMMON STOCKS (Cost $577,348,321) |
| ||
Money Market Funds - 3.9% | |||
Shares | Value | ||
Fidelity Cash Central Fund, 0.11% (b) | 24,709,280 | $ 24,709,280 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 2,238,215 | 2,238,215 | |
TOTAL MONEY MARKET FUNDS (Cost $26,947,495) |
| ||
TOTAL INVESTMENT PORTFOLIO - 100.2% (Cost $604,295,816) | 689,602,988 | ||
NET OTHER ASSETS (LIABILITIES) - (0.2)% | (1,138,817) | ||
NET ASSETS - 100% | $ 688,464,171 |
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 | $ 8,692 |
Fidelity Securities Lending Cash Central Fund | 312,654 |
Total | $ 321,346 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2013, 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 | $ 662,655,493 | $ 662,655,492 | $ - | $ 1 |
Money Market Funds | 26,947,495 | 26,947,495 | - | - |
Total Investments in Securities: | $ 689,602,988 | $ 689,602,987 | $ - | $ 1 |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows. (Unaudited) |
United States of America | 87.3% |
Canada | 4.1% |
Curacao | 3.8% |
United Kingdom | 2.7% |
Others (Individually Less Than 1%) | 2.1% |
| 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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $2,191,678) - See accompanying schedule: Unaffiliated issuers (cost $577,348,321) | $ 662,655,493 |
|
Fidelity Central Funds (cost $26,947,495) | 26,947,495 |
|
Total Investments (cost $604,295,816) |
| $ 689,602,988 |
Receivable for investments sold | 10,778,929 | |
Receivable for fund shares sold | 971,435 | |
Dividends receivable | 131,109 | |
Distributions receivable from Fidelity Central Funds | 21,688 | |
Other receivables | 7,472 | |
Total assets | 701,513,621 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 8,926,289 | |
Payable for fund shares redeemed | 1,109,873 | |
Accrued management fee | 314,844 | |
Distribution and service plan fees payable | 249,455 | |
Other affiliated payables | 168,694 | |
Other payables and accrued expenses | 42,080 | |
Collateral on securities loaned, at value | 2,238,215 | |
Total liabilities | 13,049,450 | |
|
|
|
Net Assets | $ 688,464,171 | |
Net Assets consist of: |
| |
Paid in capital | $ 596,636,074 | |
Accumulated net investment loss | (571,396) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 7,092,381 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 85,307,112 | |
Net Assets | $ 688,464,171 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 40.59 | |
|
|
|
Maximum offering price per share (100/94.25 of $40.59) | $ 43.07 | |
Class T: | $ 41.38 | |
|
|
|
Maximum offering price per share (100/96.50 of $41.38) | $ 42.88 | |
Class B: | $ 37.65 | |
|
|
|
Class C: | $ 37.92 | |
|
|
|
Institutional Class: | $ 42.55 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Operations
| Year ended July 31, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 11,241,598 |
Interest |
| 32 |
Income from Fidelity Central Funds |
| 321,346 |
Total income |
| 11,562,976 |
|
|
|
Expenses | ||
Management fee | $ 3,654,426 | |
Transfer agent fees | 1,795,877 | |
Distribution and service plan fees | 2,946,270 | |
Accounting and security lending fees | 239,551 | |
Custodian fees and expenses | 18,612 | |
Independent trustees' compensation | 4,677 | |
Registration fees | 83,931 | |
Audit | 48,976 | |
Legal | 2,389 | |
Interest | 178 | |
Miscellaneous | 5,798 | |
Total expenses before reductions | 8,800,685 | |
Expense reductions | (74,922) | 8,725,763 |
Net investment income (loss) | 2,837,213 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 68,498,795 | |
Foreign currency transactions | (7,491) | |
Total net realized gain (loss) |
| 68,491,304 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 51,387,414 | |
Assets and liabilities in foreign currencies | 279 | |
Total change in net unrealized appreciation (depreciation) |
| 51,387,693 |
Net gain (loss) | 119,878,997 | |
Net increase (decrease) in net assets resulting from operations | $ 122,716,210 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 2,837,213 | $ 3,591,237 |
Net realized gain (loss) | 68,491,304 | (47,752,015) |
Change in net unrealized appreciation (depreciation) | 51,387,693 | (91,975,369) |
Net increase (decrease) in net assets resulting from operations | 122,716,210 | (136,136,147) |
Distributions to shareholders from net investment income | (2,261,471) | (3,625,437) |
Share transactions - net increase (decrease) | (79,579,362) | (71,627,600) |
Redemption fees | 15,482 | 37,255 |
Total increase (decrease) in net assets | 40,890,859 | (211,351,929) |
|
|
|
Net Assets | ||
Beginning of period | 647,573,312 | 858,925,241 |
End of period (including accumulated net investment loss of $571,396 and accumulated net investment loss of $503,083, respectively) | $ 688,464,171 | $ 647,573,312 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 33.71 | $ 40.17 | $ 27.70 | $ 25.82 | $ 50.24 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .23 | .25 | .11 | (.05) | (.04) |
Net realized and unrealized gain (loss) | 6.81 | (6.50) | 12.47 | 1.93 | (17.48) |
Total from investment operations | 7.04 | (6.25) | 12.58 | 1.88 | (17.52) |
Distributions from net investment income | (.16) | (.21) | (.11) | - | - |
Distributions from net realized gain | - | - | - | - | (6.90) |
Total distributions | (.16) | (.21) | (.11) | - | (6.90) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 40.59 | $ 33.71 | $ 40.17 | $ 27.70 | $ 25.82 |
Total Return A, B | 20.94% | (15.58)% | 45.46% | 7.28% | (38.86)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.16% | 1.17% | 1.16% | 1.20% | 1.22% |
Expenses net of fee waivers, if any | 1.16% | 1.17% | 1.16% | 1.20% | 1.22% |
Expenses net of all reductions | 1.15% | 1.17% | 1.16% | 1.19% | 1.21% |
Net investment income (loss) | .61% | .72% | .30% | (.16)% | (.14)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 279,798 | $ 253,332 | $ 331,120 | $ 214,407 | $ 216,595 |
Portfolio turnover rate E | 68% | 88% | 91% | 103% | 148% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 34.40 | $ 41.04 | $ 28.33 | $ 26.47 | $ 51.40 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .15 | .18 | .03 | (.11) | (.10) |
Net realized and unrealized gain (loss) | 6.95 | (6.65) | 12.75 | 1.97 | (17.93) |
Total from investment operations | 7.10 | (6.47) | 12.78 | 1.86 | (18.03) |
Distributions from net investment income | (.12) | (.17) | (.07) | - | - |
Distributions from net realized gain | - | - | - | - | (6.90) |
Total distributions | (.12) | (.17) | (.07) | - | (6.90) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 41.38 | $ 34.40 | $ 41.04 | $ 28.33 | $ 26.47 |
Total Return A, B | 20.70% | (15.77)% | 45.16% | 7.03% | (38.99)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.36% | 1.38% | 1.37% | 1.41% | 1.45% |
Expenses net of fee waivers, if any | 1.36% | 1.38% | 1.37% | 1.41% | 1.45% |
Expenses net of all reductions | 1.35% | 1.38% | 1.37% | 1.41% | 1.45% |
Net investment income (loss) | .40% | .50% | .09% | (.37)% | (.38)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 223,248 | $ 215,488 | $ 290,512 | $ 219,051 | $ 224,376 |
Portfolio turnover rate E | 68% | 88% | 91% | 103% | 148% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 31.41 | $ 37.61 | $ 26.06 | $ 24.48 | $ 48.35 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.05) | (.01) | (.15) | (.25) | (.22) |
Net realized and unrealized gain (loss) | 6.34 | (6.09) | 11.71 | 1.83 | (16.75) |
Total from investment operations | 6.29 | (6.10) | 11.56 | 1.58 | (16.97) |
Distributions from net investment income | (.05) | (.10) | (.01) | - | - |
Distributions from net realized gain | - | - | - | - | (6.90) |
Total distributions | (.05) | (.10) | (.01) | - | (6.90) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 37.65 | $ 31.41 | $ 37.61 | $ 26.06 | $ 24.48 |
Total Return A, B | 20.04% | (16.22)% | 44.38% | 6.45% | (39.31)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.92% | 1.92% | 1.93% | 1.96% | 1.96% |
Expenses net of fee waivers, if any | 1.92% | 1.92% | 1.93% | 1.96% | 1.96% |
Expenses net of all reductions | 1.91% | 1.92% | 1.92% | 1.95% | 1.96% |
Net investment income (loss) | (.15)% | (.03)% | (.46)% | (.92)% | (.89)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 20,551 | $ 28,558 | $ 49,793 | $ 44,330 | $ 47,795 |
Portfolio turnover rate E | 68% | 88% | 91% | 103% | 148% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 31.63 | $ 37.88 | $ 26.25 | $ 24.65 | $ 48.63 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.04) | (.01) | (.15) | (.25) | (.21) |
Net realized and unrealized gain (loss) | 6.38 | (6.13) | 11.80 | 1.85 | (16.87) |
Total from investment operations | 6.34 | (6.14) | 11.65 | 1.60 | (17.08) |
Distributions from net investment income | (.05) | (.11) | (.02) | - | - |
Distributions from net realized gain | - | - | - | - | (6.90) |
Total distributions | (.05) | (.11) | (.02) | - | (6.90) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 37.92 | $ 31.63 | $ 37.88 | $ 26.25 | $ 24.65 |
Total Return A, B | 20.08% | (16.22)% | 44.38% | 6.49% | (39.31)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.90% | 1.92% | 1.90% | 1.94% | 1.96% |
Expenses net of fee waivers, if any | 1.90% | 1.92% | 1.90% | 1.94% | 1.96% |
Expenses net of all reductions | 1.88% | 1.91% | 1.89% | 1.93% | 1.95% |
Net investment income (loss) | (.13)% | (.03)% | (.43)% | (.90)% | (.88)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 99,833 | $ 93,504 | $ 133,476 | $ 90,596 | $ 86,650 |
Portfolio turnover rate E | 68% | 88% | 91% | 103% | 148% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 35.28 | $ 41.95 | $ 28.87 | $ 26.83 | $ 51.76 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .35 | .37 | .23 | .04 | .03 |
Net realized and unrealized gain (loss) | 7.12 | (6.79) | 12.99 | 2.00 | (18.06) |
Total from investment operations | 7.47 | (6.42) | 13.22 | 2.04 | (18.03) |
Distributions from net investment income | (.20) | (.25) | (.14) | - | - |
Distributions from net realized gain | - | - | - | - | (6.90) |
Total distributions | (.20) | (.25) | (.14) | - | (6.90) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 42.55 | $ 35.28 | $ 41.95 | $ 28.87 | $ 26.83 |
Total Return A | 21.26% | (15.31)% | 45.87% | 7.60% | (38.68)% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .88% | .86% | .86% | .90% | .95% |
Expenses net of fee waivers, if any | .88% | .86% | .86% | .90% | .95% |
Expenses net of all reductions | .86% | .85% | .85% | .90% | .94% |
Net investment income (loss) | .89% | 1.03% | .60% | .14% | .13% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 65,034 | $ 56,692 | $ 54,024 | $ 27,338 | $ 18,631 |
Portfolio turnover rate D | 68% | 88% | 91% | 103% | 148% |
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, 2013
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.
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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.
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, 2013, is included at the end of the Fund's Schedule of Investments.
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. 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 and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), partnerships, deferred trustees compensation, 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 | $ 96,455,756 |
Gross unrealized depreciation | (12,514,959) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 83,940,797 |
|
|
Tax Cost | $ 605,662,191 |
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 | $ 448,988 |
Undistributed long-term capital gain | $ 8,458,755 |
Net unrealized appreciation (depreciation) | $ 83,940,737 |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 2,261,471 | $ 3,625,437 |
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 net asset value 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 $439,597,034 and $530,735,853, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .56% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 652,181 | $ 26,074 |
Class T | .25% | .25% | 1,086,030 | 31,960 |
Class B | .75% | .25% | 248,405 | 188,161 |
Class C | .75% | .25% | 959,654 | 132,283 |
|
|
| $ 2,946,270 | $ 378,478 |
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 | $ 97,668 |
Class T | 19,281 |
Class B* | 31,798 |
Class C* | 6,955 |
| $ 155,702 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 762,709 | .29 |
Class T | 537,672 | .25 |
Class B | 75,017 | .30 |
Class C | 267,056 | .28 |
Institutional Class | 153,423 | .26 |
| $ 1,795,877 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $10,294 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Loan | Weighted Average | Interest |
Borrower | $ 7,352,000 | .44% | $ 178 |
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $1,545 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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
Annual Report
7. Security Lending - continued
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. At period end, there were no security loans outstanding with FCM. 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 $312,654, including $11,612 from securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $74,922 for the period.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net investment income |
|
|
Class A | $ 1,079,554 | $ 1,638,737 |
Class T | 706,555 | 1,147,864 |
Class B | 36,766 | 121,615 |
Class C | 148,895 | 359,185 |
Institutional Class | 289,701 | 358,036 |
Total | $ 2,261,471 | $ 3,625,437 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 1,740,823 | 1,965,815 | $ 65,442,879 | $ 67,878,173 |
Reinvestment of distributions | 27,199 | 41,823 | 963,658 | 1,442,046 |
Shares redeemed | (2,390,270) | (2,734,716) | (87,941,708) | (93,508,870) |
Net increase (decrease) | (622,248) | (727,078) | $ (21,535,171) | $ (24,188,651) |
Class T |
|
|
|
|
Shares sold | 467,358 | 716,955 | $ 17,841,598 | $ 25,119,936 |
Reinvestment of distributions | 18,548 | 30,771 | 670,876 | 1,084,070 |
Shares redeemed | (1,355,160) | (1,562,534) | (50,748,604) | (54,290,373) |
Net increase (decrease) | (869,254) | (814,808) | $ (32,236,130) | $ (28,086,367) |
Class B |
|
|
|
|
Shares sold | 13,140 | 77,487 | $ 454,110 | $ 2,508,867 |
Reinvestment of distributions | 989 | 3,337 | 32,636 | 107,704 |
Shares redeemed | (377,487) | (495,555) | (13,045,539) | (15,865,000) |
Net increase (decrease) | (363,358) | (414,731) | $ (12,558,793) | $ (13,248,429) |
Class C |
|
|
|
|
Shares sold | 525,111 | 443,617 | $ 18,433,044 | $ 14,508,195 |
Reinvestment of distributions | 3,815 | 9,390 | 126,850 | 305,281 |
Shares redeemed | (851,939) | (1,020,680) | (29,267,435) | (32,456,638) |
Net increase (decrease) | (323,013) | (567,673) | $ (10,707,541) | $ (17,643,162) |
Institutional Class |
|
|
|
|
Shares sold | 923,636 | 947,827 | $ 35,802,942 | $ 33,843,047 |
Reinvestment of distributions | 6,056 | 7,770 | 224,624 | 279,800 |
Shares redeemed | (1,008,582) | (636,276) | (38,569,293) | (22,583,838) |
Net increase (decrease) | (78,890) | 319,321 | $ (2,541,727) | $ 11,539,009 |
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 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, 2013 | Past 1 | Past 5 | Past 10 |
Institutional Class | 33.45% | 1.55% | 0.87% |
$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, 2003. 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
Comments from Christopher Lee, who became Portfolio Manager of Fidelity Advisor® Financial Services Fund on May 21, 2013: For the 12-month period, the fund's Institutional Class shares returned 33.45%, lagging the 38.04% gain of the MSCI® U.S. IMI Financials 25-50 Index and beating the S&P 500®. Increases in capital markets activity and rising asset values helped to fuel huge gains for several industries within the MSCI index. Exposure to the out-of-index data processing/outsourced services segment was the fund's biggest detractor versus the sector benchmark, mainly because of a large stake in VeriFone Systems, which makes electronic payment systems. Its shares plunged because of weak economic growth overseas, a management change and concern over competitive threats. Not owning enough of diversified financials firms Bank of America and JPMorgan Chase also hurt, as the shares of both these major index components rallied sharply. Lastly, a small cash position detracted. By contrast, stock picks in the thrifts/mortgage finance segment, positioning in diversified capital markets and an overweighting in diversified banks helped. Standouts included timely ownership of government-controlled mortgage giant Fannie Mae. I sold VeriFone and Fannie Mae, which were not in the sector index, from the portfolio. By period end, I had reduced total holdings from roughly 300 to about 70 names, while also significantly reducing our out-of-index and foreign exposure.
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, 2013 to July 31, 2013).
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 | 1.28% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,128.80 | $ 6.76 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.45 | $ 6.41 |
Class T | 1.53% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,127.00 | $ 8.07 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.21 | $ 7.65 |
Class B | 2.03% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,125.00 | $ 10.70 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.73 | $ 10.14 |
Class C | 2.02% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,124.30 | $ 10.64 |
HypotheticalA |
| $ 1,000.00 | $ 1,014.78 | $ 10.09 |
Institutional Class | .94% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,130.00 | $ 4.96 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.13 | $ 4.71 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Bank of America Corp. | 5.3 | 0.0 |
JPMorgan Chase & Co. | 5.0 | 0.6 |
Citigroup, Inc. | 5.0 | 5.0 |
U.S. Bancorp | 4.8 | 1.3 |
Capital One Financial Corp. | 4.2 | 1.8 |
Wells Fargo & Co. | 4.2 | 0.0 |
American Tower Corp. | 2.8 | 0.0 |
MetLife, Inc. | 2.7 | 0.2 |
Simon Property Group, Inc. | 2.6 | 0.0 |
PNC Financial Services Group, Inc. | 2.3 | 1.3 |
| 38.9 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Commercial Banks | 19.9% |
|
![]() | Insurance | 19.4% |
|
![]() | Diversified Financial Services | 18.9% |
|
![]() | Capital Markets | 12.0% |
|
![]() | Real Estate Investment Trusts | 10.1% |
|
![]() | All Others* | 19.7% |
|
As of January 31, 2013 | |||
![]() | Real Estate Investment Trusts | 29.0% |
|
![]() | Commercial Banks | 24.0% |
|
![]() | Insurance | 13.2% |
|
![]() | Capital Markets | 12.1% |
|
![]() | Diversified Financial Services | 9.2% |
|
![]() | All Others* | 12.5% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Financial Services Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 98.2% | |||
Shares | Value | ||
CAPITAL MARKETS - 12.0% | |||
Asset Management & Custody Banks - 8.8% | |||
Affiliated Managers Group, Inc. (a) | 11,514 | $ 2,076,550 | |
Ameriprise Financial, Inc. | 21,000 | 1,869,000 | |
BlackRock, Inc. Class A | 4,306 | 1,214,120 | |
Carlyle Group LP | 32,600 | 912,474 | |
Invesco Ltd. | 99,038 | 3,188,033 | |
Oaktree Capital Group LLC Class A | 21,900 | 1,182,381 | |
The Blackstone Group LP | 82,365 | 1,857,331 | |
| 12,299,889 | ||
Diversified Capital Markets - 1.0% | |||
Deutsche Bank AG (NY Shares) | 7,700 | 346,423 | |
UBS AG (NY Shares) | 55,303 | 1,087,810 | |
| 1,434,233 | ||
Investment Banking & Brokerage - 2.2% | |||
FXCM, Inc. Class A (d) | 43,600 | 719,400 | |
Raymond James Financial, Inc. | 54,400 | 2,397,408 | |
| 3,116,808 | ||
TOTAL CAPITAL MARKETS | 16,850,930 | ||
COMMERCIAL BANKS - 19.9% | |||
Diversified Banks - 9.8% | |||
Comerica, Inc. | 25,495 | 1,084,557 | |
U.S. Bancorp | 181,308 | 6,766,415 | |
Wells Fargo & Co. | 134,948 | 5,870,238 | |
| 13,721,210 | ||
Regional Banks - 10.1% | |||
CIT Group, Inc. (a) | 21,500 | 1,077,365 | |
CoBiz, Inc. | 57,191 | 574,198 | |
Commerce Bancshares, Inc. | 23,200 | 1,058,616 | |
East West Bancorp, Inc. | 43,100 | 1,328,773 | |
Fifth Third Bancorp | 111,540 | 2,144,914 | |
First Horizon National Corp. | 64,400 | 794,052 | |
M&T Bank Corp. (d) | 19,400 | 2,267,084 | |
PNC Financial Services Group, Inc. | 43,470 | 3,305,894 | |
Popular, Inc. (a) | 28,800 | 947,520 | |
Texas Capital Bancshares, Inc. (a) | 16,150 | 734,664 | |
| 14,233,080 | ||
TOTAL COMMERCIAL BANKS | 27,954,290 | ||
CONSUMER FINANCE - 5.7% | |||
Consumer Finance - 5.7% | |||
Capital One Financial Corp. | 85,238 | 5,883,127 | |
Regional Management Corp. (a) | 7,100 | 219,461 | |
SLM Corp. | 79,765 | 1,970,993 | |
| 8,073,581 | ||
| |||
Shares | Value | ||
DIVERSIFIED CONSUMER SERVICES - 0.6% | |||
Specialized Consumer Services - 0.6% | |||
H&R Block, Inc. | 28,300 | $ 889,469 | |
DIVERSIFIED FINANCIAL SERVICES - 18.9% | |||
Other Diversified Financial Services - 15.3% | |||
Bank of America Corp. | 512,156 | 7,477,476 | |
Citigroup, Inc. | 133,665 | 6,969,293 | |
JPMorgan Chase & Co. | 125,281 | 6,981,910 | |
| 21,428,679 | ||
Specialized Finance - 3.6% | |||
IntercontinentalExchange, Inc. (a)(d) | 13,004 | 2,372,580 | |
McGraw-Hill Companies, Inc. | 29,000 | 1,793,940 | |
MSCI, Inc. Class A (a) | 26,382 | 924,689 | |
| 5,091,209 | ||
TOTAL DIVERSIFIED FINANCIAL SERVICES | 26,519,888 | ||
HEALTH CARE PROVIDERS & SERVICES - 0.9% | |||
Health Care Facilities - 0.9% | |||
Brookdale Senior Living, Inc. (a) | 45,100 | 1,313,312 | |
INSURANCE - 19.4% | |||
Insurance Brokers - 1.9% | |||
Marsh & McLennan Companies, Inc. | 65,300 | 2,734,111 | |
Life & Health Insurance - 4.0% | |||
MetLife, Inc. | 79,226 | 3,836,123 | |
Prudential PLC | 36,839 | 654,253 | |
Torchmark Corp. | 15,700 | 1,115,956 | |
| 5,606,332 | ||
Multi-Line Insurance - 2.2% | |||
American International Group, Inc. | 29,030 | 1,321,155 | |
Hartford Financial Services Group, Inc. | 55,800 | 1,721,988 | |
| 3,043,143 | ||
Property & Casualty Insurance - 10.1% | |||
ACE Ltd. | 30,149 | 2,755,016 | |
Allied World Assurance Co. Holdings Ltd. | 19,000 | 1,798,350 | |
Allstate Corp. | 50,440 | 2,571,431 | |
Axis Capital Holdings Ltd. | 5,400 | 235,224 | |
Berkshire Hathaway, Inc. Class B (a) | 16,649 | 1,929,120 | |
ProAssurance Corp. | 32,600 | 1,745,078 | |
The Travelers Companies, Inc. | 37,792 | 3,157,522 | |
| 14,191,741 | ||
Reinsurance - 1.2% | |||
Everest Re Group Ltd. | 13,000 | 1,735,890 | |
TOTAL INSURANCE | 27,311,217 | ||
IT SERVICES - 3.8% | |||
Data Processing & Outsourced Services - 3.8% | |||
Fiserv, Inc. (a) | 14,433 | 1,389,032 | |
FleetCor Technologies, Inc. (a) | 13,300 | 1,193,941 | |
Common Stocks - continued | |||
Shares | Value | ||
IT SERVICES - CONTINUED | |||
Data Processing & Outsourced Services - continued | |||
Global Payments, Inc. | 13,861 | $ 641,903 | |
The Western Union Co. | 60,500 | 1,086,580 | |
Visa, Inc. Class A | 5,430 | 961,164 | |
| 5,272,620 | ||
PROFESSIONAL SERVICES - 1.1% | |||
Research & Consulting Services - 1.1% | |||
Dun & Bradstreet Corp. | 6,100 | 632,143 | |
Equifax, Inc. | 13,270 | 839,062 | |
| 1,471,205 | ||
REAL ESTATE INVESTMENT TRUSTS - 10.1% | |||
Mortgage REITs - 0.9% | |||
Blackstone Mortgage Trust, Inc. | 25,300 | 639,584 | |
Redwood Trust, Inc. | 40,500 | 686,070 | |
| 1,325,654 | ||
Retail REITs - 3.9% | |||
Pennsylvania Real Estate Investment Trust (SBI) | 37,600 | 778,320 | |
Retail Properties America, Inc. | 67,000 | 944,030 | |
Simon Property Group, Inc. | 23,238 | 3,719,474 | |
| 5,441,824 | ||
Specialized REITs - 5.3% | |||
American Tower Corp. | 55,500 | 3,928,845 | |
Rayonier, Inc. | 36,000 | 2,103,840 | |
Ventas, Inc. | 22,235 | 1,461,729 | |
| 7,494,414 | ||
TOTAL REAL ESTATE INVESTMENT TRUSTS | 14,261,892 | ||
REAL ESTATE MANAGEMENT & DEVELOPMENT - 3.7% | |||
Real Estate Operating Companies - 0.7% | |||
Forest City Enterprises, Inc. Class A (a) | 54,000 | 946,080 | |
Real Estate Services - 3.0% | |||
Altisource Portfolio Solutions SA | 19,800 | 2,441,538 | |
CBRE Group, Inc. (a) | 78,687 | 1,823,178 | |
| 4,264,716 | ||
TOTAL REAL ESTATE MANAGEMENT & DEVELOPMENT | 5,210,796 | ||
| |||
Shares | Value | ||
THRIFTS & MORTGAGE FINANCE - 2.1% | |||
Thrifts & Mortgage Finance - 2.1% | |||
MGIC Investment Corp. (a) | 50,000 | $ 382,000 | |
Ocwen Financial Corp. (a) | 49,400 | 2,352,428 | |
Radian Group, Inc. | 19,600 | 275,380 | |
| 3,009,808 | ||
TOTAL COMMON STOCKS (Cost $129,086,317) |
| ||
Money Market Funds - 4.7% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 3,539,309 | 3,539,309 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 3,150,375 | 3,150,375 | |
TOTAL MONEY MARKET FUNDS (Cost $6,689,684) |
| ||
TOTAL INVESTMENT PORTFOLIO - 102.9% (Cost $135,776,001) | 144,828,692 | ||
NET OTHER ASSETS (LIABILITIES) - (2.9)% | (4,142,393) | ||
NET ASSETS - 100% | $ 140,686,299 |
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 | $ 4,437 |
Fidelity Securities Lending Cash Central Fund | 18,741 |
Total | $ 23,178 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2013, 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 | $ 138,139,008 | $ 137,484,755 | $ 654,253 | $ - |
Money Market Funds | 6,689,684 | 6,689,684 | - | - |
Total Investments in Securities: | $ 144,828,692 | $ 144,174,439 | $ 654,253 | $ - |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows. (Unaudited) |
United States of America | 89.1% |
Switzerland | 4.1% |
Bermuda | 3.7% |
Luxembourg | 1.7% |
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 Financial Services Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $3,094,905) - See accompanying schedule: Unaffiliated issuers (cost $129,086,317) | $ 138,139,008 |
|
Fidelity Central Funds (cost $6,689,684) | 6,689,684 |
|
Total Investments (cost $135,776,001) |
| $ 144,828,692 |
Receivable for investments sold | 51,386 | |
Receivable for fund shares sold | 187,965 | |
Dividends receivable | 83,991 | |
Distributions receivable from Fidelity Central Funds | 811 | |
Other receivables | 16,611 | |
Total assets | 145,169,456 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 953,384 | |
Payable for fund shares redeemed | 160,131 | |
Accrued management fee | 62,729 | |
Distribution and service plan fees payable | 54,820 | |
Other affiliated payables | 35,770 | |
Other payables and accrued expenses | 65,948 | |
Collateral on securities loaned, at value | 3,150,375 | |
Total liabilities | 4,483,157 | |
|
|
|
Net Assets | $ 140,686,299 | |
Net Assets consist of: |
| |
Paid in capital | $ 198,556,989 | |
Undistributed net investment income | 426,508 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (67,349,204) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 9,052,006 | |
Net Assets | $ 140,686,299 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 13.41 | |
|
|
|
Maximum offering price per share (100/94.25 of $13.41) | $ 14.23 | |
Class T: | $ 13.31 | |
|
|
|
Maximum offering price per share (100/96.50 of $13.31) | $ 13.79 | |
Class B: | $ 12.87 | |
|
|
|
Class C: | $ 12.75 | |
|
|
|
Institutional Class: | $ 13.73 |
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, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 2,932,548 |
Income from Fidelity Central Funds |
| 23,178 |
Total income |
| 2,955,726 |
|
|
|
Expenses | ||
Management fee | $ 648,792 | |
Transfer agent fees | 348,201 | |
Distribution and service plan fees | 570,504 | |
Accounting and security lending fees | 46,168 | |
Custodian fees and expenses | 43,138 | |
Independent trustees' compensation | 860 | |
Registration fees | 62,156 | |
Audit | 58,040 | |
Legal | 973 | |
Miscellaneous | 926 | |
Total expenses before reductions | 1,779,758 | |
Expense reductions | (85,896) | 1,693,862 |
Net investment income (loss) | 1,261,864 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 21,693,220 | |
Foreign currency transactions | (15,453) | |
Total net realized gain (loss) |
| 21,677,767 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 10,093,311 | |
Assets and liabilities in foreign currencies | 1,097 | |
Total change in net unrealized appreciation (depreciation) |
| 10,094,408 |
Net gain (loss) | 31,772,175 | |
Net increase (decrease) in net assets resulting from operations | $ 33,034,039 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 1,261,864 | $ 574,514 |
Net realized gain (loss) | 21,677,767 | (5,662,549) |
Change in net unrealized appreciation (depreciation) | 10,094,408 | 6,136,917 |
Net increase (decrease) in net assets resulting from operations | 33,034,039 | 1,048,882 |
Distributions to shareholders from net investment income | (847,180) | (107,549) |
Share transactions - net increase (decrease) | 4,858,599 | (27,119,342) |
Redemption fees | 3,052 | 4,119 |
Total increase (decrease) in net assets | 37,048,510 | (26,173,890) |
|
|
|
Net Assets | ||
Beginning of period | 103,637,789 | 129,811,679 |
End of period (including undistributed net investment income of $426,508 and undistributed net investment income of $195,946, respectively) | $ 140,686,299 | $ 103,637,789 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.18 | $ 10.06 | $ 10.35 | $ 9.53 | $ 13.18 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .15 | .07 | (.02) | (.01) | .19 |
Net realized and unrealized gain (loss) | 3.18 | .06 | (.27) | .93 | (3.58) |
Total from investment operations | 3.33 | .13 | (.29) | .92 | (3.39) |
Distributions from net investment income | (.10) | (.01) | - | (.10) | (.24) |
Distributions from net realized gain | - | - | - | - | (.02) |
Total distributions | (.10) | (.01) | - | (.10) | (.26) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 13.41 | $ 10.18 | $ 10.06 | $ 10.35 | $ 9.53 |
Total Return A, B | 32.99% | 1.34% | (2.80)% | 9.61% | (25.87)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.29% | 1.28% | 1.26% | 1.27% | 1.29% |
Expenses net of fee waivers, if any | 1.29% | 1.28% | 1.26% | 1.27% | 1.29% |
Expenses net of all reductions | 1.21% | 1.20% | 1.21% | 1.22% | 1.28% |
Net investment income (loss) | 1.31% | .72% | (.24)% | (.09)% | 2.12% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 64,428 | $ 47,055 | $ 63,937 | $ 69,723 | $ 68,245 |
Portfolio turnover rate E | 288% | 441% | 260% | 254% | 269% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.11 | $ 10.01 | $ 10.32 | $ 9.52 | $ 13.14 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .12 | .04 | (.05) | (.04) | .16 |
Net realized and unrealized gain (loss) | 3.16 | .06 | (.26) | .92 | (3.56) |
Total from investment operations | 3.28 | .10 | (.31) | .88 | (3.40) |
Distributions from net investment income | (.08) | - G | - | (.08) | (.20) |
Distributions from net realized gain | - | - | - | - | (.02) |
Total distributions | (.08) | - G | - | (.08) | (.22) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 13.31 | $ 10.11 | $ 10.01 | $ 10.32 | $ 9.52 |
Total Return A, B | 32.66% | 1.03% | (3.00)% | 9.26% | (26.00)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.55% | 1.54% | 1.52% | 1.53% | 1.55% |
Expenses net of fee waivers, if any | 1.55% | 1.54% | 1.52% | 1.53% | 1.55% |
Expenses net of all reductions | 1.47% | 1.45% | 1.47% | 1.47% | 1.54% |
Net investment income (loss) | 1.06% | .46% | (.49)% | (.35)% | 1.86% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 30,576 | $ 24,367 | $ 27,037 | $ 33,310 | $ 34,927 |
Portfolio turnover rate E | 288% | 441% | 260% | 254% | 269% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 9.79 | $ 9.73 | $ 10.09 | $ 9.33 | $ 12.85 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .06 | - G | (.10) | (.09) | .12 |
Net realized and unrealized gain (loss) | 3.06 | .06 | (.26) | .91 | (3.50) |
Total from investment operations | 3.12 | .06 | (.36) | .82 | (3.38) |
Distributions from net investment income | (.04) | - | - | (.06) | (.12) |
Distributions from net realized gain | - | - | - | - | (.02) |
Total distributions | (.04) | - | - | (.06) | (.14) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 12.87 | $ 9.79 | $ 9.73 | $ 10.09 | $ 9.33 |
Total Return A, B | 32.00% | .62% | (3.57)% | 8.78% | (26.35)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.04% | 2.03% | 2.01% | 2.02% | 2.04% |
Expenses net of fee waivers, if any | 2.04% | 2.03% | 2.01% | 2.02% | 2.04% |
Expenses net of all reductions | 1.97% | 1.94% | 1.96% | 1.97% | 2.03% |
Net investment income (loss) | .56% | (.03)% | (.98)% | (.85)% | 1.38% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 6,511 | $ 5,745 | $ 7,480 | $ 10,992 | $ 12,477 |
Portfolio turnover rate E | 288% | 441% | 260% | 254% | 269% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 9.70 | $ 9.65 | $ 10.00 | $ 9.25 | $ 12.78 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .06 | - G | (.10) | (.09) | .12 |
Net realized and unrealized gain (loss) | 3.03 | .05 | (.25) | .90 | (3.48) |
Total from investment operations | 3.09 | .05 | (.35) | .81 | (3.36) |
Distributions from net investment income | (.04) | - | - | (.06) | (.15) |
Distributions from net realized gain | - | - | - | - | (.02) |
Total distributions | (.04) | - | - | (.06) | (.17) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 12.75 | $ 9.70 | $ 9.65 | $ 10.00 | $ 9.25 |
Total Return A, B | 31.98% | .52% | (3.50)% | 8.79% | (26.38)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 2.03% | 2.03% | 2.01% | 2.02% | 2.04% |
Expenses net of fee waivers, if any | 2.03% | 2.03% | 2.01% | 2.02% | 2.04% |
Expenses net of all reductions | 1.96% | 1.94% | 1.96% | 1.96% | 2.03% |
Net investment income (loss) | .57% | (.03)% | (.99)% | (.84)% | 1.37% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 29,897 | $ 20,875 | $ 23,196 | $ 30,804 | $ 29,849 |
Portfolio turnover rate E | 288% | 441% | 260% | 254% | 269% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.42 | $ 10.28 | $ 10.55 | $ 9.69 | $ 13.38 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .20 | .10 | .01 | .02 | .21 |
Net realized and unrealized gain (loss) | 3.25 | .06 | (.28) | .95 | (3.63) |
Total from investment operations | 3.45 | .16 | (.27) | .97 | (3.42) |
Distributions from net investment income | (.14) | (.02) | - | (.11) | (.25) |
Distributions from net realized gain | - | - | - | - | (.02) |
Total distributions | (.14) | (.02) | - | (.11) | (.27) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 13.73 | $ 10.42 | $ 10.28 | $ 10.55 | $ 9.69 |
Total Return A | 33.45% | 1.61% | (2.56)% | 9.99% | (25.68)% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .96% | .98% | .96% | .99% | 1.04% |
Expenses net of fee waivers, if any | .96% | .98% | .96% | .99% | 1.04% |
Expenses net of all reductions | .88% | .89% | .91% | .94% | 1.03% |
Net investment income (loss) | 1.65% | 1.02% | .07% | .19% | 2.37% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 9,275 | $ 5,596 | $ 8,162 | $ 5,158 | $ 3,797 |
Portfolio turnover rate D | 288% | 441% | 260% | 254% | 269% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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.
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, 2013, 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. 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 and distributions from the Fidelity Central Funds are accrued as earned. 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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), equity-debt classifications, partnerships, deferred trustees compensation, 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 | $ 9,578,130 |
Gross unrealized depreciation | (1,689,070) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 7,889,060 |
|
|
Tax Cost | $ 136,939,632 |
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 | $ 426,519 |
Capital loss carryforward | $ (66,185,572) |
Net unrealized appreciation (depreciation) | $ 7,888,375 |
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 | $ (42,483,031) |
2018 | (23,251,884) |
2019 | (450,657) |
Total capital loss carryforward | $ (66,185,572) |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 847,180 | $ 107,549 |
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 net asset value 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 $337,387,321 and $327,222,913, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .56% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 133,805 | $ 7,689 |
Class T | .25% | .25% | 135,484 | 4,200 |
Class B | .75% | .25% | 61,049 | 46,235 |
Class C | .75% | .25% | 240,166 | 42,054 |
|
|
| $ 570,504 | $ 100,178 |
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 | $ 28,479 |
Class T | 6,588 |
Class B* | 8,636 |
Class C* | 2,355 |
| $ 46,058 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 161,359 | .30 |
Class T | 83,600 | .31 |
Class B | 18,377 | .30 |
Class C | 71,478 | .30 |
Institutional Class | 13,387 | .22 |
| $ 348,201 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $13,118 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $268 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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,
Annual Report
7. Security Lending - continued
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 $18,741. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $85,876 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 $20.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net investment income |
|
|
Class A | $ 468,043 | $ 83,840 |
Class T | 194,766 | 7,542 |
Class B | 25,088 | - |
Class C | 89,452 | - |
Institutional Class | 69,831 | 16,167 |
Total | $ 847,180 | $ 107,549 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 1,230,107 | 1,565,665 | $ 14,721,154 | $ 14,397,253 |
Reinvestment of distributions | 36,718 | 8,251 | 401,001 | 73,682 |
Shares redeemed | (1,085,572) | (3,304,887) | (12,586,886) | (32,600,547) |
Net increase (decrease) | 181,253 | (1,730,971) | $ 2,535,269 | $ (18,129,612) |
Class T |
|
|
|
|
Shares sold | 446,551 | 376,369 | $ 5,238,758 | $ 3,652,534 |
Reinvestment of distributions | 16,926 | 806 | 183,990 | 7,158 |
Shares redeemed | (576,646) | (668,164) | (6,688,740) | (6,208,120) |
Net increase (decrease) | (113,169) | (290,989) | $ (1,265,992) | $ (2,548,428) |
Class B |
|
|
|
|
Shares sold | 117,587 | 18,960 | $ 1,311,553 | $ 183,629 |
Reinvestment of distributions | 1,943 | - | 20,652 | - |
Shares redeemed | (200,454) | (200,436) | (2,232,316) | (1,817,467) |
Net increase (decrease) | (80,924) | (181,476) | $ (900,111) | $ (1,633,838) |
Class C |
|
|
|
|
Shares sold | 769,144 | 373,577 | $ 8,857,879 | $ 3,534,293 |
Reinvestment of distributions | 7,186 | - | 75,671 | - |
Shares redeemed | (584,253) | (625,998) | (6,452,079) | (5,580,570) |
Net increase (decrease) | 192,077 | (252,421) | $ 2,481,471 | $ (2,046,277) |
Institutional Class |
|
|
|
|
Shares sold | 490,356 | 366,163 | $ 6,177,619 | $ 3,659,590 |
Reinvestment of distributions | 5,017 | 1,570 | 55,775 | 14,317 |
Shares redeemed | (356,871) | (624,705) | (4,225,432) | (6,435,094) |
Net increase (decrease) | 138,502 | (256,972) | $ 2,007,962 | $ (2,761,187) |
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 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, 2013 |
| Past 1 | Past 5 | Past 10 |
Institutional Class |
| 43.12% | 15.54% | 10.82% |
$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, 2003. 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
Comments from Edward Yoon, Portfolio Manager of Fidelity Advisor® Health Care Fund: For the year, the fund's Institutional Class shares gained 43.12%, solidly outpacing the 36.49% advance of the MSCI® U.S. IMI Health Care 25-50 Index and the S&P 500®. Health care stocks did well, as investors flocked to the stability of the sector amid a broader move into more-defensive areas of the market given ongoing weakness in the global economy. I believe health care is a space where active management really makes sense, and one of my core beliefs is that if you do better research you can uncover new innovations and business trends before other market participants. I utilize Fidelity's deep global health care research team to supplement my own bottom-up approach, which I believe gives us an edge in finding high-quality stocks that can create long-term value for shareholders. I'm focused on the earnings power and secular-growth rates of companies, and aim to keep volatility low in the fund by investing a large portion of assets in firms that are highly diversified and can thrive over the long run regardless of near-term economic uncertainty. During the period, a substantial overweighting in biotechnology provided a lift. Biotech was among the best-performing areas in the index, thanks to a strong and diverse pipeline of new treatments and the launch of multiple novel products across many disease categories. The fund's biggest relative contributor was biotech firm and hepatitis C drugmaker Gilead Sciences, which I view as one of the best large-cap growth firms out there. Positioning in health care equipment also helped overall, and we captured a nice gain with medical device maker Boston Scientific, whose share price doubled over the period. Conversely, it hurt to avoid index name Celgene, a large-cap biotech name that specializes in cancer therapies and outperformed, and underweight large-cap pharmaceuticals firm Johnson & Johnson, which I sold from the fund in April. Finally, even a small cash stake hurt the fund in a rising market.
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, 2013 to July 31, 2013).
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 | $ 1,254.60 | $ 6.26 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.24 | $ 5.61 |
Class T | 1.37% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,252.50 | $ 7.65 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.00 | $ 6.85 |
Class B | 1.91% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,249.30 | $ 10.65 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.32 | $ 9.54 |
Class C | 1.85% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,249.90 | $ 10.32 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.62 | $ 9.25 |
Institutional Class | .85% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,256.00 | $ 4.75 |
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 Health Care Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2013 | ||
| % of fund's | % of fund's net assets |
Gilead Sciences, Inc. | 8.0 | 6.8 |
Amgen, Inc. | 7.0 | 7.9 |
Actavis, Inc. | 4.4 | 2.6 |
Boston Scientific Corp. | 3.7 | 2.1 |
Alexion Pharmaceuticals, Inc. | 3.7 | 1.5 |
McKesson Corp. | 3.4 | 1.8 |
Cerner Corp. | 3.2 | 2.4 |
Perrigo Co. | 2.9 | 0.0 |
Catamaran Corp. | 2.6 | 2.7 |
Merck & Co., Inc. | 2.6 | 8.1 |
| 41.5 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Biotechnology | 33.2% |
|
![]() | Pharmaceuticals | 27.6% |
|
![]() | Health Care Providers & Services | 17.1% |
|
![]() | Health Care Equipment & Supplies | 10.4% |
|
![]() | Health Care Technology | 5.2% |
|
![]() | All Others* | 6.5% |
|
As of January 31, 2013 | |||
![]() | Biotechnology | 33.6% |
|
![]() | Pharmaceuticals | 29.1% |
|
![]() | Health Care Providers & Services | 16.7% |
|
![]() | Health Care Equipment & Supplies | 8.6% |
|
![]() | Health Care Technology | 4.1% |
|
![]() | All Others* | 7.9% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Health Care Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 99.3% | |||
Shares | Value | ||
BIOTECHNOLOGY - 33.2% | |||
Biotechnology - 33.2% | |||
Acorda Therapeutics, Inc. (a) | 40,845 | $ 1,550,885 | |
Alexion Pharmaceuticals, Inc. (a) | 234,586 | 27,265,931 | |
Amgen, Inc. | 478,300 | 51,795,107 | |
Biogen Idec, Inc. (a) | 54,128 | 11,806,941 | |
BioMarin Pharmaceutical, Inc. (a) | 169,297 | 10,945,051 | |
Biovitrum AB (a) | 330,900 | 2,482,454 | |
Cubist Pharmaceuticals, Inc. (a) | 118,100 | 7,361,173 | |
Discovery Laboratories, Inc. (a)(d) | 488,938 | 787,190 | |
Genomic Health, Inc. (a) | 100,000 | 3,564,000 | |
Gilead Sciences, Inc. (a) | 962,934 | 59,172,292 | |
Grifols SA ADR | 218,087 | 6,922,081 | |
Infinity Pharmaceuticals, Inc. (a) | 87,200 | 1,846,896 | |
Insmed, Inc. (a) | 53,900 | 598,829 | |
Intercept Pharmaceuticals, Inc. | 35,900 | 1,680,479 | |
InterMune, Inc. (a) | 234,400 | 3,635,544 | |
Lexicon Pharmaceuticals, Inc. (a) | 724,111 | 1,795,795 | |
Medivation, Inc. (a) | 150,000 | 8,680,500 | |
Merrimack Pharmaceuticals, Inc. (a)(d) | 88,673 | 423,857 | |
Momenta Pharmaceuticals, Inc. (a) | 170,000 | 2,934,200 | |
Neurocrine Biosciences, Inc. (a) | 294,271 | 4,116,851 | |
NPS Pharmaceuticals, Inc. (a) | 171,000 | 3,079,710 | |
Onyx Pharmaceuticals, Inc. (a) | 48,069 | 6,311,460 | |
Puma Biotechnology, Inc. (a) | 80,000 | 4,088,800 | |
Regeneron Pharmaceuticals, Inc. (a) | 57,329 | 15,482,270 | |
Spectrum Pharmaceuticals, Inc. | 179,500 | 1,514,980 | |
Theravance, Inc. (a) | 68,100 | 2,625,936 | |
Vanda Pharmaceuticals, Inc. (a) | 143,208 | 1,669,805 | |
ZIOPHARM Oncology, Inc. (a)(d) | 404,100 | 1,204,218 | |
| 245,343,235 | ||
DIVERSIFIED CONSUMER SERVICES - 0.5% | |||
Specialized Consumer Services - 0.5% | |||
Carriage Services, Inc. | 180,955 | 3,394,716 | |
FOOD & STAPLES RETAILING - 1.2% | |||
Drug Retail - 1.2% | |||
CVS Caremark Corp. | 140,746 | 8,654,472 | |
HEALTH CARE EQUIPMENT & SUPPLIES - 10.4% | |||
Health Care Equipment - 8.9% | |||
Boston Scientific Corp. (a) | 2,520,801 | 27,527,147 | |
C.R. Bard, Inc. | 19,922 | 2,283,061 | |
Cardiovascular Systems, Inc. (a) | 97,620 | 2,009,996 | |
CONMED Corp. | 130,000 | 4,264,000 | |
Covidien PLC | 37,623 | 2,318,705 | |
Genmark Diagnostics, Inc. (a) | 11,000 | 104,500 | |
HeartWare International, Inc. (a) | 17,605 | 1,627,054 | |
Insulet Corp. (a) | 89,100 | 2,841,399 | |
Intuitive Surgical, Inc. (a) | 11,000 | 4,268,000 | |
Stryker Corp. | 139,705 | 9,843,614 | |
Volcano Corp. (a) | 242,700 | 4,846,719 | |
| |||
Shares | Value | ||
Zeltiq Aesthetics, Inc. (a) | 228,400 | $ 1,379,536 | |
Zimmer Holdings, Inc. | 24,800 | 2,070,304 | |
| 65,384,035 | ||
Health Care Supplies - 1.5% | |||
Derma Sciences, Inc. (a) | 190,000 | 2,699,900 | |
The Cooper Companies, Inc. | 68,350 | 8,704,373 | |
| 11,404,273 | ||
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | 76,788,308 | ||
HEALTH CARE PROVIDERS & SERVICES - 17.1% | |||
Health Care Distributors & Services - 3.6% | |||
Amplifon SpA | 300,263 | 1,502,749 | |
McKesson Corp. | 201,155 | 24,673,672 | |
| 26,176,421 | ||
Health Care Facilities - 2.4% | |||
Brookdale Senior Living, Inc. (a) | 140,801 | 4,100,125 | |
Emeritus Corp. (a) | 118,100 | 2,738,739 | |
Hanger, Inc. (a) | 61,265 | 2,261,904 | |
HCA Holdings, Inc. | 131,200 | 5,116,800 | |
NMC Health PLC | 341,800 | 1,541,691 | |
Ramsay Health Care Ltd. | 67,936 | 2,248,997 | |
| 18,008,256 | ||
Health Care Services - 6.3% | |||
BioScrip, Inc. (a) | 350,100 | 5,689,125 | |
Catamaran Corp. (a) | 371,700 | 19,578,395 | |
MEDNAX, Inc. (a) | 120,700 | 11,758,594 | |
Quest Diagnostics, Inc. | 160,848 | 9,379,047 | |
| 46,405,161 | ||
Managed Health Care - 4.8% | |||
Aetna, Inc. | 28,400 | 1,822,428 | |
CIGNA Corp. | 201,300 | 15,667,179 | |
Humana, Inc. | 127,857 | 11,668,230 | |
UnitedHealth Group, Inc. | 90,464 | 6,590,302 | |
| 35,748,139 | ||
TOTAL HEALTH CARE PROVIDERS & SERVICES | 126,337,977 | ||
HEALTH CARE TECHNOLOGY - 4.9% | |||
Health Care Technology - 4.9% | |||
athenahealth, Inc. (a)(d) | 54,065 | 6,052,577 | |
Cerner Corp. (a) | 478,398 | 23,441,502 | |
HealthStream, Inc. (a) | 140,808 | 4,435,452 | |
HMS Holdings Corp. (a) | 101,300 | 2,450,447 | |
| 36,379,978 | ||
IT SERVICES - 0.5% | |||
Data Processing & Outsourced Services - 0.5% | |||
Maximus, Inc. | 101,640 | 3,822,680 | |
LIFE SCIENCES TOOLS & SERVICES - 2.5% | |||
Life Sciences Tools & Services - 2.5% | |||
Bruker BioSciences Corp. (a) | 98,800 | 1,770,496 | |
Common Stocks - continued | |||
Shares | Value | ||
LIFE SCIENCES TOOLS & SERVICES - CONTINUED | |||
Life Sciences Tools & Services - continued | |||
Illumina, Inc. (a)(d) | 200,440 | $ 15,999,121 | |
Nanostring Technologies, Inc. | 71,000 | 646,810 | |
| 18,416,427 | ||
PERSONAL PRODUCTS - 0.8% | |||
Personal Products - 0.8% | |||
Prestige Brands Holdings, Inc. (a) | 171,172 | 5,804,443 | |
PHARMACEUTICALS - 27.6% | |||
Pharmaceuticals - 27.6% | |||
AbbVie, Inc. | 107,299 | 4,879,959 | |
Actavis, Inc. (a) | 240,922 | 32,348,597 | |
Bayer AG | 60,300 | 7,007,226 | |
Bristol-Myers Squibb Co. | 117,639 | 5,086,710 | |
Cadence Pharmaceuticals, Inc. (a) | 149,019 | 1,113,172 | |
Endo Health Solutions, Inc. (a) | 90,369 | 3,475,592 | |
Hi-Tech Pharmacal Co., Inc. | 57,395 | 2,062,776 | |
Impax Laboratories, Inc. (a) | 142,000 | 2,945,080 | |
Jazz Pharmaceuticals PLC (a) | 50,900 | 3,843,459 | |
Meda AB (A Shares) | 196,400 | 2,294,495 | |
Merck & Co., Inc. | 398,333 | 19,187,701 | |
Mylan, Inc. (a) | 302,292 | 10,144,920 | |
Optimer Pharmaceuticals, Inc. (a) | 218,554 | 2,734,111 | |
Pacira Pharmaceuticals, Inc. (a)(d) | 88,200 | 2,992,626 | |
Perrigo Co. | 170,797 | 21,245,439 | |
Pfizer, Inc. | 336,198 | 9,827,068 | |
Salix Pharmaceuticals Ltd. (a) | 82,500 | 6,096,750 | |
Sanofi SA | 160,884 | 16,841,943 | |
Shire PLC sponsored ADR | 56,300 | 6,156,405 | |
The Medicines Company (a) | 78,900 | 2,438,010 | |
UCB SA | 56,200 | 3,239,223 | |
Valeant Pharmaceuticals International, Inc. (Canada) (a) | 150,504 | 13,964,591 | |
ViroPharma, Inc. (a) | 300,000 | 10,296,000 | |
Warner Chilcott PLC | 655,000 | 13,958,050 | |
| 204,179,903 | ||
PROFESSIONAL SERVICES - 0.3% | |||
Human Resource & Employment Services - 0.3% | |||
Towers Watson & Co. | 29,750 | 2,505,843 | |
REAL ESTATE MANAGEMENT & DEVELOPMENT - 0.3% | |||
Real Estate Development - 0.3% | |||
PT Lippo Karawaci Tbk | 15,620,000 | 1,945,377 | |
TOTAL COMMON STOCKS (Cost $520,813,967) |
| ||
Convertible Preferred Stocks - 0.3% | |||
Shares | Value | ||
HEALTH CARE TECHNOLOGY - 0.3% | |||
Health Care Technology - 0.3% | |||
Castlight Health, Inc. Series D (a)(e) | 336,800 | $ 2,680,928 | |
Money Market Funds - 3.9% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 9,002,235 | 9,002,235 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 19,893,415 | 19,893,415 | |
TOTAL MONEY MARKET FUNDS (Cost $28,895,650) |
| ||
TOTAL INVESTMENT PORTFOLIO - 103.5% (Cost $551,742,730) | 765,149,937 | ||
NET OTHER ASSETS (LIABILITIES) - (3.5)% | (26,224,067) | ||
NET ASSETS - 100% | $ 738,925,870 |
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 $2,680,928 or 0.3% of net assets. |
Additional information on each restricted holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Castlight Health, Inc. Series D | 4/25/12 | $ 2,033,113 |
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 | $ 13,980 |
Fidelity Securities Lending Cash Central Fund | 194,466 |
Total | $ 208,446 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2013, 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 | $ 733,573,359 | $ 716,731,416 | $ 16,841,943 | $ - |
Convertible Preferred Stocks | 2,680,928 | - | - | 2,680,928 |
Money Market Funds | 28,895,650 | 28,895,650 | - | - |
Total Investments in Securities: | $ 765,149,937 | $ 745,627,066 | $ 16,841,943 | $ 2,680,928 |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows. (Unaudited) |
United States of America | 85.9% |
Canada | 4.5% |
Ireland | 2.7% |
France | 2.3% |
Others (Individually Less Than 1%) | 4.6% |
| 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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $19,233,737) - See accompanying schedule: Unaffiliated issuers (cost $522,847,080) | $ 736,254,287 |
|
Fidelity Central Funds (cost $28,895,650) | 28,895,650 |
|
Total Investments (cost $551,742,730) |
| $ 765,149,937 |
Cash |
| 261,886 |
Receivable for investments sold | 9,890,147 | |
Receivable for fund shares sold | 1,417,280 | |
Dividends receivable | 222,418 | |
Distributions receivable from Fidelity Central Funds | 11,875 | |
Other receivables | 11,337 | |
Total assets | 776,964,880 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 16,852,153 | |
Payable for fund shares redeemed | 518,872 | |
Accrued management fee | 324,216 | |
Distribution and service plan fees payable | 246,937 | |
Other affiliated payables | 154,437 | |
Other payables and accrued expenses | 48,980 | |
Collateral on securities loaned, at value | 19,893,415 | |
Total liabilities | 38,039,010 | |
|
|
|
Net Assets | $ 738,925,870 | |
Net Assets consist of: |
| |
Paid in capital | $ 480,483,207 | |
Accumulated net investment loss | (1,170,069) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 46,207,637 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 213,405,095 | |
Net Assets | $ 738,925,870 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 31.29 | |
|
|
|
Maximum offering price per share (100/94.25 of $31.29) | $ 33.20 | |
Class T: | $ 29.91 | |
|
|
|
Maximum offering price per share (100/96.50 of $29.91) | $ 30.99 | |
Class B: | $ 27.16 | |
|
|
|
Class C: | $ 27.11 | |
|
|
|
Institutional Class: | $ 33.12 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Operations
| Year ended July 31, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 6,095,055 |
Income from Fidelity Central Funds |
| 208,446 |
Total income |
| 6,303,501 |
|
|
|
Expenses | ||
Management fee | $ 3,139,289 | |
Transfer agent fees | 1,471,178 | |
Distribution and service plan fees | 2,412,069 | |
Accounting and security lending fees | 215,424 | |
Custodian fees and expenses | 43,092 | |
Independent trustees' compensation | 3,982 | |
Registration fees | 90,605 | |
Audit | 53,068 | |
Legal | 2,013 | |
Miscellaneous | 4,057 | |
Total expenses before reductions | 7,434,777 | |
Expense reductions | (83,710) | 7,351,067 |
Net investment income (loss) | (1,047,566) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 65,104,626 | |
Foreign currency transactions | (55,959) | |
Total net realized gain (loss) |
| 65,048,667 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 144,189,583 | |
Assets and liabilities in foreign currencies | (1,338) | |
Total change in net unrealized appreciation (depreciation) |
| 144,188,245 |
Net gain (loss) | 209,236,912 | |
Net increase (decrease) in net assets resulting from operations | $ 208,189,346 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (1,047,566) | $ (1,625,002) |
Net realized gain (loss) | 65,048,667 | 42,565,605 |
Change in net unrealized appreciation (depreciation) | 144,188,245 | (11,616,324) |
Net increase (decrease) in net assets resulting from operations | 208,189,346 | 29,324,279 |
Distributions to shareholders from net realized gain | (53,403,217) | (49,973,824) |
Share transactions - net increase (decrease) | 98,074,235 | 14,972,155 |
Redemption fees | 6,876 | 69,585 |
Total increase (decrease) in net assets | 252,867,240 | (5,607,805) |
|
|
|
Net Assets | ||
Beginning of period | 486,058,630 | 491,666,435 |
End of period (including accumulated net investment loss of $1,170,069 and accumulated net investment loss of $849,653, respectively) | $ 738,925,870 | $ 486,058,630 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 24.35 | $ 25.60 | $ 19.01 | $ 17.15 | $ 19.72 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | - G | (.04) | (.10) | (.07) | .02 |
Net realized and unrealized gain (loss) | 9.53 | 1.43 | 6.69 | 1.93 | (2.22) |
Total from investment operations | 9.53 | 1.39 | 6.59 | 1.86 | (2.20) |
Distributions from net realized gain | (2.59) | (2.64) | - | - | (.37) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 31.29 | $ 24.35 | $ 25.60 | $ 19.01 | $ 17.15 |
Total Return A, B | 42.77% | 7.58% | 34.67% | 10.85% | (11.37)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.14% | 1.19% | 1.19% | 1.22% | 1.23% |
Expenses net of fee waivers, if any | 1.14% | 1.19% | 1.19% | 1.22% | 1.23% |
Expenses net of all reductions | 1.13% | 1.18% | 1.18% | 1.21% | 1.23% |
Net investment income (loss) | (.01)% | (.18)% | (.43)% | (.36)% | .11% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 365,416 | $ 233,188 | $ 224,704 | $ 179,586 | $ 177,890 |
Portfolio turnover rate E | 92% | 124% | 125% | 103% | 172% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 23.42 | $ 24.80 | $ 18.46 | $ 16.69 | $ 19.26 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.07) | (.09) | (.16) | (.12) | (.02) |
Net realized and unrealized gain (loss) | 9.13 | 1.35 | 6.50 | 1.89 | (2.18) |
Total from investment operations | 9.06 | 1.26 | 6.34 | 1.77 | (2.20) |
Distributions from net realized gain | (2.57) | (2.64) | - | - | (.37) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 29.91 | $ 23.42 | $ 24.80 | $ 18.46 | $ 16.69 |
Total Return A, B | 42.39% | 7.27% | 34.34% | 10.61% | (11.65)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.39% | 1.43% | 1.44% | 1.47% | 1.49% |
Expenses net of fee waivers, if any | 1.39% | 1.43% | 1.44% | 1.47% | 1.49% |
Expenses net of all reductions | 1.38% | 1.43% | 1.43% | 1.46% | 1.49% |
Net investment income (loss) | (.26)% | (.42)% | (.69)% | (.62)% | (.15)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 158,611 | $ 117,969 | $ 123,606 | $ 100,883 | $ 103,772 |
Portfolio turnover rate E | 92% | 124% | 125% | 103% | 172% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 21.55 | $ 23.15 | $ 17.32 | $ 15.74 | $ 18.27 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.18) | (.19) | (.25) | (.20) | (.09) |
Net realized and unrealized gain (loss) | 8.31 | 1.23 | 6.08 | 1.78 | (2.07) |
Total from investment operations | 8.13 | 1.04 | 5.83 | 1.58 | (2.16) |
Distributions from net realized gain | (2.52) | (2.64) | - | - | (.37) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 27.16 | $ 21.55 | $ 23.15 | $ 17.32 | $ 15.74 |
Total Return A, B | 41.61% | 6.78% | 33.66% | 10.04% | (12.07)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.93% | 1.94% | 1.94% | 1.97% | 1.98% |
Expenses net of fee waivers, if any | 1.93% | 1.94% | 1.94% | 1.97% | 1.98% |
Expenses net of all reductions | 1.91% | 1.93% | 1.93% | 1.96% | 1.98% |
Net investment income (loss) | (.80)% | (.93)% | (1.19)% | (1.11)% | (.64)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 14,517 | $ 15,403 | $ 20,365 | $ 23,543 | $ 29,381 |
Portfolio turnover rate E | 92% | 124% | 125% | 103% | 172% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 21.51 | $ 23.11 | $ 17.29 | $ 15.70 | $ 18.23 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.17) | (.18) | (.24) | (.19) | (.09) |
Net realized and unrealized gain (loss) | 8.31 | 1.22 | 6.06 | 1.78 | (2.07) |
Total from investment operations | 8.14 | 1.04 | 5.82 | 1.59 | (2.16) |
Distributions from net realized gain | (2.54) | (2.64) | - | - | (.37) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 27.11 | $ 21.51 | $ 23.11 | $ 17.29 | $ 15.70 |
Total Return A, B | 41.74% | 6.80% | 33.66% | 10.13% | (12.09)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.87% | 1.90% | 1.90% | 1.94% | 1.98% |
Expenses net of fee waivers, if any | 1.87% | 1.90% | 1.90% | 1.94% | 1.98% |
Expenses net of all reductions | 1.85% | 1.89% | 1.89% | 1.93% | 1.98% |
Net investment income (loss) | (.74)% | (.89)% | (1.15)% | (1.08)% | (.64)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 125,965 | $ 78,763 | $ 77,749 | $ 60,861 | $ 64,002 |
Portfolio turnover rate E | 92% | 124% | 125% | 103% | 172% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 25.60 | $ 26.69 | $ 19.77 | $ 17.78 | $ 20.39 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .07 | .03 | (.03) | (.02) | .06 |
Net realized and unrealized gain (loss) | 10.07 | 1.52 | 6.95 | 2.01 | (2.30) |
Total from investment operations | 10.14 | 1.55 | 6.92 | 1.99 | (2.24) |
Distributions from net realized gain | (2.62) | (2.64) | - | - | (.37) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 33.12 | $ 25.60 | $ 26.69 | $ 19.77 | $ 17.78 |
Total Return A | 43.12% | 7.91% | 35.00% | 11.19% | (11.19)% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .87% | .89% | .89% | .96% | .98% |
Expenses net of fee waivers, if any | .87% | .89% | .89% | .96% | .98% |
Expenses net of all reductions | .85% | .88% | .88% | .95% | .98% |
Net investment income (loss) | .26% | .12% | (.13)% | (.10)% | .36% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 74,417 | $ 40,737 | $ 45,243 | $ 14,172 | $ 13,452 |
Portfolio turnover rate D | 92% | 124% | 125% | 103% | 172% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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 restricted equity securities and private placements where observable inputs are limited, assumptions about market activity and risk are used and these securities are generally 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, 2013, 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. 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 and distributions from the Fidelity Central Funds are accrued as earned. 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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, deferred trustees compensation, net operating losses and losses deferred due to wash sales 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 | $ 218,966,846 |
Gross unrealized depreciation | (6,357,419) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 212,609,427 |
|
|
Tax Cost | $ 552,540,510 |
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 | $ 17,373,342 |
Undistributed long-term capital gain | $ 29,632,075 |
Net unrealized appreciation (depreciation) | $ 212,607,315 |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 1,722,659 | $ - |
Long-term Capital Gains | 51,680,558 | 49,973,824 |
Total | $ 53,403,217 | $ 49,973,824 |
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 net asset value 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 $562,636,788 and $514,461,115, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .55% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 692,782 | $ 32,011 |
Class T | .25% | .25% | 661,234 | 16,450 |
Class B | .75% | .25% | 143,170 | 108,559 |
Class C | .75% | .25% | 914,883 | 142,951 |
|
|
| $ 2,412,069 | $ 299,971 |
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 | $ 120,253 |
Class T | 23,083 |
Class B* | 10,011 |
Class C * | 3,453 |
| $ 156,800 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 736,231 | .27 |
Class T | 349,517 | .26 |
Class B | 42,982 | .30 |
Class C | 222,499 | .24 |
Institutional Class | 119,949 | .24 |
| $ 1,471,178 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $7,115 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $1,280 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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. At period end, there were no security loans outstanding with FCM. 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 $194,466, including $20,558 from securities loaned to FCM.
Annual Report
8. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $83,586 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 $124.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net realized gain |
|
|
Class A | $ 25,387,002 | $ 22,638,273 |
Class T | 13,085,534 | 12,838,928 |
Class B | 1,715,002 | 2,229,080 |
Class C | 9,051,114 | 8,852,071 |
Institutional Class | 4,164,565 | 3,415,472 |
Total | $ 53,403,217 | $ 49,973,824 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 3,549,260 | 2,109,585 | $ 93,836,372 | $ 48,063,125 |
Reinvestment of distributions | 942,761 | 974,579 | 22,474,621 | 19,679,030 |
Shares redeemed | (2,389,171) | (2,283,119) | (61,582,185) | (51,867,480) |
Net increase (decrease) | 2,102,850 | 801,045 | $ 54,728,808 | $ 15,874,675 |
Class T |
|
|
|
|
Shares sold | 680,868 | 517,207 | $ 17,081,065 | $ 11,288,178 |
Reinvestment of distributions | 547,411 | 626,615 | 12,508,788 | 12,200,296 |
Shares redeemed | (963,078) | (1,091,618) | (23,759,625) | (23,806,614) |
Net increase (decrease) | 265,201 | 52,204 | $ 5,830,228 | $ (318,140) |
Class B |
|
|
|
|
Shares sold | 53,093 | 73,881 | $ 1,227,477 | $ 1,480,151 |
Reinvestment of distributions | 72,420 | 107,208 | 1,510,947 | 1,929,279 |
Shares redeemed | (305,905) | (345,800) | (6,859,622) | (6,952,570) |
Net increase (decrease) | (180,392) | (164,711) | $ (4,121,198) | $ (3,543,140) |
Class C |
|
|
|
|
Shares sold | 1,458,495 | 610,790 | $ 33,813,707 | $ 12,332,347 |
Reinvestment of distributions | 363,077 | 406,182 | 7,555,835 | 7,293,865 |
Shares redeemed | (836,253) | (719,664) | (18,706,199) | (14,281,889) |
Net increase (decrease) | 985,319 | 297,308 | $ 22,663,343 | $ 5,344,323 |
Institutional Class |
|
|
|
|
Shares sold | 1,149,859 | 969,515 | $ 32,276,173 | $ 23,079,181 |
Reinvestment of distributions | 148,348 | 134,306 | 3,734,787 | 2,842,866 |
Shares redeemed | (643,078) | (1,207,175) | (17,037,906) | (28,307,610) |
Net increase (decrease) | 655,129 | (103,354) | $ 18,973,054 | $ (2,385,563) |
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, 2013 | Past 1 | Past 5 | Past 10 |
Institutional Class A | 33.28% | 10.61% | 13.26% |
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, 2003. 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
Comments from Tobias Welo, Portfolio Manager of Fidelity Advisor® Industrials Fund: For the year, the fund's Institutional Class shares returned 33.28%, modestly beating the 32.81% gain of the MSCI® U.S. IMI Industrials 25-50 Index but significantly ahead of the S&P 500®. Versus the broader market, the MSCI index was particularly aided by strong results in aerospace and defense and in industrial machinery. In managing the fund, I try to take advantage of recurring patterns within different segments of the industrials sector as they cycle between boom and bust. With that said, stock selection in the construction/farm machinery/heavy trucks segment - where demand had been unevenly improving from a deep cyclical base during the 2007-2009 recession - provided the biggest boost to performance versus the MSCI sector index. In particular, not owning weak-performing index component Caterpillar for most of the period was beneficial. While continued sluggishness in China's economy hurt the stock of this heavy-equipment manufacturer beginning in February, I thought investors became overly pessimistic, and so I built Cat into a significant position by period end. The fund also was rewarded for exiting a position in lagging index component Deere, another maker of heavy equipment, because I thought it was fully valued. Elsewhere, our results were lifted by overweighted positions in human resources consultant Towers Watson and business information provider Dun & Bradstreet, both of which outperformed. Conversely, one industry that stood out as a significant detractor from performance versus the MSCI index was aerospace and defense. In part, the problem here was our underweighted exposure to major defense contractors, whose stocks performed surprisingly well during the period. However, an overweighting in regional jet manufacturer Textron made this stock the fund's biggest relative detractor. My confidence that demand for regional jets would materially improve during the period was not rewarded, and I reduced our overweighting here. Additionally, the fund was hurt by not owning index stock Boeing, which is a hybrid play on commercial aerospace and defense. While this stock handily outperformed the broader market during the final five months of the period, I continued to favor investing in its suppliers rather than the company itself. Carrying no positions in airlines, the MSCI benchmark's best-performing segment, also dampened performance. Here, not owning index stock Delta Air Lines detracted. Maintaining a relatively modest cash position in a strongly rising market also curbed our gain.
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, 2013 to July 31, 2013).
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 | $ 1,139.70 | $ 5.84 |
HypotheticalA |
| $ 1,000.00 | $ 1,019.34 | $ 5.51 |
Class T | 1.35% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,138.20 | $ 7.16 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.10 | $ 6.76 |
Class B | 1.90% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,135.30 | $ 10.06 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.37 | $ 9.49 |
Class C | 1.85% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,135.20 | $ 9.79 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.62 | $ 9.25 |
Institutional Class | .84% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,141.40 | $ 4.46 |
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 Industrials Fund
Investment Changes (Unaudited)
Top Ten Stocks as of July 31, 2013 | ||
| % of fund's | % of fund's net assets |
General Electric Co. | 12.2 | 13.4 |
United Technologies Corp. | 7.0 | 6.5 |
Danaher Corp. | 5.7 | 3.9 |
Union Pacific Corp. | 4.5 | 1.9 |
Honeywell International, Inc. | 4.0 | 3.1 |
Caterpillar, Inc. | 3.2 | 0.0 |
Eaton Corp. PLC | 2.8 | 2.8 |
Precision Castparts Corp. | 2.7 | 1.9 |
Cummins, Inc. | 2.1 | 3.1 |
Parker Hannifin Corp. | 2.0 | 1.7 |
| 46.2 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Machinery | 29.7% |
|
![]() | Industrial Conglomerates | 17.9% |
|
![]() | Aerospace & Defense | 16.3% |
|
![]() | Electrical Equipment | 7.8% |
|
![]() | Professional Services | 6.8% |
|
![]() | All Others* | 21.5% |
|
As of January 31, 2013 | |||
![]() | Machinery | 25.3% |
|
![]() | Industrial Conglomerates | 21.8% |
|
![]() | Aerospace & Defense | 16.4% |
|
![]() | Electrical Equipment | 8.8% |
|
![]() | Professional Services | 6.3% |
|
![]() | All Others* | 21.4% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Industrials Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 97.8% | |||
Shares | Value | ||
AEROSPACE & DEFENSE - 16.3% | |||
Aerospace & Defense - 16.3% | |||
Honeywell International, Inc. | 263,792 | $ 21,889,460 | |
Precision Castparts Corp. | 67,182 | 14,895,593 | |
Teledyne Technologies, Inc. (a) | 91,531 | 7,338,040 | |
Textron, Inc. | 231,318 | 6,333,487 | |
United Technologies Corp. | 360,732 | 38,082,477 | |
| 88,539,057 | ||
AIR FREIGHT & LOGISTICS - 0.9% | |||
Air Freight & Logistics - 0.9% | |||
C.H. Robinson Worldwide, Inc. | 85,363 | 5,089,342 | |
AUTO COMPONENTS - 1.8% | |||
Auto Parts & Equipment - 1.8% | |||
Johnson Controls, Inc. | 239,592 | 9,633,994 | |
BUILDING PRODUCTS - 1.3% | |||
Building Products - 1.3% | |||
A.O. Smith Corp. | 172,665 | 7,134,518 | |
Aspen Aerogels, Inc. warrants 3/28/23 (a) | 3,499,903 | 35 | |
| 7,134,553 | ||
COMMERCIAL SERVICES & SUPPLIES - 2.9% | |||
Environmental & Facility Services - 2.9% | |||
Republic Services, Inc. | 148,136 | 5,023,292 | |
Stericycle, Inc. (a) | 33,524 | 3,886,773 | |
Waste Connections, Inc. | 151,900 | 6,571,194 | |
| 15,481,259 | ||
CONSTRUCTION & ENGINEERING - 2.2% | |||
Construction & Engineering - 2.2% | |||
EMCOR Group, Inc. | 109,285 | 4,511,285 | |
URS Corp. | 163,749 | 7,614,329 | |
| 12,125,614 | ||
ELECTRICAL EQUIPMENT - 7.8% | |||
Electrical Components & Equipment - 7.8% | |||
AMETEK, Inc. | 121,700 | 5,632,276 | |
Eaton Corp. PLC | 220,260 | 15,186,927 | |
Generac Holdings, Inc. | 106,544 | 4,618,682 | |
Hubbell, Inc. Class B | 95,934 | 10,298,515 | |
Rockwell Automation, Inc. | 70,800 | 6,856,980 | |
| 42,593,380 | ||
INDUSTRIAL CONGLOMERATES - 17.9% | |||
Industrial Conglomerates - 17.9% | |||
Danaher Corp. | 458,977 | 30,907,511 | |
General Electric Co. | 2,711,267 | 66,073,578 | |
| 96,981,089 | ||
LIFE SCIENCES TOOLS & SERVICES - 0.5% | |||
Life Sciences Tools & Services - 0.5% | |||
Eurofins Scientific SA | 12,638 | 2,774,139 | |
| |||
Shares | Value | ||
MACHINERY - 29.7% | |||
Construction & Farm Machinery & Heavy Trucks - 11.4% | |||
Caterpillar, Inc. | 211,474 | $ 17,533,309 | |
Cummins, Inc. | 91,854 | 11,131,786 | |
Manitowoc Co., Inc. | 430,846 | 8,845,268 | |
Oshkosh Truck Corp. (a) | 86,544 | 3,878,902 | |
PACCAR, Inc. | 133,215 | 7,496,008 | |
Toro Co. | 92,800 | 4,573,184 | |
Wabtec Corp. | 140,200 | 8,140,012 | |
| 61,598,469 | ||
Industrial Machinery - 18.3% | |||
Donaldson Co., Inc. | 103,451 | 3,750,099 | |
Dover Corp. | 93,291 | 7,989,441 | |
GEA Group AG | 135,577 | 5,594,016 | |
Graco, Inc. | 92,826 | 6,477,398 | |
Harsco Corp. | 215,181 | 5,543,063 | |
IDEX Corp. | 112,369 | 6,702,811 | |
Ingersoll-Rand PLC | 120,787 | 7,374,046 | |
ITT Corp. | 18,700 | 584,188 | |
Nordson Corp. | 40,193 | 2,900,327 | |
Pall Corp. | 103,767 | 7,259,539 | |
Parker Hannifin Corp. | 103,794 | 10,719,844 | |
Pentair Ltd. | 143,296 | 8,752,520 | |
Stanley Black & Decker, Inc. | 101,802 | 8,614,485 | |
Timken Co. | 119,883 | 7,003,565 | |
TriMas Corp. (a) | 150,183 | 5,561,276 | |
Valmont Industries, Inc. | 32,899 | 4,594,016 | |
| 99,420,634 | ||
TOTAL MACHINERY | 161,019,103 | ||
PROFESSIONAL SERVICES - 6.8% | |||
Human Resource & Employment Services - 1.8% | |||
Towers Watson & Co. | 117,584 | 9,904,100 | |
Research & Consulting Services - 5.0% | |||
Bureau Veritas SA | 56,212 | 1,668,378 | |
Dun & Bradstreet Corp. | 98,865 | 10,245,380 | |
Nielsen Holdings B.V. | 261,312 | 8,733,047 | |
Verisk Analytics, Inc. (a) | 100,974 | 6,498,687 | |
| 27,145,492 | ||
TOTAL PROFESSIONAL SERVICES | 37,049,592 | ||
ROAD & RAIL - 5.9% | |||
Railroads - 4.5% | |||
Union Pacific Corp. | 154,088 | 24,436,816 | |
Trucking - 1.4% | |||
Con-way, Inc. | 27,753 | 1,150,362 | |
J.B. Hunt Transport Services, Inc. | 85,244 | 6,387,333 | |
| 7,537,695 | ||
TOTAL ROAD & RAIL | 31,974,511 | ||
Common Stocks - continued | |||
Shares | Value | ||
TRADING COMPANIES & DISTRIBUTORS - 3.8% | |||
Trading Companies & Distributors - 3.8% | |||
Applied Industrial Technologies, Inc. | 36,041 | $ 1,879,899 | |
W.W. Grainger, Inc. | 24,944 | 6,538,820 | |
Watsco, Inc. | 58,771 | 5,486,273 | |
WESCO International, Inc. (a) | 89,056 | 6,748,664 | |
| 20,653,656 | ||
TOTAL COMMON STOCKS (Cost $406,445,005) |
|
Convertible Bonds - 0.4% | ||||
| Principal Amount |
| ||
BUILDING PRODUCTS - 0.4% | ||||
Building Products - 0.4% | ||||
Aspen Aerogels, Inc.: | ||||
8% 6/1/14 (c) | $ 1,177,234 | 1,177,234 | ||
8% 12/6/14 (c) | 1,114,117 | 1,114,117 | ||
8% 3/28/16 (c) | 90,496 | 90,496 | ||
TOTAL CONVERTIBLE BONDS (Cost $2,381,812) |
|
Money Market Funds - 1.7% | |||
Shares |
| ||
Fidelity Cash Central Fund, 0.11% (b) | 9,075,166 |
| |
TOTAL INVESTMENT PORTFOLIO - 99.9% (Cost $417,901,983) | 542,506,302 | ||
NET OTHER ASSETS (LIABILITIES) - 0.1% | 352,558 | ||
NET ASSETS - 100% | $ 542,858,860 |
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) 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 $2,381,847 or 0.4% of net assets. |
Additional information on each restricted holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Aspen Aerogels, Inc. 8% 6/1/14 | 6/14/11 - 12/31/12 | $ 1,177,234 |
Aspen Aerogels, Inc. 8% 12/6/14 | 12/6/11 - 12/31/12 | $ 1,114,117 |
Aspen Aerogels, Inc. 8% 3/28/16 | 5/6/13 | $ 90,461 |
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 | $ 18,729 |
Fidelity Securities Lending Cash Central Fund | 2,912 |
Total | $ 21,641 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2013, 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 | $ 531,049,289 | $ 531,049,254 | $ - | $ 35 |
Convertible Bonds | 2,381,847 | - | - | 2,381,847 |
Money Market Funds | 9,075,166 | 9,075,166 | - | - |
Total Investments in Securities: | $ 542,506,302 | $ 540,124,420 | $ - | $ 2,381,882 |
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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $408,826,817) | $ 533,431,136 |
|
Fidelity Central Funds (cost $9,075,166) | 9,075,166 |
|
Total Investments (cost $417,901,983) |
| $ 542,506,302 |
Receivable for fund shares sold | 1,977,474 | |
Dividends receivable | 296,511 | |
Interest receivable | 109,148 | |
Distributions receivable from Fidelity Central Funds | 1,184 | |
Other receivables | 3,345 | |
Total assets | 544,893,964 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 520,232 | |
Payable for fund shares redeemed | 946,789 | |
Accrued management fee | 242,587 | |
Distribution and service plan fees payable | 173,922 | |
Transfer agent fees payable | 94,550 | |
Other affiliated payables | 16,792 | |
Other payables and accrued expenses | 40,232 | |
Total liabilities | 2,035,104 | |
|
|
|
Net Assets | $ 542,858,860 | |
Net Assets consist of: |
| |
Paid in capital | $ 398,667,156 | |
Undistributed net investment income | 768,614 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 18,818,567 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 124,604,523 | |
Net Assets | $ 542,858,860 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 34.50 | |
|
|
|
Maximum offering price per share (100/94.25 of $34.50) | $ 36.60 | |
Class T: | $ 33.93 | |
|
|
|
Maximum offering price per share (100/96.50 of $33.93) | $ 35.16 | |
Class B: | $ 31.97 | |
|
|
|
Class C: | $ 32.08 | |
|
|
|
Institutional Class: | $ 35.83 |
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, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 8,027,432 |
Interest |
| 185,735 |
Income from Fidelity Central Funds |
| 21,641 |
Total income |
| 8,234,808 |
|
|
|
Expenses | ||
Management fee | $ 2,436,049 | |
Transfer agent fees | 1,024,771 | |
Distribution and service plan fees | 1,823,035 | |
Accounting and security lending fees | 170,530 | |
Custodian fees and expenses | 18,825 | |
Independent trustees' compensation | 3,043 | |
Registration fees | 82,863 | |
Audit | 53,823 | |
Legal | 1,349 | |
Miscellaneous | 3,394 | |
Total expenses before reductions | 5,617,682 | |
Expense reductions | (39,065) | 5,578,617 |
Net investment income (loss) | 2,656,191 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 37,642,029 | |
Foreign currency transactions | 9,764 | |
Futures contracts | 595,204 | |
Total net realized gain (loss) |
| 38,246,997 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 82,841,114 | |
Assets and liabilities in foreign currencies | 1,260 | |
Futures contracts | (195,061) | |
Total change in net unrealized appreciation (depreciation) |
| 82,647,313 |
Net gain (loss) | 120,894,310 | |
Net increase (decrease) in net assets resulting from operations | $ 123,550,501 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 2,656,191 | $ 2,427,938 |
Net realized gain (loss) | 38,246,997 | (16,401,175) |
Change in net unrealized appreciation (depreciation) | 82,647,313 | 18,503,016 |
Net increase (decrease) in net assets resulting from operations | 123,550,501 | 4,529,779 |
Distributions to shareholders from net investment income | (2,791,779) | (1,437,740) |
Distributions to shareholders from net realized gain | - | (4,219,307) |
Total distributions | (2,791,779) | (5,657,047) |
Share transactions - net increase (decrease) | 36,897,765 | (82,942,475) |
Redemption fees | 13,370 | 15,881 |
Total increase (decrease) in net assets | 157,669,857 | (84,053,862) |
|
|
|
Net Assets | ||
Beginning of period | 385,189,003 | 469,242,865 |
End of period (including undistributed net investment income of $768,614 and undistributed net investment income of $1,084,983, respectively) | $ 542,858,860 | $ 385,189,003 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 26.18 | $ 25.73 | $ 21.54 | $ 16.87 | $ 21.97 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .23 | .20 | .09 | .06 | .13 |
Net realized and unrealized gain (loss) | 8.33 | .61 | 4.13 | 4.68 | (5.08) |
Total from investment operations | 8.56 | .81 | 4.22 | 4.74 | (4.95) |
Distributions from net investment income | (.24) | (.11) | (.03) | (.07) | (.13) |
Distributions from net realized gain | - | (.25) | - | - | (.02) |
Total distributions | (.24) | (.36) | (.03) | (.07) | (.15) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 34.50 | $ 26.18 | $ 25.73 | $ 21.54 | $ 16.87 |
Total Return A, B | 32.92% | 3.42% | 19.59% | 28.13% | (22.49)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.11% | 1.14% | 1.13% | 1.18% | 1.23% |
Expenses net of fee waivers, if any | 1.11% | 1.14% | 1.13% | 1.18% | 1.23% |
Expenses net of all reductions | 1.11% | 1.14% | 1.13% | 1.17% | 1.23% |
Net investment income (loss) | .77% | .80% | .36% | .31% | .89% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 271,512 | $ 192,038 | $ 228,106 | $ 165,029 | $ 130,860 |
Portfolio turnover rate E | 78% | 82% | 75% | 110% | 135% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 25.75 | $ 25.33 | $ 21.24 | $ 16.64 | $ 21.67 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .15 | .13 | .03 | .01 | .10 |
Net realized and unrealized gain (loss) | 8.20 | .61 | 4.07 | 4.61 | (5.03) |
Total from investment operations | 8.35 | .74 | 4.10 | 4.62 | (4.93) |
Distributions from net investment income | (.17) | (.07) | (.01) | (.02) | (.08) |
Distributions from net realized gain | - | (.25) | - | - | (.02) |
Total distributions | (.17) | (.32) | (.01) | (.02) | (.10) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 33.93 | $ 25.75 | $ 25.33 | $ 21.24 | $ 16.64 |
Total Return A, B | 32.60% | 3.15% | 19.28% | 27.80% | (22.68)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.37% | 1.40% | 1.39% | 1.44% | 1.48% |
Expenses net of fee waivers, if any | 1.37% | 1.40% | 1.39% | 1.44% | 1.48% |
Expenses net of all reductions | 1.36% | 1.39% | 1.38% | 1.43% | 1.48% |
Net investment income (loss) | .52% | .54% | .10% | .06% | .63% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 79,172 | $ 63,954 | $ 71,542 | $ 58,202 | $ 48,054 |
Portfolio turnover rate E | 78% | 82% | 75% | 110% | 135% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 24.29 | $ 23.99 | $ 20.22 | $ 15.90 | $ 20.74 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.01) | - H | (.11) | (.09) | .02 |
Net realized and unrealized gain (loss) | 7.74 | .57 | 3.88 | 4.41 | (4.82) |
Total from investment operations | 7.73 | .57 | 3.77 | 4.32 | (4.80) |
Distributions from net investment income | (.05) | (.02) | - | - | (.04) |
Distributions from net realized gain | - | (.25) | - | - | - |
Total distributions | (.05) | (.27) | - | - | (.04) |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 31.97 | $ 24.29 | $ 23.99 | $ 20.22 | $ 15.90 |
Total Return A, B | 31.87% | 2.59% | 18.64% | 27.17% | (23.10)% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 1.92% | 1.94% | 1.93% | 1.97% | 1.98% |
Expenses net of fee waivers, if any | 1.92% | 1.94% | 1.93% | 1.97% | 1.98% |
Expenses net of all reductions | 1.91% | 1.94% | 1.93% | 1.97% | 1.98% |
Net investment income (loss) | (.04)% | -% F | (.44)% | (.48)% | .13% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 17,502 | $ 20,058 | $ 28,600 | $ 29,048 | $ 25,212 |
Portfolio turnover rate E | 78% | 82% | 75% | 110% | 135% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 24.38 | $ 24.07 | $ 20.28 | $ 15.94 | $ 20.79 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .01 | .01 | (.09) | (.08) | .02 |
Net realized and unrealized gain (loss) | 7.75 | .58 | 3.88 | 4.42 | (4.83) |
Total from investment operations | 7.76 | .59 | 3.79 | 4.34 | (4.81) |
Distributions from net investment income | (.06) | (.03) | - | - | (.04) |
Distributions from net realized gain | - | (.25) | - | - | - |
Total distributions | (.06) | (.28) | - | - | (.04) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 32.08 | $ 24.38 | $ 24.07 | $ 20.28 | $ 15.94 |
Total Return A, B | 31.90% | 2.67% | 18.69% | 27.23% | (23.09)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.87% | 1.89% | 1.89% | 1.93% | 1.98% |
Expenses net of fee waivers, if any | 1.87% | 1.89% | 1.89% | 1.93% | 1.98% |
Expenses net of all reductions | 1.86% | 1.88% | 1.88% | 1.92% | 1.98% |
Net investment income (loss) | .02% | .05% | (.40)% | (.43)% | .14% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 89,893 | $ 66,289 | $ 72,673 | $ 51,760 | $ 37,862 |
Portfolio turnover rate E | 78% | 82% | 75% | 110% | 135% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 27.18 | $ 26.69 | $ 22.30 | $ 17.45 | $ 22.72 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .33 | .28 | .17 | .13 | .19 |
Net realized and unrealized gain (loss) | 8.64 | .63 | 4.28 | 4.83 | (5.27) |
Total from investment operations | 8.97 | .91 | 4.45 | 4.96 | (5.08) |
Distributions from net investment income | (.32) | (.17) | (.06) | (.11) | (.17) |
Distributions from net realized gain | - | (.25) | - | - | (.02) |
Total distributions | (.32) | (.42) | (.06) | (.11) | (.19) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 35.83 | $ 27.18 | $ 26.69 | $ 22.30 | $ 17.45 |
Total Return A | 33.28% | 3.72% | 19.95% | 28.52% | (22.31)% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .84% | .85% | .85% | .89% | .96% |
Expenses net of fee waivers, if any | .84% | .85% | .85% | .89% | .96% |
Expenses net of all reductions | .83% | .85% | .84% | .88% | .95% |
Net investment income (loss) | 1.04% | 1.08% | .65% | .61% | 1.16% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 84,780 | $ 42,850 | $ 68,323 | $ 29,578 | $ 12,762 |
Portfolio turnover rate D | 78% | 82% | 75% | 110% | 135% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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, changes in interest rates and credit quality. 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 restricted equity securities and private placements where observable inputs are limited, assumptions about market activity and risk are used and these securities are generally categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. For corporate bonds, pricing vendors utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type as well as broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Investment Valuation - continued
valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
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, 2013, 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. 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 and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to futures contracts, foreign currency transactions, equity-debt classifications, capital loss carryforwards and losses deferred due to wash sales.
Annual Report
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 | $ 123,912,594 |
Gross unrealized depreciation | (1,338,720) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 122,573,874 |
|
|
Tax Cost | $ 419,932,428 |
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 1,115,984 |
Undistributed long-term capital gain | $ 20,501,642 |
Net unrealized appreciation (depreciation) | $ 122,574,078 |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 2,791,779 | $ 1,437,740 |
Long-term Capital Gains | - | 4,219,307 |
Total | $ 2,791,779 | $ 5,657,047 |
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 net asset value 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.
New Accounting Pronouncement. The Financial Accounting Standards Board issued in December 2011, Accounting Standard Update No. 2011-11, Disclosures about Offsetting Assets and Liabilities, and in January 2013, Accounting Standards Update No. 2013-1 Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. These updates create new disclosure requirements requiring entities to disclose both gross and net information for derivatives and other financial instruments that are either offset in the Statement of Assets and Liabilities or subject to an enforceable master netting arrangement or similar agreement. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Management expects that the impact of the update's adoption will be limited to additional financial statement disclosures as applicable.
4. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including futures contracts. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment. |
Annual Report
Notes to Financial Statements - continued
4. Derivative Instruments - continued
Risk Exposures and the Use of Derivative Instruments - continued
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Counterparty credit risk related to exchange-traded futures contracts may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Futures Contracts. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. The Fund used futures contracts to manage its exposure to the stock market.
Upon entering into a futures contract, a fund is required to deposit either cash or securities (initial margin) with a clearing broker in an amount equal to a certain percentage of the face value of the contract. Futures contracts are marked-to-market daily and subsequent daily payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contracts and are recorded as unrealized appreciation or (depreciation). This receivable and/or payable, if any, is included in daily variation margin for derivative instruments in the Statement of Assets and Liabilities. Realized gain or (loss) is recorded upon the expiration or closing of a futures contract.
Any open futures contracts at period end are presented in the Schedule of Investments under the caption "Futures Contracts." The underlying face amount at value reflects each contract's exposure to the underlying instrument or index at period end. Securities deposited to meet initial margin requirements are identified in the Schedule of Investments.
During the period the Fund recognized net realized gain (loss) of $595,204 and a change in net unrealized appreciation (depreciation) of $(195,061) related to its investment in futures contracts. These amounts are included in the Statement of Operations.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $379,874,110 and $331,865,021, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .56% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 550,485 | $ 17,945 |
Class T | .25% | .25% | 346,384 | 12,278 |
Class B | .75% | .25% | 189,880 | 143,886 |
Class C | .75% | .25% | 736,286 | 100,966 |
|
|
| $ 1,823,035 | $ 275,075 |
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
Annual Report
6. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
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 | $ 96,176 |
Class T | 12,796 |
Class B* | 19,584 |
Class C* | 4,573 |
| $ 133,129 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 512,890 | .23 |
Class T | 163,549 | .24 |
Class B | 55,201 | .29 |
Class C | 172,760 | .23 |
Institutional Class | 120,371 | .21 |
| $ 1,024,771 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $5,799 for the period.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $997 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities 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, including 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. At period end, there were no security loans outstanding
Annual Report
Notes to Financial Statements - continued
8. Security Lending - continued
with FCM. 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 $2,912, including $175 from securities loaned to FCM.
9. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $39,059 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 $6.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net investment income |
|
|
Class A | $ 1,710,170 | $ 896,458 |
Class T | 408,593 | 170,680 |
Class B | 36,770 | 16,830 |
Class C | 160,671 | 70,972 |
Institutional Class | 475,575 | 282,800 |
Total | $ 2,791,779 | $ 1,437,740 |
From net realized gain |
|
|
Class A | $ - | $ 2,092,354 |
Class T | - | 659,892 |
Class B | - | 286,480 |
Class C | - | 731,497 |
Institutional Class | - | 449,084 |
Total | $ - | $ 4,219,307 |
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 2,574,295 | 1,757,163 | $ 79,657,790 | $ 44,013,667 |
Reinvestment of distributions | 53,714 | 118,075 | 1,500,721 | 2,609,664 |
Shares redeemed | (2,093,962) | (3,404,053) | (62,545,427) | (83,950,843) |
Net increase (decrease) | 534,047 | (1,528,815) | $ 18,613,084 | $ (37,327,512) |
Class T |
|
|
|
|
Shares sold | 353,347 | 369,147 | $ 10,754,227 | $ 9,058,222 |
Reinvestment of distributions | 14,180 | 36,910 | 390,674 | 800,817 |
Shares redeemed | (517,661) | (746,452) | (15,034,025) | (17,604,399) |
Net increase (decrease) | (150,134) | (340,395) | $ (3,889,124) | $ (7,745,360) |
Class B |
|
|
|
|
Shares sold | 24,479 | 62,276 | $ 701,454 | $ 1,371,568 |
Reinvestment of distributions | 1,145 | 12,641 | 30,226 | 255,322 |
Shares redeemed | (303,898) | (441,128) | (8,464,475) | (10,119,054) |
Net increase (decrease) | (278,274) | (366,211) | $ (7,732,795) | $ (8,492,164) |
Class C |
|
|
|
|
Shares sold | 682,170 | 457,163 | $ 19,951,920 | $ 10,854,816 |
Reinvestment of distributions | 5,091 | 31,555 | 134,814 | 641,832 |
Shares redeemed | (604,905) | (787,971) | (16,678,512) | (18,054,638) |
Net increase (decrease) | 82,356 | (299,253) | $ 3,408,222 | $ (6,557,990) |
Annual Report
11. Share Transactions - continued
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Institutional Class |
|
|
|
|
Shares sold | 1,667,388 | 806,817 | $ 53,671,489 | $ 21,049,427 |
Reinvestment of distributions | 12,331 | 22,926 | 356,365 | 525,598 |
Shares redeemed | (890,195) | (1,812,880) | (27,529,476) | (44,394,474) |
Net increase (decrease) | 789,524 | (983,137) | $ 26,498,378 | $ (22,819,449) |
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 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, 2013 | Past 1 | Past 5 | Past 10 |
Institutional Class | 18.75% | 12.22% | 8.82% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor Technology Fund - Institutional Class on July 31, 2003. 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
Comments from Charlie Chai, Portfolio Manager of Fidelity Advisor® Technology Fund: For the year, the fund's Institutional Class shares returned 18.75%, topping the 14.25% gain of the MSCI® U.S. IMI Information Technology 25-50 Index but trailing the S&P 500®. Versus the overall market, the technology sector was particularly weighed down by weak results in computer hardware stocks. I look for situations where a company's future earnings power is not reflected in its valuation, whether due to underestimated long-term growth, a misunderstood turnaround story or an unanticipated cyclical rebound. Typically, I find the most compelling investment candidates in the mid-cap and small-cap areas of the market, because that's where the fastest growth tends to be. Given this bias, it was nice to see the fund's relative performance meaningfully bolstered by a sizable underweighting in companies with market capitalizations above $100 billion, and overweightings in mid-caps and especially small-caps. For example, in the semiconductor space, where I nearly halved the fund's weighting because I thought I saw better opportunities elsewhere, the fund benefited from not owning weak-performing Intel, the leading maker of chips for personal computers and a sizable component of the MSCI sector index. On the other hand, the fund had a large overweighting in Cree, a mid-cap stock whose price nearly tripled during the period. This company manufactures semiconductors used in light-emitting diode (LED) products. With that said, as Cree's share price climbed, I significantly reduced this position to manage risk and lock in profits. However, the fund's largest relative contributor was Apple. We started the period with essentially a market weighting here, but early in the year I decreased the position to a large underweighting, which - based on this stock's weak showing - was the right call. That said, Apple remained a huge part of our MSCI benchmark, and it was the fund's largest position at period end. Additionally, Apple was by far the fund's biggest detractor in absolute terms. Elsewhere, communications equipment was an area in which I boosted the fund's weighting, because I expected it to benefit from increasing enterprise IT spending. Stock selection in this group had a positive impact on the fund's relative results, led by Juniper Networks, in which I built a large position during the period, and Acme Packet, which I sold in the spring for a healthy profit, after the stock spiked higher on enterprise database maker Oracle's February announcement that it planned to purchase the company. On the flip side, I was late in bringing up our allocation to strong-performing index stock Cisco Systems, a large-cap provider of network equipment that was our biggest relative detractor because of underweighted exposure here early in the period. Stock picking in systems software was also a negative, mainly due to two stocks: Oracle and VMware. Although we began the period with a large underweighting in Oracle, I eventually built this position into the fund's third-largest holding by period end. However, the shares have been volatile so far in 2013, as the company has been uncharacteristically unreliable at hitting its sales and earnings targets. Meanwhile, VMware, a provider of hardware and software enabling corporate clients to operate virtual, cloud-based servers and related applications, saw its stock plummet in late January, after the firm unveiled a disappointing outlook for 2013 and announced plans to cut 900 jobs. I sold all but a token position here.
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, 2013 to July 31, 2013).
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 | 1.17% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,115.30 | $ 6.14 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.99 | $ 5.86 |
Class T | 1.41% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,113.70 | $ 7.39 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.80 | $ 7.05 |
Class B | 1.92% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,110.80 | $ 10.05 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.27 | $ 9.59 |
Class C | 1.91% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,110.70 | $ 10.00 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.32 | $ 9.54 |
Institutional Class | .86% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,116.70 | $ 4.51 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.53 | $ 4.31 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Apple, Inc. | 10.0 | 11.4 |
Google, Inc. Class A | 9.0 | 8.3 |
Oracle Corp. | 6.4 | 3.6 |
Microsoft Corp. | 5.6 | 0.0 |
Cisco Systems, Inc. | 4.1 | 0.5 |
salesforce.com, Inc. | 3.6 | 3.4 |
Visa, Inc. Class A | 3.3 | 3.3 |
Juniper Networks, Inc. | 3.0 | 1.2 |
F5 Networks, Inc. | 2.3 | 1.2 |
Fidelity National Information Services, Inc. | 1.6 | 0.2 |
| 48.9 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Software | 27.7% |
|
![]() | Internet Software & Services | 16.2% |
|
![]() | Computers & Peripherals | 13.4% |
|
![]() | Communications Equipment | 12.5% |
|
![]() | IT Services | 9.5% |
|
![]() | All Others* | 20.7% |
|
As of January 31, 2013 | |||
![]() | Software | 19.9% |
|
![]() | Internet Software & Services | 17.6% |
|
![]() | Computers & Peripherals | 17.1% |
|
![]() | Semiconductors & Semiconductor Equipment | 15.1% |
|
![]() | Communications Equipment | 9.7% |
|
![]() | All Others* | 20.6% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Technology Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 96.9% | |||
Shares | Value | ||
AEROSPACE & DEFENSE - 0.0% | |||
Aerospace & Defense - 0.0% | |||
DigitalGlobe, Inc. (a) | 236 | $ 7,646 | |
AUTOMOBILES - 0.3% | |||
Automobile Manufacturers - 0.3% | |||
Tesla Motors, Inc. (a) | 16,400 | 2,202,192 | |
COMMUNICATIONS EQUIPMENT - 12.5% | |||
Communications Equipment - 12.5% | |||
AAC Acoustic Technology Holdings, Inc. | 16,500 | 76,803 | |
ADTRAN, Inc. | 27,686 | 731,741 | |
ADVA AG Optical Networking (a) | 92,560 | 502,400 | |
Alcatel-Lucent SA (a)(d) | 289,353 | 730,359 | |
Alcatel-Lucent SA sponsored ADR (a) | 926,388 | 2,353,026 | |
Aruba Networks, Inc. (a) | 146,044 | 2,596,662 | |
BlackBerry Ltd. (a) | 300 | 2,649 | |
Brocade Communications Systems, Inc. (a) | 14,000 | 93,240 | |
Ciena Corp. (a) | 129,912 | 2,865,859 | |
Cisco Systems, Inc. | 1,361,717 | 34,791,869 | |
Comba Telecom Systems Holdings Ltd. (a) | 66,000 | 23,658 | |
F5 Networks, Inc. (a) | 223,468 | 19,611,552 | |
Finisar Corp. (a) | 4,863 | 94,002 | |
HTC Corp. | 10,000 | 53,176 | |
Infinera Corp. (a)(d) | 271,890 | 2,966,320 | |
Ixia (a) | 26,400 | 366,960 | |
JDS Uniphase Corp. (a) | 28,981 | 425,151 | |
Juniper Networks, Inc. (a) | 1,180,748 | 25,586,809 | |
Motorola Solutions, Inc. | 1,318 | 72,266 | |
Palo Alto Networks, Inc. | 9,633 | 471,439 | |
Polycom, Inc. (a) | 119 | 1,138 | |
QUALCOMM, Inc. | 1,360 | 87,788 | |
Radware Ltd. (a) | 128,480 | 1,760,176 | |
Riverbed Technology, Inc. (a) | 470 | 7,351 | |
Sandvine Corp. (U.K.) (a) | 1,305,800 | 2,466,412 | |
SerComm Corp. | 273,000 | 351,319 | |
Sonus Networks, Inc. (a) | 1,685,784 | 5,765,381 | |
Spirent Communications PLC | 296,600 | 596,039 | |
ZTE Corp. (H Shares) | 220,800 | 383,772 | |
| 105,835,317 | ||
COMPUTERS & PERIPHERALS - 13.4% | |||
Computer Hardware - 12.2% | |||
3D Systems Corp. (a) | 4,990 | 235,678 | |
Advantech Co. Ltd. | 176,000 | 850,808 | |
Apple, Inc. | 185,757 | 84,055,032 | |
Hewlett-Packard Co. | 590 | 15,151 | |
Lenovo Group Ltd. | 13,986,000 | 12,749,629 | |
NCR Corp. (a) | 122,240 | 4,400,640 | |
Stratasys Ltd. (a) | 9,741 | 863,540 | |
Wistron Corp. | 81,200 | 77,424 | |
| 103,247,902 | ||
| |||
Shares | Value | ||
Computer Storage & Peripherals - 1.2% | |||
ADLINK Technology, Inc. | 2,300 | $ 3,435 | |
Catcher Technology Co. Ltd. | 1,000 | 4,334 | |
Chicony Electronics Co. Ltd. | 29,290 | 70,112 | |
EMC Corp. | 335,605 | 8,776,071 | |
Gemalto NV | 940 | 98,292 | |
NetApp, Inc. | 32,046 | 1,317,732 | |
SanDisk Corp. | 1,414 | 77,940 | |
Synaptics, Inc. (a) | 181 | 7,240 | |
Wacom Co. Ltd. | 7,400 | 59,859 | |
| 10,415,015 | ||
TOTAL COMPUTERS & PERIPHERALS | 113,662,917 | ||
DIVERSIFIED CONSUMER SERVICES - 0.0% | |||
Education Services - 0.0% | |||
Educomp Solutions Ltd. | 16,123 | 6,584 | |
New Oriental Education & Technology Group, Inc. sponsored ADR | 3,974 | 88,183 | |
| 94,767 | ||
Specialized Consumer Services - 0.0% | |||
LifeLock, Inc. | 15,000 | 170,550 | |
TOTAL DIVERSIFIED CONSUMER SERVICES | 265,317 | ||
ELECTRICAL EQUIPMENT - 0.1% | |||
Electrical Components & Equipment - 0.1% | |||
Dynapack International Technology Corp. | 14,000 | 39,627 | |
TECO Electric & Machinery Co. Ltd. | 471,000 | 513,476 | |
| 553,103 | ||
ELECTRONIC EQUIPMENT & COMPONENTS - 4.5% | |||
Electronic Components - 2.0% | |||
Aeroflex Holding Corp. (a) | 13,464 | 101,249 | |
Amphenol Corp. Class A | 20,108 | 1,579,684 | |
AU Optronics Corp. (a) | 9,000 | 3,241 | |
Delta Electronics, Inc. | 86,000 | 417,170 | |
InvenSense, Inc. (a)(d) | 117,037 | 2,069,214 | |
Kyocera Corp. | 700 | 71,137 | |
Ledlink Optics, Inc. | 379,000 | 1,259,753 | |
Omron Corp. | 48,800 | 1,512,695 | |
Sapphire Technology Co. Ltd. (a) | 4,685 | 149,051 | |
Sunny Optical Technology Group Co. Ltd. | 92,000 | 92,052 | |
Taiyo Yuden Co. Ltd. | 129,300 | 1,733,948 | |
Tong Hsing Electronics Industries Ltd. | 1,128,000 | 5,490,515 | |
TXC Corp. | 776,000 | 1,041,307 | |
Universal Display Corp. (a)(d) | 2,827 | 81,842 | |
Yaskawa Electric Corp. | 130,000 | 1,554,795 | |
| 17,157,653 | ||
Electronic Equipment & Instruments - 0.6% | |||
Chroma ATE, Inc. | 358,683 | 749,772 | |
FEI Co. | 3,300 | 255,585 | |
Common Stocks - continued | |||
Shares | Value | ||
ELECTRONIC EQUIPMENT & COMPONENTS - CONTINUED | |||
Electronic Equipment & Instruments - continued | |||
Keyence Corp. | 7,850 | $ 2,565,621 | |
National Instruments Corp. | 29,793 | 839,865 | |
RealD, Inc. (a) | 12,949 | 137,907 | |
Test Research, Inc. | 20,366 | 27,227 | |
TPK Holding Co. Ltd. GDR (Reg. S) | 904 | 10,624 | |
| 4,586,601 | ||
Electronic Manufacturing Services - 1.3% | |||
Benchmark Electronics, Inc. (a) | 1,200 | 26,544 | |
Fabrinet (a) | 10,766 | 159,444 | |
IPG Photonics Corp. | 2,200 | 133,980 | |
Jabil Circuit, Inc. | 4,037 | 92,811 | |
Ju Teng International Holdings Ltd. | 5,014,000 | 2,437,307 | |
KEMET Corp. (a) | 1,417 | 6,178 | |
TE Connectivity Ltd. | 118,085 | 6,027,058 | |
Trimble Navigation Ltd. (a) | 75,867 | 2,165,244 | |
| 11,048,566 | ||
Technology Distributors - 0.6% | |||
Arrow Electronics, Inc. (a) | 53 | 2,419 | |
Digital China Holdings Ltd. (H Shares) | 4,073,000 | 4,474,439 | |
Redington India Ltd. | 57,478 | 53,034 | |
VST Holdings Ltd. | 1,176,000 | 197,122 | |
WPG Holding Co. Ltd. | 328,975 | 409,642 | |
WT Microelectronics Co. Ltd. | 17,509 | 19,000 | |
| 5,155,656 | ||
TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 37,948,476 | ||
HEALTH CARE EQUIPMENT & SUPPLIES - 0.1% | |||
Health Care Equipment - 0.1% | |||
Biosensors International Group Ltd. | 1,223,000 | 1,000,842 | |
HEALTH CARE TECHNOLOGY - 0.7% | |||
Health Care Technology - 0.7% | |||
athenahealth, Inc. (a) | 7,866 | 880,599 | |
Cerner Corp. (a) | 49,354 | 2,418,346 | |
So-net M3, Inc. | 1,041 | 2,870,697 | |
| 6,169,642 | ||
HOUSEHOLD DURABLES - 0.7% | |||
Consumer Electronics - 0.7% | |||
Alpine Electronics, Inc. | 236,500 | 2,326,111 | |
Sony Corp. | 4,500 | 94,477 | |
Sony Corp. sponsored ADR (d) | 167,000 | 3,513,680 | |
| 5,934,268 | ||
Household Appliances - 0.0% | |||
Haier Electronics Group Co. Ltd. | 17,000 | 30,644 | |
TOTAL HOUSEHOLD DURABLES | 5,964,912 | ||
| |||
Shares | Value | ||
HOUSEHOLD PRODUCTS - 0.0% | |||
Household Products - 0.0% | |||
NVC Lighting Holdings Ltd. | 180,000 | $ 47,579 | |
INDUSTRIAL CONGLOMERATES - 0.0% | |||
Industrial Conglomerates - 0.0% | |||
Samsung Techwin Co. Ltd. | 196 | 12,279 | |
Toshiba Corp. | 3,000 | 13,022 | |
| 25,301 | ||
INTERNET & CATALOG RETAIL - 0.6% | |||
Internet Retail - 0.6% | |||
Amazon.com, Inc. (a) | 6,801 | 2,048,597 | |
Ctrip.com International Ltd. sponsored ADR (a) | 25,100 | 919,413 | |
E-Commerce China Dangdang, Inc. ADR (a) | 260 | 2,452 | |
Expedia, Inc. | 29 | 1,367 | |
Groupon, Inc. Class A (a) | 47,355 | 419,565 | |
priceline.com, Inc. (a) | 69 | 60,421 | |
Rakuten, Inc. | 1,300 | 17,566 | |
Start Today Co. Ltd. | 48,200 | 997,377 | |
TripAdvisor, Inc. (a) | 2,394 | 179,598 | |
| 4,646,356 | ||
INTERNET SOFTWARE & SERVICES - 16.2% | |||
Internet Software & Services - 16.2% | |||
Active Network, Inc. (a) | 64,340 | 548,820 | |
Akamai Technologies, Inc. (a) | 1,994 | 94,117 | |
Angie's List, Inc. (a)(d) | 100,360 | 2,209,927 | |
Baidu.com, Inc. sponsored ADR (a) | 51 | 6,748 | |
Bankrate, Inc. (a) | 80,285 | 1,439,510 | |
Bazaarvoice, Inc. (a) | 2,800 | 29,344 | |
Cornerstone OnDemand, Inc. (a) | 65,665 | 2,891,887 | |
DealerTrack Holdings, Inc. (a) | 31,770 | 1,188,198 | |
Demandware, Inc. (a) | 54,814 | 2,434,838 | |
E2open, Inc. | 54,993 | 1,093,261 | |
eBay, Inc. (a) | 1,579 | 81,619 | |
Facebook, Inc. Class A (a) | 29,758 | 1,095,987 | |
Google, Inc. Class A (a) | 86,067 | 76,393,069 | |
INFO Edge India Ltd. | 35,836 | 185,555 | |
IntraLinks Holdings, Inc. (a) | 13,467 | 127,937 | |
Kakaku.com, Inc. | 2,200 | 76,284 | |
LinkedIn Corp. (a) | 46,740 | 9,525,145 | |
LogMeIn, Inc. (a) | 347 | 10,313 | |
Mail.Ru Group Ltd. GDR (e) | 1,800 | 57,510 | |
Marketo, Inc. | 1,100 | 34,573 | |
MercadoLibre, Inc. | 134 | 15,736 | |
Millennial Media, Inc. (a)(d) | 141,724 | 1,404,485 | |
NHN Corp. | 8,407 | 2,195,830 | |
Qihoo 360 Technology Co. Ltd. ADR (a) | 9,200 | 598,552 | |
Rackspace Hosting, Inc. (a) | 25,504 | 1,155,076 | |
Renren, Inc. ADR (a)(d) | 5,900 | 19,647 | |
Responsys, Inc. (a) | 224,130 | 3,247,644 | |
Common Stocks - continued | |||
Shares | Value | ||
INTERNET SOFTWARE & SERVICES - CONTINUED | |||
Internet Software & Services - continued | |||
SciQuest, Inc. (a) | 89,627 | $ 2,210,202 | |
SINA Corp. (a) | 31,341 | 2,161,589 | |
SouFun Holdings Ltd. ADR | 157 | 5,457 | |
TelecityGroup PLC | 63,300 | 856,064 | |
Tencent Holdings Ltd. | 173,100 | 7,851,950 | |
Velti PLC (a) | 10,736 | 12,132 | |
VeriSign, Inc. (a) | 1,630 | 77,979 | |
Vocus, Inc. (a) | 117,715 | 1,203,047 | |
Web.com Group, Inc. (a) | 31,450 | 817,071 | |
XO Group, Inc. (a) | 5,200 | 62,192 | |
Yahoo!, Inc. (a) | 400,857 | 11,260,073 | |
Yandex NV (a) | 82,276 | 2,673,970 | |
Youku Tudou, Inc. ADR (a) | 404 | 8,961 | |
| 137,362,299 | ||
IT SERVICES - 9.5% | |||
Data Processing & Outsourced Services - 8.4% | |||
Automatic Data Processing, Inc. | 1,366 | 98,475 | |
EVERTEC, Inc. | 10,100 | 241,390 | |
Fidelity National Information Services, Inc. | 310,100 | 13,383,916 | |
Fiserv, Inc. (a) | 13,912 | 1,338,891 | |
FleetCor Technologies, Inc. (a) | 42,106 | 3,779,856 | |
Global Payments, Inc. | 202 | 9,355 | |
Jack Henry & Associates, Inc. | 20,492 | 989,764 | |
MasterCard, Inc. Class A | 21,270 | 12,987,675 | |
Paychex, Inc. | 54,004 | 2,129,918 | |
QIWI PLC Class B sponsored ADR | 10,200 | 292,740 | |
Syntel, Inc. | 1,100 | 78,958 | |
The Western Union Co. | 74,542 | 1,338,774 | |
Total System Services, Inc. | 168,155 | 4,609,129 | |
VeriFone Systems, Inc. (a) | 44 | 839 | |
Visa, Inc. Class A | 155,848 | 27,586,654 | |
WEX, Inc. (a) | 26,253 | 2,282,436 | |
| 71,148,770 | ||
IT Consulting & Other Services - 1.1% | |||
Accenture PLC Class A | 22,243 | 1,641,756 | |
Bit-isle, Inc. | 1,600 | 14,413 | |
Camelot Information Systems, Inc. ADR (a) | 145 | 255 | |
ChinaSoft International Ltd. (a) | 20,000 | 5,390 | |
Cognizant Technology Solutions Corp. Class A (a) | 44,828 | 3,245,099 | |
EPAM Systems, Inc. (a) | 44,400 | 1,285,380 | |
IBM Corp. | 375 | 73,140 | |
InterXion Holding N.V. (a) | 30,700 | 772,719 | |
Pactera Technology International Ltd. ADR | 94,096 | 630,443 | |
ServiceSource International, Inc. (a) | 82,288 | 878,013 | |
| |||
Shares | Value | ||
Teradata Corp. (a) | 1,536 | $ 90,808 | |
Virtusa Corp. (a) | 16,100 | 415,058 | |
| 9,052,474 | ||
TOTAL IT SERVICES | 80,201,244 | ||
LIFE SCIENCES TOOLS & SERVICES - 0.1% | |||
Life Sciences Tools & Services - 0.1% | |||
Illumina, Inc. (a)(d) | 1,406 | 112,227 | |
WuXi PharmaTech Cayman, Inc. sponsored ADR (a) | 27,300 | 606,060 | |
| 718,287 | ||
MACHINERY - 0.4% | |||
Industrial Machinery - 0.4% | |||
Airtac International Group | 13,910 | 78,836 | |
Fanuc Corp. | 15,400 | 2,337,289 | |
Mirle Automation Corp. | 95,738 | 70,858 | |
Shin Zu Shing Co. Ltd. | 154,000 | 346,558 | |
SMC Corp. | 3,400 | 721,254 | |
| 3,554,795 | ||
MEDIA - 0.1% | |||
Advertising - 0.0% | |||
Dentsu, Inc. | 200 | 6,394 | |
ReachLocal, Inc. (a) | 658 | 8,495 | |
| 14,889 | ||
Cable & Satellite - 0.0% | |||
DIRECTV (a) | 190 | 12,021 | |
Movies & Entertainment - 0.1% | |||
IMAX Corp. (a) | 29,830 | 751,119 | |
TOTAL MEDIA | 778,029 | ||
OFFICE ELECTRONICS - 0.0% | |||
Office Electronics - 0.0% | |||
Xerox Corp. | 8,333 | 80,830 | |
PHARMACEUTICALS - 0.0% | |||
Pharmaceuticals - 0.0% | |||
China Medical System Holdings Ltd. | 95,250 | 85,970 | |
PROFESSIONAL SERVICES - 0.0% | |||
Research & Consulting Services - 0.0% | |||
Acacia Research Corp. | 300 | 6,846 | |
IHS, Inc. Class A (a) | 850 | 93,313 | |
| 100,159 | ||
REAL ESTATE INVESTMENT TRUSTS - 0.2% | |||
Specialized REITs - 0.2% | |||
American Tower Corp. | 23,574 | 1,668,803 | |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 9.3% | |||
Semiconductor Equipment - 2.6% | |||
Advanced Energy Industries, Inc. (a) | 5,757 | 124,697 | |
Aixtron AG (a)(d) | 169,719 | 2,664,864 | |
Common Stocks - continued | |||
Shares | Value | ||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - CONTINUED | |||
Semiconductor Equipment - continued | |||
Amkor Technology, Inc. (a)(d) | 1,594 | $ 6,727 | |
Applied Materials, Inc. | 524 | 8,546 | |
ASM International NV (depositary receipt) | 2,330 | 73,162 | |
ASML Holding NV | 78 | 7,012 | |
Entegris, Inc. (a) | 8,857 | 84,407 | |
FormFactor, Inc. (a) | 50,000 | 363,500 | |
GCL-Poly Energy Holdings Ltd. | 7,410,000 | 1,891,769 | |
GT Advanced Technologies, Inc. (a)(d) | 256,511 | 1,331,292 | |
ICD Co. Ltd. (a) | 5,573 | 73,153 | |
Lam Research Corp. (a) | 8,289 | 407,985 | |
Nanometrics, Inc. (a) | 8,409 | 129,162 | |
Rubicon Technology, Inc. (a)(d) | 303,671 | 2,556,910 | |
Teradyne, Inc. (a) | 4,232 | 69,786 | |
Tessera Technologies, Inc. | 324,314 | 6,508,982 | |
Ultratech, Inc. (a) | 69,227 | 2,022,813 | |
Veeco Instruments, Inc. (a)(d) | 102,272 | 3,554,975 | |
| 21,879,742 | ||
Semiconductors - 6.7% | |||
Advanced Micro Devices, Inc. (a) | 1,157 | 4,362 | |
Alpha & Omega Semiconductor Ltd. (a) | 8,432 | 64,505 | |
Altera Corp. | 326,668 | 11,616,314 | |
Analog Devices, Inc. | 1,758 | 86,775 | |
Applied Micro Circuits Corp. (a) | 106,225 | 1,260,891 | |
ARM Holdings PLC sponsored ADR | 19 | 763 | |
Atmel Corp. (a) | 11,952 | 94,421 | |
Avago Technologies Ltd. | 2,238 | 82,090 | |
Broadcom Corp. Class A | 313,377 | 8,639,804 | |
Canadian Solar, Inc. (a) | 32 | 473 | |
Cavium, Inc. (a) | 69,229 | 2,531,012 | |
Chipbond Technology Corp. | 228,000 | 503,204 | |
ChipMOS TECHNOLOGIES (Bermuda) Ltd. | 10,042 | 150,931 | |
Cirrus Logic, Inc. (a) | 3,406 | 65,668 | |
Cree, Inc. (a) | 43,287 | 3,025,761 | |
Crystalwise Technology, Inc. (a) | 200,000 | 185,698 | |
Cypress Semiconductor Corp. | 172,228 | 2,199,352 | |
Dialog Semiconductor PLC (a) | 3,866 | 63,903 | |
Diodes, Inc. (a) | 370 | 10,142 | |
Epistar Corp. | 35,000 | 58,343 | |
EZchip Semiconductor Ltd. (a)(d) | 31,915 | 1,010,110 | |
Fairchild Semiconductor International, Inc. (a) | 565 | 7,130 | |
Freescale Semiconductor Holdings I Ltd. (a) | 66,458 | 1,043,391 | |
Himax Technologies, Inc. sponsored ADR | 46,500 | 302,715 | |
Hittite Microwave Corp. (a) | 147 | 9,185 | |
Infineon Technologies AG | 1,000 | 8,826 | |
Inotera Memories, Inc. (a) | 8,360,000 | 3,135,523 | |
Inphi Corp. (a) | 126,857 | 1,479,153 | |
Intermolecular, Inc. (a) | 303,054 | 1,915,301 | |
| |||
Shares | Value | ||
International Rectifier Corp. (a) | 3,569 | $ 86,049 | |
Intersil Corp. Class A | 96,094 | 981,120 | |
JA Solar Holdings Co. Ltd. ADR (a)(d) | 8,186 | 76,294 | |
Linear Technology Corp. | 185 | 7,504 | |
LSI Corp. | 11,127 | 86,568 | |
MagnaChip Semiconductor Corp. (a) | 64 | 1,316 | |
Marvell Technology Group Ltd. | 566 | 7,341 | |
MediaTek, Inc. | 1,522 | 18,267 | |
Mellanox Technologies Ltd. (a) | 64,752 | 2,955,929 | |
Micron Technology, Inc. (a) | 631 | 8,361 | |
Microsemi Corp. (a) | 4,100 | 101,106 | |
Mindspeed Technologies, Inc. (a)(d) | 161,476 | 495,731 | |
Monolithic Power Systems, Inc. | 32,001 | 837,786 | |
Novatek Microelectronics Corp. | 383,000 | 1,691,865 | |
NVIDIA Corp. | 6,070 | 87,590 | |
NXP Semiconductors NV (a) | 2,533 | 82,702 | |
O2Micro International Ltd. sponsored ADR (a) | 14,600 | 47,012 | |
Omnivision Technologies, Inc. (a) | 113,282 | 1,841,965 | |
ON Semiconductor Corp. (a) | 9,535 | 78,568 | |
Phison Electronics Corp. | 8,000 | 59,743 | |
PMC-Sierra, Inc. (a) | 212,399 | 1,402,895 | |
Power Integrations, Inc. | 1,654 | 91,218 | |
Radiant Opto-Electronics Corp. | 2,626 | 8,238 | |
Rambus, Inc. (a) | 105 | 1,024 | |
RDA Microelectronics, Inc. sponsored ADR | 15,172 | 170,837 | |
RF Micro Devices, Inc. (a) | 1,611 | 8,361 | |
Samsung Electronics Co. Ltd. | 2 | 2,278 | |
Semtech Corp. (a) | 2,703 | 81,766 | |
Silicon Laboratories, Inc. (a) | 1,700 | 66,402 | |
Silicon Motion Technology Corp. sponsored ADR | 66 | 788 | |
Siliconware Precision Industries Co. Ltd. sponsored ADR | 53,700 | 306,090 | |
SK Hynix, Inc. (a) | 270 | 6,536 | |
Skyworks Solutions, Inc. (a) | 3,767 | 90,483 | |
Spreadtrum Communications, Inc. ADR | 277 | 8,266 | |
STMicroelectronics NV (NY Shares) unit | 1,000 | 8,530 | |
Texas Instruments, Inc. | 2,850 | 111,720 | |
Trina Solar Ltd. (a) | 10,094 | 74,897 | |
Xilinx, Inc. | 116,844 | 5,455,446 | |
YoungTek Electronics Corp. | 34,156 | 75,839 | |
| 57,080,177 | ||
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | 78,959,919 | ||
SOFTWARE - 27.7% | |||
Application Software - 11.6% | |||
Adobe Systems, Inc. (a) | 194,099 | 9,177,001 | |
ANSYS, Inc. (a) | 47,662 | 3,805,334 | |
Aspen Technology, Inc. (a) | 124,921 | 4,064,929 | |
Autodesk, Inc. (a) | 2,307 | 81,645 | |
Common Stocks - continued | |||
Shares | Value | ||
SOFTWARE - CONTINUED | |||
Application Software - continued | |||
Blackbaud, Inc. | 2,435 | $ 85,444 | |
BroadSoft, Inc. (a) | 102,777 | 3,066,866 | |
Citrix Systems, Inc. (a) | 124,785 | 8,987,016 | |
Compuware Corp. | 230,453 | 2,613,337 | |
Comverse, Inc. | 4,710 | 147,517 | |
Concur Technologies, Inc. (a) | 19,698 | 1,750,955 | |
Descartes Systems Group, Inc. (a) | 219,300 | 2,538,679 | |
Ellie Mae, Inc. (a) | 3,074 | 72,393 | |
Guidewire Software, Inc. (a) | 62,200 | 2,721,872 | |
Informatica Corp. (a) | 2,233 | 85,234 | |
Intuit, Inc. | 104,746 | 6,695,364 | |
Jive Software, Inc. (a) | 78,998 | 1,060,153 | |
Kingdee International Software Group Co. Ltd. (a) | 14,498,800 | 3,047,223 | |
Manhattan Associates, Inc. (a) | 97 | 8,569 | |
MicroStrategy, Inc. Class A (a) | 17,560 | 1,668,376 | |
Nuance Communications, Inc. (a) | 4,581 | 85,940 | |
Open Text Corp. | 100 | 7,067 | |
Parametric Technology Corp. (a) | 47,220 | 1,278,718 | |
Pegasystems, Inc. | 23,421 | 840,814 | |
PROS Holdings, Inc. (a) | 8,633 | 283,335 | |
QLIK Technologies, Inc. (a) | 53,287 | 1,668,949 | |
RealPage, Inc. (a) | 4,600 | 92,736 | |
salesforce.com, Inc. (a) | 690,703 | 30,218,256 | |
SAP AG | 125 | 9,159 | |
SAP AG sponsored ADR | 1,100 | 80,179 | |
SolarWinds, Inc. (a) | 15,283 | 542,394 | |
Splunk, Inc. (a) | 200 | 10,002 | |
Synchronoss Technologies, Inc. (a) | 12,887 | 444,473 | |
Synopsys, Inc. (a) | 2,500 | 92,600 | |
TIBCO Software, Inc. (a) | 264,833 | 6,604,935 | |
TiVo, Inc. (a) | 8,000 | 88,400 | |
Ultimate Software Group, Inc. (a) | 20,100 | 2,719,530 | |
Verint Systems, Inc. (a) | 215 | 7,693 | |
Workday, Inc. Class A | 12,692 | 866,737 | |
| 97,619,824 | ||
Home Entertainment Software - 2.2% | |||
Activision Blizzard, Inc. | 360,570 | 6,483,049 | |
Capcom Co. Ltd. | 1,400 | 24,909 | |
Nintendo Co. Ltd. | 41,300 | 5,261,959 | |
Nintendo Co. Ltd. ADR | 34,827 | 550,267 | |
Perfect World Co. Ltd. sponsored ADR Class B | 258,432 | 5,439,994 | |
Take-Two Interactive Software, Inc. (a) | 53,923 | 945,270 | |
| 18,705,448 | ||
Systems Software - 13.9% | |||
Allot Communications Ltd. (a) | 20,200 | 295,526 | |
BMC Software, Inc. (a) | 1,824 | 83,849 | |
Check Point Software Technologies Ltd. (a) | 13 | 732 | |
CommVault Systems, Inc. (a) | 16,715 | 1,411,247 | |
| |||
Shares | Value | ||
Fortinet, Inc. (a) | 442 | $ 9,393 | |
Imperva, Inc. (a) | 11,600 | 587,192 | |
Infoblox, Inc. (a) | 3,000 | 98,100 | |
Insyde Software Corp. | 304,000 | 443,914 | |
Microsoft Corp. | 1,496,275 | 47,626,433 | |
NetSuite, Inc. (a) | 39,404 | 3,699,642 | |
Oracle Corp. | 1,685,450 | 54,524,308 | |
Red Hat, Inc. (a) | 107,751 | 5,578,269 | |
ServiceNow, Inc. (a) | 47,700 | 2,078,766 | |
Symantec Corp. | 584 | 15,581 | |
Tableau Software, Inc. | 1,400 | 77,560 | |
Totvs SA | 72,900 | 1,150,371 | |
VMware, Inc. Class A (a) | 1,046 | 85,971 | |
| 117,766,854 | ||
TOTAL SOFTWARE | 234,092,126 | ||
WIRELESS TELECOMMUNICATION SERVICES - 0.5% | |||
Wireless Telecommunication Services - 0.5% | |||
SBA Communications Corp. Class A (a) | 61,807 | 4,579,281 | |
TOTAL COMMON STOCKS (Cost $763,304,914) |
| ||
Money Market Funds - 4.2% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 18,978,148 | 18,978,148 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 16,714,477 | 16,714,477 | |
TOTAL MONEY MARKET FUNDS (Cost $35,692,625) |
| ||
TOTAL INVESTMENT PORTFOLIO - 101.1% (Cost $798,997,539) | 856,203,967 | ||
NET OTHER ASSETS (LIABILITIES) - (1.1)% | (9,659,138) | ||
NET ASSETS - 100% | $ 846,544,829 |
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) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $57,510 or 0.0% of net assets. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 61,392 |
Fidelity Securities Lending Cash Central Fund | 268,641 |
Total | $ 330,033 |
Other Information |
The following is a summary of the inputs used, as of July 31, 2013, 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 | $ 820,511,342 | $ 809,551,453 | $ 8,764,059 | $ 2,195,830 |
Money Market Funds | 35,692,625 | 35,692,625 | - | - |
Total Investments in Securities: | $ 856,203,967 | $ 845,244,078 | $ 8,764,059 | $ 2,195,830 |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows. (Unaudited) |
United States of America | 85.2% |
Cayman Islands | 3.1% |
Japan | 3.1% |
Taiwan | 2.2% |
Hong Kong | 1.5% |
Others (Individually Less Than 1%) | 4.9% |
| 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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $16,100,221) - See accompanying schedule: Unaffiliated issuers (cost $763,304,914) | $ 820,511,342 |
|
Fidelity Central Funds (cost $35,692,625) | 35,692,625 |
|
Total Investments (cost $798,997,539) |
| $ 856,203,967 |
Receivable for investments sold | 41,084,127 | |
Receivable for fund shares sold | 531,751 | |
Dividends receivable | 573,201 | |
Distributions receivable from Fidelity Central Funds | 16,406 | |
Other receivables | 55,274 | |
Total assets | 898,464,726 | |
|
|
|
Liabilities | ||
Payable to custodian bank | $ 318 | |
Payable for investments purchased | 33,497,081 | |
Payable for fund shares redeemed | 824,199 | |
Accrued management fee | 387,028 | |
Distribution and service plan fees payable | 225,409 | |
Other affiliated payables | 204,593 | |
Other payables and accrued expenses | 66,792 | |
Collateral on securities loaned, at value | 16,714,477 | |
Total liabilities | 51,919,897 | |
|
|
|
Net Assets | $ 846,544,829 | |
Net Assets consist of: |
| |
Paid in capital | $ 807,879,942 | |
Accumulated net investment loss | (1,634,632) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (16,905,898) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 57,205,417 | |
Net Assets | $ 846,544,829 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 29.90 | |
|
|
|
Maximum offering price per share (100/94.25 of $29.90) | $ 31.72 | |
Class T: | $ 28.79 | |
|
|
|
Maximum offering price per share (100/96.50 of $28.79) | $ 29.83 | |
Class B: | $ 26.56 | |
|
|
|
Class C: | $ 26.68 | |
|
|
|
Institutional Class: | $ 31.47 |
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 Technology Fund
Financial Statements - continued
Statement of Operations
| Year ended July 31, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 6,293,285 |
Interest |
| 378,202 |
Income from Fidelity Central Funds |
| 330,033 |
Total income |
| 7,001,520 |
|
|
|
Expenses | ||
Management fee | $ 4,379,157 | |
Transfer agent fees | 2,219,558 | |
Distribution and service plan fees | 2,710,907 | |
Accounting and security lending fees | 278,733 | |
Custodian fees and expenses | 115,866 | |
Independent trustees' compensation | 5,595 | |
Registration fees | 76,946 | |
Audit | 61,076 | |
Legal | 5,479 | |
Miscellaneous | 6,989 | |
Total expenses before reductions | 9,860,306 | |
Expense reductions | (249,926) | 9,610,380 |
Net investment income (loss) | (2,608,860) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 108,252,317 | |
Foreign currency transactions | (129,819) | |
Total net realized gain (loss) |
| 108,122,498 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 25,688,069 | |
Assets and liabilities in foreign currencies | (2,130) | |
Total change in net unrealized appreciation (depreciation) |
| 25,685,939 |
Net gain (loss) | 133,808,437 | |
Net increase (decrease) in net assets resulting from operations | $ 131,199,577 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ (2,608,860) | $ (4,886,076) |
Net realized gain (loss) | 108,122,498 | 13,565,652 |
Change in net unrealized appreciation (depreciation) | 25,685,939 | (12,835,203) |
Net increase (decrease) in net assets resulting from operations | 131,199,577 | (4,155,627) |
Share transactions - net increase (decrease) | 5,042,118 | (54,812,282) |
Redemption fees | 41,110 | 30,293 |
Total increase (decrease) in net assets | 136,282,805 | (58,937,616) |
|
|
|
Net Assets | ||
Beginning of period | 710,262,024 | 769,199,640 |
End of period (including accumulated net investment loss of $1,634,632 and accumulated net investment loss of $2,745,337, respectively) | $ 846,544,829 | $ 710,262,024 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 25.25 | $ 25.14 | $ 19.83 | $ 16.03 | $ 17.04 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.07) | (.13) | (.18) | (.16) | .02 F |
Net realized and unrealized gain (loss) | 4.72 | .24 | 5.49 | 3.96 | (1.03) |
Total from investment operations | 4.65 | .11 | 5.31 | 3.80 | (1.01) |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 29.90 | $ 25.25 | $ 25.14 | $ 19.83 | $ 16.03 |
Total Return A, B | 18.42% | .44% | 26.78% | 23.71% | (5.93)% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 1.18% | 1.18% | 1.18% | 1.21% | 1.23% |
Expenses net of fee waivers, if any | 1.18% | 1.18% | 1.18% | 1.21% | 1.23% |
Expenses net of all reductions | 1.14% | 1.17% | 1.16% | 1.18% | 1.22% |
Net investment income (loss) | (.25)% | (.55)% | (.73)% | (.83)% | .17% F |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 355,306 | $ 336,693 | $ 375,609 | $ 312,659 | $ 258,433 |
Portfolio turnover rate E | 142% | 201% | 167% | 115% | 225% |
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 $.04 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.18)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 24.38 | $ 24.33 | $ 19.24 | $ 15.59 | $ 16.62 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.13) | (.19) | (.23) | (.20) | (.01) F |
Net realized and unrealized gain (loss) | 4.54 | .24 | 5.32 | 3.85 | (1.02) |
Total from investment operations | 4.41 | .05 | 5.09 | 3.65 | (1.03) |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 28.79 | $ 24.38 | $ 24.33 | $ 19.24 | $ 15.59 |
Total Return A, B | 18.09% | .21% | 26.46% | 23.41% | (6.20)% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 1.42% | 1.43% | 1.43% | 1.46% | 1.49% |
Expenses net of fee waivers, if any | 1.42% | 1.43% | 1.43% | 1.46% | 1.49% |
Expenses net of all reductions | 1.39% | 1.42% | 1.40% | 1.44% | 1.48% |
Net investment income (loss) | (.50)% | (.80)% | (.98)% | (1.09)% | (.09)% F |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 173,692 | $ 172,709 | $ 196,913 | $ 169,049 | $ 151,170 |
Portfolio turnover rate E | 142% | 201% | 167% | 115% | 225% |
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 $.04 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.44)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 22.60 | $ 22.67 | $ 18.01 | $ 14.67 | $ 15.72 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.24) | (.28) | (.33) | (.27) | (.07) F |
Net realized and unrealized gain (loss) | 4.20 | .21 | 4.99 | 3.61 | (.98) |
Total from investment operations | 3.96 | (.07) | 4.66 | 3.34 | (1.05) |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 26.56 | $ 22.60 | $ 22.67 | $ 18.01 | $ 14.67 |
Total Return A, B | 17.52% | (.31)% | 25.87% | 22.77% | (6.68)% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 1.93% | 1.93% | 1.93% | 1.96% | 1.98% |
Expenses net of fee waivers, if any | 1.93% | 1.93% | 1.93% | 1.96% | 1.98% |
Expenses net of all reductions | 1.89% | 1.92% | 1.91% | 1.94% | 1.97% |
Net investment income (loss) | (1.01)% | (1.30)% | (1.49)% | (1.59)% | (.58)% F |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 13,745 | $ 17,476 | $ 25,508 | $ 29,176 | $ 30,580 |
Portfolio turnover rate E | 142% | 201% | 167% | 115% | 225% |
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 $.04 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.93)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 22.70 | $ 22.77 | $ 18.09 | $ 14.74 | $ 15.79 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | (.24) | (.29) | (.33) | (.28) | (.07) F |
Net realized and unrealized gain (loss) | 4.22 | .22 | 5.01 | 3.63 | (.98) |
Total from investment operations | 3.98 | (.07) | 4.68 | 3.35 | (1.05) |
Redemption fees added to paid in capital C, H | - | - | - | - | - |
Net asset value, end of period | $ 26.68 | $ 22.70 | $ 22.77 | $ 18.09 | $ 14.74 |
Total Return A, B | 17.53% | (.31)% | 25.87% | 22.73% | (6.65)% |
Ratios to Average Net Assets D, G |
|
|
|
|
|
Expenses before reductions | 1.91% | 1.93% | 1.92% | 1.96% | 1.98% |
Expenses net of fee waivers, if any | 1.91% | 1.93% | 1.92% | 1.96% | 1.98% |
Expenses net of all reductions | 1.88% | 1.91% | 1.90% | 1.93% | 1.97% |
Net investment income (loss) | (.99)% | (1.29)% | (1.48)% | (1.58)% | (.58)% F |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 84,858 | $ 88,074 | $ 89,819 | $ 70,017 | $ 55,645 |
Portfolio turnover rate E | 142% | 201% | 167% | 115% | 225% |
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 $.04 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.93)%.
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 26.50 | $ 26.30 | $ 20.68 | $ 16.67 | $ 17.68 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .02 | (.06) | (.11) | (.11) | .06 E |
Net realized and unrealized gain (loss) | 4.95 | .26 | 5.73 | 4.12 | (1.07) |
Total from investment operations | 4.97 | .20 | 5.62 | 4.01 | (1.01) |
Redemption fees added to paid in capital B, G | - | - | - | - | - |
Net asset value, end of period | $ 31.47 | $ 26.50 | $ 26.30 | $ 20.68 | $ 16.67 |
Total Return A | 18.75% | .76% | 27.18% | 24.06% | (5.71)% |
Ratios to Average Net Assets C, F |
|
|
|
|
|
Expenses before reductions | .86% | .86% | .87% | .92% | .98% |
Expenses net of fee waivers, if any | .86% | .86% | .87% | .92% | .98% |
Expenses net of all reductions | .83% | .85% | .85% | .90% | .97% |
Net investment income (loss) | .06% | (.23)% | (.43)% | (.55)% | .42% E |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 218,944 | $ 95,310 | $ 81,350 | $ 42,277 | $ 26,285 |
Portfolio turnover rate D | 142% | 201% | 167% | 115% | 225% |
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 $.04 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .07%.
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, 2013
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.
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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.
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, 2013, 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. 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 and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, market discounts, deferred trustees compensation, 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 | $ 94,978,316 |
Gross unrealized depreciation | (41,304,263) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 53,674,053 |
|
|
Tax Cost | $ 802,529,914 |
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 | $ (13,373,523) |
Net unrealized appreciation (depreciation) | $ 53,673,042 |
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 | $ (13,373,523) |
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 net asset value 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 $1,100,570,826 and $1,063,843,921, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .56% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 848,707 | $ 33,831 |
Class T | .25% | .25% | 851,550 | 20,642 |
Class B | .75% | .25% | 154,203 | 116,994 |
Class C | .75% | .25% | 856,447 | 101,027 |
|
|
| $ 2,710,907 | $ 272,494 |
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 | $ 57,057 |
Class T | 15,893 |
Class B* | 22,798 |
Class C* | 4,089 |
| $ 99,837 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 1,016,946 | .30 |
Class T | 501,293 | .29 |
Class B | 46,281 | .30 |
Class C | 241,397 | .28 |
Institutional Class | 413,641 | .23 |
| $ 2,219,558 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $31,496 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $1,838 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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. At period end, there were no security loans outstanding with FCM. 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 $268,641, including $35,374 from securities loaned to FCM.
Annual Report
Notes to Financial Statements - continued
8. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $249,774 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 $152.
9. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 2,023,713 | 2,592,933 | $ 54,950,216 | $ 63,934,256 |
Shares redeemed | (3,472,615) | (4,198,134) | (93,501,470) | (101,495,361) |
Net increase (decrease) | (1,448,902) | (1,605,201) | $ (38,551,254) | $ (37,561,105) |
Class T |
|
|
|
|
Shares sold | 649,951 | 978,762 | $ 16,942,760 | $ 23,400,718 |
Shares redeemed | (1,701,808) | (1,986,110) | (44,280,679) | (46,751,109) |
Net increase (decrease) | (1,051,857) | (1,007,348) | $ (27,337,919) | $ (23,350,391) |
Class B |
|
|
|
|
Shares sold | 13,056 | 50,311 | $ 310,857 | $ 1,085,625 |
Shares redeemed | (268,749) | (402,080) | (6,477,118) | (8,778,422) |
Net increase (decrease) | (255,693) | (351,769) | $ (6,166,261) | $ (7,692,797) |
Class C |
|
|
|
|
Shares sold | 460,587 | 840,429 | $ 11,287,228 | $ 19,233,850 |
Shares redeemed | (1,159,733) | (904,947) | (27,841,417) | (19,636,815) |
Net increase (decrease) | (699,146) | (64,518) | $ (16,554,189) | $ (402,965) |
Institutional Class |
|
|
|
|
Shares sold | 6,347,952 | 2,443,052 | $ 179,251,253 | $ 63,798,153 |
Shares redeemed | (2,987,970) | (1,939,243) | (85,599,512) | (49,603,177) |
Net increase (decrease) | 3,359,982 | 503,809 | $ 93,651,741 | $ 14,194,976 |
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 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, 2013 |
| Past 1 | Past 5 | Past 10 |
Institutional Class A |
| 13.40% | 5.48% | 10.80% |
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, 2003. 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: The bull run in U.S. stocks comfortably settled into a fifth year, as major equity benchmarks ripped through records during the 12 months ending July 31, 2013. Gains were fueled by a generally improving global economy and accommodative monetary policies worldwide. The tone was positive for most of the year, based largely on stronger U.S. economic data, including employment, housing and consumer sentiment. Setting a series of new highs along the way, the broad-based S&P 500® Index rose an impressive 25.00% for the 12 months, while the blue-chip-laden Dow Jones Industrial AverageSM also moved into record territory en route to a 22.36% gain. The growth-oriented Nasdaq Composite Index® had a similarly strong run, advancing 25.15%. During the year, markets were resilient amid intermittent volatility over debt woes in Europe, the 2012 U.S. presidential election and year-end Congressional gridlock over the federal budget. In mid-to-late June, concern arose about the U.S. Federal Reserve possibly tapering its sustaining bond-buying strategy - which prompted a brief, but steep, market sell-off. However, investors' continued quest for yield and the Fed's pledge to keep buying bonds until the economy showed significant improvement overpowered the uncertainty and helped equities climb notably higher in July to close the period on a strong note.
Comments from Douglas Simmons, Portfolio Manager of Fidelity Advisor® Utilities Fund: For the year, the fund's Institutional Class shares returned 13.40%, outperforming the 10.82% gain of the MSCI® U.S. IMI Utilities 20-50 Index, but underperforming the S&P 500®. Utilities underperformed the broad market partly due to concerns about higher tax rates on dividends. I favor stocks offering above-average dividend growth with significant investment opportunities that can earn timely and above-average returns on their investments. The two areas I've focused on are utilities with large pipeline operations focused on transporting natural gas, and utilities constructing electric transmission infrastructure. Top individual contributors versus the index included San Diego-based multi-utility Sempra Energy; an out-of-benchmark stake in Houston-based oil/gas storage/transport firm Cheniere Energy; and an underweighting in electric utility and underperforming index component Exelon, which has headquarters in Chicago, and which I sold from the fund before period end. On the down side, my positioning in gas utilities detracted, including untimely ownership of Oklahoma-based ONEOK. An overweighting in Ohio electric utility FirstEnergy also hurt the fund's relative performance.
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, 2013 to July 31, 2013).
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 | 1.17% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,090.10 | $ 6.06 |
HypotheticalA |
| $ 1,000.00 | $ 1,018.99 | $ 5.86 |
Class T | 1.45% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,089.00 | $ 7.51 |
HypotheticalA |
| $ 1,000.00 | $ 1,017.60 | $ 7.25 |
Class B | 1.94% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,086.00 | $ 10.03 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.17 | $ 9.69 |
Class C | 1.90% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,086.30 | $ 9.83 |
HypotheticalA |
| $ 1,000.00 | $ 1,015.37 | $ 9.49 |
Institutional Class | .86% |
|
|
|
Actual |
| $ 1,000.00 | $ 1,091.90 | $ 4.46 |
HypotheticalA |
| $ 1,000.00 | $ 1,020.53 | $ 4.31 |
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, 2013 | ||
| % of fund's | % of fund's net assets |
Duke Energy Corp. | 10.7 | 13.7 |
Sempra Energy | 7.8 | 8.8 |
NextEra Energy, Inc. | 6.9 | 3.5 |
CenterPoint Energy, Inc. | 5.6 | 4.3 |
OGE Energy Corp. | 5.6 | 1.5 |
NRG Energy, Inc. | 5.4 | 4.4 |
Edison International | 5.0 | 6.5 |
Ameren Corp. | 4.5 | 1.4 |
PG&E Corp. | 4.3 | 3.8 |
NiSource, Inc. | 4.2 | 4.5 |
| 60.0 |
Top Industries (% of fund's net assets) | |||
As of July 31, 2013 | |||
![]() | Electric Utilities | 38.6% |
|
![]() | Multi-Utilities | 26.4% |
|
![]() | Oil, Gas & Consumable Fuels | 15.2% |
|
![]() | Independent Power Producers & Energy Traders | 13.6% |
|
![]() | Gas Utilities | 4.7% |
|
![]() | All Others* | 1.5% |
|
As of January 31, 2013 | |||
![]() | Electric Utilities | 42.5% |
|
![]() | Multi-Utilities | 24.9% |
|
![]() | Independent Power Producers & Energy Traders | 13.2% |
|
![]() | Oil, Gas & Consumable Fuels | 8.1% |
|
![]() | Gas Utilities | 4.7% |
|
![]() | All Others* | 6.6% |
|
* Includes short-term investments and net other assets (liabilities). |
Annual Report
Fidelity Advisor Utilities Fund
Investments July 31, 2013
Showing Percentage of Net Assets
Common Stocks - 98.5% | |||
Shares | Value | ||
ELECTRIC UTILITIES - 38.6% | |||
Electric Utilities - 38.6% | |||
Companhia Energetica de Minas Gerais (CEMIG) (PN) sponsored ADR (non-vtg.) (d) | 23,911 | $ 221,416 | |
Duke Energy Corp. | 315,691 | 22,414,061 | |
EDF SA | 22,400 | 657,235 | |
Edison International | 209,623 | 10,449,707 | |
Entergy Corp. | 85,200 | 5,751,000 | |
FirstEnergy Corp. | 81,282 | 3,094,406 | |
ITC Holdings Corp. | 35,580 | 3,265,177 | |
NextEra Energy, Inc. | 166,640 | 14,432,690 | |
OGE Energy Corp. | 311,670 | 11,656,458 | |
PPL Corp. | 268,057 | 8,516,171 | |
| 80,458,321 | ||
GAS UTILITIES - 4.7% | |||
Gas Utilities - 4.7% | |||
National Fuel Gas Co. | 27,570 | 1,787,363 | |
ONEOK, Inc. | 68,903 | 3,648,414 | |
Questar Corp. | 182,733 | 4,360,009 | |
| 9,795,786 | ||
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 13.6% | |||
Independent Power Producers & Energy Traders - 13.6% | |||
Calpine Corp. (a) | 390,717 | 7,818,247 | |
Drax Group PLC | 114,700 | 1,119,337 | |
NRG Energy, Inc. | 418,615 | 11,227,254 | |
The AES Corp. | 657,567 | 8,180,133 | |
| 28,344,971 | ||
MULTI-UTILITIES - 26.4% | |||
Multi-Utilities - 26.4% | |||
Ameren Corp. | 263,600 | 9,439,516 | |
CenterPoint Energy, Inc. | 473,019 | 11,740,332 | |
NiSource, Inc. | 286,863 | 8,812,431 | |
PG&E Corp. | 192,418 | 8,830,062 | |
Sempra Energy | 185,437 | 16,249,844 | |
| 55,072,185 | ||
OIL, GAS & CONSUMABLE FUELS - 15.2% | |||
Oil & Gas Exploration & Production - 3.4% | |||
Energen Corp. | 118,543 | 7,099,540 | |
| |||
Shares | Value | ||
Oil & Gas Storage & Transport - 11.8% | |||
Cheniere Energy, Inc. (a) | 110,689 | $ 3,162,385 | |
Enbridge, Inc. | 143,800 | 6,380,066 | |
Spectra Energy Corp. | 110,176 | 3,965,234 | |
The Williams Companies, Inc. | 167,866 | 5,735,981 | |
TransCanada Corp. (d) | 115,000 | 5,254,552 | |
| 24,498,218 | ||
TOTAL OIL, GAS & CONSUMABLE FUELS | 31,597,758 | ||
TOTAL COMMON STOCKS (Cost $187,529,940) |
| ||
Money Market Funds - 2.5% | |||
|
|
|
|
Fidelity Cash Central Fund, 0.11% (b) | 398,653 | 398,653 | |
Fidelity Securities Lending Cash Central Fund, 0.12% (b)(c) | 4,902,575 | 4,902,575 | |
TOTAL MONEY MARKET FUNDS (Cost $5,301,228) |
| ||
TOTAL INVESTMENT PORTFOLIO - 101.0% (Cost $192,831,168) | 210,570,249 | ||
NET OTHER ASSETS (LIABILITIES) - (1.0)% | (2,172,045) | ||
NET ASSETS - 100% | $ 208,398,204 |
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 | $ 4,287 |
Fidelity Securities Lending Cash Central Fund | 5,947 |
Total | $ 10,234 |
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, 2013 | |
|
|
|
Assets | ||
Investment in securities, at value (including securities loaned of $4,643,762) - See accompanying schedule: Unaffiliated issuers (cost $187,529,940) | $ 205,269,021 |
|
Fidelity Central Funds (cost $5,301,228) | 5,301,228 |
|
Total Investments (cost $192,831,168) |
| $ 210,570,249 |
Receivable for investments sold | 8,744,107 | |
Receivable for fund shares sold | 220,982 | |
Dividends receivable | 192,031 | |
Distributions receivable from Fidelity Central Funds | 1,590 | |
Other receivables | 10,611 | |
Total assets | 219,739,570 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 5,740,666 | |
Payable for fund shares redeemed | 439,230 | |
Accrued management fee | 95,216 | |
Distribution and service plan fees payable | 72,499 | |
Other affiliated payables | 54,482 | |
Other payables and accrued expenses | 36,698 | |
Collateral on securities loaned, at value | 4,902,575 | |
Total liabilities | 11,341,366 | |
|
|
|
Net Assets | $ 208,398,204 | |
Net Assets consist of: |
| |
Paid in capital | $ 202,325,056 | |
Undistributed net investment income | 2,085,978 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (13,752,902) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 17,740,072 | |
Net Assets | $ 208,398,204 |
Statement of Assets and Liabilities - continued
| July 31, 2013 | |
|
|
|
Calculation of Maximum Offering Price Class A: | $ 23.48 | |
|
|
|
Maximum offering price per share (100/94.25 of $23.48) | $ 24.91 | |
Class T: | $ 23.50 | |
|
|
|
Maximum offering price per share (100/96.50 of $23.50) | $ 24.35 | |
Class B: | $ 23.24 | |
|
|
|
Class C: | $ 23.03 | |
|
|
|
Institutional Class: | $ 23.87 |
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, 2013 | |
|
|
|
Investment Income |
|
|
Dividends |
| $ 6,712,298 |
Income from Fidelity Central Funds |
| 10,234 |
Total income |
| 6,722,532 |
|
|
|
Expenses | ||
Management fee | $ 1,124,419 | |
Transfer agent fees | 578,038 | |
Distribution and service plan fees | 820,392 | |
Accounting and security lending fees | 78,978 | |
Custodian fees and expenses | 7,783 | |
Independent trustees' compensation | 1,457 | |
Registration fees | 66,778 | |
Audit | 45,568 | |
Legal | 778 | |
Interest | 238 | |
Miscellaneous | 1,666 | |
Total expenses before reductions | 2,726,095 | |
Expense reductions | (72,106) | 2,653,989 |
Net investment income (loss) | 4,068,543 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 17,530,623 | |
Foreign currency transactions | (12,799) | |
Total net realized gain (loss) |
| 17,517,824 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 2,064,734 | |
Assets and liabilities in foreign currencies | 991 | |
Total change in net unrealized appreciation (depreciation) |
| 2,065,725 |
Net gain (loss) | 19,583,549 | |
Net increase (decrease) in net assets resulting from operations | $ 23,652,092 |
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) | $ 4,068,543 | $ 3,499,951 |
Net realized gain (loss) | 17,517,824 | 12,574,840 |
Change in net unrealized appreciation (depreciation) | 2,065,725 | 5,997,904 |
Net increase (decrease) in net assets resulting from operations | 23,652,092 | 22,072,695 |
Distributions to shareholders from net investment income | (3,653,862) | (3,107,112) |
Share transactions - net increase (decrease) | (6,877,753) | 16,682,706 |
Redemption fees | 5,578 | 8,157 |
Total increase (decrease) in net assets | 13,126,055 | 35,656,446 |
|
|
|
Net Assets | ||
Beginning of period | 195,272,149 | 159,615,703 |
End of period (including undistributed net investment income of $2,085,978 and undistributed net investment income of $1,693,797, respectively) | $ 208,398,204 | $ 195,272,149 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights - Class A
Years ended July 31, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 21.20 | $ 19.09 | $ 16.59 | $ 15.27 | $ 20.28 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .47 | .43 | .39 | .40 | .35 |
Net realized and unrealized gain (loss) | 2.24 | 2.07 | 2.50 | 1.32 | (5.10) |
Total from investment operations | 2.71 | 2.50 | 2.89 | 1.72 | (4.75) |
Distributions from net investment income | (.43) | (.39) | (.39) | (.40) | (.26) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 23.48 | $ 21.20 | $ 19.09 | $ 16.59 | $ 15.27 |
Total Return A, B | 13.09% | 13.40% | 17.71% | 11.42% | (23.44)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.20% | 1.23% | 1.24% | 1.26% | 1.26% |
Expenses net of fee waivers, if any | 1.20% | 1.23% | 1.24% | 1.26% | 1.26% |
Expenses net of all reductions | 1.16% | 1.22% | 1.20% | 1.22% | 1.26% |
Net investment income (loss) | 2.16% | 2.24% | 2.18% | 2.49% | 2.37% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 106,851 | $ 99,813 | $ 78,312 | $ 64,890 | $ 66,064 |
Portfolio turnover rate E | 154% | 195% | 201% | 216% | 247% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 21.21 | $ 19.09 | $ 16.59 | $ 15.27 | $ 20.26 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .41 | .38 | .35 | .35 | .31 |
Net realized and unrealized gain (loss) | 2.25 | 2.07 | 2.50 | 1.33 | (5.10) |
Total from investment operations | 2.66 | 2.45 | 2.85 | 1.68 | (4.79) |
Distributions from net investment income | (.37) | (.33) | (.35) | (.36) | (.20) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 23.50 | $ 21.21 | $ 19.09 | $ 16.59 | $ 15.27 |
Total Return A, B | 12.81% | 13.13% | 17.39% | 11.13% | (23.61)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.47% | 1.49% | 1.50% | 1.52% | 1.52% |
Expenses net of fee waivers, if any | 1.47% | 1.49% | 1.50% | 1.52% | 1.52% |
Expenses net of all reductions | 1.43% | 1.48% | 1.46% | 1.49% | 1.52% |
Net investment income (loss) | 1.89% | 1.98% | 1.92% | 2.23% | 2.11% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 41,239 | $ 38,276 | $ 35,701 | $ 33,651 | $ 33,989 |
Portfolio turnover rate E | 154% | 195% | 201% | 216% | 247% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 20.96 | $ 18.86 | $ 16.38 | $ 15.08 | $ 20.01 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .30 | .28 | .25 | .27 | .24 |
Net realized and unrealized gain (loss) | 2.23 | 2.05 | 2.49 | 1.31 | (5.04) |
Total from investment operations | 2.53 | 2.33 | 2.74 | 1.58 | (4.80) |
Distributions from net investment income | (.25) | (.23) | (.26) | (.28) | (.13) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 23.24 | $ 20.96 | $ 18.86 | $ 16.38 | $ 15.08 |
Total Return A, B | 12.24% | 12.54% | 16.87% | 10.56% | (23.97)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.96% | 1.98% | 1.99% | 2.01% | 2.01% |
Expenses net of fee waivers, if any | 1.96% | 1.98% | 1.99% | 2.01% | 2.01% |
Expenses net of all reductions | 1.92% | 1.97% | 1.95% | 1.98% | 2.01% |
Net investment income (loss) | 1.40% | 1.49% | 1.43% | 1.74% | 1.62% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 5,289 | $ 6,677 | $ 7,773 | $ 8,794 | $ 10,634 |
Portfolio turnover rate E | 154% | 195% | 201% | 216% | 247% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 20.80 | $ 18.75 | $ 16.30 | $ 15.02 | $ 19.93 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C | .31 | .29 | .26 | .27 | .24 |
Net realized and unrealized gain (loss) | 2.20 | 2.03 | 2.46 | 1.30 | (5.02) |
Total from investment operations | 2.51 | 2.32 | 2.72 | 1.57 | (4.78) |
Distributions from net investment income | (.28) | (.27) | (.27) | (.29) | (.13) |
Redemption fees added to paid in capital C, G | - | - | - | - | - |
Net asset value, end of period | $ 23.03 | $ 20.80 | $ 18.75 | $ 16.30 | $ 15.02 |
Total Return A, B | 12.27% | 12.56% | 16.85% | 10.54% | (23.96)% |
Ratios to Average Net Assets D, F |
|
|
|
|
|
Expenses before reductions | 1.93% | 1.95% | 1.98% | 2.01% | 2.01% |
Expenses net of fee waivers, if any | 1.93% | 1.95% | 1.98% | 2.01% | 2.01% |
Expenses net of all reductions | 1.89% | 1.95% | 1.94% | 1.97% | 2.01% |
Net investment income (loss) | 1.43% | 1.51% | 1.43% | 1.74% | 1.62% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 35,457 | $ 29,942 | $ 26,915 | $ 21,415 | $ 22,352 |
Portfolio turnover rate E | 154% | 195% | 201% | 216% | 247% |
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, | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 21.56 | $ 19.40 | $ 16.85 | $ 15.51 | $ 20.52 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B | .55 | .50 | .45 | .44 | .39 |
Net realized and unrealized gain (loss) | 2.26 | 2.10 | 2.54 | 1.35 | (5.17) |
Total from investment operations | 2.81 | 2.60 | 2.99 | 1.79 | (4.78) |
Distributions from net investment income | (.50) | (.44) | (.44) | (.45) | (.23) |
Redemption fees added to paid in capital B, F | - | - | - | - | - |
Net asset value, end of period | $ 23.87 | $ 21.56 | $ 19.40 | $ 16.85 | $ 15.51 |
Total Return A | 13.40% | 13.79% | 18.05% | 11.66% | (23.24)% |
Ratios to Average Net Assets C, E |
|
|
|
|
|
Expenses before reductions | .89% | .92% | .98% | 1.00% | 1.00% |
Expenses net of fee waivers, if any | .89% | .92% | .98% | 1.00% | 1.00% |
Expenses net of all reductions | .85% | .91% | .94% | .97% | 1.00% |
Net investment income (loss) | 2.46% | 2.55% | 2.44% | 2.75% | 2.63% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 19,562 | $ 20,564 | $ 10,914 | $ 6,511 | $ 4,373 |
Portfolio turnover rate D | 154% | 195% | 201% | 216% | 247% |
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, 2013
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 Fidelity Management & Research Company (FMR) 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 FMR.
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 FMR 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.
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. 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 and distributions from the Fidelity Central Funds are accrued as earned. 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 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. 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 income taxes is required. As of July 31, 2013, 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. A 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. Temporary book-tax differences 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 | $ 19,254,170 |
Gross unrealized depreciation | (1,722,646) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 17,531,524 |
|
|
Tax Cost | $ 193,038,725 |
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 2,085,982 |
Capital loss carryforward | $ (13,545,345) |
Net unrealized appreciation (depreciation) | $ 17,532,515 |
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
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 |
|
2018 | $ (13,545,345) |
Total capital loss carryforward | $ (13,545,345) |
The tax character of distributions paid was as follows:
| July 31, 2013 | July 31, 2012 |
Ordinary Income | $ 3,653,862 | $ 3,107,112 |
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 net asset value 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 $307,684,612 and $311,753,007, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .55% of the Fund's average net assets.
Effective August 1, 2013, Fidelity SelectCo, LLC (SelectCo), an affiliate of FMR, will replace FMR as investment adviser to the Fund pursuant to a management contract between the Fund and SelectCo. The new contract will not impact the Fund's investment process, strategies or management fees.
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 FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution | Service | Total Fees | Retained |
Class A | -% | .25% | $ 254,923 | $ 11,679 |
Class T | .25% | .25% | 193,134 | 4,958 |
Class B | .75% | .25% | 57,706 | 45,047 |
Class C | .75% | .25% | 314,629 | 59,965 |
|
|
| $ 820,392 | $ 121,649 |
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 | $ 65,568 |
Class T | 8,376 |
Class B* | 7,419 |
Class C* | 2,444 |
| $ 83,807 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:
| Amount | % of |
Class A | $ 297,076 | .29 |
Class T | 120,247 | .31 |
Class B | 17,416 | .30 |
Class C | 85,688 | .27 |
Institutional Class | 57,611 | .23 |
| $ 578,038 |
|
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for 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 $4,537 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Loan | Weighted Average | Interest |
Borrower | $ 5,621,600 | .30% | $ 238 |
6. Committed Line of Credit.
The Fund participates with other funds managed by FMR 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 $471 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.
7. Security Lending.
The Fund lends portfolio securities 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, including 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
Annual Report
Notes to Financial Statements - continued
7. Security Lending - continued
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 $5,947. During the period, there were no securities loaned to FCM.
8. Expense Reductions.
Commissions paid to certain brokers with whom FMR places trades on behalf of the Fund include an amount in addition to trade execution, which is rebated back to the Fund to offset certain expenses. This amount totaled $72,102 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 $4.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Years ended July 31, | 2013 | 2012 |
From net investment income |
|
|
Class A | $ 2,004,234 | $ 1,654,303 |
Class T | 666,068 | 639,462 |
Class B | 71,622 | 91,242 |
Class C | 400,020 | 419,210 |
Institutional Class | 511,918 | 302,895 |
Total | $ 3,653,862 | $ 3,107,112 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars | ||
Years ended July 31, | 2013 | 2012 | 2013 | 2012 |
Class A |
|
|
|
|
Shares sold | 1,274,291 | 1,455,060 | $ 28,192,446 | $ 28,046,781 |
Reinvestment of distributions | 85,327 | 77,893 | 1,751,329 | 1,433,959 |
Shares redeemed | (1,517,309) | (926,992) | (33,069,256) | (17,830,196) |
Net increase (decrease) | (157,691) | 605,961 | $ (3,125,481) | $ 11,650,544 |
Class T |
|
|
|
|
Shares sold | 287,114 | 428,140 | $ 6,306,381 | $ 8,180,543 |
Reinvestment of distributions | 30,843 | 32,850 | 634,437 | 606,115 |
Shares redeemed | (367,378) | (526,129) | (7,924,238) | (10,126,088) |
Net increase (decrease) | (49,421) | (65,139) | $ (983,420) | $ (1,339,430) |
Class B |
|
|
|
|
Shares sold | 17,365 | 59,712 | $ 386,769 | $ 1,111,703 |
Reinvestment of distributions | 3,129 | 4,324 | 63,812 | 79,307 |
Shares redeemed | (111,479) | (157,671) | (2,387,277) | (2,989,895) |
Net increase (decrease) | (90,985) | (93,635) | $ (1,936,696) | $ (1,798,885) |
Class C |
|
|
|
|
Shares sold | 509,725 | 518,655 | $ 11,190,388 | $ 9,682,101 |
Reinvestment of distributions | 15,458 | 18,237 | 312,553 | 332,155 |
Shares redeemed | (425,145) | (533,137) | (9,149,304) | (10,002,257) |
Net increase (decrease) | 100,038 | 3,755 | $ 2,353,637 | $ 11,999 |
Institutional Class |
|
|
|
|
Shares sold | 936,449 | 988,603 | $ 20,838,974 | $ 19,698,436 |
Reinvestment of distributions | 22,869 | 14,596 | 476,446 | 273,126 |
Shares redeemed | (1,093,899) | (611,715) | (24,501,213) | (11,813,084) |
Net increase (decrease) | (134,581) | 391,484 | $ (3,185,793) | $ 8,158,478 |
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
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, 2013, 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, 2013, 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, 2013, 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, 2013
Annual Report
Trustees and Officers
The Trustees and executive 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. Ned C. Lautenbach, Ronald P. O'Hanley, and William S. Stavropoulos each oversees 230 Fidelity funds. David A. Rosow, Garnett A. Smith, and Michael E. Wiley each oversees 64 Fidelity 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 executive 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. Ronald P. O'Hanley 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+ | |
Ronald P. O'Hanley (1957) | |
| Year of Election or Appointment: 2013 Mr. O'Hanley is Trustee and Chairman of the Board of Trustees of certain funds. Mr. O'Hanley also serves as a Trustee of other Fidelity funds (2011-present), and is Director of FMR Co., Inc. (2010-present), Director of Fidelity Investments Money Management, Inc. (2010-present), Director of Fidelity Research & Analysis Company (2010-present), President of Fidelity Asset Management and Corporate Services and a Member of Fidelity's Executive Committee (2010-present). Previously, Mr. O'Hanley served as President and Chief Executive Officer of BNY Mellon Asset Management (2007-2010). Mr. O'Hanley also served as Vice Chairman of Bank New York Mellon Corp. and a member of that firm's Executive Committee. Prior to the 2007 merger of The Bank of New York and Mellon Financial Corporation, he was Vice Chairman of Mellon Financial Corporation and President and Chief Executive Officer of Mellon Asset Management. He joined Mellon in February 1997. Mr. O'Hanley currently serves as Chairman of the Boston Public Library Foundation Board of Directors and sits on the Board of Directors of Beth Israel Deaconess Medical Center, the Board of Trustees of the Marine Biological Laboratory and the Advisory Board of the Maxwell School of Citizenship and Public Administration at Syracuse University. Mr. O'Hanley also chairs the Council on Asset Management for the Financial Services Roundtable and is a member of the Board of Directors of Institutional Investor's U.S. Institute. |
* 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+ | |
Ned C. Lautenbach (1944) | |
| Year of Election or Appointment: 2013 Mr. Lautenbach serves as Chairman of the Independent Trustees of other Fidelity funds (2006-present). Mr. Lautenbach currently serves as the Lead Director of the Eaton Corporation Board of Directors (diversified industrial, 1997-present). Mr. Lautenbach is Chairman of the Board of Directors of the Philharmonic Center for the Arts in Naples, Florida (2012-present) and a member of the Council on Foreign Relations (1994-present). Previously, Mr. Lautenbach was a Partner/Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007). |
David A. Rosow (1942) | |
| Year of Election or Appointment: 2013 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 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 is a board member of the Jackson Hole Land Trust (2009-present). Mr. Smith served as a Member of the Advisory Board of other Fidelity funds (2012-2013). |
William S. Stavropoulos (1939) | |
| Year of Election or Appointment: 2013 Mr. Stavropoulos serves as Vice Chairman of the Independent Trustees of other Fidelity funds (2006-present). Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and Maersk Inc. (industrial conglomerate), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of the Naples Philharmonic Center for the Arts. Previously, Mr. Stavropoulos served as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012). |
Michael E. Wiley (1950) | |
| Year of Election or Appointment: 2013 Mr. Wiley serves as Chairman of the Independent Trustees of Fidelity's Sector Portfolios (2013-present). Mr. Wiley also serves as a Director of Asia Pacific Exploration Consolidated (international oil and gas exploration and production, 2008-present). 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 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 each fund.
Executive Officers:
Correspondence intended for each executive officer may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupation | |
Kenneth B. Robins (1969) | |
| Year of Election or Appointment: 2008 President and Treasurer of Fidelity's Sector Portfolios. Mr. Robins also serves as President and Treasurer (2008-present) and Assistant Treasurer (2009-present) of other Fidelity funds and is an employee of Fidelity Investments (2004-present). Mr. Robins serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (2013-present). Previously, Mr. Robins served as Deputy Treasurer of the Fidelity funds (2005-2008) and Treasurer and Chief Financial Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2006-2008). |
Brian B. Hogan (1964) | |
| Year of Election or Appointment: 2009 Vice President of Fidelity's Sector Portfolios. Mr. Hogan also serves as Vice President of other Fidelity funds (2009-present) and 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. |
Christopher S. Bartel (1971) | |
| Year of Election or Appointment: 2009 Vice President of Fidelity's Sector and Real Estate Equity Funds. Mr. Bartel also 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). |
Scott C. Goebel (1968) | |
| Year of Election or Appointment: 2008 Secretary and Chief Legal Officer (CLO) of the Fidelity funds. Mr. Goebel also serves as Secretary of Fidelity Investments Money Management, Inc. (FIMM) (2010-present) and Fidelity Research and Analysis Company (FRAC) (2010-present); Secretary and CLO of The North Carolina Capital Management Trust: Cash and Term Portfolios (2008-present); General Counsel, Secretary, and Senior Vice President of FMR (2008-present) and FMR Co., Inc. (2008-present); employed by FMR LLC or an affiliate (2001-present); Chief Legal Officer of Fidelity Management & Research (Hong Kong) Limited (2008-present) and Assistant Secretary of Fidelity Management & Research (Japan) Inc. (2008-present), and Fidelity Management & Research (U.K.) Inc. (2008-present). Previously, Mr. Goebel served as Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and the Funds (2007-2008) and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007). |
William C. Coffey (1969) | |
| Year of Election or Appointment: 2009 Assistant Secretary of Fidelity's Sector Portfolios. Mr. Coffey also serves as Assistant Secretary of other Fidelity funds (2009-present), 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). |
Elizabeth Paige Baumann (1968) | |
| Year of Election or Appointment: 2012 Anti-Money Laundering (AML) Officer of the Fidelity funds. Ms. Baumann also serves as AML Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2012-present), 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). |
Christine Reynolds (1958) | |
| Year of Election or Appointment: 2008 Chief Financial Officer of the Fidelity funds. Ms. Reynolds became President of Fidelity Pricing and Cash Management Services (FPCMS) in August 2008. Ms. Reynolds served as Chief Operating Officer of FPCMS (2007-2008). Previously, Ms. Reynolds served as President, Treasurer, and Anti-Money Laundering officer of the Fidelity funds (2004-2007). |
Joseph A. Hanlon (1968) | |
| Year of Election or Appointment: 2012 Chief Compliance Officer of Fidelity's Sector Portfolios. Mr. Hanlon also serves as Chief Compliance Officer of other Fidelity funds (2012-present). Mr. Hanlon serves as Compliance Officer of FMR, FMR Co., Inc., Fidelity Investments Money Management, Inc. (FIMM), Fidelity Research and Analysis Company (FRAC), and Fidelity Management & Research (Hong Kong) (2009-present), as Senior Vice President of the Fidelity Asset Management Division (2009-present), and is an employee of Fidelity Investments. Previously, Mr. Hanlon served as Compliance Officer of Fidelity Management & Research (Japan) Inc. (2009-2013), Strategic Advisers, Inc. (2009-2013), and Fidelity Management & Research (U.K.) Inc. (2009-2013). |
Joseph F. Zambello (1957) | |
| Year of Election or Appointment: 2011 Deputy Treasurer of the Fidelity 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). |
Adrien E. Deberghes (1967) | |
| Year of Election or Appointment: 2008 Deputy Treasurer of Fidelity's Sector Portfolios. Mr. Deberghes also serves as Vice President (2011-present), Deputy Treasurer (2008-present), and Assistant Treasurer (2010-present) of other Fidelity funds, and is an employee of Fidelity Investments (2008-present). Previously, Mr. Deberghes served as 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). |
Stephen Sadoski (1971) | |
| Year of Election or Appointment: 2012 Deputy Treasurer of Fidelity's Sector Portfolios. Mr. Sadoski also serves as Deputy Treasurer of other Fidelity funds (2012-present) and is an employee of Fidelity Investments (2012-present). Previously, Mr. Sadoski served as Assistant Treasurer of Fidelity's Fixed Income and Asset Allocation Funds (2012-2013), an assistant chief accountant in the Division of Investment Management of the Securities and Exchange Commission (SEC) (2009-2012) and as a senior manager at Deloitte & Touche LLP (1997-2009). |
Stacie M. Smith (1974) | |
| Year of Election or Appointment: 2013 Deputy Treasurer of Fidelity's Sector Portfolios. Ms. Smith also serves as Deputy Treasurer of other Fidelity funds (2013-present) and is an employee of Fidelity Investments (2009-present). Previously, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009). |
Stephanie J. Dorsey (1969) | |
| Year of Election or Appointment: 2010 Assistant Treasurer of Fidelity's Sector Portfolios. Ms. Dorsey also serves as President and Treasurer (2013-present) and Assistant Treasurer (2010-present) of other Fidelity funds, Treasurer and Chief Financial Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2013-present), and is an employee of Fidelity Investments (2008-present). Previously, Ms. Dorsey served as Deputy Treasurer of Fidelity's Fixed Income and Asset Allocation Funds (2008-2013), Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank. |
Gary W. Ryan (1958) | |
| Year of Election or Appointment: 2005 Assistant Treasurer of the Fidelity funds. Mr. Ryan is an employee of Fidelity Investments. Previously, Mr. Ryan served as Vice President of Fund Reporting in Fidelity Pricing and Cash Management Services (FPCMS) (1999-2005). |
Jonathan Davis (1968) | |
| Year of Election or Appointment: 2010 Assistant Treasurer of the Fidelity funds. Mr. Davis is also Assistant Treasurer of Fidelity Rutland Square Trust II and Fidelity Commonwealth Trust II. Mr. Davis is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (2003-2010). |
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 | 09/09/13 | 09/06/13 | $0.000 | $0.000 |
Fidelity Advisor Communications Equipment Fund |
|
|
|
|
Institutional Class | 09/16/13 | 09/13/13 | $0.000 | $0.000 |
Fidelity Advisor Consumer Discretionary Fund |
|
|
|
|
Institutional Class | 09/09/13 | 09/06/13 | $0.000 | $1.071 |
Fidelity Advisor Electronics Fund |
|
|
|
|
Institutional Class | 09/16/13 | 09/13/13 | $0.000 | $0.000 |
Fidelity Advisor Energy Fund |
|
|
|
|
Institutional Class | 09/09/13 | 09/06/13 | $0.105 | $0.497 |
Fidelity Advisor Financial Services Fund |
|
|
|
|
Institutional Class | 09/09/13 | 09/06/13 | $0.082 | $0.000 |
Fidelity Advisor Health Care Fund |
|
|
|
|
Institutional Class | 09/09/13 | 09/06/13 | $0.000 | $1.968 |
Fidelity Advisor Industrials Fund |
|
|
|
|
Institutional Class | 09/09/13 | 09/06/13 | $0.138 | $1.250 |
Fidelity Advisor Technology Fund |
|
|
|
|
Institutional Class | 09/09/13 | 09/06/13 | $0.000 | $0.000 |
Fidelity Advisor Utilities Fund |
|
|
|
|
Institutional Class | 09/09/13 | 09/06/13 | $0.289 | $0.000 |
The funds hereby designate as capital gain dividend the amounts noted below for the taxable year ended July 31, 2013, or, if subsequently determined to be different, the net capital gain of such year.
Fidelity Advisor Consumer Discretionary Fund | $4,929,534 |
Fidelity Advisor Energy Fund | $8,461,408 |
Fidelity Advisor Health Care Fund | $42,015,500 |
Fidelity Advisor Industrials Fund | $21,494,783 |
A percentage of the dividends distributed during the fiscal year for the following funds qualify for the dividends-received deduction for corporate shareholders:
| September 2012 | December 2012 |
Fidelity Advisor Consumer Discretionary Fund |
|
|
Institutional Class | 0% | 46% |
Fidelity Advisor Energy Fund |
|
|
Institutional Class | 0% | 100% |
Fidelity Advisor Financial Services Fund |
|
|
Institutional Class | 86% | 55% |
Fidelity Advisor Health Care Fund |
|
|
Institutional Class | 0% | 100% |
Fidelity Advisor Industrials Fund |
|
|
Institutional Class | 100% | 100% |
Fidelity Advisor Utilities Fund |
|
|
Institutional Class | 100% | 100% |
Annual Report
Distributions (Unaudited) - continued
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 2012 | December 2012 |
Fidelity Advisor Consumer Discretionary Fund |
|
|
Institutional Class | 0% | 47% |
Fidelity Advisor Energy Fund |
|
|
Institutional Class | 0% | 100% |
Fidelity Advisor Financial Services Fund |
|
|
Institutional Class | 100% | 100% |
Fidelity Advisor Health Care Fund |
|
|
Institutional Class | 0% | 100% |
Fidelity Advisor Industrials Fund |
|
|
Institutional Class | 100% | 100% |
Fidelity Advisor Utilities Fund |
|
|
Institutional Class | 100% | 100% |
The funds will notify shareholders in January 2014 of amounts for use in preparing 2013 income tax returns.
Annual Report
Proxy Voting Results
A special meeting of each fund's shareholders was held on June 18, 2013. The results of votes taken among shareholders on the proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.
PROPOSAL 1 | ||
To elect a Board of Trustees.A | ||
| # of | % of |
Ned C. Lautenbach | ||
Affirmative | 2,198,660,066.13 | 95.750 |
Withheld | 97,591,697.03 | 4.250 |
TOTAL | 2,296,251,763.16 | 100.000 |
Ronald P. O'Hanley | ||
Affirmative | 2,202,691,976.72 | 95.926 |
Withheld | 93,559,786.44 | 4.074 |
TOTAL | 2,296,251,763.16 | 100.000 |
David A. Rosow | ||
Affirmative | 2,198,765,612.76 | 95.755 |
Withheld | 97,486,150.40 | 4.245 |
TOTAL | 2,296,251,763.16 | 100.000 |
Garnett A. Smith | ||
Affirmative | 2,201,945,782.92 | 95.894 |
Withheld | 94,305,980.24 | 4.106 |
TOTAL | 2,296,251,763.16 | 100.000 |
William S. Stavropoulos | ||
Affirmative | 2,196,127,224.90 | 95.640 |
Withheld | 100,124,538.26 | 4.360 |
TOTAL | 2,296,251,763.16 | 100.000 |
Michael E. Wiley | ||
Affirmative | 2,201,986,460.61 | 95.895 |
Withheld | 94,265,302.55 | 4.105 |
TOTAL | 2,296,251,763.16 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Biotechnology Fund and Fidelity SelectCo, LLC. | ||
Affirmative | 137,116,305.19 | 73.359 |
Against | 6,359,191.13 | 3.403 |
Abstain | 7,177,117.61 | 3.839 |
Broker Non-Votes | 36,260,149.42 | 19.399 |
TOTAL | 186,912,763.35 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Communications Equipment Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 5,233,693.93 | 72.464 |
Against | 34,215.90 | 0.474 |
Abstain | 833,046.86 | 11.534 |
Broker Non-Votes | 1,121,564.98 | 15.528 |
TOTAL | 7,222,521.67 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Consumer Discretionary Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 33,211,831.52 | 75.349 |
Against | 776,267.96 | 1.761 |
Abstain | 2,119,724.81 | 4.809 |
Broker Non-Votes | 7,970,040.80 | 18.081 |
TOTAL | 44,077,865.09 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Electronics Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 6,301,924.59 | 74.665 |
Against | 207,963.13 | 2.464 |
Abstain | 701,419.52 | 8.310 |
Broker Non-Votes | 1,229,019.77 | 14.561 |
TOTAL | 8,440,327.01 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Energy Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 275,558,564.89 | 70.351 |
Against | 13,248,744.01 | 3.383 |
Abstain | 18,657,642.59 | 4.763 |
Broker Non-Votes | 84,229,792.26 | 21.503 |
TOTAL | 391,694,743.75 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Financial Services Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 51,207,192.54 | 69.108 |
Against | 3,941,419.25 | 5.320 |
Abstain | 3,198,203.57 | 4.316 |
Broker Non-Votes | 15,750,658.72 | 21.256 |
TOTAL | 74,097,474.08 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Health Care Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 223,297,798.07 | 70.835 |
Against | 12,190,538.03 | 3.868 |
Abstain | 16,814,461.94 | 5.333 |
Broker Non-Votes | 62,934,963.61 | 19.964 |
TOTAL | 315,237,761.65 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Industrials Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 184,060,135.52 | 70.555 |
Against | 9,949,332.48 | 3.814 |
Abstain | 11,643,900.90 | 4.463 |
Broker Non-Votes | 55,223,136.22 | 21.168 |
TOTAL | 260,876,505.12 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Technology Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 321,976,700.64 | 71.695 |
Against | 19,581,003.61 | 4.361 |
Abstain | 27,788,990.72 | 6.187 |
Broker Non-Votes | 79,749,011.61 | 17.757 |
TOTAL | 449,095,706.58 | 100.000 |
PROPOSAL 2 | ||
To approve a management contract between Fidelity Advisor Utilities Fund and Fidelity SelectCo, LLC. | ||
| # of | % of |
Affirmative | 94,643,508.86 | 71.936 |
Against | 5,510,188.26 | 4.188 |
Abstain | 6,002,394.12 | 4.562 |
Broker Non-Votes | 25,411,787.41 | 19.314 |
TOTAL | 131,567,878.65 | 100.000 |
A Denotes trust-wide proposal and voting results. |
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.
AFOCI-UANNPRO-0913
1.789242.109
Item 2. Code of Ethics
As of the end of the period, July 31, 2013, 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, 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 |
July 31, 2012 FeesA
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Advisor Biotechnology Fund | $33,000 | $- | $4,600 | $400 |
Fidelity Advisor Communications Equipment Fund | $35,000 | $- | $4,600 | $400 |
Fidelity Advisor Consumer Discretionary Fund | $33,000 | $- | $5,700 | $400 |
Fidelity Advisor Electronics Fund | $33,000 | $- | $4,600 | $400 |
Fidelity Advisor Energy Fund | $34,000 | $- | $6,700 | $500 |
Fidelity Advisor Financial Services Fund | $35,000 | $- | $6,700 | $400 |
Fidelity Advisor Health Care Fund | $34,000 | $- | $5,700 | $400 |
Fidelity Advisor Industrials Fund | $33,000 | $- | $5,700 | $400 |
Fidelity Advisor Real Estate Fund | $36,000 | $- | $5,700 | $400 |
Fidelity Advisor Technology Fund | $35,000 | $- | $5,700 | $500 |
Fidelity Advisor Utilities Fund | $33,000 | $- | $5,700 | $400 |
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, 2013A | July 31, 2012A |
Audit-Related Fees | $915,000 | $615,000 |
Tax Fees | $- | $- |
All Other Fees | $765,000 | $1,115,000 |
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, 2013 A | July 31, 2012 A |
Deloitte Entities | $1,845,000 | $1,885,000 |
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/Kenneth B. Robins |
| Kenneth B. Robins |
| President and Treasurer |
|
|
Date: | September 26, 2013 |
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/Kenneth B. Robins |
| Kenneth B. Robins |
| President and Treasurer |
|
|
Date: | September 26, 2013 |
By: | /s/Christine Reynolds |
| Christine Reynolds |
| Chief Financial Officer |
|
|
Date: | September 26, 2013 |