UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-3010
Fidelity Advisor Series VII
(Exact name of registrant as specified in charter)
245 Summer St., Boston, Massachusetts 02210
(Address of principal executive offices) (Zip code)
Marc Bryant Secretary
245 Summer St.
Boston, Massachusetts 02210
(Name and address of agent for service)
Registrant's telephone number, including area code:
617-563-7000
Date of fiscal year end: | July 31 |
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Date of reporting period: | July 31, 2015 |
Item 1.
Reports to Stockholders
Fidelity Advisor Focus Funds® 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, 2015 |
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Contents
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.
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 call1-877-208-0098 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. © 2015 FMR LLC. All rights reserved.
Fidelity Advisor® Biotechnology Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | 50.48% | 37.06% | 17.68% |
| Class T (incl. 3.50% sales charge) | 53.60% | 37.28% | 17.62% |
| Class B (incl. contingent deferred sales charge) | 53.42% | 37.53% | 17.76% |
| Class C (incl. contingent deferred sales charge) | 57.43% | 37.65% | 17.48% |
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.
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, 2005, 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.
| Period Ending Values | ||
| $50,932 | Fidelity Advisor® Biotechnology Fund - Class A | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Biotechnology Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Rajiv Kaul: For the year, the fund's share classes handily outpaced the 51.91% return of the MSCI U.S. IMI Biotechnology 25/50 Index and the broadly based S&P 500®. (For specific class-level results, please see the Performance section of this report.) The fund's robust performance attracted steady inflows of capital, which I put to work in a variety of names. Versus the MSCI index, the fund was aided mainly by stock selection – specifically, investors' enthusiasm for small- and mid-cap biotech shares, which I tend to favor over large-caps for their more-robust growth prospects. Our top relative contributor was a large overweighting in mid-cap holding Anacor Pharmaceuticals, whose share price exploded higher in the final month of the period after the company reported positive results from two key Phase III studies on crisaborole, a non-steroidal ointment for patients with mild-to-moderate dermatitis. Several of the fund's top relative contributors were large-cap benchmark names I underweighted that failed to keep pace with the MSCI index: Biogen, Gilead Sciences and Amgen. Conversely, a large underweighting in bluebird bio curbed our relative results, in view of this index component's roughly 397% return. An overweighting in Epizyme also hampered our 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.Fidelity Advisor® Biotechnology Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Gilead Sciences, Inc. | 8.8 | 11.3 |
| Biogen, Inc. | 6.9 | 7.1 |
| Celgene Corp. | 6.0 | 7.3 |
| Regeneron Pharmaceuticals, Inc. | 5.4 | 4.1 |
| Alexion Pharmaceuticals, Inc. | 5.4 | 4.7 |
| BioMarin Pharmaceutical, Inc. | 4.9 | 2.7 |
| Vertex Pharmaceuticals, Inc. | 3.6 | 4.0 |
| Anacor Pharmaceuticals, Inc. | 2.3 | 0.4 |
| Incyte Corp. | 2.2 | 1.8 |
| Radius Health, Inc. | 1.9 | 1.1 |
| 47.4 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Biotechnology | 90.4% | |
| Pharmaceuticals | 8.8% | |
| Health Care Equipment & Supplies | 0.2% | |
| Life Sciences Tools & Services | 0.1% | |
| Capital Markets | 0.0% | |
| All Others* | 0.5% | |
| As of January 31, 2015 | ||
| Biotechnology | 94.2% | |
| Pharmaceuticals | 5.2% | |
| Health Care Equipment & Supplies | 0.1% | |
| Life Sciences Tools & Services | 0.0% | |
| Personal Products | 0.0% | |
| All Others* | 0.5% | |
* Includes short-term investments and net other assets (liabilities).
Fidelity Advisor® Biotechnology Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 98.1% | |||
| Shares | Value | ||
| Biotechnology - 89.7% | |||
| Biotechnology - 89.7% | |||
| ACADIA Pharmaceuticals, Inc. (a)(b) | 439,886 | $21,470,836 | |
| Acceleron Pharma, Inc. (a) | 534,157 | 15,298,256 | |
| Achillion Pharmaceuticals, Inc. (a)(b) | 1,640,172 | 13,974,265 | |
| Acorda Therapeutics, Inc. (a) | 665,253 | 22,858,093 | |
| Actelion Ltd. | 102,247 | 15,120,663 | |
| Adamas Pharmaceuticals, Inc. (a) | 891,152 | 22,064,924 | |
| Adaptimmune Therapeutics PLC sponsored ADR (b) | 560,777 | 8,439,694 | |
| ADMA Biologics, Inc. (a) | 50,300 | 468,796 | |
| Aduro Biotech, Inc. (b) | 87,388 | 2,291,313 | |
| Aduro Biotech, Inc. | 345,762 | 8,159,292 | |
| Aegerion Pharmaceuticals, Inc. (a)(b)(c) | 1,437,389 | 27,497,252 | |
| Affimed NV | 46,150 | 757,322 | |
| Agenus, Inc. (a) | 487,360 | 4,162,054 | |
| Agenus, Inc. warrants 1/9/18 (a) | 452,000 | 66,557 | |
| Agios Pharmaceuticals, Inc. (a) | 41,571 | 4,580,293 | |
| Akebia Therapeutics, Inc. (a) | 321,877 | 3,025,644 | |
| Alder Biopharmaceuticals, Inc. (a) | 526,313 | 24,431,449 | |
| Aldeyra Therapeutics, Inc. (a) | 478,895 | 4,252,588 | |
| Alexion Pharmaceuticals, Inc. (a) | 1,125,715 | 222,261,170 | |
| Alkermes PLC (a) | 347,441 | 24,327,819 | |
| Alnylam Pharmaceuticals, Inc. (a) | 208,735 | 26,599,101 | |
| AMAG Pharmaceuticals, Inc. (a)(b) | 815,018 | 52,079,650 | |
| Amarin Corp. PLC ADR (a)(b) | 706,803 | 1,597,375 | |
| Amgen, Inc. | 387,830 | 68,486,900 | |
| Amicus Therapeutics, Inc. (a) | 768,570 | 13,211,718 | |
| Anacor Pharmaceuticals, Inc. (a) | 625,028 | 93,247,927 | |
| Applied Genetic Technologies Corp. (a)(b) | 210,996 | 3,894,986 | |
| Ardelyx, Inc. (a) | 769,395 | 15,172,469 | |
| ARIAD Pharmaceuticals, Inc. (a)(b) | 815,995 | 6,658,519 | |
| Array BioPharma, Inc. (a) | 378,104 | 2,196,784 | |
| Ascendis Pharma A/S ADR | 35,700 | 715,071 | |
| Asterias Biotherapeutics, Inc. (a)(b) | 115,938 | 570,415 | |
| Atara Biotherapeutics, Inc. (b) | 290,699 | 16,319,842 | |
| aTyr Pharma, Inc. (a) | 45,620 | 855,375 | |
| aTyr Pharma, Inc. | 55,238 | 932,141 | |
| Avalanche Biotechnologies, Inc. (a) | 125,129 | 1,841,899 | |
| Baxalta, Inc. | 37,900 | 1,244,257 | |
| BioCryst Pharmaceuticals, Inc. (a) | 326,300 | 5,051,124 | |
| Biogen, Inc. (a) | 888,906 | 283,365,455 | |
| BioMarin Pharmaceutical, Inc. (a) | 1,375,020 | 201,124,175 | |
| Bionovo, Inc. warrants 2/2/16 (a) | 56,850 | 1 | |
| BioTime, Inc. warrants 10/1/18 (a) | 2 | 2 | |
| bluebird bio, Inc. (a) | 33,549 | 5,563,431 | |
| Blueprint Medicines Corp. | 102,288 | 2,763,822 | |
| Calithera Biosciences, Inc. (b) | 497,158 | 3,678,969 | |
| Cara Therapeutics, Inc. (a) | 273,227 | 5,822,467 | |
| Catabasis Pharmaceuticals, Inc. | 138,100 | 1,795,300 | |
| Catalyst Pharmaceutical Partners, Inc.: | |||
| warrants 5/2/17 (a) | 8,557 | 31,409 | |
| warrants 5/30/17 (a) | 17,900 | 70,184 | |
| Celgene Corp. (a) | 1,889,799 | 248,036,119 | |
| Cell Therapeutics, Inc. warrants 7/6/16 (a) | 46,404 | 0 | |
| Celldex Therapeutics, Inc. (a)(b) | 539,120 | 12,696,276 | |
| Cellectis SA sponsored ADR | 40,000 | 1,420,400 | |
| Cepheid, Inc. (a) | 51,400 | 2,857,326 | |
| Cerulean Pharma, Inc. (a) | 1,310,113 | 5,292,857 | |
| Chiasma, Inc. | 325,192 | 6,898,298 | |
| Chiasma, Inc. | 29,500 | 695,315 | |
| Chiasma, Inc. warrants (a) | 81,298 | 1,184,016 | |
| Chimerix, Inc. (a) | 280,086 | 15,051,822 | |
| Cidara Therapeutics, Inc. | 19,000 | 265,620 | |
| Cidara Therapeutics, Inc. Series B | 223,967 | 2,817,953 | |
| Clovis Oncology, Inc. (a) | 201,132 | 16,981,575 | |
| CTI BioPharma Corp. (a)(b) | 1,758,315 | 3,252,883 | |
| Cytokinetics, Inc. (a) | 67,916 | 433,983 | |
| Cytokinetics, Inc. warrants 6/25/17 (a) | 244,500 | 90,798 | |
| DBV Technologies SA sponsored ADR (a) | 258,000 | 11,246,220 | |
| Dicerna Pharmaceuticals, Inc. (a) | 125,106 | 1,528,795 | |
| Dyax Corp. (a) | 1,872,832 | 46,090,396 | |
| Eleven Biotherapeutics, Inc. (a)(b) | 140,279 | 388,573 | |
| Emergent BioSolutions, Inc. (a) | 146,555 | 4,811,401 | |
| Enanta Pharmaceuticals, Inc. (a)(b) | 140,822 | 7,132,634 | |
| Epirus Biopharmaceuticals, Inc. (a)(b) | 254,100 | 1,649,109 | |
| Epizyme, Inc. (a)(b) | 2,060,493 | 45,969,599 | |
| Esperion Therapeutics, Inc. (a)(b) | 389,646 | 24,158,052 | |
| Exact Sciences Corp. (a)(b) | 364,159 | 8,765,307 | |
| Exelixis, Inc. (a)(b) | 1,013,812 | 5,809,143 | |
| Fate Therapeutics, Inc. (a)(b) | 198,704 | 1,402,850 | |
| Fibrocell Science, Inc. (a) | 279,800 | 1,824,296 | |
| FibroGen, Inc. (b) | 74,322 | 1,727,987 | |
| Forward Pharma A/S sponsored ADR | 23,100 | 749,826 | |
| Foundation Medicine, Inc. (a) | 159,200 | 3,230,964 | |
| Galapagos Genomics NV sponsored ADR | 253,629 | 15,382,599 | |
| Genmab A/S (a) | 387,749 | 36,493,151 | |
| Genocea Biosciences, Inc. (a) | 159,921 | 2,078,973 | |
| Genomic Health, Inc. (a) | 54,120 | 1,465,570 | |
| Geron Corp. (a)(b) | 4,752,575 | 19,247,929 | |
| Gilead Sciences, Inc. | 3,072,903 | 362,172,343 | |
| Halozyme Therapeutics, Inc. (a)(b) | 839,755 | 19,599,882 | |
| Heron Therapeutics, Inc. (a) | 403,200 | 13,039,488 | |
| Histogenics Corp. (b)(c) | 672,534 | 4,284,042 | |
| Ignyta, Inc. (a) | 629,000 | 8,717,940 | |
| Immune Design Corp. (a) | 268,300 | 5,194,288 | |
| ImmunoGen, Inc. (a)(b) | 1,104,927 | 19,910,785 | |
| Immunomedics, Inc. (a)(b) | 1,111,071 | 2,277,696 | |
| Incyte Corp. (a) | 882,941 | 92,073,087 | |
| Infinity Pharmaceuticals, Inc. (a) | 287,434 | 2,512,173 | |
| Insys Therapeutics, Inc. (a)(b) | 585,194 | 26,286,914 | |
| Intercept Pharmaceuticals, Inc. (a)(b) | 174,460 | 46,024,293 | |
| Intrexon Corp. (a)(b) | 182,908 | 11,934,747 | |
| Ironwood Pharmaceuticals, Inc. Class A (a) | 670,651 | 7,008,303 | |
| Isis Pharmaceuticals, Inc. (a) | 366,994 | 20,158,980 | |
| JHL Biotech, Inc. (d) | 234,770 | 878,040 | |
| Juno Therapeutics, Inc. | 73,900 | 3,615,188 | |
| Juno Therapeutics, Inc. (e) | 214,673 | 10,501,803 | |
| Karyopharm Therapeutics, Inc. (a) | 650,766 | 13,353,718 | |
| Keryx Biopharmaceuticals, Inc. (a)(b) | 673,542 | 5,374,865 | |
| Kite Pharma, Inc. (a)(b) | 654,920 | 47,658,528 | |
| La Jolla Pharmaceutical Co. (a) | 268,300 | 8,156,320 | |
| Lexicon Pharmaceuticals, Inc. (a)(b) | 785,970 | 6,633,587 | |
| Ligand Pharmaceuticals, Inc. Class B (a)(b) | 110,425 | 11,954,611 | |
| Lion Biotechnologies, Inc. (a) | 369,046 | 3,159,034 | |
| Macrocure Ltd. | 4,000 | 53,960 | |
| Macrogenics, Inc. (a) | 511,457 | 19,230,783 | |
| MannKind Corp. (a)(b) | 1,151,662 | 4,940,630 | |
| Medivation, Inc. (a) | 535,177 | 56,370,193 | |
| Merrimack Pharmaceuticals, Inc. (a) | 60,200 | 608,020 | |
| MiMedx Group, Inc. (a)(b) | 250,413 | 2,686,931 | |
| Minerva Neurosciences, Inc. (b) | 921,974 | 5,255,252 | |
| Momenta Pharmaceuticals, Inc. (a) | 121,037 | 2,631,344 | |
| Myriad Genetics, Inc. (a)(b) | 195,057 | 6,655,345 | |
| Neurocrine Biosciences, Inc. (a) | 624,728 | 31,311,367 | |
| NewLink Genetics Corp. (a) | 252,479 | 13,166,780 | |
| Nivalis Therapeutics, Inc. | 18,600 | 315,642 | |
| Novavax, Inc. (a) | 2,465,631 | 29,735,510 | |
| Novelos Therapeutics, Inc. warrants 12/6/16 (a) | 137,600 | 80 | |
| OncoMed Pharmaceuticals, Inc. (a) | 125,932 | 2,876,287 | |
| Ophthotech Corp. (a) | 674,737 | 45,672,948 | |
| Opko Health, Inc. (a)(b) | 586,151 | 9,595,292 | |
| Oragenics, Inc. (a) | 250,308 | 655,807 | |
| Orexigen Therapeutics, Inc. (a)(b) | 1,765,996 | 7,063,984 | |
| Organovo Holdings, Inc. (a)(b) | 194,083 | 656,001 | |
| Osiris Therapeutics, Inc. (a) | 203,971 | 4,350,701 | |
| OvaScience, Inc. (a)(b) | 193,445 | 5,513,183 | |
| PolyMedix, Inc. warrants 4/10/16 (a) | 163,833 | 2 | |
| Portola Pharmaceuticals, Inc. (a) | 475,082 | 23,488,054 | |
| Progenics Pharmaceuticals, Inc. (a)(b) | 793,543 | 6,872,082 | |
| ProNai Therapeutics, Inc. | 199,883 | 5,476,794 | |
| ProQR Therapeutics BV (a) | 249,416 | 4,035,551 | |
| Proteon Therapeutics, Inc. (b) | 137,500 | 2,376,000 | |
| Prothena Corp. PLC (a) | 113,234 | 7,470,047 | |
| PTC Therapeutics, Inc. (a) | 313,245 | 16,041,276 | |
| Puma Biotechnology, Inc. (a)(b) | 291,758 | 26,433,275 | |
| Radius Health, Inc. (a)(b) | 975,562 | 76,406,016 | |
| Raptor Pharmaceutical Corp. (a)(b) | 625,173 | 8,902,464 | |
| Receptos, Inc. (a) | 57,870 | 13,186,258 | |
| Regeneron Pharmaceuticals, Inc. (a) | 405,563 | 224,544,011 | |
| Regulus Therapeutics, Inc. (a) | 254,763 | 2,089,057 | |
| Repligen Corp. (a) | 361,227 | 12,646,557 | |
| Retrophin, Inc. (a)(b) | 71,300 | 2,263,062 | |
| Rigel Pharmaceuticals, Inc. (a) | 643,465 | 1,917,526 | |
| Sage Therapeutics, Inc. (b) | 262,168 | 17,921,804 | |
| Sangamo Biosciences, Inc. (a) | 682,052 | 6,240,776 | |
| Sarepta Therapeutics, Inc. (a)(b) | 371,104 | 11,845,640 | |
| Seattle Genetics, Inc. (a)(b) | 196,850 | 9,423,210 | |
| Seres Therapeutics, Inc. | 237,191 | 8,977,679 | |
| Seres Therapeutics, Inc. | 352,270 | 12,000,078 | |
| Sophiris Bio, Inc. (a) | 141,653 | 123,181 | |
| Sorrento Therapeutics, Inc. (a) | 7,400 | 153,772 | |
| Spark Therapeutics, Inc. (b) | 269,670 | 16,568,525 | |
| Spectrum Pharmaceuticals, Inc. (a) | 338,247 | 2,338,978 | |
| Stemline Therapeutics, Inc. (a)(b) | 348,093 | 3,735,038 | |
| Sunesis Pharmaceuticals, Inc. (a)(b) | 830,240 | 1,158,185 | |
| Synta Pharmaceuticals Corp. (a) | 471,286 | 999,126 | |
| TESARO, Inc. (a) | 391,937 | 22,732,346 | |
| TG Therapeutics, Inc. (a)(b) | 1,273,655 | 22,225,280 | |
| Threshold Pharmaceuticals, Inc. (a) | 26,804 | 115,793 | |
| Threshold Pharmaceuticals, Inc. warrants 3/16/16 (a) | 35,146 | 66,462 | |
| Tokai Pharmaceuticals, Inc. (b) | 91,000 | 1,186,640 | |
| Ultragenyx Pharmaceutical, Inc. (a) | 365,327 | 44,178,994 | |
| uniQure B.V. (a) | 158,829 | 4,089,847 | |
| United Therapeutics Corp. (a) | 142,294 | 24,098,912 | |
| Verastem, Inc. (a)(b) | 331,008 | 2,416,358 | |
| Versartis, Inc. (a) | 351,776 | 6,367,146 | |
| Vertex Pharmaceuticals, Inc. (a) | 1,089,676 | 147,106,260 | |
| Vical, Inc. (a) | 659,862 | 424,951 | |
| Vitae Pharmaceuticals, Inc. (b) | 1,091,502 | 11,035,085 | |
| Vital Therapies, Inc. (a)(b) | 218,579 | 3,545,351 | |
| Xencor, Inc. (a) | 464,569 | 10,401,700 | |
| Xenon Pharmaceuticals, Inc. | 102,215 | 1,113,121 | |
| XOMA Corp. (a)(b) | 1,918,701 | 1,401,803 | |
| Zafgen, Inc. (a)(b) | 1,306,751 | 49,617,335 | |
| ZIOPHARM Oncology, Inc. (a)(b) | 29,667 | 396,351 | |
| 3,699,508,117 | |||
| Capital Markets - 0.0% | |||
| Asset Management & Custody Banks - 0.0% | |||
| RPI International Holdings LP (d) | 12,210 | 1,719,168 | |
| Health Care Equipment & Supplies - 0.1% | |||
| Health Care Equipment - 0.1% | |||
| Bellerophon Therapeutics, Inc. | 227,700 | 790,119 | |
| Vermillion, Inc. (a)(b) | 1,165,400 | 2,330,800 | |
| Zosano Pharma Corp. | 172,100 | 1,344,101 | |
| 4,465,020 | |||
| Life Sciences Tools & Services - 0.1% | |||
| Life Sciences Tools & Services - 0.1% | |||
| NantKwest, Inc. | 83,700 | 2,561,220 | |
| Transgenomic, Inc. (a) | 13,500 | 20,520 | |
| Transgenomic, Inc. warrants 2/3/17 (a) | 81,000 | 43 | |
| 2,581,783 | |||
| Personal Products - 0.0% | |||
| Personal Products - 0.0% | |||
| MYOS Corp. (a) | 6,666 | 21,198 | |
| Pharmaceuticals - 8.2% | |||
| Pharmaceuticals - 8.2% | |||
| Achaogen, Inc. (a) | 141,215 | 1,018,160 | |
| Adimab LLC unit (d)(f) | 398,401 | 7,378,324 | |
| Aradigm Corp. (a) | 8,786 | 65,192 | |
| Auris Medical Holding AG (a) | 261,667 | 1,355,435 | |
| Biodel, Inc. (a)(b) | 718,800 | 740,364 | |
| Carbylan Therapeutics, Inc. | 699,867 | 4,836,081 | |
| Cempra, Inc. (a) | 187,800 | 7,861,308 | |
| Collegium Pharmaceutical, Inc. | 81,700 | 1,636,451 | |
| Dermira, Inc. (e) | 162,931 | 3,678,982 | |
| Dermira, Inc. | 449,300 | 10,145,194 | |
| Egalet Corp. (a)(b) | 489,678 | 5,675,368 | |
| Eisai Co. Ltd. | 342,900 | 22,397,027 | |
| Endo Health Solutions, Inc. (a) | 58,774 | 5,145,076 | |
| Flex Pharma, Inc. | 22,600 | 352,334 | |
| GW Pharmaceuticals PLC ADR (a)(b) | 346,424 | 39,669,012 | |
| Horizon Pharma PLC (a) | 1,745,938 | 64,337,815 | |
| Intra-Cellular Therapies, Inc. (a) | 253,854 | 7,387,151 | |
| Jazz Pharmaceuticals PLC (a) | 250,087 | 48,076,725 | |
| Kura Oncology, Inc. | 325,932 | 2,059,890 | |
| Nektar Therapeutics (a)(b) | 277,332 | 3,497,157 | |
| NeurogesX, Inc. (a) | 150,000 | 900 | |
| Ocular Therapeutix, Inc. | 196,271 | 4,531,897 | |
| Pacira Pharmaceuticals, Inc. (a) | 152,160 | 10,106,467 | |
| Paratek Pharmaceuticals, Inc. (a) | 683,303 | 17,191,903 | |
| Parnell Pharmaceuticals Holdings Ltd. (a) | 123,569 | 594,367 | |
| Repros Therapeutics, Inc. (a)(b) | 1,213,840 | 8,982,416 | |
| SCYNEXIS, Inc. (a) | 111,900 | 889,605 | |
| Sun Pharmaceutical Industries Ltd. (a) | 181,199 | 2,328,837 | |
| Tetraphase Pharmaceuticals, Inc. (a) | 378,131 | 17,980,129 | |
| TherapeuticsMD, Inc. (a) | 918,373 | 7,154,126 | |
| XenoPort, Inc. (a) | 478,008 | 3,489,458 | |
| Zogenix, Inc. (a)(b) | 560,316 | 10,819,702 | |
| Zogenix, Inc. warrants 7/27/17 (a) | 32,985 | 9,657 | |
| ZS Pharma, Inc. (a) | 259,204 | 15,482,255 | |
| 336,874,765 | |||
| TOTAL COMMON STOCKS | |||
| (Cost $2,842,483,596) | 4,045,170,051 | ||
| Preferred Stocks - 1.4% | |||
| Convertible Preferred Stocks - 1.4% | |||
| Biotechnology - 0.7% | |||
| Biotechnology - 0.7% | |||
| 23andMe, Inc. Series E (d) | 341,730 | 3,700,003 | |
| Aimmune Therapeutics, Inc. Series B (d) | 349,360 | 6,623,865 | |
| CytomX Therapeutics, Inc. Series D (d) | 4,092,403 | 607,075 | |
| Gensight Biologics Series B (d) | 191,500 | 584,675 | |
| Immunocore Ltd. Series A (d) | 17,149 | 3,238,594 | |
| Jounce Therapeutics, Inc. Series B (d) | 1,591,779 | 3,597,421 | |
| Moderna LLC Series E (d) | 54,410 | 3,355,465 | |
| Pronutria Biosciences, Inc. Series C (d) | 341,857 | 3,445,919 | |
| RaNA Therapeutics LLC Series B (d) | 1,310,353 | 1,415,181 | |
| Twist Bioscience Corp. Series C (d) | 1,866,791 | 2,799,998 | |
| 29,368,196 | |||
| Health Care Equipment & Supplies - 0.1% | |||
| Health Care Supplies - 0.1% | |||
| Novocure Ltd. Series J (d) | 26,307 | 3,629,051 | |
| Pharmaceuticals - 0.6% | |||
| Pharmaceuticals - 0.6% | |||
| Afferent Pharmaceuticals, Inc. Series C (d) | 1,915,787 | 4,699,998 | |
| Global Blood Therapeutics, Inc. Series B (d) | 1,814,085 | 9,324,397 | |
| Kolltan Pharmaceuticals, Inc. Series D (a)(d) | 1,610,391 | 1,610,391 | |
| MyoKardia, Inc. Series B (d) | 1,781,076 | 4,800,000 | |
| Syros Pharmaceuticals, Inc. Series B, 6.00% (d) | 163,994 | 515,942 | |
| Voyager Therapeutics, Inc. Series B (d) | 1,200,000 | 3,600,000 | |
| 24,550,728 | |||
| TOTAL CONVERTIBLE PREFERRED STOCKS | 57,547,975 | ||
| Nonconvertible Preferred Stocks - 0.0% | |||
| Biotechnology - 0.0% | |||
| Biotechnology - 0.0% | |||
| Moderna LLC Series D, 8.00% (a)(d) | 26,918 | 1,660,033 | |
| TOTAL PREFERRED STOCKS | |||
| (Cost $49,323,372) | 59,208,008 | ||
| Money Market Funds - 7.7% | |||
| Fidelity Cash Central Fund, 0.17% (g) | 30,057,446 | 30,057,446 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (g)(h) | 286,288,233 | 286,288,233 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $316,345,679) | 316,345,679 | ||
| TOTAL INVESTMENT PORTFOLIO - 107.2% | |||
| (Cost $3,208,152,647) | 4,420,723,738 | ||
| NET OTHER ASSETS (LIABILITIES) - (7.2)% | (295,543,483) | ||
| NET ASSETS - 100% | $4,125,180,255 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Affiliated company
(d) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $69,183,540 or 1.7% of net assets.
(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 $14,180,785 or 0.3% of net assets.
(f) Investment is owned by an entity that is treated as a corporation for U.S. tax purposes and is wholly-owned by the Fund.
(g) 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.
(h) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost |
| 23andMe, Inc. Series E | 6/18/15 | $3,700,003 |
| Adimab LLC unit | 9/17/14 - 6/5/15 | $6,416,091 |
| Afferent Pharmaceuticals, Inc. Series C | 7/1/15 | $4,700,000 |
| Aimmune Therapeutics, Inc. Series B | 2/26/15 | $2,620,200 |
| CytomX Therapeutics, Inc. Series D | 6/12/15 | $607,075 |
| Gensight Biologics Series B | 7/2/15 | $590,265 |
| Global Blood Therapeutics, Inc. Series B | 12/22/14 | $4,535,213 |
| Immunocore Ltd. Series A | 7/27/15 | $3,227,085 |
| JHL Biotech, Inc. | 4/14/15 | $878,040 |
| Jounce Therapeutics, Inc. Series B | 4/17/15 | $3,597,421 |
| Kolltan Pharmaceuticals, Inc. Series D | 3/13/14 | $1,610,391 |
| Moderna LLC Series D, 8.00% | 11/6/13 | $574,161 |
| Moderna LLC Series E | 12/18/14 | $3,355,465 |
| MyoKardia, Inc. Series B | 4/20/15 | $4,800,000 |
| Novocure Ltd. Series J | 6/1/15 | $3,629,051 |
| Pronutria Biosciences, Inc. Series C | 1/30/15 | $3,445,919 |
| RaNA Therapeutics LLC Series B | 7/17/15 | $1,415,181 |
| RPI International Holdings LP | 5/21/15 | $1,439,559 |
| Syros Pharmaceuticals, Inc. Series B, 6.00% | 10/9/14 | $515,942 |
| Twist Bioscience Corp. Series C | 5/29/15 | $2,800,000 |
| Voyager Therapeutics, Inc. Series B | 4/10/15 | $3,600,000 |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $33,479 |
| Fidelity Securities Lending Cash Central Fund | 4,375,447 |
| Total | $4,408,926 |
Other Affiliated Issuers
An affiliated company is a company in which the Fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows:
| Affiliate | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value, end of period |
| Aegerion Pharmaceuticals, Inc. | $14,658,766 | $26,915,448 | $-- | $-- | $27,497,252 |
| Aldeyra Therapeutics, Inc. | 993,513 | 1,504,500 | -- | -- | -- |
| Histogenics Corp. | -- | 7,408,337 | -- | -- | 4,284,042 |
| Repros Therapeutics, Inc. | 2,969,436 | 10,793,250 | -- | -- | -- |
| Vitae Pharmaceuticals, Inc. | -- | 13,496,238 | -- | -- | -- |
| Total | $18,621,715 | $60,117,773 | $-- | $-- | $31,781,294 |
Investment Valuation
The following is a summary of the inputs used, as of July 31, 2015, 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 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 | $4,045,170,051 | $4,000,807,658 | $31,142,955 | $13,219,438 |
| Preferred Stocks | 59,208,008 | -- | -- | 59,208,008 |
| Money Market Funds | 316,345,679 | 316,345,679 | -- | -- |
| Total Investments in Securities: | $4,420,723,738 | $4,317,153,337 | $31,142,955 | $72,427,446 |
The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value:
| Investments in Securities: | |
| Other Investments in Securities | |
| Beginning Balance | $-- |
| Total Realized Gain (Loss) | (73,792) |
| Total Unrealized Gain (Loss) | 2,499,647 |
| Cost of Purchases | 10,793,583 |
| Proceeds of Sales | -- |
| Amortization/Accretion | -- |
| Transfers in to Level 3 | -- |
| Transfers out of Level 3 | -- |
| Ending Balance | $13,219,438 |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at July 31, 2015 | $2,425,855 |
| Preferred Stocks | |
| Beginning Balance | $4,580,027 |
| Total Realized Gain (Loss) | (37,571) |
| Total Unrealized Gain (Loss) | 9,936,555 |
| Cost of Purchases | 47,138,818 |
| Proceeds of Sales | (2,409,821) |
| Amortization/Accretion | -- |
| Transfers in to Level 3 | -- |
| Transfers out of Level 3 | -- |
| Ending Balance | $59,208,008 |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at July 31, 2015 | $9,884,638 |
The information used in the above reconciliations represent fiscal year to date activity for any Investments in Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represent the beginning value of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. The cost of purchases and the proceeds of sales may include securities received or delivered through corporate actions or exchanges. Realized and unrealized gains (losses) disclosed in the reconciliation are included in Net Gain (Loss) on the Fund's Statement of Operations.
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Biotechnology Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $282,809,554) — See accompanying schedule: Unaffiliated issuers (cost $2,841,026,638) | $4,072,596,765 | |
| Fidelity Central Funds (cost $316,345,679) | 316,345,679 | |
| Other affiliated issuers (cost $50,780,330) | 31,781,294 | |
| Total Investments (cost $3,208,152,647) | $4,420,723,738 | |
| Cash | 18,331 | |
| Foreign currency held at value (cost $3,238,596) | 3,238,596 | |
| Receivable for investments sold | 16,679,600 | |
| Receivable for fund shares sold | 19,882,119 | |
| Distributions receivable from Fidelity Central Funds | 449,549 | |
| Other receivables | 21,759 | |
| Total assets | 4,461,013,692 | |
| Liabilities | ||
| Payable for investments purchased | $42,505,382 | |
| Payable for fund shares redeemed | 3,122,814 | |
| Accrued management fee | 1,835,035 | |
| Distribution and service plan fees payable | 1,181,168 | |
| Other affiliated payables | 650,799 | |
| Other payables and accrued expenses | 250,006 | |
| Collateral on securities loaned, at value | 286,288,233 | |
| Total liabilities | 335,833,437 | |
| Net Assets | $4,125,180,255 | |
| Net Assets consist of: | ||
| Paid in capital | $2,735,740,642 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 176,868,522 | |
| Net unrealized appreciation (depreciation) on investments | 1,212,571,091 | |
| Net Assets | $4,125,180,255 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($1,560,528,108 ÷ 49,657,414 shares) | $31.43 | |
| Maximum offering price per share (100/94.25 of $31.43) | $33.35 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($196,393,228 ÷ 6,533,001 shares) | $30.06 | |
| Maximum offering price per share (100/96.50 of $30.06) | $31.15 | |
| Class B: | ||
| Net Asset Value and offering price per share ($8,097,965 ÷ 292,071 shares)(a) | $27.73 | |
| Class C: | ||
| Net Asset Value and offering price per share ($956,494,535 ÷ 34,425,841 shares)(a) | $27.78 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($1,403,666,419 ÷ 42,595,280 shares) | $32.95 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $3,283,311 | |
| Income from Fidelity Central Funds (including $4,375,447 from security lending) | 4,408,926 | |
| Total income | 7,692,237 | |
| Expenses | ||
| Management fee | $14,470,394 | |
| Transfer agent fees | 4,982,034 | |
| Distribution and service plan fees | 9,417,806 | |
| Accounting and security lending fees | 807,688 | |
| Custodian fees and expenses | 76,442 | |
| Independent trustees' compensation | 41,710 | |
| Registration fees | 411,171 | |
| Audit | 50,757 | |
| Legal | 25,848 | |
| Miscellaneous | 19,628 | |
| Total expenses before reductions | 30,303,478 | |
| Expense reductions | (106,911) | 30,196,567 |
| Net investment income (loss) | (22,504,330) | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 265,574,762 | |
| Foreign currency transactions | (44,901) | |
| Total net realized gain (loss) | 265,529,861 | |
| Change in net unrealized appreciation (depreciation) on investment securities | 881,295,858 | |
| Net gain (loss) | 1,146,825,719 | |
| Net increase (decrease) in net assets resulting from operations | $1,124,321,389 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $(22,504,330) | $(9,882,130) |
| Net realized gain (loss) | 265,529,861 | 15,835,693 |
| Change in net unrealized appreciation (depreciation) | 881,295,858 | 126,643,560 |
| Net increase (decrease) in net assets resulting from operations | 1,124,321,389 | 132,597,123 |
| Distributions to shareholders from net investment income | (69,565) | – |
| Distributions to shareholders from net realized gain | (51,362,234) | (3,083,051) |
| Total distributions | (51,431,799) | (3,083,051) |
| Share transactions - net increase (decrease) | 1,521,666,795 | 713,552,409 |
| Redemption fees | 97,303 | 133,198 |
| Total increase (decrease) in net assets | 2,594,653,688 | 843,199,679 |
| Net Assets | ||
| Beginning of period | 1,530,526,567 | 687,326,888 |
| End of period (including undistributed net investment income of $0 and accumulated net investment loss of $6,816,483, respectively) | $4,125,180,255 | $1,530,526,567 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Biotechnology Fund Class A
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $20.19 | $17.25 | $11.79 | $8.81 | $6.67 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.20) | (.13) | (.09) | (.07) | (.07)B |
| Net realized and unrealized gain (loss) | 12.04 | 3.12 | 6.24 | 3.05 | 2.21 |
| Total from investment operations | 11.84 | 2.99 | 6.15 | 2.98 | 2.14 |
| Distributions from net realized gain | (.60) | (.05) | (.69) | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $31.43 | $20.19 | $17.25 | $11.79 | $8.81 |
| Total ReturnD,E | 59.66% | 17.38% | 54.94% | 33.83% | 32.08% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.04% | 1.08% | 1.15% | 1.27% | 1.35% |
| Expenses net of fee waivers, if any | 1.04% | 1.08% | 1.15% | 1.27% | 1.35% |
| Expenses net of all reductions | 1.04% | 1.08% | 1.14% | 1.27% | 1.34% |
| Net investment income (loss) | (.75)% | (.68)% | (.63)% | (.73)% | (.91)%B |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $1,560,528 | $602,625 | $286,695 | $68,993 | $30,639 |
| Portfolio turnover rateH | 26% | 50% | 22% | 82% | 99% |
A Calculated based on average shares outstanding during the period.
B 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) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Biotechnology Fund Class T
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $19.39 | $16.63 | $11.42 | $8.56 | $6.50 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.27) | (.19) | (.12) | (.10) | (.09)B |
| Net realized and unrealized gain (loss) | 11.54 | 3.00 | 6.02 | 2.96 | 2.15 |
| Total from investment operations | 11.27 | 2.81 | 5.90 | 2.86 | 2.06 |
| Distributions from net realized gain | (.60) | (.05) | (.69) | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $30.06 | $19.39 | $16.63 | $11.42 | $8.56 |
| Total ReturnD,E | 59.17% | 16.95% | 54.50% | 33.41% | 31.69% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.35% | 1.41% | 1.46% | 1.56% | 1.64% |
| Expenses net of fee waivers, if any | 1.35% | 1.41% | 1.46% | 1.56% | 1.64% |
| Expenses net of all reductions | 1.34% | 1.40% | 1.46% | 1.56% | 1.64% |
| Net investment income (loss) | (1.05)% | (1.01)% | (.94)% | (1.02)% | (1.21)%B |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $196,393 | $95,945 | $67,887 | $28,154 | $16,454 |
| Portfolio turnover rateH | 26% | 50% | 22% | 82% | 99% |
A Calculated based on average shares outstanding during the period.
B 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) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Biotechnology Fund Class B
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $18.01 | $15.52 | $10.75 | $8.09 | $6.17 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.35) | (.26) | (.17) | (.13) | (.12)B |
| Net realized and unrealized gain (loss) | 10.67 | 2.80 | 5.63 | 2.79 | 2.04 |
| Total from investment operations | 10.32 | 2.54 | 5.46 | 2.66 | 1.92 |
| Distributions from net realized gain | (.60) | (.05) | (.69) | – | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $27.73 | $18.01 | $15.52 | $10.75 | $8.09 |
| Total ReturnD,E | 58.42% | 16.42% | 53.76% | 32.88% | 31.12% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.83% | 1.89% | 1.94% | 2.03% | 2.10% |
| Expenses net of fee waivers, if any | 1.83% | 1.89% | 1.94% | 2.03% | 2.10% |
| Expenses net of all reductions | 1.82% | 1.88% | 1.94% | 2.02% | 2.09% |
| Net investment income (loss) | (1.53)% | (1.49)% | (1.42)% | (1.49)% | (1.66)%B |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $8,098 | $6,101 | $8,136 | $6,349 | $5,849 |
| Portfolio turnover rateH | 26% | 50% | 22% | 82% | 99% |
A Calculated based on average shares outstanding during the period.
B 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) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Biotechnology Fund Class C
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $18.04 | $15.53 | $10.76 | $8.10 | $6.18 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.35) | (.25) | (.17) | (.13) | (.12)B |
| Net realized and unrealized gain (loss) | 10.69 | 2.81 | 5.63 | 2.79 | 2.04 |
| Total from investment operations | 10.34 | 2.56 | 5.46 | 2.66 | 1.92 |
| Distributions from net realized gain | (.60) | (.05) | (.69) | – | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $27.78 | $18.04 | $15.53 | $10.76 | $8.10 |
| Total ReturnD,E | 58.43% | 16.54% | 53.71% | 32.84% | 31.07% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.79% | 1.83% | 1.88% | 2.01% | 2.10% |
| Expenses net of fee waivers, if any | 1.79% | 1.83% | 1.88% | 2.01% | 2.10% |
| Expenses net of all reductions | 1.79% | 1.83% | 1.87% | 2.01% | 2.09% |
| Net investment income (loss) | (1.49)% | (1.43)% | (1.36)% | (1.47)% | (1.66)%B |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $956,495 | $359,967 | $146,684 | $31,710 | $15,787 |
| Portfolio turnover rateH | 26% | 50% | 22% | 82% | 99% |
A Calculated based on average shares outstanding during the period.
B 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) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Biotechnology Fund Class I
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $21.10 | $17.97 | $12.22 | $9.10 | $6.87 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.14) | (.08) | (.05) | (.04) | (.05)B |
| Net realized and unrealized gain (loss) | 12.60 | 3.26 | 6.49 | 3.16 | 2.28 |
| Total from investment operations | 12.46 | 3.18 | 6.44 | 3.12 | 2.23 |
| Distributions from investment income | –C | – | – | – | – |
| Distributions from net realized gain | (.60) | (.05) | (.69) | – | – |
| Total distributions | (.61)D | (.05) | (.69) | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $32.95 | $21.10 | $17.97 | $12.22 | $9.10 |
| Total ReturnE | 60.00% | 17.74% | 55.39% | 34.29% | 32.46% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | .78% | .81% | .85% | .95% | 1.04% |
| Expenses net of fee waivers, if any | .78% | .81% | .85% | .95% | 1.04% |
| Expenses net of all reductions | .77% | .80% | .84% | .94% | 1.03% |
| Net investment income (loss) | (.48)% | (.41)% | (.32)% | (.40)% | (.60)%B |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $1,403,666 | $465,889 | $177,926 | $26,772 | $5,903 |
| Portfolio turnover rateH | 26% | 50% | 22% | 82% | 99% |
A Calculated based on average shares outstanding during the period.
B 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) %.
C Amount represents less than $.01 per share.
D Total distributions of $.61 per share is comprised of distributions from net investment income of $.003 and distributions from net realized gain of $.604 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy. Equity securities, including restricted securities, for which observable inputs are not available are valued using alternate valuation approaches, including the market approach and the income approach and are categorized as Level 3 in the hierarchy. The market approach generally consists of using comparable market transactions while the income approach generally consists of using the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.
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.
The following provides information on Level 3 securities held by the Fund that were valued at period end based on unobservable inputs. These amounts exclude valuations provided by a broker.
| Asset Type | Fair Value at 07/31/15 | Valuation Technique(s) | Unobservable Input | Amount or Range/Weighted Average | Impact to Valuation from an Increase in Input* |
| Equities | $ 72,427,446 | Black scholes | Discount for lack of marketability | 10.0% | Decrease |
| Discount cash flow | Discount rate | 8.0% | Decrease | ||
| Discount rate | Discount for lack of marketability | 10.0% | Decrease | ||
| Last transaction price | Transaction price | $0.15-$137.95/$27.68 | Increase | ||
| Registration statement | Discount rate | 10.0% | Decrease |
* Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.
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, 2015, as well as a roll forward of Level 3 investments, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. During the period, dividend income has been increased $415,705 with a corresponding decrease to net unrealized appreciation (depreciation) as a result of a change in the prior period estimate, which had no impact on the total net assets or total return of the Fund. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), partnerships, net operating losses 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 | $1,391,318,986 |
| Gross unrealized depreciation | (190,969,871) |
| Net unrealized appreciation (depreciation) on securities | $1,200,349,115 |
| Tax Cost | $3,220,374,623 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $ 41,636,838 |
| Undistributed long-term capital gain | $ 147,453,662 |
| Net unrealized appreciation (depreciation) on securities and other investments | $1,200,349,115 |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $69,565 | $– |
| Long-term Capital Gains | 51,362,234 | 3,083,051 |
| Total | $51,431,799 | $ 3,083,051 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $2,114,556,562 and $686,266,912, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $2,497,966 | $59,669 |
| Class T | .25% | .25% | 714,048 | 2,248 |
| Class B | .75% | .25% | 72,711 | 54,539 |
| Class C | .75% | .25% | 6,133,081 | 2,675,253 |
| $9,417,806 | $2,791,709 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $2,094,492 |
| Class T | 128,052 |
| Class B* | 3,865 |
| Class C* | 142,139 |
| $2,368,548 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $1,895,518 | .19 |
| Class T | 351,986 | .25 |
| Class B | 16,532 | .23 |
| Class C | 1,168,975 | .19 |
| Class I | 1,549,023 | .18 |
| $ 4,982,034 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $58,735 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $3,449 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $58,478 for the period.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $14,520 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $13,398 |
| Class T | 2,003 |
| Class B | 155 |
| Class C | 7,791 |
| Class I | 10,566 |
| $33,913 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class I | $69,565 | $– |
| Total | $69,565 | $– |
| From net realized gain | ||
| Class A | $19,162,759 | $1,291,021 |
| Class T | 3,137,062 | 234,772 |
| Class B | 191,809 | 24,488 |
| Class C | 13,249,824 | 722,216 |
| Class I | 15,620,780 | 810,554 |
| Total | $51,362,234 | $3,083,051 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 28,734,829 | 26,291,422 | $782,311,246 | $513,888,215 |
| Reinvestment of distributions | 750,777 | 64,680 | 17,834,437 | 1,162,299 |
| Shares redeemed | (9,674,834) | (13,129,582) | (251,598,976) | (254,303,314) |
| Net increase (decrease) | 19,810,772 | 13,226,520 | $548,546,707 | $260,747,200 |
| Class T | ||||
| Shares sold | 2,609,939 | 2,490,442 | $67,425,583 | $47,007,190 |
| Reinvestment of distributions | 134,415 | 13,197 | 3,058,643 | 228,306 |
| Shares redeemed | (1,158,298) | (1,639,876) | (29,041,801) | (30,470,117) |
| Net increase (decrease) | 1,586,056 | 863,763 | $41,442,425 | $16,765,379 |
| Class B | ||||
| Shares sold | 83,752 | 92,681 | $1,983,767 | $1,623,597 |
| Reinvestment of distributions | 8,590 | 1,384 | 180,710 | 22,292 |
| Shares redeemed | (138,999) | (279,647) | (3,242,788) | (4,810,522) |
| Net increase (decrease) | (46,657) | (185,582) | $(1,078,311) | $(3,164,633) |
| Class C | ||||
| Shares sold | 18,036,528 | 14,509,075 | $437,867,038 | $256,484,365 |
| Reinvestment of distributions | 528,140 | 36,658 | 11,164,448 | 591,299 |
| Shares redeemed | (4,090,881) | (4,036,055) | (97,122,016) | (69,713,827) |
| Net increase (decrease) | 14,473,787 | 10,509,678 | $351,909,470 | $187,361,837 |
| Class I | ||||
| Shares sold | 29,622,523 | 21,677,297 | $833,349,459 | $442,824,898 |
| Reinvestment of distributions | 532,595 | 35,974 | 13,257,162 | 674,146 |
| Shares redeemed | (9,644,195) | (9,529,193) | (265,760,117) | (191,656,418) |
| Net increase (decrease) | 20,510,923 | 12,184,078 | $580,846,504 | $251,842,626 |
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.
Fidelity Advisor® Communications Equipment Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | (0.53)% | 7.01% | 4.83% |
| Class T (incl. 3.50% sales charge) | 1.56% | 7.27% | 4.82% |
| Class B (incl. contingent deferred sales charge) | (0.26)% | 7.20% | 4.90% |
| Class C (incl. contingent deferred sales charge) | 3.74% | 7.48% | 4.66% |
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.
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.
Prior to October 1, 2006, the 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, 2005, 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.
| Period Ending Values | ||
| $16,025 | Fidelity Advisor® Communications Equipment Fund - Class A | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Communications Equipment Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Colin Anderson, who succeeded Ali Khan on January 31, 2015: For the year, the fund's share classes mostly lagged the 5.84% return of the S&P® Custom Communications Equipment Index and underperformed the broadly based S&P 500® by a wide margin. (For specific class-level results, please see the Performance section of this report.) Versus the industry index, our relative results were meaningfully hurt by large underweightings in three strong-performing benchmark components. The fund's largest relative detractor by far was Palo Alto Networks, a strong-performing provider of enterprise security platforms. We had exited this position due to concerns about overvaluation. The second-largest relative detractor was Infinera, a provider of optical transport networking equipment. Here, too, we mostly missed this stock's robust return. Brocade Communications, a manufacturer of storage networking equipment, detracted because we didn't own it early in the period, when the stock was strongest. Additionally, the fund's foreign holdings detracted, partly due to a stronger U.S. dollar. Conversely, F5 Networks, a maker of application delivery controllers, was our top relative contributor. CommScope Holding, a maker of components for telecom equipment applications that we began buying in November, also contributed.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.Fidelity Advisor® Communications Equipment Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| QUALCOMM, Inc. | 19.2 | 17.1 |
| Cisco Systems, Inc. | 16.9 | 17.8 |
| F5 Networks, Inc. | 6.9 | 2.6 |
| Juniper Networks, Inc. | 5.0 | 5.4 |
| CommScope Holding Co., Inc. | 4.8 | 1.9 |
| Harris Corp. | 4.6 | 0.0 |
| Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 4.4 | 4.8 |
| Nokia Corp. sponsored ADR | 3.9 | 5.5 |
| Alcatel-Lucent SA sponsored ADR | 3.8 | 3.9 |
| Brocade Communications Systems, Inc. | 3.4 | 0.0 |
| 72.9 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Communications Equipment | 92.2% | |
| Technology Hardware, Storage & Peripherals | 2.8% | |
| Semiconductors & Semiconductor Equipment | 1.6% | |
| Internet Software & Services | 1.3% | |
| Electronic Equipment & Components | 1.0% | |
| All Others* | 1.1% | |
| As of January 31, 2015 | ||
| Communications Equipment | 84.3% | |
| Internet Software & Services | 3.4% | |
| Semiconductors & Semiconductor Equipment | 3.2% | |
| Technology Hardware, Storage & Peripherals | 2.6% | |
| Software | 2.4% | |
| All Others* | 4.1% | |
* Includes short-term investments and net other assets (liabilities).
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity Advisor® Communications Equipment Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 100.1% | |||
| Shares | Value | ||
| Communications Equipment - 92.2% | |||
| Communications Equipment - 92.2% | |||
| ADTRAN, Inc. | 9,000 | $148,500 | |
| Alcatel-Lucent SA sponsored ADR (a) | 131,757 | 492,771 | |
| Arris Group, Inc. (a) | 6,400 | 197,888 | |
| AudioCodes Ltd. (a) | 5,900 | 17,287 | |
| Brocade Communications Systems, Inc. | 43,700 | 448,362 | |
| Calix Networks, Inc. (a) | 1,000 | 8,430 | |
| Ciena Corp. (a) | 600 | 15,270 | |
| Cisco Systems, Inc. | 78,024 | 2,217,442 | |
| CommScope Holding Co., Inc. (a) | 20,100 | 630,537 | |
| EchoStar Holding Corp. Class A (a) | 200 | 9,284 | |
| Extreme Networks, Inc. (a) | 3,400 | 7,888 | |
| F5 Networks, Inc. (a) | 6,715 | 900,750 | |
| Finisar Corp. (a) | 15,700 | 273,337 | |
| Harris Corp. | 7,300 | 605,462 | |
| Infinera Corp. (a) | 2,200 | 52,668 | |
| InterDigital, Inc. | 2,800 | 151,396 | |
| Ixia (a) | 8,100 | 106,920 | |
| JDS Uniphase Corp. (a) | 12,800 | 141,952 | |
| Juniper Networks, Inc. | 23,188 | 659,003 | |
| Mitel Networks Corp. (a) | 4,100 | 38,745 | |
| Motorola Solutions, Inc. | 4,347 | 261,516 | |
| NETGEAR, Inc. (a) | 1,000 | 33,490 | |
| Nokia Corp. sponsored ADR | 72,520 | 511,266 | |
| Plantronics, Inc. | 4,360 | 253,229 | |
| Polycom, Inc. (a) | 8,499 | 96,719 | |
| QUALCOMM, Inc. | 39,181 | 2,522,862 | |
| Radware Ltd. (a) | 11,200 | 213,248 | |
| Ruckus Wireless, Inc. (a) | 25,700 | 316,881 | |
| Sandvine Corp. (U.K.) (a) | 5,100 | 13,687 | |
| Sonus Networks, Inc. (a) | 8,440 | 68,111 | |
| Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 54,320 | 582,854 | |
| Transmode AB | 2,800 | 39,760 | |
| ViaSat, Inc. (a) | 100 | 6,200 | |
| Wi-Lan, Inc. | 21,800 | 45,672 | |
| 12,089,387 | |||
| Diversified Telecommunication Services - 0.2% | |||
| Alternative Carriers - 0.2% | |||
| Vonage Holdings Corp. (a) | 3,400 | 21,726 | |
| Electronic Equipment & Components - 1.0% | |||
| Electronic Components - 0.2% | |||
| II-VI, Inc. (a) | 1,700 | 28,900 | |
| Electronic Manufacturing Services - 0.8% | |||
| TE Connectivity Ltd. | 1,800 | 109,656 | |
| TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 138,556 | ||
| Internet Software & Services - 1.3% | |||
| Internet Software & Services - 1.3% | |||
| Google, Inc.: | |||
| Class A (a) | 49 | 32,218 | |
| Class C | 98 | 61,310 | |
| Rackspace Hosting, Inc. (a) | 800 | 27,224 | |
| Web.com Group, Inc. (a) | 2,200 | 54,758 | |
| 175,510 | |||
| Semiconductors & Semiconductor Equipment - 1.6% | |||
| Semiconductors - 1.6% | |||
| Broadcom Corp. Class A | 350 | 17,714 | |
| EZchip Semiconductor Ltd. (a) | 1,000 | 16,500 | |
| GSI Technology, Inc. (a) | 2,900 | 14,935 | |
| Marvell Technology Group Ltd. | 6,200 | 77,128 | |
| Maxim Integrated Products, Inc. | 1,690 | 57,528 | |
| Semtech Corp. (a) | 1,300 | 22,867 | |
| 206,672 | |||
| Software - 1.0% | |||
| Application Software - 0.2% | |||
| BroadSoft, Inc. (a) | 400 | 13,968 | |
| Comverse, Inc. (a) | 500 | 10,135 | |
| 24,103 | |||
| Systems Software - 0.8% | |||
| Oracle Corp. | 1,480 | 59,111 | |
| Rovi Corp. (a)(b) | 4,000 | 43,960 | |
| 103,071 | |||
| TOTAL SOFTWARE | 127,174 | ||
| Technology Hardware, Storage & Peripherals - 2.8% | |||
| Technology Hardware, Storage & Peripherals - 2.8% | |||
| BlackBerry Ltd. (a) | 25,800 | 200,032 | |
| Hewlett-Packard Co. | 2,200 | 67,144 | |
| QLogic Corp. (a) | 5,100 | 45,237 | |
| Samsung Electronics Co. Ltd. | 58 | 58,943 | |
| 371,356 | |||
| TOTAL COMMON STOCKS | |||
| (Cost $10,922,531) | 13,130,381 | ||
| Money Market Funds - 0.4% | |||
| Fidelity Securities Lending Cash Central Fund, 0.18% (c)(d) | |||
| (Cost $51,675) | 51,675 | 51,675 | |
| TOTAL INVESTMENT PORTFOLIO - 100.5% | |||
| (Cost $10,974,206) | 13,182,056 | ||
| NET OTHER ASSETS (LIABILITIES) - (0.5)% | (69,129) | ||
| NET ASSETS - 100% | $13,112,927 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) 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.
(d) Investment made with cash collateral received from securities on loan.
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 | $614 |
| Fidelity Securities Lending Cash Central Fund | 2,878 |
| Total | $3,492 |
Investment Valuation
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 81.6% |
| Sweden | 4.7% |
| Finland | 3.9% |
| France | 3.8% |
| Canada | 2.3% |
| Israel | 1.8% |
| Others (Individually Less Than 1%) | 1.9% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Communications Equipment Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $42,861) — See accompanying schedule: Unaffiliated issuers (cost $10,922,531) | $13,130,381 | |
| Fidelity Central Funds (cost $51,675) | 51,675 | |
| Total Investments (cost $10,974,206) | $13,182,056 | |
| Receivable for investments sold | 92,345 | |
| Receivable for fund shares sold | 782 | |
| Dividends receivable | 852 | |
| Distributions receivable from Fidelity Central Funds | 16 | |
| Receivable from investment adviser for expense reductions | 1,984 | |
| Other receivables | 164 | |
| Total assets | 13,278,199 | |
| Liabilities | ||
| Payable to custodian bank | $21,463 | |
| Payable for investments purchased | 34,099 | |
| Payable for fund shares redeemed | 4,817 | |
| Accrued management fee | 5,901 | |
| Distribution and service plan fees payable | 5,294 | |
| Other affiliated payables | 3,762 | |
| Other payables and accrued expenses | 38,261 | |
| Collateral on securities loaned, at value | 51,675 | |
| Total liabilities | 165,272 | |
| Net Assets | $13,112,927 | |
| Net Assets consist of: | ||
| Paid in capital | $10,672,818 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 232,260 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 2,207,849 | |
| Net Assets | $13,112,927 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($4,806,397 ÷ 382,262 shares) | $12.57 | |
| Maximum offering price per share (100/94.25 of $12.57) | $13.34 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($4,028,933 ÷ 331,565 shares) | $12.15 | |
| Maximum offering price per share (100/96.50 of $12.15) | $12.59 | |
| Class B: | ||
| Net Asset Value and offering price per share ($288,051 ÷ 25,541 shares)(a) | $11.28 | |
| Class C: | ||
| Net Asset Value and offering price per share ($2,965,777 ÷ 263,095 shares)(a) | $11.27 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($1,023,769 ÷ 78,674 shares) | $13.01 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $224,311 | |
| Income from Fidelity Central Funds | 3,492 | |
| Total income | 227,803 | |
| Expenses | ||
| Management fee | $81,024 | |
| Transfer agent fees | 43,997 | |
| Distribution and service plan fees | 65,847 | |
| Accounting and security lending fees | 5,882 | |
| Custodian fees and expenses | 10,816 | |
| Independent trustees' compensation | 261 | |
| Registration fees | 54,499 | |
| Audit | 46,420 | |
| Legal | 253 | |
| Miscellaneous | 244 | |
| Total expenses before reductions | 309,243 | |
| Expense reductions | (75,387) | 233,856 |
| Net investment income (loss) | (6,053) | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 968,286 | |
| Foreign currency transactions | (817) | |
| Total net realized gain (loss) | 967,469 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (133,967) | |
| Assets and liabilities in foreign currencies | (3) | |
| Total change in net unrealized appreciation (depreciation) | (133,970) | |
| Net gain (loss) | 833,499 | |
| Net increase (decrease) in net assets resulting from operations | $827,446 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $(6,053) | $32,595 |
| Net realized gain (loss) | 967,469 | 685,793 |
| Change in net unrealized appreciation (depreciation) | (133,970) | 1,223,850 |
| Net increase (decrease) in net assets resulting from operations | 827,446 | 1,942,238 |
| Distributions to shareholders from net investment income | (25,322) | – |
| Share transactions - net increase (decrease) | (2,143,838) | 1,539,076 |
| Redemption fees | 500 | 568 |
| Total increase (decrease) in net assets | (1,341,214) | 3,481,882 |
| Net Assets | ||
| Beginning of period | 14,454,141 | 10,972,259 |
| End of period (including undistributed net investment income of $0 and $23,615, respectively) | $13,112,927 | $14,454,141 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Communications Equipment Fund Class A
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $11.94 | $10.22 | $7.71 | $9.73 | $8.67 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .02 | .04B | .02 | (.01) | (.06) |
| Net realized and unrealized gain (loss) | .64 | 1.68 | 2.50 | (1.81) | 1.12 |
| Total from investment operations | .66 | 1.72 | 2.52 | (1.82) | 1.06 |
| Distributions from net investment income | (.03) | – | (.01) | – | – |
| Distributions from net realized gain | – | – | – | (.20) | – |
| Total distributions | (.03) | – | (.01) | (.20) | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $12.57 | $11.94 | $10.22 | $7.71 | $9.73 |
| Total ReturnD,E | 5.54% | 16.83% | 32.65% | (18.88)% | 12.23% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.90% | 1.96% | 2.22% | 1.96% | 1.64% |
| Expenses net of fee waivers, if any | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% |
| Expenses net of all reductions | 1.39% | 1.39% | 1.37% | 1.39% | 1.39% |
| Net investment income (loss) | .16% | .40%B | .18% | (.16)% | (.60)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $4,806 | $4,725 | $3,962 | $3,568 | $8,787 |
| Portfolio turnover rateH | 60% | 160% | 33% | 79% | 101% |
A Calculated based on average shares outstanding during the period.
B Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .14%.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Communications Equipment Fund Class T
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $11.55 | $9.91 | $7.49 | $9.48 | $8.46 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.01) | .02B | (.01) | (.03) | (.09) |
| Net realized and unrealized gain (loss) | .62 | 1.62 | 2.43 | (1.76) | 1.11 |
| Total from investment operations | .61 | 1.64 | 2.42 | (1.79) | 1.02 |
| Distributions from net investment income | (.01) | – | – | – | – |
| Distributions from net realized gain | – | – | – | (.20) | – |
| Total distributions | (.01) | – | – | (.20) | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $12.15 | $11.55 | $9.91 | $7.49 | $9.48 |
| Total ReturnD,E | 5.24% | 16.55% | 32.31% | (19.06)% | 12.06% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 2.19% | 2.25% | 2.52% | 2.27% | 1.97% |
| Expenses net of fee waivers, if any | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% |
| Expenses net of all reductions | 1.64% | 1.64% | 1.62% | 1.64% | 1.64% |
| Net investment income (loss) | (.09)% | .14%B | (.07)% | (.41)% | (.85)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $4,029 | $3,995 | $3,342 | $2,843 | $4,607 |
| Portfolio turnover rateH | 60% | 160% | 33% | 79% | 101% |
A Calculated based on average shares outstanding during the period.
B Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.11) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Communications Equipment Fund Class B
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $10.77 | $9.28 | $7.05 | $8.99 | $8.06 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.07) | (.04)B | (.05) | (.07) | (.13) |
| Net realized and unrealized gain (loss) | .58 | 1.53 | 2.28 | (1.67) | 1.06 |
| Total from investment operations | .51 | 1.49 | 2.23 | (1.74) | .93 |
| Distributions from net realized gain | – | – | – | (.20) | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $11.28 | $10.77 | $9.28 | $7.05 | $8.99 |
| Total ReturnD,E | 4.74% | 16.06% | 31.63% | (19.56)% | 11.54% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 2.68% | 2.74% | 3.00% | 2.71% | 2.47% |
| Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
| Expenses net of all reductions | 2.14% | 2.14% | 2.13% | 2.13% | 2.14% |
| Net investment income (loss) | (.60)% | (.36)%B | (.57)% | (.91)% | (1.35)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $288 | $399 | $480 | $570 | $1,316 |
| Portfolio turnover rateH | 60% | 160% | 33% | 79% | 101% |
A Calculated based on average shares outstanding during the period.
B Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.61) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Communications Equipment Fund Class C
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $10.76 | $9.28 | $7.05 | $8.98 | $8.06 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.07) | (.04)B | (.05) | (.07) | (.13) |
| Net realized and unrealized gain (loss) | .58 | 1.52 | 2.28 | (1.66) | 1.05 |
| Total from investment operations | .51 | 1.48 | 2.23 | (1.73) | .92 |
| Distributions from net realized gain | – | – | – | (.20) | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $11.27 | $10.76 | $9.28 | $7.05 | $8.98 |
| Total ReturnD,E | 4.74% | 15.95% | 31.63% | (19.47)% | 11.41% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 2.65% | 2.73% | 2.98% | 2.71% | 2.40% |
| Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
| Expenses net of all reductions | 2.14% | 2.14% | 2.12% | 2.14% | 2.14% |
| Net investment income (loss) | (.59)% | (.35)%B | (.57)% | (.91)% | (1.35)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $2,966 | $2,744 | $2,334 | $2,142 | $5,866 |
| Portfolio turnover rateH | 60% | 160% | 33% | 79% | 101% |
A Calculated based on average shares outstanding during the period.
B Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.61) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Communications Equipment Fund Class I
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $12.35 | $10.55 | $7.95 | $10.00 | $8.88 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .05 | .08B | .04 | .01 | (.04) |
| Net realized and unrealized gain (loss) | .67 | 1.72 | 2.58 | (1.86) | 1.16 |
| Total from investment operations | .72 | 1.80 | 2.62 | (1.85) | 1.12 |
| Distributions from net investment income | (.06) | – | (.02) | – | – |
| Distributions from net realized gain | – | – | – | (.20) | – |
| Total distributions | (.06) | – | (.02) | (.20) | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $13.01 | $12.35 | $10.55 | $7.95 | $10.00 |
| Total ReturnD | 5.83% | 17.06% | 32.92% | (18.66)% | 12.61% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.57% | 1.45% | 1.93% | 1.66% | 1.22% |
| Expenses net of fee waivers, if any | 1.15% | 1.15% | 1.15% | 1.15% | 1.15% |
| Expenses net of all reductions | 1.14% | 1.14% | 1.12% | 1.13% | 1.14% |
| Net investment income (loss) | .41% | .65%B | .43% | .10% | (.35)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $1,024 | $2,592 | $855 | $721 | $2,855 |
| Portfolio turnover rateG | 60% | 160% | 33% | 79% | 101% |
A Calculated based on average shares outstanding during the period.
B Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .39%.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, net operating losses, 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 | $2,589,310 |
| Gross unrealized depreciation | (437,689) |
| Net unrealized appreciation (depreciation) on securities | $2,151,621 |
| Tax cost | $11,030,435 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed long-term capital gain | $288,488 |
| Net unrealized appreciation (depreciation) on securities and other investments | $2,151,621 |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $25,322 | $ - |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $8,595,689 and $9,004,220, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $12,585 | $556 |
| Class T | .25% | .25% | 20,834 | – |
| Class B | .75% | .25% | 3,659 | 2,744 |
| Class C | .75% | .25% | 28,769 | 3,707 |
| $65,847 | $7,007 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $3,870 |
| Class T | 1,201 |
| Class B* | 61 |
| Class C* | 235 |
| $5,367 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $15,615 | .31 |
| Class T | 14,012 | .34 |
| Class B | 1,133 | .31 |
| Class C | 8,961 | .31 |
| Class I | 4,276 | .19 |
| $ 43,997 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $670 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $22 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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 $2,878.
8. Expense Reductions.
The investment adviser voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense Limitations | Reimbursement | |
| Class A | 1.40% | $25,236 |
| Class T | 1.65% | 22,436 |
| Class B | 2.15% | 1,943 |
| Class C | 2.15% | 14,490 |
| Class I | 1.15% | 9,687 |
| $73,792 |
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $1,452 for the period.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $55 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $14 |
| Class T | 8 |
| Class B | 1 |
| Class C | 8 |
| Class I | 57 |
| $88 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $11,846 | $– |
| Class T | 1,754 | – |
| Class I | 11,722 | – |
| Total | $25,322 | $– |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 153,268 | 118,184 | $1,925,058 | $1,378,044 |
| Reinvestment of distributions | 914 | – | 11,238 | – |
| Shares redeemed | (167,571) | (110,145) | (2,111,373) | (1,218,133) |
| Net increase (decrease) | (13,389) | 8,039 | $(175,077) | $159,911 |
| Class T | ||||
| Shares sold | 42,233 | 51,248 | $505,832 | $564,493 |
| Reinvestment of distributions | 146 | – | 1,738 | – |
| Shares redeemed | (56,809) | (42,610) | (686,152) | (470,057) |
| Net increase (decrease) | (14,430) | 8,638 | $(178,582) | $94,436 |
| Class B | ||||
| Shares sold | – | 64 | $– | $624 |
| Shares redeemed | (11,477) | (14,700) | (128,010) | (144,244) |
| Net increase (decrease) | (11,477) | (14,636) | $(128,010) | $(143,620) |
| Class C | ||||
| Shares sold | 55,503 | 74,081 | $631,530 | $769,830 |
| Shares redeemed | (47,426) | (70,636) | (530,907) | (715,373) |
| Net increase (decrease) | 8,077 | 3,445 | $100,623 | $54,457 |
| Class I | ||||
| Shares sold | 18,312 | 1,448,765 | $232,557 | $17,115,064 |
| Reinvestment of distributions | 868 | – | 11,030 | – |
| Shares redeemed | (150,382) | (1,319,932) | (2,006,379) | (15,741,172) |
| Net increase (decrease) | (131,202) | 128,833 | $(1,762,792) | $1,373,892 |
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.
Fidelity Advisor® Consumer Discretionary Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | 15.23% | 17.92% | 8.36% |
| Class T (incl. 3.50% sales charge) | 17.65% | 18.15% | 8.34% |
| Class B (incl. contingent deferred sales charge) | 16.35% | 18.20% | 8.43% |
| Class C (incl. contingent deferred sales charge) | 20.37% | 18.46% | 8.20% |
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.
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.
Prior to October 1, 2006, the 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, 2005, 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.
| Period Ending Values | ||
| $22,319 | Fidelity Advisor® Consumer Discretionary Fund - Class A | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Consumer Discretionary Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Peter Dixon: For the year, the fund's share classes performed in line with the 22.15% return of the MSCI U.S. IMI Consumer Discretionary 25/50 Index and led the broader S&P 500®. (For specific class-level results, please see the Performance section of this report.) Consumer discretionary stocks easily outperformed the broad market, as an improving job market and housing fundamentals plus low interest rates and lower energy costs helped put cash in U.S. consumers' pockets. Versus the sector benchmark, security selection overall was positive, particularly within restaurants, movies & entertainment, broadcasting and apparel retail. A large underweighting in Ford Motor helped the most. Ford's stock suffered from several setbacks the past year, including the announcements of a weak 2015 outlook in September 2014, and a year-over-year sales decline in March. Shares declined again in July after crash tests for Ford's new aluminum-bodied truck raised concerns about the cost of repairs and its overall safety. On the flip side, positioning in Internet retail and picks in the hotels, resorts & cruise lines segment hurt. Looking at individual names, underweighting Amazon.com was the fund's biggest relative detractor. Amazon shares outperformed during the period, driven in part by first-quarter revenue growth of 15% as well as optimism for Amazon Web Services, which offers cloud-based computing power to both startups and established firms.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.Fidelity Advisor® Consumer Discretionary Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| The Walt Disney Co. | 8.0 | 7.6 |
| Amazon.com, Inc. | 7.1 | 1.4 |
| Comcast Corp. Class A | 5.4 | 5.8 |
| NIKE, Inc. Class B | 4.6 | 3.3 |
| Starbucks Corp. | 4.6 | 3.9 |
| Hilton Worldwide Holdings, Inc. | 4.6 | 1.4 |
| Home Depot, Inc. | 4.5 | 5.5 |
| L Brands, Inc. | 4.2 | 4.1 |
| Las Vegas Sands Corp. | 3.0 | 1.7 |
| Macy's, Inc. | 2.5 | 0.0 |
| 48.5 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Media | 23.0% | |
| Hotels, Restaurants & Leisure | 22.3% | |
| Specialty Retail | 17.9% | |
| Internet & Catalog Retail | 8.1% | |
| Textiles, Apparel & Luxury Goods | 6.2% | |
| All Others* | 22.5% | |
| As of January 31, 2015 | ||
| Media | 22.5% | |
| Hotels, Restaurants & Leisure | 21.1% | |
| Specialty Retail | 19.9% | |
| Textiles, Apparel & Luxury Goods | 11.7% | |
| Internet & Catalog Retail | 5.1% | |
| All Others* | 19.7% | |
* Includes short-term investments and net other assets (liabilities).
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity Advisor® Consumer Discretionary Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 97.8% | |||
| Shares | Value | ||
| Auto Components - 3.2% | |||
| Auto Parts & Equipment - 3.2% | |||
| Delphi Automotive PLC | 41,084 | $3,207,839 | |
| Tenneco, Inc. (a) | 72,000 | 3,586,320 | |
| Visteon Corp. (a) | 6,500 | 646,945 | |
| 7,441,104 | |||
| Automobiles - 2.8% | |||
| Automobile Manufacturers - 1.6% | |||
| Tata Motors Ltd. (a) | 93,448 | 560,070 | |
| Tesla Motors, Inc. (a) | 11,500 | 3,060,725 | |
| 3,620,795 | |||
| Motorcycle Manufacturers - 1.2% | |||
| Harley-Davidson, Inc. | 49,500 | 2,885,850 | |
| TOTAL AUTOMOBILES | 6,506,645 | ||
| Beverages - 3.2% | |||
| Distillers & Vintners - 1.8% | |||
| Constellation Brands, Inc. Class A (sub. vtg.) | 35,927 | 4,311,959 | |
| Soft Drinks - 1.4% | |||
| Monster Beverage Corp. (a) | 21,000 | 3,224,550 | |
| TOTAL BEVERAGES | 7,536,509 | ||
| Food Products - 1.0% | |||
| Packaged Foods & Meats - 1.0% | |||
| Associated British Foods PLC | 21,000 | 1,057,300 | |
| Keurig Green Mountain, Inc. | 16,060 | 1,205,142 | |
| 2,262,442 | |||
| Hotels, Restaurants & Leisure - 22.3% | |||
| Casinos & Gaming - 4.0% | |||
| Las Vegas Sands Corp. | 126,880 | 7,110,355 | |
| Wynn Resorts Ltd. | 23,400 | 2,415,582 | |
| 9,525,937 | |||
| Hotels, Resorts & Cruise Lines - 7.4% | |||
| Accor SA | 38,114 | 1,870,037 | |
| Hilton Worldwide Holdings, Inc. | 397,400 | 10,670,190 | |
| Wyndham Worldwide Corp. | 57,706 | 4,761,899 | |
| 17,302,126 | |||
| Leisure Facilities - 1.2% | |||
| Vail Resorts, Inc. | 25,160 | 2,759,800 | |
| Restaurants - 9.7% | |||
| Dave & Buster's Entertainment, Inc. | 34,900 | 1,354,120 | |
| Domino's Pizza, Inc. | 13,309 | 1,515,097 | |
| Fiesta Restaurant Group, Inc. (a) | 33,510 | 1,947,936 | |
| Jubilant Foodworks Ltd. (a) | 34,626 | 991,433 | |
| McDonald's Corp. | 13,700 | 1,368,082 | |
| Papa John's International, Inc. | 26,792 | 2,024,404 | |
| Ruth's Hospitality Group, Inc. | 166,300 | 2,915,239 | |
| Starbucks Corp. | 184,306 | 10,676,847 | |
| 22,793,158 | |||
| TOTAL HOTELS, RESTAURANTS & LEISURE | 52,381,021 | ||
| Household Durables - 3.1% | |||
| Homebuilding - 2.4% | |||
| D.R. Horton, Inc. | 64,800 | 1,923,912 | |
| Lennar Corp. Class A | 34,140 | 1,810,786 | |
| PulteGroup, Inc. | 91,000 | 1,885,520 | |
| 5,620,218 | |||
| Housewares & Specialties - 0.7% | |||
| Jarden Corp. (a) | 30,900 | 1,699,500 | |
| TOTAL HOUSEHOLD DURABLES | 7,319,718 | ||
| Household Products - 0.2% | |||
| Household Products - 0.2% | |||
| Spectrum Brands Holdings, Inc. | 4,760 | 504,322 | |
| Internet & Catalog Retail - 8.1% | |||
| Internet Retail - 8.1% | |||
| Amazon.com, Inc. (a) | 31,160 | 16,706,434 | |
| Ocado Group PLC (a)(b) | 373,142 | 2,313,387 | |
| 19,019,821 | |||
| Internet Software & Services - 1.9% | |||
| Internet Software & Services - 1.9% | |||
| Alibaba Group Holding Ltd. sponsored ADR (b) | 31,800 | 2,491,212 | |
| HomeAway, Inc. (a) | 38,800 | 1,165,552 | |
| JUST EAT Ltd. (a) | 128,900 | 877,654 | |
| 4,534,418 | |||
| Leisure Products - 1.2% | |||
| Leisure Products - 1.2% | |||
| Polaris Industries, Inc. | 19,900 | 2,727,494 | |
| Media - 23.0% | |||
| Advertising - 0.6% | |||
| MDC Partners, Inc. Class A (sub. vtg.) | 73,800 | 1,301,094 | |
| Broadcasting - 2.4% | |||
| ITV PLC | 1,305,229 | 5,721,539 | |
| Cable & Satellite - 9.2% | |||
| Charter Communications, Inc. Class A (a)(b) | 17,140 | 3,185,640 | |
| Comcast Corp. Class A | 201,500 | 12,575,615 | |
| Naspers Ltd. Class N | 32,865 | 4,598,411 | |
| Starz Series A (a) | 29,100 | 1,177,095 | |
| 21,536,761 | |||
| Movies & Entertainment - 10.8% | |||
| Lions Gate Entertainment Corp. | 67,800 | 2,656,404 | |
| The Walt Disney Co. | 155,506 | 18,660,719 | |
| Time Warner, Inc. | 45,300 | 3,988,212 | |
| 25,305,335 | |||
| TOTAL MEDIA | 53,864,729 | ||
| Multiline Retail - 2.9% | |||
| Department Stores - 2.5% | |||
| Macy's, Inc. | 84,800 | 5,856,288 | |
| General Merchandise Stores - 0.4% | |||
| B&M European Value Retail S.A. | 166,711 | 928,648 | |
| TOTAL MULTILINE RETAIL | 6,784,936 | ||
| Software - 0.8% | |||
| Application Software - 0.5% | |||
| Mobileye NV (a) | 19,200 | 1,153,920 | |
| Home Entertainment Software - 0.3% | |||
| Playtech Ltd. | 55,096 | 779,959 | |
| TOTAL SOFTWARE | 1,933,879 | ||
| Specialty Retail - 17.9% | |||
| Apparel Retail - 8.3% | |||
| L Brands, Inc. | 122,800 | 9,912,416 | |
| Ross Stores, Inc. | 102,520 | 5,449,963 | |
| TJX Companies, Inc. | 28,208 | 1,969,483 | |
| United Arrows Ltd. | 14,200 | 567,152 | |
| Zumiez, Inc. (a) | 62,528 | 1,631,981 | |
| 19,530,995 | |||
| Automotive Retail - 3.8% | |||
| AutoZone, Inc. (a) | 6,380 | 4,471,997 | |
| O'Reilly Automotive, Inc. (a) | 18,700 | 4,493,797 | |
| 8,965,794 | |||
| Home Improvement Retail - 4.5% | |||
| Home Depot, Inc. | 89,360 | 10,457,801 | |
| Specialty Stores - 1.3% | |||
| Staples, Inc. | 215,700 | 3,172,947 | |
| TOTAL SPECIALTY RETAIL | 42,127,537 | ||
| Textiles, Apparel & Luxury Goods - 6.2% | |||
| Apparel, Accessories & Luxury Goods - 1.6% | |||
| G-III Apparel Group Ltd. (a) | 50,880 | 3,675,062 | |
| Footwear - 4.6% | |||
| NIKE, Inc. Class B | 94,317 | 10,867,205 | |
| TOTAL TEXTILES, APPAREL & LUXURY GOODS | 14,542,267 | ||
| TOTAL COMMON STOCKS | |||
| (Cost $197,894,359) | 229,486,842 | ||
| Money Market Funds - 4.3% | |||
| Fidelity Cash Central Fund, 0.17% (c) | 4,196,516 | 4,196,516 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (c)(d) | 5,891,605 | 5,891,605 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $10,088,121) | 10,088,121 | ||
| TOTAL INVESTMENT PORTFOLIO - 102.1% | |||
| (Cost $207,982,480) | 239,574,963 | ||
| NET OTHER ASSETS (LIABILITIES) - (2.1)% | (4,834,640) | ||
| NET ASSETS - 100% | $234,740,323 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) 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.
(d) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $5,293 |
| Fidelity Securities Lending Cash Central Fund | 17,197 |
| Total | $22,490 |
Investment Valuation
The following is a summary of the inputs used, as of July 31, 2015, 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 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 | $229,486,842 | $228,926,772 | $560,070 | $-- |
| Money Market Funds | 10,088,121 | 10,088,121 | -- | -- |
| Total Investments in Securities: | $239,574,963 | $239,014,893 | $560,070 | $-- |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 86.6% |
| United Kingdom | 4.7% |
| South Africa | 2.0% |
| Canada | 1.7% |
| Bailiwick of Jersey | 1.4% |
| Cayman Islands | 1.0% |
| Others (Individually Less Than 1%) | 2.6% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Consumer Discretionary Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $5,682,321) — See accompanying schedule: Unaffiliated issuers (cost $197,894,359) | $229,486,842 | |
| Fidelity Central Funds (cost $10,088,121) | 10,088,121 | |
| Total Investments (cost $207,982,480) | $239,574,963 | |
| Receivable for investments sold | 2,913,220 | |
| Receivable for fund shares sold | 2,113,744 | |
| Dividends receivable | 14,223 | |
| Distributions receivable from Fidelity Central Funds | 3,766 | |
| Other receivables | 4,099 | |
| Total assets | 244,624,015 | |
| Liabilities | ||
| Payable for investments purchased | $3,288,619 | |
| Payable for fund shares redeemed | 425,540 | |
| Accrued management fee | 101,101 | |
| Distribution and service plan fees payable | 67,968 | |
| Other affiliated payables | 42,025 | |
| Other payables and accrued expenses | 66,834 | |
| Collateral on securities loaned, at value | 5,891,605 | |
| Total liabilities | 9,883,692 | |
| Net Assets | $234,740,323 | |
| Net Assets consist of: | ||
| Paid in capital | $197,817,912 | |
| Undistributed net investment income | 175,568 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 5,170,553 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 31,576,290 | |
| Net Assets | $234,740,323 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($115,026,646 ÷ 5,348,507 shares) | $21.51 | |
| Maximum offering price per share (100/94.25 of $21.51) | $22.82 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($25,947,585 ÷ 1,280,672 shares) | $20.26 | |
| Maximum offering price per share (100/96.50 of $20.26) | $20.99 | |
| Class B: | ||
| Net Asset Value and offering price per share ($1,438,259 ÷ 80,686 shares)(a) | $17.83 | |
| Class C: | ||
| Net Asset Value and offering price per share ($43,998,668 ÷ 2,466,659 shares)(a) | $17.84 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($48,329,165 ÷ 2,095,901 shares) | $23.06 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $2,177,357 | |
| Income from Fidelity Central Funds | 22,490 | |
| Total income | 2,199,847 | |
| Expenses | ||
| Management fee | $852,448 | |
| Transfer agent fees | 332,412 | |
| Distribution and service plan fees | 581,814 | |
| Accounting and security lending fees | 60,923 | |
| Custodian fees and expenses | 19,378 | |
| Independent trustees' compensation | 2,558 | |
| Registration fees | 87,646 | |
| Audit | 53,755 | |
| Legal | 1,648 | |
| Miscellaneous | 1,495 | |
| Total expenses before reductions | 1,994,077 | |
| Expense reductions | (13,063) | 1,981,014 |
| Net investment income (loss) | 218,833 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers (net of foreign taxes of $5,922) | 7,999,773 | |
| Foreign currency transactions | (5,782) | |
| Total net realized gain (loss) | 7,993,991 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities (net of increase in deferred foreign taxes of $15,238) | 21,202,533 | |
| Assets and liabilities in foreign currencies | (1,790) | |
| Total change in net unrealized appreciation (depreciation) | 21,200,743 | |
| Net gain (loss) | 29,194,734 | |
| Net increase (decrease) in net assets resulting from operations | $29,413,567 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $218,833 | $(430,703) |
| Net realized gain (loss) | 7,993,991 | 17,599,668 |
| Change in net unrealized appreciation (depreciation) | 21,200,743 | (7,703,576) |
| Net increase (decrease) in net assets resulting from operations | 29,413,567 | 9,465,389 |
| Distributions to shareholders from net realized gain | (13,923,456) | (8,442,076) |
| Share transactions - net increase (decrease) | 97,114,685 | 27,584,653 |
| Redemption fees | 10,114 | 3,923 |
| Total increase (decrease) in net assets | 112,614,910 | 28,611,889 |
| Net Assets | ||
| Beginning of period | 122,125,413 | 93,513,524 |
| End of period (including undistributed net investment income of $175,568 and $0, respectively) | $234,740,323 | $122,125,413 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Consumer Discretionary Fund Class A
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $19.75 | $19.59 | $16.22 | $16.00 | $12.75 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .05 | (.04) | (.02) | .01 | (.02) |
| Net realized and unrealized gain (loss) | 3.99 | 1.75 | 5.04 | 1.07 | 3.27 |
| Total from investment operations | 4.04 | 1.71 | 5.02 | 1.08 | 3.25 |
| Distributions from net investment income | – | – | – | (.03) | – |
| Distributions from net realized gain | (2.28) | (1.55) | (1.65) | (.83) | – |
| Total distributions | (2.28) | (1.55) | (1.65) | (.86) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $21.51 | $19.75 | $19.59 | $16.22 | $16.00 |
| Total ReturnC,D | 22.26% | 9.28% | 33.65% | 7.96% | 25.49% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.15% | 1.20% | 1.31% | 1.38% | 1.39% |
| Expenses net of fee waivers, if any | 1.15% | 1.20% | 1.31% | 1.38% | 1.39% |
| Expenses net of all reductions | 1.14% | 1.19% | 1.29% | 1.37% | 1.38% |
| Net investment income (loss) | .27% | (.21)% | (.10)% | .04% | (.15)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $115,027 | $59,089 | $45,292 | $26,547 | $23,447 |
| Portfolio turnover rateG | 71% | 171% | 146% | 217% | 179% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Consumer Discretionary Fund Class T
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $18.75 | $18.68 | $15.57 | $15.43 | $12.32 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.01) | (.10) | (.06) | (.03) | (.06) |
| Net realized and unrealized gain (loss) | 3.77 | 1.67 | 4.81 | 1.02 | 3.17 |
| Total from investment operations | 3.76 | 1.57 | 4.75 | .99 | 3.11 |
| Distributions from net investment income | – | – | – | (.02) | – |
| Distributions from net realized gain | (2.25) | (1.50) | (1.64) | (.83) | – |
| Total distributions | (2.25) | (1.50) | (1.64) | (.85) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $20.26 | $18.75 | $18.68 | $15.57 | $15.43 |
| Total ReturnC,D | 21.92% | 8.94% | 33.25% | 7.62% | 25.24% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.46% | 1.50% | 1.60% | 1.64% | 1.66% |
| Expenses net of fee waivers, if any | 1.45% | 1.50% | 1.60% | 1.64% | 1.65% |
| Expenses net of all reductions | 1.45% | 1.49% | 1.58% | 1.63% | 1.64% |
| Net investment income (loss) | (.03)% | (.51)% | (.39)% | (.23)% | (.40)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $25,948 | $18,779 | $15,613 | $10,447 | $9,897 |
| Portfolio turnover rateG | 71% | 171% | 146% | 217% | 179% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Consumer Discretionary Fund Class B
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $16.76 | $16.85 | $14.23 | $14.23 | $11.42 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.09) | (.17) | (.13) | (.10) | (.12) |
| Net realized and unrealized gain (loss) | 3.34 | 1.49 | 4.36 | .93 | 2.93 |
| Total from investment operations | 3.25 | 1.32 | 4.23 | .83 | 2.81 |
| Distributions from net realized gain | (2.18) | (1.41) | (1.61) | (.83) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $17.83 | $16.76 | $16.85 | $14.23 | $14.23 |
| Total ReturnC,D | 21.35% | 8.36% | 32.61% | 7.11% | 24.61% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.96% | 2.01% | 2.09% | 2.13% | 2.15% |
| Expenses net of fee waivers, if any | 1.96% | 2.01% | 2.09% | 2.13% | 2.15% |
| Expenses net of all reductions | 1.95% | 2.01% | 2.07% | 2.12% | 2.13% |
| Net investment income (loss) | (.54)% | (1.02)% | (.88)% | (.72)% | (.90)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $1,438 | $1,824 | $2,389 | $2,577 | $3,170 |
| Portfolio turnover rateG | 71% | 171% | 146% | 217% | 179% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Consumer Discretionary Fund Class C
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $16.79 | $16.90 | $14.27 | $14.26 | $11.44 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.08) | (.16) | (.12) | (.09) | (.12) |
| Net realized and unrealized gain (loss) | 3.34 | 1.49 | 4.37 | .93 | 2.94 |
| Total from investment operations | 3.26 | 1.33 | 4.25 | .84 | 2.82 |
| Distributions from net realized gain | (2.21) | (1.44) | (1.62) | (.83) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $17.84 | $16.79 | $16.90 | $14.27 | $14.26 |
| Total ReturnC,D | 21.37% | 8.44% | 32.68% | 7.17% | 24.65% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.91% | 1.97% | 2.04% | 2.09% | 2.11% |
| Expenses net of fee waivers, if any | 1.91% | 1.97% | 2.04% | 2.09% | 2.11% |
| Expenses net of all reductions | 1.90% | 1.96% | 2.02% | 2.08% | 2.09% |
| Net investment income (loss) | (.49)% | (.97)% | (.83)% | (.68)% | (.86)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $43,999 | $20,726 | $17,176 | $13,507 | $7,341 |
| Portfolio turnover rateG | 71% | 171% | 146% | 217% | 179% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Consumer Discretionary Fund Class I
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $21.00 | $20.72 | $17.04 | $16.72 | $13.27 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .12 | .02 | .04 | .07 | .03 |
| Net realized and unrealized gain (loss) | 4.26 | 1.85 | 5.32 | 1.13 | 3.42 |
| Total from investment operations | 4.38 | 1.87 | 5.36 | 1.20 | 3.45 |
| Distributions from net investment income | – | – | – | (.05) | – |
| Distributions from net realized gain | (2.32) | (1.59) | (1.68) | (.83) | – |
| Total distributions | (2.32) | (1.59) | (1.68) | (.88) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $23.06 | $21.00 | $20.72 | $17.04 | $16.72 |
| Total ReturnC | 22.60% | 9.61% | 34.06% | 8.33% | 26.00% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | .87% | .91% | .97% | 1.00% | 1.03% |
| Expenses net of fee waivers, if any | .87% | .91% | .97% | 1.00% | 1.03% |
| Expenses net of all reductions | .87% | .91% | .96% | .99% | 1.01% |
| Net investment income (loss) | .55% | .08% | .24% | .41% | .22% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $48,329 | $21,708 | $13,044 | $9,984 | $9,406 |
| Portfolio turnover rateF | 71% | 171% | 146% | 217% | 179% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of July 31, 2015, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. The Fund is subject to a tax imposed on capital gains by certain countries in which it invests. An estimated deferred tax liability for net unrealized appreciation on the applicable securities is included in Other payables and accrued expenses on the Statement of Assets & Liabilities.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, deferred trustees compensation and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $38,409,116 |
| Gross unrealized depreciation | (7,131,368) |
| Net unrealized appreciation (depreciation) on securities | $31,277,748 |
| Tax Cost | $208,297,215 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $ 175,135 |
| Undistributed long-term capital gain | $5,485,288 |
| Net unrealized appreciation (depreciation) on securities and other investments | $31,277,227 |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $1,683,775 | $ 3,587,518 |
| Long-term Capital Gains | 12,239,681 | 4,854,558 |
| Total | $13,923,456 | $ 8,442,076 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $191,450,583 and $109,983,718, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | –% | .25% | $183,150 | $4,690 |
| Class T | .25% | .25% | 108,166 | – |
| Class B | .75% | .25% | 15,129 | 11,351 |
| Class C | .75% | .25% | 275,369 | 85,212 |
| $581,814 | $101,253 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $81,079 |
| Class T | 8,899 |
| Class B* | 1,127 |
| Class C* | 5,191 |
| $96,296 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $153,861 | .21 |
| Class T | 56,296 | .26 |
| Class B | 4,018 | .27 |
| Class C | 61,326 | .22 |
| Class I | 56,911 | .18 |
| $332,412 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $2,428 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $209 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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 $17,197.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $9,604 for the period.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $814 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $1,304 |
| Class T | 365 |
| Class B | 17 |
| Class C | 487 |
| Class I | 472 |
| $2,645 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net realized gain | ||
| Class A | $6,488,273 | $4,039,405 |
| Class T | 2,268,637 | 1,360,265 |
| Class B | 224,707 | 196,098 |
| Class C | 2,737,034 | 1,615,723 |
| Class I | 2,204,805 | 1,230,585 |
| Total | $13,923,456 | $8,442,076 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 3,721,895 | 1,790,947 | $75,431,970 | $35,353,582 |
| Reinvestment of distributions | 314,662 | 185,416 | 5,921,151 | 3,485,073 |
| Shares redeemed | (1,680,428) | (1,296,503) | (32,834,119) | (25,801,801) |
| Net increase (decrease) | 2,356,129 | 679,860 | $48,519,002 | $13,036,854 |
| Class T | ||||
| Shares sold | 338,629 | 282,329 | $6,435,082 | $5,295,701 |
| Reinvestment of distributions | 122,984 | 73,668 | 2,187,662 | 1,316,540 |
| Shares redeemed | (182,245) | (190,454) | (3,405,237) | (3,590,224) |
| Net increase (decrease) | 279,368 | 165,543 | $5,217,507 | $3,022,017 |
| Class B | ||||
| Shares sold | 8,479 | 14,978 | $145,589 | $248,602 |
| Reinvestment of distributions | 10,956 | 9,369 | 172,497 | 150,012 |
| Shares redeemed | (47,549) | (57,312) | (771,428) | (968,609) |
| Net increase (decrease) | (28,114) | (32,965) | $(453,342) | $(569,995) |
| Class C | ||||
| Shares sold | 1,409,357 | 472,482 | $23,864,510 | $7,968,901 |
| Reinvestment of distributions | 157,518 | 89,038 | 2,481,906 | 1,432,315 |
| Shares redeemed | (334,437) | (343,513) | (5,460,293) | (5,820,370) |
| Net increase (decrease) | 1,232,438 | 218,007 | $20,886,123 | $3,580,846 |
| Class I | ||||
| Shares sold | 2,162,351 | 777,526 | $46,666,847 | $16,341,397 |
| Reinvestment of distributions | 93,807 | 51,438 | 1,886,667 | 1,028,758 |
| Shares redeemed | (1,194,006) | (424,690) | (25,608,119) | (8,855,224) |
| Net increase (decrease) | 1,062,152 | 404,274 | $22,945,395 | $8,514,931 |
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.
Fidelity Advisor® Electronics Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | 4.48% | 15.19% | 6.10% |
| Class T (incl. 3.50% sales charge) | 6.68% | 15.44% | 6.08% |
| Class B (incl. contingent deferred sales charge) | 4.95% | 15.43% | 6.17% |
| Class C (incl. contingent deferred sales charge) | 9.03% | 15.69% | 5.94% |
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.
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, 2005, 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.
| Period Ending Values | ||
| $18,077 | Fidelity Advisor® Electronics Fund - Class A | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Electronics Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Stephen Barwikowski: For the year, the fund's share classes handily bested the 4.81% return of the MSCI U.S. IMI Semiconductors & Semiconductor Equipment 25/50 Index but lagged the broadly based S&P 500®. (For specific class-level results, please see the Performance section of this report.) Versus the MSCI index, stock selection in the fund's primary category of semiconductors was the primary driver of our outperformance. Computer chipmaker Intel, in which we had a large underweighting, was the fund's biggest relative contributor as well as its largest holding. I questioned the firm's ability to sustain content-per-PC of roughly $115 in the face of alternatives in the mobile ecosystem that cost considerably less. A sizable overweighting in Freescale Semiconductor also was a significant contributor. In March, Netherlands-based rival NXP Semiconductors – another contributor – announced an agreement to acquire Freescale for a mix of cash and stock. Conversely, a large period-average underweighting in strong-performing Avago Technologies hurt our relative results. I built Avago into the fund's third-largest position by period end, which was roughly a market weighting. Like Avago, Skyworks Solutions is a provider of radio-frequency semiconductors and detracted from relative performance because I largely avoided its strong-performing shares.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.Fidelity Advisor® Electronics Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Intel Corp. | 15.3 | 7.6 |
| Broadcom Corp. Class A | 11.2 | 8.1 |
| Avago Technologies Ltd. | 6.1 | 0.2 |
| Micron Technology, Inc. | 5.8 | 3.8 |
| Maxim Integrated Products, Inc. | 5.0 | 4.1 |
| QUALCOMM, Inc. | 4.6 | 5.5 |
| Analog Devices, Inc. | 4.6 | 2.1 |
| Marvell Technology Group Ltd. | 4.5 | 4.2 |
| Semtech Corp. | 4.5 | 2.0 |
| Intersil Corp. Class A | 2.8 | 2.8 |
| 64.4 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Semiconductors & Semiconductor Equipment | 84.1% | |
| Technology Hardware, Storage & Peripherals | 5.8% | |
| Communications Equipment | 4.6% | |
| Electronic Equipment & Components | 3.4% | |
| Internet Software & Services | 0.6% | |
| All Others* | 1.5% | |
| As of January 31, 2015 | ||
| Semiconductors & Semiconductor Equipment | 75.9% | |
| Communications Equipment | 6.5% | |
| Electronic Equipment & Components | 6.2% | |
| Technology Hardware, Storage & Peripherals | 4.8% | |
| Internet Software & Services | 3.5% | |
| All Others* | 3.1% | |
* Includes short-term investments and net other assets (liabilities).
Fidelity Advisor® Electronics Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 98.3% | |||
| Shares | Value | ||
| Biotechnology - 0.0% | |||
| Biotechnology - 0.0% | |||
| Arrowhead Research Corp. warrants 5/21/17 (a) | 64,879 | $1 | |
| Communications Equipment - 4.6% | |||
| Communications Equipment - 4.6% | |||
| QUALCOMM, Inc. | 76,726 | 4,940,387 | |
| Diversified Telecommunication Services - 0.3% | |||
| Alternative Carriers - 0.3% | |||
| Intelsat SA (a) | 37,000 | 351,870 | |
| Electronic Equipment & Components - 3.1% | |||
| Electronic Manufacturing Services - 2.8% | |||
| Jabil Circuit, Inc. | 59,576 | 1,206,414 | |
| KEMET Corp. (a) | 53,500 | 124,655 | |
| TTM Technologies, Inc. (a) | 176,655 | 1,612,860 | |
| 2,943,929 | |||
| Technology Distributors - 0.3% | |||
| Avnet, Inc. | 8,400 | 350,532 | |
| TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 3,294,461 | ||
| Internet Software & Services - 0.6% | |||
| Internet Software & Services - 0.6% | |||
| Google, Inc.: | |||
| Class A (a) | 940 | 618,050 | |
| Class C | 5 | 3,128 | |
| 621,178 | |||
| Semiconductors & Semiconductor Equipment - 83.9% | |||
| Semiconductor Equipment - 3.6% | |||
| Amkor Technology, Inc. (a) | 167,500 | 738,675 | |
| KLA-Tencor Corp. | 8,200 | 435,010 | |
| Lam Research Corp. | 31,481 | 2,419,944 | |
| Xcerra Corp. (a) | 31,300 | 196,721 | |
| 3,790,350 | |||
| Semiconductors - 80.3% | |||
| Advanced Micro Devices, Inc. (a)(b) | 404,400 | 780,492 | |
| Altera Corp. | 16,800 | 834,288 | |
| Analog Devices, Inc. | 84,528 | 4,930,518 | |
| Applied Micro Circuits Corp. (a) | 40,437 | 251,114 | |
| Atmel Corp. | 348,979 | 2,889,546 | |
| Avago Technologies Ltd. | 52,100 | 6,519,794 | |
| Broadcom Corp. Class A | 235,601 | 11,923,767 | |
| Cavium, Inc. (a) | 7,300 | 494,940 | |
| Cirrus Logic, Inc. (a) | 24,200 | 798,842 | |
| Cree, Inc. (a)(b) | 55,980 | 1,379,907 | |
| Cypress Semiconductor Corp. | 39,300 | 451,164 | |
| Diodes, Inc. (a) | 6,400 | 142,016 | |
| Exar Corp. (a) | 59,100 | 465,117 | |
| EZchip Semiconductor Ltd. (a) | 17,300 | 285,450 | |
| Freescale Semiconductor, Inc. (a) | 44,214 | 1,762,812 | |
| Hua Hong Semiconductor Ltd. (a) | 122,000 | 119,761 | |
| Intel Corp. | 560,078 | 16,214,256 | |
| Intersil Corp. Class A | 270,637 | 3,012,190 | |
| MagnaChip Semiconductor Corp. (a) | 31,236 | 267,380 | |
| Marvell Technology Group Ltd. | 381,800 | 4,749,592 | |
| Maxim Integrated Products, Inc. | 156,022 | 5,310,989 | |
| MediaTek, Inc. | 49,000 | 513,834 | |
| Microchip Technology, Inc. (b) | 61,500 | 2,634,660 | |
| Micron Technology, Inc. (a) | 331,512 | 6,136,287 | |
| Motech Industries, Inc. | 1 | 1 | |
| NVIDIA Corp. | 37,223 | 742,599 | |
| NXP Semiconductors NV (a) | 4,779 | 463,515 | |
| O2Micro International Ltd. sponsored ADR (a) | 11,012 | 27,200 | |
| Omnivision Technologies, Inc. (a) | 17,200 | 420,024 | |
| PMC-Sierra, Inc. (a) | 251,347 | 1,711,673 | |
| Qorvo, Inc. (a) | 6,000 | 347,700 | |
| Sanken Electric Co. Ltd. | 34,000 | 189,293 | |
| Semiconductor Manufacturing International Corp. (a) | 1,753,000 | 157,519 | |
| Semtech Corp. (a) | 269,722 | 4,744,410 | |
| Silicon Laboratories, Inc. (a) | 6,100 | 274,439 | |
| Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR | 15,100 | 333,861 | |
| Texas Instruments, Inc. | 48,818 | 2,439,924 | |
| Trident Microsystems, Inc. (a) | 19 | 0 | |
| Xilinx, Inc. | 13,236 | 552,603 | |
| 85,273,477 | |||
| TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | 89,063,827 | ||
| Software - 0.0% | |||
| Systems Software - 0.0% | |||
| Infoblox, Inc. (a) | 1 | 24 | |
| Technology Hardware, Storage & Peripherals - 5.8% | |||
| Technology Hardware, Storage & Peripherals - 5.8% | |||
| BlackBerry Ltd. (a) | 100 | 774 | |
| Hewlett-Packard Co. | 88,700 | 2,707,124 | |
| QLogic Corp. (a) | 14,400 | 127,728 | |
| Samsung Electronics Co. Ltd. | 1,444 | 1,467,480 | |
| Seagate Technology LLC | 20,400 | 1,032,240 | |
| Western Digital Corp. | 9,200 | 791,752 | |
| 6,127,098 | |||
| TOTAL COMMON STOCKS | |||
| (Cost $110,378,320) | 104,398,846 | ||
| Principal Amount | Value | ||
| Corporate Bonds - 0.5% | |||
| Convertible Bonds - 0.3% | |||
| Electronic Equipment & Components - 0.3% | |||
| Electronic Components - 0.3% | |||
| InvenSense, Inc. 1.75% 11/1/18 | 250,000 | 243,125 | |
| Nonconvertible Bonds - 0.2% | |||
| Semiconductors & Semiconductor Equipment - 0.2% | |||
| Semiconductors - 0.2% | |||
| Advanced Micro Devices, Inc.: | |||
| 7% 7/1/24 | 215,000 | 142,975 | |
| 7.75% 8/1/20 | 130,000 | 87,506 | |
| 230,481 | |||
| TOTAL CORPORATE BONDS | |||
| (Cost $522,218) | 473,606 | ||
| Shares | Value | ||
| Money Market Funds - 5.9% | |||
| Fidelity Cash Central Fund, 0.17% (c) | 2,343,741 | 2,343,741 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (c)(d) | 3,918,800 | 3,918,800 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $6,262,541) | 6,262,541 | ||
| TOTAL INVESTMENT PORTFOLIO - 104.7% | |||
| (Cost $117,163,079) | 111,134,993 | ||
| NET OTHER ASSETS (LIABILITIES) - (4.7)% | (4,945,101) | ||
| NET ASSETS - 100% | $106,189,892 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) 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.
(d) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $6,094 |
| Fidelity Securities Lending Cash Central Fund | 23,684 |
| Total | $29,778 |
Investment Valuation
The following is a summary of the inputs used, as of July 31, 2015, 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 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 | $104,398,846 | $104,241,326 | $157,520 | $-- |
| Corporate Bonds | 473,606 | -- | 473,606 | -- |
| Money Market Funds | 6,262,541 | 6,262,541 | -- | -- |
| Total Investments in Securities: | $111,134,993 | $110,503,867 | $631,126 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended July 31, 2015. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $2,307,249 |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 83.0% |
| Bermuda | 6.2% |
| Singapore | 6.1% |
| Korea (South) | 1.4% |
| Ireland | 1.0% |
| Others (Individually Less Than 1%) | 2.3% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Electronics Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $3,779,760) — See accompanying schedule: Unaffiliated issuers (cost $110,900,538) | $104,872,452 | |
| Fidelity Central Funds (cost $6,262,541) | 6,262,541 | |
| Total Investments (cost $117,163,079) | $111,134,993 | |
| Cash | 529,870 | |
| Receivable for investments sold | 2,409,776 | |
| Receivable for fund shares sold | 145,275 | |
| Dividends receivable | 36,960 | |
| Interest receivable | 7,385 | |
| Distributions receivable from Fidelity Central Funds | 3,277 | |
| Other receivables | 6,633 | |
| Total assets | 114,274,169 | |
| Liabilities | ||
| Payable for investments purchased | $2,240,546 | |
| Payable for fund shares redeemed | 1,761,054 | |
| Accrued management fee | 52,821 | |
| Distribution and service plan fees payable | 31,010 | |
| Other affiliated payables | 27,033 | |
| Other payables and accrued expenses | 53,013 | |
| Collateral on securities loaned, at value | 3,918,800 | |
| Total liabilities | 8,084,277 | |
| Net Assets | $106,189,892 | |
| Net Assets consist of: | ||
| Paid in capital | $104,471,675 | |
| Undistributed net investment income | 39,890 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 7,706,702 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (6,028,375) | |
| Net Assets | $106,189,892 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($38,237,241 ÷ 2,500,722 shares) | $15.29 | |
| Maximum offering price per share (100/94.25 of $15.29) | $16.22 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($10,825,615 ÷ 731,177 shares) | $14.81 | |
| Maximum offering price per share (100/96.50 of $14.81) | $15.35 | |
| Class B: | ||
| Net Asset Value and offering price per share ($320,051 ÷ 23,157 shares)(a) | $13.82 | |
| Class C: | ||
| Net Asset Value and offering price per share ($20,864,356 ÷ 1,512,366 shares)(a) | $13.80 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($35,942,629 ÷ 2,261,606 shares) | $15.89 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $1,419,885 | |
| Interest | 23,410 | |
| Income from Fidelity Central Funds | 29,778 | |
| Total income | 1,473,073 | |
| Expenses | ||
| Management fee | $550,469 | |
| Transfer agent fees | 228,664 | |
| Distribution and service plan fees | 294,631 | |
| Accounting and security lending fees | 39,792 | |
| Custodian fees and expenses | 84,723 | |
| Independent trustees' compensation | 1,620 | |
| Registration fees | 73,083 | |
| Audit | 46,785 | |
| Legal | 1,045 | |
| Miscellaneous | 735 | |
| Total expenses before reductions | 1,321,547 | |
| Expense reductions | (17,056) | 1,304,491 |
| Net investment income (loss) | 168,582 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 10,895,803 | |
| Foreign currency transactions | (2,328) | |
| Total net realized gain (loss) | 10,893,475 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (5,872,898) | |
| Assets and liabilities in foreign currencies | (289) | |
| Total change in net unrealized appreciation (depreciation) | (5,873,187) | |
| Net gain (loss) | 5,020,288 | |
| Net increase (decrease) in net assets resulting from operations | $5,188,870 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $168,582 | $(66,312) |
| Net realized gain (loss) | 10,893,475 | 5,071,173 |
| Change in net unrealized appreciation (depreciation) | (5,873,187) | 1,173,624 |
| Net increase (decrease) in net assets resulting from operations | 5,188,870 | 6,178,485 |
| Distributions to shareholders from net investment income | (57,407) | – |
| Distributions to shareholders from net realized gain | (377,502) | – |
| Total distributions | (434,909) | – |
| Share transactions - net increase (decrease) | 44,912,905 | 34,400,043 |
| Redemption fees | 13,381 | 4,495 |
| Total increase (decrease) in net assets | 49,680,247 | 40,583,023 |
| Net Assets | ||
| Beginning of period | 56,509,645 | 15,926,622 |
| End of period (including undistributed net investment income of $39,890 and accumulated net investment loss of $62,995, respectively) | $106,189,892 | $56,509,645 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Electronics Fund Class A
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $13.86 | $10.33 | $8.45 | $8.93 | $7.14 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .03 | (.02) | (.01) | (.05) | (.04) |
| Net realized and unrealized gain (loss) | 1.48 | 3.55 | 1.89 | (.43) | 1.83 |
| Total from investment operations | 1.51 | 3.53 | 1.88 | (.48) | 1.79 |
| Distributions from net investment income | (.01) | – | – | – | – |
| Distributions from net realized gain | (.07) | – | – | – | – |
| Total distributions | (.08) | – | – | – | – |
| Redemption fees added to paid in capital A,B | – | – | – | – | – |
| Net asset value, end of period | $15.29 | $13.86 | $10.33 | $8.45 | $8.93 |
| Total ReturnC,D | 10.85% | 34.17% | 22.25% | (5.38)% | 25.07% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.28% | 1.84% | 2.18% | 1.88% | 1.89% |
| Expenses net of fee waivers, if any | 1.28% | 1.40% | 1.40% | 1.40% | 1.40% |
| Expenses net of all reductions | 1.27% | 1.39% | 1.37% | 1.39% | 1.39% |
| Net investment income (loss) | .20% | (.16)% | (.07)% | (.53)% | (.40)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $38,237 | $16,542 | $5,833 | $6,000 | $7,537 |
| Portfolio turnover rateG | 156% | 156% | 179% | 140% | 166% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Electronics Fund Class T
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $13.45 | $10.05 | $8.24 | $8.73 | $7.00 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.02) | (.05) | (.03) | (.07) | (.06) |
| Net realized and unrealized gain (loss) | 1.44 | 3.45 | 1.84 | (.42) | 1.79 |
| Total from investment operations | 1.42 | 3.40 | 1.81 | (.49) | 1.73 |
| Distributions from net realized gain | (.06) | – | – | – | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $14.81 | $13.45 | $10.05 | $8.24 | $8.73 |
| Total ReturnC,D | 10.55% | 33.83% | 21.97% | (5.61)% | 24.71% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.62% | 2.19% | 2.48% | 2.23% | 2.25% |
| Expenses net of fee waivers, if any | 1.62% | 1.65% | 1.65% | 1.65% | 1.65% |
| Expenses net of all reductions | 1.61% | 1.64% | 1.62% | 1.64% | 1.64% |
| Net investment income (loss) | (.14)% | (.42)% | (.32)% | (.78)% | (.65)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $10,826 | $7,144 | $3,756 | $3,909 | $4,476 |
| Portfolio turnover rateG | 156% | 156% | 179% | 140% | 166% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Electronics Fund Class B
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $12.59 | $9.46 | $7.79 | $8.29 | $6.69 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.09) | (.10) | (.07) | (.10) | (.09) |
| Net realized and unrealized gain (loss) | 1.34 | 3.23 | 1.74 | (.40) | 1.69 |
| Total from investment operations | 1.25 | 3.13 | 1.67 | (.50) | 1.60 |
| Distributions from net realized gain | (.02) | – | – | – | – |
| Redemption fees added to paid in capital A,B | – | – | – | – | – |
| Net asset value, end of period | $13.82 | $12.59 | $9.46 | $7.79 | $8.29 |
| Total ReturnC,D | 9.95% | 33.09% | 21.44% | (6.03)% | 23.92% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 2.11% | 2.68% | 2.95% | 2.70% | 2.76% |
| Expenses net of fee waivers, if any | 2.10% | 2.15% | 2.15% | 2.15% | 2.15% |
| Expenses net of all reductions | 2.09% | 2.14% | 2.12% | 2.15% | 2.14% |
| Net investment income (loss) | (.62)% | (.92)% | (.82)% | (1.29)% | (1.15)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $320 | $392 | $306 | $459 | $691 |
| Portfolio turnover rateG | 156% | 156% | 179% | 140% | 166% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Electronics Fund Class C
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $12.58 | $9.44 | $7.78 | $8.29 | $6.68 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.08) | (.10) | (.07) | (.10) | (.09) |
| Net realized and unrealized gain (loss) | 1.34 | 3.24 | 1.73 | (.41) | 1.70 |
| Total from investment operations | 1.26 | 3.14 | 1.66 | (.51) | 1.61 |
| Distributions from net realized gain | (.04) | – | – | – | – |
| Redemption fees added to paid in capital A,B | – | – | – | – | – |
| Net asset value, end of period | $13.80 | $12.58 | $9.44 | $7.78 | $8.29 |
| Total ReturnC,D | 10.03% | 33.26% | 21.34% | (6.15)% | 24.10% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 2.06% | 2.60% | 2.93% | 2.65% | 2.70% |
| Expenses net of fee waivers, if any | 2.06% | 2.15% | 2.15% | 2.15% | 2.15% |
| Expenses net of all reductions | 2.05% | 2.14% | 2.12% | 2.14% | 2.14% |
| Net investment income (loss) | (.58)% | (.91)% | (.82)% | (1.28)% | (1.15)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $20,864 | $7,381 | $3,157 | $3,721 | $3,836 |
| Portfolio turnover rateG | 156% | 156% | 179% | 140% | 166% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Electronics Fund Class I
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $14.37 | $10.68 | $8.72 | $9.19 | $7.33 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .08 | .01 | .02 | (.02) | (.01) |
| Net realized and unrealized gain (loss) | 1.53 | 3.68 | 1.94 | (.45) | 1.87 |
| Total from investment operations | 1.61 | 3.69 | 1.96 | (.47) | 1.86 |
| Distributions from net investment income | (.02) | – | – | – | – |
| Distributions from net realized gain | (.07) | – | – | – | – |
| Total distributions | (.09) | – | – | – | – |
| Redemption fees added to paid in capital A,B | – | – | – | – | – |
| Net asset value, end of period | $15.89 | $14.37 | $10.68 | $8.72 | $9.19 |
| Total ReturnC | 11.17% | 34.55% | 22.48% | (5.11)% | 25.38% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | .98% | 1.34% | 1.86% | 1.55% | 1.42% |
| Expenses net of fee waivers, if any | .98% | 1.15% | 1.15% | 1.15% | 1.15% |
| Expenses net of all reductions | .96% | 1.14% | 1.12% | 1.14% | 1.14% |
| Net investment income (loss) | .51% | .08% | .18% | (.28)% | (.15)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $35,943 | $25,050 | $2,874 | $3,271 | $1,765 |
| Portfolio turnover rateF | 156% | 156% | 179% | 140% | 166% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, 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 reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
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. Corporate bonds are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be 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, 2015, including information on transfers between Levels 1 and 2 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, capital loss carryforwards, market discount 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 | $5,303,241 |
| Gross unrealized depreciation | (12,543,375) |
| Net unrealized appreciation (depreciation) on securities | $(7,240,134) |
| Tax Cost | $118,375,127 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $7,990,531 |
| Undistributed long-term capital gain | $968,110 |
| Net unrealized appreciation (depreciation) on securities and other investments | $(7,240,423) |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $423,024 | $ - |
| Long-term Capital Gains | 11,885 | – |
| Total | $434,909 | $ - |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $193,985,323 and $147,870,706, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $80,004 | $5,337 |
| Class T | .25% | .25% | 48,418 | 88 |
| Class B | .75% | .25% | 3,841 | 2,887 |
| Class C | .75% | .25% | 162,368 | 79,672 |
| $294,631 | $87,984 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $70,773 |
| Class T | 5,693 |
| Class B* | 189 |
| Class C* | 4,722 |
| $81,377 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $75,949 | .24 |
| Class T | 31,708 | .33 |
| Class B | 1,176 | .31 |
| Class C | 43,241 | .27 |
| Class I | 76,590 | .18 |
| $ 228,664 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $9,918 for the period.
Other. During the period, the investment adviser reimbursed the Fund for certain losses in the amount of $2,754.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $136 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $23,684.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $15,676 for the period.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $517 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $285 |
| Class T | 22 |
| Class B | 1 |
| Class C | 141 |
| Class I | 414 |
| $863 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $13,078 | $– |
| Class I | 44,329 | – |
| Total | $57,407 | $– |
| From net realized gain | ||
| Class A | $128,913 | $– |
| Class T | 34,794 | – |
| Class B | 598 | – |
| Class C | 43,270 | – |
| Class I | 169,927 | – |
| Total | $377,502 | $– |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 2,442,737 | 772,579 | $38,016,336 | $10,230,441 |
| Reinvestment of distributions | 7,644 | – | 119,544 | – |
| Shares redeemed | (1,143,527) | (143,457) | (17,859,819) | (1,810,191) |
| Net increase (decrease) | 1,306,854 | 629,122 | $20,276,061 | $8,420,250 |
| Class T | ||||
| Shares sold | 393,756 | 230,216 | $5,963,896 | $2,844,843 |
| Reinvestment of distributions | 2,215 | – | 33,619 | – |
| Shares redeemed | (195,977) | (72,780) | (2,908,278) | (817,318) |
| Net increase (decrease) | 199,994 | 157,436 | $3,089,237 | $2,027,525 |
| Class B | ||||
| Shares sold | 8,518 | 7,793 | $118,987 | $94,749 |
| Reinvestment of distributions | 39 | – | 551 | – |
| Shares redeemed | (16,542) | (9,002) | (232,148) | (95,467) |
| Net increase (decrease) | (7,985) | (1,209) | $(112,610) | $(718) |
| Class C | ||||
| Shares sold | 1,188,406 | 357,228 | $16,685,789 | $4,283,093 |
| Reinvestment of distributions | 2,732 | – | 38,744 | – |
| Shares redeemed | (265,701) | (104,588) | (3,757,943) | (1,156,253) |
| Net increase (decrease) | 925,437 | 252,640 | $12,966,590 | $3,126,840 |
| Class I | ||||
| Shares sold | 3,205,885 | 1,892,867 | $51,968,937 | $26,288,223 |
| Reinvestment of distributions | 10,497 | – | 170,367 | – |
| Shares redeemed | (2,698,476) | (418,217) | (43,445,677) | (5,462,077) |
| Net increase (decrease) | 517,906 | 1,474,650 | $8,693,627 | $20,826,146 |
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.
Fidelity Advisor® Energy Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | (33.01)% | 3.34% | 3.41% |
| Class T (incl. 3.50% sales charge) | (31.57)% | 3.60% | 3.43% |
| Class B (incl. contingent deferred sales charge) | (32.85)% | 3.42% | 3.47% |
| Class C (incl. contingent deferred sales charge) | (30.11)% | 3.80% | 3.27% |
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.
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.
Prior to October 1, 2006, the 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, 2005, 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.
| Period Ending Values | ||
| $13,987 | Fidelity Advisor® Energy Fund - Class A | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Energy Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015, as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. Consequently, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for the consumer staples sector and the real estate segment of financials yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager John Dowd: For the year, the fund's share classes lagged the -27.92% return of the sector benchmark, the MSCI U.S. IMI Energy 25/50 Index, and fell well short of the broad-based S&P 500®. (For specific class-level results, please see the Performance section of this report.) Energy stocks suffered a huge sell-off the past year, as oil prices collapsed to six-year lows, challenging profits across the sector. Versus the MSCI benchmark, the fund's positioning in the oil & gas equipment & services group detracted. Here, we were stung by an early overweighting in services giant Halliburton, whose stock price fell after it launched a bid to acquire rival Baker Hughes. I eliminated Halliburton from the fund in March, having shifted my focus to Baker Hughes on the belief the latter would be acquired at a premium. A sizable underweighting in Exxon Mobil and the large integrated oil & gas firms curbed results, as this group is often seen as a safe haven in a turbulent market. Untimely ownership of refiner Marathon Petroleum was the biggest relative detractor for the period. I sold out of the position in April, and Marathon gained ground through period end. Conversely, returns were helped by investments in pipelines, also known as the oil & gas storage & transportation segment. Contributors here included an out-of-index stake in Valero Energy Partners and an overweighting in Tesoro. Largely avoiding E&P Apache was the fund's top contributor, as it struggled with a production miss and analyst downgrade. I eliminated the position by period end. Lastly, the relative strength of the U.S. dollar hurt the performance of our non-U.S. investments.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.Fidelity Advisor® Energy Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Exxon Mobil Corp. | 14.6 | 14.1 |
| Schlumberger Ltd. | 9.5 | 8.8 |
| EOG Resources, Inc. | 6.1 | 6.6 |
| Valero Energy Corp. | 5.2 | 1.3 |
| Anadarko Petroleum Corp. | 4.5 | 5.1 |
| Chevron Corp. | 4.3 | 6.9 |
| Cimarex Energy Co. | 3.9 | 4.0 |
| Newfield Exploration Co. | 3.9 | 0.3 |
| Noble Energy, Inc. | 3.0 | 3.2 |
| Pioneer Natural Resources Co. | 2.9 | 1.0 |
| 57.9 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Oil, Gas & Consumable Fuels | 82.1% | |
| Energy Equipment & Services | 15.6% | |
| Independent Power and Renewable Electricity Producers | 1.1% | |
| Chemicals | 0.6% | |
| All Others* | 0.6% | |
| As of January 31, 2015 | ||
| Oil, Gas & Consumable Fuels | 76.3% | |
| Energy Equipment & Services | 18.4% | |
| Independent Power and Renewable Electricity Producers | 1.2% | |
| Multi-Utilities | 0.1% | |
| All Others* | 4.0% | |
* Includes short-term investments and net other assets (liabilities).
Fidelity Advisor® Energy Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 99.4% | |||
| Shares | Value | ||
| Chemicals - 0.6% | |||
| Commodity Chemicals - 0.6% | |||
| LyondellBasell Industries NV Class A | 49,400 | $4,635,202 | |
| Energy Equipment & Services - 15.6% | |||
| Oil & Gas Drilling - 0.5% | |||
| Helmerich & Payne, Inc. (a) | 30,000 | 1,732,200 | |
| Ocean Rig UDW, Inc. (United States) | 108,900 | 418,176 | |
| Odfjell Drilling A/S (b) | 567,856 | 417,109 | |
| Xtreme Drilling & Coil Services Corp. (b) | 813,202 | 1,610,424 | |
| 4,177,909 | |||
| Oil & Gas Equipment & Services - 15.1% | |||
| Baker Hughes, Inc. | 348,600 | 20,271,090 | |
| C&J Energy Services Ltd. (b) | 37,300 | 359,945 | |
| Dril-Quip, Inc. (b) | 87,191 | 5,092,826 | |
| FMC Technologies, Inc. (b) | 63,406 | 2,077,181 | |
| Frank's International NV | 299,200 | 4,844,048 | |
| Oceaneering International, Inc. | 216,273 | 8,655,245 | |
| Schlumberger Ltd. | 871,909 | 72,211,503 | |
| Total Energy Services, Inc. | 52,700 | 595,965 | |
| 114,107,803 | |||
| TOTAL ENERGY EQUIPMENT & SERVICES | 118,285,712 | ||
| Independent Power and Renewable Electricity Producers - 1.1% | |||
| Independent Power Producers & Energy Traders - 0.7% | |||
| Dynegy, Inc. (b) | 120,922 | 3,150,018 | |
| NRG Yield, Inc. Class C | 92,700 | 1,788,183 | |
| 4,938,201 | |||
| Renewable Electricity - 0.4% | |||
| NextEra Energy Partners LP | 95,000 | 3,389,600 | |
| TOTAL INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS | 8,327,801 | ||
| Oil, Gas & Consumable Fuels - 82.1% | |||
| Integrated Oil & Gas - 19.5% | |||
| Chevron Corp. | 372,709 | 32,977,292 | |
| Exxon Mobil Corp. | 1,400,061 | 110,898,834 | |
| Occidental Petroleum Corp. | 53,200 | 3,734,640 | |
| Suncor Energy, Inc. | 26,900 | 757,729 | |
| 148,368,495 | |||
| Oil & Gas Exploration & Production - 43.1% | |||
| Anadarko Petroleum Corp. | 453,483 | 33,716,461 | |
| Antero Resources Corp. (b) | 62,000 | 1,705,620 | |
| Bankers Petroleum Ltd. (b) | 624,600 | 1,217,823 | |
| Bonanza Creek Energy, Inc. (b) | 101,625 | 793,691 | |
| Cabot Oil & Gas Corp. | 53,000 | 1,386,480 | |
| Canadian Natural Resources Ltd. | 115,300 | 2,814,066 | |
| Carrizo Oil & Gas, Inc. (b) | 49,800 | 1,898,874 | |
| Cimarex Energy Co. | 284,547 | 29,627,034 | |
| Concho Resources, Inc. (b) | 159,500 | 16,996,320 | |
| ConocoPhillips Co. | 50,636 | 2,549,016 | |
| Continental Resources, Inc. (b) | 161,330 | 5,390,035 | |
| Diamondback Energy, Inc. | 179,500 | 12,080,350 | |
| Encana Corp. | 1,760,300 | 13,378,738 | |
| Energen Corp. | 172,013 | 9,495,118 | |
| EOG Resources, Inc. | 599,086 | 46,243,448 | |
| EQT Corp. | 100,500 | 7,723,425 | |
| Evolution Petroleum Corp. | 60,495 | 315,784 | |
| Gulfport Energy Corp. (b) | 224,400 | 7,351,344 | |
| Hess Corp. | 68,700 | 4,053,987 | |
| Memorial Resource Development Corp. (b) | 622,800 | 9,528,840 | |
| Newfield Exploration Co. (b) | 901,300 | 29,553,627 | |
| Noble Energy, Inc. | 654,608 | 23,061,840 | |
| Northern Oil & Gas, Inc. (b) | 234,293 | 1,115,235 | |
| Parsley Energy, Inc. Class A (b) | 249,100 | 3,601,986 | |
| PDC Energy, Inc. (b) | 262,688 | 12,333,202 | |
| Peyto Exploration & Development Corp. (a) | 45,800 | 991,046 | |
| Pioneer Natural Resources Co. | 174,216 | 22,085,362 | |
| QEP Resources, Inc. | 92,200 | 1,279,736 | |
| Rice Energy, Inc. (b) | 230,000 | 4,151,500 | |
| RSP Permian, Inc. (b) | 98,800 | 2,450,240 | |
| SM Energy Co. | 261,700 | 9,701,219 | |
| Synergy Resources Corp. (b) | 772,615 | 7,517,544 | |
| TAG Oil Ltd. (b) | 446,700 | 413,279 | |
| 326,522,270 | |||
| Oil & Gas Refining & Marketing - 7.6% | |||
| Alon U.S.A. Energy, Inc. | 50,100 | 932,361 | |
| CVR Refining, LP | 33,873 | 700,832 | |
| Delek U.S. Holdings, Inc. | 7,700 | 274,659 | |
| Tesoro Corp. | 149,600 | 14,562,064 | |
| Valero Energy Corp. | 594,526 | 39,000,906 | |
| World Fuel Services Corp. | 48,533 | 1,972,866 | |
| 57,443,688 | |||
| Oil & Gas Storage & Transport - 11.9% | |||
| Cheniere Energy Partners LP Holdings LLC | 89,900 | 1,965,214 | |
| Cheniere Energy, Inc. (b) | 165,600 | 11,421,432 | |
| Columbia Pipeline Group, Inc. | 26,800 | 782,024 | |
| Columbia Pipeline Partners LP | 27,300 | 639,912 | |
| Dominion Midstream Partners LP | 30,664 | 1,076,920 | |
| Enable Midstream Partners LP | 42,900 | 701,844 | |
| Energy Transfer Equity LP | 193,700 | 5,826,496 | |
| EQT Midstream Partners LP | 33,700 | 2,654,886 | |
| Golar LNG Ltd. | 187,000 | 8,054,090 | |
| Kinder Morgan, Inc. | 466,500 | 16,159,560 | |
| Magellan Midstream Partners LP | 37,034 | 2,607,194 | |
| MPLX LP | 52,494 | 2,923,391 | |
| ONEOK, Inc. | 38,100 | 1,439,799 | |
| Phillips 66 Partners LP | 56,069 | 3,493,659 | |
| Plains GP Holdings LP Class A | 358,000 | 9,179,120 | |
| Rice Midstream Partners LP | 25,000 | 416,750 | |
| SemGroup Corp. Class A | 29,000 | 2,061,610 | |
| Tallgrass Energy Partners LP | 18,500 | 855,625 | |
| Targa Resources Corp. | 73,832 | 6,530,440 | |
| The Williams Companies, Inc. | 132,400 | 6,948,352 | |
| Valero Energy Partners LP | 92,143 | 4,327,957 | |
| 90,066,275 | |||
| TOTAL OIL, GAS & CONSUMABLE FUELS | 622,400,728 | ||
| TOTAL COMMON STOCKS | |||
| (Cost $820,684,262) | 753,649,443 | ||
| Money Market Funds - 0.9% | |||
| Fidelity Cash Central Fund, 0.17% (c) | 4,073,855 | 4,073,855 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (c)(d) | 2,844,637 | 2,844,637 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $6,918,492) | 6,918,492 | ||
| TOTAL INVESTMENT PORTFOLIO - 100.3% | |||
| (Cost $827,602,754) | 760,567,935 | ||
| NET OTHER ASSETS (LIABILITIES) - (0.3)% | (2,639,118) | ||
| NET ASSETS - 100% | $757,928,817 |
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) 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.
(d) Investment made with cash collateral received from securities on loan.
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 | $24,953 |
| Fidelity Securities Lending Cash Central Fund | 70,308 |
| Total | $95,261 |
Investment Valuation
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 85.0% |
| Curacao | 9.5% |
| Canada | 3.0% |
| Netherlands | 1.2% |
| Bermuda | 1.2% |
| Others (Individually Less Than 1%) | 0.1% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Energy Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $2,703,129) — See accompanying schedule: Unaffiliated issuers (cost $820,684,262) | $753,649,443 | |
| Fidelity Central Funds (cost $6,918,492) | 6,918,492 | |
| Total Investments (cost $827,602,754) | $760,567,935 | |
| Receivable for investments sold | 7,473,619 | |
| Receivable for fund shares sold | 973,893 | |
| Dividends receivable | 1,060,467 | |
| Distributions receivable from Fidelity Central Funds | 1,168 | |
| Other receivables | 33,771 | |
| Total assets | 770,110,853 | |
| Liabilities | ||
| Payable for investments purchased | $6,631,413 | |
| Payable for fund shares redeemed | 1,781,434 | |
| Accrued management fee | 363,633 | |
| Distribution and service plan fees payable | 284,636 | |
| Other affiliated payables | 195,453 | |
| Other payables and accrued expenses | 80,830 | |
| Collateral on securities loaned, at value | 2,844,637 | |
| Total liabilities | 12,182,036 | |
| Net Assets | $757,928,817 | |
| Net Assets consist of: | ||
| Paid in capital | $884,050,332 | |
| Undistributed net investment income | 1,038,469 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (60,121,990) | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (67,037,994) | |
| Net Assets | $757,928,817 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($292,287,922 ÷ 9,441,249 shares) | $30.96 | |
| Maximum offering price per share (100/94.25 of $30.96) | $32.85 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($164,848,206 ÷ 5,211,849 shares) | $31.63 | |
| Maximum offering price per share (100/96.50 of $31.63) | $32.78 | |
| Class B: | ||
| Net Asset Value and offering price per share ($8,162,640 ÷ 287,345 shares)(a) | $28.41 | |
| Class C: | ||
| Net Asset Value and offering price per share ($162,321,601 ÷ 5,679,349 shares)(a) | $28.58 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($130,308,448 ÷ 3,995,272 shares) | $32.62 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $14,727,885 | |
| Income from Fidelity Central Funds | 95,261 | |
| Total income | 14,823,146 | |
| Expenses | ||
| Management fee | $4,352,637 | |
| Transfer agent fees | 1,950,324 | |
| Distribution and service plan fees | 3,381,478 | |
| Accounting and security lending fees | 278,435 | |
| Custodian fees and expenses | 16,458 | |
| Independent trustees' compensation | 13,957 | |
| Registration fees | 146,120 | |
| Audit | 50,334 | |
| Legal | 9,505 | |
| Interest | 408 | |
| Miscellaneous | 10,448 | |
| Total expenses before reductions | 10,210,104 | |
| Expense reductions | (53,097) | 10,157,007 |
| Net investment income (loss) | 4,666,139 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | (60,262,649) | |
| Foreign currency transactions | 53,077 | |
| Total net realized gain (loss) | (60,209,572) | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (212,685,723) | |
| Assets and liabilities in foreign currencies | (3,095) | |
| Total change in net unrealized appreciation (depreciation) | (212,688,818) | |
| Net gain (loss) | (272,898,390) | |
| Net increase (decrease) in net assets resulting from operations | $(268,232,251) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $4,666,139 | $1,451,099 |
| Net realized gain (loss) | (60,209,572) | 63,966,553 |
| Change in net unrealized appreciation (depreciation) | (212,688,818) | 60,343,712 |
| Net increase (decrease) in net assets resulting from operations | (268,232,251) | 125,761,364 |
| Distributions to shareholders from net investment income | (2,612,091) | (2,028,433) |
| Distributions to shareholders from net realized gain | (36,171,815) | (32,993,983) |
| Total distributions | (38,783,906) | (35,022,416) |
| Share transactions - net increase (decrease) | 190,554,548 | 95,115,595 |
| Redemption fees | 54,564 | 17,148 |
| Total increase (decrease) in net assets | (116,407,045) | 185,871,691 |
| Net Assets | ||
| Beginning of period | 874,335,862 | 688,464,171 |
| End of period (including undistributed net investment income of $1,038,469 and undistributed net investment income of $44,776, respectively) | $757,928,817 | $874,335,862 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Energy Fund Class A
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $45.71 | $40.59 | $33.71 | $40.17 | $27.70 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .28 | .15 | .23 | .25 | .11 |
| Net realized and unrealized gain (loss) | (12.89) | 7.06 | 6.81 | (6.50) | 12.47 |
| Total from investment operations | (12.61) | 7.21 | 7.04 | (6.25) | 12.58 |
| Distributions from net investment income | (.18)B | (.17) | (.16) | (.21) | (.11) |
| Distributions from net realized gain | (1.96)B | (1.93) | – | – | – |
| Total distributions | (2.14) | (2.09)C | (.16) | (.21) | (.11) |
| Redemption fees added to paid in capitalA,D | – | – | – | – | – |
| Net asset value, end of period | $30.96 | $45.71 | $40.59 | $33.71 | $40.17 |
| Total ReturnE,F | (28.92)% | 18.46% | 20.94% | (15.58)% | 45.46% |
| Ratios to Average Net AssetsG,H | |||||
| Expenses before reductions | 1.12% | 1.12% | 1.16% | 1.17% | 1.16% |
| Expenses net of fee waivers, if any | 1.12% | 1.12% | 1.16% | 1.17% | 1.16% |
| Expenses net of all reductions | 1.11% | 1.12% | 1.15% | 1.17% | 1.16% |
| Net investment income (loss) | .76% | .36% | .61% | .72% | .30% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $292,288 | $369,400 | $279,798 | $253,332 | $331,120 |
| Portfolio turnover rateI | 61% | 112% | 68% | 88% | 91% |
A Calculated based on average shares outstanding during the period.
B The amount shown reflects certain reclassifications related to book to tax differences.
C Total distributions of $2.09 per share is comprised of distributions from net investment income of $.165 and distributions from net realized gain of $1.929 per share.
D Amount represents less than $.01 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the sales charges.
G 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Energy Fund Class T
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $46.64 | $41.38 | $34.40 | $41.04 | $28.33 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .20 | .06 | .15 | .18 | .03 |
| Net realized and unrealized gain (loss) | (13.18) | 7.21 | 6.95 | (6.65) | 12.75 |
| Total from investment operations | (12.98) | 7.27 | 7.10 | (6.47) | 12.78 |
| Distributions from net investment income | (.08)B | (.08) | (.12) | (.17) | (.07) |
| Distributions from net realized gain | (1.95)B | (1.93) | – | – | – |
| Total distributions | (2.03) | (2.01) | (.12) | (.17) | (.07) |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $31.63 | $46.64 | $41.38 | $34.40 | $41.04 |
| Total ReturnD,E | (29.09)% | 18.19% | 20.70% | (15.77)% | 45.16% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.36% | 1.34% | 1.36% | 1.38% | 1.37% |
| Expenses net of fee waivers, if any | 1.35% | 1.34% | 1.36% | 1.38% | 1.37% |
| Expenses net of all reductions | 1.35% | 1.34% | 1.35% | 1.38% | 1.37% |
| Net investment income (loss) | .52% | .14% | .40% | .50% | .09% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $164,848 | $245,828 | $223,248 | $215,488 | $290,512 |
| Portfolio turnover rateH | 61% | 112% | 68% | 88% | 91% |
A Calculated based on average shares outstanding during the period.
B The amount shown reflects certain reclassifications related to book to tax differences.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Energy Fund Class B
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $42.08 | $37.65 | $31.41 | $37.61 | $26.06 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.02) | (.17) | (.05) | (.01) | (.15) |
| Net realized and unrealized gain (loss) | (11.84) | 6.52 | 6.34 | (6.09) | 11.71 |
| Total from investment operations | (11.86) | 6.35 | 6.29 | (6.10) | 11.56 |
| Distributions from net investment income | – | – | (.05) | (.10) | (.01) |
| Distributions from net realized gain | (1.81) | (1.92) | – | – | – |
| Total distributions | (1.81) | (1.92) | (.05) | (.10) | (.01) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $28.41 | $42.08 | $37.65 | $31.41 | $37.61 |
| Total ReturnC,D | (29.47)% | 17.50% | 20.04% | (16.22)% | 44.38% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.92% | 1.91% | 1.92% | 1.92% | 1.93% |
| Expenses net of fee waivers, if any | 1.92% | 1.91% | 1.92% | 1.92% | 1.93% |
| Expenses net of all reductions | 1.92% | 1.91% | 1.91% | 1.92% | 1.92% |
| Net investment income (loss) | (.05)% | (.44)% | (.15)% | (.03)% | (.46)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $8,163 | $17,432 | $20,551 | $28,558 | $49,793 |
| Portfolio turnover rateG | 61% | 112% | 68% | 88% | 91% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Energy Fund Class C
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $42.40 | $37.92 | $31.63 | $37.88 | $26.25 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .01 | (.15) | (.04) | (.01) | (.15) |
| Net realized and unrealized gain (loss) | (11.93) | 6.57 | 6.38 | (6.13) | 11.80 |
| Total from investment operations | (11.92) | 6.42 | 6.34 | (6.14) | 11.65 |
| Distributions from net investment income | (.03)B | (.01) | (.05) | (.11) | (.02) |
| Distributions from net realized gain | (1.88)B | (1.93) | – | – | – |
| Total distributions | (1.90)C | (1.94) | (.05) | (.11) | (.02) |
| Redemption fees added to paid in capitalA,D | – | – | – | – | – |
| Net asset value, end of period | $28.58 | $42.40 | $37.92 | $31.63 | $37.88 |
| Total ReturnE,F | (29.44)% | 17.57% | 20.08% | (16.22)% | 44.38% |
| Ratios to Average Net AssetsG,H | |||||
| Expenses before reductions | 1.85% | 1.86% | 1.90% | 1.92% | 1.90% |
| Expenses net of fee waivers, if any | 1.85% | 1.86% | 1.90% | 1.92% | 1.90% |
| Expenses net of all reductions | 1.85% | 1.86% | 1.88% | 1.91% | 1.89% |
| Net investment income (loss) | .02% | (.38)% | (.13)% | (.03)% | (.43)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $162,322 | $130,881 | $99,833 | $93,504 | $133,476 |
| Portfolio turnover rateI | 61% | 112% | 68% | 88% | 91% |
A Calculated based on average shares outstanding during the period.
B The amount shown reflects certain reclassifications related to book to tax differences.
C Total distributions of $1.90 per share is comprised of distributions from net investment income of $.027 and distributions from net realized gain of $1.877 per share.
D Amount represents less than $.01 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the contingent deferred sales charge.
G 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Energy Fund Class I
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $48.05 | $42.55 | $35.28 | $41.95 | $28.87 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .39 | .28 | .35 | .37 | .23 |
| Net realized and unrealized gain (loss) | (13.56) | 7.42 | 7.12 | (6.79) | 12.99 |
| Total from investment operations | (13.17) | 7.70 | 7.47 | (6.42) | 13.22 |
| Distributions from net investment income | (.30)B | (.27) | (.20) | (.25) | (.14) |
| Distributions from net realized gain | (1.96)B | (1.93) | – | – | – |
| Total distributions | (2.26) | (2.20) | (.20) | (.25) | (.14) |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $32.62 | $48.05 | $42.55 | $35.28 | $41.95 |
| Total ReturnD | (28.73)% | 18.80% | 21.26% | (15.31)% | 45.87% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | .85% | .85% | .88% | .86% | .86% |
| Expenses net of fee waivers, if any | .85% | .85% | .88% | .86% | .86% |
| Expenses net of all reductions | .85% | .85% | .86% | .85% | .85% |
| Net investment income (loss) | 1.02% | .63% | .89% | 1.03% | .60% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $130,308 | $110,795 | $65,034 | $56,692 | $54,024 |
| Portfolio turnover rateG | 61% | 112% | 68% | 88% | 91% |
A Calculated based on average shares outstanding during the period.
B The amount shown reflects certain reclassifications related to book to tax differences.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes. These differences resulted in distribution reclassifications.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), partnerships, 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 | $42,611,030 |
| Gross unrealized depreciation | (116,347,407) |
| Net unrealized appreciation (depreciation) on securities | $(73,736,377) |
| Tax Cost | $834,304,312 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $1,658,244 |
| Capital loss carryforward | $(2,928,505) |
| Net unrealized appreciation (depreciation) on securities and other investments | $(73,744,115) |
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 | $(2,928,505) |
The Fund intends to elect to defer to its next fiscal year $50,491,927 of capital losses recognized during the period November 1, 2014 to July 31, 2015.
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $13,961,242 | $ 11,364,599 |
| Long-term Capital Gains | 24,822,664 | 23,657,817 |
| Total | $38,783,906 | $ 35,022,416 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $638,511,782 and $474,579,008, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | –% | .25% | $785,563 | $16,767 |
| Class T | .25% | .25% | 998,959 | 2,512 |
| Class B | .75% | .25% | 123,955 | 92,966 |
| Class C | .75% | .25% | 1,473,001 | 549,547 |
| $3,381,478 | $661,792 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $318,870 |
| Class T | 51,651 |
| Class B* | 9,609 |
| Class C* | 28,470 |
| $408,600 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $799,684 | .25 |
| Class T | 481,218 | .24 |
| Class B | 37,559 | .30 |
| Class C | 349,645 | .24 |
| Class I | 282,218 | .24 |
| $1,950,324 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $8,275 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $15,226,000 | .32% | $408 |
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,149 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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 $70,308.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $32,715 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 $48.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $3,473 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $6,988 |
| Class T | 5,034 |
| Class B | 27 |
| Class C | 2,749 |
| Class I | 2,063 |
| $16,861 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $1,364 ,001 | $1,151,717 |
| Class T | 410,584 | 407,949 |
| Class C | 97,069 | 21,755 |
| Class I | 740,437 | 447,012 |
| Total | $2,612,091 | $2,028,433 |
| From net realized gain | ||
| Class A | $14,838,103 | $13,468,952 |
| Class T | 10,229,565 | 10,162,438 |
| Class B | 735,058 | 951,726 |
| Class C | 5,981,735 | 5,213,518 |
| Class I | 4,387,354 | 3,197,349 |
| Total | $36,171,815 | $32,993,983 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 4,817,511 | 2,566,576 | $172,397,292 | $110,639,298 |
| Reinvestment of distributions | 346,427 | 321,215 | 15,023,137 | 13,089,815 |
| Shares redeemed | (3,804,502) | (1,699,770) | (141,434,625) | (72,383,987) |
| Net increase (decrease) | 1,359,436 | 1,188,021 | $45,985,804 | $51,345,126 |
| Class T | ||||
| Shares sold | 895,677 | 572,893 | $32,882,150 | $25,352,574 |
| Reinvestment of distributions | 229,140 | 243,465 | 10,214,195 | 10,134,909 |
| Shares redeemed | (1,183,564) | (940,893) | (44,251,675) | (41,085,209) |
| Net increase (decrease) | (58,747) | (124,535) | $(1,155,330) | $(5,597,726) |
| Class B | ||||
| Shares sold | 43,535 | 26,300 | $1,451,766 | $1,074,846 |
| Reinvestment of distributions | 16,323 | 22,691 | 661,892 | 856,078 |
| Shares redeemed | (186,733) | (180,679) | (6,263,061) | (7,111,293) |
| Net increase (decrease) | (126,875) | (131,688) | $(4,149,403) | $(5,180,369) |
| Class C | ||||
| Shares sold | 3,704,544 | 779,598 | $122,458,966 | $31,528,558 |
| Reinvestment of distributions | 130,140 | 118,310 | 5,288,652 | 4,495,184 |
| Shares redeemed | (1,241,801) | (444,228) | (41,167,367) | (17,602,373) |
| Net increase (decrease) | 2,592,883 | 453,680 | $86,580,251 | $18,421,369 |
| Class I | ||||
| Shares sold | 3,563,036 | 1,344,490 | $133,557,103 | $61,641,683 |
| Reinvestment of distributions | 99,377 | 75,999 | 4,498,001 | 3,249,427 |
| Shares redeemed | (1,973,125) | (642,747) | (74,761,878) | (28,763,915) |
| Net increase (decrease) | 1,689,288 | 777,742 | $63,293,226 | $36,127,195 |
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.
Fidelity Advisor® Financial Services Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | 4.89% | 9.08% | (0.11)% |
| Class T (incl. 3.50% sales charge) | 7.10% | 9.31% | (0.13)% |
| Class B (incl. contingent deferred sales charge) | 5.41% | 9.25% | (0.04)% |
| Class C (incl. contingent deferred sales charge) | 9.45% | 9.56% | (0.25)% |
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.
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, 2005, 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.
| Period Ending Values | ||
| $9,889 | Fidelity Advisor® Financial Services Fund - Class A | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Financial Services Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Christopher Lee: For the 12-month period, the fund’s share classes lagged the 14.34% return of the MSCI U.S. IMI Financials 25/50 Index, but more closely tracked the S&P 500®. (For specific class-level results, please see the Performance section of this report.) Expectations that the U.S. Federal Reserve would raise key short-term interest rate targets later this year, increased market volatility and reasonably good merger-and-acquisition activity helped fuel the MSCI sector benchmark’s gain. Versus the MSCI index, security selection in the thrifts & mortgage finance group hurt the most, followed by stock picks in mortgage real estate investment trusts (REITs). Individual detractors included subprime mortgage servicer Ocwen Financial. The stock plunged when federal regulators began investigating its fast growth and later reached a settlement that included years of oversight and the CEO/founder’s resignation. Shares of its sister company, mortgage REIT Altisource Residential, declined due to its association with Ocwen and the prospect of rising interest rates. Stock picks in the consumer finance segment were the biggest plus, thanks largely to an overweighting in subprime lender Springleaf Holdings. In March, the company announced plans to acquire its largest competitor. Its shares took off amid expectations that the deal would lead to cost savings and give a significant boost to earnings power.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.Fidelity Advisor® Financial Services Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Citigroup, Inc. | 5.0 | 4.8 |
| Bank of America Corp. | 5.0 | 4.9 |
| JPMorgan Chase & Co. | 5.0 | 4.9 |
| Berkshire Hathaway, Inc. Class B | 4.8 | 4.9 |
| U.S. Bancorp | 4.1 | 4.3 |
| Wells Fargo & Co. | 3.8 | 3.3 |
| Capital One Financial Corp. | 3.8 | 3.6 |
| American Tower Corp. | 3.3 | 3.8 |
| ACE Ltd. | 2.6 | 0.0 |
| CBRE Group, Inc. | 2.4 | 2.3 |
| 39.8 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Banks | 30.5% | |
| Real Estate Investment Trusts | 13.4% | |
| Insurance | 12.8% | |
| Capital Markets | 10.9% | |
| Diversified Financial Services | 9.0% | |
| All Others* | 23.4% | |
| As of January 31, 2015 | ||
| Banks | 27.9% | |
| Real Estate Investment Trusts | 13.5% | |
| Capital Markets | 12.2% | |
| Insurance | 12.0% | |
| Diversified Financial Services | 9.7% | |
| All Others* | 24.7% | |
* Includes short-term investments and net other assets (liabilities).
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity Advisor® Financial Services Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 96.8% | |||
| Shares | Value | ||
| Banks - 30.5% | |||
| Diversified Banks - 23.7% | |||
| Bank of America Corp. | 653,956 | $11,692,733 | |
| Citigroup, Inc. | 200,665 | 11,730,874 | |
| Comerica, Inc. | 37,119 | 1,760,554 | |
| JPMorgan Chase & Co. | 170,131 | 11,659,077 | |
| U.S. Bancorp | 210,608 | 9,521,588 | |
| Wells Fargo & Co. | 154,448 | 8,937,906 | |
| 55,302,732 | |||
| Regional Banks - 6.8% | |||
| CIT Group, Inc. | 41,700 | 1,961,568 | |
| CoBiz, Inc. | 70,391 | 900,301 | |
| Fifth Third Bancorp | 140,440 | 2,959,071 | |
| Huntington Bancshares, Inc. | 122,600 | 1,430,742 | |
| Popular, Inc. (a) | 52,200 | 1,598,364 | |
| Prosperity Bancshares, Inc. | 28,100 | 1,533,979 | |
| Regions Financial Corp. | 187,200 | 1,945,008 | |
| SunTrust Banks, Inc. | 83,400 | 3,697,956 | |
| 16,026,989 | |||
| TOTAL BANKS | 71,329,721 | ||
| Capital Markets - 10.9% | |||
| Asset Management & Custody Banks - 7.3% | |||
| Affiliated Managers Group, Inc. (a) | 16,254 | 3,379,207 | |
| Artisan Partners Asset Management, Inc. | 60,700 | 2,898,425 | |
| Invesco Ltd. | 126,338 | 4,876,647 | |
| Oaktree Capital Group LLC Class A | 36,300 | 2,003,397 | |
| The Blackstone Group LP | 98,265 | 3,856,901 | |
| 17,014,577 | |||
| Diversified Capital Markets - 0.0% | |||
| Close Brothers Group PLC | 6,400 | 145,221 | |
| Investment Banking & Brokerage - 3.6% | |||
| E*TRADE Financial Corp. (a) | 115,900 | 3,293,878 | |
| Goldman Sachs Group, Inc. | 11,600 | 2,378,812 | |
| Raymond James Financial, Inc. | 46,400 | 2,737,600 | |
| 8,410,290 | |||
| TOTAL CAPITAL MARKETS | 25,570,088 | ||
| Consumer Finance - 6.0% | |||
| Consumer Finance - 6.0% | |||
| Capital One Financial Corp. | 107,638 | 8,750,969 | |
| Navient Corp. | 139,015 | 2,182,536 | |
| Springleaf Holdings, Inc. (a) | 60,300 | 3,045,753 | |
| 13,979,258 | |||
| Diversified Consumer Services - 1.4% | |||
| Specialized Consumer Services - 1.4% | |||
| H&R Block, Inc. | 97,400 | 3,242,446 | |
| Diversified Financial Services - 9.0% | |||
| Multi-Sector Holdings - 4.8% | |||
| Berkshire Hathaway, Inc. Class B (a) | 79,519 | 11,350,542 | |
| Specialized Finance - 4.2% | |||
| Element Financial Corp. (a) | 84,200 | 1,276,021 | |
| Element Financial Corp. rights (a) | 53,000 | 801,170 | |
| IntercontinentalExchange Group, Inc. | 22,264 | 5,077,083 | |
| McGraw Hill Financial, Inc. | 25,600 | 2,604,800 | |
| 9,759,074 | |||
| TOTAL DIVERSIFIED FINANCIAL SERVICES | 21,109,616 | ||
| Health Care Providers & Services - 1.0% | |||
| Health Care Facilities - 1.0% | |||
| Brookdale Senior Living, Inc. (a) | 70,200 | 2,325,726 | |
| Insurance - 12.8% | |||
| Insurance Brokers - 3.5% | |||
| Arthur J. Gallagher & Co. | 46,800 | 2,219,724 | |
| Brown & Brown, Inc. | 97,300 | 3,254,685 | |
| Marsh & McLennan Companies, Inc. | 46,400 | 2,688,416 | |
| 8,162,825 | |||
| Life & Health Insurance - 2.4% | |||
| Prudential PLC | 55,625 | 1,308,602 | |
| Torchmark Corp. | 69,580 | 4,286,824 | |
| 5,595,426 | |||
| Property & Casualty Insurance - 6.9% | |||
| ACE Ltd. | 56,200 | 6,112,874 | |
| Allstate Corp. | 79,590 | 5,487,731 | |
| FNF Group | 95,300 | 3,725,277 | |
| The Chubb Corp. | 7,600 | 944,908 | |
| 16,270,790 | |||
| TOTAL INSURANCE | 30,029,041 | ||
| Internet Software & Services - 0.6% | |||
| Internet Software & Services - 0.6% | |||
| eBay, Inc. (a) | 46,800 | 1,316,016 | |
| IT Services - 4.7% | |||
| Data Processing & Outsourced Services - 4.7% | |||
| EVERTEC, Inc. | 83,400 | 1,569,588 | |
| MasterCard, Inc. Class A | 11,700 | 1,139,580 | |
| PayPal Holdings, Inc. (a) | 46,400 | 1,795,680 | |
| The Western Union Co. | 112,700 | 2,281,048 | |
| Visa, Inc. Class A | 55,620 | 4,190,411 | |
| 10,976,307 | |||
| Real Estate Investment Trusts - 13.4% | |||
| Diversified REITs - 1.3% | |||
| NorthStar Realty Finance Corp. | 185,450 | 2,967,200 | |
| Health Care REIT's - 0.9% | |||
| Ventas, Inc. | 32,400 | 2,173,716 | |
| Mortgage REITs - 2.8% | |||
| Altisource Residential Corp. Class B | 114,150 | 1,878,909 | |
| Redwood Trust, Inc. | 162,200 | 2,514,100 | |
| Two Harbors Investment Corp. | 196,600 | 2,009,252 | |
| 6,402,261 | |||
| Office REITs - 1.4% | |||
| Boston Properties, Inc. | 26,700 | 3,291,576 | |
| Residential REITs - 1.1% | |||
| Essex Property Trust, Inc. | 11,800 | 2,653,938 | |
| Specialized REITs - 5.9% | |||
| American Tower Corp. | 80,250 | 7,632,578 | |
| Outfront Media, Inc. | 115,930 | 2,913,321 | |
| Public Storage | 16,180 | 3,319,812 | |
| 13,865,711 | |||
| TOTAL REAL ESTATE INVESTMENT TRUSTS | 31,354,402 | ||
| Real Estate Management & Development - 4.2% | |||
| Real Estate Services - 4.2% | |||
| CBRE Group, Inc. (a) | 145,087 | 5,508,953 | |
| Realogy Holdings Corp. (a) | 92,700 | 4,219,704 | |
| 9,728,657 | |||
| Thrifts & Mortgage Finance - 1.0% | |||
| Thrifts & Mortgage Finance - 1.0% | |||
| MGIC Investment Corp. (a) | 75,000 | 830,250 | |
| Ocwen Financial Corp. (a)(b) | 112,650 | 949,640 | |
| Radian Group, Inc. | 26,000 | 479,960 | |
| 2,259,850 | |||
| Trading Companies & Distributors - 1.3% | |||
| Trading Companies & Distributors - 1.3% | |||
| AerCap Holdings NV (a) | 64,900 | 3,039,916 | |
| TOTAL COMMON STOCKS | |||
| (Cost $202,521,643) | 226,261,044 | ||
| Money Market Funds - 5.4% | |||
| Fidelity Cash Central Fund, 0.17% (c) | 11,708,734 | 11,708,734 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (c)(d) | 838,200 | 838,200 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $12,546,934) | 12,546,934 | ||
| TOTAL INVESTMENT PORTFOLIO - 102.2% | |||
| (Cost $215,068,577) | 238,807,978 | ||
| NET OTHER ASSETS (LIABILITIES) - (2.2)% | (5,030,867) | ||
| NET ASSETS - 100% | $233,777,111 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) 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.
(d) Investment made with cash collateral received from securities on loan.
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 | $10,323 |
| Fidelity Securities Lending Cash Central Fund | 9,415 |
| Total | $19,738 |
Investment Valuation
The following is a summary of the inputs used, as of July 31, 2015, 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 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 | $226,261,044 | $224,952,442 | $1,308,602 | $-- |
| Money Market Funds | 12,546,934 | 12,546,934 | -- | -- |
| Total Investments in Securities: | $238,807,978 | $237,499,376 | $1,308,602 | $-- |
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Financial Services Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $588,836) — See accompanying schedule: Unaffiliated issuers (cost $202,521,643) | $226,261,044 | |
| Fidelity Central Funds (cost $12,546,934) | 12,546,934 | |
| Total Investments (cost $215,068,577) | $238,807,978 | |
| Receivable for investments sold | 2,464,699 | |
| Receivable for fund shares sold | 793,405 | |
| Dividends receivable | 106,451 | |
| Distributions receivable from Fidelity Central Funds | 2,070 | |
| Other receivables | 2,853 | |
| Total assets | 242,177,456 | |
| Liabilities | ||
| Payable for investments purchased | $7,142,839 | |
| Payable for fund shares redeemed | 147,009 | |
| Accrued management fee | 102,700 | |
| Distribution and service plan fees payable | 78,358 | |
| Other affiliated payables | 49,412 | |
| Other payables and accrued expenses | 41,827 | |
| Collateral on securities loaned, at value | 838,200 | |
| Total liabilities | 8,400,345 | |
| Net Assets | $233,777,111 | |
| Net Assets consist of: | ||
| Paid in capital | $257,071,731 | |
| Distributions in excess of net investment income | (213,877) | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (46,820,067) | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 23,739,324 | |
| Net Assets | $233,777,111 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($102,983,339 ÷ 6,230,377 shares) | $16.53 | |
| Maximum offering price per share (100/94.25 of $16.53) | $17.54 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($34,314,063 ÷ 2,091,293 shares) | $16.41 | |
| Maximum offering price per share (100/96.50 of $16.41) | $17.01 | |
| Class B: | ||
| Net Asset Value and offering price per share ($3,830,995 ÷ 242,193 shares)(a) | $15.82 | |
| Class C: | ||
| Net Asset Value and offering price per share ($50,205,586 ÷ 3,204,911 shares)(a) | $15.67 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($42,443,128 ÷ 2,505,738 shares) | $16.94 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $3,415,880 | |
| Income from Fidelity Central Funds | 19,738 | |
| Total income | 3,435,618 | |
| Expenses | ||
| Management fee | $1,060,306 | |
| Transfer agent fees | 479,341 | |
| Distribution and service plan fees | 844,575 | |
| Accounting and security lending fees | 75,786 | |
| Custodian fees and expenses | 12,554 | |
| Independent trustees' compensation | 3,342 | |
| Registration fees | 73,949 | |
| Audit | 54,050 | |
| Legal | 3,194 | |
| Miscellaneous | 1,988 | |
| Total expenses before reductions | 2,609,085 | |
| Expense reductions | (10,168) | 2,598,917 |
| Net investment income (loss) | 836,701 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 12,559,365 | |
| Foreign currency transactions | 9,982 | |
| Total net realized gain (loss) | 12,569,347 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | 5,449,378 | |
| Assets and liabilities in foreign currencies | (379) | |
| Total change in net unrealized appreciation (depreciation) | 5,448,999 | |
| Net gain (loss) | 18,018,346 | |
| Net increase (decrease) in net assets resulting from operations | $18,855,047 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $836,701 | $764,187 |
| Net realized gain (loss) | 12,569,347 | 7,593,535 |
| Change in net unrealized appreciation (depreciation) | 5,448,999 | 9,238,319 |
| Net increase (decrease) in net assets resulting from operations | 18,855,047 | 17,596,041 |
| Distributions to shareholders from net investment income | (1,174,436) | (647,193) |
| Distributions to shareholders from net realized gain | – | (72,538) |
| Total distributions | (1,174,436) | (719,731) |
| Share transactions - net increase (decrease) | 48,366,952 | 10,142,137 |
| Redemption fees | 16,144 | 8,658 |
| Total increase (decrease) in net assets | 66,063,707 | 27,027,105 |
| Net Assets | ||
| Beginning of period | 167,713,404 | 140,686,299 |
| End of period (including distributions in excess of net investment income of $213,877 and undistributed net investment income of $327,058, respectively) | $233,777,111 | $167,713,404 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Financial Services Fund Class A
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $14.97 | $13.41 | $10.18 | $10.06�� | $10.35 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .10 | .10 | .15 | .07 | (.02) |
| Net realized and unrealized gain (loss) | 1.59B | 1.55 | 3.18 | .06 | (.27) |
| Total from investment operations | 1.69 | 1.65 | 3.33 | .13 | (.29) |
| Distributions from net investment income | (.13) | (.08) | (.10) | (.01) | – |
| Distributions from net realized gain | – | (.01) | – | – | – |
| Total distributions | (.13) | (.09) | (.10) | (.01) | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $16.53 | $14.97 | $13.41 | $10.18 | $10.06 |
| Total ReturnD,E | 11.29%B | 12.39% | 32.99% | 1.34% | (2.80)% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.17% | 1.22% | 1.29% | 1.28% | 1.26% |
| Expenses net of fee waivers, if any | 1.17% | 1.22% | 1.29% | 1.28% | 1.26% |
| Expenses net of all reductions | 1.17% | 1.22% | 1.21% | 1.20% | 1.21% |
| Net investment income (loss) | .61% | .68% | 1.31% | .72% | (.24)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $102,983 | $77,674 | $64,428 | $47,055 | $63,937 |
| Portfolio turnover rateH | 44% | 49% | 288% | 441% | 260% |
A Calculated based on average shares outstanding during the period.
B Net realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.05 per share. Excluding these litigation proceeds, the total return would have been 10.97%.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Financial Services Fund Class T
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $14.86 | $13.31 | $10.11 | $10.01 | $10.32 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .05 | .06 | .12 | .04 | (.05) |
| Net realized and unrealized gain (loss) | 1.58B | 1.55 | 3.16 | .06 | (.26) |
| Total from investment operations | 1.63 | 1.61 | 3.28 | .10 | (.31) |
| Distributions from net investment income | (.08) | (.05) | (.08) | –C | – |
| Distributions from net realized gain | – | (.01) | – | – | – |
| Total distributions | (.08) | (.06) | (.08) | –C | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $16.41 | $14.86 | $13.31 | $10.11 | $10.01 |
| Total ReturnD,E | 10.98%B | 12.10% | 32.66% | 1.03% | (3.00)% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.45% | 1.48% | 1.55% | 1.54% | 1.52% |
| Expenses net of fee waivers, if any | 1.45% | 1.48% | 1.55% | 1.54% | 1.52% |
| Expenses net of all reductions | 1.45% | 1.48% | 1.47% | 1.45% | 1.47% |
| Net investment income (loss) | .33% | .42% | 1.06% | .46% | (.49)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $34,314 | $31,596 | $30,576 | $24,367 | $27,037 |
| Portfolio turnover rateH | 44% | 49% | 288% | 441% | 260% |
A Calculated based on average shares outstanding during the period.
B Net realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.05 per share. Excluding these litigation proceeds, the total return would have been 10.66%.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Financial Services Fund Class B
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $14.35 | $12.87 | $9.79 | $9.73 | $10.09 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.03) | (.01) | .06 | –B | (.10) |
| Net realized and unrealized gain (loss) | 1.52C | 1.49 | 3.06 | .06 | (.26) |
| Total from investment operations | 1.49 | 1.48 | 3.12 | .06 | (.36) |
| Distributions from net investment income | (.02) | – | (.04) | – | – |
| Redemption fees added to paid in capital A,B | – | – | – | – | – |
| Net asset value, end of period | $15.82 | $14.35 | $12.87 | $9.79 | $9.73 |
| Total ReturnD,E | 10.41%C | 11.50% | 32.00% | .62% | (3.57)% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.96% | 1.98% | 2.04% | 2.03% | 2.01% |
| Expenses net of fee waivers, if any | 1.96% | 1.98% | 2.04% | 2.03% | 2.01% |
| Expenses net of all reductions | 1.96% | 1.98% | 1.97% | 1.94% | 1.96% |
| Net investment income (loss) | (.18)% | (.08)% | .56% | (.03)% | (.98)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $3,831 | $5,540 | $6,511 | $5,745 | $7,480 |
| Portfolio turnover rateH | 44% | 49% | 288% | 441% | 260% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Net realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.05 per share. Excluding these litigation proceeds, the total return would have been 10.09%.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Financial Services Fund Class C
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $14.22 | $12.75 | $9.70 | $9.65 | $10.00 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.02) | –B | .06 | –B | (.10) |
| Net realized and unrealized gain (loss) | 1.51C | 1.48 | 3.03 | .05 | (.25) |
| Total from investment operations | 1.49 | 1.48 | 3.09 | .05 | (.35) |
| Distributions from net investment income | (.04) | (.01) | (.04) | – | – |
| Redemption fees added to paid in capital A,B | – | – | – | – | – |
| Net asset value, end of period | $15.67 | $14.22 | $12.75 | $9.70 | $9.65 |
| Total ReturnD,E | 10.45%C | 11.65% | 31.98% | .52% | (3.50)% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.90% | 1.94% | 2.03% | 2.03% | 2.01% |
| Expenses net of fee waivers, if any | 1.90% | 1.94% | 2.03% | 2.03% | 2.01% |
| Expenses net of all reductions | 1.90% | 1.93% | 1.96% | 1.94% | 1.96% |
| Net investment income (loss) | (.12)% | (.03)% | .57% | (.03)% | (.99)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $50,206 | $36,740 | $29,897 | $20,875 | $23,196 |
| Portfolio turnover rateH | 44% | 49% | 288% | 441% | 260% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Net realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.05 per share. Excluding these litigation proceeds, the total return would have been 10.13%.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Financial Services Fund Class I
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $15.34 | $13.73 | $10.42 | $10.28 | $10.55 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .15 | .15 | .20 | .10 | .01 |
| Net realized and unrealized gain (loss) | 1.62B | 1.60 | 3.25 | .06 | (.28) |
| Total from investment operations | 1.77 | 1.75 | 3.45 | .16 | (.27) |
| Distributions from net investment income | (.17) | (.13) | (.14) | (.02) | – |
| Distributions from net realized gain | – | (.01) | – | – | – |
| Total distributions | (.17) | (.14) | (.14) | (.02) | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $16.94 | $15.34 | $13.73 | $10.42 | $10.28 |
| Total ReturnD | 11.61%B | 12.85% | 33.45% | 1.61% | (2.56)% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | .84% | .87% | .96% | .98% | .96% |
| Expenses net of fee waivers, if any | .84% | .87% | .96% | .98% | .96% |
| Expenses net of all reductions | .84% | .86% | .88% | .89% | .91% |
| Net investment income (loss) | .94% | 1.04% | 1.65% | 1.02% | .07% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $42,443 | $16,164 | $9,275 | $5,596 | $8,162 |
| Portfolio turnover rateG | 44% | 49% | 288% | 441% | 260% |
A Calculated based on average shares outstanding during the period.
B Net realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.05 per share. Excluding these litigation proceeds, the total return would have been 11.29%.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of July 31, 2015 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships, 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 | $29,420,595 |
| Gross unrealized depreciation | (5,959,819) |
| Net unrealized appreciation (depreciation) on securities | $23,460,776 |
| Tax cost | $215,347,202 |
The tax-based components of distributable earnings as of period end were as follows:
| Capital loss carryforward | $(46,541,443) |
| Net unrealized appreciation (depreciation) on securities and other investments | $23,460,699 |
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 | $(22,843,955) |
| 2018 | (23,251,884) |
| 2019 | (445,604) |
| Total capital loss carryforward | $(46,541,443) |
The Fund intends to elect to defer to its next fiscal year $213,865 of ordinary losses recognized during the period January 1, 2015 to July 31, 2015.
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $ 1,174,436 | $ 719,731 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $127,063,199 and $81,265,187, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $220,751 | $4,750 |
| Class T | .25% | .25% | 163,284 | 694 |
| Class B | .75% | .25% | 48,365 | 36,277 |
| Class C | .75% | .25% | 412,175 | 92,945 |
| $844,575 | $134,666 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $61,056 |
| Class T | 6,350 |
| Class B* | 2,271 |
| Class C* | 9,843 |
| $79,520 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $226,401 | .26 |
| Class T | 93,275 | .29 |
| Class B | 14,448 | .30 |
| Class C | 98,965 | .24 |
| Class I | 46,252 | .18 |
| $ 479,341 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $2,068 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $274 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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 $9,415.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $6,525 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 $5.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $854 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $1,208 |
| Class T | 387 |
| Class B | 12 |
| Class C | 796 |
| Class I | 381 |
| $2,784 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $677,086 | $405,756 |
| Class T | 166,609 | 104,978 |
| Class B | 7,587 | – |
| Class C | 95,653 | 31,349 |
| Class I | 227,501 | 105,110 |
| Total | $1,174,436 | $647,193 |
| From net realized gain | ||
| Class A | $– | $43,910 |
| Class T | – | 20,144 |
| Class I | – | 8,484 |
| Total | $– | $72,538 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 2,375,926 | 1,697,938 | $38,271,380 | $24,378,496 |
| Reinvestment of distributions | 37,600 | 28,780 | 601,602 | 390,562 |
| Shares redeemed | (1,370,832) | (1,342,224) | (21,745,625) | (19,118,798) |
| Net increase (decrease) | 1,042,694 | 384,494 | $17,127,357 | $5,650,260 |
| Class T | ||||
| Shares sold | 282,748 | 306,863 | $4,530,961 | $4,347,352 |
| Reinvestment of distributions | 9,927 | 8,794 | 158,623 | 118,136 |
| Shares redeemed | (327,213) | (486,368) | (5,144,018) | (6,897,348) |
| Net increase (decrease) | (34,538) | (170,711) | $(454,434) | $(2,431,860) |
| Class B | ||||
| Shares sold | 9,940 | 29,215 | $153,403 | $390,860 |
| Reinvestment of distributions | 462 | – | 7,229 | – |
| Shares redeemed | (154,232) | (149,230) | (2,370,354) | (2,060,292) |
| Net increase (decrease) | (143,830) | (120,015) | $(2,209,722) | $(1,669,432) |
| Class C | ||||
| Shares sold | 1,276,982 | 859,537 | $19,580,585 | $11,703,173 |
| Reinvestment of distributions | 5,490 | 2,148 | 84,931 | 26,657 |
| Shares redeemed | (661,896) | (621,486) | (9,959,897) | (8,469,563) |
| Net increase (decrease) | 620,576 | 240,199 | $9,705,619 | $3,260,267 |
| Class I | ||||
| Shares sold | 2,718,004 | 823,593 | $44,696,215 | $12,007,905 |
| Reinvestment of distributions | 9,845 | 5,144 | 161,164 | 71,934 |
| Shares redeemed | (1,276,123) | (450,058) | (20,659,247) | (6,746,937) |
| Net increase (decrease) | 1,451,726 | 378,679 | $24,198,132 | $5,332,902 |
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.
Fidelity Advisor® Health Care Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | 26.36% | 28.64% | 13.91% |
| Class T (incl. 3.50% sales charge) | 29.01% | 28.91% | 13.89% |
| Class B (incl. contingent deferred sales charge) | 28.00% | 29.02% | 13.99% |
| Class C (incl. contingent deferred sales charge) | 32.04% | 29.22% | 13.76% |
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.
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, 2005, 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.
| Period Ending Values | ||
| $36,792 | Fidelity Advisor® Health Care Fund - Class A | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Health Care Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Eddie Yoon: For the year, the fund's share classes outperformed the 30.63% result of the MSCI U.S. IMI Health Care 25/50 Index and easily led the broader S&P 500®. (For specific class-level results, please see the Performance section of this report.) Health care stocks continued to benefit from solid fundamentals and favorable long-term trends, including an aging population, a growing emerging-markets middle class with money to spend on health care, and a tremendous wave of innovation, particularly within the biotechnology industry. Elevated merger-and-acquisition activity was another positive for the industry and sector. Versus the sector index, stock picking in pharmaceuticals, which made up about a third of the fund's assets, was by far the biggest contributor. Here, not owning large-cap index giant Johnson & Johnson (J&J) was the top individual contributor. J&J underperformed due in part to its exposure to foreign currency against a generally rising U.S. dollar. Conversely, an underweighting in managed health care was a negative. From a stock perspective, the fund's overweighting in Puma Biotechnology was by far its largest individual detractor. Shares of the development-stage firm plunged this period. At this year's conference of the American Society of Clinical Oncology, Puma Biotech revealed follow-up neratinib results that only modestly outperformed a placebo, plus a high rate of certain highly compromising side effects.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.Fidelity Advisor® Health Care Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Medtronic PLC | 7.8 | 5.7 |
| Allergan PLC | 6.6 | 7.5 |
| Teva Pharmaceutical Industries Ltd. sponsored ADR | 5.0 | 2.7 |
| Boston Scientific Corp. | 4.3 | 3.7 |
| AbbVie, Inc. | 4.2 | 0.6 |
| McKesson Corp. | 3.2 | 4.3 |
| Vertex Pharmaceuticals, Inc. | 3.0 | 2.5 |
| Amgen, Inc. | 2.5 | 4.7 |
| Shire PLC sponsored ADR | 2.4 | 3.0 |
| Bristol-Myers Squibb Co. | 2.3 | 0.9 |
| 41.3 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Pharmaceuticals | 36.6% | |
| Health Care Equipment & Supplies | 20.5% | |
| Biotechnology | 19.0% | |
| Health Care Providers & Services | 13.4% | |
| Health Care Technology | 3.2% | |
| All Others* | 7.3% | |
| As of January 31, 2015 | ||
| Pharmaceuticals | 29.4% | |
| Biotechnology | 27.4% | |
| Health Care Equipment & Supplies | 19.0% | |
| Health Care Providers & Services | 12.2% | |
| Health Care Technology | 4.4% | |
| All Others* | 7.6% | |
* Includes short-term investments and net other assets (liabilities).
Fidelity Advisor® Health Care Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 97.5% | |||
| Shares | Value | ||
| Biotechnology - 19.0% | |||
| Biotechnology - 19.0% | |||
| Ablynx NV (a) | 439,712 | $6,432,411 | |
| Acceleron Pharma, Inc. (a) | 105,738 | 3,028,336 | |
| Acorda Therapeutics, Inc. (a) | 190,171 | 6,534,276 | |
| Actelion Ltd. | 90,000 | 13,309,531 | |
| Advaxis, Inc. (a)(b) | 410,000 | 6,830,600 | |
| Alder Biopharmaceuticals, Inc. (a) | 240,000 | 11,140,800 | |
| Alnylam Pharmaceuticals, Inc. (a) | 94,402 | 12,029,647 | |
| AMAG Pharmaceuticals, Inc. (a) | 316,700 | 20,237,130 | |
| Amgen, Inc. | 475,517 | 83,971,547 | |
| Amicus Therapeutics, Inc. (a) | 521,400 | 8,962,866 | |
| Arena Pharmaceuticals, Inc. (a) | 2,000,000 | 8,080,000 | |
| Array BioPharma, Inc. (a)(b) | 800,000 | 4,648,000 | |
| Ascendis Pharma A/S ADR (b) | 400,000 | 8,012,000 | |
| Avalanche Biotechnologies, Inc. (a) | 39,952 | 588,093 | |
| Biogen, Inc. (a) | 111,884 | 35,666,382 | |
| BioMarin Pharmaceutical, Inc. (a) | 274,800 | 40,194,996 | |
| bluebird bio, Inc. (a) | 5,700 | 945,231 | |
| Blueprint Medicines Corp. | 74,377 | 2,009,667 | |
| Cara Therapeutics, Inc. (a) | 216,457 | 4,612,699 | |
| Celgene Corp. (a) | 114,308 | 15,002,925 | |
| Cellectis SA sponsored ADR | 220,700 | 7,837,057 | |
| Curis, Inc. (a) | 1,533,700 | 4,815,818 | |
| Discovery Laboratories, Inc. (a) | 1,574,833 | 803,165 | |
| Dyax Corp. (a) | 483,023 | 11,887,196 | |
| Gilead Sciences, Inc. | 341,362 | 40,232,925 | |
| Heron Therapeutics, Inc. (a) | 132,911 | 4,298,342 | |
| Incyte Corp. (a) | 77,700 | 8,102,556 | |
| Insmed, Inc. (a) | 545,227 | 14,775,652 | |
| Intercept Pharmaceuticals, Inc. (a) | 51,021 | 13,459,850 | |
| Mirati Therapeutics, Inc. (a) | 274,000 | 7,839,140 | |
| Neurocrine Biosciences, Inc. (a) | 340,000 | 17,040,800 | |
| ProNai Therapeutics, Inc. | 97,200 | 2,663,280 | |
| Puma Biotechnology, Inc. (a) | 342,439 | 31,024,973 | |
| Spark Therapeutics, Inc. | 125,106 | 7,686,513 | |
| TESARO, Inc. (a) | 260,000 | 15,080,000 | |
| Trevena, Inc. (a) | 1,000,000 | 5,820,000 | |
| Ultragenyx Pharmaceutical, Inc. (a) | 201,440 | 24,360,139 | |
| United Therapeutics Corp. (a) | 84,300 | 14,277,048 | |
| Vertex Pharmaceuticals, Inc. (a) | 737,800 | 99,603,000 | |
| Vital Therapies, Inc. (a)(b) | 240,000 | 3,892,800 | |
| Xencor, Inc. (a) | 264,873 | 5,930,506 | |
| 633,667,897 | |||
| Capital Markets - 0.0% | |||
| Asset Management & Custody Banks - 0.0% | |||
| RPI International Holdings LP (c) | 10,510 | 1,479,808 | |
| Diversified Consumer Services - 0.2% | |||
| Specialized Consumer Services - 0.2% | |||
| Carriage Services, Inc. | 215,735 | 5,184,112 | |
| Health Care Equipment & Supplies - 20.5% | |||
| Health Care Equipment - 19.5% | |||
| Atricure, Inc. (a) | 380,000 | 10,560,200 | |
| Boston Scientific Corp. (a) | 8,280,000 | 143,575,200 | |
| CONMED Corp. | 326,300 | 18,507,736 | |
| Edwards Lifesciences Corp. (a) | 93,657 | 14,250,849 | |
| HeartWare International, Inc. (a) | 171,671 | 15,572,276 | |
| Integra LifeSciences Holdings Corp. (a) | 150,000 | 9,619,500 | |
| Invuity, Inc. | 517,800 | 6,099,684 | |
| Medtronic PLC | 3,296,100 | 258,381,280 | |
| Neovasc, Inc. (a) | 1,100,000 | 6,490,000 | |
| Nevro Corp. | 137,500 | 6,980,875 | |
| ResMed, Inc. (b) | 231,300 | 13,403,835 | |
| St. Jude Medical, Inc. | 347,600 | 25,659,832 | |
| Steris Corp. | 172,084 | 11,896,167 | |
| Stryker Corp. | 200,000 | 20,454,000 | |
| Teleflex, Inc. | 128,000 | 17,150,720 | |
| Tornier NV (a) | 1,000,000 | 24,890,000 | |
| Wright Medical Group, Inc. (a) | 412,900 | 10,669,336 | |
| Zeltiq Aesthetics, Inc. (a)(b) | 253,818 | 8,718,648 | |
| Zimmer Biomet Holdings, Inc. | 254,100 | 26,444,187 | |
| 649,324,325 | |||
| Health Care Supplies - 1.0% | |||
| Derma Sciences, Inc. (a)(b) | 490,000 | 3,503,500 | |
| The Cooper Companies, Inc. | 159,169 | 28,172,913 | |
| The Spectranetics Corp. (a)(b) | 204,255 | 3,492,761 | |
| 35,169,174 | |||
| TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | 684,493,499 | ||
| Health Care Providers & Services - 13.3% | |||
| Health Care Distributors & Services - 3.8% | |||
| Amplifon SpA | 761,295 | 6,375,203 | |
| EBOS Group Ltd. | 1,100,157 | 7,915,729 | |
| McKesson Corp. | 490,000 | 108,079,300 | |
| United Drug PLC (United Kingdom) | 700,000 | 5,482,172 | |
| 127,852,404 | |||
| Health Care Facilities - 2.9% | |||
| Brookdale Senior Living, Inc. (a) | 406,070 | 13,453,099 | |
| HCA Holdings, Inc. (a) | 380,000 | 35,343,800 | |
| Surgical Care Affiliates, Inc. (a) | 547,905 | 20,831,348 | |
| Universal Health Services, Inc. Class B | 187,327 | 27,205,500 | |
| 96,833,747 | |||
| Health Care Services - 2.1% | |||
| Adeptus Health, Inc. Class A (a) | 120,010 | 13,187,899 | |
| DaVita HealthCare Partners, Inc. (a) | 280,000 | 22,128,400 | |
| Envision Healthcare Holdings, Inc. (a) | 758,704 | 33,989,939 | |
| 69,306,238 | |||
| Managed Health Care - 4.5% | |||
| Cigna Corp. | 450,000 | 64,827,000 | |
| UnitedHealth Group, Inc. | 603,424 | 73,255,674 | |
| Wellcare Health Plans, Inc. (a) | 126,900 | 10,253,520 | |
| 148,336,194 | |||
| TOTAL HEALTH CARE PROVIDERS & SERVICES | 442,328,583 | ||
| Health Care Technology - 3.2% | |||
| Health Care Technology - 3.2% | |||
| athenahealth, Inc. (a) | 239,100 | 33,464,436 | |
| Castlight Health, Inc. | 336,800 | 2,418,224 | |
| Castlight Health, Inc. Class B (a) | 28,300 | 203,194 | |
| Cerner Corp. (a) | 420,396 | 30,150,801 | |
| Connecture, Inc. | 500,000 | 4,715,000 | |
| Evolent Health, Inc. | 215,652 | 4,599,857 | |
| HealthStream, Inc. (a) | 526,075 | 14,761,665 | |
| Medidata Solutions, Inc. (a) | 304,774 | 16,396,841 | |
| 106,710,018 | |||
| Industrial Conglomerates - 1.0% | |||
| Industrial Conglomerates - 1.0% | |||
| Danaher Corp. | 358,323 | 32,808,054 | |
| Life Sciences Tools & Services - 3.1% | |||
| Life Sciences Tools & Services - 3.1% | |||
| Agilent Technologies, Inc. | 1,400,000 | 57,330,000 | |
| Bruker Corp. (a) | 575,553 | 12,115,391 | |
| PRA Health Sciences, Inc. | 279,143 | 11,721,215 | |
| Thermo Fisher Scientific, Inc. | 152,292 | 21,249,303 | |
| 102,415,909 | |||
| Pharmaceuticals - 36.6% | |||
| Pharmaceuticals - 36.6% | |||
| AbbVie, Inc. | 2,000,000 | 140,020,000 | |
| Allergan PLC (a) | 662,500 | 219,386,875 | |
| Amphastar Pharmaceuticals, Inc. (a)(b) | 600,000 | 9,756,000 | |
| Astellas Pharma, Inc. | 1,200,000 | 18,077,218 | |
| Bristol-Myers Squibb Co. | 1,162,803 | 76,326,389 | |
| Catalent, Inc. (a) | 400,000 | 13,632,000 | |
| Dechra Pharmaceuticals PLC | 530,000 | 8,148,455 | |
| Eisai Co. Ltd. | 307,100 | 20,058,696 | |
| Eli Lilly & Co. | 149,100 | 12,600,441 | |
| Endo Health Solutions, Inc. (a) | 600,000 | 52,524,000 | |
| Horizon Pharma PLC (a) | 564,000 | 20,783,400 | |
| Jazz Pharmaceuticals PLC (a) | 300,000 | 57,672,000 | |
| Jiangsu Hengrui Medicine Co. Ltd. | 1,430,000 | 10,346,616 | |
| Lee's Pharmaceutical Holdings Ltd. | 4,366,536 | 7,344,869 | |
| Mallinckrodt PLC (a) | 270,000 | 33,469,200 | |
| Mylan N.V. | 570,771 | 31,957,468 | |
| Novartis AG sponsored ADR | 415,800 | 43,139,250 | |
| Pacira Pharmaceuticals, Inc. (a) | 165,700 | 11,005,794 | |
| Perrigo Co. PLC | 231,500 | 44,494,300 | |
| Prestige Brands Holdings, Inc. (a) | 387,100 | 18,433,702 | |
| Sanofi SA sponsored ADR | 578,800 | 31,249,412 | |
| Shire PLC sponsored ADR | 300,000 | 80,043,000 | |
| Sun Pharmaceutical Industries Ltd. (a) | 805,082 | 10,347,211 | |
| Teva Pharmaceutical Industries Ltd. sponsored ADR | 2,403,200 | 165,868,864 | |
| TherapeuticsMD, Inc. (a) | 1,374,300 | 10,705,797 | |
| Valeant Pharmaceuticals International, Inc. (Canada) (a) | 228,000 | 58,456,979 | |
| ZS Pharma, Inc. (a) | 215,700 | 12,883,761 | |
| 1,218,731,697 | |||
| Professional Services - 0.6% | |||
| Human Resource & Employment Services - 0.6% | |||
| WageWorks, Inc. (a) | 415,600 | 20,759,220 | |
| TOTAL COMMON STOCKS | |||
| (Cost $2,601,949,861) | 3,248,578,797 | ||
| Convertible Preferred Stocks - 0.1% | |||
| Health Care Providers & Services - 0.1% | |||
| Health Care Services - 0.1% | |||
| 1Life Healthcare, Inc. Series G (a)(c) | |||
| (Cost $2,121,583) | 322,145 | 2,119,714 | |
| Money Market Funds - 3.1% | |||
| Fidelity Cash Central Fund, 0.17% (d) | 86,738,691 | 86,738,691 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (d)(e) | 16,798,950 | 16,798,950 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $103,537,641) | 103,537,641 | ||
| TOTAL INVESTMENT PORTFOLIO - 100.7% | |||
| (Cost $2,707,609,085) | 3,354,236,152 | ||
| NET OTHER ASSETS (LIABILITIES) - (0.7)% | (24,286,123) | ||
| NET ASSETS - 100% | $3,329,950,029 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(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 $3,599,522 or 0.1% of net assets.
(d) 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.
(e) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost |
| 1Life Healthcare, Inc. Series G | 4/10/14 | $2,121,583 |
| RPI International Holdings LP | 5/21/15 | $1,239,129 |
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 | $85,089 |
| Fidelity Securities Lending Cash Central Fund | 320,465 |
| Total | $405,554 |
Investment Valuation
The following is a summary of the inputs used, as of July 31, 2015, 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 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 | $3,248,578,797 | $3,247,098,989 | $-- | $1,479,808 |
| Convertible Preferred Stocks | 2,119,714 | -- | -- | 2,119,714 |
| Money Market Funds | 103,537,641 | 103,537,641 | -- | -- |
| Total Investments in Securities: | $3,354,236,152 | $3,350,636,630 | $-- | $3,599,522 |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 62.3% |
| Ireland | 20.8% |
| Israel | 5.0% |
| Bailiwick of Jersey | 2.4% |
| Canada | 2.0% |
| Netherlands | 1.7% |
| Switzerland | 1.7% |
| France | 1.1% |
| Japan | 1.1% |
| Others (Individually Less Than 1%) | 1.9% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Health Care Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $17,232,235) — See accompanying schedule: Unaffiliated issuers (cost $2,604,071,444) | $3,250,698,511 | |
| Fidelity Central Funds (cost $103,537,641) | 103,537,641 | |
| Total Investments (cost $2,707,609,085) | $3,354,236,152 | |
| Cash | 43,447 | |
| Receivable for investments sold | 50,535,915 | |
| Receivable for fund shares sold | 14,475,692 | |
| Dividends receivable | 1,452,088 | |
| Distributions receivable from Fidelity Central Funds | 102,354 | |
| Other receivables | 58,612 | |
| Total assets | 3,420,904,260 | |
| Liabilities | ||
| Payable for investments purchased | $65,526,845 | |
| Payable for fund shares redeemed | 5,399,936 | |
| Accrued management fee | 1,457,789 | |
| Distribution and service plan fees payable | 1,031,821 | |
| Other affiliated payables | 556,373 | |
| Other payables and accrued expenses | 182,517 | |
| Collateral on securities loaned, at value | 16,798,950 | |
| Total liabilities | 90,954,231 | |
| Net Assets | $3,329,950,029 | |
| Net Assets consist of: | ||
| Paid in capital | $2,486,070,902 | |
| Accumulated net investment loss | (17) | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 197,252,485 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 646,626,659 | |
| Net Assets | $3,329,950,029 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($1,374,653,882 ÷ 30,431,602 shares) | $45.17 | |
| Maximum offering price per share (100/94.25 of $45.17) | $47.93 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($348,885,699 ÷ 8,173,684 shares) | $42.68 | |
| Maximum offering price per share (100/96.50 of $42.68) | $44.23 | |
| Class B: | ||
| Net Asset Value and offering price per share ($12,925,770 ÷ 342,228 shares)(a) | $37.77 | |
| Class C: | ||
| Net Asset Value and offering price per share ($761,070,145 ÷ 20,321,950 shares)(a) | $37.45 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($832,414,533 ÷ 17,153,820 shares) | $48.53 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $12,871,454 | |
| Income from Fidelity Central Funds | 405,554 | |
| Total income | 13,277,008 | |
| Expenses | ||
| Management fee | $12,454,480 | |
| Transfer agent fees | 4,412,788 | |
| Distribution and service plan fees | 8,589,868 | |
| Accounting and security lending fees | 685,992 | |
| Custodian fees and expenses | 74,472 | |
| Independent trustees' compensation | 36,386 | |
| Registration fees | 325,691 | |
| Audit | 53,174 | |
| Legal | 22,966 | |
| Miscellaneous | 16,805 | |
| Total expenses before reductions | 26,672,622 | |
| Expense reductions | (169,003) | 26,503,619 |
| Net investment income (loss) | (13,226,611) | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 303,997,164 | |
| Foreign currency transactions | (60,982) | |
| Total net realized gain (loss) | 303,936,182 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | 322,305,767 | |
| Assets and liabilities in foreign currencies | (316) | |
| Total change in net unrealized appreciation (depreciation) | 322,305,451 | |
| Net gain (loss) | 626,241,633 | |
| Net increase (decrease) in net assets resulting from operations | $613,015,022 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $(13,226,611) | $(7,157,995) |
| Net realized gain (loss) | 303,936,182 | 181,443,195 |
| Change in net unrealized appreciation (depreciation) | 322,305,451 | 110,916,113 |
| Net increase (decrease) in net assets resulting from operations | 613,015,022 | 285,201,313 |
| Distributions to shareholders from net realized gain | (188,666,593) | (91,415,211) |
| Share transactions - net increase (decrease) | 1,510,649,436 | 462,114,251 |
| Redemption fees | 66,619 | 59,322 |
| Total increase (decrease) in net assets | 1,935,064,484 | 655,959,675 |
| Net Assets | ||
| Beginning of period | 1,394,885,545 | 738,925,870 |
| End of period (including accumulated net investment loss of $17 and accumulated net investment loss of $4,464,030, respectively) | $3,329,950,029 | $1,394,885,545 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Health Care Fund Class A
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $37.72 | $31.29 | $24.35 | $25.60 | $19.01 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.19) | (.18) | –B | (.04) | (.10) |
| Net realized and unrealized gain (loss) | 12.03 | 10.13 | 9.53 | 1.43 | 6.69 |
| Total from investment operations | 11.84 | 9.95 | 9.53 | 1.39 | 6.59 |
| Distributions from net realized gain | (4.39) | (3.52) | (2.59) | (2.64) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $45.17 | $37.72 | $31.29 | $24.35 | $25.60 |
| Total ReturnC,D | 34.07% | 34.79% | 42.77% | 7.58% | 34.67% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.04% | 1.08% | 1.14% | 1.19% | 1.19% |
| Expenses net of fee waivers, if any | 1.04% | 1.08% | 1.14% | 1.19% | 1.19% |
| Expenses net of all reductions | 1.04% | 1.07% | 1.13% | 1.18% | 1.18% |
| Net investment income (loss) | (.45)% | (.54)% | (.01)% | (.18)% | (.43)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $1,374,654 | $613,995 | $365,416 | $233,188 | $224,704 |
| Portfolio turnover rateG | 80% | 111% | 92% | 124% | 125% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Health Care Fund Class T
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $35.87 | $29.91 | $23.42 | $24.80 | $18.46 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.28) | (.26) | (.07) | (.09) | (.16) |
| Net realized and unrealized gain (loss) | 11.39 | 9.67 | 9.13 | 1.35 | 6.50 |
| Total from investment operations | 11.11 | 9.41 | 9.06 | 1.26 | 6.34 |
| Distributions from net realized gain | (4.30) | (3.45) | (2.57) | (2.64) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $42.68 | $35.87 | $29.91 | $23.42 | $24.80 |
| Total ReturnC,D | 33.69% | 34.49% | 42.39% | 7.27% | 34.34% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.31% | 1.34% | 1.39% | 1.43% | 1.44% |
| Expenses net of fee waivers, if any | 1.31% | 1.34% | 1.39% | 1.43% | 1.44% |
| Expenses net of all reductions | 1.30% | 1.34% | 1.38% | 1.43% | 1.43% |
| Net investment income (loss) | (.72)% | (.80)% | (.26)% | (.42)% | (.69)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $348,886 | $216,973 | $158,611 | $117,969 | $123,606 |
| Portfolio turnover rateG | 80% | 111% | 92% | 124% | 125% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Health Care Fund Class B
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $32.17 | $27.16 | $21.55 | $23.15 | $17.32 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.43) | (.40) | (.18) | (.19) | (.25) |
| Net realized and unrealized gain (loss) | 10.13 | 8.71 | 8.31 | 1.23 | 6.08 |
| Total from investment operations | 9.70 | 8.31 | 8.13 | 1.04 | 5.83 |
| Distributions from net realized gain | (4.10) | (3.30) | (2.52) | (2.64) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $37.77 | $32.17 | $27.16 | $21.55 | $23.15 |
| Total ReturnC,D | 33.00% | 33.72% | 41.61% | 6.78% | 33.66% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.85% | 1.91% | 1.93% | 1.94% | 1.94% |
| Expenses net of fee waivers, if any | 1.85% | 1.91% | 1.93% | 1.94% | 1.94% |
| Expenses net of all reductions | 1.85% | 1.90% | 1.91% | 1.93% | 1.93% |
| Net investment income (loss) | (1.26)% | (1.37)% | (.80)% | (.93)% | (1.19)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $12,926 | $13,405 | $14,517 | $15,403 | $20,365 |
| Portfolio turnover rateG | 80% | 111% | 92% | 124% | 125% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Health Care Fund Class C
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $32.03 | $27.11 | $21.51 | $23.11 | $17.29 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.41) | (.38) | (.17) | (.18) | (.24) |
| Net realized and unrealized gain (loss) | 10.05 | 8.68 | 8.31 | 1.22 | 6.06 |
| Total from investment operations | 9.64 | 8.30 | 8.14 | 1.04 | 5.82 |
| Distributions from net realized gain | (4.22) | (3.38) | (2.54) | (2.64) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $37.45 | $32.03 | $27.11 | $21.51 | $23.11 |
| Total ReturnC,D | 33.04% | 33.83% | 41.74% | 6.80% | 33.66% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.79% | 1.83% | 1.87% | 1.90% | 1.90% |
| Expenses net of fee waivers, if any | 1.79% | 1.83% | 1.87% | 1.90% | 1.90% |
| Expenses net of all reductions | 1.79% | 1.82% | 1.85% | 1.89% | 1.89% |
| Net investment income (loss) | (1.20)% | (1.29)% | (.74)% | (.89)% | (1.15)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $761,070 | $257,859 | $125,965 | $78,763 | $77,749 |
| Portfolio turnover rateG | 80% | 111% | 92% | 124% | 125% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Health Care Fund Class I
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $40.22 | $33.12 | $25.60 | $26.69 | $19.77 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.09) | (.10) | .07 | .03 | (.03) |
| Net realized and unrealized gain (loss) | 12.88 | 10.80 | 10.07 | 1.52 | 6.95 |
| Total from investment operations | 12.79 | 10.70 | 10.14 | 1.55 | 6.92 |
| Distributions from net realized gain | (4.48) | (3.60) | (2.62) | (2.64) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $48.53 | $40.22 | $33.12 | $25.60 | $26.69 |
| Total ReturnC | 34.40% | 35.21% | 43.12% | 7.91% | 35.00% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | .79% | .81% | .87% | .89% | .89% |
| Expenses net of fee waivers, if any | .79% | .81% | .87% | .89% | .89% |
| Expenses net of all reductions | .78% | .81% | .85% | .88% | .88% |
| Net investment income (loss) | (.20)% | (.27)% | .26% | .12% | (.13)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $832,415 | $292,654 | $74,417 | $40,737 | $45,243 |
| Portfolio turnover rateF | 80% | 111% | 92% | 124% | 125% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2015 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, deferred trustees compensation, net operating losses and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $ 710,953,243 |
| Gross unrealized depreciation | (67,186,880) |
| Net unrealized appreciation (depreciation) on securities | $ 643,766,363 |
| Tax cost | $2,710,469,789 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed tax-exempt income | $110,883,814 |
| Undistributed ordinary income | $ 89,229,374 |
| Net unrealized appreciation (depreciation) on securities and other investments | $643,765,955 |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $39,548,467 | $ 26,242,071 |
| Long-term Capital Gains | 149,118,126 | 65,173,140 |
| Total | $188,666,593 | $ 91,415,211 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $3,036,424,104 and $1,779,135,244, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $2,378,836 | $52,030 |
| Class T | .25% | .25% | 1,405,434 | 996 |
| Class B | .75% | .25% | 133,723 | 100,351 |
| Class C | .75% | .25% | 4,671,875 | 2,037,051 |
| $8,589,868 | $2,190,428 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $1,360,135 |
| Class T | 146,517 |
| Class B* | 1,266 |
| Class C* | 85,269 |
| $1,593,187 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $1,841,320 | .19 |
| Class T | 581,819 | .21 |
| Class B | 33,636 | .25 |
| Class C | 917,011 | .20 |
| Class I | 1,039,002 | .19 |
| $ 4,412,788 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $48,690 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $3,021 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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 $320,465.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $126,401 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 by $67.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $12,065 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $13,536 |
| Class T | 4,784 |
| Class B | 204 |
| Class C | 5,829 |
| Class I | 6,117 |
| $30,470 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net realized gain | ||
| Class A | $79,203,094 | $43,930,276 |
| Class T | 27,289,653 | 18,842,643 |
| Class B | 1,660,970 | 1,694,148 |
| Class C | 39,451,396 | 17,484,352 |
| Class I | 41,061,480 | 9,463,792 |
| Total | $188,666,593 | $91,415,211 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 16,613,714 | 7,083,573 | $685,795,856 | $246,500,176 |
| Reinvestment of distributions | 1,907,379 | 1,286,052 | 71,987,733 | 39,516,716 |
| Shares redeemed | (4,365,455) | (3,773,574) | (177,799,342) | (131,027,775) |
| Net increase (decrease) | 14,155,638 | 4,596,051 | $579,984,247 | $154,989,117 |
| Class T | ||||
| Shares sold | 2,292,430 | 1,019,177 | $89,470,281 | $33,380,934 |
| Reinvestment of distributions | 737,547 | 618,886 | 26,321,410 | 18,107,896 |
| Shares redeemed | (905,351) | (891,508) | (35,007,523) | (29,012,294) |
| Net increase (decrease) | 2,124,626 | 746,555 | $80,784,168 | $22,476,536 |
| Class B | ||||
| Shares sold | 49,985 | 52,714 | $1,711,713 | $1,492,321 |
| Reinvestment of distributions | 47,751 | 57,285 | 1,514,650 | 1,511,205 |
| Shares redeemed | (172,141) | (227,802) | (5,890,995) | (6,589,471) |
| Net increase (decrease) | (74,405) | (117,803) | $(2,664,632) | $(3,585,945) |
| Class C | ||||
| Shares sold | 12,628,362 | 3,765,135 | $437,473,337 | $111,711,536 |
| Reinvestment of distributions | 1,088,220 | 567,385 | 34,383,515 | 14,940,641 |
| Shares redeemed | (1,445,818) | (928,018) | (49,753,436) | (27,242,442) |
| Net increase (decrease) | 12,270,764 | 3,404,502 | $422,103,416 | $99,409,735 |
| Class I | ||||
| Shares sold | 13,587,551 | 6,450,084 | $597,091,181 | $241,929,933 |
| Reinvestment of distributions | 926,189 | 259,255 | 37,490,066 | 8,481,841 |
| Shares redeemed | (4,637,021) | (1,678,853) | (204,139,010) | (61,586,966) |
| Net increase (decrease) | 9,876,719 | 5,030,486 | $430,442,237 | $188,824,808 |
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.
Fidelity Advisor® Industrials Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | 1.95% | 13.53% | 9.24% |
| Class T (incl. 3.50% sales charge) | 4.10% | 13.78% | 9.23% |
| Class B (incl. contingent deferred sales charge) | 2.34% | 13.73% | 9.29% |
| Class C (incl. contingent deferred sales charge) | 6.36% | 14.02% | 9.08% |
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.
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.
Prior to October 1, 2006, the 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, 2005, 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.
| Period Ending Values | ||
| $24,209 | Fidelity Advisor® Industrials Fund - Class A | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Industrials Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Tobias Welo: For the year, the fund's share classes handily outpaced the 6.97% gain of the MSCI U.S. IMI Industrials 25/50 Index but lagged the broadly based S&P 500®. (For specific class-level results, please see the Performance section of this report.) Versus the MSCI index, stock selection was the main driver of results, with subindustry selection a secondary positive. The fund's positioning in building products particularly bolstered relative performance. One contributor here was A.O. Smith, which reported strong quarterly financial results in both January and April. Lennox International, a provider of residential and commercial heating and cooling systems, also did well and rewarded our overweighting there. Industrial conglomerate Danaher, the fund's largest overweighting at period end, further bolstered relative results. Conversely, an underweighting and weak stock picking in airlines – a segment in which the fund started with an underweight and had virtually no exposure by period end – hurt relative performance. At the stock level, a sizable overweighting in crane- and refrigeration-equipment manufacturer Manitowoc was the fund's biggest relative detractor. Relative performance also suffered because of a non-benchmark position in Golar LNG, the leading independent owner/operator of liquefied natural gas carriers. I sold this stock in January 2015.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.Fidelity Advisor® Industrials Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| General Electric Co. | 12.1 | 1.9 |
| Danaher Corp. | 7.7 | 6.8 |
| FedEx Corp. | 6.6 | 5.3 |
| United Technologies Corp. | 5.8 | 8.1 |
| The Boeing Co. | 5.6 | 5.5 |
| J.B. Hunt Transport Services, Inc. | 5.4 | 3.2 |
| Honeywell International, Inc. | 4.0 | 4.8 |
| Union Pacific Corp. | 3.7 | 5.4 |
| Raytheon Co. | 2.9 | 2.0 |
| General Dynamics Corp. | 2.7 | 2.3 |
| 56.5 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Aerospace & Defense | 26.4% | |
| Industrial Conglomerates | 19.8% | |
| Road & Rail | 10.3% | |
| Electrical Equipment | 7.1% | |
| Machinery | 6.7% | |
| All Others* | 29.7% | |
| As of January 31, 2015 | ||
| Aerospace & Defense | 29.3% | |
| Machinery | 12.7% | |
| Road & Rail | 11.6% | |
| Professional Services | 9.5% | |
| Industrial Conglomerates | 8.7% | |
| All Others* | 28.2% | |
* Includes short-term investments and net other assets (liabilities).
Fidelity Advisor® Industrials Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 99.5% | |||
| Shares | Value | ||
| Aerospace & Defense - 26.4% | |||
| Aerospace & Defense - 26.4% | |||
| General Dynamics Corp. | 141,762 | $21,138,132 | |
| Honeywell International, Inc. | 294,433 | 30,930,187 | |
| Orbital ATK, Inc. | 137,169 | 9,732,141 | |
| Raytheon Co. | 204,900 | 22,352,541 | |
| Teledyne Technologies, Inc. (a) | 134,665 | 13,960,721 | |
| Textron, Inc. | 421,078 | 18,401,109 | |
| The Boeing Co. | 304,529 | 43,903,946 | |
| United Technologies Corp. | 445,951 | 44,733,345 | |
| 205,152,122 | |||
| Air Freight & Logistics - 6.6% | |||
| Air Freight & Logistics - 6.6% | |||
| FedEx Corp. | 298,632 | 51,191,497 | |
| Airlines - 0.3% | |||
| Airlines - 0.3% | |||
| Copa Holdings SA Class A | 25,100 | 1,895,803 | |
| Building Products - 5.4% | |||
| Building Products - 5.4% | |||
| A.O. Smith Corp. | 236,342 | 16,974,082 | |
| Caesarstone Sdot-Yam Ltd. | 60,392 | 4,332,522 | |
| Lennox International, Inc. | 173,704 | 20,509,231 | |
| 41,815,835 | |||
| Commercial Services & Supplies - 4.8% | |||
| Diversified Support Services - 1.3% | |||
| KAR Auction Services, Inc. | 255,800 | 9,958,294 | |
| Office Services & Supplies - 1.8% | |||
| West Corp. | 495,832 | 14,304,753 | |
| Security & Alarm Services - 1.7% | |||
| Tyco International Ltd. | 345,500 | 13,125,545 | |
| TOTAL COMMERCIAL SERVICES & SUPPLIES | 37,388,592 | ||
| Construction & Engineering - 2.7% | |||
| Construction & Engineering - 2.7% | |||
| AECOM Technology Corp. (a) | 677,621 | 20,891,055 | |
| Diversified Consumer Services - 1.1% | |||
| Specialized Consumer Services - 1.1% | |||
| ServiceMaster Global Holdings, Inc. (a) | 213,000 | 8,249,490 | |
| Electrical Equipment - 7.1% | |||
| Electrical Components & Equipment - 4.9% | |||
| Acuity Brands, Inc. | 2,100 | 422,499 | |
| AMETEK, Inc. | 269,200 | 14,281,060 | |
| Eaton Corp. PLC | 272,100 | 16,483,818 | |
| EnerSys | 108,277 | 6,761,899 | |
| 37,949,276 | |||
| Heavy Electrical Equipment - 2.2% | |||
| BWX Technologies, Inc. | 696,900 | 17,115,864 | |
| TOTAL ELECTRICAL EQUIPMENT | 55,065,140 | ||
| Energy Equipment & Services - 0.2% | |||
| Oil & Gas Equipment & Services - 0.2% | |||
| Aspen Aerogels, Inc. (a) | 234,166 | 1,543,154 | |
| Industrial Conglomerates - 19.8% | |||
| Industrial Conglomerates - 19.8% | |||
| Danaher Corp. | 659,132 | 60,350,126 | |
| General Electric Co. | 3,592,748 | 93,770,721 | |
| 154,120,847 | |||
| Machinery - 6.7% | |||
| Agricultural & Farm Machinery - 2.0% | |||
| Deere & Co. | 165,250 | 15,627,693 | |
| Construction Machinery & Heavy Trucks - 0.8% | |||
| Manitowoc Co., Inc. (b) | 363,927 | 6,430,590 | |
| Industrial Machinery - 3.9% | |||
| IDEX Corp. | 164,229 | 12,486,331 | |
| Ingersoll-Rand PLC | 210,600 | 12,930,840 | |
| Pentair PLC | 77,800 | 4,731,018 | |
| 30,148,189 | |||
| TOTAL MACHINERY | 52,206,472 | ||
| Professional Services - 3.9% | |||
| Research & Consulting Services - 3.9% | |||
| CEB, Inc. | 121,200 | 9,274,224 | |
| Huron Consulting Group, Inc. (a) | 111,520 | 8,527,934 | |
| Verisk Analytics, Inc. (a) | 161,544 | 12,618,202 | |
| 30,420,360 | |||
| Road & Rail - 10.3% | |||
| Railroads - 4.9% | |||
| Kansas City Southern | 93,000 | 9,224,670 | |
| Union Pacific Corp. | 300,628 | 29,338,287 | |
| 38,562,957 | |||
| Trucking - 5.4% | |||
| J.B. Hunt Transport Services, Inc. | 496,684 | 41,781,058 | |
| TOTAL ROAD & RAIL | 80,344,015 | ||
| Trading Companies & Distributors - 4.2% | |||
| Trading Companies & Distributors - 4.2% | |||
| AerCap Holdings NV (a) | 220,400 | 10,323,536 | |
| HD Supply Holdings, Inc. (a) | 520,206 | 18,623,375 | |
| Wolseley PLC | 58,863 | 3,912,260 | |
| 32,859,171 | |||
| TOTAL COMMON STOCKS | |||
| (Cost $649,473,861) | 773,143,553 | ||
| Money Market Funds - 1.3% | |||
| Fidelity Cash Central Fund, 0.17% (c) | 3,834,417 | 3,834,417 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (c)(d) | 6,367,883 | 6,367,883 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $10,202,300) | 10,202,300 | ||
| TOTAL INVESTMENT PORTFOLIO - 100.8% | |||
| (Cost $659,676,161) | 783,345,853 | ||
| NET OTHER ASSETS (LIABILITIES) - (0.8)% | (6,170,423) | ||
| NET ASSETS - 100% | $777,175,430 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) 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.
(d) Investment made with cash collateral received from securities on loan.
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 | $8,175 |
| Fidelity Securities Lending Cash Central Fund | 114,891 |
| Total | $123,066 |
Investment Valuation
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Industrials Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $6,429,742) — See accompanying schedule: Unaffiliated issuers (cost $649,473,861) | $773,143,553 | |
| Fidelity Central Funds (cost $10,202,300) | 10,202,300 | |
| Total Investments (cost $659,676,161) | $783,345,853 | |
| Receivable for investments sold | 6,639,480 | |
| Receivable for fund shares sold | 256,062 | |
| Dividends receivable | 766,155 | |
| Distributions receivable from Fidelity Central Funds | 1,681 | |
| Other receivables | 14,189 | |
| Total assets | 791,023,420 | |
| Liabilities | ||
| Payable for investments purchased | $4,781,788 | |
| Payable for fund shares redeemed | 1,877,925 | |
| Accrued management fee | 359,987 | |
| Distribution and service plan fees payable | 231,848 | |
| Other affiliated payables | 157,181 | |
| Other payables and accrued expenses | 71,378 | |
| Collateral on securities loaned, at value | 6,367,883 | |
| Total liabilities | 13,847,990 | |
| Net Assets | $777,175,430 | |
| Net Assets consist of: | ||
| Paid in capital | $600,598,291 | |
| Undistributed net investment income | 1,206,981 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 51,700,941 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 123,669,217 | |
| Net Assets | $777,175,430 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($333,404,896 ÷ 8,996,632 shares) | $37.06 | |
| Maximum offering price per share (100/94.25 of $37.06) | $39.32 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($88,115,877 ÷ 2,424,315 shares) | $36.35 | |
| Maximum offering price per share (100/96.50 of $36.35) | $37.67 | |
| Class B: | ||
| Net Asset Value and offering price per share ($6,698,494 ÷ 198,622 shares)(a) | $33.72 | |
| Class C: | ||
| Net Asset Value and offering price per share ($141,494,112 ÷ 4,159,255 shares)(a) | $34.02 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($207,462,051 ÷ 5,364,373 shares) | $38.67 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $12,788,133 | |
| Income from Fidelity Central Funds | 123,066 | |
| Total income | 12,911,199 | |
| Expenses | ||
| Management fee | $4,683,103 | |
| Transfer agent fees | 1,704,217 | |
| Distribution and service plan fees | 2,975,949 | |
| Accounting and security lending fees | 294,905 | |
| Custodian fees and expenses | 20,158 | |
| Independent trustees' compensation | 15,167 | |
| Registration fees | 127,692 | |
| Audit | 47,882 | |
| Legal | 10,378 | |
| Interest | 190 | |
| Miscellaneous | 10,653 | |
| Total expenses before reductions | 9,890,294 | |
| Expense reductions | (50,465) | 9,839,829 |
| Net investment income (loss) | 3,071,370 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 72,044,308 | |
| Foreign currency transactions | (1,584) | |
| Total net realized gain (loss) | 72,042,724 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (8,020,899) | |
| Assets and liabilities in foreign currencies | (963) | |
| Total change in net unrealized appreciation (depreciation) | (8,021,862) | |
| Net gain (loss) | 64,020,862 | |
| Net increase (decrease) in net assets resulting from operations | $67,092,232 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $3,071,370 | $1,948,813 |
| Net realized gain (loss) | 72,042,724 | 62,719,747 |
| Change in net unrealized appreciation (depreciation) | (8,021,862) | 7,086,556 |
| Net increase (decrease) in net assets resulting from operations | 67,092,232 | 71,755,116 |
| Distributions to shareholders from net investment income | (2,601,876) | (2,130,491) |
| Distributions to shareholders from net realized gain | (62,327,818) | (26,777,623) |
| Total distributions | (64,929,694) | (28,908,114) |
| Share transactions - net increase (decrease) | (97,329,347) | 286,586,081 |
| Redemption fees | 26,890 | 23,406 |
| Total increase (decrease) in net assets | (95,139,919) | 329,456,489 |
| Net Assets | ||
| Beginning of period | 872,315,349 | 542,858,860 |
| End of period (including undistributed net investment income of $1,206,981 and undistributed net investment income of $853,887, respectively) | $777,175,430 | $872,315,349 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Industrials Fund Class A
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $36.92 | $34.50 | $26.18 | $25.73 | $21.54 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .17 | .13 | .23 | .20 | .09 |
| Net realized and unrealized gain (loss) | 2.76 | 4.01 | 8.33 | .61 | 4.13 |
| Total from investment operations | 2.93 | 4.14 | 8.56 | .81 | 4.22 |
| Distributions from net investment income | (.11) | (.15) | (.24) | (.11) | (.03) |
| Distributions from net realized gain | (2.68) | (1.58) | – | (.25) | – |
| Total distributions | (2.79) | (1.72)B | (.24) | (.36) | (.03) |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $37.06 | $36.92 | $34.50 | $26.18 | $25.73 |
| Total ReturnD,E | 8.17% | 12.52% | 32.92% | 3.42% | 19.59% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.06% | 1.09% | 1.11% | 1.14% | 1.13% |
| Expenses net of fee waivers, if any | 1.06% | 1.09% | 1.11% | 1.14% | 1.13% |
| Expenses net of all reductions | 1.06% | 1.09% | 1.11% | 1.14% | 1.13% |
| Net investment income (loss) | .46% | .37% | .77% | .80% | .36% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $333,405 | $378,826 | $271,512 | $192,038 | $228,106 |
| Portfolio turnover rateH | 70% | 57% | 78% | 82% | 75% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $1.72 per share is comprised of distributions from net investment income of $.146 and distributions from net realized gain of $1.577 per share.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Industrials Fund Class T
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $36.29 | $33.93 | $25.75 | $25.33 | $21.24 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .07 | .04 | .15 | .13 | .03 |
| Net realized and unrealized gain (loss) | 2.71 | 3.95 | 8.20 | .61 | 4.07 |
| Total from investment operations | 2.78 | 3.99 | 8.35 | .74 | 4.10 |
| Distributions from net investment income | (.05) | (.06) | (.17) | (.07) | (.01) |
| Distributions from net realized gain | (2.67) | (1.58) | – | (.25) | – |
| Total distributions | (2.72) | (1.63)B | (.17) | (.32) | (.01) |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $36.35 | $36.29 | $33.93 | $25.75 | $25.33 |
| Total ReturnD,E | 7.88% | 12.27% | 32.60% | 3.15% | 19.28% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.33% | 1.33% | 1.37% | 1.40% | 1.39% |
| Expenses net of fee waivers, if any | 1.32% | 1.33% | 1.37% | 1.40% | 1.39% |
| Expenses net of all reductions | 1.32% | 1.33% | 1.36% | 1.39% | 1.38% |
| Net investment income (loss) | .20% | .12% | .52% | .54% | .10% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $88,116 | $90,509 | $79,172 | $63,954 | $71,542 |
| Portfolio turnover rateH | 70% | 57% | 78% | 82% | 75% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $1.63 per share is comprised of distributions from net investment income of $.057 and distributions from net realized gain of $1.577 per share.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Industrials Fund Class B
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $34.02 | $31.97 | $24.29 | $23.99 | $20.22 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.11) | (.14) | (.01) | –B | (.11) |
| Net realized and unrealized gain (loss) | 2.52 | 3.71 | 7.74 | .57 | 3.88 |
| Total from investment operations | 2.41 | 3.57 | 7.73 | .57 | 3.77 |
| Distributions from net investment income | (.03) | – | (.05) | (.02) | – |
| Distributions from net realized gain | (2.68) | (1.52) | – | (.25) | – |
| Total distributions | (2.71) | (1.52) | (.05) | (.27) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $33.72 | $34.02 | $31.97 | $24.29 | $23.99 |
| Total ReturnC,D | 7.29% | 11.64% | 31.87% | 2.59% | 18.64% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.86% | 1.88% | 1.92% | 1.94% | 1.93% |
| Expenses net of fee waivers, if any | 1.85% | 1.88% | 1.92% | 1.94% | 1.93% |
| Expenses net of all reductions | 1.85% | 1.87% | 1.91% | 1.94% | 1.93% |
| Net investment income (loss) | (.33)% | (.42)% | (.04)% | - %G | (.44)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $6,698 | $12,459 | $17,502 | $20,058 | $28,600 |
| Portfolio turnover rateH | 70% | 57% | 78% | 82% | 75% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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%.
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Industrials Fund Class C
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $34.13 | $32.08 | $24.38 | $24.07 | $20.28 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.10) | (.13) | .01 | .01 | (.09) |
| Net realized and unrealized gain (loss) | 2.54 | 3.73 | 7.75 | .58 | 3.88 |
| Total from investment operations | 2.44 | 3.60 | 7.76 | .59 | 3.79 |
| Distributions from net investment income | – | – | (.06) | (.03) | – |
| Distributions from net realized gain | (2.55) | (1.55) | – | (.25) | – |
| Total distributions | (2.55) | (1.55) | (.06) | (.28) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $34.02 | $34.13 | $32.08 | $24.38 | $24.07 |
| Total ReturnC,D | 7.36% | 11.71% | 31.90% | 2.67% | 18.69% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.82% | 1.83% | 1.87% | 1.89% | 1.89% |
| Expenses net of fee waivers, if any | 1.82% | 1.83% | 1.87% | 1.89% | 1.89% |
| Expenses net of all reductions | 1.81% | 1.83% | 1.86% | 1.88% | 1.88% |
| Net investment income (loss) | (.30)% | (.38)% | .02% | .05% | (.40)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $141,494 | $147,749 | $89,893 | $66,289 | $72,673 |
| Portfolio turnover rateG | 70% | 57% | 78% | 82% | 75% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Industrials Fund Class I
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $38.42 | $35.83 | $27.18 | $26.69 | $22.30 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .28 | .25 | .33 | .28 | .17 |
| Net realized and unrealized gain (loss) | 2.87 | 4.16 | 8.64 | .63 | 4.28 |
| Total from investment operations | 3.15 | 4.41 | 8.97 | .91 | 4.45 |
| Distributions from net investment income | (.22) | (.24) | (.32) | (.17) | (.06) |
| Distributions from net realized gain | (2.68) | (1.58) | – | (.25) | – |
| Total distributions | (2.90) | (1.82) | (.32) | (.42) | (.06) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $38.67 | $38.42 | $35.83 | $27.18 | $26.69 |
| Total ReturnC | 8.45% | 12.82% | 33.28% | 3.72% | 19.95% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | .80% | .81% | .84% | .85% | .85% |
| Expenses net of fee waivers, if any | .80% | .81% | .84% | .85% | .85% |
| Expenses net of all reductions | .79% | .81% | .83% | .85% | .84% |
| Net investment income (loss) | .72% | .64% | 1.04% | 1.08% | .65% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $207,462 | $242,772 | $84,780 | $42,850 | $68,323 |
| Portfolio turnover rateF | 70% | 57% | 78% | 82% | 75% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions 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 | $135,684,178 |
| Gross unrealized depreciation | (13,601,552) |
| Net unrealized appreciation (depreciation) on securities | $122,082,626 |
| Tax Cost | $661,263,227 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $1,206,982 |
| Undistributed long-term capital gain | $53,288,008 |
| Net unrealized appreciation (depreciation) on securities and other investments | $122,082,151 |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $5,181,299 | $ 6,372,762 |
| Long-term Capital Gains | 59,748,395 | 22,535,352 |
| Total | $64,929,694 | $ 28,908,114 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $591,182,743 and $737,053,857, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | –% | .25% | $907,096 | $ 8,382 |
| Class T | .25% | .25% | 460,830 | - |
| Class B | .75% | .25% | 98,405 | 73,829 |
| Class C | .75% | .25% | 1,509,618 | 363,133 |
| $2,975,949 | $ 445,344 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $122,486 |
| Class T | 13,144 |
| Class B* | 3,331 |
| Class C* | 32,550 |
| $171,511 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $732,207 | .20 |
| Class T | 197,324 | .21 |
| Class B | 23,845 | .24 |
| Class C | 309,991 | .21 |
| Class I | 440,850 | .19 |
| $1,704,217 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $11,396 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $3,411,833 | .33% | $190 |
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,254 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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 $114,891.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $30,250 for the period.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $3,279 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | 7,693 |
| Class T | 1,997 |
| Class B | 328 |
| Class C | 2,891 |
| Class I | 4,027 |
| 16,936 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $1,073,088 | $1,245,229 |
| Class T | 117,188 | 134,405 |
| Class B | 10,986 | – |
| Class I | 1,400,614 | 750,857 |
| Total | $2,601,876 | $2,130,491 |
| From net realized gain | ||
| Class A | $26,712,147 | $13,069,252 |
| Class T | 6,664,310 | 3,703,526 |
| Class B | 905,701 | 784,693 |
| Class C | 11,132,591 | 4,700,595 |
| Class I | 16,913,069 | 4,519,557 |
| Total | $62,327,818 | $26,777,623 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 1,896,772 | 4,772,547 | $70,041,684 | $175,272,457 |
| Reinvestment of distributions | 707,344 | 371,629 | 25,707,295 | 12,577,496 |
| Shares redeemed | (3,868,022) | (2,753,437) | (142,586,857) | (102,587,048) |
| Net increase (decrease) | (1,263,906) | 2,390,739 | $(46,837,878) | $85,262,905 |
| Class T | ||||
| Shares sold | 223,605 | 488,031 | $8,111,419 | $17,620,607 |
| Reinvestment of distributions | 183,489 | 111,368 | 6,551,657 | 3,695,039 |
| Shares redeemed | (477,116) | (438,393) | (17,277,571) | (15,778,298) |
| Net increase (decrease) | (70,022) | 161,006 | $(2,614,495) | $5,537,348 |
| Class B | ||||
| Shares sold | 7,145 | 23,437 | $236,954 | $779,028 |
| Reinvestment of distributions | 23,129 | 20,842 | 769,253 | 646,413 |
| Shares redeemed | (197,915) | (225,514) | (6,710,202) | (7,608,429) |
| Net increase (decrease) | (167,641) | (181,235) | $(5,703,995) | $(6,182,988) |
| Class C | ||||
| Shares sold | 897,971 | 2,035,151 | $30,459,518 | $69,252,170 |
| Reinvestment of distributions | 266,310 | 122,955 | 8,933,204 | 3,851,644 |
| Shares redeemed | (1,333,978) | (631,000) | (45,225,201) | (21,673,420) |
| Net increase (decrease) | (169,697) | 1,527,106 | $(5,832,479) | $51,430,394 |
| Class I | ||||
| Shares sold | 2,703,369 | 5,450,475 | $103,567,578 | $209,069,151 |
| Reinvestment of distributions | 388,187 | 116,471 | 14,699,436 | 4,133,979 |
| Shares redeemed | (4,045,495) | (1,614,908) | (154,607,514) | (62,664,708) |
| Net increase (decrease) | (953,939) | 3,952,038 | $(36,340,500) | $150,538,422 |
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.
Fidelity Advisor® Technology Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | 4.56% | 14.01% | 8.98% |
| Class T (incl. 3.50% sales charge) | 6.76% | 14.26% | 8.96% |
| Class B (incl. contingent deferred sales charge) | 5.04% | 14.25% | 9.06% |
| Class C (incl. contingent deferred sales charge) | 9.07% | 14.51% | 8.81% |
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.
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, 2005, 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.
| Period Ending Values | ||
| $23,633 | Fidelity Advisor® Technology Fund - Class A | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Technology Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Charlie Chai: For the year, the fund's share classes lagged the 13.06% gain of the MSCI U.S. IMI Information Technology 25/50 Index and also trailed the broadly based S&P 500®. (For specific class-level results, please see the Performance section of this report.) Versus the MSCI index, stock selection in Internet software & services held back relative performance. At the stock level, an overweighting in Internet portal Yahoo! was the fund's biggest relative detractor. I added to our share count in Yahoo! during the period but continued to monitor the tax ramifications – still in flux at period end – of a proposed spinoff of its large stake in Alibaba Group Holding, which reported disappointing earnings amid a slowing Chinese economy. An out-of-benchmark stake in NAVER, South Korea's top Web-search operator, also hurt relative results, as did a sizable underweighting in strong-performing payment processor and index name Visa. Conversely, stock selection in the mega-cap group was a noteworthy positive. For example, not owning IT services giant IBM, an index component and our top relative contributor, bolstered results, as did mostly avoiding PC chipmaker Intel, another weak-performing index name. Lastly, our non-U.S. holdings contributed, despite the headwind of a rising U.S dollar.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.Fidelity Advisor® Technology Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Apple, Inc. | 12.9 | 14.1 |
| Facebook, Inc. Class A | 7.0 | 6.6 |
| Google, Inc. Class C | 5.2 | 4.2 |
| Google, Inc. Class A | 5.0 | 4.1 |
| QUALCOMM, Inc. | 2.7 | 2.1 |
| Yahoo!, Inc. | 2.1 | 3.1 |
| Microsoft Corp. | 2.1 | 0.0 |
| Tesla Motors, Inc. | 2.0 | 0.7 |
| Hewlett-Packard Co. | 1.9 | 2.0 |
| Oracle Corp. | 1.8 | 0.7 |
| 42.7 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Internet Software & Services | 29.2% | |
| Technology Hardware, Storage & Peripherals | 16.4% | |
| Software | 14.9% | |
| Semiconductors & Semiconductor Equipment | 10.3% | |
| IT Services | 6.1% | |
| All Others* | 23.1% | |
| As of January 31, 2015 | ||
| Internet Software & Services | 29.9% | |
| Technology Hardware, Storage & Peripherals | 17.9% | |
| Software | 12.8% | |
| Semiconductors & Semiconductor Equipment | 9.7% | |
| Communications Equipment | 7.2% | |
| All Others* | 22.5% | |
* Includes short-term investments and net other assets (liabilities).
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity Advisor® Technology Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 97.8% | |||
| Shares | Value | ||
| Auto Components - 0.0% | |||
| Auto Parts & Equipment - 0.0% | |||
| NOK Corp. | 24,700 | $724,448 | |
| Automobiles - 2.0% | |||
| Automobile Manufacturers - 2.0% | |||
| Tesla Motors, Inc. (a)(b) | 123,209 | 32,792,075 | |
| Banks - 0.9% | |||
| Diversified Banks - 0.9% | |||
| Hangzhou Hikvision Digital Technology Co. Ltd. ELS (BNP Paribas Warrant Program) warrants 11/27/17 (a)(c) | 2,184,400 | 11,617,669 | |
| Luxshare Precision Industry Co. Ltd. ELS (BNP Paribas Warrant Program) warrants 6/3/16 (a)(c) | 173,750 | 949,088 | |
| Midea Group ELS (BNP Paribas Arbitrage Warrant Program) warrants 1/6/16 (a)(c) | 417,500 | 2,228,773 | |
| 14,795,530 | |||
| Biotechnology - 0.1% | |||
| Biotechnology - 0.1% | |||
| JHL Biotech, Inc. (d) | 277,738 | 1,038,740 | |
| Capital Markets - 0.1% | |||
| Diversified Capital Markets - 0.1% | |||
| Shenzhen O-film Tech Co. Ltd. ELS (UBS Warrant Program) warrants 7/18/16 (a)(c) | 292,500 | 1,294,871 | |
| Chemicals - 0.2% | |||
| Industrial Gases - 0.1% | |||
| OCI Materials Co. Ltd. | 8,666 | 987,712 | |
| Specialty Chemicals - 0.1% | |||
| Duk San Neolux Co. Ltd. (a) | 105,097 | 1,410,559 | |
| JSR Corp. | 8,900 | 148,220 | |
| Nitto Denko Corp. | 2,200 | 166,684 | |
| 1,725,463 | |||
| TOTAL CHEMICALS | 2,713,175 | ||
| Communications Equipment - 4.7% | |||
| Communications Equipment - 4.7% | |||
| BYD Electronic International Co. Ltd. | 1,793,500 | 1,492,212 | |
| Ciena Corp. (a)(b) | 192,000 | 4,886,400 | |
| Cisco Systems, Inc. | 231,100 | 6,567,862 | |
| CommScope Holding Co., Inc. (a) | 373,800 | 11,726,106 | |
| Ixia (a) | 234,825 | 3,099,690 | |
| Juniper Networks, Inc. | 32,466 | 922,684 | |
| Palo Alto Networks, Inc. (a) | 15,400 | 2,861,782 | |
| QUALCOMM, Inc. | 680,800 | 43,836,712 | |
| Radware Ltd. (a) | 610 | 11,614 | |
| 75,405,062 | |||
| Construction Materials - 0.0% | |||
| Construction Materials - 0.0% | |||
| Universal Cement Corp. | 378,705 | 284,687 | |
| Diversified Consumer Services - 0.7% | |||
| Education Services - 0.7% | |||
| New Oriental Education & Technology Group, Inc. sponsored ADR | 475,700 | 10,655,680 | |
| Specialized Consumer Services - 0.0% | |||
| LifeLock, Inc. (a)(b) | 867 | 6,867 | |
| TOTAL DIVERSIFIED CONSUMER SERVICES | 10,662,547 | ||
| Diversified Telecommunication Services - 0.1% | |||
| Alternative Carriers - 0.1% | |||
| 8x8, Inc. (a) | 271,800 | 2,367,378 | |
| Electrical Equipment - 0.9% | |||
| Electrical Components & Equipment - 0.9% | |||
| Lumenpulse, Inc. (a) | 21,700 | 237,433 | |
| Nidec Corp. | 40,700 | 3,638,837 | |
| OSRAM Licht AG | 187,063 | 10,650,110 | |
| 14,526,380 | |||
| Electronic Equipment & Components - 3.7% | |||
| Electronic Components - 1.4% | |||
| Alps Electric Co. Ltd. | 1,200 | 37,907 | |
| Largan Precision Co. Ltd. | 1,000 | 101,232 | |
| Ledlink Optics, Inc. | 753,405 | 1,131,535 | |
| OMRON Corp. | 95,600 | 3,752,725 | |
| Samsung SDI Co. Ltd. | 38,955 | 2,866,402 | |
| Sunny Optical Technology Group Co. Ltd. | 3,712,100 | 7,163,425 | |
| Taiyo Yuden Co. Ltd. | 56,900 | 713,919 | |
| TDK Corp. | 10,300 | 722,209 | |
| TPK Holding Co. Ltd. | 688,000 | 2,346,936 | |
| Universal Display Corp. (a) | 21,800 | 1,040,078 | |
| Yageo Corp. | 2,063,660 | 2,933,187 | |
| Yaskawa Electric Corp. | 1,100 | 13,056 | |
| 22,822,611 | |||
| Electronic Equipment & Instruments - 0.3% | |||
| Chroma ATE, Inc. | 1,671,683 | 3,379,271 | |
| Cognex Corp. | 34,600 | 1,566,342 | |
| FEI Co. | 200 | 17,194 | |
| Keyence Corp. | 300 | 151,289 | |
| 5,114,096 | |||
| Electronic Manufacturing Services - 1.8% | |||
| TE Connectivity Ltd. | 110,729 | 6,745,611 | |
| Trimble Navigation Ltd. (a) | 945,396 | 21,838,648 | |
| 28,584,259 | |||
| Technology Distributors - 0.2% | |||
| Digital China Holdings Ltd. (H Shares) | 2,566,000 | 2,542,069 | |
| TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 59,063,035 | ||
| Health Care Equipment & Supplies - 0.1% | |||
| Health Care Equipment - 0.1% | |||
| Intai Technology Corp. | 439,000 | 1,553,001 | |
| Olympus Corp. | 4,500 | 172,469 | |
| 1,725,470 | |||
| Health Care Providers & Services - 0.0% | |||
| Managed Health Care - 0.0% | |||
| HealthEquity, Inc. (a) | 600 | 20,196 | |
| Health Care Technology - 0.7% | |||
| Health Care Technology - 0.7% | |||
| athenahealth, Inc. (a) | 66,994 | 9,376,480 | |
| M3, Inc. | 78,200 | 1,844,343 | |
| Medidata Solutions, Inc. (a) | 15,200 | 817,760 | |
| 12,038,583 | |||
| Hotels, Restaurants & Leisure - 0.3% | |||
| Casinos & Gaming - 0.3% | |||
| 500.com Ltd. sponsored ADR Class A (a)(b) | 186,100 | 4,378,933 | |
| Household Durables - 0.6% | |||
| Consumer Electronics - 0.4% | |||
| Sky Light Holdings Ltd. (a) | 920,000 | 391,626 | |
| Skyworth Digital Holdings Ltd. | 328,000 | 250,898 | |
| Sony Corp. (a) | 122,400 | 3,469,602 | |
| Sony Corp. sponsored ADR (a) | 49,900 | 1,414,665 | |
| TCL Multimedia Technology Holdings Ltd. | 342,000 | 176,464 | |
| 5,703,255 | |||
| Household Appliances - 0.2% | |||
| Haier Electronics Group Co. Ltd. | 1,451,000 | 3,410,242 | |
| TOTAL HOUSEHOLD DURABLES | 9,113,497 | ||
| Internet & Catalog Retail - 3.3% | |||
| Internet Retail - 3.3% | |||
| Amazon.com, Inc. (a) | 32,600 | 17,478,490 | |
| ASOS PLC (a) | 3,500 | 185,836 | |
| E-Commerce China Dangdang, Inc. ADR (a)(b) | 84,315 | 569,126 | |
| Groupon, Inc. Class A (a)(b) | 1,998,500 | 9,632,770 | |
| Jumei International Holding Ltd. sponsored ADR (a)(b) | 1,105,410 | 20,682,221 | |
| MySale Group PLC (a) | 19,300 | 14,166 | |
| Qunar Cayman Islands Ltd. sponsored ADR (a) | 21,527 | 898,968 | |
| Travelport Worldwide Ltd. | 85,223 | 1,086,593 | |
| Vipshop Holdings Ltd. ADR (a) | 114,100 | 2,223,809 | |
| zulily, Inc. Class A (a) | 1,000 | 13,210 | |
| 52,785,189 | |||
| Internet Software & Services - 28.6% | |||
| Internet Software & Services - 28.6% | |||
| 58.com, Inc. ADR (a)(b) | 159,700 | 9,484,583 | |
| Alibaba Group Holding Ltd. sponsored ADR (b) | 196,200 | 15,370,308 | |
| Baidu.com, Inc. sponsored ADR (a) | 85,400 | 14,745,164 | |
| ChannelAdvisor Corp. (a) | 166,464 | 1,679,622 | |
| Constant Contact, Inc. (a) | 400 | 10,336 | |
| Cornerstone OnDemand, Inc. (a) | 109,032 | 3,931,694 | |
| Cvent, Inc. (a) | 50,808 | 1,367,751 | |
| Demandware, Inc. (a) | 34,006 | 2,569,493 | |
| DeNA Co. Ltd. | 324,400 | 6,452,140 | |
| eBay, Inc. (a) | 12,900 | 362,748 | |
| eGain Communications Corp. (a)(b) | 64,050 | 285,663 | |
| Endurance International Group Holdings, Inc. (a) | 488,000 | 9,862,480 | |
| Facebook, Inc. Class A (a) | 1,189,111 | 111,788,325 | |
| Google, Inc.: | |||
| Class A (a) | 121,887 | 80,140,703 | |
| Class C | 132,655 | 82,990,295 | |
| HomeAway, Inc. (a) | 271,390 | 8,152,556 | |
| Hortonworks, Inc. | 1,500 | 36,390 | |
| LendingClub Corp. | 700 | 10,157 | |
| LinkedIn Corp. Class A (a) | 3,800 | 772,388 | |
| Marketo, Inc. (a) | 87,813 | 2,670,393 | |
| Momo, Inc. ADR | 1,386 | 22,439 | |
| NAVER Corp. | 19,851 | 8,903,702 | |
| New Relic, Inc. | 400 | 13,920 | |
| NIC, Inc. | 59,508 | 1,073,524 | |
| Q2 Holdings, Inc. (a) | 700 | 19,033 | |
| Qihoo 360 Technology Co. Ltd. ADR (a)(b) | 52,911 | 3,281,011 | |
| Rackspace Hosting, Inc. (a) | 30,639 | 1,042,645 | |
| Renren, Inc. ADR (a)(b) | 164,400 | 577,044 | |
| SciQuest, Inc. (a) | 185,354 | 2,203,859 | |
| SINA Corp. (a) | 17,700 | 718,797 | |
| Sohu.com, Inc. (a) | 17,300 | 832,649 | |
| SouFun Holdings Ltd. ADR (b) | 587,200 | 3,916,624 | |
| Textura Corp. (a) | 247,315 | 7,172,135 | |
| Twitter, Inc. (a) | 137,100 | 4,251,471 | |
| Web.com Group, Inc. (a) | 203,586 | 5,067,256 | |
| Weibo Corp. sponsored ADR (a)(b) | 57,000 | 799,710 | |
| Xunlei Ltd. sponsored ADR (a) | 490,873 | 4,540,575 | |
| Yahoo!, Inc. (a) | 909,400 | 33,347,698 | |
| Yelp, Inc. (a)(b) | 110,643 | 2,920,975 | |
| Youku Tudou, Inc. ADR (a)(b) | 1,153,305 | 22,374,117 | |
| YY, Inc. ADR (a)(b) | 2,651 | 156,701 | |
| Zillow Group, Inc. (a)(b) | 47,510 | 3,872,065 | |
| 459,791,139 | |||
| IT Services - 6.1% | |||
| Data Processing & Outsourced Services - 5.6% | |||
| Euronet Worldwide, Inc. (a) | 25,835 | 1,769,698 | |
| Fidelity National Information Services, Inc. | 331,495 | 21,689,718 | |
| FleetCor Technologies, Inc. (a) | 56,800 | 8,793,776 | |
| Optimal Payments PLC (a) | 2,105,200 | 8,679,226 | |
| PayPal Holdings, Inc. (a) | 12,900 | 499,230 | |
| Total System Services, Inc. | 267,153 | 12,347,812 | |
| Vantiv, Inc. (a) | 246,600 | 10,850,400 | |
| Visa, Inc. Class A | 333,800 | 25,148,492 | |
| 89,778,352 | |||
| IT Consulting & Other Services - 0.5% | |||
| Cognizant Technology Solutions Corp. Class A (a) | 135,094 | 8,524,431 | |
| EPAM Systems, Inc. (a) | 2,861 | 212,029 | |
| Virtusa Corp. (a) | 400 | 19,176 | |
| 8,755,636 | |||
| TOTAL IT SERVICES | 98,533,988 | ||
| Machinery - 1.2% | |||
| Construction Machinery & Heavy Trucks - 0.8% | |||
| Zhengzhou Yutong Bus Co. Ltd. | 4,257,508 | 13,273,538 | |
| Industrial Machinery - 0.4% | |||
| Harmonic Drive Systems, Inc. | 52,100 | 778,967 | |
| Minebea Ltd. | 355,000 | 5,565,538 | |
| 6,344,505 | |||
| TOTAL MACHINERY | 19,618,043 | ||
| Media - 1.1% | |||
| Advertising - 0.1% | |||
| iCar Asia Ltd. (a)(b) | 1,257,513 | 689,384 | |
| Cable & Satellite - 0.4% | |||
| Naspers Ltd. Class N | 40,745 | 5,700,966 | |
| Movies & Entertainment - 0.4% | |||
| Bona Film Group Ltd. sponsored ADR (a) | 234,644 | 2,768,799 | |
| IMAX Corp. (a) | 109,500 | 4,096,395 | |
| 6,865,194 | |||
| Publishing - 0.2% | |||
| NEXT Co. Ltd. | 21,800 | 163,058 | |
| Schibsted ASA: | |||
| (A Shares) | 54,400 | 1,896,703 | |
| (B Shares) (a) | 54,383 | 1,777,603 | |
| 3,837,364 | |||
| TOTAL MEDIA | 17,092,908 | ||
| Professional Services - 0.2% | |||
| Human Resource & Employment Services - 0.1% | |||
| 51job, Inc. sponsored ADR (a) | 400 | 12,224 | |
| WageWorks, Inc. (a) | 30,744 | 1,535,663 | |
| 1,547,887 | |||
| Research & Consulting Services - 0.1% | |||
| ICF International, Inc. (a) | 33,600 | 1,231,776 | |
| Verisk Analytics, Inc. (a) | 168 | 13,122 | |
| 1,244,898 | |||
| TOTAL PROFESSIONAL SERVICES | 2,792,785 | ||
| Real Estate Management & Development - 0.0% | |||
| Real Estate Development - 0.0% | |||
| Greenland Hong Kong Holdings Ltd. | 1,094,000 | 629,393 | |
| Road & Rail - 0.0% | |||
| Trucking - 0.0% | |||
| eHi Car Service Co. Ltd. sponsored ADR (b) | 24,400 | 283,772 | |
| Semiconductors & Semiconductor Equipment - 10.3% | |||
| Semiconductor Equipment - 0.2% | |||
| Hermes Microvision, Inc. | 12,000 | 596,968 | |
| Nanometrics, Inc. (a) | 9,409 | 128,715 | |
| Rubicon Technology, Inc. (a)(b) | 681,267 | 1,205,843 | |
| SunEdison, Inc. (a) | 700 | 16,296 | |
| Ultratech, Inc. (a) | 121,600 | 1,935,872 | |
| 3,883,694 | |||
| Semiconductors - 10.1% | |||
| Analog Devices, Inc. | 2,800 | 163,324 | |
| Atmel Corp. | 1,565,000 | 12,958,200 | |
| Avago Technologies Ltd. | 82,500 | 10,324,050 | |
| Broadcom Corp. Class A | 125,022 | 6,327,363 | |
| Cavium, Inc. (a) | 13,700 | 928,860 | |
| Cirrus Logic, Inc. (a) | 22,714 | 749,789 | |
| Everlight Electronics Co. Ltd. | 2,141,000 | 2,819,953 | |
| First Solar, Inc. (a) | 64,800 | 2,870,640 | |
| Freescale Semiconductor, Inc. (a) | 78,356 | 3,124,054 | |
| Genesis Photonics, Inc. (a) | 2,474,066 | 777,541 | |
| Hua Hong Semiconductor Ltd. (a) | 1,615,000 | 1,585,355 | |
| Inotera Memories, Inc. (a) | 5,467,000 | 3,289,525 | |
| Intel Corp. | 133,900 | 3,876,405 | |
| Intersil Corp. Class A | 351,594 | 3,913,241 | |
| Lextar Electronics Corp. | 437,000 | 209,804 | |
| M/A-COM Technology Solutions Holdings, Inc. (a)(b) | 38,107 | 1,284,587 | |
| MagnaChip Semiconductor Corp. (a) | 114,554 | 980,582 | |
| Marvell Technology Group Ltd. | 2,091,782 | 26,021,768 | |
| Maxim Integrated Products, Inc. | 592,700 | 20,175,508 | |
| Melexis NV | 293 | 15,636 | |
| Micron Technology, Inc. (a) | 608,700 | 11,267,037 | |
| Microsemi Corp. (a) | 182,200 | 6,001,668 | |
| Monolithic Power Systems, Inc. | 71,201 | 3,681,804 | |
| Novatek Microelectronics Corp. | 979,000 | 3,540,603 | |
| ON Semiconductor Corp. (a) | 129,500 | 1,375,290 | |
| PMC-Sierra, Inc. (a) | 326,200 | 2,221,422 | |
| Power Integrations, Inc. | 41,500 | 1,608,540 | |
| Qorvo, Inc. (a) | 269,133 | 15,596,257 | |
| Radiant Opto-Electronics Corp. | 934,000 | 2,773,089 | |
| Sanken Electric Co. Ltd. | 858,000 | 4,776,859 | |
| Semiconductor Manufacturing International Corp. (a) | 13,421,000 | 1,205,967 | |
| Semtech Corp. (a) | 266,998 | 4,696,495 | |
| Silicon Laboratories, Inc. (a) | 30,900 | 1,390,191 | |
| STMicroelectronics NV | 1,630 | 12,729 | |
| 162,544,136 | |||
| TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | 166,427,830 | ||
| Software - 14.9% | |||
| Application Software - 7.1% | |||
| Adobe Systems, Inc. (a) | 189,316 | 15,522,019 | |
| ANSYS, Inc. (a) | 175 | 16,476 | |
| Autodesk, Inc. (a) | 139,500 | 7,055,910 | |
| Blackbaud, Inc. | 17,200 | 1,051,952 | |
| Citrix Systems, Inc. (a) | 203,115 | 15,357,525 | |
| Guidewire Software, Inc. (a) | 190 | 11,220 | |
| Idreamsky Technology Ltd. ADR (b) | 113,949 | 1,333,203 | |
| Interactive Intelligence Group, Inc. (a) | 53,960 | 2,237,182 | |
| Intuit, Inc. | 142,100 | 15,029,917 | |
| Kingdee International Software Group Co. Ltd. | 8,813,800 | 3,808,706 | |
| Linx SA | 700 | 10,318 | |
| Mobileye NV (a) | 51,500 | 3,095,150 | |
| Parametric Technology Corp. (a) | 43,100 | 1,566,685 | |
| Paycom Software, Inc. (a) | 900 | 28,800 | |
| Paylocity Holding Corp. (a)(b) | 45,300 | 1,627,176 | |
| Qlik Technologies, Inc. (a) | 44,300 | 1,792,378 | |
| RealPage, Inc. (a) | 219,900 | 4,222,080 | |
| Salesforce.com, Inc. (a) | 374,519 | 27,452,243 | |
| SolarWinds, Inc. (a) | 333 | 13,283 | |
| Splunk, Inc. (a) | 21,696 | 1,517,418 | |
| SS&C Technologies Holdings, Inc. | 52,200 | 3,551,166 | |
| Ultimate Software Group, Inc. (a) | 76 | 14,000 | |
| Workday, Inc. Class A (a) | 9,700 | 818,001 | |
| Workiva, Inc. | 51,400 | 749,926 | |
| Yodlee, inc. | 1,300 | 16,328 | |
| Zendesk, Inc. (a)(b) | 288,700 | 5,955,881 | |
| 113,854,943 | |||
| Home Entertainment Software - 1.3% | |||
| Activision Blizzard, Inc. | 233,170 | 6,013,454 | |
| Nintendo Co. Ltd. | 85,400 | 15,028,636 | |
| 21,042,090 | |||
| Systems Software - 6.5% | |||
| Allot Communications Ltd. (a) | 288,719 | 1,504,226 | |
| CommVault Systems, Inc. (a) | 300 | 11,241 | |
| Fleetmatics Group PLC (a) | 385,930 | 18,474,469 | |
| Imperva, Inc. (a) | 300 | 19,710 | |
| Infoblox, Inc. (a) | 900 | 21,150 | |
| Microsoft Corp. | 709,600 | 33,138,320 | |
| NetSuite, Inc. (a) | 107,077 | 10,583,491 | |
| Oracle Corp. | 728,400 | 29,092,296 | |
| Progress Software Corp. (a) | 82,300 | 2,442,664 | |
| Rapid7, Inc. | 2,500 | 57,450 | |
| Red Hat, Inc. (a) | 31,448 | 2,486,908 | |
| ServiceNow, Inc. (a) | 71,495 | 5,755,348 | |
| Tableau Software, Inc. (a) | 3,300 | 345,642 | |
| Varonis Systems, Inc. (a) | 900 | 18,711 | |
| VMware, Inc. Class A (a) | 200 | 17,826 | |
| 103,969,452 | |||
| TOTAL SOFTWARE | 238,866,485 | ||
| Technology Hardware, Storage & Peripherals - 16.4% | |||
| Technology Hardware, Storage & Peripherals - 16.4% | |||
| Apple, Inc. | 1,709,129 | 207,317,347 | |
| BlackBerry Ltd. (a) | 1,486 | 11,521 | |
| Electronics for Imaging, Inc. (a) | 87,100 | 3,980,470 | |
| EMC Corp. | 258,400 | 6,948,376 | |
| Hewlett-Packard Co. | 997,700 | 30,449,804 | |
| Nimble Storage, Inc. (a) | 5,000 | 138,100 | |
| SanDisk Corp. | 173,200 | 10,442,228 | |
| Seagate Technology LLC | 30,400 | 1,538,240 | |
| Silicon Graphics International Corp. (a) | 166,658 | 851,622 | |
| Stratasys Ltd. (a) | 100 | 3,073 | |
| Western Digital Corp. | 17,700 | 1,523,262 | |
| 263,204,043 | |||
| Wireless Telecommunication Services - 0.6% | |||
| Wireless Telecommunication Services - 0.6% | |||
| Bharti Infratel Ltd. | 936,976 | 6,554,916 | |
| RingCentral, Inc. (a) | 170,800 | 3,364,760 | |
| 9,919,676 | |||
| TOTAL COMMON STOCKS | |||
| (Cost $1,403,592,250) | 1,572,889,858 | ||
| Convertible Preferred Stocks - 1.0% | |||
| Internet & Catalog Retail - 0.4% | |||
| Internet Retail - 0.4% | |||
| Meituan Corp. Series D (d) | 758,456 | 5,893,203 | |
| Internet Software & Services - 0.6% | |||
| Internet Software & Services - 0.6% | |||
| Uber Technologies, Inc. Series D, 8.00% (a)(d) | 232,064 | 9,199,017 | |
| IT Services - 0.0% | |||
| Data Processing & Outsourced Services - 0.0% | |||
| Nutanix, Inc. Series E (d) | 39,963 | 636,211 | |
| TOTAL CONVERTIBLE PREFERRED STOCKS | |||
| (Cost $8,930,115) | 15,728,431 | ||
| Money Market Funds - 7.3% | |||
| Fidelity Cash Central Fund, 0.17% (e) | 14,154,017 | 14,154,017 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (e)(f) | 103,635,609 | 103,635,609 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $117,789,626) | 117,789,626 | ||
| TOTAL INVESTMENT PORTFOLIO - 106.1% | |||
| (Cost $1,530,311,991) | 1,706,407,915 | ||
| NET OTHER ASSETS (LIABILITIES) - (6.1)% | (98,362,251) | ||
| NET ASSETS - 100% | $1,608,045,664 |
Security Type Abbreviations
ELS – Equity-Linked Security
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) 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 $16,090,401 or 1.0% of net assets.
(d) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $16,767,171 or 1.0% of net assets.
(e) 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.
(f) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost |
| JHL Biotech, Inc. | 4/14/15 | $1,038,740 |
| Meituan Corp. Series D | 1/26/15 | $4,794,731 |
| Nutanix, Inc. Series E | 8/26/14 | $535,364 |
| Uber Technologies, Inc. Series D, 8.00% | 6/6/14 | $3,600,020 |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $28,620 |
| Fidelity Securities Lending Cash Central Fund | 708,181 |
| Total | $736,801 |
Investment Valuation
The following is a summary of the inputs used, as of July 31, 2015, 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 below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| Valuation Inputs at Reporting Date: | ||||
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | ||||
| Common Stocks | $1,572,889,858 | $1,547,433,582 | $12,799,867 | $12,656,409 |
| Convertible Preferred Stocks | 15,728,431 | -- | -- | 15,728,431 |
| Money Market Funds | 117,789,626 | 117,789,626 | -- | -- |
| Total Investments in Securities: | $1,706,407,915 | $1,665,223,208 | $12,799,867 | $28,384,840 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended July 31, 2015. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $98,181,240 |
The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value:
| Investments in Securities: | |
| Beginning Balance | $4,087,100 |
| Total Realized Gain (Loss) | 9,015 |
| Total Unrealized Gain (Loss) | 4,689,501 |
| Cost of Purchases | 20,118,557 |
| Proceeds of Sales | (519,333) |
| Amortization/Accretion | -- |
| Transfers in to Level 3 | -- |
| Transfers out of Level 3 | -- |
| Ending Balance | $28,384,840 |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at July 31, 2015 | $4,657,248 |
The information used in the above reconciliation represents fiscal year to date activity for any Investments in Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represent the beginning value of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. The cost of purchases and the proceeds of sales may include securities received or delivered through corporate actions or exchanges. Realized and unrealized gains (losses) disclosed in the reconciliation are included in Net Gain (Loss) on the Fund's Statement of Operations.
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 76.6% |
| Cayman Islands | 8.8% |
| Japan | 2.8% |
| Bermuda | 2.3% |
| Taiwan | 1.5% |
| Ireland | 1.2% |
| Netherlands | 1.1% |
| Korea (South) | 1.0% |
| Others (Individually Less Than 1%) | 4.7% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Technology Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $102,017,859) — See accompanying schedule: Unaffiliated issuers (cost $1,412,522,365) | $1,588,618,289 | |
| Fidelity Central Funds (cost $117,789,626) | 117,789,626 | |
| Total Investments (cost $1,530,311,991) | $1,706,407,915 | |
| Cash | 42,502 | |
| Foreign currency held at value (cost $68,863) | 68,889 | |
| Receivable for investments sold | 24,260,961 | |
| Receivable for fund shares sold | 3,691,481 | |
| Dividends receivable | 856,608 | |
| Distributions receivable from Fidelity Central Funds | 70,382 | |
| Other receivables | 74,920 | |
| Total assets | 1,735,473,658 | |
| Liabilities | ||
| Payable for investments purchased | $21,243,022 | |
| Payable for fund shares redeemed | 1,012,502 | |
| Accrued management fee | 731,930 | |
| Distribution and service plan fees payable | 305,784 | |
| Other affiliated payables | 300,522 | |
| Other payables and accrued expenses | 198,625 | |
| Collateral on securities loaned, at value | 103,635,609 | |
| Total liabilities | 127,427,994 | |
| Net Assets | $1,608,045,664 | |
| Net Assets consist of: | ||
| Paid in capital | $1,375,234,096 | |
| Accumulated net investment loss | (24,170) | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 56,859,514 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 175,976,224 | |
| Net Assets | $1,608,045,664 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($468,819,422 ÷ 12,730,785 shares) | $36.83 | |
| Maximum offering price per share (100/94.25 of $36.83) | $39.08 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($208,191,772 ÷ 5,904,054 shares) | $35.26 | |
| Maximum offering price per share (100/96.50 of $35.26) | $36.54 | |
| Class B: | ||
| Net Asset Value and offering price per share ($8,884,540 ÷ 276,368 shares)(a) | $32.15 | |
| Class C: | ||
| Net Asset Value and offering price per share ($138,204,865 ÷ 4,282,301 shares)(a) | $32.27 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($783,945,065 ÷ 20,084,746 shares) | $39.03 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $11,806,425 | |
| Special dividends | 3,045,103 | |
| Interest | 26 | |
| Income from Fidelity Central Funds | 736,801 | |
| Total income | 15,588,355 | |
| Expenses | ||
| Management fee | $8,273,440 | |
| Transfer agent fees | 2,965,004 | |
| Distribution and service plan fees | 3,414,130 | |
| Accounting and security lending fees | 484,390 | |
| Custodian fees and expenses | 129,367 | |
| Independent trustees' compensation | 25,623 | |
| Registration fees | 87,583 | |
| Audit | 73,061 | |
| Legal | 21,277 | |
| Interest | 718 | |
| Miscellaneous | 14,353 | |
| Total expenses before reductions | 15,488,946 | |
| Expense reductions | (157,981) | 15,330,965 |
| Net investment income (loss) | 257,390 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 99,946,133 | |
| Redemption in-kind with affiliated entities | 23,460,718 | |
| Foreign currency transactions | (306,614) | |
| Total net realized gain (loss) | 123,100,237 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities (net of increase in deferred foreign taxes of $104,553) | 30,812,391 | |
| Assets and liabilities in foreign currencies | (10,237) | |
| Total change in net unrealized appreciation (depreciation) | 30,802,154 | |
| Net gain (loss) | 153,902,391 | |
| Net increase (decrease) in net assets resulting from operations | $154,159,781 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $257,390 | $(3,870,002) |
| Net realized gain (loss) | 123,100,237 | 107,601,371 |
| Change in net unrealized appreciation (depreciation) | 30,802,154 | 87,968,653 |
| Net increase (decrease) in net assets resulting from operations | 154,159,781 | 191,700,022 |
| Distributions to shareholders from net investment income | (1,694,661) | – |
| Distributions to shareholders from net realized gain | (115,642,281) | (11,189,247) |
| Total distributions | (117,336,942) | (11,189,247) |
| Share transactions - net increase (decrease) | 393,289,614 | 150,832,224 |
| Redemption fees | 24,197 | 21,186 |
| Total increase (decrease) in net assets | 430,136,650 | 331,364,185 |
| Net Assets | ||
| Beginning of period | 1,177,909,014 | 846,544,829 |
| End of period (including accumulated net investment loss of $24,170 and accumulated net investment loss of $10,080, respectively) | $1,608,045,664 | $1,177,909,014 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Technology Fund Class A
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $36.06 | $29.90 | $25.25 | $25.14 | $19.83 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.02)B | (.12) | (.07) | (.13) | (.18) |
| Net realized and unrealized gain (loss) | 3.75 | 6.70 | 4.72 | .24 | 5.49 |
| Total from investment operations | 3.73 | 6.58 | 4.65 | .11 | 5.31 |
| Distributions from net investment income | (.02) | – | – | – | – |
| Distributions from net realized gain | (2.94) | (.42) | – | – | – |
| Total distributions | (2.96) | (.42) | – | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $36.83 | $36.06 | $29.90 | $25.25 | $25.14 |
| Total ReturnD,E | 10.94% | 22.15% | 18.42% | .44% | 26.78% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.09% | 1.14% | 1.18% | 1.18% | 1.18% |
| Expenses net of fee waivers, if any | 1.09% | 1.14% | 1.18% | 1.18% | 1.18% |
| Expenses net of all reductions | 1.08% | 1.12% | 1.14% | 1.17% | 1.16% |
| Net investment income (loss) | (.05)%B | (.35)% | (.25)% | (.55)% | (.73)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $468,819 | $408,687 | $355,306 | $336,693 | $375,609 |
| Portfolio turnover rateH | 142%I | 186% | 142% | 201% | 167% |
A Calculated based on average shares outstanding during the period.
B 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 (.25) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Technology Fund Class T
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $34.66 | $28.79 | $24.38 | $24.33 | $19.24 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.11)B | (.19) | (.13) | (.19) | (.23) |
| Net realized and unrealized gain (loss) | 3.60 | 6.45 | 4.54 | .24 | 5.32 |
| Total from investment operations | 3.49 | 6.26 | 4.41 | .05 | 5.09 |
| Distributions from net realized gain | (2.89) | (.39) | – | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $35.26 | $34.66 | $28.79 | $24.38 | $24.33 |
| Total ReturnD,E | 10.63% | 21.89% | 18.09% | .21% | 26.46% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.35% | 1.38% | 1.42% | 1.43% | 1.43% |
| Expenses net of fee waivers, if any | 1.35% | 1.38% | 1.42% | 1.43% | 1.43% |
| Expenses net of all reductions | 1.34% | 1.37% | 1.39% | 1.42% | 1.40% |
| Net investment income (loss) | (.31)%B | (.60)% | (.50)% | (.80)% | (.98)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $208,192 | $196,067 | $173,692 | $172,709 | $196,913 |
| Portfolio turnover rateH | 142%I | 186% | 142% | 201% | 167% |
A Calculated based on average shares outstanding during the period.
B 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 (.51) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Technology Fund Class B
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $31.83 | $26.56 | $22.60 | $22.67 | $18.01 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.27)B | (.34) | (.24) | (.28) | (.33) |
| Net realized and unrealized gain (loss) | 3.29 | 5.94 | 4.20 | .21 | 4.99 |
| Total from investment operations | 3.02 | 5.60 | 3.96 | (.07) | 4.66 |
| Distributions from net realized gain | (2.70) | (.33) | – | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $32.15 | $31.83 | $26.56 | $22.60 | $22.67 |
| Total ReturnD,E | 10.04% | 21.21% | 17.52% | (.31)% | 25.87% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.91% | 1.92% | 1.93% | 1.93% | 1.93% |
| Expenses net of fee waivers, if any | 1.91% | 1.92% | 1.93% | 1.93% | 1.93% |
| Expenses net of all reductions | 1.90% | 1.91% | 1.89% | 1.92% | 1.91% |
| Net investment income (loss) | (.86)%B | (1.14)% | (1.01)% | (1.30)% | (1.49)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $8,885 | $12,043 | $13,745 | $17,476 | $25,508 |
| Portfolio turnover rateH | 142%I | 186% | 142% | 201% | 167% |
A Calculated based on average shares outstanding during the period.
B 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 (1.07) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Technology Fund Class C
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $31.99 | $26.68 | $22.70 | $22.77 | $18.09 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.25)B | (.33) | (.24) | (.29) | (.33) |
| Net realized and unrealized gain (loss) | 3.29 | 5.98 | 4.22 | .22 | 5.01 |
| Total from investment operations | 3.04 | 5.65 | 3.98 | (.07) | 4.68 |
| Distributions from net realized gain | (2.76) | (.34) | – | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $32.27 | $31.99 | $26.68 | $22.70 | $22.77 |
| Total ReturnD,E | 10.07% | 21.31% | 17.53% | (.31)% | 25.87% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.84% | 1.87% | 1.91% | 1.93% | 1.92% |
| Expenses net of fee waivers, if any | 1.84% | 1.87% | 1.91% | 1.93% | 1.92% |
| Expenses net of all reductions | 1.83% | 1.86% | 1.88% | 1.91% | 1.90% |
| Net investment income (loss) | (.80)%B | (1.09)% | (.99)% | (1.29)% | (1.48)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $138,205 | $105,499 | $84,858 | $88,074 | $89,819 |
| Portfolio turnover rateH | 142%I | 186% | 142% | 201% | 167% |
A Calculated based on average shares outstanding during the period.
B 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 (1.00) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Technology Fund Class I
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $38.06 | $31.47 | $26.50 | $26.30 | $20.68 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .11B | (.02) | .02 | (.06) | (.11) |
| Net realized and unrealized gain (loss) | 3.96 | 7.06 | 4.95 | .26 | 5.73 |
| Total from investment operations | 4.07 | 7.04 | 4.97 | .20 | 5.62 |
| Distributions from net investment income | (.07) | – | – | – | – |
| Distributions from net realized gain | (3.03) | (.45) | – | – | – |
| Total distributions | (3.10) | (.45) | – | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $39.03 | $38.06 | $31.47 | $26.50 | $26.30 |
| Total ReturnD | 11.30% | 22.55% | 18.75% | .76% | 27.18% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | .75% | .83% | .86% | .86% | .87% |
| Expenses net of fee waivers, if any | .75% | .83% | .86% | .86% | .87% |
| Expenses net of all reductions | .74% | .82% | .83% | .85% | .85% |
| Net investment income (loss) | .29%B | (.05)% | .06% | (.23)% | (.43)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $783,945 | $455,612 | $218,944 | $95,310 | $81,350 |
| Portfolio turnover rateG | 142%H | 186% | 142% | 201% | 167% |
A Calculated based on average shares outstanding during the period.
B Investment income per share reflects a large, non-recurring dividend which amounted to $.08 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .09%.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I(formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy. Equity securities, including restricted securities, for which observable inputs are not available are valued using alternate valuation approaches, including the market approach and the income approach and are categorized as Level 3 in the hierarchy. The market approach generally consists of using comparable market transactions while the income approach generally consists of using the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.
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.
The following provides information on Level 3 securities held by the Fund that were valued at period end based on unobservable inputs. These amounts exclude valuations provided by a broker.
| Asset Type | Fair Value at 07/31/15 | Valuation Technique(s) | Unobservable Input | Amount or Range/Weighted Average | Impact to Valuation from an Increase in Input* |
| Equities | $ 28,384,840 | Adjusted transaction price | Proxy movement | 2.0% | Increase |
| Last transaction price | Transaction price | $3.74-$39.64/$36.00 | Increase | ||
| Market comparable | Discount rate | 10.0% | Decrease | ||
| EV/Sales multiple | 7.4 | Increase | |||
| EV/GMV multiple | 0.4 | Increase |
* Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.
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, 2015, including information on transfers between Levels 1 and 2, as well as a roll forward of Level 3 investments, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Large, non-recurring dividends recognized by the Fund are presented separately on the Statement of Operations as "Special Dividends" and the impact of these dividends is presented in the Financial Highlights. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. The Fund is subject to a tax imposed on capital gains by certain countries in which it invests. An estimated deferred tax liability for net unrealized appreciation on the applicable securities is included in Other payables and accrued expenses on the Statement of Assets & Liabilities.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), redemptions in kind, deferred trustees compensation and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $270,336,592 |
| Gross unrealized depreciation | (107,365,713) |
| Net unrealized appreciation (depreciation) on securities | $162,970,879 |
| Tax cost | $1,543,437,036 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $47,212,420 |
| Undistributed long-term capital gain | $22,772,140 |
| Net unrealized appreciation (depreciation) on securities and other investments | $162,958,929 |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $73,053,772 | $ 2,941,208 |
| Long-term Capital Gains | 44,283,170 | 8,248,039 |
| Total | $117,336,942 | $ 11,189,247 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions, aggregated $2,182,059,885 and $2,061,048,342, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $1,090,850 | $17,201 |
| Class T | .25% | .25% | 1,018,776 | 4,754 |
| Class B | .75% | .25% | 106,441 | 80,121 |
| Class C | .75% | .25% | 1,198,063 | 192,863 |
| $3,414,130 | $294,939 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $173,463 |
| Class T | 24,598 |
| Class B* | 2,793 |
| Class C* | 9,974 |
| $210,828 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $1,039,702 | .24 |
| Class T | 501,133 | .25 |
| Class B | 32,234 | .30 |
| Class C | 288,800 | .24 |
| Class I | 1,103,135 | .15 |
| $ 2,965,004 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $39,865 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $6,741,000 | .35% | $718 |
Redemptions In-Kind. During the period, 2,476,292 shares of the Fund held by affiliated entities were redeemed for investments with a value of $93,826,692. The net realized gain of $23,460,718 on investments delivered through in-kind redemptions is included in the accompanying Statement of Operations. The amount of in-kind redemptions is included in share transactions in the accompanying Statement of Changes in Net Assets as well as Note 10: Share Transactions. The Fund recognized no gain or loss for federal income tax purposes.
Exchanges In-Kind. During the period, certain investment companies managed by the investment adviser or its affiliates (Investing Funds) completed exchanges in-kind with the Fund. The Investing Funds delivered cash and investments valued at $311,440,613 in exchange for 8,219,599 shares of the Fund. The amount of in-kind exchanges is included in share transactions in the accompanying Statement of Changes in Net Assets as well as Note 10: Share Transactions. The Fund recognized no gain or loss for federal income tax purposes.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $2,128 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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 $708,181.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $127,319 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 $15.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $6,525 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $7,666 |
| Class T | 4,347 |
| Class B | 30 |
| Class C | 2,322 |
| Class I | 9,757 |
| $ 24,122 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $285,364 | $– |
| Class I | 1,409,297 | – |
| Total | $1,694,661 | $– |
| From net realized gain | ||
| Class A | $33,752,271 | $4,830,573 |
| Class T | 16,437,395 | 2,285,378 |
| Class B | 983,656 | 152,106 |
| Class C | 9,419,892 | 1,068,092 |
| Class I | 55,049,067 | 2,853,098 |
| Total | $115,642,281 | $11,189,247 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 2,913,106 | 1,967,332 | $105,555,201 | $66,338,054 |
| Reinvestment of distributions | 901,782 | 136,812 | 31,562,947 | 4,412,177 |
| Shares redeemed | (2,417,005) | (2,655,768) | (86,800,900) | (89,258,893) |
| Net increase (decrease) | 1,397,883 | (551,624) | $50,317,248 | $(18,508,662) |
| Class T | ||||
| Shares sold | 637,105 | 604,269 | $22,054,709 | $19,519,431 |
| Reinvestment of distributions | 476,624 | 71,453 | 16,015,842 | 2,218,622 |
| Shares redeemed | (866,616) | (1,051,577) | (29,828,780) | (34,073,517) |
| Net increase (decrease) | 247,113 | (375,855) | $8,241,771 | $(12,335,464) |
| Class B | ||||
| Shares sold | 11,273 | 9,706 | $348,144 | $287,815 |
| Reinvestment of distributions | 29,273 | 4,834 | 901,739 | 138,293 |
| Shares redeemed | (142,494) | (153,751) | (4,494,534) | (4,566,688) |
| Net increase (decrease) | (101,948) | (139,211) | $(3,244,651) | $(4,140,580) |
| Class C | ||||
| Shares sold | 1,277,139 | 594,192 | $40,629,084 | $17,948,827 |
| Reinvestment of distributions | 261,235 | 31,647 | 8,065,851 | 909,547 |
| Shares redeemed | (554,231) | (507,790) | (17,408,387) | (15,090,389) |
| Net increase (decrease) | 984,143 | 118,049 | $31,286,548 | $3,767,985 |
| Class I | ||||
| Shares sold | 23,671,191(a) | 7,128,296 | $899,915,317(a) | $254,841,416 |
| Reinvestment of distributions | 1,510,080 | 81,545 | 55,853,504 | 2,770,913 |
| Shares redeemed | (17,066,384)(b) | (2,196,859) | (649,080,123)(b) | (75,563,384) |
| Net increase (decrease) | 8,114,887 | 5,012,982 | $306,688,698 | $182,048,945 |
(a) Amount includes in-kind exchanges (see Note 5: Exchanges In-Kind).
(b) Amount includes in-kind redemptions (see Note 5: Redemptions In-Kind).
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, Strategic Advisers Core Fund was the owner of record of approximately 33% of the total outstanding shares of the Fund.
Fidelity Advisor® Utilities Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | (3.85)% | 11.05% | 7.25% |
| Class T (incl. 3.50% sales charge) | (1.84)% | 11.27% | 7.22% |
| Class B (incl. contingent deferred sales charge) | (3.53)% | 11.26% | 7.33% |
| Class C (incl. contingent deferred sales charge) | 0.34% | 11.55% | 7.11% |
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.
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.
Prior to October 1, 2006, the fund was named Fidelity Advisor® Telecommunications & Utilities Growth 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, 2005, 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.
| Period Ending Values | ||
| $20,140 | Fidelity Advisor® Utilities Fund - Class A | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Utilities Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015, as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. Consequently, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for the consumer staples sector and the real estate segment of financials yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Douglas Simmons: In a challenging year for utilities as a group, the fund's share classes underperformed the benchmark MSCI U.S. IMI Utilities 25/50 Index and the broad-based S&P 500®. (For specific class-level results, please see the Performance section of this report.) The fund underperformed the 9.22% return of the MSCI index due to a combination of stock picking and market selection. In general, the more regulated utility names that I tend to avoid performed the best for the one-year period, because they are more sensitive to interest rate movements. A sizable overweighting in the less interest-rate-sensitive names in the independent power producers & energy traders segment delivered the most significant hit. Energy producer NRG Energy was one of the primary detractors here. NRG depends on the capital markets to increase its cash flow and dividend payments. During the period, the capital markets were weak for many stocks tied to energy, calling into question whether NRG had the ability to issue equity to boost its dividend. The fund's out-of-index stake in oil & gas storage & transportation also hurt. Terminal operator Cheniere Energy declined during the time we owned it. The stock became caught up in the sector correction and declined from late March through July. On the flip side, a significant overweighting in Florida-based electric company NextEra Energy was the biggest contributor to relative performance, followed by natural gas infrastructure company NiSource.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.Fidelity Advisor® Utilities Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| NextEra Energy, Inc. | 16.1 | 12.3 |
| Exelon Corp. | 13.0 | 9.9 |
| Sempra Energy | 11.2 | 9.2 |
| Dominion Resources, Inc. | 9.0 | 9.7 |
| PPL Corp. | 4.9 | 4.9 |
| Edison International | 4.9 | 3.4 |
| PG&E Corp. | 4.6 | 7.9 |
| Calpine Corp. | 4.3 | 4.0 |
| NRG Energy, Inc. | 3.9 | 2.7 |
| FirstEnergy Corp. | 3.1 | 1.9 |
| 75.0 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Electric Utilities | 48.8% | |
| Multi-Utilities | 30.8% | |
| Independent Power and Renewable Electricity Producers | 11.6% | |
| Oil, Gas & Consumable Fuels | 4.7% | |
| Real Estate Investment Trusts | 2.7% | |
| All Others* | 1.4% | |
| As of January 31, 2015 | ||
| Electric Utilities | 40.4% | |
| Multi-Utilities | 31.6% | |
| Independent Power Producers & Renewable Electricity Producers | 10.0% | |
| Oil, Gas & Consumable Fuels | 6.1% | |
| Media | 2.9% | |
| All Others* | 9.0% | |
* Includes short-term investments and net other assets (liabilities).
Fidelity Advisor® Utilities Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 98.6% | |||
| Shares | Value | ||
| Electric Utilities - 48.8% | |||
| Electric Utilities - 48.8% | |||
| Duke Energy Corp. | 37,400 | $2,775,828 | |
| Edison International | 222,002 | 13,322,340 | |
| Exelon Corp. | 1,106,250 | 35,499,563 | |
| FirstEnergy Corp. | 244,200 | 8,293,032 | |
| ITC Holdings Corp. | 138,400 | 4,675,152 | |
| NextEra Energy, Inc. | 418,340 | 44,009,369 | |
| OGE Energy Corp. | 263,423 | 7,839,468 | |
| PNM Resources, Inc. | 20,800 | 548,704 | |
| PPL Corp. | 420,572 | 13,378,395 | |
| Southern Co. | 62,700 | 2,804,571 | |
| 133,146,422 | |||
| Independent Power and Renewable Electricity Producers - 11.6% | |||
| Independent Power Producers & Energy Traders - 11.6% | |||
| Black Hills Corp. | 67,500 | 2,812,050 | |
| Calpine Corp. (a) | 645,217 | 11,807,471 | |
| Dynegy, Inc. (a) | 146,057 | 3,804,785 | |
| NRG Energy, Inc. | 476,415 | 10,695,517 | |
| NRG Yield, Inc. Class C | 37,300 | 719,517 | |
| The AES Corp. | 134,800 | 1,725,440 | |
| 31,564,780 | |||
| Multi-Utilities - 30.8% | |||
| Multi-Utilities - 30.8% | |||
| Dominion Resources, Inc. | 343,399 | 24,621,708 | |
| DTE Energy Co. | 71,498 | 5,752,729 | |
| NiSource, Inc. | 383,083 | 6,688,629 | |
| PG&E Corp. | 238,218 | 12,508,827 | |
| Sempra Energy | 300,637 | 30,598,834 | |
| TECO Energy, Inc. | 52,000 | 1,150,240 | |
| WEC Energy Group, Inc. | 59,760 | 2,928,240 | |
| 84,249,207 | |||
| Oil, Gas & Consumable Fuels - 4.7% | |||
| Oil & Gas Storage & Transport - 4.7% | |||
| Cheniere Energy Partners LP Holdings LLC | 310,762 | 6,793,257 | |
| Columbia Pipeline Group, Inc. | 207,983 | 6,068,944 | |
| 12,862,201 | |||
| Real Estate Investment Trusts - 2.7% | |||
| Specialized REITs - 2.7% | |||
| Crown Castle International Corp. | 89,800 | 7,355,518 | |
| TOTAL COMMON STOCKS | |||
| (Cost $255,473,255) | 269,178,128 | ||
| Money Market Funds - 2.1% | |||
| Fidelity Cash Central Fund, 0.17% (b) | |||
| (Cost $5,703,373) | 5,703,373 | 5,703,373 | |
| TOTAL INVESTMENT PORTFOLIO - 100.7% | |||
| (Cost $261,176,628) | 274,881,501 | ||
| NET OTHER ASSETS (LIABILITIES) - (0.7)% | (1,804,384) | ||
| NET ASSETS - 100% | $273,077,117 |
Legend
(a) Non-income producing
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $6,550 |
| Fidelity Securities Lending Cash Central Fund | 31,909 |
| Total | $38,459 |
Investment Valuation
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Utilities Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $255,473,255) | $269,178,128 | |
| Fidelity Central Funds (cost $5,703,373) | 5,703,373 | |
| Total Investments (cost $261,176,628) | $274,881,501 | |
| Receivable for investments sold | 444,425 | |
| Receivable for fund shares sold | 342,179 | |
| Dividends receivable | 172,881 | |
| Distributions receivable from Fidelity Central Funds | 1,393 | |
| Other receivables | 17,965 | |
| Total assets | 275,860,344 | |
| Liabilities | ||
| Payable for investments purchased | $1,836,357 | |
| Payable for fund shares redeemed | 621,939 | |
| Accrued management fee | 125,945 | |
| Distribution and service plan fees payable | 93,851 | |
| Other affiliated payables | 67,259 | |
| Other payables and accrued expenses | 37,876 | |
| Total liabilities | 2,783,227 | |
| Net Assets | $273,077,117 | |
| Net Assets consist of: | ||
| Paid in capital | $254,322,840 | |
| Undistributed net investment income | 1,963,229 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 3,086,397 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 13,704,651 | |
| Net Assets | $273,077,117 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($140,148,128 ÷ 5,500,243 shares) | $25.48 | |
| Maximum offering price per share (100/94.25 of $25.48) | $27.03 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($46,366,423 ÷ 1,818,810 shares) | $25.49 | |
| Maximum offering price per share (100/96.50 of $25.49) | $26.41 | |
| Class B: | ||
| Net Asset Value and offering price per share ($2,680,227 ÷ 106,168 shares)(a) | $25.25 | |
| Class C: | ||
| Net Asset Value and offering price per share ($52,171,987 ÷ 2,094,659 shares)(a) | $24.91 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($31,710,352 ÷ 1,221,130 shares) | $25.97 |
(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.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $8,553,813 | |
| Income from Fidelity Central Funds | 38,459 | |
| Total income | 8,592,272 | |
| Expenses | ||
| Management fee | $1,714,293 | |
| Transfer agent fees | 752,256 | |
| Distribution and service plan fees | 1,264,580 | |
| Accounting and security lending fees | 122,418 | |
| Custodian fees and expenses | 10,182 | |
| Independent trustees' compensation | 5,535 | |
| Registration fees | 79,393 | |
| Audit | 46,568 | |
| Legal | 3,948 | |
| Interest | 319 | |
| Miscellaneous | 3,532 | |
| Total expenses before reductions | 4,003,024 | |
| Expense reductions | (49,428) | 3,953,596 |
| Net investment income (loss) | 4,638,676 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 6,144,641 | |
| Foreign currency transactions | 5,204 | |
| Futures contracts | (104,527) | |
| Total net realized gain (loss) | 6,045,318 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (5,645,462) | |
| Assets and liabilities in foreign currencies | (222) | |
| Total change in net unrealized appreciation (depreciation) | (5,645,684) | |
| Net gain (loss) | 399,634 | |
| Net increase (decrease) in net assets resulting from operations | $5,038,310 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $4,638,676 | $3,559,541 |
| Net realized gain (loss) | 6,045,318 | 27,603,316 |
| Change in net unrealized appreciation (depreciation) | (5,645,684) | 1,610,263 |
| Net increase (decrease) in net assets resulting from operations | 5,038,310 | 32,773,120 |
| Distributions to shareholders from net investment income | (4,008,742) | (3,729,207) |
| Distributions to shareholders from net realized gain | (17,304,031) | (88,322) |
| Total distributions | (21,312,773) | (3,817,529) |
| Share transactions - net increase (decrease) | (19,607,828) | 71,585,618 |
| Redemption fees | 10,186 | 9,809 |
| Total increase (decrease) in net assets | (35,872,105) | 100,551,018 |
| Net Assets | ||
| Beginning of period | 308,949,222 | 208,398,204 |
| End of period (including undistributed net investment income of $1,963,229 and undistributed net investment income of $1,595,872, respectively) | $273,077,117 | $308,949,222 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Utilities Fund Class A
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $26.77 | $23.48 | $21.20 | $19.09 | $16.59 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .44 | .41 | .47 | .43 | .39 |
| Net realized and unrealized gain (loss) | .18 | 3.35 | 2.24 | 2.07 | 2.50 |
| Total from investment operations | .62 | 3.76 | 2.71 | 2.50 | 2.89 |
| Distributions from net investment income | (.38) | (.46) | (.43) | (.39) | (.39) |
| Distributions from net realized gain | (1.52) | (.01) | – | – | – |
| Total distributions | (1.91)B | (.47) | (.43) | (.39) | (.39) |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $25.48 | $26.77 | $23.48 | $21.20 | $19.09 |
| Total ReturnD,E | 2.01% | 16.38% | 13.09% | 13.40% | 17.71% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.13% | 1.16% | 1.20% | 1.23% | 1.24% |
| Expenses net of fee waivers, if any | 1.13% | 1.16% | 1.20% | 1.23% | 1.24% |
| Expenses net of all reductions | 1.11% | 1.15% | 1.16% | 1.22% | 1.20% |
| Net investment income (loss) | 1.65% | 1.64% | 2.16% | 2.24% | 2.18% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $140,148 | $154,134 | $106,851 | $99,813 | $78,312 |
| Portfolio turnover rateH | 105% | 112% | 154% | 195% | 201% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $1.91 per share is comprised of distributions from net investment income of $.384 and distributions from net realized gain of $1.524 per share.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Utilities Fund Class T
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $26.78 | $23.50 | $21.21 | $19.09 | $16.59 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .36 | .34 | .41 | .38 | .35 |
| Net realized and unrealized gain (loss) | .18 | 3.35 | 2.25 | 2.07 | 2.50 |
| Total from investment operations | .54 | 3.69 | 2.66 | 2.45 | 2.85 |
| Distributions from net investment income | (.31) | (.40) | (.37) | (.33) | (.35) |
| Distributions from net realized gain | (1.52) | (.01) | – | – | – |
| Total distributions | (1.83) | (.41) | (.37) | (.33) | (.35) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $25.49 | $26.78 | $23.50 | $21.21 | $19.09 |
| Total ReturnC,D | 1.72% | 15.99% | 12.81% | 13.13% | 17.39% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.42% | 1.45% | 1.47% | 1.49% | 1.50% |
| Expenses net of fee waivers, if any | 1.42% | 1.45% | 1.47% | 1.49% | 1.50% |
| Expenses net of all reductions | 1.41% | 1.44% | 1.43% | 1.48% | 1.46% |
| Net investment income (loss) | 1.35% | 1.35% | 1.89% | 1.98% | 1.92% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $46,366 | $49,272 | $41,239 | $38,276 | $35,701 |
| Portfolio turnover rateG | 105% | 112% | 154% | 195% | 201% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Utilities Fund Class B
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $26.51 | $23.24 | $20.96 | $18.86 | $16.38 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .22 | .21 | .30 | .28 | .25 |
| Net realized and unrealized gain (loss) | .19 | 3.33 | 2.23 | 2.05 | 2.49 |
| Total from investment operations | .41 | 3.54 | 2.53 | 2.33 | 2.74 |
| Distributions from net investment income | (.14) | (.26) | (.25) | (.23) | (.26) |
| Distributions from net realized gain | (1.52) | (.01) | – | – | – |
| Total distributions | (1.67)B | (.27) | (.25) | (.23) | (.26) |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $25.25 | $26.51 | $23.24 | $20.96 | $18.86 |
| Total ReturnD,E | 1.23% | 15.41% | 12.24% | 12.54% | 16.87% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.94% | 1.95% | 1.96% | 1.98% | 1.99% |
| Expenses net of fee waivers, if any | 1.94% | 1.95% | 1.96% | 1.98% | 1.99% |
| Expenses net of all reductions | 1.93% | 1.94% | 1.92% | 1.97% | 1.95% |
| Net investment income (loss) | .83% | .85% | 1.40% | 1.49% | 1.43% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $2,680 | $4,598 | $5,289 | $6,677 | $7,773 |
| Portfolio turnover rateH | 105% | 112% | 154% | 195% | 201% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $1.67 per share is comprised of distributions from net investment income of $.141 and distributions from net realized gain of $1.524 per share.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Utilities Fund Class C
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $26.23 | $23.03 | $20.80 | $18.75 | $16.30 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .23 | .23 | .31 | .29 | .26 |
| Net realized and unrealized gain (loss) | .19 | 3.29 | 2.20 | 2.03 | 2.46 |
| Total from investment operations | .42 | 3.52 | 2.51 | 2.32 | 2.72 |
| Distributions from net investment income | (.22) | (.31) | (.28) | (.27) | (.27) |
| Distributions from net realized gain | (1.52) | (.01) | – | – | – |
| Total distributions | (1.74) | (.32) | (.28) | (.27) | (.27) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $24.91 | $26.23 | $23.03 | $20.80 | $18.75 |
| Total ReturnC,D | 1.29% | 15.52% | 12.27% | 12.56% | 16.85% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.88% | 1.89% | 1.93% | 1.95% | 1.98% |
| Expenses net of fee waivers, if any | 1.88% | 1.89% | 1.93% | 1.95% | 1.98% |
| Expenses net of all reductions | 1.86% | 1.88% | 1.89% | 1.95% | 1.94% |
| Net investment income (loss) | .89% | .91% | 1.43% | 1.51% | 1.43% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $52,172 | $54,810 | $35,457 | $29,942 | $26,915 |
| Portfolio turnover rateG | 105% | 112% | 154% | 195% | 201% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Utilities Fund Class I
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $27.24 | $23.87 | $21.56 | $19.40 | $16.85 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .52 | .51 | .55 | .50 | .45 |
| Net realized and unrealized gain (loss) | .20 | 3.39 | 2.26 | 2.10 | 2.54 |
| Total from investment operations | .72 | 3.90 | 2.81 | 2.60 | 2.99 |
| Distributions from net investment income | (.46) | (.52) | (.50) | (.44) | (.44) |
| Distributions from net realized gain | (1.52) | (.01) | – | – | – |
| Total distributions | (1.99)B | (.53) | (.50) | (.44) | (.44) |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $25.97 | $27.24 | $23.87 | $21.56 | $19.40 |
| Total ReturnD | 2.35% | 16.74% | 13.40% | 13.79% | 18.05% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | .83% | .85% | .89% | .92% | .98% |
| Expenses net of fee waivers, if any | .83% | .85% | .89% | .92% | .98% |
| Expenses net of all reductions | .81% | .84% | .85% | .91% | .94% |
| Net investment income (loss) | 1.94% | 1.95% | 2.46% | 2.55% | 2.44% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $31,710 | $46,135 | $19,562 | $20,564 | $10,914 |
| Portfolio turnover rateG | 105% | 112% | 154% | 195% | 201% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $1.99 per share is comprised of distributions from net investment income of $.463 and distributions from net realized gain of $1.524 per share.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to futures contracts, foreign currency transactions, partnerships, deferred trustees compensation, 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 | $23,923,486 |
| Gross unrealized depreciation | (11,159,436) |
| Net unrealized appreciation (depreciation) on securities | $ 12,764,050 |
| Tax cost | $ 262,117,451 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $2,226,083 |
| Undistributed long-term capital gain | $6,189,862 |
| Net unrealized appreciation (depreciation) on securities and other investments | $12,763,828 |
The fund intends to elect to defer to its next fiscal year $2,425,490 of capital losses recognized during the period November 1, 2014 to July 31, 2015.
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $4,794,753 | $ 3,817,529 |
| Long-term Capital Gains | 16,518,020 | – |
| Total | $21,312,773 | $ 3,817,529 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. 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. |
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. Cash deposited to meet initial margin requirements is presented as segregated cash with brokers for derivative instruments in the Statement of Assets and Liabilities.
During the period the Fund recognized net realized gain (loss) of $(104,527) related to its investment in futures contracts. This amount is included in the Statement of Operations.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $321,335,111 and $360,849,616, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $390,136 | $11,332 |
| Class T | .25% | .25% | 256,358 | 1,450 |
| Class B | .75% | .25% | 39,439 | 29,623 |
| Class C | .75% | .25% | 578,647 | 142,534 |
| $1,264,580 | $184,939 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $127,007 |
| Class T | 16,306 |
| Class B* | 1,701 |
| Class C* | 11,621 |
| $156,635 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $373,458 | .24 |
| Class T | 145,597 | .28 |
| Class B | 11,905 | .30 |
| Class C | 138,031 | .24 |
| Class I | 83,265 | .19 |
| $ 752,256 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $6,955 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $4,247,125 | .34% | $319 |
7. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $461 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow 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. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $31,909.
9. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $42,593 for the period.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $1,157 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $3,044 |
| Class T | 790 |
| Class B | 10 |
| Class C | 1,066 |
| Class I | 768 |
| $5,678 |
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $2,209,427 | $2,098,780 |
| Class T | 589,279 | 689,503 |
| Class B | 23,317 | 54,086 |
| Class C | 465,161 | 483,241 |
| Class I | 721,558 | 403,597 |
| Total | $4,008,742 | $3,729,207 |
| From net realized gain | ||
| Class A | $8,639,872 | $45,735 |
| Class T | 2,863,183 | 17,387 |
| Class B | 255,750 | 2,010 |
| Class C | 3,177,658 | 15,931 |
| Class I | 2,367,568 | 7,259 |
| Total | $17,304,031 | $88,322 |
11. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 1,888,559 | 2,276,742 | $50,338,260 | $59,563,163 |
| Reinvestment of distributions | 365,507 | 82,514 | 9,845,503 | 1,888,613 |
| Shares redeemed | (2,512,099) | (1,151,286) | (66,117,493) | (29,069,514) |
| Net increase (decrease) | (258,033) | 1,207,970 | $(5,933,730) | $32,382,262 |
| Class T | ||||
| Shares sold | 388,662 | 365,889 | $10,348,248 | $9,445,083 |
| Reinvestment of distributions | 123,166 | 29,388 | 3,324,380 | 673,761 |
| Shares redeemed | (532,785) | (310,668) | (14,023,975) | (7,776,879) |
| Net increase (decrease) | (20,957) | 84,609 | $(351,347) | $2,341,965 |
| Class B | ||||
| Shares sold | 10,961 | 19,626 | $290,048 | $511,179 |
| Reinvestment of distributions | 9,053 | 2,105 | 242,668 | 47,986 |
| Shares redeemed | (87,257) | (75,934) | (2,288,453) | (1,892,640) |
| Net increase (decrease) | (67,243) | (54,203) | $(1,755,737) | $(1,333,475) |
| Class C | ||||
| Shares sold | 773,976 | 898,033 | $20,247,064 | $23,064,197 |
| Reinvestment of distributions | 116,026 | 17,647 | 3,068,131 | 397,963 |
| Shares redeemed | (884,724) | (365,639) | (22,817,991) | (9,096,804) |
| Net increase (decrease) | 5,278 | 550,041 | $497,204 | $14,365,356 |
| Class I | ||||
| Shares sold | 1,143,014 | 1,373,720 | $31,002,673 | $36,918,565 |
| Reinvestment of distributions | 90,001 | 15,288 | 2,465,972 | 354,761 |
| Shares redeemed | (1,705,406) | (514,863) | (45,532,863) | (13,443,816) |
| Net increase (decrease) | (472,391) | 874,145 | $(12,064,218) | $23,829,510 |
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.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity 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, 2015, 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, 2015, by correspondence with the custodians and brokers; when 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, 2015, 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 23, 2015
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and funds, as applicable, are listed below. The Board of Trustees governs each fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee each fund's activities, review contractual arrangements with companies that provide services to each fund, oversee management of the risks associated with such activities and contractual arrangements, and review each fund's performance. Each of the Trustees oversees 75 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. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the funds is referred to herein as an Independent Trustee.
Each fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing each fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the funds, is provided below.
Board Structure and Oversight Function. Brian B. Hogan is an interested person 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 Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Brian B. Hogan (1964)
Year of Election or Appointment: 2014
Trustee
Chairman of the Board of Trustees
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager.
* Determined to be an "Interested Trustee" by virtue of, among other things, his or her affiliation with the trust or various entities under common control with SelectCo.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for each fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
David A. Rosow (1942)
Year of Election or Appointment: 2013
Trustee
Mr. Rosow also serves as Trustee of other Fidelity® funds. Prior to his retirement in 2006, Mr. Rosow was the Chief Executive Officer, owner and operator of a number of private companies, which encompassed oil refining, drilling and marketing of petroleum products (including specialty petroleum products), the recreation industry, and real estate development. Previously, Mr. Rosow served as Lead Director and Chairman of the Audit Committee of Hudson United Bancorp (1996-2006), Chairman of the Board of Westport Bank and Trust (1992-1996), and as a Director of TD Banknorth (2006-2007). In addition, Mr. Rosow served as a member (2008-2014) and President (2009-2014) of the Town Council of Palm Beach, Florida. Mr. Rosow also served as a Member of the Advisory Board of other Fidelity® funds (2012-2013).
Garnett A. Smith (1947)
Year of Election or Appointment: 2013
Trustee
Mr. Smith also serves as Trustee of other Fidelity® funds. Prior to Mr. Smith's retirement, he served as Chairman and Chief Executive Officer of Inbrand Corp. (manufacturer of personal absorbent products, 1990-1997). He also served as President (1986-1990) of Inbrand Corp. Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank. In addition, Mr. Smith served as a Member of the Advisory Board of other Fidelity® funds (2012-2013) and as a board member of the Jackson Hole Land Trust (2009-2012).
Michael E. Wiley (1950)
Year of Election or Appointment: 2008
Trustee
Chairman of the Independent Trustees
Mr. Wiley also serves as Trustee of other Fidelity® funds. Mr. Wiley serves as a Director of Tesoro Corporation (independent oil refiner and marketer, 2005-present), and a Director of Bill Barrett Corporation (exploration and production, 2005-present). In addition, Mr. Wiley also serves as a Director of Post Oak Bank (privately-held bank, 2004-present). Previously, Mr. Wiley served as a Trustee of other Fidelity® funds (2008-2013), as a Director of Asia Pacific Exploration Consolidated (international oil and gas exploration and production, 2008-2013), as a member of the Board of Trustees of the University of Tulsa (2000-2006; 2007-2010), as a Senior Energy Advisor of Katzenbach Partners, LLC (consulting, 2006-2007), as an Advisory Director of Riverstone Holdings (private investment), Chairman, President, and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004), and as Director of Spinnaker Exploration Company (exploration and production, 2001-2005).
+ The information 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.
Advisory Board Members and Officers:
Except for Anthony R. Rochte, correspondence intended for an officer may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Correspondence intended for Mr. Rochte may be sent to SelectCo, 1225 17th Street, Denver, Colorado 80202-5541. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Christopher S. Bartel (1971)
Year of Election or Appointment: 2009
Vice President
Mr. Bartel also serves as Vice President of other funds. Mr. Bartel serves as a Director, President, and Chief Executive Officer of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2012-present), a Director of Fidelity Management & Research (Hong Kong) (investment adviser firm, 2012-present), and Senior Vice President of Global Equity Research (2010-present). Previously, Mr. Bartel served as Senior Vice President of Equity Research (2009-2010), Managing Director of Research (2006-2009), and an analyst and portfolio manager (2000-2006).
Elizabeth Paige Baumann (1968)
Year of Election or Appointment: 2012
Anti-Money Laundering (AML) Officer
Ms. Baumann also serves as AML Officer of other funds. She is Chief AML Officer of FMR LLC (diversified financial services company, 2012-present) and is an employee of Fidelity Investments. Previously, Ms. Baumann served as Vice President and Deputy Anti-Money Laundering Officer (2007-2012).
Marc Bryant (1966)
Year of Election or Appointment: 2013
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and Chief Legal Officer (CLO) of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and Chief Legal Officer of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds. Mr. Davis is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2013
President and Treasurer
Mr. Deberghes also serves as an officer of other funds. He is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005).
Joseph DeSantis (1959)
Year of Election or Appointment: 2015
Vice President
Mr. DeSantis also serves as Vice President of other funds. Mr. DeSantis serves as Group Chief Investment Officer, Equities (2010-present) and is an employee of Fidelity Investments.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
James D. Gryglewicz (1972)
Year of Election or Appointment: 2014
Chief Compliance Officer
Mr. Gryglewicz also serves as Chief Compliance Officer of other funds. Mr. Gryglewicz serves as Compliance Officer of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), Vice President of Asset Management Compliance (2009-present), and is an employee of Fidelity Investments (2004-present).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2013
Deputy Treasurer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2013-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served in other fund officer roles.
Anthony R. Rochte (1968)
Year of Election or Appointment: 2013
Vice President
Mr. Rochte also serves as Vice President of other funds. Mr. Rochte serves as President of Fidelity SelectCo, LLC (investment adviser firm, 2012-present) and is an employee of Fidelity Investments (2012-present). Prior to joining Fidelity Investments, Mr. Rochte served as Senior Managing Director and head of State Street Global Advisors' North American Intermediary Business Group (2006-2012).
Stacie M. Smith (1974)
Year of Election or Appointment: 2013
Assistant Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009).
Renee Stagnone (1975)
Year of Election or Appointment: 2013
Deputy Treasurer
Ms. Stagnone also serves as Deputy Treasurer of other funds. Ms. Stagnone is an employee of Fidelity Investments.
Joseph F. Zambello (1957)
Year of Election or Appointment: 2011
Deputy Treasurer
Mr. Zambello also serves as Deputy Treasurer of other funds. Mr. Zambello is an employee of Fidelity Investments. Previously, Mr. Zambello served as Vice President of the Program Management Group of FMR (investment adviser firm, 2009-2011) and Vice President of the Transfer Agent Oversight Group (2005-2009).
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, 2015 to July 31, 2015).
Actual Expenses
The first line of the accompanying table for each class of each 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, each 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 each 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, each 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 Expense Ratio-A | Beginning Account Value February 1, 2015 | Ending Account Value July 31, 2015 | Expenses Paid During Period-B February 1, 2015 to July 31, 2015 | |
| Fidelity Advisor Biotechnology Fund | ||||
| Class A | 1.03% | |||
| Actual | $1,000.00 | $1,196.00 | $5.61 | |
| Hypothetical-C | $1,000.00 | $1,019.69 | $5.16 | |
| Class T | 1.33% | |||
| Actual | $1,000.00 | $1,194.30 | $7.24 | |
| Hypothetical-C | $1,000.00 | $1,018.20 | $6.66 | |
| Class B | 1.80% | |||
| Actual | $1,000.00 | $1,191.70 | $9.78 | |
| Hypothetical-C | $1,000.00 | $1,015.87 | $9.00 | |
| Class C | 1.78% | |||
| Actual | $1,000.00 | $1,191.30 | $9.67 | |
| Hypothetical-C | $1,000.00 | $1,015.97 | $8.90 | |
| Class I | .77% | |||
| Actual | $1,000.00 | $1,197.30 | $4.20 | |
| Hypothetical-C | $1,000.00 | $1,020.98 | $3.86 | |
| Fidelity Advisor Communications Equipment Fund | ||||
| Class A | 1.40% | |||
| Actual | $1,000.00 | $1,051.00 | $7.12 | |
| Hypothetical-C | $1,000.00 | $1,017.85 | $7.00 | |
| Class T | 1.65% | |||
| Actual | $1,000.00 | $1,050.10 | $8.39 | |
| Hypothetical-C | $1,000.00 | $1,016.61 | $8.25 | |
| Class B | 2.15% | |||
| Actual | $1,000.00 | $1,047.40 | $10.91 | |
| Hypothetical-C | $1,000.00 | $1,014.13 | $10.74 | |
| Class C | 2.15% | |||
| Actual | $1,000.00 | $1,047.40 | $10.91 | |
| Hypothetical-C | $1,000.00 | $1,014.13 | $10.74 | |
| Class I | 1.15% | |||
| Actual | $1,000.00 | $1,052.60 | $5.85 | |
| Hypothetical-C | $1,000.00 | $1,019.09 | $5.76 | |
| Fidelity Advisor Consumer Discretionary Fund | ||||
| Class A | 1.12% | |||
| Actual | $1,000.00 | $1,123.20 | $5.90 | |
| Hypothetical-C | $1,000.00 | $1,019.24 | $5.61 | |
| Class T | 1.41% | |||
| Actual | $1,000.00 | $1,121.20 | $7.42 | |
| Hypothetical-C | $1,000.00 | $1,017.80 | $7.05 | |
| Class B | 1.87% | |||
| Actual | $1,000.00 | $1,118.60 | $9.82 | |
| Hypothetical-C | $1,000.00 | $1,015.52 | $9.35 | |
| Class C | 1.87% | |||
| Actual | $1,000.00 | $1,118.50 | $9.82 | |
| Hypothetical-C | $1,000.00 | $1,015.52 | $9.35 | |
| Class I | .85% | |||
| Actual | $1,000.00 | $1,124.30 | $4.48 | |
| Hypothetical-C | $1,000.00 | $1,020.58 | $4.26 | |
| Fidelity Advisor Electronics Fund | ||||
| Class A | 1.22% | |||
| Actual | $1,000.00 | $990.30 | $6.02 | |
| Hypothetical-C | $1,000.00 | $1,018.74 | $6.11 | |
| Class T | 1.61% | |||
| Actual | $1,000.00 | $988.70 | $7.94 | |
| Hypothetical-C | $1,000.00 | $1,016.81 | $8.05 | |
| Class B | 2.06% | |||
| Actual | $1,000.00 | $985.70 | $10.14 | |
| Hypothetical-C | $1,000.00 | $1,014.58 | $10.29 | |
| Class C | 2.01% | |||
| Actual | $1,000.00 | $986.40 | $9.90 | |
| Hypothetical-C | $1,000.00 | $1,014.83 | $10.04 | |
| Class I | .89% | |||
| Actual | $1,000.00 | $991.30 | $4.39 | |
| Hypothetical-C | $1,000.00 | $1,020.38 | $4.46 | |
| Fidelity Advisor Energy Fund | ||||
| Class A | 1.11% | |||
| Actual | $1,000.00 | $923.10 | $5.29 | |
| Hypothetical-C | $1,000.00 | $1,019.29 | $5.56 | |
| Class T | 1.35% | |||
| Actual | $1,000.00 | $921.90 | $6.43 | |
| Hypothetical-C | $1,000.00 | $1,018.10 | $6.76 | |
| Class B | 1.92% | |||
| Actual | $1,000.00 | $919.40 | $9.14 | |
| Hypothetical-C | $1,000.00 | $1,015.27 | $9.59 | |
| Class C | 1.84% | |||
| Actual | $1,000.00 | $919.60 | $8.76 | |
| Hypothetical-C | $1,000.00 | $1,015.67 | $9.20 | |
| Class I | .85% | |||
| Actual | $1,000.00 | $924.30 | $4.06 | |
| Hypothetical-C | $1,000.00 | $1,020.58 | $4.26 | |
| Fidelity Advisor Financial Services Fund | ||||
| Class A | 1.14% | |||
| Actual | $1,000.00 | $1,089.70 | $5.91 | |
| Hypothetical-C | $1,000.00 | $1,019.14 | $5.71 | |
| Class T | 1.42% | |||
| Actual | $1,000.00 | $1,088.20 | $7.35 | |
| Hypothetical-C | $1,000.00 | $1,017.75 | $7.10 | |
| Class B | 1.93% | |||
| Actual | $1,000.00 | $1,085.80 | $9.98 | |
| Hypothetical-C | $1,000.00 | $1,015.22 | $9.64 | |
| Class C | 1.87% | |||
| Actual | $1,000.00 | $1,085.90 | $9.67 | |
| Hypothetical-C | $1,000.00 | $1,015.52 | $9.35 | |
| Class I | .83% | |||
| Actual | $1,000.00 | $1,091.50 | $4.30 | |
| Hypothetical-C | $1,000.00 | $1,020.68 | $4.16 | |
| Fidelity Advisor Health Care Fund | ||||
| Class A | 1.03% | |||
| Actual | $1,000.00 | $1,147.00 | $5.48 | |
| Hypothetical-C | $1,000.00 | $1,019.69 | $5.16 | |
| Class T | 1.29% | |||
| Actual | $1,000.00 | $1,145.50 | $6.86 | |
| Hypothetical-C | $1,000.00 | $1,018.40 | $6.46 | |
| Class B | 1.83% | |||
| Actual | $1,000.00 | $1,142.50 | $9.72 | |
| Hypothetical-C | $1,000.00 | $1,015.72 | $9.15 | |
| Class C | 1.78% | |||
| Actual | $1,000.00 | $1,142.80 | $9.46 | |
| Hypothetical-C | $1,000.00 | $1,015.97 | $8.90 | |
| Class I | .78% | |||
| Actual | $1,000.00 | $1,148.60 | $4.16 | |
| Hypothetical-C | $1,000.00 | $1,020.93 | $3.91 | |
| Fidelity Advisor Industrials Fund | ||||
| Class A | 1.05% | |||
| Actual | $1,000.00 | $1,028.30 | $5.28 | |
| Hypothetical-C | $1,000.00 | $1,019.59 | $5.26 | |
| Class T | 1.31% | |||
| Actual | $1,000.00 | $1,026.80 | $6.58 | |
| Hypothetical-C | $1,000.00 | $1,018.30 | $6.56 | |
| Class B | 1.83% | |||
| Actual | $1,000.00 | $1,024.00 | $9.18 | |
| Hypothetical-C | $1,000.00 | $1,015.72 | $9.15 | |
| Class C | 1.80% | |||
| Actual | $1,000.00 | $1,024.40 | $9.03 | |
| Hypothetical-C | $1,000.00 | $1,015.87 | $9.00 | |
| Class I | .78% | |||
| Actual | $1,000.00 | $1,029.60 | $3.93 | |
| Hypothetical-C | $1,000.00 | $1,020.93 | $3.91 | |
| Fidelity Advisor Technology Fund | ||||
| Class A | 1.08% | |||
| Actual | $1,000.00 | $1,080.10 | $5.57 | |
| Hypothetical-C | $1,000.00 | $1,019.44 | $5.41 | |
| Class T | 1.34% | |||
| Actual | $1,000.00 | $1,078.30 | $6.91 | |
| Hypothetical-C | $1,000.00 | $1,018.15 | $6.71 | |
| Class B | 1.90% | |||
| Actual | $1,000.00 | $1,075.60 | $9.78 | |
| Hypothetical-C | $1,000.00 | $1,015.37 | $9.49 | |
| Class C | 1.83% | |||
| Actual | $1,000.00 | $1,075.70 | $9.42 | |
| Hypothetical-C | $1,000.00 | $1,015.72 | $9.15 | |
| Class I | .75% | |||
| Actual | $1,000.00 | $1,081.80 | $3.87 | |
| Hypothetical-C | $1,000.00 | $1,021.08 | $3.76 | |
| Fidelity Advisor Utilities Fund | ||||
| Class A | 1.12% | |||
| Actual | $1,000.00 | $937.50 | $5.38 | |
| Hypothetical-C | $1,000.00 | $1,019.24 | $5.61 | |
| Class T | 1.42% | |||
| Actual | $1,000.00 | $935.80 | $6.82 | |
| Hypothetical-C | $1,000.00 | $1,017.75 | $7.10 | |
| Class B | 1.94% | |||
| Actual | $1,000.00 | $933.80 | $9.30 | |
| Hypothetical-C | $1,000.00 | $1,015.17 | $9.69 | |
| Class C | 1.87% | |||
| Actual | $1,000.00 | $934.00 | $8.97 | |
| Hypothetical-C | $1,000.00 | $1,015.52 | $9.35 | |
| Class I | .83% | |||
| Actual | $1,000.00 | $938.90 | $3.99 | |
| Hypothetical-C | $1,000.00 | $1,020.68 | $4.16 | |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/ 365 (to reflect the one-half year period).
C 5% return per year before expenses
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 | 09/14/15 | 09/11/15 | $0.000 | $1.401 |
| Class T | 09/14/15 | 09/11/15 | $0.000 | $1.352 |
| Class B | 09/14/15 | 09/11/15 | $0.000 | $1.263 |
| Class C | 09/14/15 | 09/11/15 | $0.000 | $1.316 |
| Fidelity Advisor Communications Equipment Fund | ||||
| Class A | 09/14/15 | 09/11/15 | $0.000 | $0.274 |
| Class T | 09/14/15 | 09/11/15 | $0.000 | $0.274 |
| Class B | 09/14/15 | 09/11/15 | $0.000 | $0.274 |
| Class C | 09/14/15 | 09/11/15 | $0.000 | $0.274 |
| Fidelity Advisor Consumer Discretionary Fund | ||||
| Class A | 09/14/15 | 09/11/15 | $0.011 | $0.438 |
| Class T | 09/14/15 | 09/11/15 | $0.000 | $0.438 |
| Class B | 09/14/15 | 09/11/15 | $0.000 | $0.438 |
| Class C | 09/14/15 | 09/11/15 | $0.000 | $0.438 |
| Fidelity Advisor Electronics Fund | ||||
| Class A | 09/14/15 | 09/11/15 | $0.001 | $1.494 |
| Class T | 09/14/15 | 09/11/15 | $0.000 | $1.465 |
| Class B | 09/14/15 | 09/11/15 | $0.000 | $1.411 |
| Class C | 09/14/15 | 09/11/15 | $0.000 | $1.440 |
| Fidelity Advisor Energy Fund | ||||
| Class A | 09/14/15 | 09/11/15 | $0.093 | $0.000 |
| Class T | 09/14/15 | 09/11/15 | $0.032 | $0.000 |
| Class B | 09/14/15 | 09/11/15 | $0.000 | $0.000 |
| Class C | 09/14/15 | 09/11/15 | $0.000 | $0.000 |
| Fidelity Advisor Financial Services Fund | ||||
| Class A | 09/14/15 | 09/11/15 | $0.000 | $0.000 |
| Class T | 09/14/15 | 09/11/15 | $0.000 | $0.000 |
| Class B | 09/14/15 | 09/11/15 | $0.000 | $0.000 |
| Class C | 09/14/15 | 09/11/15 | $0.000 | $0.000 |
| Fidelity Advisor Health Care Fund | ||||
| Class A | 09/14/15 | 09/11/15 | $0.000 | $2.552 |
| Class T | 09/14/15 | 09/11/15 | $0.000 | $2.490 |
| Class B | 09/14/15 | 09/11/15 | $0.000 | $2.345 |
| Class C | 09/14/15 | 09/11/15 | $0.000 | $2.457 |
| Fidelity Advisor Industrials Fund | ||||
| Class A | 09/14/15 | 09/11/15 | $0.066 | $2.647 |
| Class T | 09/14/15 | 09/11/15 | $0.015 | $2.647 |
| Class B | 09/14/15 | 09/11/15 | $0.000 | $2.647 |
| Class C | 09/14/15 | 09/11/15 | $0.000 | $2.647 |
| Fidelity Advisor Technology Fund | ||||
| Class A | 09/14/15 | 09/11/15 | $0.000 | $1.606 |
| Class T | 09/14/15 | 09/11/15 | $0.000 | $1.552 |
| Class B | 09/14/15 | 09/11/15 | $0.000 | $1.417 |
| Class C | 09/14/15 | 09/11/15 | $0.000 | $1.495 |
| Fidelity Advisor Utilities Fund | ||||
| Class A | 09/14/15 | 09/11/15 | $0.216 | $0.613 |
| Class T | 09/14/15 | 09/11/15 | $0.168 | $0.613 |
| Class B | 09/14/15 | 09/11/15 | $0.018 | $0.613 |
| Class C | 09/14/15 | 09/11/15 | $0.090 | $0.613 |
The funds hereby designate as capital gain dividend the amounts noted below for the taxable year ended July 31, 2015, or, if subsequently determined to be different, the net capital gain of such year.
| Fidelity Advisor Biotechnology Fund | $184,538,011 |
| Fidelity Advisor Communications Equipment Fund | 291,734 |
| Fidelity Advisor Consumer Discretionary Fund | 8,128,128 |
| Fidelity Advisor Electronics Fund | 979,994 |
| Fidelity Advisor Energy Fund | 0 |
| Fidelity Advisor Financial Services Fund | 0 |
| Fidelity Advisor Health Care Fund | 148,777,303 |
| Fidelity Advisor Industrials Fund | 71,825,671 |
| Fidelity Advisor Technology Fund | 29,079,653 |
| Fidelity Advisor Utilities Fund | 9,798,197 |
A percentage of the dividends distributed during the fiscal year for the following funds qualify for the dividends–received deduction for corporate shareholders:
| September 2014 | December 2014 | |
| Fidelity Advisor Biotechnology Fund | ||
| Class A | 0% | 0% |
| Class T | 0% | 0% |
| Class B | 0% | 0% |
| Class C | 0% | 0% |
| Fidelity Advisor Communications Equipment Fund | ||
| Class A | 100% | 0% |
| Class T | 100% | 0% |
| Class B | 0% | 0% |
| Class C | 0% | 0% |
| Fidelity Advisor Consumer Discretionary Fund | ||
| Class A | 37% | 0% |
| Class T | 41% | 0% |
| Class B | 56% | 0% |
| Class C | 49% | 0% |
| Fidelity Advisor Electronics Fund | ||
| Class A | 0% | 100% |
| Class T | 0% | 100% |
| Class B | 0% | 100% |
| Class C | 0% | 100% |
| Fidelity Advisor Energy Fund | ||
| Class A | 45% | 100% |
| Class T | 50% | 100% |
| Class B | 66% | 0% |
| Class C | 57% | 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 | 7% | 29% |
| Class T | 8% | 37% |
| Class B | 9% | 79% |
| Class C | 8% | 50% |
| Fidelity Advisor Industrials Fund | ||
| Class A | 100% | 100% |
| Class T | 100% | 100% |
| Class B | 100% | 0% |
| Class C | 100% | 0% |
| Fidelity Advisor Technology Fund | ||
| Class A | 7% | 9% |
| Class T | 8% | 9% |
| Class B | 9% | 10% |
| Class C | 8% | 10% |
| Fidelity Advisor Utilities Fund | ||
| Class A | 100% | 100% |
| Class T | 100% | 100% |
| Class B | 100% | 100% |
| Class C | 100% | 100% |
A percentage of the dividends distributed during the fiscal year for the following funds may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
| September 2014 | December 2014 | |
| Fidelity Advisor Biotechnology Fund | ||
| Class A | 0% | 0% |
| Class T | 0% | 0% |
| Class B | 0% | 0% |
| Class C | 0% | 0% |
| Fidelity Advisor Communications Equipment | ||
| Class A | 100% | 0% |
| Class T | 100% | 0% |
| Class B | 0% | 0% |
| Class C | 0% | 0% |
| Fidelity Advisor Consumer Discretionary Fund | ||
| Class A | 39% | 0% |
| Class T | 43% | 0% |
| Class B | 58% | 0% |
| Class C | 51% | 0% |
| Fidelity Advisor Electronics Fund | ||
| Class A | 0% | 100% |
| Class T | 0% | 100% |
| Class B | 0% | 100% |
| Class C | 0% | 100% |
| Fidelity Advisor Energy Fund | ||
| Class A | 48% | 100% |
| Class T | 54% | 100% |
| Class B | 71% | 0% |
| Class C | 62% | 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 | 10% | 46% |
| Class T | 11% | 58% |
| Class B | 13% | 100% |
| Class C | 12% | 79% |
| Fidelity Advisor Industrials Fund | ||
| Class A | 100% | 100% |
| Class T | 100% | 100% |
| Class B | 100% | 0% |
| Class C | 100% | 0% |
| Fidelity Advisor Technology Fund | ||
| Class A | 8% | 12% |
| Class T | 8% | 12% |
| Class B | 10% | 14% |
| Class C | 9% | 13% |
| 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 2016 of amounts for use in preparing 2015 income tax returns.
AFOC-ANN-0915
1.762411.114
Fidelity Advisor Focus Funds® 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, 2015 |
|
Contents
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.
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 call1-877-208-0098 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. © 2015 FMR LLC. All rights reserved.
Fidelity Advisor® Biotechnology Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class I | 60.00% | 39.10% | 18.73% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Biotechnology Fund - Class I on July 31, 2005. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values | ||
| $55,653 | Fidelity Advisor® Biotechnology Fund - Class I | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Biotechnology Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Rajiv Kaul: For the year, the fund's share classes handily outpaced the 51.91% return of the MSCI U.S. IMI Biotechnology 25/50 Index and the broadly based S&P 500®. (For specific class-level results, please see the Performance section of this report.) The fund's robust performance attracted steady inflows of capital, which I put to work in a variety of names. Versus the MSCI index, the fund was aided mainly by stock selection – specifically, investors' enthusiasm for small- and mid-cap biotech shares, which I tend to favor over large-caps for their more-robust growth prospects. Our top relative contributor was a large overweighting in mid-cap holding Anacor Pharmaceuticals, whose share price exploded higher in the final month of the period after the company reported positive results from two key Phase III studies on crisaborole, a non-steroidal ointment for patients with mild-to-moderate dermatitis. Several of the fund's top relative contributors were large-cap benchmark names I underweighted that failed to keep pace with the MSCI index: Biogen, Gilead Sciences and Amgen. Conversely, a large underweighting in bluebird bio curbed our relative results, in view of this index component's roughly 397% return. An overweighting in Epizyme also hampered our 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.Fidelity Advisor® Biotechnology Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Gilead Sciences, Inc. | 8.8 | 11.3 |
| Biogen, Inc. | 6.9 | 7.1 |
| Celgene Corp. | 6.0 | 7.3 |
| Regeneron Pharmaceuticals, Inc. | 5.4 | 4.1 |
| Alexion Pharmaceuticals, Inc. | 5.4 | 4.7 |
| BioMarin Pharmaceutical, Inc. | 4.9 | 2.7 |
| Vertex Pharmaceuticals, Inc. | 3.6 | 4.0 |
| Anacor Pharmaceuticals, Inc. | 2.3 | 0.4 |
| Incyte Corp. | 2.2 | 1.8 |
| Radius Health, Inc. | 1.9 | 1.1 |
| 47.4 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Biotechnology | 90.4% | |
| Pharmaceuticals | 8.8% | |
| Health Care Equipment & Supplies | 0.2% | |
| Life Sciences Tools & Services | 0.1% | |
| Capital Markets | 0.0% | |
| All Others* | 0.5% | |
| As of January 31, 2015 | ||
| Biotechnology | 94.2% | |
| Pharmaceuticals | 5.2% | |
| Health Care Equipment & Supplies | 0.1% | |
| Life Sciences Tools & Services | 0.0% | |
| Personal Products | 0.0% | |
| All Others* | 0.5% | |
* Includes short-term investments and net other assets (liabilities).
Fidelity Advisor® Biotechnology Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 98.1% | |||
| Shares | Value | ||
| Biotechnology - 89.7% | |||
| Biotechnology - 89.7% | |||
| ACADIA Pharmaceuticals, Inc. (a)(b) | 439,886 | $21,470,836 | |
| Acceleron Pharma, Inc. (a) | 534,157 | 15,298,256 | |
| Achillion Pharmaceuticals, Inc. (a)(b) | 1,640,172 | 13,974,265 | |
| Acorda Therapeutics, Inc. (a) | 665,253 | 22,858,093 | |
| Actelion Ltd. | 102,247 | 15,120,663 | |
| Adamas Pharmaceuticals, Inc. (a) | 891,152 | 22,064,924 | |
| Adaptimmune Therapeutics PLC sponsored ADR (b) | 560,777 | 8,439,694 | |
| ADMA Biologics, Inc. (a) | 50,300 | 468,796 | |
| Aduro Biotech, Inc. (b) | 87,388 | 2,291,313 | |
| Aduro Biotech, Inc. | 345,762 | 8,159,292 | |
| Aegerion Pharmaceuticals, Inc. (a)(b)(c) | 1,437,389 | 27,497,252 | |
| Affimed NV | 46,150 | 757,322 | |
| Agenus, Inc. (a) | 487,360 | 4,162,054 | |
| Agenus, Inc. warrants 1/9/18 (a) | 452,000 | 66,557 | |
| Agios Pharmaceuticals, Inc. (a) | 41,571 | 4,580,293 | |
| Akebia Therapeutics, Inc. (a) | 321,877 | 3,025,644 | |
| Alder Biopharmaceuticals, Inc. (a) | 526,313 | 24,431,449 | |
| Aldeyra Therapeutics, Inc. (a) | 478,895 | 4,252,588 | |
| Alexion Pharmaceuticals, Inc. (a) | 1,125,715 | 222,261,170 | |
| Alkermes PLC (a) | 347,441 | 24,327,819 | |
| Alnylam Pharmaceuticals, Inc. (a) | 208,735 | 26,599,101 | |
| AMAG Pharmaceuticals, Inc. (a)(b) | 815,018 | 52,079,650 | |
| Amarin Corp. PLC ADR (a)(b) | 706,803 | 1,597,375 | |
| Amgen, Inc. | 387,830 | 68,486,900 | |
| Amicus Therapeutics, Inc. (a) | 768,570 | 13,211,718 | |
| Anacor Pharmaceuticals, Inc. (a) | 625,028 | 93,247,927 | |
| Applied Genetic Technologies Corp. (a)(b) | 210,996 | 3,894,986 | |
| Ardelyx, Inc. (a) | 769,395 | 15,172,469 | |
| ARIAD Pharmaceuticals, Inc. (a)(b) | 815,995 | 6,658,519 | |
| Array BioPharma, Inc. (a) | 378,104 | 2,196,784 | |
| Ascendis Pharma A/S ADR | 35,700 | 715,071 | |
| Asterias Biotherapeutics, Inc. (a)(b) | 115,938 | 570,415 | |
| Atara Biotherapeutics, Inc. (b) | 290,699 | 16,319,842 | |
| aTyr Pharma, Inc. (a) | 45,620 | 855,375 | |
| aTyr Pharma, Inc. | 55,238 | 932,141 | |
| Avalanche Biotechnologies, Inc. (a) | 125,129 | 1,841,899 | |
| Baxalta, Inc. | 37,900 | 1,244,257 | |
| BioCryst Pharmaceuticals, Inc. (a) | 326,300 | 5,051,124 | |
| Biogen, Inc. (a) | 888,906 | 283,365,455 | |
| BioMarin Pharmaceutical, Inc. (a) | 1,375,020 | 201,124,175 | |
| Bionovo, Inc. warrants 2/2/16 (a) | 56,850 | 1 | |
| BioTime, Inc. warrants 10/1/18 (a) | 2 | 2 | |
| bluebird bio, Inc. (a) | 33,549 | 5,563,431 | |
| Blueprint Medicines Corp. | 102,288 | 2,763,822 | |
| Calithera Biosciences, Inc. (b) | 497,158 | 3,678,969 | |
| Cara Therapeutics, Inc. (a) | 273,227 | 5,822,467 | |
| Catabasis Pharmaceuticals, Inc. | 138,100 | 1,795,300 | |
| Catalyst Pharmaceutical Partners, Inc.: | |||
| warrants 5/2/17 (a) | 8,557 | 31,409 | |
| warrants 5/30/17 (a) | 17,900 | 70,184 | |
| Celgene Corp. (a) | 1,889,799 | 248,036,119 | |
| Cell Therapeutics, Inc. warrants 7/6/16 (a) | 46,404 | 0 | |
| Celldex Therapeutics, Inc. (a)(b) | 539,120 | 12,696,276 | |
| Cellectis SA sponsored ADR | 40,000 | 1,420,400 | |
| Cepheid, Inc. (a) | 51,400 | 2,857,326 | |
| Cerulean Pharma, Inc. (a) | 1,310,113 | 5,292,857 | |
| Chiasma, Inc. | 325,192 | 6,898,298 | |
| Chiasma, Inc. | 29,500 | 695,315 | |
| Chiasma, Inc. warrants (a) | 81,298 | 1,184,016 | |
| Chimerix, Inc. (a) | 280,086 | 15,051,822 | |
| Cidara Therapeutics, Inc. | 19,000 | 265,620 | |
| Cidara Therapeutics, Inc. Series B | 223,967 | 2,817,953 | |
| Clovis Oncology, Inc. (a) | 201,132 | 16,981,575 | |
| CTI BioPharma Corp. (a)(b) | 1,758,315 | 3,252,883 | |
| Cytokinetics, Inc. (a) | 67,916 | 433,983 | |
| Cytokinetics, Inc. warrants 6/25/17 (a) | 244,500 | 90,798 | |
| DBV Technologies SA sponsored ADR (a) | 258,000 | 11,246,220 | |
| Dicerna Pharmaceuticals, Inc. (a) | 125,106 | 1,528,795 | |
| Dyax Corp. (a) | 1,872,832 | 46,090,396 | |
| Eleven Biotherapeutics, Inc. (a)(b) | 140,279 | 388,573 | |
| Emergent BioSolutions, Inc. (a) | 146,555 | 4,811,401 | |
| Enanta Pharmaceuticals, Inc. (a)(b) | 140,822 | 7,132,634 | |
| Epirus Biopharmaceuticals, Inc. (a)(b) | 254,100 | 1,649,109 | |
| Epizyme, Inc. (a)(b) | 2,060,493 | 45,969,599 | |
| Esperion Therapeutics, Inc. (a)(b) | 389,646 | 24,158,052 | |
| Exact Sciences Corp. (a)(b) | 364,159 | 8,765,307 | |
| Exelixis, Inc. (a)(b) | 1,013,812 | 5,809,143 | |
| Fate Therapeutics, Inc. (a)(b) | 198,704 | 1,402,850 | |
| Fibrocell Science, Inc. (a) | 279,800 | 1,824,296 | |
| FibroGen, Inc. (b) | 74,322 | 1,727,987 | |
| Forward Pharma A/S sponsored ADR | 23,100 | 749,826 | |
| Foundation Medicine, Inc. (a) | 159,200 | 3,230,964 | |
| Galapagos Genomics NV sponsored ADR | 253,629 | 15,382,599 | |
| Genmab A/S (a) | 387,749 | 36,493,151 | |
| Genocea Biosciences, Inc. (a) | 159,921 | 2,078,973 | |
| Genomic Health, Inc. (a) | 54,120 | 1,465,570 | |
| Geron Corp. (a)(b) | 4,752,575 | 19,247,929 | |
| Gilead Sciences, Inc. | 3,072,903 | 362,172,343 | |
| Halozyme Therapeutics, Inc. (a)(b) | 839,755 | 19,599,882 | |
| Heron Therapeutics, Inc. (a) | 403,200�� | 13,039,488 | |
| Histogenics Corp. (b)(c) | 672,534 | 4,284,042 | |
| Ignyta, Inc. (a) | 629,000 | 8,717,940 | |
| Immune Design Corp. (a) | 268,300 | 5,194,288 | |
| ImmunoGen, Inc. (a)(b) | 1,104,927 | 19,910,785 | |
| Immunomedics, Inc. (a)(b) | 1,111,071 | 2,277,696 | |
| Incyte Corp. (a) | 882,941 | 92,073,087 | |
| Infinity Pharmaceuticals, Inc. (a) | 287,434 | 2,512,173 | |
| Insys Therapeutics, Inc. (a)(b) | 585,194 | 26,286,914 | |
| Intercept Pharmaceuticals, Inc. (a)(b) | 174,460 | 46,024,293 | |
| Intrexon Corp. (a)(b) | 182,908 | 11,934,747 | |
| Ironwood Pharmaceuticals, Inc. Class A (a) | 670,651 | 7,008,303 | |
| Isis Pharmaceuticals, Inc. (a) | 366,994 | 20,158,980 | |
| JHL Biotech, Inc. (d) | 234,770 | 878,040 | |
| Juno Therapeutics, Inc. | 73,900 | 3,615,188 | |
| Juno Therapeutics, Inc. (e) | 214,673 | 10,501,803 | |
| Karyopharm Therapeutics, Inc. (a) | 650,766 | 13,353,718 | |
| Keryx Biopharmaceuticals, Inc. (a)(b) | 673,542 | 5,374,865 | |
| Kite Pharma, Inc. (a)(b) | 654,920 | 47,658,528 | |
| La Jolla Pharmaceutical Co. (a) | 268,300 | 8,156,320 | |
| Lexicon Pharmaceuticals, Inc. (a)(b) | 785,970 | 6,633,587 | |
| Ligand Pharmaceuticals, Inc. Class B (a)(b) | 110,425 | 11,954,611 | |
| Lion Biotechnologies, Inc. (a) | 369,046 | 3,159,034 | |
| Macrocure Ltd. | 4,000 | 53,960 | |
| Macrogenics, Inc. (a) | 511,457 | 19,230,783 | |
| MannKind Corp. (a)(b) | 1,151,662 | 4,940,630 | |
| Medivation, Inc. (a) | 535,177 | 56,370,193 | |
| Merrimack Pharmaceuticals, Inc. (a) | 60,200 | 608,020 | |
| MiMedx Group, Inc. (a)(b) | 250,413 | 2,686,931 | |
| Minerva Neurosciences, Inc. (b) | 921,974 | 5,255,252 | |
| Momenta Pharmaceuticals, Inc. (a) | 121,037 | 2,631,344 | |
| Myriad Genetics, Inc. (a)(b) | 195,057 | 6,655,345 | |
| Neurocrine Biosciences, Inc. (a) | 624,728 | 31,311,367 | |
| NewLink Genetics Corp. (a) | 252,479 | 13,166,780 | |
| Nivalis Therapeutics, Inc. | 18,600 | 315,642 | |
| Novavax, Inc. (a) | 2,465,631 | 29,735,510 | |
| Novelos Therapeutics, Inc. warrants 12/6/16 (a) | 137,600 | 80 | |
| OncoMed Pharmaceuticals, Inc. (a) | 125,932 | 2,876,287 | |
| Ophthotech Corp. (a) | 674,737 | 45,672,948 | |
| Opko Health, Inc. (a)(b) | 586,151 | 9,595,292 | |
| Oragenics, Inc. (a) | 250,308 | 655,807 | |
| Orexigen Therapeutics, Inc. (a)(b) | 1,765,996 | 7,063,984 | |
| Organovo Holdings, Inc. (a)(b) | 194,083 | 656,001 | |
| Osiris Therapeutics, Inc. (a) | 203,971 | 4,350,701 | |
| OvaScience, Inc. (a)(b) | 193,445 | 5,513,183 | |
| PolyMedix, Inc. warrants 4/10/16 (a) | 163,833 | 2 | |
| Portola Pharmaceuticals, Inc. (a) | 475,082 | 23,488,054 | |
| Progenics Pharmaceuticals, Inc. (a)(b) | 793,543 | 6,872,082 | |
| ProNai Therapeutics, Inc. | 199,883 | 5,476,794 | |
| ProQR Therapeutics BV (a) | 249,416 | 4,035,551 | |
| Proteon Therapeutics, Inc. (b) | 137,500 | 2,376,000 | |
| Prothena Corp. PLC (a) | 113,234 | 7,470,047 | |
| PTC Therapeutics, Inc. (a) | 313,245 | 16,041,276 | |
| Puma Biotechnology, Inc. (a)(b) | 291,758 | 26,433,275 | |
| Radius Health, Inc. (a)(b) | 975,562 | 76,406,016 | |
| Raptor Pharmaceutical Corp. (a)(b) | 625,173 | 8,902,464 | |
| Receptos, Inc. (a) | 57,870 | 13,186,258 | |
| Regeneron Pharmaceuticals, Inc. (a) | 405,563 | 224,544,011 | |
| Regulus Therapeutics, Inc. (a) | 254,763 | 2,089,057 | |
| Repligen Corp. (a) | 361,227 | 12,646,557 | |
| Retrophin, Inc. (a)(b) | 71,300 | 2,263,062 | |
| Rigel Pharmaceuticals, Inc. (a) | 643,465 | 1,917,526 | |
| Sage Therapeutics, Inc. (b) | 262,168 | 17,921,804 | |
| Sangamo Biosciences, Inc. (a) | 682,052 | 6,240,776 | |
| Sarepta Therapeutics, Inc. (a)(b) | 371,104 | 11,845,640 | |
| Seattle Genetics, Inc. (a)(b) | 196,850 | 9,423,210 | |
| Seres Therapeutics, Inc. | 237,191 | 8,977,679 | |
| Seres Therapeutics, Inc. | 352,270 | 12,000,078 | |
| Sophiris Bio, Inc. (a) | 141,653 | 123,181 | |
| Sorrento Therapeutics, Inc. (a) | 7,400 | 153,772 | |
| Spark Therapeutics, Inc. (b) | 269,670 | 16,568,525 | |
| Spectrum Pharmaceuticals, Inc. (a) | 338,247 | 2,338,978 | |
| Stemline Therapeutics, Inc. (a)(b) | 348,093 | 3,735,038 | |
| Sunesis Pharmaceuticals, Inc. (a)(b) | 830,240 | 1,158,185 | |
| Synta Pharmaceuticals Corp. (a) | 471,286 | 999,126 | |
| TESARO, Inc. (a) | 391,937 | 22,732,346 | |
| TG Therapeutics, Inc. (a)(b) | 1,273,655 | 22,225,280 | |
| Threshold Pharmaceuticals, Inc. (a) | 26,804 | 115,793 | |
| Threshold Pharmaceuticals, Inc. warrants 3/16/16 (a) | 35,146 | 66,462 | |
| Tokai Pharmaceuticals, Inc. (b) | 91,000 | 1,186,640 | |
| Ultragenyx Pharmaceutical, Inc. (a) | 365,327 | 44,178,994 | |
| uniQure B.V. (a) | 158,829 | 4,089,847 | |
| United Therapeutics Corp. (a) | 142,294 | 24,098,912 | |
| Verastem, Inc. (a)(b) | 331,008 | 2,416,358 | |
| Versartis, Inc. (a) | 351,776 | 6,367,146 | |
| Vertex Pharmaceuticals, Inc. (a) | 1,089,676 | 147,106,260 | |
| Vical, Inc. (a) | 659,862 | 424,951 | |
| Vitae Pharmaceuticals, Inc. (b) | 1,091,502 | 11,035,085 | |
| Vital Therapies, Inc. (a)(b) | 218,579 | 3,545,351 | |
| Xencor, Inc. (a) | 464,569 | 10,401,700 | |
| Xenon Pharmaceuticals, Inc. | 102,215 | 1,113,121 | |
| XOMA Corp. (a)(b) | 1,918,701 | 1,401,803 | |
| Zafgen, Inc. (a)(b) | 1,306,751 | 49,617,335 | |
| ZIOPHARM Oncology, Inc. (a)(b) | 29,667 | 396,351 | |
| 3,699,508,117 | |||
| Capital Markets - 0.0% | |||
| Asset Management & Custody Banks - 0.0% | |||
| RPI International Holdings LP (d) | 12,210 | 1,719,168 | |
| Health Care Equipment & Supplies - 0.1% | |||
| Health Care Equipment - 0.1% | |||
| Bellerophon Therapeutics, Inc. | 227,700 | 790,119 | |
| Vermillion, Inc. (a)(b) | 1,165,400 | 2,330,800 | |
| Zosano Pharma Corp. | 172,100 | 1,344,101 | |
| 4,465,020 | |||
| Life Sciences Tools & Services - 0.1% | |||
| Life Sciences Tools & Services - 0.1% | |||
| NantKwest, Inc. | 83,700 | 2,561,220 | |
| Transgenomic, Inc. (a) | 13,500 | 20,520 | |
| Transgenomic, Inc. warrants 2/3/17 (a) | 81,000 | 43 | |
| 2,581,783 | |||
| Personal Products - 0.0% | |||
| Personal Products - 0.0% | |||
| MYOS Corp. (a) | 6,666 | 21,198 | |
| Pharmaceuticals - 8.2% | |||
| Pharmaceuticals - 8.2% | |||
| Achaogen, Inc. (a) | 141,215 | 1,018,160 | |
| Adimab LLC unit (d)(f) | 398,401 | 7,378,324 | |
| Aradigm Corp. (a) | 8,786 | 65,192 | |
| Auris Medical Holding AG (a) | 261,667 | 1,355,435 | |
| Biodel, Inc. (a)(b) | 718,800 | 740,364 | |
| Carbylan Therapeutics, Inc. | 699,867 | 4,836,081 | |
| Cempra, Inc. (a) | 187,800 | 7,861,308 | |
| Collegium Pharmaceutical, Inc. | 81,700 | 1,636,451 | |
| Dermira, Inc. (e) | 162,931 | 3,678,982 | |
| Dermira, Inc. | 449,300 | 10,145,194 | |
| Egalet Corp. (a)(b) | 489,678 | 5,675,368 | |
| Eisai Co. Ltd. | 342,900 | 22,397,027 | |
| Endo Health Solutions, Inc. (a) | 58,774 | 5,145,076 | |
| Flex Pharma, Inc. | 22,600 | 352,334 | |
| GW Pharmaceuticals PLC ADR (a)(b) | 346,424 | 39,669,012 | |
| Horizon Pharma PLC (a) | 1,745,938 | 64,337,815 | |
| Intra-Cellular Therapies, Inc. (a) | 253,854 | 7,387,151 | |
| Jazz Pharmaceuticals PLC (a) | 250,087 | 48,076,725 | |
| Kura Oncology, Inc. | 325,932 | 2,059,890 | |
| Nektar Therapeutics (a)(b) | 277,332 | 3,497,157 | |
| NeurogesX, Inc. (a) | 150,000 | 900 | |
| Ocular Therapeutix, Inc. | 196,271 | 4,531,897 | |
| Pacira Pharmaceuticals, Inc. (a) | 152,160 | 10,106,467 | |
| Paratek Pharmaceuticals, Inc. (a) | 683,303 | 17,191,903 | |
| Parnell Pharmaceuticals Holdings Ltd. (a) | 123,569 | 594,367 | |
| Repros Therapeutics, Inc. (a)(b) | 1,213,840 | 8,982,416 | |
| SCYNEXIS, Inc. (a) | 111,900 | 889,605 | |
| Sun Pharmaceutical Industries Ltd. (a) | 181,199 | 2,328,837 | |
| Tetraphase Pharmaceuticals, Inc. (a) | 378,131 | 17,980,129 | |
| TherapeuticsMD, Inc. (a) | 918,373 | 7,154,126 | |
| XenoPort, Inc. (a) | 478,008 | 3,489,458 | |
| Zogenix, Inc. (a)(b) | 560,316 | 10,819,702 | |
| Zogenix, Inc. warrants 7/27/17 (a) | 32,985 | 9,657 | |
| ZS Pharma, Inc. (a) | 259,204 | 15,482,255 | |
| 336,874,765 | |||
| TOTAL COMMON STOCKS | |||
| (Cost $2,842,483,596) | 4,045,170,051 | ||
| Preferred Stocks - 1.4% | |||
| Convertible Preferred Stocks - 1.4% | |||
| Biotechnology - 0.7% | |||
| Biotechnology - 0.7% | |||
| 23andMe, Inc. Series E (d) | 341,730 | 3,700,003 | |
| Aimmune Therapeutics, Inc. Series B (d) | 349,360 | 6,623,865 | |
| CytomX Therapeutics, Inc. Series D (d) | 4,092,403 | 607,075 | |
| Gensight Biologics Series B (d) | 191,500 | 584,675 | |
| Immunocore Ltd. Series A (d) | 17,149 | 3,238,594 | |
| Jounce Therapeutics, Inc. Series B (d) | 1,591,779 | 3,597,421 | |
| Moderna LLC Series E (d) | 54,410 | 3,355,465 | |
| Pronutria Biosciences, Inc. Series C (d) | 341,857 | 3,445,919 | |
| RaNA Therapeutics LLC Series B (d) | 1,310,353 | 1,415,181 | |
| Twist Bioscience Corp. Series C (d) | 1,866,791 | 2,799,998 | |
| 29,368,196 | |||
| Health Care Equipment & Supplies - 0.1% | |||
| Health Care Supplies - 0.1% | |||
| Novocure Ltd. Series J (d) | 26,307 | 3,629,051 | |
| Pharmaceuticals - 0.6% | |||
| Pharmaceuticals - 0.6% | |||
| Afferent Pharmaceuticals, Inc. Series C (d) | 1,915,787 | 4,699,998 | |
| Global Blood Therapeutics, Inc. Series B (d) | 1,814,085 | 9,324,397 | |
| Kolltan Pharmaceuticals, Inc. Series D (a)(d) | 1,610,391 | 1,610,391 | |
| MyoKardia, Inc. Series B (d) | 1,781,076 | 4,800,000 | |
| Syros Pharmaceuticals, Inc. Series B, 6.00% (d) | 163,994 | 515,942 | |
| Voyager Therapeutics, Inc. Series B (d) | 1,200,000 | 3,600,000 | |
| 24,550,728 | |||
| TOTAL CONVERTIBLE PREFERRED STOCKS | 57,547,975 | ||
| Nonconvertible Preferred Stocks - 0.0% | |||
| Biotechnology - 0.0% | |||
| Biotechnology - 0.0% | |||
| Moderna LLC Series D, 8.00% (a)(d) | 26,918 | 1,660,033 | |
| TOTAL PREFERRED STOCKS | |||
| (Cost $49,323,372) | 59,208,008 | ||
| Money Market Funds - 7.7% | |||
| Fidelity Cash Central Fund, 0.17% (g) | 30,057,446 | 30,057,446 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (g)(h) | 286,288,233 | 286,288,233 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $316,345,679) | 316,345,679 | ||
| TOTAL INVESTMENT PORTFOLIO - 107.2% | |||
| (Cost $3,208,152,647) | 4,420,723,738 | ||
| NET OTHER ASSETS (LIABILITIES) - (7.2)% | (295,543,483) | ||
| NET ASSETS - 100% | $4,125,180,255 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Affiliated company
(d) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $69,183,540 or 1.7% of net assets.
(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 $14,180,785 or 0.3% of net assets.
(f) Investment is owned by an entity that is treated as a corporation for U.S. tax purposes and is wholly-owned by the Fund.
(g) 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.
(h) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost |
| 23andMe, Inc. Series E | 6/18/15 | $3,700,003 |
| Adimab LLC unit | 9/17/14 - 6/5/15 | $6,416,091 |
| Afferent Pharmaceuticals, Inc. Series C | 7/1/15 | $4,700,000 |
| Aimmune Therapeutics, Inc. Series B | 2/26/15 | $2,620,200 |
| CytomX Therapeutics, Inc. Series D | 6/12/15 | $607,075 |
| Gensight Biologics Series B | 7/2/15 | $590,265 |
| Global Blood Therapeutics, Inc. Series B | 12/22/14 | $4,535,213 |
| Immunocore Ltd. Series A | 7/27/15 | $3,227,085 |
| JHL Biotech, Inc. | 4/14/15 | $878,040 |
| Jounce Therapeutics, Inc. Series B | 4/17/15 | $3,597,421 |
| Kolltan Pharmaceuticals, Inc. Series D | 3/13/14 | $1,610,391 |
| Moderna LLC Series D, 8.00% | 11/6/13 | $574,161 |
| Moderna LLC Series E | 12/18/14 | $3,355,465 |
| MyoKardia, Inc. Series B | 4/20/15 | $4,800,000 |
| Novocure Ltd. Series J | 6/1/15 | $3,629,051 |
| Pronutria Biosciences, Inc. Series C | 1/30/15 | $3,445,919 |
| RaNA Therapeutics LLC Series B | 7/17/15 | $1,415,181 |
| RPI International Holdings LP | 5/21/15 | $1,439,559 |
| Syros Pharmaceuticals, Inc. Series B, 6.00% | 10/9/14 | $515,942 |
| Twist Bioscience Corp. Series C | 5/29/15 | $2,800,000 |
| Voyager Therapeutics, Inc. Series B | 4/10/15 | $3,600,000 |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $33,479 |
| Fidelity Securities Lending Cash Central Fund | 4,375,447 |
| Total | $4,408,926 |
Other Affiliated Issuers
An affiliated company is a company in which the Fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows:
| Affiliate | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value, end of period |
| Aegerion Pharmaceuticals, Inc. | $14,658,766 | $26,915,448 | $-- | $-- | $27,497,252 |
| Aldeyra Therapeutics, Inc. | 993,513 | 1,504,500 | -- | -- | -- |
| Histogenics Corp. | -- | 7,408,337 | -- | -- | 4,284,042 |
| Repros Therapeutics, Inc. | 2,969,436 | 10,793,250 | -- | -- | -- |
| Vitae Pharmaceuticals, Inc. | -- | 13,496,238 | -- | -- | -- |
| Total | $18,621,715 | $60,117,773 | $-- | $-- | $31,781,294 |
Investment Valuation
The following is a summary of the inputs used, as of July 31, 2015, 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 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 | $4,045,170,051 | $4,000,807,658 | $31,142,955 | $13,219,438 |
| Preferred Stocks | 59,208,008 | -- | -- | 59,208,008 |
| Money Market Funds | 316,345,679 | 316,345,679 | -- | -- |
| Total Investments in Securities: | $4,420,723,738 | $4,317,153,337 | $31,142,955 | $72,427,446 |
The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value:
| Investments in Securities: | |
| Other Investments in Securities | |
| Beginning Balance | $-- |
| Total Realized Gain (Loss) | (73,792) |
| Total Unrealized Gain (Loss) | 2,499,647 |
| Cost of Purchases | 10,793,583 |
| Proceeds of Sales | -- |
| Amortization/Accretion | -- |
| Transfers in to Level 3 | -- |
| Transfers out of Level 3 | -- |
| Ending Balance | $13,219,438 |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at July 31, 2015 | $2,425,855 |
| Preferred Stocks | |
| Beginning Balance | $4,580,027 |
| Total Realized Gain (Loss) | (37,571) |
| Total Unrealized Gain (Loss) | 9,936,555 |
| Cost of Purchases | 47,138,818 |
| Proceeds of Sales | (2,409,821) |
| Amortization/Accretion | -- |
| Transfers in to Level 3 | -- |
| Transfers out of Level 3 | -- |
| Ending Balance | $59,208,008 |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at July 31, 2015 | $9,884,638 |
The information used in the above reconciliations represent fiscal year to date activity for any Investments in Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represent the beginning value of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. The cost of purchases and the proceeds of sales may include securities received or delivered through corporate actions or exchanges. Realized and unrealized gains (losses) disclosed in the reconciliation are included in Net Gain (Loss) on the Fund's Statement of Operations.
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Biotechnology Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $282,809,554) — See accompanying schedule: Unaffiliated issuers (cost $2,841,026,638) | $4,072,596,765 | |
| Fidelity Central Funds (cost $316,345,679) | 316,345,679 | |
| Other affiliated issuers (cost $50,780,330) | 31,781,294 | |
| Total Investments (cost $3,208,152,647) | $4,420,723,738 | |
| Cash | 18,331 | |
| Foreign currency held at value (cost $3,238,596) | 3,238,596 | |
| Receivable for investments sold | 16,679,600 | |
| Receivable for fund shares sold | 19,882,119 | |
| Distributions receivable from Fidelity Central Funds | 449,549 | |
| Other receivables | 21,759 | |
| Total assets | 4,461,013,692 | |
| Liabilities | ||
| Payable for investments purchased | $42,505,382 | |
| Payable for fund shares redeemed | 3,122,814 | |
| Accrued management fee | 1,835,035 | |
| Distribution and service plan fees payable | 1,181,168 | |
| Other affiliated payables | 650,799 | |
| Other payables and accrued expenses | 250,006 | |
| Collateral on securities loaned, at value | 286,288,233 | |
| Total liabilities | 335,833,437 | |
| Net Assets | $4,125,180,255 | |
| Net Assets consist of: | ||
| Paid in capital | $2,735,740,642 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 176,868,522 | |
| Net unrealized appreciation (depreciation) on investments | 1,212,571,091 | |
| Net Assets | $4,125,180,255 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($1,560,528,108 ÷ 49,657,414 shares) | $31.43 | |
| Maximum offering price per share (100/94.25 of $31.43) | $33.35 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($196,393,228 ÷ 6,533,001 shares) | $30.06 | |
| Maximum offering price per share (100/96.50 of $30.06) | $31.15 | |
| Class B: | ||
| Net Asset Value and offering price per share ($8,097,965 ÷ 292,071 shares)(a) | $27.73 | |
| Class C: | ||
| Net Asset Value and offering price per share ($956,494,535 ÷ 34,425,841 shares)(a) | $27.78 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($1,403,666,419 ÷ 42,595,280 shares) | $32.95 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $3,283,311 | |
| Income from Fidelity Central Funds (including $4,375,447 from security lending) | 4,408,926 | |
| Total income | 7,692,237 | |
| Expenses | ||
| Management fee | $14,470,394 | |
| Transfer agent fees | 4,982,034 | |
| Distribution and service plan fees | 9,417,806 | |
| Accounting and security lending fees | 807,688 | |
| Custodian fees and expenses | 76,442 | |
| Independent trustees' compensation | 41,710 | |
| Registration fees | 411,171 | |
| Audit | 50,757 | |
| Legal | 25,848 | |
| Miscellaneous | 19,628 | |
| Total expenses before reductions | 30,303,478 | |
| Expense reductions | (106,911) | 30,196,567 |
| Net investment income (loss) | (22,504,330) | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 265,574,762 | |
| Foreign currency transactions | (44,901) | |
| Total net realized gain (loss) | 265,529,861 | |
| Change in net unrealized appreciation (depreciation) on investment securities | 881,295,858 | |
| Net gain (loss) | 1,146,825,719 | |
| Net increase (decrease) in net assets resulting from operations | $1,124,321,389 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $(22,504,330) | $(9,882,130) |
| Net realized gain (loss) | 265,529,861 | 15,835,693 |
| Change in net unrealized appreciation (depreciation) | 881,295,858 | 126,643,560 |
| Net increase (decrease) in net assets resulting from operations | 1,124,321,389 | 132,597,123 |
| Distributions to shareholders from net investment income | (69,565) | – |
| Distributions to shareholders from net realized gain | (51,362,234) | (3,083,051) |
| Total distributions | (51,431,799) | (3,083,051) |
| Share transactions - net increase (decrease) | 1,521,666,795 | 713,552,409 |
| Redemption fees | 97,303 | 133,198 |
| Total increase (decrease) in net assets | 2,594,653,688 | 843,199,679 |
| Net Assets | ||
| Beginning of period | 1,530,526,567 | 687,326,888 |
| End of period (including undistributed net investment income of $0 and accumulated net investment loss of $6,816,483, respectively) | $4,125,180,255 | $1,530,526,567 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Biotechnology Fund Class A
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $20.19 | $17.25 | $11.79 | $8.81 | $6.67 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.20) | (.13) | (.09) | (.07) | (.07)B |
| Net realized and unrealized gain (loss) | 12.04 | 3.12 | 6.24 | 3.05 | 2.21 |
| Total from investment operations | 11.84 | 2.99 | 6.15 | 2.98 | 2.14 |
| Distributions from net realized gain | (.60) | (.05) | (.69) | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $31.43 | $20.19 | $17.25 | $11.79 | $8.81 |
| Total ReturnD,E | 59.66% | 17.38% | 54.94% | 33.83% | 32.08% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.04% | 1.08% | 1.15% | 1.27% | 1.35% |
| Expenses net of fee waivers, if any | 1.04% | 1.08% | 1.15% | 1.27% | 1.35% |
| Expenses net of all reductions | 1.04% | 1.08% | 1.14% | 1.27% | 1.34% |
| Net investment income (loss) | (.75)% | (.68)% | (.63)% | (.73)% | (.91)%B |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $1,560,528 | $602,625 | $286,695 | $68,993 | $30,639 |
| Portfolio turnover rateH | 26% | 50% | 22% | 82% | 99% |
A Calculated based on average shares outstanding during the period.
B 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) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Biotechnology Fund Class T
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $19.39 | $16.63 | $11.42 | $8.56 | $6.50 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.27) | (.19) | (.12) | (.10) | (.09)B |
| Net realized and unrealized gain (loss) | 11.54 | 3.00 | 6.02 | 2.96 | 2.15 |
| Total from investment operations | 11.27 | 2.81 | 5.90 | 2.86 | 2.06 |
| Distributions from net realized gain | (.60) | (.05) | (.69) | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $30.06 | $19.39 | $16.63 | $11.42 | $8.56 |
| Total ReturnD,E | 59.17% | 16.95% | 54.50% | 33.41% | 31.69% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.35% | 1.41% | 1.46% | 1.56% | 1.64% |
| Expenses net of fee waivers, if any | 1.35% | 1.41% | 1.46% | 1.56% | 1.64% |
| Expenses net of all reductions | 1.34% | 1.40% | 1.46% | 1.56% | 1.64% |
| Net investment income (loss) | (1.05)% | (1.01)% | (.94)% | (1.02)% | (1.21)%B |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $196,393 | $95,945 | $67,887 | $28,154 | $16,454 |
| Portfolio turnover rateH | 26% | 50% | 22% | 82% | 99% |
A Calculated based on average shares outstanding during the period.
B 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) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Biotechnology Fund Class B
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $18.01 | $15.52 | $10.75 | $8.09 | $6.17 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.35) | (.26) | (.17) | (.13) | (.12)B |
| Net realized and unrealized gain (loss) | 10.67 | 2.80 | 5.63 | 2.79 | 2.04 |
| Total from investment operations | 10.32 | 2.54 | 5.46 | 2.66 | 1.92 |
| Distributions from net realized gain | (.60) | (.05) | (.69) | – | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $27.73 | $18.01 | $15.52 | $10.75 | $8.09 |
| Total ReturnD,E | 58.42% | 16.42% | 53.76% | 32.88% | 31.12% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.83% | 1.89% | 1.94% | 2.03% | 2.10% |
| Expenses net of fee waivers, if any | 1.83% | 1.89% | 1.94% | 2.03% | 2.10% |
| Expenses net of all reductions | 1.82% | 1.88% | 1.94% | 2.02% | 2.09% |
| Net investment income (loss) | (1.53)% | (1.49)% | (1.42)% | (1.49)% | (1.66)%B |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $8,098 | $6,101 | $8,136 | $6,349 | $5,849 |
| Portfolio turnover rateH | 26% | 50% | 22% | 82% | 99% |
A Calculated based on average shares outstanding during the period.
B 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) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Biotechnology Fund Class C
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $18.04 | $15.53 | $10.76 | $8.10 | $6.18 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.35) | (.25) | (.17) | (.13) | (.12)B |
| Net realized and unrealized gain (loss) | 10.69 | 2.81 | 5.63 | 2.79 | 2.04 |
| Total from investment operations | 10.34 | 2.56 | 5.46 | 2.66 | 1.92 |
| Distributions from net realized gain | (.60) | (.05) | (.69) | – | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $27.78 | $18.04 | $15.53 | $10.76 | $8.10 |
| Total ReturnD,E | 58.43% | 16.54% | 53.71% | 32.84% | 31.07% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.79% | 1.83% | 1.88% | 2.01% | 2.10% |
| Expenses net of fee waivers, if any | 1.79% | 1.83% | 1.88% | 2.01% | 2.10% |
| Expenses net of all reductions | 1.79% | 1.83% | 1.87% | 2.01% | 2.09% |
| Net investment income (loss) | (1.49)% | (1.43)% | (1.36)% | (1.47)% | (1.66)%B |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $956,495 | $359,967 | $146,684 | $31,710 | $15,787 |
| Portfolio turnover rateH | 26% | 50% | 22% | 82% | 99% |
A Calculated based on average shares outstanding during the period.
B 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) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Biotechnology Fund Class I
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $21.10 | $17.97 | $12.22 | $9.10 | $6.87 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.14) | (.08) | (.05) | (.04) | (.05)B |
| Net realized and unrealized gain (loss) | 12.60 | 3.26 | 6.49 | 3.16 | 2.28 |
| Total from investment operations | 12.46 | 3.18 | 6.44 | 3.12 | 2.23 |
| Distributions from investment income | –C | – | – | – | – |
| Distributions from net realized gain | (.60) | (.05) | (.69) | – | – |
| Total distributions | (.61)D | (.05) | (.69) | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $32.95 | $21.10 | $17.97 | $12.22 | $9.10 |
| Total ReturnE | 60.00% | 17.74% | 55.39% | 34.29% | 32.46% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | .78% | .81% | .85% | .95% | 1.04% |
| Expenses net of fee waivers, if any | .78% | .81% | .85% | .95% | 1.04% |
| Expenses net of all reductions | .77% | .80% | .84% | .94% | 1.03% |
| Net investment income (loss) | (.48)% | (.41)% | (.32)% | (.40)% | (.60)%B |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $1,403,666 | $465,889 | $177,926 | $26,772 | $5,903 |
| Portfolio turnover rateH | 26% | 50% | 22% | 82% | 99% |
A Calculated based on average shares outstanding during the period.
B 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) %.
C Amount represents less than $.01 per share.
D Total distributions of $.61 per share is comprised of distributions from net investment income of $.003 and distributions from net realized gain of $.604 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy. Equity securities, including restricted securities, for which observable inputs are not available are valued using alternate valuation approaches, including the market approach and the income approach and are categorized as Level 3 in the hierarchy. The market approach generally consists of using comparable market transactions while the income approach generally consists of using the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.
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.
The following provides information on Level 3 securities held by the Fund that were valued at period end based on unobservable inputs. These amounts exclude valuations provided by a broker.
| Asset Type | Fair Value at 07/31/15 | Valuation Technique(s) | Unobservable Input | Amount or Range/Weighted Average | Impact to Valuation from an Increase in Input* |
| Equities | $ 72,427,446 | Black scholes | Discount for lack of marketability | 10.0% | Decrease |
| Discount cash flow | Discount rate | 8.0% | Decrease | ||
| Discount rate | Discount for lack of marketability | 10.0% | Decrease | ||
| Last transaction price | Transaction price | $0.15-$137.95/$27.68 | Increase | ||
| Registration statement | Discount rate | 10.0% | Decrease |
* Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.
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, 2015, as well as a roll forward of Level 3 investments, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. During the period, dividend income has been increased $415,705 with a corresponding decrease to net unrealized appreciation (depreciation) as a result of a change in the prior period estimate, which had no impact on the total net assets or total return of the Fund. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), partnerships, net operating losses 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 | $1,391,318,986 |
| Gross unrealized depreciation | (190,969,871) |
| Net unrealized appreciation (depreciation) on securities | $1,200,349,115 |
| Tax Cost | $3,220,374,623 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $ 41,636,838 |
| Undistributed long-term capital gain | $ 147,453,662 |
| Net unrealized appreciation (depreciation) on securities and other investments | $1,200,349,115 |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $69,565 | $– |
| Long-term Capital Gains | 51,362,234 | 3,083,051 |
| Total | $51,431,799 | $ 3,083,051 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $2,114,556,562 and $686,266,912, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $2,497,966 | $59,669 |
| Class T | .25% | .25% | 714,048 | 2,248 |
| Class B | .75% | .25% | 72,711 | 54,539 |
| Class C | .75% | .25% | 6,133,081 | 2,675,253 |
| $9,417,806 | $2,791,709 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $2,094,492 |
| Class T | 128,052 |
| Class B* | 3,865 |
| Class C* | 142,139 |
| $2,368,548 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $1,895,518 | .19 |
| Class T | 351,986 | .25 |
| Class B | 16,532 | .23 |
| Class C | 1,168,975 | .19 |
| Class I | 1,549,023 | .18 |
| $ 4,982,034 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $58,735 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $3,449 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $58,478 for the period.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $14,520 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $13,398 |
| Class T | 2,003 |
| Class B | 155 |
| Class C | 7,791 |
| Class I | 10,566 |
| $33,913 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class I | $69,565 | $– |
| Total | $69,565 | $– |
| From net realized gain | ||
| Class A | $19,162,759 | $1,291,021 |
| Class T | 3,137,062 | 234,772 |
| Class B | 191,809 | 24,488 |
| Class C | 13,249,824 | 722,216 |
| Class I | 15,620,780 | 810,554 |
| Total | $51,362,234 | $3,083,051 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 28,734,829 | 26,291,422 | $782,311,246 | $513,888,215 |
| Reinvestment of distributions | 750,777 | 64,680 | 17,834,437 | 1,162,299 |
| Shares redeemed | (9,674,834) | (13,129,582) | (251,598,976) | (254,303,314) |
| Net increase (decrease) | 19,810,772 | 13,226,520 | $548,546,707 | $260,747,200 |
| Class T | ||||
| Shares sold | 2,609,939 | 2,490,442 | $67,425,583 | $47,007,190 |
| Reinvestment of distributions | 134,415 | 13,197 | 3,058,643 | 228,306 |
| Shares redeemed | (1,158,298) | (1,639,876) | (29,041,801) | (30,470,117) |
| Net increase (decrease) | 1,586,056 | 863,763 | $41,442,425 | $16,765,379 |
| Class B | ||||
| Shares sold | 83,752 | 92,681 | $1,983,767 | $1,623,597 |
| Reinvestment of distributions | 8,590 | 1,384 | 180,710 | 22,292 |
| Shares redeemed | (138,999) | (279,647) | (3,242,788) | (4,810,522) |
| Net increase (decrease) | (46,657) | (185,582) | $(1,078,311) | $(3,164,633) |
| Class C | ||||
| Shares sold | 18,036,528 | 14,509,075 | $437,867,038 | $256,484,365 |
| Reinvestment of distributions | 528,140 | 36,658 | 11,164,448 | 591,299 |
| Shares redeemed | (4,090,881) | (4,036,055) | (97,122,016) | (69,713,827) |
| Net increase (decrease) | 14,473,787 | 10,509,678 | $351,909,470 | $187,361,837 |
| Class I | ||||
| Shares sold | 29,622,523 | 21,677,297 | $833,349,459 | $442,824,898 |
| Reinvestment of distributions | 532,595 | 35,974 | 13,257,162 | 674,146 |
| Shares redeemed | (9,644,195) | (9,529,193) | (265,760,117) | (191,656,418) |
| Net increase (decrease) | 20,510,923 | 12,184,078 | $580,846,504 | $251,842,626 |
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.
Fidelity Advisor® Communications Equipment Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class I | 5.83% | 8.57% | 5.71% |
Prior to October 1, 2006, the 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 I on July 31, 2005. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values | ||
| $17,432 | Fidelity Advisor® Communications Equipment Fund - Class I | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Communications Equipment Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Colin Anderson, who succeeded Ali Khan on January 31, 2015: For the year, the fund's share classes mostly lagged the 5.84% return of the S&P® Custom Communications Equipment Index and underperformed the broadly based S&P 500® by a wide margin. (For specific class-level results, please see the Performance section of this report.) Versus the industry index, our relative results were meaningfully hurt by large underweightings in three strong-performing benchmark components. The fund's largest relative detractor by far was Palo Alto Networks, a strong-performing provider of enterprise security platforms. We had exited this position due to concerns about overvaluation. The second-largest relative detractor was Infinera, a provider of optical transport networking equipment. Here, too, we mostly missed this stock's robust return. Brocade Communications, a manufacturer of storage networking equipment, detracted because we didn't own it early in the period, when the stock was strongest. Additionally, the fund's foreign holdings detracted, partly due to a stronger U.S. dollar. Conversely, F5 Networks, a maker of application delivery controllers, was our top relative contributor. CommScope Holding, a maker of components for telecom equipment applications that we began buying in November, also contributed.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.Fidelity Advisor® Communications Equipment Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| QUALCOMM, Inc. | 19.2 | 17.1 |
| Cisco Systems, Inc. | 16.9 | 17.8 |
| F5 Networks, Inc. | 6.9 | 2.6 |
| Juniper Networks, Inc. | 5.0 | 5.4 |
| CommScope Holding Co., Inc. | 4.8 | 1.9 |
| Harris Corp. | 4.6 | 0.0 |
| Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 4.4 | 4.8 |
| Nokia Corp. sponsored ADR | 3.9 | 5.5 |
| Alcatel-Lucent SA sponsored ADR | 3.8 | 3.9 |
| Brocade Communications Systems, Inc. | 3.4 | 0.0 |
| 72.9 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Communications Equipment | 92.2% | |
| Technology Hardware, Storage & Peripherals | 2.8% | |
| Semiconductors & Semiconductor Equipment | 1.6% | |
| Internet Software & Services | 1.3% | |
| Electronic Equipment & Components | 1.0% | |
| All Others* | 1.1% | |
| As of January 31, 2015 | ||
| Communications Equipment | 84.3% | |
| Internet Software & Services | 3.4% | |
| Semiconductors & Semiconductor Equipment | 3.2% | |
| Technology Hardware, Storage & Peripherals | 2.6% | |
| Software | 2.4% | |
| All Others* | 4.1% | |
* Includes short-term investments and net other assets (liabilities).
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity Advisor® Communications Equipment Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 100.1% | |||
| Shares | Value | ||
| Communications Equipment - 92.2% | |||
| Communications Equipment - 92.2% | |||
| ADTRAN, Inc. | 9,000 | $148,500 | |
| Alcatel-Lucent SA sponsored ADR (a) | 131,757 | 492,771 | |
| Arris Group, Inc. (a) | 6,400 | 197,888 | |
| AudioCodes Ltd. (a) | 5,900 | 17,287 | |
| Brocade Communications Systems, Inc. | 43,700 | 448,362 | |
| Calix Networks, Inc. (a) | 1,000 | 8,430 | |
| Ciena Corp. (a) | 600 | 15,270 | |
| Cisco Systems, Inc. | 78,024 | 2,217,442 | |
| CommScope Holding Co., Inc. (a) | 20,100 | 630,537 | |
| EchoStar Holding Corp. Class A (a) | 200 | 9,284 | |
| Extreme Networks, Inc. (a) | 3,400 | 7,888 | |
| F5 Networks, Inc. (a) | 6,715 | 900,750 | |
| Finisar Corp. (a) | 15,700 | 273,337 | |
| Harris Corp. | 7,300 | 605,462 | |
| Infinera Corp. (a) | 2,200 | 52,668 | |
| InterDigital, Inc. | 2,800 | 151,396 | |
| Ixia (a) | 8,100 | 106,920 | |
| JDS Uniphase Corp. (a) | 12,800 | 141,952 | |
| Juniper Networks, Inc. | 23,188 | 659,003 | |
| Mitel Networks Corp. (a) | 4,100 | 38,745 | |
| Motorola Solutions, Inc. | 4,347 | 261,516 | |
| NETGEAR, Inc. (a) | 1,000 | 33,490 | |
| Nokia Corp. sponsored ADR | 72,520 | 511,266 | |
| Plantronics, Inc. | 4,360 | 253,229 | |
| Polycom, Inc. (a) | 8,499 | 96,719 | |
| QUALCOMM, Inc. | 39,181 | 2,522,862 | |
| Radware Ltd. (a) | 11,200 | 213,248 | |
| Ruckus Wireless, Inc. (a) | 25,700 | 316,881 | |
| Sandvine Corp. (U.K.) (a) | 5,100 | 13,687 | |
| Sonus Networks, Inc. (a) | 8,440 | 68,111 | |
| Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 54,320 | 582,854 | |
| Transmode AB | 2,800 | 39,760 | |
| ViaSat, Inc. (a) | 100 | 6,200 | |
| Wi-Lan, Inc. | 21,800 | 45,672 | |
| 12,089,387 | |||
| Diversified Telecommunication Services - 0.2% | |||
| Alternative Carriers - 0.2% | |||
| Vonage Holdings Corp. (a) | 3,400 | 21,726 | |
| Electronic Equipment & Components - 1.0% | |||
| Electronic Components - 0.2% | |||
| II-VI, Inc. (a) | 1,700 | 28,900 | |
| Electronic Manufacturing Services - 0.8% | |||
| TE Connectivity Ltd. | 1,800 | 109,656 | |
| TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 138,556 | ||
| Internet Software & Services - 1.3% | |||
| Internet Software & Services - 1.3% | |||
| Google, Inc.: | |||
| Class A (a) | 49 | 32,218 | |
| Class C | 98 | 61,310 | |
| Rackspace Hosting, Inc. (a) | 800 | 27,224 | |
| Web.com Group, Inc. (a) | 2,200 | 54,758 | |
| 175,510 | |||
| Semiconductors & Semiconductor Equipment - 1.6% | |||
| Semiconductors - 1.6% | |||
| Broadcom Corp. Class A | 350 | 17,714 | |
| EZchip Semiconductor Ltd. (a) | 1,000 | 16,500 | |
| GSI Technology, Inc. (a) | 2,900 | 14,935 | |
| Marvell Technology Group Ltd. | 6,200 | 77,128 | |
| Maxim Integrated Products, Inc. | 1,690 | 57,528 | |
| Semtech Corp. (a) | 1,300 | 22,867 | |
| 206,672 | |||
| Software - 1.0% | |||
| Application Software - 0.2% | |||
| BroadSoft, Inc. (a) | 400 | 13,968 | |
| Comverse, Inc. (a) | 500 | 10,135 | |
| 24,103 | |||
| Systems Software - 0.8% | |||
| Oracle Corp. | 1,480 | 59,111 | |
| Rovi Corp. (a)(b) | 4,000 | 43,960 | |
| 103,071 | |||
| TOTAL SOFTWARE | 127,174 | ||
| Technology Hardware, Storage & Peripherals - 2.8% | |||
| Technology Hardware, Storage & Peripherals - 2.8% | |||
| BlackBerry Ltd. (a) | 25,800 | 200,032 | |
| Hewlett-Packard Co. | 2,200 | 67,144 | |
| QLogic Corp. (a) | 5,100 | 45,237 | |
| Samsung Electronics Co. Ltd. | 58 | 58,943 | |
| 371,356 | |||
| TOTAL COMMON STOCKS | |||
| (Cost $10,922,531) | 13,130,381 | ||
| Money Market Funds - 0.4% | |||
| Fidelity Securities Lending Cash Central Fund, 0.18% (c)(d) | |||
| (Cost $51,675) | 51,675 | 51,675 | |
| TOTAL INVESTMENT PORTFOLIO - 100.5% | |||
| (Cost $10,974,206) | 13,182,056 | ||
| NET OTHER ASSETS (LIABILITIES) - (0.5)% | (69,129) | ||
| NET ASSETS - 100% | $13,112,927 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) 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.
(d) Investment made with cash collateral received from securities on loan.
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 | $614 |
| Fidelity Securities Lending Cash Central Fund | 2,878 |
| Total | $3,492 |
Investment Valuation
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 81.6% |
| Sweden | 4.7% |
| Finland | 3.9% |
| France | 3.8% |
| Canada | 2.3% |
| Israel | 1.8% |
| Others (Individually Less Than 1%) | 1.9% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Communications Equipment Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $42,861) — See accompanying schedule: Unaffiliated issuers (cost $10,922,531) | $13,130,381 | |
| Fidelity Central Funds (cost $51,675) | 51,675 | |
| Total Investments (cost $10,974,206) | $13,182,056 | |
| Receivable for investments sold | 92,345 | |
| Receivable for fund shares sold | 782 | |
| Dividends receivable | 852 | |
| Distributions receivable from Fidelity Central Funds | 16 | |
| Receivable from investment adviser for expense reductions | 1,984 | |
| Other receivables | 164 | |
| Total assets | 13,278,199 | |
| Liabilities | ||
| Payable to custodian bank | $21,463 | |
| Payable for investments purchased | 34,099 | |
| Payable for fund shares redeemed | 4,817 | |
| Accrued management fee | 5,901 | |
| Distribution and service plan fees payable | 5,294 | |
| Other affiliated payables | 3,762 | |
| Other payables and accrued expenses | 38,261 | |
| Collateral on securities loaned, at value | 51,675 | |
| Total liabilities | 165,272 | |
| Net Assets | $13,112,927 | |
| Net Assets consist of: | ||
| Paid in capital | $10,672,818 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 232,260 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 2,207,849 | |
| Net Assets | $13,112,927 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($4,806,397 ÷ 382,262 shares) | $12.57 | |
| Maximum offering price per share (100/94.25 of $12.57) | $13.34 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($4,028,933 ÷ 331,565 shares) | $12.15 | |
| Maximum offering price per share (100/96.50 of $12.15) | $12.59 | |
| Class B: | ||
| Net Asset Value and offering price per share ($288,051 ÷ 25,541 shares)(a) | $11.28 | |
| Class C: | ||
| Net Asset Value and offering price per share ($2,965,777 ÷ 263,095 shares)(a) | $11.27 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($1,023,769 ÷ 78,674 shares) | $13.01 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $224,311 | |
| Income from Fidelity Central Funds | 3,492 | |
| Total income | 227,803 | |
| Expenses | ||
| Management fee | $81,024 | |
| Transfer agent fees | 43,997 | |
| Distribution and service plan fees | 65,847 | |
| Accounting and security lending fees | 5,882 | |
| Custodian fees and expenses | 10,816 | |
| Independent trustees' compensation | 261 | |
| Registration fees | 54,499 | |
| Audit | 46,420 | |
| Legal | 253 | |
| Miscellaneous | 244 | |
| Total expenses before reductions | 309,243 | |
| Expense reductions | (75,387) | 233,856 |
| Net investment income (loss) | (6,053) | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 968,286 | |
| Foreign currency transactions | (817) | |
| Total net realized gain (loss) | 967,469 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (133,967) | |
| Assets and liabilities in foreign currencies | (3) | |
| Total change in net unrealized appreciation (depreciation) | (133,970) | |
| Net gain (loss) | 833,499 | |
| Net increase (decrease) in net assets resulting from operations | $827,446 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $(6,053) | $32,595 |
| Net realized gain (loss) | 967,469 | 685,793 |
| Change in net unrealized appreciation (depreciation) | (133,970) | 1,223,850 |
| Net increase (decrease) in net assets resulting from operations | 827,446 | 1,942,238 |
| Distributions to shareholders from net investment income | (25,322) | – |
| Share transactions - net increase (decrease) | (2,143,838) | 1,539,076 |
| Redemption fees | 500 | 568 |
| Total increase (decrease) in net assets | (1,341,214) | 3,481,882 |
| Net Assets | ||
| Beginning of period | 14,454,141 | 10,972,259 |
| End of period (including undistributed net investment income of $0 and $23,615, respectively) | $13,112,927 | $14,454,141 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Communications Equipment Fund Class A
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $11.94 | $10.22 | $7.71 | $9.73 | $8.67 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .02 | .04B | .02 | (.01) | (.06) |
| Net realized and unrealized gain (loss) | .64 | 1.68 | 2.50 | (1.81) | 1.12 |
| Total from investment operations | .66 | 1.72 | 2.52 | (1.82) | 1.06 |
| Distributions from net investment income | (.03) | – | (.01) | – | – |
| Distributions from net realized gain | – | – | – | (.20) | – |
| Total distributions | (.03) | – | (.01) | (.20) | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $12.57 | $11.94 | $10.22 | $7.71 | $9.73 |
| Total ReturnD,E | 5.54% | 16.83% | 32.65% | (18.88)% | 12.23% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.90% | 1.96% | 2.22% | 1.96% | 1.64% |
| Expenses net of fee waivers, if any | 1.40% | 1.40% | 1.40% | 1.40% | 1.40% |
| Expenses net of all reductions | 1.39% | 1.39% | 1.37% | 1.39% | 1.39% |
| Net investment income (loss) | .16% | .40%B | .18% | (.16)% | (.60)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $4,806 | $4,725 | $3,962 | $3,568 | $8,787 |
| Portfolio turnover rateH | 60% | 160% | 33% | 79% | 101% |
A Calculated based on average shares outstanding during the period.
B Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .14%.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Communications Equipment Fund Class T
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $11.55 | $9.91 | $7.49 | $9.48 | $8.46 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.01) | .02B | (.01) | (.03) | (.09) |
| Net realized and unrealized gain (loss) | .62 | 1.62 | 2.43 | (1.76) | 1.11 |
| Total from investment operations | .61 | 1.64 | 2.42 | (1.79) | 1.02 |
| Distributions from net investment income | (.01) | – | – | – | – |
| Distributions from net realized gain | – | – | – | (.20) | – |
| Total distributions | (.01) | – | – | (.20) | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $12.15 | $11.55 | $9.91 | $7.49 | $9.48 |
| Total ReturnD,E | 5.24% | 16.55% | 32.31% | (19.06)% | 12.06% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 2.19% | 2.25% | 2.52% | 2.27% | 1.97% |
| Expenses net of fee waivers, if any | 1.65% | 1.65% | 1.65% | 1.65% | 1.65% |
| Expenses net of all reductions | 1.64% | 1.64% | 1.62% | 1.64% | 1.64% |
| Net investment income (loss) | (.09)% | .14%B | (.07)% | (.41)% | (.85)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $4,029 | $3,995 | $3,342 | $2,843 | $4,607 |
| Portfolio turnover rateH | 60% | 160% | 33% | 79% | 101% |
A Calculated based on average shares outstanding during the period.
B Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.11) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Communications Equipment Fund Class B
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $10.77 | $9.28 | $7.05 | $8.99 | $8.06 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.07) | (.04)B | (.05) | (.07) | (.13) |
| Net realized and unrealized gain (loss) | .58 | 1.53 | 2.28 | (1.67) | 1.06 |
| Total from investment operations | .51 | 1.49 | 2.23 | (1.74) | .93 |
| Distributions from net realized gain | – | – | – | (.20) | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $11.28 | $10.77 | $9.28 | $7.05 | $8.99 |
| Total ReturnD,E | 4.74% | 16.06% | 31.63% | (19.56)% | 11.54% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 2.68% | 2.74% | 3.00% | 2.71% | 2.47% |
| Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
| Expenses net of all reductions | 2.14% | 2.14% | 2.13% | 2.13% | 2.14% |
| Net investment income (loss) | (.60)% | (.36)%B | (.57)% | (.91)% | (1.35)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $288 | $399 | $480 | $570 | $1,316 |
| Portfolio turnover rateH | 60% | 160% | 33% | 79% | 101% |
A Calculated based on average shares outstanding during the period.
B Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.61) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Communications Equipment Fund Class C
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $10.76 | $9.28 | $7.05 | $8.98 | $8.06 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.07) | (.04)B | (.05) | (.07) | (.13) |
| Net realized and unrealized gain (loss) | .58 | 1.52 | 2.28 | (1.66) | 1.05 |
| Total from investment operations | .51 | 1.48 | 2.23 | (1.73) | .92 |
| Distributions from net realized gain | – | – | – | (.20) | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $11.27 | $10.76 | $9.28 | $7.05 | $8.98 |
| Total ReturnD,E | 4.74% | 15.95% | 31.63% | (19.47)% | 11.41% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 2.65% | 2.73% | 2.98% | 2.71% | 2.40% |
| Expenses net of fee waivers, if any | 2.15% | 2.15% | 2.15% | 2.15% | 2.15% |
| Expenses net of all reductions | 2.14% | 2.14% | 2.12% | 2.14% | 2.14% |
| Net investment income (loss) | (.59)% | (.35)%B | (.57)% | (.91)% | (1.35)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $2,966 | $2,744 | $2,334 | $2,142 | $5,866 |
| Portfolio turnover rateH | 60% | 160% | 33% | 79% | 101% |
A Calculated based on average shares outstanding during the period.
B Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.61) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Communications Equipment Fund Class I
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $12.35 | $10.55 | $7.95 | $10.00 | $8.88 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .05 | .08B | .04 | .01 | (.04) |
| Net realized and unrealized gain (loss) | .67 | 1.72 | 2.58 | (1.86) | 1.16 |
| Total from investment operations | .72 | 1.80 | 2.62 | (1.85) | 1.12 |
| Distributions from net investment income | (.06) | – | (.02) | – | – |
| Distributions from net realized gain | – | – | – | (.20) | – |
| Total distributions | (.06) | – | (.02) | (.20) | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $13.01 | $12.35 | $10.55 | $7.95 | $10.00 |
| Total ReturnD | 5.83% | 17.06% | 32.92% | (18.66)% | 12.61% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.57% | 1.45% | 1.93% | 1.66% | 1.22% |
| Expenses net of fee waivers, if any | 1.15% | 1.15% | 1.15% | 1.15% | 1.15% |
| Expenses net of all reductions | 1.14% | 1.14% | 1.12% | 1.13% | 1.14% |
| Net investment income (loss) | .41% | .65%B | .43% | .10% | (.35)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $1,024 | $2,592 | $855 | $721 | $2,855 |
| Portfolio turnover rateG | 60% | 160% | 33% | 79% | 101% |
A Calculated based on average shares outstanding during the period.
B Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .39%.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, net operating losses, 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 | $2,589,310 |
| Gross unrealized depreciation | (437,689) |
| Net unrealized appreciation (depreciation) on securities | $2,151,621 |
| Tax cost | $11,030,435 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed long-term capital gain | $288,488 |
| Net unrealized appreciation (depreciation) on securities and other investments | $2,151,621 |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $25,322 | $ - |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $8,595,689 and $9,004,220, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $12,585 | $556 |
| Class T | .25% | .25% | 20,834 | – |
| Class B | .75% | .25% | 3,659 | 2,744 |
| Class C | .75% | .25% | 28,769 | 3,707 |
| $65,847 | $7,007 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $3,870 |
| Class T | 1,201 |
| Class B* | 61 |
| Class C* | 235 |
| $5,367 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $15,615 | .31 |
| Class T | 14,012 | .34 |
| Class B | 1,133 | .31 |
| Class C | 8,961 | .31 |
| Class I | 4,276 | .19 |
| $ 43,997 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $670 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $22 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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 $2,878.
8. Expense Reductions.
The investment adviser voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, including commitment fees, are excluded from this reimbursement.
The following classes were in reimbursement during the period:
| Expense Limitations | Reimbursement | |
| Class A | 1.40% | $25,236 |
| Class T | 1.65% | 22,436 |
| Class B | 2.15% | 1,943 |
| Class C | 2.15% | 14,490 |
| Class I | 1.15% | 9,687 |
| $73,792 |
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $1,452 for the period.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $55 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $14 |
| Class T | 8 |
| Class B | 1 |
| Class C | 8 |
| Class I | 57 |
| $88 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $11,846 | $– |
| Class T | 1,754 | – |
| Class I | 11,722 | – |
| Total | $25,322 | $– |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 153,268 | 118,184 | $1,925,058 | $1,378,044 |
| Reinvestment of distributions | 914 | – | 11,238 | – |
| Shares redeemed | (167,571) | (110,145) | (2,111,373) | (1,218,133) |
| Net increase (decrease) | (13,389) | 8,039 | $(175,077) | $159,911 |
| Class T | ||||
| Shares sold | 42,233 | 51,248 | $505,832 | $564,493 |
| Reinvestment of distributions | 146 | – | 1,738 | – |
| Shares redeemed | (56,809) | (42,610) | (686,152) | (470,057) |
| Net increase (decrease) | (14,430) | 8,638 | $(178,582) | $94,436 |
| Class B | ||||
| Shares sold | – | 64 | $– | $624 |
| Shares redeemed | (11,477) | (14,700) | (128,010) | (144,244) |
| Net increase (decrease) | (11,477) | (14,636) | $(128,010) | $(143,620) |
| Class C | ||||
| Shares sold | 55,503 | 74,081 | $631,530 | $769,830 |
| Shares redeemed | (47,426) | (70,636) | (530,907) | (715,373) |
| Net increase (decrease) | 8,077 | 3,445 | $100,623 | $54,457 |
| Class I | ||||
| Shares sold | 18,312 | 1,448,765 | $232,557 | $17,115,064 |
| Reinvestment of distributions | 868 | – | 11,030 | – |
| Shares redeemed | (150,382) | (1,319,932) | (2,006,379) | (15,741,172) |
| Net increase (decrease) | (131,202) | 128,833 | $(1,762,792) | $1,373,892 |
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.
Fidelity Advisor® Consumer Discretionary Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class I | 22.60% | 19.72% | 9.32% |
Prior to October 1, 2006, the 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 I on July 31, 2005. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values | ||
| $24,388 | Fidelity Advisor® Consumer Discretionary Fund - Class I | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Consumer Discretionary Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Peter Dixon: For the year, the fund's share classes performed in line with the 22.15% return of the MSCI U.S. IMI Consumer Discretionary 25/50 Index and led the broader S&P 500®. (For specific class-level results, please see the Performance section of this report.) Consumer discretionary stocks easily outperformed the broad market, as an improving job market and housing fundamentals plus low interest rates and lower energy costs helped put cash in U.S. consumers' pockets. Versus the sector benchmark, security selection overall was positive, particularly within restaurants, movies & entertainment, broadcasting and apparel retail. A large underweighting in Ford Motor helped the most. Ford's stock suffered from several setbacks the past year, including the announcements of a weak 2015 outlook in September 2014, and a year-over-year sales decline in March. Shares declined again in July after crash tests for Ford's new aluminum-bodied truck raised concerns about the cost of repairs and its overall safety. On the flip side, positioning in Internet retail and picks in the hotels, resorts & cruise lines segment hurt. Looking at individual names, underweighting Amazon.com was the fund's biggest relative detractor. Amazon shares outperformed during the period, driven in part by first-quarter revenue growth of 15% as well as optimism for Amazon Web Services, which offers cloud-based computing power to both startups and established firms.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.Fidelity Advisor® Consumer Discretionary Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| The Walt Disney Co. | 8.0 | 7.6 |
| Amazon.com, Inc. | 7.1 | 1.4 |
| Comcast Corp. Class A | 5.4 | 5.8 |
| NIKE, Inc. Class B | 4.6 | 3.3 |
| Starbucks Corp. | 4.6 | 3.9 |
| Hilton Worldwide Holdings, Inc. | 4.6 | 1.4 |
| Home Depot, Inc. | 4.5 | 5.5 |
| L Brands, Inc. | 4.2 | 4.1 |
| Las Vegas Sands Corp. | 3.0 | 1.7 |
| Macy's, Inc. | 2.5 | 0.0 |
| 48.5 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Media | 23.0% | |
| Hotels, Restaurants & Leisure | 22.3% | |
| Specialty Retail | 17.9% | |
| Internet & Catalog Retail | 8.1% | |
| Textiles, Apparel & Luxury Goods | 6.2% | |
| All Others* | 22.5% | |
| As of January 31, 2015 | ||
| Media | 22.5% | |
| Hotels, Restaurants & Leisure | 21.1% | |
| Specialty Retail | 19.9% | |
| Textiles, Apparel & Luxury Goods | 11.7% | |
| Internet & Catalog Retail | 5.1% | |
| All Others* | 19.7% | |
* Includes short-term investments and net other assets (liabilities).
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity Advisor® Consumer Discretionary Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 97.8% | |||
| Shares | Value | ||
| Auto Components - 3.2% | |||
| Auto Parts & Equipment - 3.2% | |||
| Delphi Automotive PLC | 41,084 | $3,207,839 | |
| Tenneco, Inc. (a) | 72,000 | 3,586,320 | |
| Visteon Corp. (a) | 6,500 | 646,945 | |
| 7,441,104 | |||
| Automobiles - 2.8% | |||
| Automobile Manufacturers - 1.6% | |||
| Tata Motors Ltd. (a) | 93,448 | 560,070 | |
| Tesla Motors, Inc. (a) | 11,500 | 3,060,725 | |
| 3,620,795 | |||
| Motorcycle Manufacturers - 1.2% | |||
| Harley-Davidson, Inc. | 49,500 | 2,885,850 | |
| TOTAL AUTOMOBILES | 6,506,645 | ||
| Beverages - 3.2% | |||
| Distillers & Vintners - 1.8% | |||
| Constellation Brands, Inc. Class A (sub. vtg.) | 35,927 | 4,311,959 | |
| Soft Drinks - 1.4% | |||
| Monster Beverage Corp. (a) | 21,000 | 3,224,550 | |
| TOTAL BEVERAGES | 7,536,509 | ||
| Food Products - 1.0% | |||
| Packaged Foods & Meats - 1.0% | |||
| Associated British Foods PLC | 21,000 | 1,057,300 | |
| Keurig Green Mountain, Inc. | 16,060 | 1,205,142 | |
| 2,262,442 | |||
| Hotels, Restaurants & Leisure - 22.3% | |||
| Casinos & Gaming - 4.0% | |||
| Las Vegas Sands Corp. | 126,880 | 7,110,355 | |
| Wynn Resorts Ltd. | 23,400 | 2,415,582 | |
| 9,525,937 | |||
| Hotels, Resorts & Cruise Lines - 7.4% | |||
| Accor SA | 38,114 | 1,870,037 | |
| Hilton Worldwide Holdings, Inc. | 397,400 | 10,670,190 | |
| Wyndham Worldwide Corp. | 57,706 | 4,761,899 | |
| 17,302,126 | |||
| Leisure Facilities - 1.2% | |||
| Vail Resorts, Inc. | 25,160 | 2,759,800 | |
| Restaurants - 9.7% | |||
| Dave & Buster's Entertainment, Inc. | 34,900 | 1,354,120 | |
| Domino's Pizza, Inc. | 13,309 | 1,515,097 | |
| Fiesta Restaurant Group, Inc. (a) | 33,510 | 1,947,936 | |
| Jubilant Foodworks Ltd. (a) | 34,626 | 991,433 | |
| McDonald's Corp. | 13,700 | 1,368,082 | |
| Papa John's International, Inc. | 26,792 | 2,024,404 | |
| Ruth's Hospitality Group, Inc. | 166,300 | 2,915,239 | |
| Starbucks Corp. | 184,306 | 10,676,847 | |
| 22,793,158 | |||
| TOTAL HOTELS, RESTAURANTS & LEISURE | 52,381,021 | ||
| Household Durables - 3.1% | |||
| Homebuilding - 2.4% | |||
| D.R. Horton, Inc. | 64,800 | 1,923,912 | |
| Lennar Corp. Class A | 34,140 | 1,810,786 | |
| PulteGroup, Inc. | 91,000 | 1,885,520 | |
| 5,620,218 | |||
| Housewares & Specialties - 0.7% | |||
| Jarden Corp. (a) | 30,900 | 1,699,500 | |
| TOTAL HOUSEHOLD DURABLES | 7,319,718 | ||
| Household Products - 0.2% | |||
| Household Products - 0.2% | |||
| Spectrum Brands Holdings, Inc. | 4,760 | 504,322 | |
| Internet & Catalog Retail - 8.1% | |||
| Internet Retail - 8.1% | |||
| Amazon.com, Inc. (a) | 31,160 | 16,706,434 | |
| Ocado Group PLC (a)(b) | 373,142 | 2,313,387 | |
| 19,019,821 | |||
| Internet Software & Services - 1.9% | |||
| Internet Software & Services - 1.9% | |||
| Alibaba Group Holding Ltd. sponsored ADR (b) | 31,800 | 2,491,212 | |
| HomeAway, Inc. (a) | 38,800 | 1,165,552 | |
| JUST EAT Ltd. (a) | 128,900 | 877,654 | |
| 4,534,418 | |||
| Leisure Products - 1.2% | |||
| Leisure Products - 1.2% | |||
| Polaris Industries, Inc. | 19,900 | 2,727,494 | |
| Media - 23.0% | |||
| Advertising - 0.6% | |||
| MDC Partners, Inc. Class A (sub. vtg.) | 73,800 | 1,301,094 | |
| Broadcasting - 2.4% | |||
| ITV PLC | 1,305,229 | 5,721,539 | |
| Cable & Satellite - 9.2% | |||
| Charter Communications, Inc. Class A (a)(b) | 17,140 | 3,185,640 | |
| Comcast Corp. Class A | 201,500 | 12,575,615 | |
| Naspers Ltd. Class N | 32,865 | 4,598,411 | |
| Starz Series A (a) | 29,100 | 1,177,095 | |
| 21,536,761 | |||
| Movies & Entertainment - 10.8% | |||
| Lions Gate Entertainment Corp. | 67,800 | 2,656,404 | |
| The Walt Disney Co. | 155,506 | 18,660,719 | |
| Time Warner, Inc. | 45,300 | 3,988,212 | |
| 25,305,335 | |||
| TOTAL MEDIA | 53,864,729 | ||
| Multiline Retail - 2.9% | |||
| Department Stores - 2.5% | |||
| Macy's, Inc. | 84,800 | 5,856,288 | |
| General Merchandise Stores - 0.4% | |||
| B&M European Value Retail S.A. | 166,711 | 928,648 | |
| TOTAL MULTILINE RETAIL | 6,784,936 | ||
| Software - 0.8% | |||
| Application Software - 0.5% | |||
| Mobileye NV (a) | 19,200 | 1,153,920 | |
| Home Entertainment Software - 0.3% | |||
| Playtech Ltd. | 55,096 | 779,959 | |
| TOTAL SOFTWARE | 1,933,879 | ||
| Specialty Retail - 17.9% | |||
| Apparel Retail - 8.3% | |||
| L Brands, Inc. | 122,800 | 9,912,416 | |
| Ross Stores, Inc. | 102,520 | 5,449,963 | |
| TJX Companies, Inc. | 28,208 | 1,969,483 | |
| United Arrows Ltd. | 14,200 | 567,152 | |
| Zumiez, Inc. (a) | 62,528 | 1,631,981 | |
| 19,530,995 | |||
| Automotive Retail - 3.8% | |||
| AutoZone, Inc. (a) | 6,380 | 4,471,997 | |
| O'Reilly Automotive, Inc. (a) | 18,700 | 4,493,797 | |
| 8,965,794 | |||
| Home Improvement Retail - 4.5% | |||
| Home Depot, Inc. | 89,360 | 10,457,801 | |
| Specialty Stores - 1.3% | |||
| Staples, Inc. | 215,700 | 3,172,947 | |
| TOTAL SPECIALTY RETAIL | 42,127,537 | ||
| Textiles, Apparel & Luxury Goods - 6.2% | |||
| Apparel, Accessories & Luxury Goods - 1.6% | |||
| G-III Apparel Group Ltd. (a) | 50,880 | 3,675,062 | |
| Footwear - 4.6% | |||
| NIKE, Inc. Class B | 94,317 | 10,867,205 | |
| TOTAL TEXTILES, APPAREL & LUXURY GOODS | 14,542,267 | ||
| TOTAL COMMON STOCKS | |||
| (Cost $197,894,359) | 229,486,842 | ||
| Money Market Funds - 4.3% | |||
| Fidelity Cash Central Fund, 0.17% (c) | 4,196,516 | 4,196,516 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (c)(d) | 5,891,605 | 5,891,605 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $10,088,121) | 10,088,121 | ||
| TOTAL INVESTMENT PORTFOLIO - 102.1% | |||
| (Cost $207,982,480) | 239,574,963 | ||
| NET OTHER ASSETS (LIABILITIES) - (2.1)% | (4,834,640) | ||
| NET ASSETS - 100% | $234,740,323 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) 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.
(d) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $5,293 |
| Fidelity Securities Lending Cash Central Fund | 17,197 |
| Total | $22,490 |
Investment Valuation
The following is a summary of the inputs used, as of July 31, 2015, 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 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 | $229,486,842 | $228,926,772 | $560,070 | $-- |
| Money Market Funds | 10,088,121 | 10,088,121 | -- | -- |
| Total Investments in Securities: | $239,574,963 | $239,014,893 | $560,070 | $-- |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 86.6% |
| United Kingdom | 4.7% |
| South Africa | 2.0% |
| Canada | 1.7% |
| Bailiwick of Jersey | 1.4% |
| Cayman Islands | 1.0% |
| Others (Individually Less Than 1%) | 2.6% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Consumer Discretionary Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $5,682,321) — See accompanying schedule: Unaffiliated issuers (cost $197,894,359) | $229,486,842 | |
| Fidelity Central Funds (cost $10,088,121) | 10,088,121 | |
| Total Investments (cost $207,982,480) | $239,574,963 | |
| Receivable for investments sold | 2,913,220 | |
| Receivable for fund shares sold | 2,113,744 | |
| Dividends receivable | 14,223 | |
| Distributions receivable from Fidelity Central Funds | 3,766 | |
| Other receivables | 4,099 | |
| Total assets | 244,624,015 | |
| Liabilities | ||
| Payable for investments purchased | $3,288,619 | |
| Payable for fund shares redeemed | 425,540 | |
| Accrued management fee | 101,101 | |
| Distribution and service plan fees payable | 67,968 | |
| Other affiliated payables | 42,025 | |
| Other payables and accrued expenses | 66,834 | |
| Collateral on securities loaned, at value | 5,891,605 | |
| Total liabilities | 9,883,692 | |
| Net Assets | $234,740,323 | |
| Net Assets consist of: | ||
| Paid in capital | $197,817,912 | |
| Undistributed net investment income | 175,568 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 5,170,553 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 31,576,290 | |
| Net Assets | $234,740,323 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($115,026,646 ÷ 5,348,507 shares) | $21.51 | |
| Maximum offering price per share (100/94.25 of $21.51) | $22.82 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($25,947,585 ÷ 1,280,672 shares) | $20.26 | |
| Maximum offering price per share (100/96.50 of $20.26) | $20.99 | |
| Class B: | ||
| Net Asset Value and offering price per share ($1,438,259 ÷ 80,686 shares)(a) | $17.83 | |
| Class C: | ||
| Net Asset Value and offering price per share ($43,998,668 ÷ 2,466,659 shares)(a) | $17.84 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($48,329,165 ÷ 2,095,901 shares) | $23.06 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $2,177,357 | |
| Income from Fidelity Central Funds | 22,490 | |
| Total income | 2,199,847 | |
| Expenses | ||
| Management fee | $852,448 | |
| Transfer agent fees | 332,412 | |
| Distribution and service plan fees | 581,814 | |
| Accounting and security lending fees | 60,923 | |
| Custodian fees and expenses | 19,378 | |
| Independent trustees' compensation | 2,558 | |
| Registration fees | 87,646 | |
| Audit | 53,755 | |
| Legal | 1,648 | |
| Miscellaneous | 1,495 | |
| Total expenses before reductions | 1,994,077 | |
| Expense reductions | (13,063) | 1,981,014 |
| Net investment income (loss) | 218,833 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers (net of foreign taxes of $5,922) | 7,999,773 | |
| Foreign currency transactions | (5,782) | |
| Total net realized gain (loss) | 7,993,991 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities (net of increase in deferred foreign taxes of $15,238) | 21,202,533 | |
| Assets and liabilities in foreign currencies | (1,790) | |
| Total change in net unrealized appreciation (depreciation) | 21,200,743 | |
| Net gain (loss) | 29,194,734 | |
| Net increase (decrease) in net assets resulting from operations | $29,413,567 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $218,833 | $(430,703) |
| Net realized gain (loss) | 7,993,991 | 17,599,668 |
| Change in net unrealized appreciation (depreciation) | 21,200,743 | (7,703,576) |
| Net increase (decrease) in net assets resulting from operations | 29,413,567 | 9,465,389 |
| Distributions to shareholders from net realized gain | (13,923,456) | (8,442,076) |
| Share transactions - net increase (decrease) | 97,114,685 | 27,584,653 |
| Redemption fees | 10,114 | 3,923 |
| Total increase (decrease) in net assets | 112,614,910 | 28,611,889 |
| Net Assets | ||
| Beginning of period | 122,125,413 | 93,513,524 |
| End of period (including undistributed net investment income of $175,568 and $0, respectively) | $234,740,323 | $122,125,413 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Consumer Discretionary Fund Class A
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $19.75 | $19.59 | $16.22 | $16.00 | $12.75 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .05 | (.04) | (.02) | .01 | (.02) |
| Net realized and unrealized gain (loss) | 3.99 | 1.75 | 5.04 | 1.07 | 3.27 |
| Total from investment operations | 4.04 | 1.71 | 5.02 | 1.08 | 3.25 |
| Distributions from net investment income | – | – | – | (.03) | – |
| Distributions from net realized gain | (2.28) | (1.55) | (1.65) | (.83) | – |
| Total distributions | (2.28) | (1.55) | (1.65) | (.86) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $21.51 | $19.75 | $19.59 | $16.22 | $16.00 |
| Total ReturnC,D | 22.26% | 9.28% | 33.65% | 7.96% | 25.49% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.15% | 1.20% | 1.31% | 1.38% | 1.39% |
| Expenses net of fee waivers, if any | 1.15% | 1.20% | 1.31% | 1.38% | 1.39% |
| Expenses net of all reductions | 1.14% | 1.19% | 1.29% | 1.37% | 1.38% |
| Net investment income (loss) | .27% | (.21)% | (.10)% | .04% | (.15)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $115,027 | $59,089 | $45,292 | $26,547 | $23,447 |
| Portfolio turnover rateG | 71% | 171% | 146% | 217% | 179% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Consumer Discretionary Fund Class T
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $18.75 | $18.68 | $15.57 | $15.43 | $12.32 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.01) | (.10) | (.06) | (.03) | (.06) |
| Net realized and unrealized gain (loss) | 3.77 | 1.67 | 4.81 | 1.02 | 3.17 |
| Total from investment operations | 3.76 | 1.57 | 4.75 | .99 | 3.11 |
| Distributions from net investment income | – | – | – | (.02) | – |
| Distributions from net realized gain | (2.25) | (1.50) | (1.64) | (.83) | – |
| Total distributions | (2.25) | (1.50) | (1.64) | (.85) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $20.26 | $18.75 | $18.68 | $15.57 | $15.43 |
| Total ReturnC,D | 21.92% | 8.94% | 33.25% | 7.62% | 25.24% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.46% | 1.50% | 1.60% | 1.64% | 1.66% |
| Expenses net of fee waivers, if any | 1.45% | 1.50% | 1.60% | 1.64% | 1.65% |
| Expenses net of all reductions | 1.45% | 1.49% | 1.58% | 1.63% | 1.64% |
| Net investment income (loss) | (.03)% | (.51)% | (.39)% | (.23)% | (.40)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $25,948 | $18,779 | $15,613 | $10,447 | $9,897 |
| Portfolio turnover rateG | 71% | 171% | 146% | 217% | 179% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Consumer Discretionary Fund Class B
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $16.76 | $16.85 | $14.23 | $14.23 | $11.42 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.09) | (.17) | (.13) | (.10) | (.12) |
| Net realized and unrealized gain (loss) | 3.34 | 1.49 | 4.36 | .93 | 2.93 |
| Total from investment operations | 3.25 | 1.32 | 4.23 | .83 | 2.81 |
| Distributions from net realized gain | (2.18) | (1.41) | (1.61) | (.83) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $17.83 | $16.76 | $16.85 | $14.23 | $14.23 |
| Total ReturnC,D | 21.35% | 8.36% | 32.61% | 7.11% | 24.61% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.96% | 2.01% | 2.09% | 2.13% | 2.15% |
| Expenses net of fee waivers, if any | 1.96% | 2.01% | 2.09% | 2.13% | 2.15% |
| Expenses net of all reductions | 1.95% | 2.01% | 2.07% | 2.12% | 2.13% |
| Net investment income (loss) | (.54)% | (1.02)% | (.88)% | (.72)% | (.90)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $1,438 | $1,824 | $2,389 | $2,577 | $3,170 |
| Portfolio turnover rateG | 71% | 171% | 146% | 217% | 179% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Consumer Discretionary Fund Class C
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $16.79 | $16.90 | $14.27 | $14.26 | $11.44 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.08) | (.16) | (.12) | (.09) | (.12) |
| Net realized and unrealized gain (loss) | 3.34 | 1.49 | 4.37 | .93 | 2.94 |
| Total from investment operations | 3.26 | 1.33 | 4.25 | .84 | 2.82 |
| Distributions from net realized gain | (2.21) | (1.44) | (1.62) | (.83) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $17.84 | $16.79 | $16.90 | $14.27 | $14.26 |
| Total ReturnC,D | 21.37% | 8.44% | 32.68% | 7.17% | 24.65% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.91% | 1.97% | 2.04% | 2.09% | 2.11% |
| Expenses net of fee waivers, if any | 1.91% | 1.97% | 2.04% | 2.09% | 2.11% |
| Expenses net of all reductions | 1.90% | 1.96% | 2.02% | 2.08% | 2.09% |
| Net investment income (loss) | (.49)% | (.97)% | (.83)% | (.68)% | (.86)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $43,999 | $20,726 | $17,176 | $13,507 | $7,341 |
| Portfolio turnover rateG | 71% | 171% | 146% | 217% | 179% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Consumer Discretionary Fund Class I
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $21.00 | $20.72 | $17.04 | $16.72 | $13.27 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .12 | .02 | .04 | .07 | .03 |
| Net realized and unrealized gain (loss) | 4.26 | 1.85 | 5.32 | 1.13 | 3.42 |
| Total from investment operations | 4.38 | 1.87 | 5.36 | 1.20 | 3.45 |
| Distributions from net investment income | – | – | – | (.05) | – |
| Distributions from net realized gain | (2.32) | (1.59) | (1.68) | (.83) | – |
| Total distributions | (2.32) | (1.59) | (1.68) | (.88) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $23.06 | $21.00 | $20.72 | $17.04 | $16.72 |
| Total ReturnC | 22.60% | 9.61% | 34.06% | 8.33% | 26.00% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | .87% | .91% | .97% | 1.00% | 1.03% |
| Expenses net of fee waivers, if any | .87% | .91% | .97% | 1.00% | 1.03% |
| Expenses net of all reductions | .87% | .91% | .96% | .99% | 1.01% |
| Net investment income (loss) | .55% | .08% | .24% | .41% | .22% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $48,329 | $21,708 | $13,044 | $9,984 | $9,406 |
| Portfolio turnover rateF | 71% | 171% | 146% | 217% | 179% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of July 31, 2015, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. The Fund is subject to a tax imposed on capital gains by certain countries in which it invests. An estimated deferred tax liability for net unrealized appreciation on the applicable securities is included in Other payables and accrued expenses on the Statement of Assets & Liabilities.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, deferred trustees compensation and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $38,409,116 |
| Gross unrealized depreciation | (7,131,368) |
| Net unrealized appreciation (depreciation) on securities | $31,277,748 |
| Tax Cost | $208,297,215 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $ 175,135 |
| Undistributed long-term capital gain | $5,485,288 |
| Net unrealized appreciation (depreciation) on securities and other investments | $31,277,227 |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $1,683,775 | $ 3,587,518 |
| Long-term Capital Gains | 12,239,681 | 4,854,558 |
| Total | $13,923,456 | $ 8,442,076 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $191,450,583 and $109,983,718, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | –% | .25% | $183,150 | $4,690 |
| Class T | .25% | .25% | 108,166 | – |
| Class B | .75% | .25% | 15,129 | 11,351 |
| Class C | .75% | .25% | 275,369 | 85,212 |
| $581,814 | $101,253 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $81,079 |
| Class T | 8,899 |
| Class B* | 1,127 |
| Class C* | 5,191 |
| $96,296 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $153,861 | .21 |
| Class T | 56,296 | .26 |
| Class B | 4,018 | .27 |
| Class C | 61,326 | .22 |
| Class I | 56,911 | .18 |
| $332,412 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $2,428 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $209 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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 $17,197.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $9,604 for the period.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $814 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $1,304 |
| Class T | 365 |
| Class B | 17 |
| Class C | 487 |
| Class I | 472 |
| $2,645 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net realized gain | ||
| Class A | $6,488,273 | $4,039,405 |
| Class T | 2,268,637 | 1,360,265 |
| Class B | 224,707 | 196,098 |
| Class C | 2,737,034 | 1,615,723 |
| Class I | 2,204,805 | 1,230,585 |
| Total | $13,923,456 | $8,442,076 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 3,721,895 | 1,790,947 | $75,431,970 | $35,353,582 |
| Reinvestment of distributions | 314,662 | 185,416 | 5,921,151 | 3,485,073 |
| Shares redeemed | (1,680,428) | (1,296,503) | (32,834,119) | (25,801,801) |
| Net increase (decrease) | 2,356,129 | 679,860 | $48,519,002 | $13,036,854 |
| Class T | ||||
| Shares sold | 338,629 | 282,329 | $6,435,082 | $5,295,701 |
| Reinvestment of distributions | 122,984 | 73,668 | 2,187,662 | 1,316,540 |
| Shares redeemed | (182,245) | (190,454) | (3,405,237) | (3,590,224) |
| Net increase (decrease) | 279,368 | 165,543 | $5,217,507 | $3,022,017 |
| Class B | ||||
| Shares sold | 8,479 | 14,978 | $145,589 | $248,602 |
| Reinvestment of distributions | 10,956 | 9,369 | 172,497 | 150,012 |
| Shares redeemed | (47,549) | (57,312) | (771,428) | (968,609) |
| Net increase (decrease) | (28,114) | (32,965) | $(453,342) | $(569,995) |
| Class C | ||||
| Shares sold | 1,409,357 | 472,482 | $23,864,510 | $7,968,901 |
| Reinvestment of distributions | 157,518 | 89,038 | 2,481,906 | 1,432,315 |
| Shares redeemed | (334,437) | (343,513) | (5,460,293) | (5,820,370) |
| Net increase (decrease) | 1,232,438 | 218,007 | $20,886,123 | $3,580,846 |
| Class I | ||||
| Shares sold | 2,162,351 | 777,526 | $46,666,847 | $16,341,397 |
| Reinvestment of distributions | 93,807 | 51,438 | 1,886,667 | 1,028,758 |
| Shares redeemed | (1,194,006) | (424,690) | (25,608,119) | (8,855,224) |
| Net increase (decrease) | 1,062,152 | 404,274 | $22,945,395 | $8,514,931 |
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.
Fidelity Advisor® Electronics Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class I | 11.17% | 16.86% | 7.01% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Electronics Fund - Class I on July 31, 2005. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values | ||
| $19,693 | Fidelity Advisor® Electronics Fund - Class I | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Electronics Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Stephen Barwikowski: For the year, the fund's share classes handily bested the 4.81% return of the MSCI U.S. IMI Semiconductors & Semiconductor Equipment 25/50 Index but lagged the broadly based S&P 500®. (For specific class-level results, please see the Performance section of this report.) Versus the MSCI index, stock selection in the fund's primary category of semiconductors was the primary driver of our outperformance. Computer chipmaker Intel, in which we had a large underweighting, was the fund's biggest relative contributor as well as its largest holding. I questioned the firm's ability to sustain content-per-PC of roughly $115 in the face of alternatives in the mobile ecosystem that cost considerably less. A sizable overweighting in Freescale Semiconductor also was a significant contributor. In March, Netherlands-based rival NXP Semiconductors – another contributor – announced an agreement to acquire Freescale for a mix of cash and stock. Conversely, a large period-average underweighting in strong-performing Avago Technologies hurt our relative results. I built Avago into the fund's third-largest position by period end, which was roughly a market weighting. Like Avago, Skyworks Solutions is a provider of radio-frequency semiconductors and detracted from relative performance because I largely avoided its strong-performing shares.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.Fidelity Advisor® Electronics Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Intel Corp. | 15.3 | 7.6 |
| Broadcom Corp. Class A | 11.2 | 8.1 |
| Avago Technologies Ltd. | 6.1 | 0.2 |
| Micron Technology, Inc. | 5.8 | 3.8 |
| Maxim Integrated Products, Inc. | 5.0 | 4.1 |
| QUALCOMM, Inc. | 4.6 | 5.5 |
| Analog Devices, Inc. | 4.6 | 2.1 |
| Marvell Technology Group Ltd. | 4.5 | 4.2 |
| Semtech Corp. | 4.5 | 2.0 |
| Intersil Corp. Class A | 2.8 | 2.8 |
| 64.4 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Semiconductors & Semiconductor Equipment | 84.1% | |
| Technology Hardware, Storage & Peripherals | 5.8% | |
| Communications Equipment | 4.6% | |
| Electronic Equipment & Components | 3.4% | |
| Internet Software & Services | 0.6% | |
| All Others* | 1.5% | |
| As of January 31, 2015 | ||
| Semiconductors & Semiconductor Equipment | 75.9% | |
| Communications Equipment | 6.5% | |
| Electronic Equipment & Components | 6.2% | |
| Technology Hardware, Storage & Peripherals | 4.8% | |
| Internet Software & Services | 3.5% | |
| All Others* | 3.1% | |
* Includes short-term investments and net other assets (liabilities).
Fidelity Advisor® Electronics Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 98.3% | |||
| Shares | Value | ||
| Biotechnology - 0.0% | |||
| Biotechnology - 0.0% | |||
| Arrowhead Research Corp. warrants 5/21/17 (a) | 64,879 | $1 | |
| Communications Equipment - 4.6% | |||
| Communications Equipment - 4.6% | |||
| QUALCOMM, Inc. | 76,726 | 4,940,387 | |
| Diversified Telecommunication Services - 0.3% | |||
| Alternative Carriers - 0.3% | |||
| Intelsat SA (a) | 37,000 | 351,870 | |
| Electronic Equipment & Components - 3.1% | |||
| Electronic Manufacturing Services - 2.8% | |||
| Jabil Circuit, Inc. | 59,576 | 1,206,414 | |
| KEMET Corp. (a) | 53,500 | 124,655 | |
| TTM Technologies, Inc. (a) | 176,655 | 1,612,860 | |
| 2,943,929 | |||
| Technology Distributors - 0.3% | |||
| Avnet, Inc. | 8,400 | 350,532 | |
| TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 3,294,461 | ||
| Internet Software & Services - 0.6% | |||
| Internet Software & Services - 0.6% | |||
| Google, Inc.: | |||
| Class A (a) | 940 | 618,050 | |
| Class C | 5 | 3,128 | |
| 621,178 | |||
| Semiconductors & Semiconductor Equipment - 83.9% | |||
| Semiconductor Equipment - 3.6% | |||
| Amkor Technology, Inc. (a) | 167,500 | 738,675 | |
| KLA-Tencor Corp. | 8,200 | 435,010 | |
| Lam Research Corp. | 31,481 | 2,419,944 | |
| Xcerra Corp. (a) | 31,300 | 196,721 | |
| 3,790,350 | |||
| Semiconductors - 80.3% | |||
| Advanced Micro Devices, Inc. (a)(b) | 404,400 | 780,492 | |
| Altera Corp. | 16,800 | 834,288 | |
| Analog Devices, Inc. | 84,528 | 4,930,518 | |
| Applied Micro Circuits Corp. (a) | 40,437 | 251,114 | |
| Atmel Corp. | 348,979 | 2,889,546 | |
| Avago Technologies Ltd. | 52,100 | 6,519,794 | |
| Broadcom Corp. Class A | 235,601 | 11,923,767 | |
| Cavium, Inc. (a) | 7,300 | 494,940 | |
| Cirrus Logic, Inc. (a) | 24,200 | 798,842 | |
| Cree, Inc. (a)(b) | 55,980 | 1,379,907 | |
| Cypress Semiconductor Corp. | 39,300 | 451,164 | |
| Diodes, Inc. (a) | 6,400 | 142,016 | |
| Exar Corp. (a) | 59,100 | 465,117 | |
| EZchip Semiconductor Ltd. (a) | 17,300 | 285,450 | |
| Freescale Semiconductor, Inc. (a) | 44,214 | 1,762,812 | |
| Hua Hong Semiconductor Ltd. (a) | 122,000 | 119,761 | |
| Intel Corp. | 560,078 | 16,214,256 | |
| Intersil Corp. Class A | 270,637 | 3,012,190 | |
| MagnaChip Semiconductor Corp. (a) | 31,236 | 267,380 | |
| Marvell Technology Group Ltd. | 381,800 | 4,749,592 | |
| Maxim Integrated Products, Inc. | 156,022 | 5,310,989 | |
| MediaTek, Inc. | 49,000 | 513,834 | |
| Microchip Technology, Inc. (b) | 61,500 | 2,634,660 | |
| Micron Technology, Inc. (a) | 331,512 | 6,136,287 | |
| Motech Industries, Inc. | 1 | 1 | |
| NVIDIA Corp. | 37,223 | 742,599 | |
| NXP Semiconductors NV (a) | 4,779 | 463,515 | |
| O2Micro International Ltd. sponsored ADR (a) | 11,012 | 27,200 | |
| Omnivision Technologies, Inc. (a) | 17,200 | 420,024 | |
| PMC-Sierra, Inc. (a) | 251,347 | 1,711,673 | |
| Qorvo, Inc. (a) | 6,000 | 347,700 | |
| Sanken Electric Co. Ltd. | 34,000 | 189,293 | |
| Semiconductor Manufacturing International Corp. (a) | 1,753,000 | 157,519 | |
| Semtech Corp. (a) | 269,722 | 4,744,410 | |
| Silicon Laboratories, Inc. (a) | 6,100 | 274,439 | |
| Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR | 15,100 | 333,861 | |
| Texas Instruments, Inc. | 48,818 | 2,439,924 | |
| Trident Microsystems, Inc. (a) | 19 | 0 | |
| Xilinx, Inc. | 13,236 | 552,603 | |
| 85,273,477 | |||
| TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | 89,063,827 | ||
| Software - 0.0% | |||
| Systems Software - 0.0% | |||
| Infoblox, Inc. (a) | 1 | 24 | |
| Technology Hardware, Storage & Peripherals - 5.8% | |||
| Technology Hardware, Storage & Peripherals - 5.8% | |||
| BlackBerry Ltd. (a) | 100 | 774 | |
| Hewlett-Packard Co. | 88,700 | 2,707,124 | |
| QLogic Corp. (a) | 14,400 | 127,728 | |
| Samsung Electronics Co. Ltd. | 1,444 | 1,467,480 | |
| Seagate Technology LLC | 20,400 | 1,032,240 | |
| Western Digital Corp. | 9,200 | 791,752 | |
| 6,127,098 | |||
| TOTAL COMMON STOCKS | |||
| (Cost $110,378,320) | 104,398,846 | ||
| Principal Amount | Value | ||
| Corporate Bonds - 0.5% | |||
| Convertible Bonds - 0.3% | |||
| Electronic Equipment & Components - 0.3% | |||
| Electronic Components - 0.3% | |||
| InvenSense, Inc. 1.75% 11/1/18 | 250,000 | 243,125 | |
| Nonconvertible Bonds - 0.2% | |||
| Semiconductors & Semiconductor Equipment - 0.2% | |||
| Semiconductors - 0.2% | |||
| Advanced Micro Devices, Inc.: | |||
| 7% 7/1/24 | 215,000 | 142,975 | |
| 7.75% 8/1/20 | 130,000 | 87,506 | |
| 230,481 | |||
| TOTAL CORPORATE BONDS | |||
| (Cost $522,218) | 473,606 | ||
| Shares | Value | ||
| Money Market Funds - 5.9% | |||
| Fidelity Cash Central Fund, 0.17% (c) | 2,343,741 | 2,343,741 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (c)(d) | 3,918,800 | 3,918,800 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $6,262,541) | 6,262,541 | ||
| TOTAL INVESTMENT PORTFOLIO - 104.7% | |||
| (Cost $117,163,079) | 111,134,993 | ||
| NET OTHER ASSETS (LIABILITIES) - (4.7)% | (4,945,101) | ||
| NET ASSETS - 100% | $106,189,892 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) 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.
(d) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $6,094 |
| Fidelity Securities Lending Cash Central Fund | 23,684 |
| Total | $29,778 |
Investment Valuation
The following is a summary of the inputs used, as of July 31, 2015, 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 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 | $104,398,846 | $104,241,326 | $157,520 | $-- |
| Corporate Bonds | 473,606 | -- | 473,606 | -- |
| Money Market Funds | 6,262,541 | 6,262,541 | -- | -- |
| Total Investments in Securities: | $111,134,993 | $110,503,867 | $631,126 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended July 31, 2015. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $2,307,249 |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 83.0% |
| Bermuda | 6.2% |
| Singapore | 6.1% |
| Korea (South) | 1.4% |
| Ireland | 1.0% |
| Others (Individually Less Than 1%) | 2.3% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Electronics Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $3,779,760) — See accompanying schedule: Unaffiliated issuers (cost $110,900,538) | $104,872,452 | |
| Fidelity Central Funds (cost $6,262,541) | 6,262,541 | |
| Total Investments (cost $117,163,079) | $111,134,993 | |
| Cash | 529,870 | |
| Receivable for investments sold | 2,409,776 | |
| Receivable for fund shares sold | 145,275 | |
| Dividends receivable | 36,960 | |
| Interest receivable | 7,385 | |
| Distributions receivable from Fidelity Central Funds | 3,277 | |
| Other receivables | 6,633 | |
| Total assets | 114,274,169 | |
| Liabilities | ||
| Payable for investments purchased | $2,240,546 | |
| Payable for fund shares redeemed | 1,761,054 | |
| Accrued management fee | 52,821 | |
| Distribution and service plan fees payable | 31,010 | |
| Other affiliated payables | 27,033 | |
| Other payables and accrued expenses | 53,013 | |
| Collateral on securities loaned, at value | 3,918,800 | |
| Total liabilities | 8,084,277 | |
| Net Assets | $106,189,892 | |
| Net Assets consist of: | ||
| Paid in capital | $104,471,675 | |
| Undistributed net investment income | 39,890 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 7,706,702 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (6,028,375) | |
| Net Assets | $106,189,892 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($38,237,241 ÷ 2,500,722 shares) | $15.29 | |
| Maximum offering price per share (100/94.25 of $15.29) | $16.22 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($10,825,615 ÷ 731,177 shares) | $14.81 | |
| Maximum offering price per share (100/96.50 of $14.81) | $15.35 | |
| Class B: | ||
| Net Asset Value and offering price per share ($320,051 ÷ 23,157 shares)(a) | $13.82 | |
| Class C: | ||
| Net Asset Value and offering price per share ($20,864,356 ÷ 1,512,366 shares)(a) | $13.80 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($35,942,629 ÷ 2,261,606 shares) | $15.89 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $1,419,885 | |
| Interest | 23,410 | |
| Income from Fidelity Central Funds | 29,778 | |
| Total income | 1,473,073 | |
| Expenses | ||
| Management fee | $550,469 | |
| Transfer agent fees | 228,664 | |
| Distribution and service plan fees | 294,631 | |
| Accounting and security lending fees | 39,792 | |
| Custodian fees and expenses | 84,723 | |
| Independent trustees' compensation | 1,620 | |
| Registration fees | 73,083 | |
| Audit | 46,785 | |
| Legal | 1,045 | |
| Miscellaneous | 735 | |
| Total expenses before reductions | 1,321,547 | |
| Expense reductions | (17,056) | 1,304,491 |
| Net investment income (loss) | 168,582 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 10,895,803 | |
| Foreign currency transactions | (2,328) | |
| Total net realized gain (loss) | 10,893,475 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (5,872,898) | |
| Assets and liabilities in foreign currencies | (289) | |
| Total change in net unrealized appreciation (depreciation) | (5,873,187) | |
| Net gain (loss) | 5,020,288 | |
| Net increase (decrease) in net assets resulting from operations | $5,188,870 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $168,582 | $(66,312) |
| Net realized gain (loss) | 10,893,475 | 5,071,173 |
| Change in net unrealized appreciation (depreciation) | (5,873,187) | 1,173,624 |
| Net increase (decrease) in net assets resulting from operations | 5,188,870 | 6,178,485 |
| Distributions to shareholders from net investment income | (57,407) | – |
| Distributions to shareholders from net realized gain | (377,502) | – |
| Total distributions | (434,909) | – |
| Share transactions - net increase (decrease) | 44,912,905 | 34,400,043 |
| Redemption fees | 13,381 | 4,495 |
| Total increase (decrease) in net assets | 49,680,247 | 40,583,023 |
| Net Assets | ||
| Beginning of period | 56,509,645 | 15,926,622 |
| End of period (including undistributed net investment income of $39,890 and accumulated net investment loss of $62,995, respectively) | $106,189,892 | $56,509,645 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Electronics Fund Class A
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $13.86 | $10.33 | $8.45 | $8.93 | $7.14 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .03 | (.02) | (.01) | (.05) | (.04) |
| Net realized and unrealized gain (loss) | 1.48 | 3.55 | 1.89 | (.43) | 1.83 |
| Total from investment operations | 1.51 | 3.53 | 1.88 | (.48) | 1.79 |
| Distributions from net investment income | (.01) | – | – | – | – |
| Distributions from net realized gain | (.07) | – | – | – | – |
| Total distributions | (.08) | – | – | – | – |
| Redemption fees added to paid in capital A,B | – | – | – | – | – |
| Net asset value, end of period | $15.29 | $13.86 | $10.33 | $8.45 | $8.93 |
| Total ReturnC,D | 10.85% | 34.17% | 22.25% | (5.38)% | 25.07% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.28% | 1.84% | 2.18% | 1.88% | 1.89% |
| Expenses net of fee waivers, if any | 1.28% | 1.40% | 1.40% | 1.40% | 1.40% |
| Expenses net of all reductions | 1.27% | 1.39% | 1.37% | 1.39% | 1.39% |
| Net investment income (loss) | .20% | (.16)% | (.07)% | (.53)% | (.40)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $38,237 | $16,542 | $5,833 | $6,000 | $7,537 |
| Portfolio turnover rateG | 156% | 156% | 179% | 140% | 166% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Electronics Fund Class T
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $13.45 | $10.05 | $8.24 | $8.73 | $7.00 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.02) | (.05) | (.03) | (.07) | (.06) |
| Net realized and unrealized gain (loss) | 1.44 | 3.45 | 1.84 | (.42) | 1.79 |
| Total from investment operations | 1.42 | 3.40 | 1.81 | (.49) | 1.73 |
| Distributions from net realized gain | (.06) | – | – | – | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $14.81 | $13.45 | $10.05 | $8.24 | $8.73 |
| Total ReturnC,D | 10.55% | 33.83% | 21.97% | (5.61)% | 24.71% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.62% | 2.19% | 2.48% | 2.23% | 2.25% |
| Expenses net of fee waivers, if any | 1.62% | 1.65% | 1.65% | 1.65% | 1.65% |
| Expenses net of all reductions | 1.61% | 1.64% | 1.62% | 1.64% | 1.64% |
| Net investment income (loss) | (.14)% | (.42)% | (.32)% | (.78)% | (.65)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $10,826 | $7,144 | $3,756 | $3,909 | $4,476 |
| Portfolio turnover rateG | 156% | 156% | 179% | 140% | 166% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Electronics Fund Class B
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $12.59 | $9.46 | $7.79 | $8.29 | $6.69 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.09) | (.10) | (.07) | (.10) | (.09) |
| Net realized and unrealized gain (loss) | 1.34 | 3.23 | 1.74 | (.40) | 1.69 |
| Total from investment operations | 1.25 | 3.13 | 1.67 | (.50) | 1.60 |
| Distributions from net realized gain | (.02) | – | – | – | – |
| Redemption fees added to paid in capital A,B | – | – | – | – | – |
| Net asset value, end of period | $13.82 | $12.59 | $9.46 | $7.79 | $8.29 |
| Total ReturnC,D | 9.95% | 33.09% | 21.44% | (6.03)% | 23.92% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 2.11% | 2.68% | 2.95% | 2.70% | 2.76% |
| Expenses net of fee waivers, if any | 2.10% | 2.15% | 2.15% | 2.15% | 2.15% |
| Expenses net of all reductions | 2.09% | 2.14% | 2.12% | 2.15% | 2.14% |
| Net investment income (loss) | (.62)% | (.92)% | (.82)% | (1.29)% | (1.15)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $320 | $392 | $306 | $459 | $691 |
| Portfolio turnover rateG | 156% | 156% | 179% | 140% | 166% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Electronics Fund Class C
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $12.58 | $9.44 | $7.78 | $8.29 | $6.68 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.08) | (.10) | (.07) | (.10) | (.09) |
| Net realized and unrealized gain (loss) | 1.34 | 3.24 | 1.73 | (.41) | 1.70 |
| Total from investment operations | 1.26 | 3.14 | 1.66 | (.51) | 1.61 |
| Distributions from net realized gain | (.04) | – | – | – | – |
| Redemption fees added to paid in capital A,B | – | – | – | – | – |
| Net asset value, end of period | $13.80 | $12.58 | $9.44 | $7.78 | $8.29 |
| Total ReturnC,D | 10.03% | 33.26% | 21.34% | (6.15)% | 24.10% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 2.06% | 2.60% | 2.93% | 2.65% | 2.70% |
| Expenses net of fee waivers, if any | 2.06% | 2.15% | 2.15% | 2.15% | 2.15% |
| Expenses net of all reductions | 2.05% | 2.14% | 2.12% | 2.14% | 2.14% |
| Net investment income (loss) | (.58)% | (.91)% | (.82)% | (1.28)% | (1.15)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $20,864 | $7,381 | $3,157 | $3,721 | $3,836 |
| Portfolio turnover rateG | 156% | 156% | 179% | 140% | 166% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Electronics Fund Class I
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $14.37 | $10.68 | $8.72 | $9.19 | $7.33 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .08 | .01 | .02 | (.02) | (.01) |
| Net realized and unrealized gain (loss) | 1.53 | 3.68 | 1.94 | (.45) | 1.87 |
| Total from investment operations | 1.61 | 3.69 | 1.96 | (.47) | 1.86 |
| Distributions from net investment income | (.02) | – | – | – | – |
| Distributions from net realized gain | (.07) | – | – | – | – |
| Total distributions | (.09) | – | – | – | – |
| Redemption fees added to paid in capital A,B | – | – | – | – | – |
| Net asset value, end of period | $15.89 | $14.37 | $10.68 | $8.72 | $9.19 |
| Total ReturnC | 11.17% | 34.55% | 22.48% | (5.11)% | 25.38% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | .98% | 1.34% | 1.86% | 1.55% | 1.42% |
| Expenses net of fee waivers, if any | .98% | 1.15% | 1.15% | 1.15% | 1.15% |
| Expenses net of all reductions | .96% | 1.14% | 1.12% | 1.14% | 1.14% |
| Net investment income (loss) | .51% | .08% | .18% | (.28)% | (.15)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $35,943 | $25,050 | $2,874 | $3,271 | $1,765 |
| Portfolio turnover rateF | 156% | 156% | 179% | 140% | 166% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, 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 reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
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. Corporate bonds are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be 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, 2015, including information on transfers between Levels 1 and 2 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, capital loss carryforwards, market discount 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 | $5,303,241 |
| Gross unrealized depreciation | (12,543,375) |
| Net unrealized appreciation (depreciation) on securities | $(7,240,134) |
| Tax Cost | $118,375,127 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $7,990,531 |
| Undistributed long-term capital gain | $968,110 |
| Net unrealized appreciation (depreciation) on securities and other investments | $(7,240,423) |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $423,024 | $ - |
| Long-term Capital Gains | 11,885 | – |
| Total | $434,909 | $ - |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $193,985,323 and $147,870,706, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $80,004 | $5,337 |
| Class T | .25% | .25% | 48,418 | 88 |
| Class B | .75% | .25% | 3,841 | 2,887 |
| Class C | .75% | .25% | 162,368 | 79,672 |
| $294,631 | $87,984 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $70,773 |
| Class T | 5,693 |
| Class B* | 189 |
| Class C* | 4,722 |
| $81,377 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $75,949 | .24 |
| Class T | 31,708 | .33 |
| Class B | 1,176 | .31 |
| Class C | 43,241 | .27 |
| Class I | 76,590 | .18 |
| $ 228,664 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $9,918 for the period.
Other. During the period, the investment adviser reimbursed the Fund for certain losses in the amount of $2,754.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $136 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $23,684.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $15,676 for the period.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $517 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $285 |
| Class T | 22 |
| Class B | 1 |
| Class C | 141 |
| Class I | 414 |
| $863 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $13,078 | $– |
| Class I | 44,329 | – |
| Total | $57,407 | $– |
| From net realized gain | ||
| Class A | $128,913 | $– |
| Class T | 34,794 | – |
| Class B | 598 | – |
| Class C | 43,270 | – |
| Class I | 169,927 | – |
| Total | $377,502 | $– |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 2,442,737 | 772,579 | $38,016,336 | $10,230,441 |
| Reinvestment of distributions | 7,644 | – | 119,544 | – |
| Shares redeemed | (1,143,527) | (143,457) | (17,859,819) | (1,810,191) |
| Net increase (decrease) | 1,306,854 | 629,122 | $20,276,061 | $8,420,250 |
| Class T | ||||
| Shares sold | 393,756 | 230,216 | $5,963,896 | $2,844,843 |
| Reinvestment of distributions | 2,215 | – | 33,619 | – |
| Shares redeemed | (195,977) | (72,780) | (2,908,278) | (817,318) |
| Net increase (decrease) | 199,994 | 157,436 | $3,089,237 | $2,027,525 |
| Class B | ||||
| Shares sold | 8,518 | 7,793 | $118,987 | $94,749 |
| Reinvestment of distributions | 39 | – | 551 | – |
| Shares redeemed | (16,542) | (9,002) | (232,148) | (95,467) |
| Net increase (decrease) | (7,985) | (1,209) | $(112,610) | $(718) |
| Class C | ||||
| Shares sold | 1,188,406 | 357,228 | $16,685,789 | $4,283,093 |
| Reinvestment of distributions | 2,732 | – | 38,744 | – |
| Shares redeemed | (265,701) | (104,588) | (3,757,943) | (1,156,253) |
| Net increase (decrease) | 925,437 | 252,640 | $12,966,590 | $3,126,840 |
| Class I | ||||
| Shares sold | 3,205,885 | 1,892,867 | $51,968,937 | $26,288,223 |
| Reinvestment of distributions | 10,497 | – | 170,367 | – |
| Shares redeemed | (2,698,476) | (418,217) | (43,445,677) | (5,462,077) |
| Net increase (decrease) | 517,906 | 1,474,650 | $8,693,627 | $20,826,146 |
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.
Fidelity Advisor® Energy Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class I | (28.73)% | 4.87% | 4.34% |
Prior to October 1, 2006, the 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 I on July 31, 2005. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values | ||
| $15,286 | Fidelity Advisor® Energy Fund - Class I | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Energy Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015, as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. Consequently, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for the consumer staples sector and the real estate segment of financials yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager John Dowd: For the year, the fund's share classes lagged the -27.92% return of the sector benchmark, the MSCI U.S. IMI Energy 25/50 Index, and fell well short of the broad-based S&P 500®. (For specific class-level results, please see the Performance section of this report.) Energy stocks suffered a huge sell-off the past year, as oil prices collapsed to six-year lows, challenging profits across the sector. Versus the MSCI benchmark, the fund's positioning in the oil & gas equipment & services group detracted. Here, we were stung by an early overweighting in services giant Halliburton, whose stock price fell after it launched a bid to acquire rival Baker Hughes. I eliminated Halliburton from the fund in March, having shifted my focus to Baker Hughes on the belief the latter would be acquired at a premium. A sizable underweighting in Exxon Mobil and the large integrated oil & gas firms curbed results, as this group is often seen as a safe haven in a turbulent market. Untimely ownership of refiner Marathon Petroleum was the biggest relative detractor for the period. I sold out of the position in April, and Marathon gained ground through period end. Conversely, returns were helped by investments in pipelines, also known as the oil & gas storage & transportation segment. Contributors here included an out-of-index stake in Valero Energy Partners and an overweighting in Tesoro. Largely avoiding E&P Apache was the fund's top contributor, as it struggled with a production miss and analyst downgrade. I eliminated the position by period end. Lastly, the relative strength of the U.S. dollar hurt the performance of our non-U.S. investments.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.Fidelity Advisor® Energy Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Exxon Mobil Corp. | 14.6 | 14.1 |
| Schlumberger Ltd. | 9.5 | 8.8 |
| EOG Resources, Inc. | 6.1 | 6.6 |
| Valero Energy Corp. | 5.2 | 1.3 |
| Anadarko Petroleum Corp. | 4.5 | 5.1 |
| Chevron Corp. | 4.3 | 6.9 |
| Cimarex Energy Co. | 3.9 | 4.0 |
| Newfield Exploration Co. | 3.9 | 0.3 |
| Noble Energy, Inc. | 3.0 | 3.2 |
| Pioneer Natural Resources Co. | 2.9 | 1.0 |
| 57.9 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Oil, Gas & Consumable Fuels | 82.1% | |
| Energy Equipment & Services | 15.6% | |
| Independent Power and Renewable Electricity Producers | 1.1% | |
| Chemicals | 0.6% | |
| All Others* | 0.6% | |
| As of January 31, 2015 | ||
| Oil, Gas & Consumable Fuels | 76.3% | |
| Energy Equipment & Services | 18.4% | |
| Independent Power and Renewable Electricity Producers | 1.2% | |
| Multi-Utilities | 0.1% | |
| Real Estate Investment Trusts | 0.0% | |
| All Others* | 4.0% | |
* Includes short-term investments and net other assets (liabilities).
Fidelity Advisor® Energy Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 99.4% | |||
| Shares | Value | ||
| Chemicals - 0.6% | |||
| Commodity Chemicals - 0.6% | |||
| LyondellBasell Industries NV Class A | 49,400 | $4,635,202 | |
| Energy Equipment & Services - 15.6% | |||
| Oil & Gas Drilling - 0.5% | |||
| Helmerich & Payne, Inc. (a) | 30,000 | 1,732,200 | |
| Ocean Rig UDW, Inc. (United States) | 108,900 | 418,176 | |
| Odfjell Drilling A/S (b) | 567,856 | 417,109 | |
| Xtreme Drilling & Coil Services Corp. (b) | 813,202 | 1,610,424 | |
| 4,177,909 | |||
| Oil & Gas Equipment & Services - 15.1% | |||
| Baker Hughes, Inc. | 348,600 | 20,271,090 | |
| C&J Energy Services Ltd. (b) | 37,300 | 359,945 | |
| Dril-Quip, Inc. (b) | 87,191 | 5,092,826 | |
| FMC Technologies, Inc. (b) | 63,406 | 2,077,181 | |
| Frank's International NV | 299,200 | 4,844,048 | |
| Oceaneering International, Inc. | 216,273 | 8,655,245 | |
| Schlumberger Ltd. | 871,909 | 72,211,503 | |
| Total Energy Services, Inc. | 52,700 | 595,965 | |
| 114,107,803 | |||
| TOTAL ENERGY EQUIPMENT & SERVICES | 118,285,712 | ||
| Independent Power and Renewable Electricity Producers - 1.1% | |||
| Independent Power Producers & Energy Traders - 0.7% | |||
| Dynegy, Inc. (b) | 120,922 | 3,150,018 | |
| NRG Yield, Inc. Class C | 92,700 | 1,788,183 | |
| 4,938,201 | |||
| Renewable Electricity - 0.4% | |||
| NextEra Energy Partners LP | 95,000 | 3,389,600 | |
| TOTAL INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS | 8,327,801 | ||
| Oil, Gas & Consumable Fuels - 82.1% | |||
| Integrated Oil & Gas - 19.5% | |||
| Chevron Corp. | 372,709 | 32,977,292 | |
| Exxon Mobil Corp. | 1,400,061 | 110,898,834 | |
| Occidental Petroleum Corp. | 53,200 | 3,734,640 | |
| Suncor Energy, Inc. | 26,900 | 757,729 | |
| 148,368,495 | |||
| Oil & Gas Exploration & Production - 43.1% | |||
| Anadarko Petroleum Corp. | 453,483 | 33,716,461 | |
| Antero Resources Corp. (b) | 62,000 | 1,705,620 | |
| Bankers Petroleum Ltd. (b) | 624,600 | 1,217,823 | |
| Bonanza Creek Energy, Inc. (b) | 101,625 | 793,691 | |
| Cabot Oil & Gas Corp. | 53,000 | 1,386,480 | |
| Canadian Natural Resources Ltd. | 115,300 | 2,814,066 | |
| Carrizo Oil & Gas, Inc. (b) | 49,800 | 1,898,874 | |
| Cimarex Energy Co. | 284,547 | 29,627,034 | |
| Concho Resources, Inc. (b) | 159,500 | 16,996,320 | |
| ConocoPhillips Co. | 50,636 | 2,549,016 | |
| Continental Resources, Inc. (b) | 161,330 | 5,390,035 | |
| Diamondback Energy, Inc. | 179,500 | 12,080,350 | |
| Encana Corp. | 1,760,300 | 13,378,738 | |
| Energen Corp. | 172,013 | 9,495,118 | |
| EOG Resources, Inc. | 599,086 | 46,243,448 | |
| EQT Corp. | 100,500 | 7,723,425 | |
| Evolution Petroleum Corp. | 60,495 | 315,784 | |
| Gulfport Energy Corp. (b) | 224,400 | 7,351,344 | |
| Hess Corp. | 68,700 | 4,053,987 | |
| Memorial Resource Development Corp. (b) | 622,800 | 9,528,840 | |
| Newfield Exploration Co. (b) | 901,300 | 29,553,627 | |
| Noble Energy, Inc. | 654,608 | 23,061,840 | |
| Northern Oil & Gas, Inc. (b) | 234,293 | 1,115,235 | |
| Parsley Energy, Inc. Class A (b) | 249,100 | 3,601,986 | |
| PDC Energy, Inc. (b) | 262,688 | 12,333,202 | |
| Peyto Exploration & Development Corp. (a) | 45,800 | 991,046 | |
| Pioneer Natural Resources Co. | 174,216 | 22,085,362 | |
| QEP Resources, Inc. | 92,200 | 1,279,736 | |
| Rice Energy, Inc. (b) | 230,000 | 4,151,500 | |
| RSP Permian, Inc. (b) | 98,800 | 2,450,240 | |
| SM Energy Co. | 261,700 | 9,701,219 | |
| Synergy Resources Corp. (b) | 772,615 | 7,517,544 | |
| TAG Oil Ltd. (b) | 446,700 | 413,279 | |
| 326,522,270 | |||
| Oil & Gas Refining & Marketing - 7.6% | |||
| Alon U.S.A. Energy, Inc. | 50,100 | 932,361 | |
| CVR Refining, LP | 33,873 | 700,832 | |
| Delek U.S. Holdings, Inc. | 7,700 | 274,659 | |
| Tesoro Corp. | 149,600 | 14,562,064 | |
| Valero Energy Corp. | 594,526 | 39,000,906 | |
| World Fuel Services Corp. | 48,533 | 1,972,866 | |
| 57,443,688 | |||
| Oil & Gas Storage & Transport - 11.9% | |||
| Cheniere Energy Partners LP Holdings LLC | 89,900 | 1,965,214 | |
| Cheniere Energy, Inc. (b) | 165,600 | 11,421,432 | |
| Columbia Pipeline Group, Inc. | 26,800 | 782,024 | |
| Columbia Pipeline Partners LP | 27,300 | 639,912 | |
| Dominion Midstream Partners LP | 30,664 | 1,076,920 | |
| Enable Midstream Partners LP | 42,900 | 701,844 | |
| Energy Transfer Equity LP | 193,700 | 5,826,496 | |
| EQT Midstream Partners LP | 33,700 | 2,654,886 | |
| Golar LNG Ltd. | 187,000 | 8,054,090 | |
| Kinder Morgan, Inc. | 466,500 | 16,159,560 | |
| Magellan Midstream Partners LP | 37,034 | 2,607,194 | |
| MPLX LP | 52,494 | 2,923,391 | |
| ONEOK, Inc. | 38,100 | 1,439,799 | |
| Phillips 66 Partners LP | 56,069 | 3,493,659 | |
| Plains GP Holdings LP Class A | 358,000 | 9,179,120 | |
| Rice Midstream Partners LP | 25,000 | 416,750 | |
| SemGroup Corp. Class A | 29,000 | 2,061,610 | |
| Tallgrass Energy Partners LP | 18,500 | 855,625 | |
| Targa Resources Corp. | 73,832 | 6,530,440 | |
| The Williams Companies, Inc. | 132,400 | 6,948,352 | |
| Valero Energy Partners LP | 92,143 | 4,327,957 | |
| 90,066,275 | |||
| TOTAL OIL, GAS & CONSUMABLE FUELS | 622,400,728 | ||
| TOTAL COMMON STOCKS | |||
| (Cost $820,684,262) | 753,649,443 | ||
| Money Market Funds - 0.9% | |||
| Fidelity Cash Central Fund, 0.17% (c) | 4,073,855 | 4,073,855 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (c)(d) | 2,844,637 | 2,844,637 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $6,918,492) | 6,918,492 | ||
| TOTAL INVESTMENT PORTFOLIO - 100.3% | |||
| (Cost $827,602,754) | 760,567,935 | ||
| NET OTHER ASSETS (LIABILITIES) - (0.3)% | (2,639,118) | ||
| NET ASSETS - 100% | $757,928,817 |
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) 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.
(d) Investment made with cash collateral received from securities on loan.
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 | $24,953 |
| Fidelity Securities Lending Cash Central Fund | 70,308 |
| Total | $95,261 |
Investment Valuation
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 85.0% |
| Curacao | 9.5% |
| Canada | 3.0% |
| Netherlands | 1.2% |
| Bermuda | 1.2% |
| Others (Individually Less Than 1%) | 0.1% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Energy Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $2,703,129) — See accompanying schedule: Unaffiliated issuers (cost $820,684,262) | $753,649,443 | |
| Fidelity Central Funds (cost $6,918,492) | 6,918,492 | |
| Total Investments (cost $827,602,754) | $760,567,935 | |
| Receivable for investments sold | 7,473,619 | |
| Receivable for fund shares sold | 973,893 | |
| Dividends receivable | 1,060,467 | |
| Distributions receivable from Fidelity Central Funds | 1,168 | |
| Other receivables | 33,771 | |
| Total assets | 770,110,853 | |
| Liabilities | ||
| Payable for investments purchased | $6,631,413 | |
| Payable for fund shares redeemed | 1,781,434 | |
| Accrued management fee | 363,633 | |
| Distribution and service plan fees payable | 284,636 | |
| Other affiliated payables | 195,453 | |
| Other payables and accrued expenses | 80,830 | |
| Collateral on securities loaned, at value | 2,844,637 | |
| Total liabilities | 12,182,036 | |
| Net Assets | $757,928,817 | |
| Net Assets consist of: | ||
| Paid in capital | $884,050,332 | |
| Undistributed net investment income | 1,038,469 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (60,121,990) | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (67,037,994) | |
| Net Assets | $757,928,817 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($292,287,922 ÷ 9,441,249 shares) | $30.96 | |
| Maximum offering price per share (100/94.25 of $30.96) | $32.85 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($164,848,206 ÷ 5,211,849 shares) | $31.63 | |
| Maximum offering price per share (100/96.50 of $31.63) | $32.78 | |
| Class B: | ||
| Net Asset Value and offering price per share ($8,162,640 ÷ 287,345 shares)(a) | $28.41 | |
| Class C: | ||
| Net Asset Value and offering price per share ($162,321,601 ÷ 5,679,349 shares)(a) | $28.58 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($130,308,448 ÷ 3,995,272 shares) | $32.62 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| �� | Year ended July 31, 2015 | |
| Investment Income | ||
| Dividends | $14,727,885 | |
| Income from Fidelity Central Funds | 95,261 | |
| Total income | 14,823,146 | |
| Expenses | ||
| Management fee | $4,352,637 | |
| Transfer agent fees | 1,950,324 | |
| Distribution and service plan fees | 3,381,478 | |
| Accounting and security lending fees | 278,435 | |
| Custodian fees and expenses | 16,458 | |
| Independent trustees' compensation | 13,957 | |
| Registration fees | 146,120 | |
| Audit | 50,334 | |
| Legal | 9,505 | |
| Interest | 408 | |
| Miscellaneous | 10,448 | |
| Total expenses before reductions | 10,210,104 | |
| Expense reductions | (53,097) | 10,157,007 |
| Net investment income (loss) | 4,666,139 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | (60,262,649) | |
| Foreign currency transactions | 53,077 | |
| Total net realized gain (loss) | (60,209,572) | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (212,685,723) | |
| Assets and liabilities in foreign currencies | (3,095) | |
| Total change in net unrealized appreciation (depreciation) | (212,688,818) | |
| Net gain (loss) | (272,898,390) | |
| Net increase (decrease) in net assets resulting from operations | $(268,232,251) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $4,666,139 | $1,451,099 |
| Net realized gain (loss) | (60,209,572) | 63,966,553 |
| Change in net unrealized appreciation (depreciation) | (212,688,818) | 60,343,712 |
| Net increase (decrease) in net assets resulting from operations | (268,232,251) | 125,761,364 |
| Distributions to shareholders from net investment income | (2,612,091) | (2,028,433) |
| Distributions to shareholders from net realized gain | (36,171,815) | (32,993,983) |
| Total distributions | (38,783,906) | (35,022,416) |
| Share transactions - net increase (decrease) | 190,554,548 | 95,115,595 |
| Redemption fees | 54,564 | 17,148 |
| Total increase (decrease) in net assets | (116,407,045) | 185,871,691 |
| Net Assets | ||
| Beginning of period | 874,335,862 | 688,464,171 |
| End of period (including undistributed net investment income of $1,038,469 and undistributed net investment income of $44,776, respectively) | $757,928,817 | $874,335,862 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Energy Fund Class A
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $45.71 | $40.59 | $33.71 | $40.17 | $27.70 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .28 | .15 | .23 | .25 | .11 |
| Net realized and unrealized gain (loss) | (12.89) | 7.06 | 6.81 | (6.50) | 12.47 |
| Total from investment operations | (12.61) | 7.21 | 7.04 | (6.25) | 12.58 |
| Distributions from net investment income | (.18)B | (.17) | (.16) | (.21) | (.11) |
| Distributions from net realized gain | (1.96)B | (1.93) | – | – | – |
| Total distributions | (2.14) | (2.09)C | (.16) | (.21) | (.11) |
| Redemption fees added to paid in capitalA,D | – | – | – | – | – |
| Net asset value, end of period | $30.96 | $45.71 | $40.59 | $33.71 | $40.17 |
| Total ReturnE,F | (28.92)% | 18.46% | 20.94% | (15.58)% | 45.46% |
| Ratios to Average Net AssetsG,H | |||||
| Expenses before reductions | 1.12% | 1.12% | 1.16% | 1.17% | 1.16% |
| Expenses net of fee waivers, if any | 1.12% | 1.12% | 1.16% | 1.17% | 1.16% |
| Expenses net of all reductions | 1.11% | 1.12% | 1.15% | 1.17% | 1.16% |
| Net investment income (loss) | .76% | .36% | .61% | .72% | .30% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $292,288 | $369,400 | $279,798 | $253,332 | $331,120 |
| Portfolio turnover rateI | 61% | 112% | 68% | 88% | 91% |
A Calculated based on average shares outstanding during the period.
B The amount shown reflects certain reclassifications related to book to tax differences.
C Total distributions of $2.09 per share is comprised of distributions from net investment income of $.165 and distributions from net realized gain of $1.929 per share.
D Amount represents less than $.01 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the sales charges.
G 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Energy Fund Class T
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $46.64 | $41.38 | $34.40 | $41.04 | $28.33 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .20 | .06 | .15 | .18 | .03 |
| Net realized and unrealized gain (loss) | (13.18) | 7.21 | 6.95 | (6.65) | 12.75 |
| Total from investment operations | (12.98) | 7.27 | 7.10 | (6.47) | 12.78 |
| Distributions from net investment income | (.08)B | (.08) | (.12) | (.17) | (.07) |
| Distributions from net realized gain | (1.95)B | (1.93) | – | – | – |
| Total distributions | (2.03) | (2.01) | (.12) | (.17) | (.07) |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $31.63 | $46.64 | $41.38 | $34.40 | $41.04 |
| Total ReturnD,E | (29.09)% | 18.19% | 20.70% | (15.77)% | 45.16% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.36% | 1.34% | 1.36% | 1.38% | 1.37% |
| Expenses net of fee waivers, if any | 1.35% | 1.34% | 1.36% | 1.38% | 1.37% |
| Expenses net of all reductions | 1.35% | 1.34% | 1.35% | 1.38% | 1.37% |
| Net investment income (loss) | .52% | .14% | .40% | .50% | .09% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $164,848 | $245,828 | $223,248 | $215,488 | $290,512 |
| Portfolio turnover rateH | 61% | 112% | 68% | 88% | 91% |
A Calculated based on average shares outstanding during the period.
B The amount shown reflects certain reclassifications related to book to tax differences.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Energy Fund Class B
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $42.08 | $37.65 | $31.41 | $37.61 | $26.06 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.02) | (.17) | (.05) | (.01) | (.15) |
| Net realized and unrealized gain (loss) | (11.84) | 6.52 | 6.34 | (6.09) | 11.71 |
| Total from investment operations | (11.86) | 6.35 | 6.29 | (6.10) | 11.56 |
| Distributions from net investment income | – | – | (.05) | (.10) | (.01) |
| Distributions from net realized gain | (1.81) | (1.92) | – | – | – |
| Total distributions | (1.81) | (1.92) | (.05) | (.10) | (.01) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $28.41 | $42.08 | $37.65 | $31.41 | $37.61 |
| Total ReturnC,D | (29.47)% | 17.50% | 20.04% | (16.22)% | 44.38% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.92% | 1.91% | 1.92% | 1.92% | 1.93% |
| Expenses net of fee waivers, if any | 1.92% | 1.91% | 1.92% | 1.92% | 1.93% |
| Expenses net of all reductions | 1.92% | 1.91% | 1.91% | 1.92% | 1.92% |
| Net investment income (loss) | (.05)% | (.44)% | (.15)% | (.03)% | (.46)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $8,163 | $17,432 | $20,551 | $28,558 | $49,793 |
| Portfolio turnover rateG | 61% | 112% | 68% | 88% | 91% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Energy Fund Class C
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $42.40 | $37.92 | $31.63 | $37.88 | $26.25 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .01 | (.15) | (.04) | (.01) | (.15) |
| Net realized and unrealized gain (loss) | (11.93) | 6.57 | 6.38 | (6.13) | 11.80 |
| Total from investment operations | (11.92) | 6.42 | 6.34 | (6.14) | 11.65 |
| Distributions from net investment income | (.03)B | (.01) | (.05) | (.11) | (.02) |
| Distributions from net realized gain | (1.88)B | (1.93) | – | – | – |
| Total distributions | (1.90)C | (1.94) | (.05) | (.11) | (.02) |
| Redemption fees added to paid in capitalA,D | – | – | – | – | – |
| Net asset value, end of period | $28.58 | $42.40 | $37.92 | $31.63 | $37.88 |
| Total ReturnE,F | (29.44)% | 17.57% | 20.08% | (16.22)% | 44.38% |
| Ratios to Average Net AssetsG,H | |||||
| Expenses before reductions | 1.85% | 1.86% | 1.90% | 1.92% | 1.90% |
| Expenses net of fee waivers, if any | 1.85% | 1.86% | 1.90% | 1.92% | 1.90% |
| Expenses net of all reductions | 1.85% | 1.86% | 1.88% | 1.91% | 1.89% |
| Net investment income (loss) | .02% | (.38)% | (.13)% | (.03)% | (.43)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $162,322 | $130,881 | $99,833 | $93,504 | $133,476 |
| Portfolio turnover rateI | 61% | 112% | 68% | 88% | 91% |
A Calculated based on average shares outstanding during the period.
B The amount shown reflects certain reclassifications related to book to tax differences.
C Total distributions of $1.90 per share is comprised of distributions from net investment income of $.027 and distributions from net realized gain of $1.877 per share.
D Amount represents less than $.01 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the contingent deferred sales charge.
G 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Energy Fund Class I
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $48.05 | $42.55 | $35.28 | $41.95 | $28.87 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .39 | .28 | .35 | .37 | .23 |
| Net realized and unrealized gain (loss) | (13.56) | 7.42 | 7.12 | (6.79) | 12.99 |
| Total from investment operations | (13.17) | 7.70 | 7.47 | (6.42) | 13.22 |
| Distributions from net investment income | (.30)B | (.27) | (.20) | (.25) | (.14) |
| Distributions from net realized gain | (1.96)B | (1.93) | – | – | – |
| Total distributions | (2.26) | (2.20) | (.20) | (.25) | (.14) |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $32.62 | $48.05 | $42.55 | $35.28 | $41.95 |
| Total ReturnD | (28.73)% | 18.80% | 21.26% | (15.31)% | 45.87% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | .85% | .85% | .88% | .86% | .86% |
| Expenses net of fee waivers, if any | .85% | .85% | .88% | .86% | .86% |
| Expenses net of all reductions | .85% | .85% | .86% | .85% | .85% |
| Net investment income (loss) | 1.02% | .63% | .89% | 1.03% | .60% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $130,308 | $110,795 | $65,034 | $56,692 | $54,024 |
| Portfolio turnover rateG | 61% | 112% | 68% | 88% | 91% |
A Calculated based on average shares outstanding during the period.
B The amount shown reflects certain reclassifications related to book to tax differences.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes. These differences resulted in distribution reclassifications.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), partnerships, 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 | $42,611,030 |
| Gross unrealized depreciation | (116,347,407) |
| Net unrealized appreciation (depreciation) on securities | $(73,736,377) |
| Tax Cost | $834,304,312 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $1,658,244 |
| Capital loss carryforward | $(2,928,505) |
| Net unrealized appreciation (depreciation) on securities and other investments | $(73,744,115) |
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 | $(2,928,505) |
The Fund intends to elect to defer to its next fiscal year $50,491,927 of capital losses recognized during the period November 1, 2014 to July 31, 2015.
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $13,961,242 | $ 11,364,599 |
| Long-term Capital Gains | 24,822,664 | 23,657,817 |
| Total | $38,783,906 | $ 35,022,416 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $638,511,782 and $474,579,008, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | –% | .25% | $785,563 | $16,767 |
| Class T | .25% | .25% | 998,959 | 2,512 |
| Class B | .75% | .25% | 123,955 | 92,966 |
| Class C | .75% | .25% | 1,473,001 | 549,547 |
| $3,381,478 | $661,792 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $318,870 |
| Class T | 51,651 |
| Class B* | 9,609 |
| Class C* | 28,470 |
| $408,600 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $799,684 | .25 |
| Class T | 481,218 | .24 |
| Class B | 37,559 | .30 |
| Class C | 349,645 | .24 |
| Class I | 282,218 | .24 |
| $1,950,324 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $8,275 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $15,226,000 | .32% | $408 |
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,149 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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 $70,308.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $32,715 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 $48.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $3,473 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $6,988 |
| Class T | 5,034 |
| Class B | 27 |
| Class C | 2,749 |
| Class I | 2,063 |
| $16,861 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $1,364 ,001 | $1,151,717 |
| Class T | 410,584 | 407,949 |
| Class C | 97,069 | 21,755 |
| Class I | 740,437 | 447,012 |
| Total | $2,612,091 | $2,028,433 |
| From net realized gain | ||
| Class A | $14,838,103 | $13,468,952 |
| Class T | 10,229,565 | 10,162,438 |
| Class B | 735,058 | 951,726 |
| Class C | 5,981,735 | 5,213,518 |
| Class I | 4,387,354 | 3,197,349 |
| Total | $36,171,815 | $32,993,983 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 4,817,511 | 2,566,576 | $172,397,292 | $110,639,298 |
| Reinvestment of distributions | 346,427 | 321,215 | 15,023,137 | 13,089,815 |
| Shares redeemed | (3,804,502) | (1,699,770) | (141,434,625) | (72,383,987) |
| Net increase (decrease) | 1,359,436 | 1,188,021 | $45,985,804 | $51,345,126 |
| Class T | ||||
| Shares sold | 895,677 | 572,893 | $32,882,150 | $25,352,574 |
| Reinvestment of distributions | 229,140 | 243,465 | 10,214,195 | 10,134,909 |
| Shares redeemed | (1,183,564) | (940,893) | (44,251,675) | (41,085,209) |
| Net increase (decrease) | (58,747) | (124,535) | $(1,155,330) | $(5,597,726) |
| Class B | ||||
| Shares sold | 43,535 | 26,300 | $1,451,766 | $1,074,846 |
| Reinvestment of distributions | 16,323 | 22,691 | 661,892 | 856,078 |
| Shares redeemed | (186,733) | (180,679) | (6,263,061) | (7,111,293) |
| Net increase (decrease) | (126,875) | (131,688) | $(4,149,403) | $(5,180,369) |
| Class C | ||||
| Shares sold | 3,704,544 | 779,598 | $122,458,966 | $31,528,558 |
| Reinvestment of distributions | 130,140 | 118,310 | 5,288,652 | 4,495,184 |
| Shares redeemed | (1,241,801) | (444,228) | (41,167,367) | (17,602,373) |
| Net increase (decrease) | 2,592,883 | 453,680 | $86,580,251 | $18,421,369 |
| Class I | ||||
| Shares sold | 3,563,036 | 1,344,490 | $133,557,103 | $61,641,683 |
| Reinvestment of distributions | 99,377 | 75,999 | 4,498,001 | 3,249,427 |
| Shares redeemed | (1,973,125) | (642,747) | (74,761,878) | (28,763,915) |
| Net increase (decrease) | 1,689,288 | 777,742 | $63,293,226 | $36,127,195 |
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.
Fidelity Advisor® Financial Services Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class I | 11.61% | 10.72% | 0.80% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Financial Services Fund - Class I on July 31, 2005. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values | ||
| $10,832 | Fidelity Advisor® Financial Services Fund - Class I | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Financial Services Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Christopher Lee: For the 12-month period, the fund’s share classes lagged the 14.34% return of the MSCI U.S. IMI Financials 25/50 Index, but more closely tracked the S&P 500®. (For specific class-level results, please see the Performance section of this report.) Expectations that the U.S. Federal Reserve would raise key short-term interest rate targets later this year, increased market volatility and reasonably good merger-and-acquisition activity helped fuel the MSCI sector benchmark’s gain. Versus the MSCI index, security selection in the thrifts & mortgage finance group hurt the most, followed by stock picks in mortgage real estate investment trusts (REITs). Individual detractors included subprime mortgage servicer Ocwen Financial. The stock plunged when federal regulators began investigating its fast growth and later reached a settlement that included years of oversight and the CEO/founder’s resignation. Shares of its sister company, mortgage REIT Altisource Residential, declined due to its association with Ocwen and the prospect of rising interest rates. Stock picks in the consumer finance segment were the biggest plus, thanks largely to an overweighting in subprime lender Springleaf Holdings. In March, the company announced plans to acquire its largest competitor. Its shares took off amid expectations that the deal would lead to cost savings and give a significant boost to earnings power.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.Fidelity Advisor® Financial Services Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Citigroup, Inc. | 5.0 | 4.8 |
| Bank of America Corp. | 5.0 | 4.9 |
| JPMorgan Chase & Co. | 5.0 | 4.9 |
| Berkshire Hathaway, Inc. Class B | 4.8 | 4.9 |
| U.S. Bancorp | 4.1 | 4.3 |
| Wells Fargo & Co. | 3.8 | 3.3 |
| Capital One Financial Corp. | 3.8 | 3.6 |
| American Tower Corp. | 3.3 | 3.8 |
| ACE Ltd. | 2.6 | 0.0 |
| CBRE Group, Inc. | 2.4 | 2.3 |
| 39.8 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Banks | 30.5% | |
| Real Estate Investment Trusts | 13.4% | |
| Insurance | 12.8% | |
| Capital Markets | 10.9% | |
| Diversified Financial Services | 9.0% | |
| All Others* | 23.4% | |
| As of January 31, 2015 | ||
| Banks | 27.9% | |
| Real Estate Investment Trusts | 13.5% | |
| Capital Markets | 12.2% | |
| Insurance | 12.0% | |
| Diversified Financial Services | 9.7% | |
| All Others* | 24.7% | |
* Includes short-term investments and net other assets (liabilities).
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity Advisor® Financial Services Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 96.8% | |||
| Shares | Value | ||
| Banks - 30.5% | |||
| Diversified Banks - 23.7% | |||
| Bank of America Corp. | 653,956 | $11,692,733 | |
| Citigroup, Inc. | 200,665 | 11,730,874 | |
| Comerica, Inc. | 37,119 | 1,760,554 | |
| JPMorgan Chase & Co. | 170,131 | 11,659,077 | |
| U.S. Bancorp | 210,608 | 9,521,588 | |
| Wells Fargo & Co. | 154,448 | 8,937,906 | |
| 55,302,732 | |||
| Regional Banks - 6.8% | |||
| CIT Group, Inc. | 41,700 | 1,961,568 | |
| CoBiz, Inc. | 70,391 | 900,301 | |
| Fifth Third Bancorp | 140,440 | 2,959,071 | |
| Huntington Bancshares, Inc. | 122,600 | 1,430,742 | |
| Popular, Inc. (a) | 52,200 | 1,598,364 | |
| Prosperity Bancshares, Inc. | 28,100 | 1,533,979 | |
| Regions Financial Corp. | 187,200 | 1,945,008 | |
| SunTrust Banks, Inc. | 83,400 | 3,697,956 | |
| 16,026,989 | |||
| TOTAL BANKS | 71,329,721 | ||
| Capital Markets - 10.9% | |||
| Asset Management & Custody Banks - 7.3% | |||
| Affiliated Managers Group, Inc. (a) | 16,254 | 3,379,207 | |
| Artisan Partners Asset Management, Inc. | 60,700 | 2,898,425 | |
| Invesco Ltd. | 126,338 | 4,876,647 | |
| Oaktree Capital Group LLC Class A | 36,300 | 2,003,397 | |
| The Blackstone Group LP | 98,265 | 3,856,901 | |
| 17,014,577 | |||
| Diversified Capital Markets - 0.0% | |||
| Close Brothers Group PLC | 6,400 | 145,221 | |
| Investment Banking & Brokerage - 3.6% | |||
| E*TRADE Financial Corp. (a) | 115,900 | 3,293,878 | |
| Goldman Sachs Group, Inc. | 11,600 | 2,378,812 | |
| Raymond James Financial, Inc. | 46,400 | 2,737,600 | |
| 8,410,290 | |||
| TOTAL CAPITAL MARKETS | 25,570,088 | ||
| Consumer Finance - 6.0% | |||
| Consumer Finance - 6.0% | |||
| Capital One Financial Corp. | 107,638 | 8,750,969 | |
| Navient Corp. | 139,015 | 2,182,536 | |
| Springleaf Holdings, Inc. (a) | 60,300 | 3,045,753 | |
| 13,979,258 | |||
| Diversified Consumer Services - 1.4% | |||
| Specialized Consumer Services - 1.4% | |||
| H&R Block, Inc. | 97,400 | 3,242,446 | |
| Diversified Financial Services - 9.0% | |||
| Multi-Sector Holdings - 4.8% | |||
| Berkshire Hathaway, Inc. Class B (a) | 79,519 | 11,350,542 | |
| Specialized Finance - 4.2% | |||
| Element Financial Corp. (a) | 84,200 | 1,276,021 | |
| Element Financial Corp. rights (a) | 53,000 | 801,170 | |
| IntercontinentalExchange Group, Inc. | 22,264 | 5,077,083 | |
| McGraw Hill Financial, Inc. | 25,600 | 2,604,800 | |
| 9,759,074 | |||
| TOTAL DIVERSIFIED FINANCIAL SERVICES | 21,109,616 | ||
| Health Care Providers & Services - 1.0% | |||
| Health Care Facilities - 1.0% | |||
| Brookdale Senior Living, Inc. (a) | 70,200 | 2,325,726 | |
| Insurance - 12.8% | |||
| Insurance Brokers - 3.5% | |||
| Arthur J. Gallagher & Co. | 46,800 | 2,219,724 | |
| Brown & Brown, Inc. | 97,300 | 3,254,685 | |
| Marsh & McLennan Companies, Inc. | 46,400 | 2,688,416 | |
| 8,162,825 | |||
| Life & Health Insurance - 2.4% | |||
| Prudential PLC | 55,625 | 1,308,602 | |
| Torchmark Corp. | 69,580 | 4,286,824 | |
| 5,595,426 | |||
| Property & Casualty Insurance - 6.9% | |||
| ACE Ltd. | 56,200 | 6,112,874 | |
| Allstate Corp. | 79,590 | 5,487,731 | |
| FNF Group | 95,300 | 3,725,277 | |
| The Chubb Corp. | 7,600 | 944,908 | |
| 16,270,790 | |||
| TOTAL INSURANCE | 30,029,041 | ||
| Internet Software & Services - 0.6% | |||
| Internet Software & Services - 0.6% | |||
| eBay, Inc. (a) | 46,800 | 1,316,016 | |
| IT Services - 4.7% | |||
| Data Processing & Outsourced Services - 4.7% | |||
| EVERTEC, Inc. | 83,400 | 1,569,588 | |
| MasterCard, Inc. Class A | 11,700 | 1,139,580 | |
| PayPal Holdings, Inc. (a) | 46,400 | 1,795,680 | |
| The Western Union Co. | 112,700 | 2,281,048 | |
| Visa, Inc. Class A | 55,620 | 4,190,411 | |
| 10,976,307 | |||
| Real Estate Investment Trusts - 13.4% | |||
| Diversified REITs - 1.3% | |||
| NorthStar Realty Finance Corp. | 185,450 | 2,967,200 | |
| Health Care REIT's - 0.9% | |||
| Ventas, Inc. | 32,400 | 2,173,716 | |
| Mortgage REITs - 2.8% | |||
| Altisource Residential Corp. Class B | 114,150 | 1,878,909 | |
| Redwood Trust, Inc. | 162,200 | 2,514,100 | |
| Two Harbors Investment Corp. | 196,600 | 2,009,252 | |
| 6,402,261 | |||
| Office REITs - 1.4% | |||
| Boston Properties, Inc. | 26,700 | 3,291,576 | |
| Residential REITs - 1.1% | |||
| Essex Property Trust, Inc. | 11,800 | 2,653,938 | |
| Specialized REITs - 5.9% | |||
| American Tower Corp. | 80,250 | 7,632,578 | |
| Outfront Media, Inc. | 115,930 | 2,913,321 | |
| Public Storage | 16,180 | 3,319,812 | |
| 13,865,711 | |||
| TOTAL REAL ESTATE INVESTMENT TRUSTS | 31,354,402 | ||
| Real Estate Management & Development - 4.2% | |||
| Real Estate Services - 4.2% | |||
| CBRE Group, Inc. (a) | 145,087 | 5,508,953 | |
| Realogy Holdings Corp. (a) | 92,700 | 4,219,704 | |
| 9,728,657 | |||
| Thrifts & Mortgage Finance - 1.0% | |||
| Thrifts & Mortgage Finance - 1.0% | |||
| MGIC Investment Corp. (a) | 75,000 | 830,250 | |
| Ocwen Financial Corp. (a)(b) | 112,650 | 949,640 | |
| Radian Group, Inc. | 26,000 | 479,960 | |
| 2,259,850 | |||
| Trading Companies & Distributors - 1.3% | |||
| Trading Companies & Distributors - 1.3% | |||
| AerCap Holdings NV (a) | 64,900 | 3,039,916 | |
| TOTAL COMMON STOCKS | |||
| (Cost $202,521,643) | 226,261,044 | ||
| Money Market Funds - 5.4% | |||
| Fidelity Cash Central Fund, 0.17% (c) | 11,708,734 | 11,708,734 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (c)(d) | 838,200 | 838,200 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $12,546,934) | 12,546,934 | ||
| TOTAL INVESTMENT PORTFOLIO - 102.2% | |||
| (Cost $215,068,577) | 238,807,978 | ||
| NET OTHER ASSETS (LIABILITIES) - (2.2)% | (5,030,867) | ||
| NET ASSETS - 100% | $233,777,111 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) 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.
(d) Investment made with cash collateral received from securities on loan.
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 | $10,323 |
| Fidelity Securities Lending Cash Central Fund | 9,415 |
| Total | $19,738 |
Investment Valuation
The following is a summary of the inputs used, as of July 31, 2015, 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 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 | $226,261,044 | $224,952,442 | $1,308,602 | $-- |
| Money Market Funds | 12,546,934 | 12,546,934 | -- | -- |
| Total Investments in Securities: | $238,807,978 | $237,499,376 | $1,308,602 | $-- |
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Financial Services Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $588,836) — See accompanying schedule: Unaffiliated issuers (cost $202,521,643) | $226,261,044 | |
| Fidelity Central Funds (cost $12,546,934) | 12,546,934 | |
| Total Investments (cost $215,068,577) | $238,807,978 | |
| Receivable for investments sold | 2,464,699 | |
| Receivable for fund shares sold | 793,405 | |
| Dividends receivable | 106,451 | |
| Distributions receivable from Fidelity Central Funds | 2,070 | |
| Other receivables | 2,853 | |
| Total assets | 242,177,456 | |
| Liabilities | ||
| Payable for investments purchased | $7,142,839 | |
| Payable for fund shares redeemed | 147,009 | |
| Accrued management fee | 102,700 | |
| Distribution and service plan fees payable | 78,358 | |
| Other affiliated payables | 49,412 | |
| Other payables and accrued expenses | 41,827 | |
| Collateral on securities loaned, at value | 838,200 | |
| Total liabilities | 8,400,345 | |
| Net Assets | $233,777,111 | |
| Net Assets consist of: | ||
| Paid in capital | $257,071,731 | |
| Distributions in excess of net investment income | (213,877) | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (46,820,067) | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 23,739,324 | |
| Net Assets | $233,777,111 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($102,983,339 ÷ 6,230,377 shares) | $16.53 | |
| Maximum offering price per share (100/94.25 of $16.53) | $17.54 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($34,314,063 ÷ 2,091,293 shares) | $16.41 | |
| Maximum offering price per share (100/96.50 of $16.41) | $17.01 | |
| Class B: | ||
| Net Asset Value and offering price per share ($3,830,995 ÷ 242,193 shares)(a) | $15.82 | |
| Class C: | ||
| Net Asset Value and offering price per share ($50,205,586 ÷ 3,204,911 shares)(a) | $15.67 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($42,443,128 ÷ 2,505,738 shares) | $16.94 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $3,415,880 | |
| Income from Fidelity Central Funds | 19,738 | |
| Total income | 3,435,618 | |
| Expenses | ||
| Management fee | $1,060,306 | |
| Transfer agent fees | 479,341 | |
| Distribution and service plan fees | 844,575 | |
| Accounting and security lending fees | 75,786 | |
| Custodian fees and expenses | 12,554 | |
| Independent trustees' compensation | 3,342 | |
| Registration fees | 73,949 | |
| Audit | 54,050 | |
| Legal | 3,194 | |
| Miscellaneous | 1,988 | |
| Total expenses before reductions | 2,609,085 | |
| Expense reductions | (10,168) | 2,598,917 |
| Net investment income (loss) | 836,701 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 12,559,365 | |
| Foreign currency transactions | 9,982 | |
| Total net realized gain (loss) | 12,569,347 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | 5,449,378 | |
| Assets and liabilities in foreign currencies | (379) | |
| Total change in net unrealized appreciation (depreciation) | 5,448,999 | |
| Net gain (loss) | 18,018,346 | |
| Net increase (decrease) in net assets resulting from operations | $18,855,047 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $836,701 | $764,187 |
| Net realized gain (loss) | 12,569,347 | 7,593,535 |
| Change in net unrealized appreciation (depreciation) | 5,448,999 | 9,238,319 |
| Net increase (decrease) in net assets resulting from operations | 18,855,047 | 17,596,041 |
| Distributions to shareholders from net investment income | (1,174,436) | (647,193) |
| Distributions to shareholders from net realized gain | – | (72,538) |
| Total distributions | (1,174,436) | (719,731) |
| Share transactions - net increase (decrease) | 48,366,952 | 10,142,137 |
| Redemption fees | 16,144 | 8,658 |
| Total increase (decrease) in net assets | 66,063,707 | 27,027,105 |
| Net Assets | ||
| Beginning of period | 167,713,404 | 140,686,299 |
| End of period (including distributions in excess of net investment income of $213,877 and undistributed net investment income of $327,058, respectively) | $233,777,111 | $167,713,404 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Financial Services Fund Class A
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $14.97 | $13.41 | $10.18 | $10.06 | $10.35 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .10 | .10 | .15 | .07 | (.02) |
| Net realized and unrealized gain (loss) | 1.59B | 1.55 | 3.18 | .06 | (.27) |
| Total from investment operations | 1.69 | 1.65 | 3.33 | .13 | (.29) |
| Distributions from net investment income | (.13) | (.08) | (.10) | (.01) | – |
| Distributions from net realized gain | – | (.01) | – | – | – |
| Total distributions | (.13) | (.09) | (.10) | (.01) | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $16.53 | $14.97 | $13.41 | $10.18 | $10.06 |
| Total ReturnD,E | 11.29%B | 12.39% | 32.99% | 1.34% | (2.80)% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.17% | 1.22% | 1.29% | 1.28% | 1.26% |
| Expenses net of fee waivers, if any | 1.17% | 1.22% | 1.29% | 1.28% | 1.26% |
| Expenses net of all reductions | 1.17% | 1.22% | 1.21% | 1.20% | 1.21% |
| Net investment income (loss) | .61% | .68% | 1.31% | .72% | (.24)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $102,983 | $77,674 | $64,428 | $47,055 | $63,937 |
| Portfolio turnover rateH | 44% | 49% | 288% | 441% | 260% |
A Calculated based on average shares outstanding during the period.
B Net realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.05 per share. Excluding these litigation proceeds, the total return would have been 10.97%.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Financial Services Fund Class T
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $14.86 | $13.31 | $10.11 | $10.01 | $10.32 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .05 | .06 | .12 | .04 | (.05) |
| Net realized and unrealized gain (loss) | 1.58B | 1.55 | 3.16 | .06 | (.26) |
| Total from investment operations | 1.63 | 1.61 | 3.28 | .10 | (.31) |
| Distributions from net investment income | (.08) | (.05) | (.08) | –C | – |
| Distributions from net realized gain | – | (.01) | – | – | – |
| Total distributions | (.08) | (.06) | (.08) | –C | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $16.41 | $14.86 | $13.31 | $10.11 | $10.01 |
| Total ReturnD,E | 10.98%B | 12.10% | 32.66% | 1.03% | (3.00)% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.45% | 1.48% | 1.55% | 1.54% | 1.52% |
| Expenses net of fee waivers, if any | 1.45% | 1.48% | 1.55% | 1.54% | 1.52% |
| Expenses net of all reductions | 1.45% | 1.48% | 1.47% | 1.45% | 1.47% |
| Net investment income (loss) | .33% | .42% | 1.06% | .46% | (.49)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $34,314 | $31,596 | $30,576 | $24,367 | $27,037 |
| Portfolio turnover rateH | 44% | 49% | 288% | 441% | 260% |
A Calculated based on average shares outstanding during the period.
B Net realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.05 per share. Excluding these litigation proceeds, the total return would have been 10.66%.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Financial Services Fund Class B
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $14.35 | $12.87 | $9.79 | $9.73 | $10.09 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.03) | (.01) | .06 | –B | (.10) |
| Net realized and unrealized gain (loss) | 1.52C | 1.49 | 3.06 | .06 | (.26) |
| Total from investment operations | 1.49 | 1.48 | 3.12 | .06 | (.36) |
| Distributions from net investment income | (.02) | – | (.04) | – | – |
| Redemption fees added to paid in capital A,B | – | – | – | – | – |
| Net asset value, end of period | $15.82 | $14.35 | $12.87 | $9.79 | $9.73 |
| Total ReturnD,E | 10.41%C | 11.50% | 32.00% | .62% | (3.57)% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.96% | 1.98% | 2.04% | 2.03% | 2.01% |
| Expenses net of fee waivers, if any | 1.96% | 1.98% | 2.04% | 2.03% | 2.01% |
| Expenses net of all reductions | 1.96% | 1.98% | 1.97% | 1.94% | 1.96% |
| Net investment income (loss) | (.18)% | (.08)% | .56% | (.03)% | (.98)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $3,831 | $5,540 | $6,511 | $5,745 | $7,480 |
| Portfolio turnover rateH | 44% | 49% | 288% | 441% | 260% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Net realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.05 per share. Excluding these litigation proceeds, the total return would have been 10.09%.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Financial Services Fund Class C
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $14.22 | $12.75 | $9.70 | $9.65 | $10.00 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.02) | –B | .06 | –B | (.10) |
| Net realized and unrealized gain (loss) | 1.51C | 1.48 | 3.03 | .05 | (.25) |
| Total from investment operations | 1.49 | 1.48 | 3.09 | .05 | (.35) |
| Distributions from net investment income | (.04) | (.01) | (.04) | – | – |
| Redemption fees added to paid in capital A,B | – | – | – | – | – |
| Net asset value, end of period | $15.67 | $14.22 | $12.75 | $9.70 | $9.65 |
| Total ReturnD,E | 10.45%C | 11.65% | 31.98% | .52% | (3.50)% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.90% | 1.94% | 2.03% | 2.03% | 2.01% |
| Expenses net of fee waivers, if any | 1.90% | 1.94% | 2.03% | 2.03% | 2.01% |
| Expenses net of all reductions | 1.90% | 1.93% | 1.96% | 1.94% | 1.96% |
| Net investment income (loss) | (.12)% | (.03)% | .57% | (.03)% | (.99)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $50,206 | $36,740 | $29,897 | $20,875 | $23,196 |
| Portfolio turnover rateH | 44% | 49% | 288% | 441% | 260% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Net realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.05 per share. Excluding these litigation proceeds, the total return would have been 10.13%.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Financial Services Fund Class I
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $15.34 | $13.73 | $10.42 | $10.28 | $10.55 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .15 | .15 | .20 | .10 | .01 |
| Net realized and unrealized gain (loss) | 1.62B | 1.60 | 3.25 | .06 | (.28) |
| Total from investment operations | 1.77 | 1.75 | 3.45 | .16 | (.27) |
| Distributions from net investment income | (.17) | (.13) | (.14) | (.02) | – |
| Distributions from net realized gain | – | (.01) | – | – | – |
| Total distributions | (.17) | (.14) | (.14) | (.02) | – |
| Redemption fees added to paid in capital A,C | – | – | – | – | – |
| Net asset value, end of period | $16.94 | $15.34 | $13.73 | $10.42 | $10.28 |
| Total ReturnD | 11.61%B | 12.85% | 33.45% | 1.61% | (2.56)% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | .84% | .87% | .96% | .98% | .96% |
| Expenses net of fee waivers, if any | .84% | .87% | .96% | .98% | .96% |
| Expenses net of all reductions | .84% | .86% | .88% | .89% | .91% |
| Net investment income (loss) | .94% | 1.04% | 1.65% | 1.02% | .07% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $42,443 | $16,164 | $9,275 | $5,596 | $8,162 |
| Portfolio turnover rateG | 44% | 49% | 288% | 441% | 260% |
A Calculated based on average shares outstanding during the period.
B Net realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.05 per share. Excluding these litigation proceeds, the total return would have been 11.29%.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level as of July 31, 2015 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships, 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 | $29,420,595 |
| Gross unrealized depreciation | (5,959,819) |
| Net unrealized appreciation (depreciation) on securities | $23,460,776 |
| Tax cost | $215,347,202 |
The tax-based components of distributable earnings as of period end were as follows:
| Capital loss carryforward | $(46,541,443) |
| Net unrealized appreciation (depreciation) on securities and other investments | $23,460,699 |
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 | $(22,843,955) |
| 2018 | (23,251,884) |
| 2019 | (445,604) |
| Total capital loss carryforward | $(46,541,443) |
The Fund intends to elect to defer to its next fiscal year $213,865 of ordinary losses recognized during the period January 1, 2015 to July 31, 2015.
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $ 1,174,436 | $ 719,731 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $127,063,199 and $81,265,187, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $220,751 | $4,750 |
| Class T | .25% | .25% | 163,284 | 694 |
| Class B | .75% | .25% | 48,365 | 36,277 |
| Class C | .75% | .25% | 412,175 | 92,945 |
| $844,575 | $134,666 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $61,056 |
| Class T | 6,350 |
| Class B* | 2,271 |
| Class C* | 9,843 |
| $79,520 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $226,401 | .26 |
| Class T | 93,275 | .29 |
| Class B | 14,448 | .30 |
| Class C | 98,965 | .24 |
| Class I | 46,252 | .18 |
| $ 479,341 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $2,068 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $274 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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 $9,415.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $6,525 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 $5.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $854 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $1,208 |
| Class T | 387 |
| Class B | 12 |
| Class C | 796 |
| Class I | 381 |
| $2,784 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $677,086 | $405,756 |
| Class T | 166,609 | 104,978 |
| Class B | 7,587 | – |
| Class C | 95,653 | 31,349 |
| Class I | 227,501 | 105,110 |
| Total | $1,174,436 | $647,193 |
| From net realized gain | ||
| Class A | $– | $43,910 |
| Class T | – | 20,144 |
| Class I | – | 8,484 |
| Total | $– | $72,538 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 2,375,926 | 1,697,938 | $38,271,380 | $24,378,496 |
| Reinvestment of distributions | 37,600 | 28,780 | 601,602 | 390,562 |
| Shares redeemed | (1,370,832) | (1,342,224) | (21,745,625) | (19,118,798) |
| Net increase (decrease) | 1,042,694 | 384,494 | $17,127,357 | $5,650,260 |
| Class T | ||||
| Shares sold | 282,748 | 306,863 | $4,530,961 | $4,347,352 |
| Reinvestment of distributions | 9,927 | 8,794 | 158,623 | 118,136 |
| Shares redeemed | (327,213) | (486,368) | (5,144,018) | (6,897,348) |
| Net increase (decrease) | (34,538) | (170,711) | $(454,434) | $(2,431,860) |
| Class B | ||||
| Shares sold | 9,940 | 29,215 | $153,403 | $390,860 |
| Reinvestment of distributions | 462 | – | 7,229 | – |
| Shares redeemed | (154,232) | (149,230) | (2,370,354) | (2,060,292) |
| Net increase (decrease) | (143,830) | (120,015) | $(2,209,722) | $(1,669,432) |
| Class C | ||||
| Shares sold | 1,276,982 | 859,537 | $19,580,585 | $11,703,173 |
| Reinvestment of distributions | 5,490 | 2,148 | 84,931 | 26,657 |
| Shares redeemed | (661,896) | (621,486) | (9,959,897) | (8,469,563) |
| Net increase (decrease) | 620,576 | 240,199 | $9,705,619 | $3,260,267 |
| Class I | ||||
| Shares sold | 2,718,004 | 823,593 | $44,696,215 | $12,007,905 |
| Reinvestment of distributions | 9,845 | 5,144 | 161,164 | 71,934 |
| Shares redeemed | (1,276,123) | (450,058) | (20,659,247) | (6,746,937) |
| Net increase (decrease) | 1,451,726 | 378,679 | $24,198,132 | $5,332,902 |
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.
Fidelity Advisor® Health Care Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class I | 34.40% | 30.53% | 14.92% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Health Care Fund - Class I on July 31, 2005. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values | ||
| $40,186 | Fidelity Advisor® Health Care Fund - Class I | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Health Care Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Eddie Yoon: For the year, the fund's share classes outperformed the 30.63% result of the MSCI U.S. IMI Health Care 25/50 Index and easily led the broader S&P 500®. (For specific class-level results, please see the Performance section of this report.) Health care stocks continued to benefit from solid fundamentals and favorable long-term trends, including an aging population, a growing emerging-markets middle class with money to spend on health care, and a tremendous wave of innovation, particularly within the biotechnology industry. Elevated merger-and-acquisition activity was another positive for the industry and sector. Versus the sector index, stock picking in pharmaceuticals, which made up about a third of the fund's assets, was by far the biggest contributor. Here, not owning large-cap index giant Johnson & Johnson (J&J) was the top individual contributor. J&J underperformed due in part to its exposure to foreign currency against a generally rising U.S. dollar. Conversely, an underweighting in managed health care was a negative. From a stock perspective, the fund's overweighting in Puma Biotechnology was by far its largest individual detractor. Shares of the development-stage firm plunged this period. At this year's conference of the American Society of Clinical Oncology, Puma Biotech revealed follow-up neratinib results that only modestly outperformed a placebo, plus a high rate of certain highly compromising side effects.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.Fidelity Advisor® Health Care Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Medtronic PLC | 7.8 | 5.7 |
| Allergan PLC | 6.6 | 7.5 |
| Teva Pharmaceutical Industries Ltd. sponsored ADR | 5.0 | 2.7 |
| Boston Scientific Corp. | 4.3 | 3.7 |
| AbbVie, Inc. | 4.2 | 0.6 |
| McKesson Corp. | 3.2 | 4.3 |
| Vertex Pharmaceuticals, Inc. | 3.0 | 2.5 |
| Amgen, Inc. | 2.5 | 4.7 |
| Shire PLC sponsored ADR | 2.4 | 3.0 |
| Bristol-Myers Squibb Co. | 2.3 | 0.9 |
| 41.3 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Pharmaceuticals | 36.6% | |
| Health Care Equipment & Supplies | 20.5% | |
| Biotechnology | 19.0% | |
| Health Care Providers & Services | 13.4% | |
| Health Care Technology | 3.2% | |
| All Others* | 7.3% | |
| As of January 31, 2015 | ||
| Pharmaceuticals | 29.4% | |
| Biotechnology | 27.4% | |
| Health Care Equipment & Supplies | 19.0% | |
| Health Care Providers & Services | 12.2% | |
| Health Care Technology | 4.4% | |
| All Others* | 7.6% | |
* Includes short-term investments and net other assets (liabilities).
Fidelity Advisor® Health Care Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 97.5% | |||
| Shares | Value | ||
| Biotechnology - 19.0% | |||
| Biotechnology - 19.0% | |||
| Ablynx NV (a) | 439,712 | $6,432,411 | |
| Acceleron Pharma, Inc. (a) | 105,738 | 3,028,336 | |
| Acorda Therapeutics, Inc. (a) | 190,171 | 6,534,276 | |
| Actelion Ltd. | 90,000 | 13,309,531 | |
| Advaxis, Inc. (a)(b) | 410,000 | 6,830,600 | |
| Alder Biopharmaceuticals, Inc. (a) | 240,000 | 11,140,800 | |
| Alnylam Pharmaceuticals, Inc. (a) | 94,402 | 12,029,647 | |
| AMAG Pharmaceuticals, Inc. (a) | 316,700 | 20,237,130 | |
| Amgen, Inc. | 475,517 | 83,971,547 | |
| Amicus Therapeutics, Inc. (a) | 521,400 | 8,962,866 | |
| Arena Pharmaceuticals, Inc. (a) | 2,000,000 | 8,080,000 | |
| Array BioPharma, Inc. (a)(b) | 800,000 | 4,648,000 | |
| Ascendis Pharma A/S ADR (b) | 400,000 | 8,012,000 | |
| Avalanche Biotechnologies, Inc. (a) | 39,952 | 588,093 | |
| Biogen, Inc. (a) | 111,884 | 35,666,382 | |
| BioMarin Pharmaceutical, Inc. (a) | 274,800 | 40,194,996 | |
| bluebird bio, Inc. (a) | 5,700 | 945,231 | |
| Blueprint Medicines Corp. | 74,377 | 2,009,667 | |
| Cara Therapeutics, Inc. (a) | 216,457 | 4,612,699 | |
| Celgene Corp. (a) | 114,308 | 15,002,925 | |
| Cellectis SA sponsored ADR | 220,700 | 7,837,057 | |
| Curis, Inc. (a) | 1,533,700 | 4,815,818 | |
| Discovery Laboratories, Inc. (a) | 1,574,833 | 803,165 | |
| Dyax Corp. (a) | 483,023 | 11,887,196 | |
| Gilead Sciences, Inc. | 341,362 | 40,232,925 | |
| Heron Therapeutics, Inc. (a) | 132,911 | 4,298,342 | |
| Incyte Corp. (a) | 77,700 | 8,102,556 | |
| Insmed, Inc. (a) | 545,227 | 14,775,652 | |
| Intercept Pharmaceuticals, Inc. (a) | 51,021 | 13,459,850 | |
| Mirati Therapeutics, Inc. (a) | 274,000 | 7,839,140 | |
| Neurocrine Biosciences, Inc. (a) | 340,000 | 17,040,800 | |
| ProNai Therapeutics, Inc. | 97,200 | 2,663,280 | |
| Puma Biotechnology, Inc. (a) | 342,439 | 31,024,973 | |
| Spark Therapeutics, Inc. | 125,106 | 7,686,513 | |
| TESARO, Inc. (a) | 260,000 | 15,080,000 | |
| Trevena, Inc. (a) | 1,000,000 | 5,820,000 | |
| Ultragenyx Pharmaceutical, Inc. (a) | 201,440 | 24,360,139 | |
| United Therapeutics Corp. (a) | 84,300 | 14,277,048 | |
| Vertex Pharmaceuticals, Inc. (a) | 737,800 | 99,603,000 | |
| Vital Therapies, Inc. (a)(b) | 240,000 | 3,892,800 | |
| Xencor, Inc. (a) | 264,873 | 5,930,506 | |
| 633,667,897 | |||
| Capital Markets - 0.0% | |||
| Asset Management & Custody Banks - 0.0% | |||
| RPI International Holdings LP (c) | 10,510 | 1,479,808 | |
| Diversified Consumer Services - 0.2% | |||
| Specialized Consumer Services - 0.2% | |||
| Carriage Services, Inc. | 215,735 | 5,184,112 | |
| Health Care Equipment & Supplies - 20.5% | |||
| Health Care Equipment - 19.5% | |||
| Atricure, Inc. (a) | 380,000 | 10,560,200 | |
| Boston Scientific Corp. (a) | 8,280,000 | 143,575,200 | |
| CONMED Corp. | 326,300 | 18,507,736 | |
| Edwards Lifesciences Corp. (a) | 93,657 | 14,250,849 | |
| HeartWare International, Inc. (a) | 171,671 | 15,572,276 | |
| Integra LifeSciences Holdings Corp. (a) | 150,000 | 9,619,500 | |
| Invuity, Inc. | 517,800 | 6,099,684 | |
| Medtronic PLC | 3,296,100 | 258,381,280 | |
| Neovasc, Inc. (a) | 1,100,000 | 6,490,000 | |
| Nevro Corp. | 137,500 | 6,980,875 | |
| ResMed, Inc. (b) | 231,300 | 13,403,835 | |
| St. Jude Medical, Inc. | 347,600 | 25,659,832 | |
| Steris Corp. | 172,084 | 11,896,167 | |
| Stryker Corp. | 200,000 | 20,454,000 | |
| Teleflex, Inc. | 128,000 | 17,150,720 | |
| Tornier NV (a) | 1,000,000 | 24,890,000 | |
| Wright Medical Group, Inc. (a) | 412,900 | 10,669,336 | |
| Zeltiq Aesthetics, Inc. (a)(b) | 253,818 | 8,718,648 | |
| Zimmer Biomet Holdings, Inc. | 254,100 | 26,444,187 | |
| 649,324,325 | |||
| Health Care Supplies - 1.0% | |||
| Derma Sciences, Inc. (a)(b) | 490,000 | 3,503,500 | |
| The Cooper Companies, Inc. | 159,169 | 28,172,913 | |
| The Spectranetics Corp. (a)(b) | 204,255 | 3,492,761 | |
| 35,169,174 | |||
| TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | 684,493,499 | ||
| Health Care Providers & Services - 13.3% | |||
| Health Care Distributors & Services - 3.8% | |||
| Amplifon SpA | 761,295 | 6,375,203 | |
| EBOS Group Ltd. | 1,100,157 | 7,915,729 | |
| McKesson Corp. | 490,000 | 108,079,300 | |
| United Drug PLC (United Kingdom) | 700,000 | 5,482,172 | |
| 127,852,404 | |||
| Health Care Facilities - 2.9% | |||
| Brookdale Senior Living, Inc. (a) | 406,070 | 13,453,099 | |
| HCA Holdings, Inc. (a) | 380,000 | 35,343,800 | |
| Surgical Care Affiliates, Inc. (a) | 547,905 | 20,831,348 | |
| Universal Health Services, Inc. Class B | 187,327 | 27,205,500 | |
| 96,833,747 | |||
| Health Care Services - 2.1% | |||
| Adeptus Health, Inc. Class A (a) | 120,010 | 13,187,899 | |
| DaVita HealthCare Partners, Inc. (a) | 280,000 | 22,128,400 | |
| Envision Healthcare Holdings, Inc. (a) | 758,704 | 33,989,939 | |
| 69,306,238 | |||
| Managed Health Care - 4.5% | |||
| Cigna Corp. | 450,000 | 64,827,000 | |
| UnitedHealth Group, Inc. | 603,424 | 73,255,674 | |
| Wellcare Health Plans, Inc. (a) | 126,900 | 10,253,520 | |
| 148,336,194 | |||
| TOTAL HEALTH CARE PROVIDERS & SERVICES | 442,328,583 | ||
| Health Care Technology - 3.2% | |||
| Health Care Technology - 3.2% | |||
| athenahealth, Inc. (a) | 239,100 | 33,464,436 | |
| Castlight Health, Inc. | 336,800 | 2,418,224 | |
| Castlight Health, Inc. Class B (a) | 28,300 | 203,194 | |
| Cerner Corp. (a) | 420,396 | 30,150,801 | |
| Connecture, Inc. | 500,000 | 4,715,000 | |
| Evolent Health, Inc. | 215,652 | 4,599,857 | |
| HealthStream, Inc. (a) | 526,075 | 14,761,665 | |
| Medidata Solutions, Inc. (a) | 304,774 | 16,396,841 | |
| 106,710,018 | |||
| Industrial Conglomerates - 1.0% | |||
| Industrial Conglomerates - 1.0% | |||
| Danaher Corp. | 358,323 | 32,808,054 | |
| Life Sciences Tools & Services - 3.1% | |||
| Life Sciences Tools & Services - 3.1% | |||
| Agilent Technologies, Inc. | 1,400,000 | 57,330,000 | |
| Bruker Corp. (a) | 575,553 | 12,115,391 | |
| PRA Health Sciences, Inc. | 279,143 | 11,721,215 | |
| Thermo Fisher Scientific, Inc. | 152,292 | 21,249,303 | |
| 102,415,909 | |||
| Pharmaceuticals - 36.6% | |||
| Pharmaceuticals - 36.6% | |||
| AbbVie, Inc. | 2,000,000 | 140,020,000 | |
| Allergan PLC (a) | 662,500 | 219,386,875 | |
| Amphastar Pharmaceuticals, Inc. (a)(b) | 600,000 | 9,756,000 | |
| Astellas Pharma, Inc. | 1,200,000 | 18,077,218 | |
| Bristol-Myers Squibb Co. | 1,162,803 | 76,326,389 | |
| Catalent, Inc. (a) | 400,000 | 13,632,000 | |
| Dechra Pharmaceuticals PLC | 530,000 | 8,148,455 | |
| Eisai Co. Ltd. | 307,100 | 20,058,696 | |
| Eli Lilly & Co. | 149,100 | 12,600,441 | |
| Endo Health Solutions, Inc. (a) | 600,000 | 52,524,000 | |
| Horizon Pharma PLC (a) | 564,000 | 20,783,400 | |
| Jazz Pharmaceuticals PLC (a) | 300,000 | 57,672,000 | |
| Jiangsu Hengrui Medicine Co. Ltd. | 1,430,000 | 10,346,616 | |
| Lee's Pharmaceutical Holdings Ltd. | 4,366,536 | 7,344,869 | |
| Mallinckrodt PLC (a) | 270,000 | 33,469,200 | |
| Mylan N.V. | 570,771 | 31,957,468 | |
| Novartis AG sponsored ADR | 415,800 | 43,139,250 | |
| Pacira Pharmaceuticals, Inc. (a) | 165,700 | 11,005,794 | |
| Perrigo Co. PLC | 231,500 | 44,494,300 | |
| Prestige Brands Holdings, Inc. (a) | 387,100 | 18,433,702 | |
| Sanofi SA sponsored ADR | 578,800 | 31,249,412 | |
| Shire PLC sponsored ADR | 300,000 | 80,043,000 | |
| Sun Pharmaceutical Industries Ltd. (a) | 805,082 | 10,347,211 | |
| Teva Pharmaceutical Industries Ltd. sponsored ADR | 2,403,200 | 165,868,864 | |
| TherapeuticsMD, Inc. (a) | 1,374,300 | 10,705,797 | |
| Valeant Pharmaceuticals International, Inc. (Canada) (a) | 228,000 | 58,456,979 | |
| ZS Pharma, Inc. (a) | 215,700 | 12,883,761 | |
| 1,218,731,697 | |||
| Professional Services - 0.6% | |||
| Human Resource & Employment Services - 0.6% | |||
| WageWorks, Inc. (a) | 415,600 | 20,759,220 | |
| TOTAL COMMON STOCKS | |||
| (Cost $2,601,949,861) | 3,248,578,797 | ||
| Convertible Preferred Stocks - 0.1% | |||
| Health Care Providers & Services - 0.1% | |||
| Health Care Services - 0.1% | |||
| 1Life Healthcare, Inc. Series G (a)(c) | |||
| (Cost $2,121,583) | 322,145 | 2,119,714 | |
| Money Market Funds - 3.1% | |||
| Fidelity Cash Central Fund, 0.17% (d) | 86,738,691 | 86,738,691 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (d)(e) | 16,798,950 | 16,798,950 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $103,537,641) | 103,537,641 | ||
| TOTAL INVESTMENT PORTFOLIO - 100.7% | |||
| (Cost $2,707,609,085) | 3,354,236,152 | ||
| NET OTHER ASSETS (LIABILITIES) - (0.7)% | (24,286,123) | ||
| NET ASSETS - 100% | $3,329,950,029 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(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 $3,599,522 or 0.1% of net assets.
(d) 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.
(e) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost |
| 1Life Healthcare, Inc. Series G | 4/10/14 | $2,121,583 |
| RPI International Holdings LP | 5/21/15 | $1,239,129 |
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 | $85,089 |
| Fidelity Securities Lending Cash Central Fund | 320,465 |
| Total | $405,554 |
Investment Valuation
The following is a summary of the inputs used, as of July 31, 2015, 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 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 | $3,248,578,797 | $3,247,098,989 | $-- | $1,479,808 |
| Convertible Preferred Stocks | 2,119,714 | -- | -- | 2,119,714 |
| Money Market Funds | 103,537,641 | 103,537,641 | -- | -- |
| Total Investments in Securities: | $3,354,236,152 | $3,350,636,630 | $-- | $3,599,522 |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 62.3% |
| Ireland | 20.8% |
| Israel | 5.0% |
| Bailiwick of Jersey | 2.4% |
| Canada | 2.0% |
| Netherlands | 1.7% |
| Switzerland | 1.7% |
| France | 1.1% |
| Japan | 1.1% |
| Others (Individually Less Than 1%) | 1.9% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Health Care Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $17,232,235) — See accompanying schedule: Unaffiliated issuers (cost $2,604,071,444) | $3,250,698,511 | |
| Fidelity Central Funds (cost $103,537,641) | 103,537,641 | |
| Total Investments (cost $2,707,609,085) | $3,354,236,152 | |
| Cash | 43,447 | |
| Receivable for investments sold | 50,535,915 | |
| Receivable for fund shares sold | 14,475,692 | |
| Dividends receivable | 1,452,088 | |
| Distributions receivable from Fidelity Central Funds | 102,354 | |
| Other receivables | 58,612 | |
| Total assets | 3,420,904,260 | |
| Liabilities | ||
| Payable for investments purchased | $65,526,845 | |
| Payable for fund shares redeemed | 5,399,936 | |
| Accrued management fee | 1,457,789 | |
| Distribution and service plan fees payable | 1,031,821 | |
| Other affiliated payables | 556,373 | |
| Other payables and accrued expenses | 182,517 | |
| Collateral on securities loaned, at value | 16,798,950 | |
| Total liabilities | 90,954,231 | |
| Net Assets | $3,329,950,029 | |
| Net Assets consist of: | ||
| Paid in capital | $2,486,070,902 | |
| Accumulated net investment loss | (17) | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 197,252,485 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 646,626,659 | |
| Net Assets | $3,329,950,029 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($1,374,653,882 ÷ 30,431,602 shares) | $45.17 | |
| Maximum offering price per share (100/94.25 of $45.17) | $47.93 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($348,885,699 ÷ 8,173,684 shares) | $42.68 | |
| Maximum offering price per share (100/96.50 of $42.68) | $44.23 | |
| Class B: | ||
| Net Asset Value and offering price per share ($12,925,770 ÷ 342,228 shares)(a) | $37.77 | |
| Class C: | ||
| Net Asset Value and offering price per share ($761,070,145 ÷ 20,321,950 shares)(a) | $37.45 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($832,414,533 ÷ 17,153,820 shares) | $48.53 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $12,871,454 | |
| Income from Fidelity Central Funds | 405,554 | |
| Total income | 13,277,008 | |
| Expenses | ||
| Management fee | $12,454,480 | |
| Transfer agent fees | 4,412,788 | |
| Distribution and service plan fees | 8,589,868 | |
| Accounting and security lending fees | 685,992 | |
| Custodian fees and expenses | 74,472 | |
| Independent trustees' compensation | 36,386 | |
| Registration fees | 325,691 | |
| Audit | 53,174 | |
| Legal | 22,966 | |
| Miscellaneous | 16,805 | |
| Total expenses before reductions | 26,672,622 | |
| Expense reductions | (169,003) | 26,503,619 |
| Net investment income (loss) | (13,226,611) | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 303,997,164 | |
| Foreign currency transactions | (60,982) | |
| Total net realized gain (loss) | 303,936,182 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | 322,305,767 | |
| Assets and liabilities in foreign currencies | (316) | |
| Total change in net unrealized appreciation (depreciation) | 322,305,451 | |
| Net gain (loss) | 626,241,633 | |
| Net increase (decrease) in net assets resulting from operations | $613,015,022 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $(13,226,611) | $(7,157,995) |
| Net realized gain (loss) | 303,936,182 | 181,443,195 |
| Change in net unrealized appreciation (depreciation) | 322,305,451 | 110,916,113 |
| Net increase (decrease) in net assets resulting from operations | 613,015,022 | 285,201,313 |
| Distributions to shareholders from net realized gain | (188,666,593) | (91,415,211) |
| Share transactions - net increase (decrease) | 1,510,649,436 | 462,114,251 |
| Redemption fees | 66,619 | 59,322 |
| Total increase (decrease) in net assets | 1,935,064,484 | 655,959,675 |
| Net Assets | ||
| Beginning of period | 1,394,885,545 | 738,925,870 |
| End of period (including accumulated net investment loss of $17 and accumulated net investment loss of $4,464,030, respectively) | $3,329,950,029 | $1,394,885,545 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Health Care Fund Class A
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $37.72 | $31.29 | $24.35 | $25.60 | $19.01 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.19) | (.18) | –B | (.04) | (.10) |
| Net realized and unrealized gain (loss) | 12.03 | 10.13 | 9.53 | 1.43 | 6.69 |
| Total from investment operations | 11.84 | 9.95 | 9.53 | 1.39 | 6.59 |
| Distributions from net realized gain | (4.39) | (3.52) | (2.59) | (2.64) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $45.17 | $37.72 | $31.29 | $24.35 | $25.60 |
| Total ReturnC,D | 34.07% | 34.79% | 42.77% | 7.58% | 34.67% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.04% | 1.08% | 1.14% | 1.19% | 1.19% |
| Expenses net of fee waivers, if any | 1.04% | 1.08% | 1.14% | 1.19% | 1.19% |
| Expenses net of all reductions | 1.04% | 1.07% | 1.13% | 1.18% | 1.18% |
| Net investment income (loss) | (.45)% | (.54)% | (.01)% | (.18)% | (.43)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $1,374,654 | $613,995 | $365,416 | $233,188 | $224,704 |
| Portfolio turnover rateG | 80% | 111% | 92% | 124% | 125% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Health Care Fund Class T
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $35.87 | $29.91 | $23.42 | $24.80 | $18.46 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.28) | (.26) | (.07) | (.09) | (.16) |
| Net realized and unrealized gain (loss) | 11.39 | 9.67 | 9.13 | 1.35 | 6.50 |
| Total from investment operations | 11.11 | 9.41 | 9.06 | 1.26 | 6.34 |
| Distributions from net realized gain | (4.30) | (3.45) | (2.57) | (2.64) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $42.68 | $35.87 | $29.91 | $23.42 | $24.80 |
| Total ReturnC,D | 33.69% | 34.49% | 42.39% | 7.27% | 34.34% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.31% | 1.34% | 1.39% | 1.43% | 1.44% |
| Expenses net of fee waivers, if any | 1.31% | 1.34% | 1.39% | 1.43% | 1.44% |
| Expenses net of all reductions | 1.30% | 1.34% | 1.38% | 1.43% | 1.43% |
| Net investment income (loss) | (.72)% | (.80)% | (.26)% | (.42)% | (.69)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $348,886 | $216,973 | $158,611 | $117,969 | $123,606 |
| Portfolio turnover rateG | 80% | 111% | 92% | 124% | 125% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Health Care Fund Class B
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $32.17 | $27.16 | $21.55 | $23.15 | $17.32 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.43) | (.40) | (.18) | (.19) | (.25) |
| Net realized and unrealized gain (loss) | 10.13 | 8.71 | 8.31 | 1.23 | 6.08 |
| Total from investment operations | 9.70 | 8.31 | 8.13 | 1.04 | 5.83 |
| Distributions from net realized gain | (4.10) | (3.30) | (2.52) | (2.64) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $37.77 | $32.17 | $27.16 | $21.55 | $23.15 |
| Total ReturnC,D | 33.00% | 33.72% | 41.61% | 6.78% | 33.66% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.85% | 1.91% | 1.93% | 1.94% | 1.94% |
| Expenses net of fee waivers, if any | 1.85% | 1.91% | 1.93% | 1.94% | 1.94% |
| Expenses net of all reductions | 1.85% | 1.90% | 1.91% | 1.93% | 1.93% |
| Net investment income (loss) | (1.26)% | (1.37)% | (.80)% | (.93)% | (1.19)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $12,926 | $13,405 | $14,517 | $15,403 | $20,365 |
| Portfolio turnover rateG | 80% | 111% | 92% | 124% | 125% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Health Care Fund Class C
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $32.03 | $27.11 | $21.51 | $23.11 | $17.29 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.41) | (.38) | (.17) | (.18) | (.24) |
| Net realized and unrealized gain (loss) | 10.05 | 8.68 | 8.31 | 1.22 | 6.06 |
| Total from investment operations | 9.64 | 8.30 | 8.14 | 1.04 | 5.82 |
| Distributions from net realized gain | (4.22) | (3.38) | (2.54) | (2.64) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $37.45 | $32.03 | $27.11 | $21.51 | $23.11 |
| Total ReturnC,D | 33.04% | 33.83% | 41.74% | 6.80% | 33.66% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.79% | 1.83% | 1.87% | 1.90% | 1.90% |
| Expenses net of fee waivers, if any | 1.79% | 1.83% | 1.87% | 1.90% | 1.90% |
| Expenses net of all reductions | 1.79% | 1.82% | 1.85% | 1.89% | 1.89% |
| Net investment income (loss) | (1.20)% | (1.29)% | (.74)% | (.89)% | (1.15)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $761,070 | $257,859 | $125,965 | $78,763 | $77,749 |
| Portfolio turnover rateG | 80% | 111% | 92% | 124% | 125% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Health Care Fund Class I
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $40.22 | $33.12 | $25.60 | $26.69 | $19.77 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.09) | (.10) | .07 | .03 | (.03) |
| Net realized and unrealized gain (loss) | 12.88 | 10.80 | 10.07 | 1.52 | 6.95 |
| Total from investment operations | 12.79 | 10.70 | 10.14 | 1.55 | 6.92 |
| Distributions from net realized gain | (4.48) | (3.60) | (2.62) | (2.64) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $48.53 | $40.22 | $33.12 | $25.60 | $26.69 |
| Total ReturnC | 34.40% | 35.21% | 43.12% | 7.91% | 35.00% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | .79% | .81% | .87% | .89% | .89% |
| Expenses net of fee waivers, if any | .79% | .81% | .87% | .89% | .89% |
| Expenses net of all reductions | .78% | .81% | .85% | .88% | .88% |
| Net investment income (loss) | (.20)% | (.27)% | .26% | .12% | (.13)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $832,415 | $292,654 | $74,417 | $40,737 | $45,243 |
| Portfolio turnover rateF | 80% | 111% | 92% | 124% | 125% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of July 31, 2015 is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, deferred trustees compensation, net operating losses and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $ 710,953,243 |
| Gross unrealized depreciation | (67,186,880) |
| Net unrealized appreciation (depreciation) on securities | $ 643,766,363 |
| Tax cost | $2,710,469,789 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed tax-exempt income | $110,883,814 |
| Undistributed ordinary income | $ 89,229,374 |
| Net unrealized appreciation (depreciation) on securities and other investments | $643,765,955 |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $39,548,467 | $ 26,242,071 |
| Long-term Capital Gains | 149,118,126 | 65,173,140 |
| Total | $188,666,593 | $ 91,415,211 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $3,036,424,104 and $1,779,135,244, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $2,378,836 | $52,030 |
| Class T | .25% | .25% | 1,405,434 | 996 |
| Class B | .75% | .25% | 133,723 | 100,351 |
| Class C | .75% | .25% | 4,671,875 | 2,037,051 |
| $8,589,868 | $2,190,428 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $1,360,135 |
| Class T | 146,517 |
| Class B* | 1,266 |
| Class C* | 85,269 |
| $1,593,187 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $1,841,320 | .19 |
| Class T | 581,819 | .21 |
| Class B | 33,636 | .25 |
| Class C | 917,011 | .20 |
| Class I | 1,039,002 | .19 |
| $ 4,412,788 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $48,690 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $3,021 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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 $320,465.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $126,401 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 by $67.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $12,065 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $13,536 |
| Class T | 4,784 |
| Class B | 204 |
| Class C | 5,829 |
| Class I | 6,117 |
| $30,470 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net realized gain | ||
| Class A | $79,203,094 | $43,930,276 |
| Class T | 27,289,653 | 18,842,643 |
| Class B | 1,660,970 | 1,694,148 |
| Class C | 39,451,396 | 17,484,352 |
| Class I | 41,061,480 | 9,463,792 |
| Total | $188,666,593 | $91,415,211 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 16,613,714 | 7,083,573 | $685,795,856 | $246,500,176 |
| Reinvestment of distributions | 1,907,379 | 1,286,052 | 71,987,733 | 39,516,716 |
| Shares redeemed | (4,365,455) | (3,773,574) | (177,799,342) | (131,027,775) |
| Net increase (decrease) | 14,155,638 | 4,596,051 | $579,984,247 | $154,989,117 |
| Class T | ||||
| Shares sold | 2,292,430 | 1,019,177 | $89,470,281 | $33,380,934 |
| Reinvestment of distributions | 737,547 | 618,886 | 26,321,410 | 18,107,896 |
| Shares redeemed | (905,351) | (891,508) | (35,007,523) | (29,012,294) |
| Net increase (decrease) | 2,124,626 | 746,555 | $80,784,168 | $22,476,536 |
| Class B | ||||
| Shares sold | 49,985 | 52,714 | $1,711,713 | $1,492,321 |
| Reinvestment of distributions | 47,751 | 57,285 | 1,514,650 | 1,511,205 |
| Shares redeemed | (172,141) | (227,802) | (5,890,995) | (6,589,471) |
| Net increase (decrease) | (74,405) | (117,803) | $(2,664,632) | $(3,585,945) |
| Class C | ||||
| Shares sold | 12,628,362 | 3,765,135 | $437,473,337 | $111,711,536 |
| Reinvestment of distributions | 1,088,220 | 567,385 | 34,383,515 | 14,940,641 |
| Shares redeemed | (1,445,818) | (928,018) | (49,753,436) | (27,242,442) |
| Net increase (decrease) | 12,270,764 | 3,404,502 | $422,103,416 | $99,409,735 |
| Class I | ||||
| Shares sold | 13,587,551 | 6,450,084 | $597,091,181 | $241,929,933 |
| Reinvestment of distributions | 926,189 | 259,255 | 37,490,066 | 8,481,841 |
| Shares redeemed | (4,637,021) | (1,678,853) | (204,139,010) | (61,586,966) |
| Net increase (decrease) | 9,876,719 | 5,030,486 | $430,442,237 | $188,824,808 |
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.
Fidelity Advisor® Industrials Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class I | 8.45% | 15.20% | 10.21% |
Prior to October 1, 2006, the 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 I on July 31, 2005. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values | ||
| $26,432 | Fidelity Advisor® Industrials Fund - Class I | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Industrials Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Tobias Welo: For the year, the fund's share classes handily outpaced the 6.97% gain of the MSCI U.S. IMI Industrials 25/50 Index but lagged the broadly based S&P 500®. (For specific class-level results, please see the Performance section of this report.) Versus the MSCI index, stock selection was the main driver of results, with subindustry selection a secondary positive. The fund's positioning in building products particularly bolstered relative performance. One contributor here was A.O. Smith, which reported strong quarterly financial results in both January and April. Lennox International, a provider of residential and commercial heating and cooling systems, also did well and rewarded our overweighting there. Industrial conglomerate Danaher, the fund's largest overweighting at period end, further bolstered relative results. Conversely, an underweighting and weak stock picking in airlines – a segment in which the fund started with an underweight and had virtually no exposure by period end – hurt relative performance. At the stock level, a sizable overweighting in crane- and refrigeration-equipment manufacturer Manitowoc was the fund's biggest relative detractor. Relative performance also suffered because of a non-benchmark position in Golar LNG, the leading independent owner/operator of liquefied natural gas carriers. I sold this stock in January 2015.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.Fidelity Advisor® Industrials Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| General Electric Co. | 12.1 | 1.9 |
| Danaher Corp. | 7.7 | 6.8 |
| FedEx Corp. | 6.6 | 5.3 |
| United Technologies Corp. | 5.8 | 8.1 |
| The Boeing Co. | 5.6 | 5.5 |
| J.B. Hunt Transport Services, Inc. | 5.4 | 3.2 |
| Honeywell International, Inc. | 4.0 | 4.8 |
| Union Pacific Corp. | 3.7 | 5.4 |
| Raytheon Co. | 2.9 | 2.0 |
| General Dynamics Corp. | 2.7 | 2.3 |
| 56.5 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Aerospace & Defense | 26.4% | |
| Industrial Conglomerates | 19.8% | |
| Road & Rail | 10.3% | |
| Electrical Equipment | 7.1% | |
| Machinery | 6.7% | |
| All Others* | 29.7% | |
| As of January 31, 2015 | ||
| Aerospace & Defense | 29.3% | |
| Machinery | 12.7% | |
| Road & Rail | 11.6% | |
| Professional Services | 9.5% | |
| Industrial Conglomerates | 8.7% | |
| All Others* | 28.2% | |
* Includes short-term investments and net other assets (liabilities).
Fidelity Advisor® Industrials Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 99.5% | |||
| Shares | Value | ||
| Aerospace & Defense - 26.4% | |||
| Aerospace & Defense - 26.4% | |||
| General Dynamics Corp. | 141,762 | $21,138,132 | |
| Honeywell International, Inc. | 294,433 | 30,930,187 | |
| Orbital ATK, Inc. | 137,169 | 9,732,141 | |
| Raytheon Co. | 204,900 | 22,352,541 | |
| Teledyne Technologies, Inc. (a) | 134,665 | 13,960,721 | |
| Textron, Inc. | 421,078 | 18,401,109 | |
| The Boeing Co. | 304,529 | 43,903,946 | |
| United Technologies Corp. | 445,951 | 44,733,345 | |
| 205,152,122 | |||
| Air Freight & Logistics - 6.6% | |||
| Air Freight & Logistics - 6.6% | |||
| FedEx Corp. | 298,632 | 51,191,497 | |
| Airlines - 0.3% | |||
| Airlines - 0.3% | |||
| Copa Holdings SA Class A | 25,100 | 1,895,803 | |
| Building Products - 5.4% | |||
| Building Products - 5.4% | |||
| A.O. Smith Corp. | 236,342 | 16,974,082 | |
| Caesarstone Sdot-Yam Ltd. | 60,392 | 4,332,522 | |
| Lennox International, Inc. | 173,704 | 20,509,231 | |
| 41,815,835 | |||
| Commercial Services & Supplies - 4.8% | |||
| Diversified Support Services - 1.3% | |||
| KAR Auction Services, Inc. | 255,800 | 9,958,294 | |
| Office Services & Supplies - 1.8% | |||
| West Corp. | 495,832 | 14,304,753 | |
| Security & Alarm Services - 1.7% | |||
| Tyco International Ltd. | 345,500 | 13,125,545 | |
| TOTAL COMMERCIAL SERVICES & SUPPLIES | 37,388,592 | ||
| Construction & Engineering - 2.7% | |||
| Construction & Engineering - 2.7% | |||
| AECOM Technology Corp. (a) | 677,621 | 20,891,055 | |
| Diversified Consumer Services - 1.1% | |||
| Specialized Consumer Services - 1.1% | |||
| ServiceMaster Global Holdings, Inc. (a) | 213,000 | 8,249,490 | |
| Electrical Equipment - 7.1% | |||
| Electrical Components & Equipment - 4.9% | |||
| Acuity Brands, Inc. | 2,100 | 422,499 | |
| AMETEK, Inc. | 269,200 | 14,281,060 | |
| Eaton Corp. PLC | 272,100 | 16,483,818 | |
| EnerSys | 108,277 | 6,761,899 | |
| 37,949,276 | |||
| Heavy Electrical Equipment - 2.2% | |||
| BWX Technologies, Inc. | 696,900 | 17,115,864 | |
| TOTAL ELECTRICAL EQUIPMENT | 55,065,140 | ||
| Energy Equipment & Services - 0.2% | |||
| Oil & Gas Equipment & Services - 0.2% | |||
| Aspen Aerogels, Inc. (a) | 234,166 | 1,543,154 | |
| Industrial Conglomerates - 19.8% | |||
| Industrial Conglomerates - 19.8% | |||
| Danaher Corp. | 659,132 | 60,350,126 | |
| General Electric Co. | 3,592,748 | 93,770,721 | |
| 154,120,847 | |||
| Machinery - 6.7% | |||
| Agricultural & Farm Machinery - 2.0% | |||
| Deere & Co. | 165,250 | 15,627,693 | |
| Construction Machinery & Heavy Trucks - 0.8% | |||
| Manitowoc Co., Inc. (b) | 363,927 | 6,430,590 | |
| Industrial Machinery - 3.9% | |||
| IDEX Corp. | 164,229 | 12,486,331 | |
| Ingersoll-Rand PLC | 210,600 | 12,930,840 | |
| Pentair PLC | 77,800 | 4,731,018 | |
| 30,148,189 | |||
| TOTAL MACHINERY | 52,206,472 | ||
| Professional Services - 3.9% | |||
| Research & Consulting Services - 3.9% | |||
| CEB, Inc. | 121,200 | 9,274,224 | |
| Huron Consulting Group, Inc. (a) | 111,520 | 8,527,934 | |
| Verisk Analytics, Inc. (a) | 161,544 | 12,618,202 | |
| 30,420,360 | |||
| Road & Rail - 10.3% | |||
| Railroads - 4.9% | |||
| Kansas City Southern | 93,000 | 9,224,670 | |
| Union Pacific Corp. | 300,628 | 29,338,287 | |
| 38,562,957 | |||
| Trucking - 5.4% | |||
| J.B. Hunt Transport Services, Inc. | 496,684 | 41,781,058 | |
| TOTAL ROAD & RAIL | 80,344,015 | ||
| Trading Companies & Distributors - 4.2% | |||
| Trading Companies & Distributors - 4.2% | |||
| AerCap Holdings NV (a) | 220,400 | 10,323,536 | |
| HD Supply Holdings, Inc. (a) | 520,206 | 18,623,375 | |
| Wolseley PLC | 58,863 | 3,912,260 | |
| 32,859,171 | |||
| TOTAL COMMON STOCKS | |||
| (Cost $649,473,861) | 773,143,553 | ||
| Money Market Funds - 1.3% | |||
| Fidelity Cash Central Fund, 0.17% (c) | 3,834,417 | 3,834,417 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (c)(d) | 6,367,883 | 6,367,883 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $10,202,300) | 10,202,300 | ||
| TOTAL INVESTMENT PORTFOLIO - 100.8% | |||
| (Cost $659,676,161) | 783,345,853 | ||
| NET OTHER ASSETS (LIABILITIES) - (0.8)% | (6,170,423) | ||
| NET ASSETS - 100% | $777,175,430 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) 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.
(d) Investment made with cash collateral received from securities on loan.
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 | $8,175 |
| Fidelity Securities Lending Cash Central Fund | 114,891 |
| Total | $123,066 |
Investment Valuation
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Industrials Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $6,429,742) — See accompanying schedule: Unaffiliated issuers (cost $649,473,861) | $773,143,553 | |
| Fidelity Central Funds (cost $10,202,300) | 10,202,300 | |
| Total Investments (cost $659,676,161) | $783,345,853 | |
| Receivable for investments sold | 6,639,480 | |
| Receivable for fund shares sold | 256,062 | |
| Dividends receivable | 766,155 | |
| Distributions receivable from Fidelity Central Funds | 1,681 | |
| Other receivables | 14,189 | |
| Total assets | 791,023,420 | |
| Liabilities | ||
| Payable for investments purchased | $4,781,788 | |
| Payable for fund shares redeemed | 1,877,925 | |
| Accrued management fee | 359,987 | |
| Distribution and service plan fees payable | 231,848 | |
| Other affiliated payables | 157,181 | |
| Other payables and accrued expenses | 71,378 | |
| Collateral on securities loaned, at value | 6,367,883 | |
| Total liabilities | 13,847,990 | |
| Net Assets | $777,175,430 | |
| Net Assets consist of: | ||
| Paid in capital | $600,598,291 | |
| Undistributed net investment income | 1,206,981 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 51,700,941 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 123,669,217 | |
| Net Assets | $777,175,430 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($333,404,896 ÷ 8,996,632 shares) | $37.06 | |
| Maximum offering price per share (100/94.25 of $37.06) | $39.32 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($88,115,877 ÷ 2,424,315 shares) | $36.35 | |
| Maximum offering price per share (100/96.50 of $36.35) | $37.67 | |
| Class B: | ||
| Net Asset Value and offering price per share ($6,698,494 ÷ 198,622 shares)(a) | $33.72 | |
| Class C: | ||
| Net Asset Value and offering price per share ($141,494,112 ÷ 4,159,255 shares)(a) | $34.02 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($207,462,051 ÷ 5,364,373 shares) | $38.67 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $12,788,133 | |
| Income from Fidelity Central Funds | 123,066 | |
| Total income | 12,911,199 | |
| Expenses | ||
| Management fee | $4,683,103 | |
| Transfer agent fees | 1,704,217 | |
| Distribution and service plan fees | 2,975,949 | |
| Accounting and security lending fees | 294,905 | |
| Custodian fees and expenses | 20,158 | |
| Independent trustees' compensation | 15,167 | |
| Registration fees | 127,692 | |
| Audit | 47,882 | |
| Legal | 10,378 | |
| Interest | 190 | |
| Miscellaneous | 10,653 | |
| Total expenses before reductions | 9,890,294 | |
| Expense reductions | (50,465) | 9,839,829 |
| Net investment income (loss) | 3,071,370 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 72,044,308 | |
| Foreign currency transactions | (1,584) | |
| Total net realized gain (loss) | 72,042,724 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (8,020,899) | |
| Assets and liabilities in foreign currencies | (963) | |
| Total change in net unrealized appreciation (depreciation) | (8,021,862) | |
| Net gain (loss) | 64,020,862 | |
| Net increase (decrease) in net assets resulting from operations | $67,092,232 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $3,071,370 | $1,948,813 |
| Net realized gain (loss) | 72,042,724 | 62,719,747 |
| Change in net unrealized appreciation (depreciation) | (8,021,862) | 7,086,556 |
| Net increase (decrease) in net assets resulting from operations | 67,092,232 | 71,755,116 |
| Distributions to shareholders from net investment income | (2,601,876) | (2,130,491) |
| Distributions to shareholders from net realized gain | (62,327,818) | (26,777,623) |
| Total distributions | (64,929,694) | (28,908,114) |
| Share transactions - net increase (decrease) | (97,329,347) | 286,586,081 |
| Redemption fees | 26,890 | 23,406 |
| Total increase (decrease) in net assets | (95,139,919) | 329,456,489 |
| Net Assets | ||
| Beginning of period | 872,315,349 | 542,858,860 |
| End of period (including undistributed net investment income of $1,206,981 and undistributed net investment income of $853,887, respectively) | $777,175,430 | $872,315,349 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Industrials Fund Class A
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $36.92 | $34.50 | $26.18 | $25.73 | $21.54 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .17 | .13 | .23 | .20 | .09 |
| Net realized and unrealized gain (loss) | 2.76 | 4.01 | 8.33 | .61 | 4.13 |
| Total from investment operations | 2.93 | 4.14 | 8.56 | .81 | 4.22 |
| Distributions from net investment income | (.11) | (.15) | (.24) | (.11) | (.03) |
| Distributions from net realized gain | (2.68) | (1.58) | – | (.25) | – |
| Total distributions | (2.79) | (1.72)B | (.24) | (.36) | (.03) |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $37.06 | $36.92 | $34.50 | $26.18 | $25.73 |
| Total ReturnD,E | 8.17% | 12.52% | 32.92% | 3.42% | 19.59% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.06% | 1.09% | 1.11% | 1.14% | 1.13% |
| Expenses net of fee waivers, if any | 1.06% | 1.09% | 1.11% | 1.14% | 1.13% |
| Expenses net of all reductions | 1.06% | 1.09% | 1.11% | 1.14% | 1.13% |
| Net investment income (loss) | .46% | .37% | .77% | .80% | .36% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $333,405 | $378,826 | $271,512 | $192,038 | $228,106 |
| Portfolio turnover rateH | 70% | 57% | 78% | 82% | 75% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $1.72 per share is comprised of distributions from net investment income of $.146 and distributions from net realized gain of $1.577 per share.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Industrials Fund Class T
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $36.29 | $33.93 | $25.75 | $25.33 | $21.24 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .07 | .04 | .15 | .13 | .03 |
| Net realized and unrealized gain (loss) | 2.71 | 3.95 | 8.20 | .61 | 4.07 |
| Total from investment operations | 2.78 | 3.99 | 8.35 | .74 | 4.10 |
| Distributions from net investment income | (.05) | (.06) | (.17) | (.07) | (.01) |
| Distributions from net realized gain | (2.67) | (1.58) | – | (.25) | – |
| Total distributions | (2.72) | (1.63)B | (.17) | (.32) | (.01) |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $36.35 | $36.29 | $33.93 | $25.75 | $25.33 |
| Total ReturnD,E | 7.88% | 12.27% | 32.60% | 3.15% | 19.28% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.33% | 1.33% | 1.37% | 1.40% | 1.39% |
| Expenses net of fee waivers, if any | 1.32% | 1.33% | 1.37% | 1.40% | 1.39% |
| Expenses net of all reductions | 1.32% | 1.33% | 1.36% | 1.39% | 1.38% |
| Net investment income (loss) | .20% | .12% | .52% | .54% | .10% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $88,116 | $90,509 | $79,172 | $63,954 | $71,542 |
| Portfolio turnover rateH | 70% | 57% | 78% | 82% | 75% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $1.63 per share is comprised of distributions from net investment income of $.057 and distributions from net realized gain of $1.577 per share.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Industrials Fund Class B
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $34.02 | $31.97 | $24.29 | $23.99 | $20.22 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.11) | (.14) | (.01) | –B | (.11) |
| Net realized and unrealized gain (loss) | 2.52 | 3.71 | 7.74 | .57 | 3.88 |
| Total from investment operations | 2.41 | 3.57 | 7.73 | .57 | 3.77 |
| Distributions from net investment income | (.03) | – | (.05) | (.02) | – |
| Distributions from net realized gain | (2.68) | (1.52) | – | (.25) | – |
| Total distributions | (2.71) | (1.52) | (.05) | (.27) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $33.72 | $34.02 | $31.97 | $24.29 | $23.99 |
| Total ReturnC,D | 7.29% | 11.64% | 31.87% | 2.59% | 18.64% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.86% | 1.88% | 1.92% | 1.94% | 1.93% |
| Expenses net of fee waivers, if any | 1.85% | 1.88% | 1.92% | 1.94% | 1.93% |
| Expenses net of all reductions | 1.85% | 1.87% | 1.91% | 1.94% | 1.93% |
| Net investment income (loss) | (.33)% | (.42)% | (.04)% | - %G | (.44)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $6,698 | $12,459 | $17,502 | $20,058 | $28,600 |
| Portfolio turnover rateH | 70% | 57% | 78% | 82% | 75% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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%.
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Industrials Fund Class C
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $34.13 | $32.08 | $24.38 | $24.07 | $20.28 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.10) | (.13) | .01 | .01 | (.09) |
| Net realized and unrealized gain (loss) | 2.54 | 3.73 | 7.75 | .58 | 3.88 |
| Total from investment operations | 2.44 | 3.60 | 7.76 | .59 | 3.79 |
| Distributions from net investment income | – | – | (.06) | (.03) | – |
| Distributions from net realized gain | (2.55) | (1.55) | – | (.25) | – |
| Total distributions | (2.55) | (1.55) | (.06) | (.28) | – |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $34.02 | $34.13 | $32.08 | $24.38 | $24.07 |
| Total ReturnC,D | 7.36% | 11.71% | 31.90% | 2.67% | 18.69% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.82% | 1.83% | 1.87% | 1.89% | 1.89% |
| Expenses net of fee waivers, if any | 1.82% | 1.83% | 1.87% | 1.89% | 1.89% |
| Expenses net of all reductions | 1.81% | 1.83% | 1.86% | 1.88% | 1.88% |
| Net investment income (loss) | (.30)% | (.38)% | .02% | .05% | (.40)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $141,494 | $147,749 | $89,893 | $66,289 | $72,673 |
| Portfolio turnover rateG | 70% | 57% | 78% | 82% | 75% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Industrials Fund Class I
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $38.42 | $35.83 | $27.18 | $26.69 | $22.30 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .28 | .25 | .33 | .28 | .17 |
| Net realized and unrealized gain (loss) | 2.87 | 4.16 | 8.64 | .63 | 4.28 |
| Total from investment operations | 3.15 | 4.41 | 8.97 | .91 | 4.45 |
| Distributions from net investment income | (.22) | (.24) | (.32) | (.17) | (.06) |
| Distributions from net realized gain | (2.68) | (1.58) | – | (.25) | – |
| Total distributions | (2.90) | (1.82) | (.32) | (.42) | (.06) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $38.67 | $38.42 | $35.83 | $27.18 | $26.69 |
| Total ReturnC | 8.45% | 12.82% | 33.28% | 3.72% | 19.95% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | .80% | .81% | .84% | .85% | .85% |
| Expenses net of fee waivers, if any | .80% | .81% | .84% | .85% | .85% |
| Expenses net of all reductions | .79% | .81% | .83% | .85% | .84% |
| Net investment income (loss) | .72% | .64% | 1.04% | 1.08% | .65% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $207,462 | $242,772 | $84,780 | $42,850 | $68,323 |
| Portfolio turnover rateF | 70% | 57% | 78% | 82% | 75% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions 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 | $135,684,178 |
| Gross unrealized depreciation | (13,601,552) |
| Net unrealized appreciation (depreciation) on securities | $122,082,626 |
| Tax Cost | $661,263,227 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $1,206,982 |
| Undistributed long-term capital gain | $53,288,008 |
| Net unrealized appreciation (depreciation) on securities and other investments | $122,082,151 |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $5,181,299 | $ 6,372,762 |
| Long-term Capital Gains | 59,748,395 | 22,535,352 |
| Total | $64,929,694 | $ 28,908,114 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $591,182,743 and $737,053,857, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | –% | .25% | $907,096 | $ 8,382 |
| Class T | .25% | .25% | 460,830 | - |
| Class B | .75% | .25% | 98,405 | 73,829 |
| Class C | .75% | .25% | 1,509,618 | 363,133 |
| $2,975,949 | $ 445,344 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $122,486 |
| Class T | 13,144 |
| Class B* | 3,331 |
| Class C* | 32,550 |
| $171,511 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $732,207 | .20 |
| Class T | 197,324 | .21 |
| Class B | 23,845 | .24 |
| Class C | 309,991 | .21 |
| Class I | 440,850 | .19 |
| $1,704,217 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $11,396 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $3,411,833 | .33% | $190 |
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,254 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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 $114,891.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $30,250 for the period.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $3,279 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | 7,693 |
| Class T | 1,997 |
| Class B | 328 |
| Class C | 2,891 |
| Class I | 4,027 |
| 16,936 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $1,073,088 | $1,245,229 |
| Class T | 117,188 | 134,405 |
| Class B | 10,986 | – |
| Class I | 1,400,614 | 750,857 |
| Total | $2,601,876 | $2,130,491 |
| From net realized gain | ||
| Class A | $26,712,147 | $13,069,252 |
| Class T | 6,664,310 | 3,703,526 |
| Class B | 905,701 | 784,693 |
| Class C | 11,132,591 | 4,700,595 |
| Class I | 16,913,069 | 4,519,557 |
| Total | $62,327,818 | $26,777,623 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 1,896,772 | 4,772,547 | $70,041,684 | $175,272,457 |
| Reinvestment of distributions | 707,344 | 371,629 | 25,707,295 | 12,577,496 |
| Shares redeemed | (3,868,022) | (2,753,437) | (142,586,857) | (102,587,048) |
| Net increase (decrease) | (1,263,906) | 2,390,739 | $(46,837,878) | $85,262,905 |
| Class T | ||||
| Shares sold | 223,605 | 488,031 | $8,111,419 | $17,620,607 |
| Reinvestment of distributions | 183,489 | 111,368 | 6,551,657 | 3,695,039 |
| Shares redeemed | (477,116) | (438,393) | (17,277,571) | (15,778,298) |
| Net increase (decrease) | (70,022) | 161,006 | $(2,614,495) | $5,537,348 |
| Class B | ||||
| Shares sold | 7,145 | 23,437 | $236,954 | $779,028 |
| Reinvestment of distributions | 23,129 | 20,842 | 769,253 | 646,413 |
| Shares redeemed | (197,915) | (225,514) | (6,710,202) | (7,608,429) |
| Net increase (decrease) | (167,641) | (181,235) | $(5,703,995) | $(6,182,988) |
| Class C | ||||
| Shares sold | 897,971 | 2,035,151 | $30,459,518 | $69,252,170 |
| Reinvestment of distributions | 266,310 | 122,955 | 8,933,204 | 3,851,644 |
| Shares redeemed | (1,333,978) | (631,000) | (45,225,201) | (21,673,420) |
| Net increase (decrease) | (169,697) | 1,527,106 | $(5,832,479) | $51,430,394 |
| Class I | ||||
| Shares sold | 2,703,369 | 5,450,475 | $103,567,578 | $209,069,151 |
| Reinvestment of distributions | 388,187 | 116,471 | 14,699,436 | 4,133,979 |
| Shares redeemed | (4,045,495) | (1,614,908) | (154,607,514) | (62,664,708) |
| Net increase (decrease) | (953,939) | 3,952,038 | $(36,340,500) | $150,538,422 |
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.
Fidelity Advisor® Technology Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class I | 11.30% | 15.73% | 9.97% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Technology Fund - Class I on July 31, 2005. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values | ||
| $25,858 | Fidelity Advisor® Technology Fund - Class I | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Technology Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015 as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. As a result, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for consumer staples and the real estate segment of the financials sector yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Charlie Chai: For the year, the fund's share classes lagged the 13.06% gain of the MSCI U.S. IMI Information Technology 25/50 Index and also trailed the broadly based S&P 500®. (For specific class-level results, please see the Performance section of this report.) Versus the MSCI index, stock selection in Internet software & services held back relative performance. At the stock level, an overweighting in Internet portal Yahoo! was the fund's biggest relative detractor. I added to our share count in Yahoo! during the period but continued to monitor the tax ramifications – still in flux at period end – of a proposed spinoff of its large stake in Alibaba Group Holding, which reported disappointing earnings amid a slowing Chinese economy. An out-of-benchmark stake in NAVER, South Korea's top Web-search operator, also hurt relative results, as did a sizable underweighting in strong-performing payment processor and index name Visa. Conversely, stock selection in the mega-cap group was a noteworthy positive. For example, not owning IT services giant IBM, an index component and our top relative contributor, bolstered results, as did mostly avoiding PC chipmaker Intel, another weak-performing index name. Lastly, our non-U.S. holdings contributed, despite the headwind of a rising U.S dollar.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.Fidelity Advisor® Technology Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Apple, Inc. | 12.9 | 14.1 |
| Facebook, Inc. Class A | 7.0 | 6.6 |
| Google, Inc. Class C | 5.2 | 4.2 |
| Google, Inc. Class A | 5.0 | 4.1 |
| QUALCOMM, Inc. | 2.7 | 2.1 |
| Yahoo!, Inc. | 2.1 | 3.1 |
| Microsoft Corp. | 2.1 | 0.0 |
| Tesla Motors, Inc. | 2.0 | 0.7 |
| Hewlett-Packard Co. | 1.9 | 2.0 |
| Oracle Corp. | 1.8 | 0.7 |
| 42.7 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Internet Software & Services | 29.2% | |
| Technology Hardware, Storage & Peripherals | 16.4% | |
| Software | 14.9% | |
| Semiconductors & Semiconductor Equipment | 10.3% | |
| IT Services | 6.1% | |
| All Others* | 23.1% | |
| As of January 31, 2015 | ||
| Internet Software & Services | 29.9% | |
| Technology Hardware, Storage & Peripherals | 17.9% | |
| Software | 12.8% | |
| Semiconductors & Semiconductor Equipment | 9.7% | |
| Communications Equipment | 7.2% | |
| All Others* | 22.5% | |
* Includes short-term investments and net other assets (liabilities).
Percentages shown as 0.0% may reflect amounts less than 0.05%.
Fidelity Advisor® Technology Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 97.8% | |||
| Shares | Value | ||
| Auto Components - 0.0% | |||
| Auto Parts & Equipment - 0.0% | |||
| NOK Corp. | 24,700 | $724,448 | |
| Automobiles - 2.0% | |||
| Automobile Manufacturers - 2.0% | |||
| Tesla Motors, Inc. (a)(b) | 123,209 | 32,792,075 | |
| Banks - 0.9% | |||
| Diversified Banks - 0.9% | |||
| Hangzhou Hikvision Digital Technology Co. Ltd. ELS (BNP Paribas Warrant Program) warrants 11/27/17 (a)(c) | 2,184,400 | 11,617,669 | |
| Luxshare Precision Industry Co. Ltd. ELS (BNP Paribas Warrant Program) warrants 6/3/16 (a)(c) | 173,750 | 949,088 | |
| Midea Group ELS (BNP Paribas Arbitrage Warrant Program) warrants 1/6/16 (a)(c) | 417,500 | 2,228,773 | |
| 14,795,530 | |||
| Biotechnology - 0.1% | |||
| Biotechnology - 0.1% | |||
| JHL Biotech, Inc. (d) | 277,738 | 1,038,740 | |
| Capital Markets - 0.1% | |||
| Diversified Capital Markets - 0.1% | |||
| Shenzhen O-film Tech Co. Ltd. ELS (UBS Warrant Program) warrants 7/18/16 (a)(c) | 292,500 | 1,294,871 | |
| Chemicals - 0.2% | |||
| Industrial Gases - 0.1% | |||
| OCI Materials Co. Ltd. | 8,666 | 987,712 | |
| Specialty Chemicals - 0.1% | |||
| Duk San Neolux Co. Ltd. (a) | 105,097 | 1,410,559 | |
| JSR Corp. | 8,900 | 148,220 | |
| Nitto Denko Corp. | 2,200 | 166,684 | |
| 1,725,463 | |||
| TOTAL CHEMICALS | 2,713,175 | ||
| Communications Equipment - 4.7% | |||
| Communications Equipment - 4.7% | |||
| BYD Electronic International Co. Ltd. | 1,793,500 | 1,492,212 | |
| Ciena Corp. (a)(b) | 192,000 | 4,886,400 | |
| Cisco Systems, Inc. | 231,100 | 6,567,862 | |
| CommScope Holding Co., Inc. (a) | 373,800 | 11,726,106 | |
| Ixia (a) | 234,825 | 3,099,690 | |
| Juniper Networks, Inc. | 32,466 | 922,684 | |
| Palo Alto Networks, Inc. (a) | 15,400 | 2,861,782 | |
| QUALCOMM, Inc. | 680,800 | 43,836,712 | |
| Radware Ltd. (a) | 610 | 11,614 | |
| 75,405,062 | |||
| Construction Materials - 0.0% | |||
| Construction Materials - 0.0% | |||
| Universal Cement Corp. | 378,705 | 284,687 | |
| Diversified Consumer Services - 0.7% | |||
| Education Services - 0.7% | |||
| New Oriental Education & Technology Group, Inc. sponsored ADR | 475,700 | 10,655,680 | |
| Specialized Consumer Services - 0.0% | |||
| LifeLock, Inc. (a)(b) | 867 | 6,867 | |
| TOTAL DIVERSIFIED CONSUMER SERVICES | 10,662,547 | ||
| Diversified Telecommunication Services - 0.1% | |||
| Alternative Carriers - 0.1% | |||
| 8x8, Inc. (a) | 271,800 | 2,367,378 | |
| Electrical Equipment - 0.9% | |||
| Electrical Components & Equipment - 0.9% | |||
| Lumenpulse, Inc. (a) | 21,700 | 237,433 | |
| Nidec Corp. | 40,700 | 3,638,837 | |
| OSRAM Licht AG | 187,063 | 10,650,110 | |
| 14,526,380 | |||
| Electronic Equipment & Components - 3.7% | |||
| Electronic Components - 1.4% | |||
| Alps Electric Co. Ltd. | 1,200 | 37,907 | |
| Largan Precision Co. Ltd. | 1,000 | 101,232 | |
| Ledlink Optics, Inc. | 753,405 | 1,131,535 | |
| OMRON Corp. | 95,600 | 3,752,725 | |
| Samsung SDI Co. Ltd. | 38,955 | 2,866,402 | |
| Sunny Optical Technology Group Co. Ltd. | 3,712,100 | 7,163,425 | |
| Taiyo Yuden Co. Ltd. | 56,900 | 713,919 | |
| TDK Corp. | 10,300 | 722,209 | |
| TPK Holding Co. Ltd. | 688,000 | 2,346,936 | |
| Universal Display Corp. (a) | 21,800 | 1,040,078 | |
| Yageo Corp. | 2,063,660 | 2,933,187 | |
| Yaskawa Electric Corp. | 1,100 | 13,056 | |
| 22,822,611 | |||
| Electronic Equipment & Instruments - 0.3% | |||
| Chroma ATE, Inc. | 1,671,683 | 3,379,271 | |
| Cognex Corp. | 34,600 | 1,566,342 | |
| FEI Co. | 200 | 17,194 | |
| Keyence Corp. | 300 | 151,289 | |
| 5,114,096 | |||
| Electronic Manufacturing Services - 1.8% | |||
| TE Connectivity Ltd. | 110,729 | 6,745,611 | |
| Trimble Navigation Ltd. (a) | 945,396 | 21,838,648 | |
| 28,584,259 | |||
| Technology Distributors - 0.2% | |||
| Digital China Holdings Ltd. (H Shares) | 2,566,000 | 2,542,069 | |
| TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 59,063,035 | ||
| Health Care Equipment & Supplies - 0.1% | |||
| Health Care Equipment - 0.1% | |||
| Intai Technology Corp. | 439,000 | 1,553,001 | |
| Olympus Corp. | 4,500 | 172,469 | |
| 1,725,470 | |||
| Health Care Providers & Services - 0.0% | |||
| Managed Health Care - 0.0% | |||
| HealthEquity, Inc. (a) | 600 | 20,196 | |
| Health Care Technology - 0.7% | |||
| Health Care Technology - 0.7% | |||
| athenahealth, Inc. (a) | 66,994 | 9,376,480 | |
| M3, Inc. | 78,200 | 1,844,343 | |
| Medidata Solutions, Inc. (a) | 15,200 | 817,760 | |
| 12,038,583 | |||
| Hotels, Restaurants & Leisure - 0.3% | |||
| Casinos & Gaming - 0.3% | |||
| 500.com Ltd. sponsored ADR Class A (a)(b) | 186,100 | 4,378,933 | |
| Household Durables - 0.6% | |||
| Consumer Electronics - 0.4% | |||
| Sky Light Holdings Ltd. (a) | 920,000 | 391,626 | |
| Skyworth Digital Holdings Ltd. | 328,000 | 250,898 | |
| Sony Corp. (a) | 122,400 | 3,469,602 | |
| Sony Corp. sponsored ADR (a) | 49,900 | 1,414,665 | |
| TCL Multimedia Technology Holdings Ltd. | 342,000 | 176,464 | |
| 5,703,255 | |||
| Household Appliances - 0.2% | |||
| Haier Electronics Group Co. Ltd. | 1,451,000 | 3,410,242 | |
| TOTAL HOUSEHOLD DURABLES | 9,113,497 | ||
| Internet & Catalog Retail - 3.3% | |||
| Internet Retail - 3.3% | |||
| Amazon.com, Inc. (a) | 32,600 | 17,478,490 | |
| ASOS PLC (a) | 3,500 | 185,836 | |
| E-Commerce China Dangdang, Inc. ADR (a)(b) | 84,315 | 569,126 | |
| Groupon, Inc. Class A (a)(b) | 1,998,500 | 9,632,770 | |
| Jumei International Holding Ltd. sponsored ADR (a)(b) | 1,105,410 | 20,682,221 | |
| MySale Group PLC (a) | 19,300 | 14,166 | |
| Qunar Cayman Islands Ltd. sponsored ADR (a) | 21,527 | 898,968 | |
| Travelport Worldwide Ltd. | 85,223 | 1,086,593 | |
| Vipshop Holdings Ltd. ADR (a) | 114,100 | 2,223,809 | |
| zulily, Inc. Class A (a) | 1,000 | 13,210 | |
| 52,785,189 | |||
| Internet Software & Services - 28.6% | |||
| Internet Software & Services - 28.6% | |||
| 58.com, Inc. ADR (a)(b) | 159,700 | 9,484,583 | |
| Alibaba Group Holding Ltd. sponsored ADR (b) | 196,200 | 15,370,308 | |
| Baidu.com, Inc. sponsored ADR (a) | 85,400 | 14,745,164 | |
| ChannelAdvisor Corp. (a) | 166,464 | 1,679,622 | |
| Constant Contact, Inc. (a) | 400 | 10,336 | |
| Cornerstone OnDemand, Inc. (a) | 109,032 | 3,931,694 | |
| Cvent, Inc. (a) | 50,808 | 1,367,751 | |
| Demandware, Inc. (a) | 34,006 | 2,569,493 | |
| DeNA Co. Ltd. | 324,400 | 6,452,140 | |
| eBay, Inc. (a) | 12,900 | 362,748 | |
| eGain Communications Corp. (a)(b) | 64,050 | 285,663 | |
| Endurance International Group Holdings, Inc. (a) | 488,000 | 9,862,480 | |
| Facebook, Inc. Class A (a) | 1,189,111 | 111,788,325 | |
| Google, Inc.: | |||
| Class A (a) | 121,887 | 80,140,703 | |
| Class C | 132,655 | 82,990,295 | |
| HomeAway, Inc. (a) | 271,390 | 8,152,556 | |
| Hortonworks, Inc. | 1,500 | 36,390 | |
| LendingClub Corp. | 700 | 10,157 | |
| LinkedIn Corp. Class A (a) | 3,800 | 772,388 | |
| Marketo, Inc. (a) | 87,813 | 2,670,393 | |
| Momo, Inc. ADR | 1,386 | 22,439 | |
| NAVER Corp. | 19,851 | 8,903,702 | |
| New Relic, Inc. | 400 | 13,920 | |
| NIC, Inc. | 59,508 | 1,073,524 | |
| Q2 Holdings, Inc. (a) | 700 | 19,033 | |
| Qihoo 360 Technology Co. Ltd. ADR (a)(b) | 52,911 | 3,281,011 | |
| Rackspace Hosting, Inc. (a) | 30,639 | 1,042,645 | |
| Renren, Inc. ADR (a)(b) | 164,400 | 577,044 | |
| SciQuest, Inc. (a) | 185,354 | 2,203,859 | |
| SINA Corp. (a) | 17,700 | 718,797 | |
| Sohu.com, Inc. (a) | 17,300 | 832,649 | |
| SouFun Holdings Ltd. ADR (b) | 587,200 | 3,916,624 | |
| Textura Corp. (a) | 247,315 | 7,172,135 | |
| Twitter, Inc. (a) | 137,100 | 4,251,471 | |
| Web.com Group, Inc. (a) | 203,586 | 5,067,256 | |
| Weibo Corp. sponsored ADR (a)(b) | 57,000 | 799,710 | |
| Xunlei Ltd. sponsored ADR (a) | 490,873 | 4,540,575 | |
| Yahoo!, Inc. (a) | 909,400 | 33,347,698 | |
| Yelp, Inc. (a)(b) | 110,643 | 2,920,975 | |
| Youku Tudou, Inc. ADR (a)(b) | 1,153,305 | 22,374,117 | |
| YY, Inc. ADR (a)(b) | 2,651 | 156,701 | |
| Zillow Group, Inc. (a)(b) | 47,510 | 3,872,065 | |
| 459,791,139 | |||
| IT Services - 6.1% | |||
| Data Processing & Outsourced Services - 5.6% | |||
| Euronet Worldwide, Inc. (a) | 25,835 | 1,769,698 | |
| Fidelity National Information Services, Inc. | 331,495 | 21,689,718 | |
| FleetCor Technologies, Inc. (a) | 56,800 | 8,793,776 | |
| Optimal Payments PLC (a) | 2,105,200 | 8,679,226 | |
| PayPal Holdings, Inc. (a) | 12,900 | 499,230 | |
| Total System Services, Inc. | 267,153 | 12,347,812 | |
| Vantiv, Inc. (a) | 246,600 | 10,850,400 | |
| Visa, Inc. Class A | 333,800 | 25,148,492 | |
| 89,778,352 | |||
| IT Consulting & Other Services - 0.5% | |||
| Cognizant Technology Solutions Corp. Class A (a) | 135,094 | 8,524,431 | |
| EPAM Systems, Inc. (a) | 2,861 | 212,029 | |
| Virtusa Corp. (a) | 400 | 19,176 | |
| 8,755,636 | |||
| TOTAL IT SERVICES | 98,533,988 | ||
| Machinery - 1.2% | |||
| Construction Machinery & Heavy Trucks - 0.8% | |||
| Zhengzhou Yutong Bus Co. Ltd. | 4,257,508 | 13,273,538 | |
| Industrial Machinery - 0.4% | |||
| Harmonic Drive Systems, Inc. | 52,100 | 778,967 | |
| Minebea Ltd. | 355,000 | 5,565,538 | |
| 6,344,505 | |||
| TOTAL MACHINERY | 19,618,043 | ||
| Media - 1.1% | |||
| Advertising - 0.1% | |||
| iCar Asia Ltd. (a)(b) | 1,257,513 | 689,384 | |
| Cable & Satellite - 0.4% | |||
| Naspers Ltd. Class N | 40,745 | 5,700,966 | |
| Movies & Entertainment - 0.4% | |||
| Bona Film Group Ltd. sponsored ADR (a) | 234,644 | 2,768,799 | |
| IMAX Corp. (a) | 109,500 | 4,096,395 | |
| 6,865,194 | |||
| Publishing - 0.2% | |||
| NEXT Co. Ltd. | 21,800 | 163,058 | |
| Schibsted ASA: | |||
| (A Shares) | 54,400 | 1,896,703 | |
| (B Shares) (a) | 54,383 | 1,777,603 | |
| 3,837,364 | |||
| TOTAL MEDIA | 17,092,908 | ||
| Professional Services - 0.2% | |||
| Human Resource & Employment Services - 0.1% | |||
| 51job, Inc. sponsored ADR (a) | 400 | 12,224 | |
| WageWorks, Inc. (a) | 30,744 | 1,535,663 | |
| 1,547,887 | |||
| Research & Consulting Services - 0.1% | |||
| ICF International, Inc. (a) | 33,600 | 1,231,776 | |
| Verisk Analytics, Inc. (a) | 168 | 13,122 | |
| 1,244,898 | |||
| TOTAL PROFESSIONAL SERVICES | 2,792,785 | ||
| Real Estate Management & Development - 0.0% | |||
| Real Estate Development - 0.0% | |||
| Greenland Hong Kong Holdings Ltd. | 1,094,000 | 629,393 | |
| Road & Rail - 0.0% | |||
| Trucking - 0.0% | |||
| eHi Car Service Co. Ltd. sponsored ADR (b) | 24,400 | 283,772 | |
| Semiconductors & Semiconductor Equipment - 10.3% | |||
| Semiconductor Equipment - 0.2% | |||
| Hermes Microvision, Inc. | 12,000 | 596,968 | |
| Nanometrics, Inc. (a) | 9,409 | 128,715 | |
| Rubicon Technology, Inc. (a)(b) | 681,267 | 1,205,843 | |
| SunEdison, Inc. (a) | 700 | 16,296 | |
| Ultratech, Inc. (a) | 121,600 | 1,935,872 | |
| 3,883,694 | |||
| Semiconductors - 10.1% | |||
| Analog Devices, Inc. | 2,800 | 163,324 | |
| Atmel Corp. | 1,565,000 | 12,958,200 | |
| Avago Technologies Ltd. | 82,500 | 10,324,050 | |
| Broadcom Corp. Class A | 125,022 | 6,327,363 | |
| Cavium, Inc. (a) | 13,700 | 928,860 | |
| Cirrus Logic, Inc. (a) | 22,714 | 749,789 | |
| Everlight Electronics Co. Ltd. | 2,141,000 | 2,819,953 | |
| First Solar, Inc. (a) | 64,800 | 2,870,640 | |
| Freescale Semiconductor, Inc. (a) | 78,356 | 3,124,054 | |
| Genesis Photonics, Inc. (a) | 2,474,066 | 777,541 | |
| Hua Hong Semiconductor Ltd. (a) | 1,615,000 | 1,585,355 | |
| Inotera Memories, Inc. (a) | 5,467,000 | 3,289,525 | |
| Intel Corp. | 133,900 | 3,876,405 | |
| Intersil Corp. Class A | 351,594 | 3,913,241 | |
| Lextar Electronics Corp. | 437,000 | 209,804 | |
| M/A-COM Technology Solutions Holdings, Inc. (a)(b) | 38,107 | 1,284,587 | |
| MagnaChip Semiconductor Corp. (a) | 114,554 | 980,582 | |
| Marvell Technology Group Ltd. | 2,091,782 | 26,021,768 | |
| Maxim Integrated Products, Inc. | 592,700 | 20,175,508 | |
| Melexis NV | 293 | 15,636 | |
| Micron Technology, Inc. (a) | 608,700 | 11,267,037 | |
| Microsemi Corp. (a) | 182,200 | 6,001,668 | |
| Monolithic Power Systems, Inc. | 71,201 | 3,681,804 | |
| Novatek Microelectronics Corp. | 979,000 | 3,540,603 | |
| ON Semiconductor Corp. (a) | 129,500 | 1,375,290 | |
| PMC-Sierra, Inc. (a) | 326,200 | 2,221,422 | |
| Power Integrations, Inc. | 41,500 | 1,608,540 | |
| Qorvo, Inc. (a) | 269,133 | 15,596,257 | |
| Radiant Opto-Electronics Corp. | 934,000 | 2,773,089 | |
| Sanken Electric Co. Ltd. | 858,000 | 4,776,859 | |
| Semiconductor Manufacturing International Corp. (a) | 13,421,000 | 1,205,967 | |
| Semtech Corp. (a) | 266,998 | 4,696,495 | |
| Silicon Laboratories, Inc. (a) | 30,900 | 1,390,191 | |
| STMicroelectronics NV | 1,630 | 12,729 | |
| 162,544,136 | |||
| TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | 166,427,830 | ||
| Software - 14.9% | |||
| Application Software - 7.1% | |||
| Adobe Systems, Inc. (a) | 189,316 | 15,522,019 | |
| ANSYS, Inc. (a) | 175 | 16,476 | |
| Autodesk, Inc. (a) | 139,500 | 7,055,910 | |
| Blackbaud, Inc. | 17,200 | 1,051,952 | |
| Citrix Systems, Inc. (a) | 203,115 | 15,357,525 | |
| Guidewire Software, Inc. (a) | 190 | 11,220 | |
| Idreamsky Technology Ltd. ADR (b) | 113,949 | 1,333,203 | |
| Interactive Intelligence Group, Inc. (a) | 53,960 | 2,237,182 | |
| Intuit, Inc. | 142,100 | 15,029,917 | |
| Kingdee International Software Group Co. Ltd. | 8,813,800 | 3,808,706 | |
| Linx SA | 700 | 10,318 | |
| Mobileye NV (a) | 51,500 | 3,095,150 | |
| Parametric Technology Corp. (a) | 43,100 | 1,566,685 | |
| Paycom Software, Inc. (a) | 900 | 28,800 | |
| Paylocity Holding Corp. (a)(b) | 45,300 | 1,627,176 | |
| Qlik Technologies, Inc. (a) | 44,300 | 1,792,378 | |
| RealPage, Inc. (a) | 219,900 | 4,222,080 | |
| Salesforce.com, Inc. (a) | 374,519 | 27,452,243 | |
| SolarWinds, Inc. (a) | 333 | 13,283 | |
| Splunk, Inc. (a) | 21,696 | 1,517,418 | |
| SS&C Technologies Holdings, Inc. | 52,200 | 3,551,166 | |
| Ultimate Software Group, Inc. (a) | 76 | 14,000 | |
| Workday, Inc. Class A (a) | 9,700 | 818,001 | |
| Workiva, Inc. | 51,400 | 749,926 | |
| Yodlee, inc. | 1,300 | 16,328 | |
| Zendesk, Inc. (a)(b) | 288,700 | 5,955,881 | |
| 113,854,943 | |||
| Home Entertainment Software - 1.3% | |||
| Activision Blizzard, Inc. | 233,170 | 6,013,454 | |
| Nintendo Co. Ltd. | 85,400 | 15,028,636 | |
| 21,042,090 | |||
| Systems Software - 6.5% | |||
| Allot Communications Ltd. (a) | 288,719 | 1,504,226 | |
| CommVault Systems, Inc. (a) | 300 | 11,241 | |
| Fleetmatics Group PLC (a) | 385,930 | 18,474,469 | |
| Imperva, Inc. (a) | 300 | 19,710 | |
| Infoblox, Inc. (a) | 900 | 21,150 | |
| Microsoft Corp. | 709,600 | 33,138,320 | |
| NetSuite, Inc. (a) | 107,077 | 10,583,491 | |
| Oracle Corp. | 728,400 | 29,092,296 | |
| Progress Software Corp. (a) | 82,300 | 2,442,664 | |
| Rapid7, Inc. | 2,500 | 57,450 | |
| Red Hat, Inc. (a) | 31,448 | 2,486,908 | |
| ServiceNow, Inc. (a) | 71,495 | 5,755,348 | |
| Tableau Software, Inc. (a) | 3,300 | 345,642 | |
| Varonis Systems, Inc. (a) | 900 | 18,711 | |
| VMware, Inc. Class A (a) | 200 | 17,826 | |
| 103,969,452 | |||
| TOTAL SOFTWARE | 238,866,485 | ||
| Technology Hardware, Storage & Peripherals - 16.4% | |||
| Technology Hardware, Storage & Peripherals - 16.4% | |||
| Apple, Inc. | 1,709,129 | 207,317,347 | |
| BlackBerry Ltd. (a) | 1,486 | 11,521 | |
| Electronics for Imaging, Inc. (a) | 87,100 | 3,980,470 | |
| EMC Corp. | 258,400 | 6,948,376 | |
| Hewlett-Packard Co. | 997,700 | 30,449,804 | |
| Nimble Storage, Inc. (a) | 5,000 | 138,100 | |
| SanDisk Corp. | 173,200 | 10,442,228 | |
| Seagate Technology LLC | 30,400 | 1,538,240 | |
| Silicon Graphics International Corp. (a) | 166,658 | 851,622 | |
| Stratasys Ltd. (a) | 100 | 3,073 | |
| Western Digital Corp. | 17,700 | 1,523,262 | |
| 263,204,043 | |||
| Wireless Telecommunication Services - 0.6% | |||
| Wireless Telecommunication Services - 0.6% | |||
| Bharti Infratel Ltd. | 936,976 | 6,554,916 | |
| RingCentral, Inc. (a) | 170,800 | 3,364,760 | |
| 9,919,676 | |||
| TOTAL COMMON STOCKS | |||
| (Cost $1,403,592,250) | 1,572,889,858 | ||
| Convertible Preferred Stocks - 1.0% | |||
| Internet & Catalog Retail - 0.4% | |||
| Internet Retail - 0.4% | |||
| Meituan Corp. Series D (d) | 758,456 | 5,893,203 | |
| Internet Software & Services - 0.6% | |||
| Internet Software & Services - 0.6% | |||
| Uber Technologies, Inc. Series D, 8.00% (a)(d) | 232,064 | 9,199,017 | |
| IT Services - 0.0% | |||
| Data Processing & Outsourced Services - 0.0% | |||
| Nutanix, Inc. Series E (d) | 39,963 | 636,211 | |
| TOTAL CONVERTIBLE PREFERRED STOCKS | |||
| (Cost $8,930,115) | 15,728,431 | ||
| Money Market Funds - 7.3% | |||
| Fidelity Cash Central Fund, 0.17% (e) | 14,154,017 | 14,154,017 | |
| Fidelity Securities Lending Cash Central Fund, 0.18% (e)(f) | 103,635,609 | 103,635,609 | |
| TOTAL MONEY MARKET FUNDS | |||
| (Cost $117,789,626) | 117,789,626 | ||
| TOTAL INVESTMENT PORTFOLIO - 106.1% | |||
| (Cost $1,530,311,991) | 1,706,407,915 | ||
| NET OTHER ASSETS (LIABILITIES) - (6.1)% | (98,362,251) | ||
| NET ASSETS - 100% | $1,608,045,664 |
Security Type Abbreviations
ELS – Equity-Linked Security
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) 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 $16,090,401 or 1.0% of net assets.
(d) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $16,767,171 or 1.0% of net assets.
(e) 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.
(f) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost |
| JHL Biotech, Inc. | 4/14/15 | $1,038,740 |
| Meituan Corp. Series D | 1/26/15 | $4,794,731 |
| Nutanix, Inc. Series E | 8/26/14 | $535,364 |
| Uber Technologies, Inc. Series D, 8.00% | 6/6/14 | $3,600,020 |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $28,620 |
| Fidelity Securities Lending Cash Central Fund | 708,181 |
| Total | $736,801 |
Investment Valuation
The following is a summary of the inputs used, as of July 31, 2015, 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 below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| Valuation Inputs at Reporting Date: | ||||
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | ||||
| Common Stocks | $1,572,889,858 | $1,547,433,582 | $12,799,867 | $12,656,409 |
| Convertible Preferred Stocks | 15,728,431 | -- | -- | 15,728,431 |
| Money Market Funds | 117,789,626 | 117,789,626 | -- | -- |
| Total Investments in Securities: | $1,706,407,915 | $1,665,223,208 | $12,799,867 | $28,384,840 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended July 31, 2015. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
| Transfers | Total |
| Level 1 to Level 2 | $0 |
| Level 2 to Level 1 | $98,181,240 |
The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value:
| Investments in Securities: | |
| Beginning Balance | $4,087,100 |
| Total Realized Gain (Loss) | 9,015 |
| Total Unrealized Gain (Loss) | 4,689,501 |
| Cost of Purchases | 20,118,557 |
| Proceeds of Sales | (519,333) |
| Amortization/Accretion | -- |
| Transfers in to Level 3 | -- |
| Transfers out of Level 3 | -- |
| Ending Balance | $28,384,840 |
| The change in unrealized gain (loss) for the period attributable to Level 3 securities held at July 31, 2015 | $4,657,248 |
The information used in the above reconciliation represents fiscal year to date activity for any Investments in Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represent the beginning value of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. The cost of purchases and the proceeds of sales may include securities received or delivered through corporate actions or exchanges. Realized and unrealized gains (losses) disclosed in the reconciliation are included in Net Gain (Loss) on the Fund's Statement of Operations.
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 76.6% |
| Cayman Islands | 8.8% |
| Japan | 2.8% |
| Bermuda | 2.3% |
| Taiwan | 1.5% |
| Ireland | 1.2% |
| Netherlands | 1.1% |
| Korea (South) | 1.0% |
| Others (Individually Less Than 1%) | 4.7% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Technology Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value (including securities loaned of $102,017,859) — See accompanying schedule: Unaffiliated issuers (cost $1,412,522,365) | $1,588,618,289 | |
| Fidelity Central Funds (cost $117,789,626) | 117,789,626 | |
| Total Investments (cost $1,530,311,991) | $1,706,407,915 | |
| Cash | 42,502 | |
| Foreign currency held at value (cost $68,863) | 68,889 | |
| Receivable for investments sold | 24,260,961 | |
| Receivable for fund shares sold | 3,691,481 | |
| Dividends receivable | 856,608 | |
| Distributions receivable from Fidelity Central Funds | 70,382 | |
| Other receivables | 74,920 | |
| Total assets | 1,735,473,658 | |
| Liabilities | ||
| Payable for investments purchased | $21,243,022 | |
| Payable for fund shares redeemed | 1,012,502 | |
| Accrued management fee | 731,930 | |
| Distribution and service plan fees payable | 305,784 | |
| Other affiliated payables | 300,522 | |
| Other payables and accrued expenses | 198,625 | |
| Collateral on securities loaned, at value | 103,635,609 | |
| Total liabilities | 127,427,994 | |
| Net Assets | $1,608,045,664 | |
| Net Assets consist of: | ||
| Paid in capital | $1,375,234,096 | |
| Accumulated net investment loss | (24,170) | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 56,859,514 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 175,976,224 | |
| Net Assets | $1,608,045,664 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($468,819,422 ÷ 12,730,785 shares) | $36.83 | |
| Maximum offering price per share (100/94.25 of $36.83) | $39.08 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($208,191,772 ÷ 5,904,054 shares) | $35.26 | |
| Maximum offering price per share (100/96.50 of $35.26) | $36.54 | |
| Class B: | ||
| Net Asset Value and offering price per share ($8,884,540 ÷ 276,368 shares)(a) | $32.15 | |
| Class C: | ||
| Net Asset Value and offering price per share ($138,204,865 ÷ 4,282,301 shares)(a) | $32.27 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($783,945,065 ÷ 20,084,746 shares) | $39.03 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $11,806,425 | |
| Special dividends | 3,045,103 | |
| Interest | 26 | |
| Income from Fidelity Central Funds | 736,801 | |
| Total income | 15,588,355 | |
| Expenses | ||
| Management fee | $8,273,440 | |
| Transfer agent fees | 2,965,004 | |
| Distribution and service plan fees | 3,414,130 | |
| Accounting and security lending fees | 484,390 | |
| Custodian fees and expenses | 129,367 | |
| Independent trustees' compensation | 25,623 | |
| Registration fees | 87,583 | |
| Audit | 73,061 | |
| Legal | 21,277 | |
| Interest | 718 | |
| Miscellaneous | 14,353 | |
| Total expenses before reductions | 15,488,946 | |
| Expense reductions | (157,981) | 15,330,965 |
| Net investment income (loss) | 257,390 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 99,946,133 | |
| Redemption in-kind with affiliated entities | 23,460,718 | |
| Foreign currency transactions | (306,614) | |
| Total net realized gain (loss) | 123,100,237 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities (net of increase in deferred foreign taxes of $104,553) | 30,812,391 | |
| Assets and liabilities in foreign currencies | (10,237) | |
| Total change in net unrealized appreciation (depreciation) | 30,802,154 | |
| Net gain (loss) | 153,902,391 | |
| Net increase (decrease) in net assets resulting from operations | $154,159,781 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $257,390 | $(3,870,002) |
| Net realized gain (loss) | 123,100,237 | 107,601,371 |
| Change in net unrealized appreciation (depreciation) | 30,802,154 | 87,968,653 |
| Net increase (decrease) in net assets resulting from operations | 154,159,781 | 191,700,022 |
| Distributions to shareholders from net investment income | (1,694,661) | – |
| Distributions to shareholders from net realized gain | (115,642,281) | (11,189,247) |
| Total distributions | (117,336,942) | (11,189,247) |
| Share transactions - net increase (decrease) | 393,289,614 | 150,832,224 |
| Redemption fees | 24,197 | 21,186 |
| Total increase (decrease) in net assets | 430,136,650 | 331,364,185 |
| Net Assets | ||
| Beginning of period | 1,177,909,014 | 846,544,829 |
| End of period (including accumulated net investment loss of $24,170 and accumulated net investment loss of $10,080, respectively) | $1,608,045,664 | $1,177,909,014 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Technology Fund Class A
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $36.06 | $29.90 | $25.25 | $25.14 | $19.83 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.02)B | (.12) | (.07) | (.13) | (.18) |
| Net realized and unrealized gain (loss) | 3.75 | 6.70 | 4.72 | .24 | 5.49 |
| Total from investment operations | 3.73 | 6.58 | 4.65 | .11 | 5.31 |
| Distributions from net investment income | (.02) | – | – | – | – |
| Distributions from net realized gain | (2.94) | (.42) | – | – | – |
| Total distributions | (2.96) | (.42) | – | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $36.83 | $36.06 | $29.90 | $25.25 | $25.14 |
| Total ReturnD,E | 10.94% | 22.15% | 18.42% | .44% | 26.78% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.09% | 1.14% | 1.18% | 1.18% | 1.18% |
| Expenses net of fee waivers, if any | 1.09% | 1.14% | 1.18% | 1.18% | 1.18% |
| Expenses net of all reductions | 1.08% | 1.12% | 1.14% | 1.17% | 1.16% |
| Net investment income (loss) | (.05)%B | (.35)% | (.25)% | (.55)% | (.73)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $468,819 | $408,687 | $355,306 | $336,693 | $375,609 |
| Portfolio turnover rateH | 142%I | 186% | 142% | 201% | 167% |
A Calculated based on average shares outstanding during the period.
B 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 (.25) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Technology Fund Class T
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $34.66 | $28.79 | $24.38 | $24.33 | $19.24 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.11)B | (.19) | (.13) | (.19) | (.23) |
| Net realized and unrealized gain (loss) | 3.60 | 6.45 | 4.54 | .24 | 5.32 |
| Total from investment operations | 3.49 | 6.26 | 4.41 | .05 | 5.09 |
| Distributions from net realized gain | (2.89) | (.39) | – | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $35.26 | $34.66 | $28.79 | $24.38 | $24.33 |
| Total ReturnD,E | 10.63% | 21.89% | 18.09% | .21% | 26.46% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.35% | 1.38% | 1.42% | 1.43% | 1.43% |
| Expenses net of fee waivers, if any | 1.35% | 1.38% | 1.42% | 1.43% | 1.43% |
| Expenses net of all reductions | 1.34% | 1.37% | 1.39% | 1.42% | 1.40% |
| Net investment income (loss) | (.31)%B | (.60)% | (.50)% | (.80)% | (.98)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $208,192 | $196,067 | $173,692 | $172,709 | $196,913 |
| Portfolio turnover rateH | 142%I | 186% | 142% | 201% | 167% |
A Calculated based on average shares outstanding during the period.
B 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 (.51) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Technology Fund Class B
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $31.83 | $26.56 | $22.60 | $22.67 | $18.01 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.27)B | (.34) | (.24) | (.28) | (.33) |
| Net realized and unrealized gain (loss) | 3.29 | 5.94 | 4.20 | .21 | 4.99 |
| Total from investment operations | 3.02 | 5.60 | 3.96 | (.07) | 4.66 |
| Distributions from net realized gain | (2.70) | (.33) | – | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $32.15 | $31.83 | $26.56 | $22.60 | $22.67 |
| Total ReturnD,E | 10.04% | 21.21% | 17.52% | (.31)% | 25.87% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.91% | 1.92% | 1.93% | 1.93% | 1.93% |
| Expenses net of fee waivers, if any | 1.91% | 1.92% | 1.93% | 1.93% | 1.93% |
| Expenses net of all reductions | 1.90% | 1.91% | 1.89% | 1.92% | 1.91% |
| Net investment income (loss) | (.86)%B | (1.14)% | (1.01)% | (1.30)% | (1.49)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $8,885 | $12,043 | $13,745 | $17,476 | $25,508 |
| Portfolio turnover rateH | 142%I | 186% | 142% | 201% | 167% |
A Calculated based on average shares outstanding during the period.
B 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 (1.07) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Technology Fund Class C
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $31.99 | $26.68 | $22.70 | $22.77 | $18.09 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | (.25)B | (.33) | (.24) | (.29) | (.33) |
| Net realized and unrealized gain (loss) | 3.29 | 5.98 | 4.22 | .22 | 5.01 |
| Total from investment operations | 3.04 | 5.65 | 3.98 | (.07) | 4.68 |
| Distributions from net realized gain | (2.76) | (.34) | – | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $32.27 | $31.99 | $26.68 | $22.70 | $22.77 |
| Total ReturnD,E | 10.07% | 21.31% | 17.53% | (.31)% | 25.87% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.84% | 1.87% | 1.91% | 1.93% | 1.92% |
| Expenses net of fee waivers, if any | 1.84% | 1.87% | 1.91% | 1.93% | 1.92% |
| Expenses net of all reductions | 1.83% | 1.86% | 1.88% | 1.91% | 1.90% |
| Net investment income (loss) | (.80)%B | (1.09)% | (.99)% | (1.29)% | (1.48)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $138,205 | $105,499 | $84,858 | $88,074 | $89,819 |
| Portfolio turnover rateH | 142%I | 186% | 142% | 201% | 167% |
A Calculated based on average shares outstanding during the period.
B 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 (1.00) %.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Technology Fund Class I
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $38.06 | $31.47 | $26.50 | $26.30 | $20.68 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .11B | (.02) | .02 | (.06) | (.11) |
| Net realized and unrealized gain (loss) | 3.96 | 7.06 | 4.95 | .26 | 5.73 |
| Total from investment operations | 4.07 | 7.04 | 4.97 | .20 | 5.62 |
| Distributions from net investment income | (.07) | – | – | – | – |
| Distributions from net realized gain | (3.03) | (.45) | – | – | – |
| Total distributions | (3.10) | (.45) | – | – | – |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $39.03 | $38.06 | $31.47 | $26.50 | $26.30 |
| Total ReturnD | 11.30% | 22.55% | 18.75% | .76% | 27.18% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | .75% | .83% | .86% | .86% | .87% |
| Expenses net of fee waivers, if any | .75% | .83% | .86% | .86% | .87% |
| Expenses net of all reductions | .74% | .82% | .83% | .85% | .85% |
| Net investment income (loss) | .29%B | (.05)% | .06% | (.23)% | (.43)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $783,945 | $455,612 | $218,944 | $95,310 | $81,350 |
| Portfolio turnover rateG | 142%H | 186% | 142% | 201% | 167% |
A Calculated based on average shares outstanding during the period.
B Investment income per share reflects a large, non-recurring dividend which amounted to $.08 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .09%.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I(formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy. Equity securities, including restricted securities, for which observable inputs are not available are valued using alternate valuation approaches, including the market approach and the income approach and are categorized as Level 3 in the hierarchy. The market approach generally consists of using comparable market transactions while the income approach generally consists of using the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.
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.
The following provides information on Level 3 securities held by the Fund that were valued at period end based on unobservable inputs. These amounts exclude valuations provided by a broker.
| Asset Type | Fair Value at 07/31/15 | Valuation Technique(s) | Unobservable Input | Amount or Range/Weighted Average | Impact to Valuation from an Increase in Input* |
| Equities | $ 28,384,840 | Adjusted transaction price | Proxy movement | 2.0% | Increase |
| Last transaction price | Transaction price | $3.74-$39.64/$36.00 | Increase | ||
| Market comparable | Discount rate | 10.0% | Decrease | ||
| EV/Sales multiple | 7.4 | Increase | |||
| EV/GMV multiple | 0.4 | Increase |
* Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.
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, 2015, including information on transfers between Levels 1 and 2, as well as a roll forward of Level 3 investments, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Large, non-recurring dividends recognized by the Fund are presented separately on the Statement of Operations as "Special Dividends" and the impact of these dividends is presented in the Financial Highlights. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. The Fund is subject to a tax imposed on capital gains by certain countries in which it invests. An estimated deferred tax liability for net unrealized appreciation on the applicable securities is included in Other payables and accrued expenses on the Statement of Assets & Liabilities.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, passive foreign investment companies (PFIC), redemptions in kind, deferred trustees compensation and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $270,336,592 |
| Gross unrealized depreciation | (107,365,713) |
| Net unrealized appreciation (depreciation) on securities | $162,970,879 |
| Tax cost | $1,543,437,036 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $47,212,420 |
| Undistributed long-term capital gain | $22,772,140 |
| Net unrealized appreciation (depreciation) on securities and other investments | $162,958,929 |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $73,053,772 | $ 2,941,208 |
| Long-term Capital Gains | 44,283,170 | 8,248,039 |
| Total | $117,336,942 | $ 11,189,247 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions, aggregated $2,182,059,885 and $2,061,048,342, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $1,090,850 | $17,201 |
| Class T | .25% | .25% | 1,018,776 | 4,754 |
| Class B | .75% | .25% | 106,441 | 80,121 |
| Class C | .75% | .25% | 1,198,063 | 192,863 |
| $3,414,130 | $294,939 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $173,463 |
| Class T | 24,598 |
| Class B* | 2,793 |
| Class C* | 9,974 |
| $210,828 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $1,039,702 | .24 |
| Class T | 501,133 | .25 |
| Class B | 32,234 | .30 |
| Class C | 288,800 | .24 |
| Class I | 1,103,135 | .15 |
| $ 2,965,004 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $39,865 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $6,741,000 | .35% | $718 |
Redemptions In-Kind. During the period, 2,476,292 shares of the Fund held by affiliated entities were redeemed for investments with a value of $93,826,692. The net realized gain of $23,460,718 on investments delivered through in-kind redemptions is included in the accompanying Statement of Operations. The amount of in-kind redemptions is included in share transactions in the accompanying Statement of Changes in Net Assets as well as Note 10: Share Transactions. The Fund recognized no gain or loss for federal income tax purposes.
Exchanges In-Kind. During the period, certain investment companies managed by the investment adviser or its affiliates (Investing Funds) completed exchanges in-kind with the Fund. The Investing Funds delivered cash and investments valued at $311,440,613 in exchange for 8,219,599 shares of the Fund. The amount of in-kind exchanges is included in share transactions in the accompanying Statement of Changes in Net Assets as well as Note 10: Share Transactions. The Fund recognized no gain or loss for federal income tax purposes.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $2,128 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. 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 $708,181.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $127,319 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 $15.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $6,525 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $7,666 |
| Class T | 4,347 |
| Class B | 30 |
| Class C | 2,322 |
| Class I | 9,757 |
| $ 24,122 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $285,364 | $– |
| Class I | 1,409,297 | – |
| Total | $1,694,661 | $– |
| From net realized gain | ||
| Class A | $33,752,271 | $4,830,573 |
| Class T | 16,437,395 | 2,285,378 |
| Class B | 983,656 | 152,106 |
| Class C | 9,419,892 | 1,068,092 |
| Class I | 55,049,067 | 2,853,098 |
| Total | $115,642,281 | $11,189,247 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 2,913,106 | 1,967,332 | $105,555,201 | $66,338,054 |
| Reinvestment of distributions | 901,782 | 136,812 | 31,562,947 | 4,412,177 |
| Shares redeemed | (2,417,005) | (2,655,768) | (86,800,900) | (89,258,893) |
| Net increase (decrease) | 1,397,883 | (551,624) | $50,317,248 | $(18,508,662) |
| Class T | ||||
| Shares sold | 637,105 | 604,269 | $22,054,709 | $19,519,431 |
| Reinvestment of distributions | 476,624 | 71,453 | 16,015,842 | 2,218,622 |
| Shares redeemed | (866,616) | (1,051,577) | (29,828,780) | (34,073,517) |
| Net increase (decrease) | 247,113 | (375,855) | $8,241,771 | $(12,335,464) |
| Class B | ||||
| Shares sold | 11,273 | 9,706 | $348,144 | $287,815 |
| Reinvestment of distributions | 29,273 | 4,834 | 901,739 | 138,293 |
| Shares redeemed | (142,494) | (153,751) | (4,494,534) | (4,566,688) |
| Net increase (decrease) | (101,948) | (139,211) | $(3,244,651) | $(4,140,580) |
| Class C | ||||
| Shares sold | 1,277,139 | 594,192 | $40,629,084 | $17,948,827 |
| Reinvestment of distributions | 261,235 | 31,647 | 8,065,851 | 909,547 |
| Shares redeemed | (554,231) | (507,790) | (17,408,387) | (15,090,389) |
| Net increase (decrease) | 984,143 | 118,049 | $31,286,548 | $3,767,985 |
| Class I | ||||
| Shares sold | 23,671,191(a) | 7,128,296 | $899,915,317(a) | $254,841,416 |
| Reinvestment of distributions | 1,510,080 | 81,545 | 55,853,504 | 2,770,913 |
| Shares redeemed | (17,066,384)(b) | (2,196,859) | (649,080,123)(b) | (75,563,384) |
| Net increase (decrease) | 8,114,887 | 5,012,982 | $306,688,698 | $182,048,945 |
(a) Amount includes in-kind exchanges (see Note 5: Exchanges In-Kind).
(b) Amount includes in-kind redemptions (see Note 5: Redemptions In-Kind).
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, Strategic Advisers Core Fund was the owner of record of approximately 33% of the total outstanding shares of the Fund.
Fidelity Advisor® Utilities Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class I | 2.35% | 12.72% | 8.23% |
Prior to October 1, 2006, the fund was named Fidelity Advisor® Telecommunications & Utilities Growth 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 I on July 31, 2005. The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values | ||
| $22,056 | Fidelity Advisor® Utilities Fund - Class I | |
| $21,043 | S&P 500® Index | |
Fidelity Advisor® Utilities Fund
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015, as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. Consequently, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for the consumer staples sector and the real estate segment of financials yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Douglas Simmons: In a challenging year for utilities as a group, the fund's share classes underperformed the benchmark MSCI U.S. IMI Utilities 25/50 Index and the broad-based S&P 500®. (For specific class-level results, please see the Performance section of this report.) The fund underperformed the 9.22% return of the MSCI index due to a combination of stock picking and market selection. In general, the more regulated utility names that I tend to avoid performed the best for the one-year period, because they are more sensitive to interest rate movements. A sizable overweighting in the less interest-rate-sensitive names in the independent power producers & energy traders segment delivered the most significant hit. Energy producer NRG Energy was one of the primary detractors here. NRG depends on the capital markets to increase its cash flow and dividend payments. During the period, the capital markets were weak for many stocks tied to energy, calling into question whether NRG had the ability to issue equity to boost its dividend. The fund's out-of-index stake in oil & gas storage & transportation also hurt. Terminal operator Cheniere Energy declined during the time we owned it. The stock became caught up in the sector correction and declined from late March through July. On the flip side, a significant overweighting in Florida-based electric company NextEra Energy was the biggest contributor to relative performance, followed by natural gas infrastructure company NiSource.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.Fidelity Advisor® Utilities Fund
Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| NextEra Energy, Inc. | 16.1 | 12.3 |
| Exelon Corp. | 13.0 | 9.9 |
| Sempra Energy | 11.2 | 9.2 |
| Dominion Resources, Inc. | 9.0 | 9.7 |
| PPL Corp. | 4.9 | 4.9 |
| Edison International | 4.9 | 3.4 |
| PG&E Corp. | 4.6 | 7.9 |
| Calpine Corp. | 4.3 | 4.0 |
| NRG Energy, Inc. | 3.9 | 2.7 |
| FirstEnergy Corp. | 3.1 | 1.9 |
| 75.0 |
Top Industries (% of fund's net assets)
| As of July 31, 2015 | ||
| Electric Utilities | 48.8% | |
| Multi-Utilities | 30.8% | |
| Independent Power and Renewable Electricity Producers | 11.6% | |
| Oil, Gas & Consumable Fuels | 4.7% | |
| Real Estate Investment Trusts | 2.7% | |
| All Others* | 1.4% | |
| As of January 31, 2015 | ||
| Electric Utilities | 40.4% | |
| Multi-Utilities | 31.6% | |
| Independent Power Producers & Renewable Electricity Producers | 10.0% | |
| Oil, Gas & Consumable Fuels | 6.1% | |
| Media | 2.9% | |
| All Others* | 9.0% | |
* Includes short-term investments and net other assets (liabilities).
Fidelity Advisor® Utilities Fund
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 98.6% | |||
| Shares | Value | ||
| Electric Utilities - 48.8% | |||
| Electric Utilities - 48.8% | |||
| Duke Energy Corp. | 37,400 | $2,775,828 | |
| Edison International | 222,002 | 13,322,340 | |
| Exelon Corp. | 1,106,250 | 35,499,563 | |
| FirstEnergy Corp. | 244,200 | 8,293,032 | |
| ITC Holdings Corp. | 138,400 | 4,675,152 | |
| NextEra Energy, Inc. | 418,340 | 44,009,369 | |
| OGE Energy Corp. | 263,423 | 7,839,468 | |
| PNM Resources, Inc. | 20,800 | 548,704 | |
| PPL Corp. | 420,572 | 13,378,395 | |
| Southern Co. | 62,700 | 2,804,571 | |
| 133,146,422 | |||
| Independent Power and Renewable Electricity Producers - 11.6% | |||
| Independent Power Producers & Energy Traders - 11.6% | |||
| Black Hills Corp. | 67,500 | 2,812,050 | |
| Calpine Corp. (a) | 645,217 | 11,807,471 | |
| Dynegy, Inc. (a) | 146,057 | 3,804,785 | |
| NRG Energy, Inc. | 476,415 | 10,695,517 | |
| NRG Yield, Inc. Class C | 37,300 | 719,517 | |
| The AES Corp. | 134,800 | 1,725,440 | |
| 31,564,780 | |||
| Multi-Utilities - 30.8% | |||
| Multi-Utilities - 30.8% | |||
| Dominion Resources, Inc. | 343,399 | 24,621,708 | |
| DTE Energy Co. | 71,498 | 5,752,729 | |
| NiSource, Inc. | 383,083 | 6,688,629 | |
| PG&E Corp. | 238,218 | 12,508,827 | |
| Sempra Energy | 300,637 | 30,598,834 | |
| TECO Energy, Inc. | 52,000 | 1,150,240 | |
| WEC Energy Group, Inc. | 59,760 | 2,928,240 | |
| 84,249,207 | |||
| Oil, Gas & Consumable Fuels - 4.7% | |||
| Oil & Gas Storage & Transport - 4.7% | |||
| Cheniere Energy Partners LP Holdings LLC | 310,762 | 6,793,257 | |
| Columbia Pipeline Group, Inc. | 207,983 | 6,068,944 | |
| 12,862,201 | |||
| Real Estate Investment Trusts - 2.7% | |||
| Specialized REITs - 2.7% | |||
| Crown Castle International Corp. | 89,800 | 7,355,518 | |
| TOTAL COMMON STOCKS | |||
| (Cost $255,473,255) | 269,178,128 | ||
| Money Market Funds - 2.1% | |||
| Fidelity Cash Central Fund, 0.17% (b) | |||
| (Cost $5,703,373) | 5,703,373 | 5,703,373 | |
| TOTAL INVESTMENT PORTFOLIO - 100.7% | |||
| (Cost $261,176,628) | 274,881,501 | ||
| NET OTHER ASSETS (LIABILITIES) - (0.7)% | (1,804,384) | ||
| NET ASSETS - 100% | $273,077,117 |
Legend
(a) Non-income producing
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $6,550 |
| Fidelity Securities Lending Cash Central Fund | 31,909 |
| Total | $38,459 |
Investment Valuation
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Fidelity Advisor® Utilities Fund
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $255,473,255) | $269,178,128 | |
| Fidelity Central Funds (cost $5,703,373) | 5,703,373 | |
| Total Investments (cost $261,176,628) | $274,881,501 | |
| Receivable for investments sold | 444,425 | |
| Receivable for fund shares sold | 342,179 | |
| Dividends receivable | 172,881 | |
| Distributions receivable from Fidelity Central Funds | 1,393 | |
| Other receivables | 17,965 | |
| Total assets | 275,860,344 | |
| Liabilities | ||
| Payable for investments purchased | $1,836,357 | |
| Payable for fund shares redeemed | 621,939 | |
| Accrued management fee | 125,945 | |
| Distribution and service plan fees payable | 93,851 | |
| Other affiliated payables | 67,259 | |
| Other payables and accrued expenses | 37,876 | |
| Total liabilities | 2,783,227 | |
| Net Assets | $273,077,117 | |
| Net Assets consist of: | ||
| Paid in capital | $254,322,840 | |
| Undistributed net investment income | 1,963,229 | |
| Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 3,086,397 | |
| Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 13,704,651 | |
| Net Assets | $273,077,117 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($140,148,128 ÷ 5,500,243 shares) | $25.48 | |
| Maximum offering price per share (100/94.25 of $25.48) | $27.03 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($46,366,423 ÷ 1,818,810 shares) | $25.49 | |
| Maximum offering price per share (100/96.50 of $25.49) | $26.41 | |
| Class B: | ||
| Net Asset Value and offering price per share ($2,680,227 ÷ 106,168 shares)(a) | $25.25 | |
| Class C: | ||
| Net Asset Value and offering price per share ($52,171,987 ÷ 2,094,659 shares)(a) | $24.91 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($31,710,352 ÷ 1,221,130 shares) | $25.97 |
(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.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $8,553,813 | |
| Income from Fidelity Central Funds | 38,459 | |
| Total income | 8,592,272 | |
| Expenses | ||
| Management fee | $1,714,293 | |
| Transfer agent fees | 752,256 | |
| Distribution and service plan fees | 1,264,580 | |
| Accounting and security lending fees | 122,418 | |
| Custodian fees and expenses | 10,182 | |
| Independent trustees' compensation | 5,535 | |
| Registration fees | 79,393 | |
| Audit | 46,568 | |
| Legal | 3,948 | |
| Interest | 319 | |
| Miscellaneous | 3,532 | |
| Total expenses before reductions | 4,003,024 | |
| Expense reductions | (49,428) | 3,953,596 |
| Net investment income (loss) | 4,638,676 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 6,144,641 | |
| Foreign currency transactions | 5,204 | |
| Futures contracts | (104,527) | |
| Total net realized gain (loss) | 6,045,318 | |
| Change in net unrealized appreciation (depreciation) on: Investment securities | (5,645,462) | |
| Assets and liabilities in foreign currencies | (222) | |
| Total change in net unrealized appreciation (depreciation) | (5,645,684) | |
| Net gain (loss) | 399,634 | |
| Net increase (decrease) in net assets resulting from operations | $5,038,310 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $4,638,676 | $3,559,541 |
| Net realized gain (loss) | 6,045,318 | 27,603,316 |
| Change in net unrealized appreciation (depreciation) | (5,645,684) | 1,610,263 |
| Net increase (decrease) in net assets resulting from operations | 5,038,310 | 32,773,120 |
| Distributions to shareholders from net investment income | (4,008,742) | (3,729,207) |
| Distributions to shareholders from net realized gain | (17,304,031) | (88,322) |
| Total distributions | (21,312,773) | (3,817,529) |
| Share transactions - net increase (decrease) | (19,607,828) | 71,585,618 |
| Redemption fees | 10,186 | 9,809 |
| Total increase (decrease) in net assets | (35,872,105) | 100,551,018 |
| Net Assets | ||
| Beginning of period | 308,949,222 | 208,398,204 |
| End of period (including undistributed net investment income of $1,963,229 and undistributed net investment income of $1,595,872, respectively) | $273,077,117 | $308,949,222 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Utilities Fund Class A
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $26.77 | $23.48 | $21.20 | $19.09 | $16.59 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .44 | .41 | .47 | .43 | .39 |
| Net realized and unrealized gain (loss) | .18 | 3.35 | 2.24 | 2.07 | 2.50 |
| Total from investment operations | .62 | 3.76 | 2.71 | 2.50 | 2.89 |
| Distributions from net investment income | (.38) | (.46) | (.43) | (.39) | (.39) |
| Distributions from net realized gain | (1.52) | (.01) | – | – | – |
| Total distributions | (1.91)B | (.47) | (.43) | (.39) | (.39) |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $25.48 | $26.77 | $23.48 | $21.20 | $19.09 |
| Total ReturnD,E | 2.01% | 16.38% | 13.09% | 13.40% | 17.71% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.13% | 1.16% | 1.20% | 1.23% | 1.24% |
| Expenses net of fee waivers, if any | 1.13% | 1.16% | 1.20% | 1.23% | 1.24% |
| Expenses net of all reductions | 1.11% | 1.15% | 1.16% | 1.22% | 1.20% |
| Net investment income (loss) | 1.65% | 1.64% | 2.16% | 2.24% | 2.18% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $140,148 | $154,134 | $106,851 | $99,813 | $78,312 |
| Portfolio turnover rateH | 105% | 112% | 154% | 195% | 201% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $1.91 per share is comprised of distributions from net investment income of $.384 and distributions from net realized gain of $1.524 per share.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Utilities Fund Class T
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $26.78 | $23.50 | $21.21 | $19.09 | $16.59 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .36 | .34 | .41 | .38 | .35 |
| Net realized and unrealized gain (loss) | .18 | 3.35 | 2.25 | 2.07 | 2.50 |
| Total from investment operations | .54 | 3.69 | 2.66 | 2.45 | 2.85 |
| Distributions from net investment income | (.31) | (.40) | (.37) | (.33) | (.35) |
| Distributions from net realized gain | (1.52) | (.01) | – | – | – |
| Total distributions | (1.83) | (.41) | (.37) | (.33) | (.35) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $25.49 | $26.78 | $23.50 | $21.21 | $19.09 |
| Total ReturnC,D | 1.72% | 15.99% | 12.81% | 13.13% | 17.39% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.42% | 1.45% | 1.47% | 1.49% | 1.50% |
| Expenses net of fee waivers, if any | 1.42% | 1.45% | 1.47% | 1.49% | 1.50% |
| Expenses net of all reductions | 1.41% | 1.44% | 1.43% | 1.48% | 1.46% |
| Net investment income (loss) | 1.35% | 1.35% | 1.89% | 1.98% | 1.92% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $46,366 | $49,272 | $41,239 | $38,276 | $35,701 |
| Portfolio turnover rateG | 105% | 112% | 154% | 195% | 201% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the sales charges.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Utilities Fund Class B
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $26.51 | $23.24 | $20.96 | $18.86 | $16.38 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .22 | .21 | .30 | .28 | .25 |
| Net realized and unrealized gain (loss) | .19 | 3.33 | 2.23 | 2.05 | 2.49 |
| Total from investment operations | .41 | 3.54 | 2.53 | 2.33 | 2.74 |
| Distributions from net investment income | (.14) | (.26) | (.25) | (.23) | (.26) |
| Distributions from net realized gain | (1.52) | (.01) | – | – | – |
| Total distributions | (1.67)B | (.27) | (.25) | (.23) | (.26) |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $25.25 | $26.51 | $23.24 | $20.96 | $18.86 |
| Total ReturnD,E | 1.23% | 15.41% | 12.24% | 12.54% | 16.87% |
| Ratios to Average Net AssetsF,G | |||||
| Expenses before reductions | 1.94% | 1.95% | 1.96% | 1.98% | 1.99% |
| Expenses net of fee waivers, if any | 1.94% | 1.95% | 1.96% | 1.98% | 1.99% |
| Expenses net of all reductions | 1.93% | 1.94% | 1.92% | 1.97% | 1.95% |
| Net investment income (loss) | .83% | .85% | 1.40% | 1.49% | 1.43% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $2,680 | $4,598 | $5,289 | $6,677 | $7,773 |
| Portfolio turnover rateH | 105% | 112% | 154% | 195% | 201% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $1.67 per share is comprised of distributions from net investment income of $.141 and distributions from net realized gain of $1.524 per share.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the contingent deferred sales charge.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Utilities Fund Class C
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $26.23 | $23.03 | $20.80 | $18.75 | $16.30 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .23 | .23 | .31 | .29 | .26 |
| Net realized and unrealized gain (loss) | .19 | 3.29 | 2.20 | 2.03 | 2.46 |
| Total from investment operations | .42 | 3.52 | 2.51 | 2.32 | 2.72 |
| Distributions from net investment income | (.22) | (.31) | (.28) | (.27) | (.27) |
| Distributions from net realized gain | (1.52) | (.01) | – | – | – |
| Total distributions | (1.74) | (.32) | (.28) | (.27) | (.27) |
| Redemption fees added to paid in capitalA,B | – | – | – | – | – |
| Net asset value, end of period | $24.91 | $26.23 | $23.03 | $20.80 | $18.75 |
| Total ReturnC,D | 1.29% | 15.52% | 12.27% | 12.56% | 16.85% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.88% | 1.89% | 1.93% | 1.95% | 1.98% |
| Expenses net of fee waivers, if any | 1.88% | 1.89% | 1.93% | 1.95% | 1.98% |
| Expenses net of all reductions | 1.86% | 1.88% | 1.89% | 1.95% | 1.94% |
| Net investment income (loss) | .89% | .91% | 1.43% | 1.51% | 1.43% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $52,172 | $54,810 | $35,457 | $29,942 | $26,915 |
| Portfolio turnover rateG | 105% | 112% | 154% | 195% | 201% |
A Calculated based on average shares outstanding during the period.
B Amount represents less than $.01 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Utilities Fund Class I
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $27.24 | $23.87 | $21.56 | $19.40 | $16.85 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .52 | .51 | .55 | .50 | .45 |
| Net realized and unrealized gain (loss) | .20 | 3.39 | 2.26 | 2.10 | 2.54 |
| Total from investment operations | .72 | 3.90 | 2.81 | 2.60 | 2.99 |
| Distributions from net investment income | (.46) | (.52) | (.50) | (.44) | (.44) |
| Distributions from net realized gain | (1.52) | (.01) | – | – | – |
| Total distributions | (1.99)B | (.53) | (.50) | (.44) | (.44) |
| Redemption fees added to paid in capitalA,C | – | – | – | – | – |
| Net asset value, end of period | $25.97 | $27.24 | $23.87 | $21.56 | $19.40 |
| Total ReturnD | 2.35% | 16.74% | 13.40% | 13.79% | 18.05% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | .83% | .85% | .89% | .92% | .98% |
| Expenses net of fee waivers, if any | .83% | .85% | .89% | .92% | .98% |
| Expenses net of all reductions | .81% | .84% | .85% | .91% | .94% |
| Net investment income (loss) | 1.94% | 1.95% | 2.46% | 2.55% | 2.44% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $31,710 | $46,135 | $19,562 | $20,564 | $10,914 |
| Portfolio turnover rateG | 105% | 112% | 154% | 195% | 201% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $1.99 per share is comprised of distributions from net investment income of $.463 and distributions from net realized gain of $1.524 per share.
C Amount represents less than $.01 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to futures contracts, foreign currency transactions, partnerships, deferred trustees compensation, 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 | $23,923,486 |
| Gross unrealized depreciation | (11,159,436) |
| Net unrealized appreciation (depreciation) on securities | $ 12,764,050 |
| Tax cost | $ 262,117,451 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $2,226,083 |
| Undistributed long-term capital gain | $6,189,862 |
| Net unrealized appreciation (depreciation) on securities and other investments | $12,763,828 |
The fund intends to elect to defer to its next fiscal year $2,425,490 of capital losses recognized during the period November 1, 2014 to July 31, 2015.
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $4,794,753 | $ 3,817,529 |
| Long-term Capital Gains | 16,518,020 | – |
| Total | $21,312,773 | $ 3,817,529 |
Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 30 days may have been subject to a redemption fee equal to .75% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.
4. 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. |
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. Cash deposited to meet initial margin requirements is presented as segregated cash with brokers for derivative instruments in the Statement of Assets and Liabilities.
During the period the Fund recognized net realized gain (loss) of $(104,527) related to its investment in futures contracts. This amount is included in the Statement of Operations.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $321,335,111 and $360,849,616, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $390,136 | $11,332 |
| Class T | .25% | .25% | 256,358 | 1,450 |
| Class B | .75% | .25% | 39,439 | 29,623 |
| Class C | .75% | .25% | 578,647 | 142,534 |
| $1,264,580 | $184,939 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $127,007 |
| Class T | 16,306 |
| Class B* | 1,701 |
| Class C* | 11,621 |
| $156,635 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $373,458 | .24 |
| Class T | 145,597 | .28 |
| Class B | 11,905 | .30 |
| Class C | 138,031 | .24 |
| Class I | 83,265 | .19 |
| $ 752,256 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $6,955 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
| Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense |
| Borrower | $4,247,125 | .34% | $319 |
7. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $461 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow 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. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $31,909.
9. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $42,593 for the period.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $1,157 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $3,044 |
| Class T | 790 |
| Class B | 10 |
| Class C | 1,066 |
| Class I | 768 |
| $5,678 |
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $2,209,427 | $2,098,780 |
| Class T | 589,279 | 689,503 |
| Class B | 23,317 | 54,086 |
| Class C | 465,161 | 483,241 |
| Class I | 721,558 | 403,597 |
| Total | $4,008,742 | $3,729,207 |
| From net realized gain | ||
| Class A | $8,639,872 | $45,735 |
| Class T | 2,863,183 | 17,387 |
| Class B | 255,750 | 2,010 |
| Class C | 3,177,658 | 15,931 |
| Class I | 2,367,568 | 7,259 |
| Total | $17,304,031 | $88,322 |
11. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 1,888,559 | 2,276,742 | $50,338,260 | $59,563,163 |
| Reinvestment of distributions | 365,507 | 82,514 | 9,845,503 | 1,888,613 |
| Shares redeemed | (2,512,099) | (1,151,286) | (66,117,493) | (29,069,514) |
| Net increase (decrease) | (258,033) | 1,207,970 | $(5,933,730) | $32,382,262 |
| Class T | ||||
| Shares sold | 388,662 | 365,889 | $10,348,248 | $9,445,083 |
| Reinvestment of distributions | 123,166 | 29,388 | 3,324,380 | 673,761 |
| Shares redeemed | (532,785) | (310,668) | (14,023,975) | (7,776,879) |
| Net increase (decrease) | (20,957) | 84,609 | $(351,347) | $2,341,965 |
| Class B | ||||
| Shares sold | 10,961 | 19,626 | $290,048 | $511,179 |
| Reinvestment of distributions | 9,053 | 2,105 | 242,668 | 47,986 |
| Shares redeemed | (87,257) | (75,934) | (2,288,453) | (1,892,640) |
| Net increase (decrease) | (67,243) | (54,203) | $(1,755,737) | $(1,333,475) |
| Class C | ||||
| Shares sold | 773,976 | 898,033 | $20,247,064 | $23,064,197 |
| Reinvestment of distributions | 116,026 | 17,647 | 3,068,131 | 397,963 |
| Shares redeemed | (884,724) | (365,639) | (22,817,991) | (9,096,804) |
| Net increase (decrease) | 5,278 | 550,041 | $497,204 | $14,365,356 |
| Class I | ||||
| Shares sold | 1,143,014 | 1,373,720 | $31,002,673 | $36,918,565 |
| Reinvestment of distributions | 90,001 | 15,288 | 2,465,972 | 354,761 |
| Shares redeemed | (1,705,406) | (514,863) | (45,532,863) | (13,443,816) |
| Net increase (decrease) | (472,391) | 874,145 | $(12,064,218) | $23,829,510 |
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.
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity 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, 2015, 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, 2015, by correspondence with the custodians and brokers; when 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, 2015, 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 23, 2015
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and funds, as applicable, are listed below. The Board of Trustees governs each fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee each fund's activities, review contractual arrangements with companies that provide services to each fund, oversee management of the risks associated with such activities and contractual arrangements, and review each fund's performance. Each of the Trustees oversees 75 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. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the funds is referred to herein as an Independent Trustee.
Each fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing each fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the funds, is provided below.
Board Structure and Oversight Function. Brian B. Hogan is an interested person 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 Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Brian B. Hogan (1964)
Year of Election or Appointment: 2014
Trustee
Chairman of the Board of Trustees
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager.
* Determined to be an "Interested Trustee" by virtue of, among other things, his or her affiliation with the trust or various entities under common control with SelectCo.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for each fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
David A. Rosow (1942)
Year of Election or Appointment: 2013
Trustee
Mr. Rosow also serves as Trustee of other Fidelity® funds. Prior to his retirement in 2006, Mr. Rosow was the Chief Executive Officer, owner and operator of a number of private companies, which encompassed oil refining, drilling and marketing of petroleum products (including specialty petroleum products), the recreation industry, and real estate development. Previously, Mr. Rosow served as Lead Director and Chairman of the Audit Committee of Hudson United Bancorp (1996-2006), Chairman of the Board of Westport Bank and Trust (1992-1996), and as a Director of TD Banknorth (2006-2007). In addition, Mr. Rosow served as a member (2008-2014) and President (2009-2014) of the Town Council of Palm Beach, Florida. Mr. Rosow also served as a Member of the Advisory Board of other Fidelity® funds (2012-2013).
Garnett A. Smith (1947)
Year of Election or Appointment: 2013
Trustee
Mr. Smith also serves as Trustee of other Fidelity® funds. Prior to Mr. Smith's retirement, he served as Chairman and Chief Executive Officer of Inbrand Corp. (manufacturer of personal absorbent products, 1990-1997). He also served as President (1986-1990) of Inbrand Corp. Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank. In addition, Mr. Smith served as a Member of the Advisory Board of other Fidelity® funds (2012-2013) and as a board member of the Jackson Hole Land Trust (2009-2012).
Michael E. Wiley (1950)
Year of Election or Appointment: 2008
Trustee
Chairman of the Independent Trustees
Mr. Wiley also serves as Trustee of other Fidelity® funds. Mr. Wiley serves as a Director of Tesoro Corporation (independent oil refiner and marketer, 2005-present), and a Director of Bill Barrett Corporation (exploration and production, 2005-present). In addition, Mr. Wiley also serves as a Director of Post Oak Bank (privately-held bank, 2004-present). Previously, Mr. Wiley served as a Trustee of other Fidelity® funds (2008-2013), as a Director of Asia Pacific Exploration Consolidated (international oil and gas exploration and production, 2008-2013), as a member of the Board of Trustees of the University of Tulsa (2000-2006; 2007-2010), as a Senior Energy Advisor of Katzenbach Partners, LLC (consulting, 2006-2007), as an Advisory Director of Riverstone Holdings (private investment), Chairman, President, and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004), and as Director of Spinnaker Exploration Company (exploration and production, 2001-2005).
+ The information 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.
Advisory Board Members and Officers:
Except for Anthony R. Rochte, correspondence intended for an officer may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Correspondence intended for Mr. Rochte may be sent to SelectCo, 1225 17th Street, Denver, Colorado 80202-5541. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Christopher S. Bartel (1971)
Year of Election or Appointment: 2009
Vice President
Mr. Bartel also serves as Vice President of other funds. Mr. Bartel serves as a Director, President, and Chief Executive Officer of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2012-present), a Director of Fidelity Management & Research (Hong Kong) (investment adviser firm, 2012-present), and Senior Vice President of Global Equity Research (2010-present). Previously, Mr. Bartel served as Senior Vice President of Equity Research (2009-2010), Managing Director of Research (2006-2009), and an analyst and portfolio manager (2000-2006).
Elizabeth Paige Baumann (1968)
Year of Election or Appointment: 2012
Anti-Money Laundering (AML) Officer
Ms. Baumann also serves as AML Officer of other funds. She is Chief AML Officer of FMR LLC (diversified financial services company, 2012-present) and is an employee of Fidelity Investments. Previously, Ms. Baumann served as Vice President and Deputy Anti-Money Laundering Officer (2007-2012).
Marc Bryant (1966)
Year of Election or Appointment: 2013
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and Chief Legal Officer (CLO) of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and Chief Legal Officer of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds. Mr. Davis is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2013
President and Treasurer
Mr. Deberghes also serves as an officer of other funds. He is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005).
Joseph DeSantis (1959)
Year of Election or Appointment: 2015
Vice President
Mr. DeSantis also serves as Vice President of other funds. Mr. DeSantis serves as Group Chief Investment Officer, Equities (2010-present) and is an employee of Fidelity Investments.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
James D. Gryglewicz (1972)
Year of Election or Appointment: 2014
Chief Compliance Officer
Mr. Gryglewicz also serves as Chief Compliance Officer of other funds. Mr. Gryglewicz serves as Compliance Officer of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), Vice President of Asset Management Compliance (2009-present), and is an employee of Fidelity Investments (2004-present).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2013
Deputy Treasurer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2013-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served in other fund officer roles.
Anthony R. Rochte (1968)
Year of Election or Appointment: 2013
Vice President
Mr. Rochte also serves as Vice President of other funds. Mr. Rochte serves as President of Fidelity SelectCo, LLC (investment adviser firm, 2012-present) and is an employee of Fidelity Investments (2012-present). Prior to joining Fidelity Investments, Mr. Rochte served as Senior Managing Director and head of State Street Global Advisors' North American Intermediary Business Group (2006-2012).
Stacie M. Smith (1974)
Year of Election or Appointment: 2013
Assistant Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009).
Renee Stagnone (1975)
Year of Election or Appointment: 2013
Deputy Treasurer
Ms. Stagnone also serves as Deputy Treasurer of other funds. Ms. Stagnone is an employee of Fidelity Investments.
Joseph F. Zambello (1957)
Year of Election or Appointment: 2011
Deputy Treasurer
Mr. Zambello also serves as Deputy Treasurer of other funds. Mr. Zambello is an employee of Fidelity Investments. Previously, Mr. Zambello served as Vice President of the Program Management Group of FMR (investment adviser firm, 2009-2011) and Vice President of the Transfer Agent Oversight Group (2005-2009).
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, 2015 to July 31, 2015).
Actual Expenses
The first line of the accompanying table for each class of each 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, each 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 each 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, each 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 Expense Ratio-A | Beginning Account Value February 1, 2015 | Ending Account Value July 31, 2015 | Expenses Paid During Period-B February 1, 2015 to July 31, 2015 | |
| Fidelity Advisor Biotechnology Fund | ||||
| Class A | 1.03% | |||
| Actual | $1,000.00 | $1,196.00 | $5.61 | |
| Hypothetical-C | $1,000.00 | $1,019.69 | $5.16 | |
| Class T | 1.33% | |||
| Actual | $1,000.00 | $1,194.30 | $7.24 | |
| Hypothetical-C | $1,000.00 | $1,018.20 | $6.66 | |
| Class B | 1.80% | |||
| Actual | $1,000.00 | $1,191.70 | $9.78 | |
| Hypothetical-C | $1,000.00 | $1,015.87 | $9.00 | |
| Class C | 1.78% | |||
| Actual | $1,000.00 | $1,191.30 | $9.67 | |
| Hypothetical-C | $1,000.00 | $1,015.97 | $8.90 | |
| Class I | .77% | |||
| Actual | $1,000.00 | $1,197.30 | $4.20 | |
| Hypothetical-C | $1,000.00 | $1,020.98 | $3.86 | |
| Fidelity Advisor Communications Equipment Fund | ||||
| Class A | 1.40% | |||
| Actual | $1,000.00 | $1,051.00 | $7.12 | |
| Hypothetical-C | $1,000.00 | $1,017.85 | $7.00 | |
| Class T | 1.65% | |||
| Actual | $1,000.00 | $1,050.10 | $8.39 | |
| Hypothetical-C | $1,000.00 | $1,016.61 | $8.25 | |
| Class B | 2.15% | |||
| Actual | $1,000.00 | $1,047.40 | $10.91 | |
| Hypothetical-C | $1,000.00 | $1,014.13 | $10.74 | |
| Class C | 2.15% | |||
| Actual | $1,000.00 | $1,047.40 | $10.91 | |
| Hypothetical-C | $1,000.00 | $1,014.13 | $10.74 | |
| Class I | 1.15% | |||
| Actual | $1,000.00 | $1,052.60 | $5.85 | |
| Hypothetical-C | $1,000.00 | $1,019.09 | $5.76 | |
| Fidelity Advisor Consumer Discretionary Fund | ||||
| Class A | 1.12% | |||
| Actual | $1,000.00 | $1,123.20 | $5.90 | |
| Hypothetical-C | $1,000.00 | $1,019.24 | $5.61 | |
| Class T | 1.41% | |||
| Actual | $1,000.00 | $1,121.20 | $7.42 | |
| Hypothetical-C | $1,000.00 | $1,017.80 | $7.05 | |
| Class B | 1.87% | |||
| Actual | $1,000.00 | $1,118.60 | $9.82 | |
| Hypothetical-C | $1,000.00 | $1,015.52 | $9.35 | |
| Class C | 1.87% | |||
| Actual | $1,000.00 | $1,118.50 | $9.82 | |
| Hypothetical-C | $1,000.00 | $1,015.52 | $9.35 | |
| Class I | .85% | |||
| Actual | $1,000.00 | $1,124.30 | $4.48 | |
| Hypothetical-C | $1,000.00 | $1,020.58 | $4.26 | |
| Fidelity Advisor Electronics Fund | ||||
| Class A | 1.22% | |||
| Actual | $1,000.00 | $990.30 | $6.02 | |
| Hypothetical-C | $1,000.00 | $1,018.74 | $6.11 | |
| Class T | 1.61% | |||
| Actual | $1,000.00 | $988.70 | $7.94 | |
| Hypothetical-C | $1,000.00 | $1,016.81 | $8.05 | |
| Class B | 2.06% | |||
| Actual | $1,000.00 | $985.70 | $10.14 | |
| Hypothetical-C | $1,000.00 | $1,014.58 | $10.29 | |
| Class C | 2.01% | |||
| Actual | $1,000.00 | $986.40 | $9.90 | |
| Hypothetical-C | $1,000.00 | $1,014.83 | $10.04 | |
| Class I | .89% | |||
| Actual | $1,000.00 | $991.30 | $4.39 | |
| Hypothetical-C | $1,000.00 | $1,020.38 | $4.46 | |
| Fidelity Advisor Energy Fund | ||||
| Class A | 1.11% | |||
| Actual | $1,000.00 | $923.10 | $5.29 | |
| Hypothetical-C | $1,000.00 | $1,019.29 | $5.56 | |
| Class T | 1.35% | |||
| Actual | $1,000.00 | $921.90 | $6.43 | |
| Hypothetical-C | $1,000.00 | $1,018.10 | $6.76 | |
| Class B | 1.92% | |||
| Actual | $1,000.00 | $919.40 | $9.14 | |
| Hypothetical-C | $1,000.00 | $1,015.27 | $9.59 | |
| Class C | 1.84% | |||
| Actual | $1,000.00 | $919.60 | $8.76 | |
| Hypothetical-C | $1,000.00 | $1,015.67 | $9.20 | |
| Class I | .85% | |||
| Actual | $1,000.00 | $924.30 | $4.06 | |
| Hypothetical-C | $1,000.00 | $1,020.58 | $4.26 | |
| Fidelity Advisor Financial Services Fund | ||||
| Class A | 1.14% | |||
| Actual | $1,000.00 | $1,089.70 | $5.91 | |
| Hypothetical-C | $1,000.00 | $1,019.14 | $5.71 | |
| Class T | 1.42% | |||
| Actual | $1,000.00 | $1,088.20 | $7.35 | |
| Hypothetical-C | $1,000.00 | $1,017.75 | $7.10 | |
| Class B | 1.93% | |||
| Actual | $1,000.00 | $1,085.80 | $9.98 | |
| Hypothetical-C | $1,000.00 | $1,015.22 | $9.64 | |
| Class C | 1.87% | |||
| Actual | $1,000.00 | $1,085.90 | $9.67 | |
| Hypothetical-C | $1,000.00 | $1,015.52 | $9.35 | |
| Class I | .83% | |||
| Actual | $1,000.00 | $1,091.50 | $4.30 | |
| Hypothetical-C | $1,000.00 | $1,020.68 | $4.16 | |
| Fidelity Advisor Health Care Fund | ||||
| Class A | 1.03% | |||
| Actual | $1,000.00 | $1,147.00 | $5.48 | |
| Hypothetical-C | $1,000.00 | $1,019.69 | $5.16 | |
| Class T | 1.29% | |||
| Actual | $1,000.00 | $1,145.50 | $6.86 | |
| Hypothetical-C | $1,000.00 | $1,018.40 | $6.46 | |
| Class B | 1.83% | |||
| Actual | $1,000.00 | $1,142.50 | $9.72 | |
| Hypothetical-C | $1,000.00 | $1,015.72 | $9.15 | |
| Class C | 1.78% | |||
| Actual | $1,000.00 | $1,142.80 | $9.46 | |
| Hypothetical-C | $1,000.00 | $1,015.97 | $8.90 | |
| Class I | .78% | |||
| Actual | $1,000.00 | $1,148.60 | $4.16 | |
| Hypothetical-C | $1,000.00 | $1,020.93 | $3.91 | |
| Fidelity Advisor Industrials Fund | ||||
| Class A | 1.05% | |||
| Actual | $1,000.00 | $1,028.30 | $5.28 | |
| Hypothetical-C | $1,000.00 | $1,019.59 | $5.26 | |
| Class T | 1.31% | |||
| Actual | $1,000.00 | $1,026.80 | $6.58 | |
| Hypothetical-C | $1,000.00 | $1,018.30 | $6.56 | |
| Class B | 1.83% | |||
| Actual | $1,000.00 | $1,024.00 | $9.18 | |
| Hypothetical-C | $1,000.00 | $1,015.72 | $9.15 | |
| Class C | 1.80% | |||
| Actual | $1,000.00 | $1,024.40 | $9.03 | |
| Hypothetical-C | $1,000.00 | $1,015.87 | $9.00 | |
| Class I | .78% | |||
| Actual | $1,000.00 | $1,029.60 | $3.93 | |
| Hypothetical-C | $1,000.00 | $1,020.93 | $3.91 | |
| Fidelity Advisor Technology Fund | ||||
| Class A | 1.08% | |||
| Actual | $1,000.00 | $1,080.10 | $5.57 | |
| Hypothetical-C | $1,000.00 | $1,019.44 | $5.41 | |
| Class T | 1.34% | |||
| Actual | $1,000.00 | $1,078.30 | $6.91 | |
| Hypothetical-C | $1,000.00 | $1,018.15 | $6.71 | |
| Class B | 1.90% | |||
| Actual | $1,000.00 | $1,075.60 | $9.78 | |
| Hypothetical-C | $1,000.00 | $1,015.37 | $9.49 | |
| Class C | 1.83% | |||
| Actual | $1,000.00 | $1,075.70 | $9.42 | |
| Hypothetical-C | $1,000.00 | $1,015.72 | $9.15 | |
| Class I | .75% | |||
| Actual | $1,000.00 | $1,081.80 | $3.87 | |
| Hypothetical-C | $1,000.00 | $1,021.08 | $3.76 | |
| Fidelity Advisor Utilities Fund | ||||
| Class A | 1.12% | |||
| Actual | $1,000.00 | $937.50 | $5.38 | |
| Hypothetical-C | $1,000.00 | $1,019.24 | $5.61 | |
| Class T | 1.42% | |||
| Actual | $1,000.00 | $935.80 | $6.82 | |
| Hypothetical-C | $1,000.00 | $1,017.75 | $7.10 | |
| Class B | 1.94% | |||
| Actual | $1,000.00 | $933.80 | $9.30 | |
| Hypothetical-C | $1,000.00 | $1,015.17 | $9.69 | |
| Class C | 1.87% | |||
| Actual | $1,000.00 | $934.00 | $8.97 | |
| Hypothetical-C | $1,000.00 | $1,015.52 | $9.35 | |
| Class I | .83% | |||
| Actual | $1,000.00 | $938.90 | $3.99 | |
| Hypothetical-C | $1,000.00 | $1,020.68 | $4.16 | |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/ 365 (to reflect the one-half year period).
C 5% return per year before expenses
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 I | 09/14/15 | 09/11/15 | $0.000 | $1.436 |
| Fidelity Advisor Communications Equipment Fund | ||||
| Class I | 09/14/15 | 09/11/15 | $0.000 | $0.274 |
| Fidelity Advisor Consumer Discretionary Fund | ||||
| Class I | 09/14/15 | 09/11/15 | $0.049 | $0.438 |
| Fidelity Advisor Electronics Fund | ||||
| Class I | 09/14/15 | 09/11/15 | $0.019 | $1.494 |
| Fidelity Advisor Energy Fund | ||||
| Class I | 09/14/15 | 09/11/15 | $0.149 | $0.000 |
| Fidelity Advisor Financial Services Fund | ||||
| Class I | 09/14/15 | 09/11/15 | $0.000 | $0.000 |
| Fidelity Advisor Health Care Fund | ||||
| Class I | 09/14/15 | 09/11/15 | $0.000 | $2.601 |
| Fidelity Advisor Industrials Fund | ||||
| Class I | 09/14/15 | 09/11/15 | $0.126 | $2.647 |
| Fidelity Advisor Technology Fund | ||||
| Class I | 09/14/15 | 09/11/15 | $0.000 | $1.672 |
| Fidelity Advisor Utilities Fund | ||||
| Class I | 09/14/15 | 09/11/15 | $0.256 | $0.613 |
The funds hereby designate as capital gain dividend the amounts noted below for the taxable year ended July 31, 2015, or, if subsequently determined to be different, the net capital gain of such year.
| Fidelity Advisor Biotechnology Fund | $184,538,011 |
| Fidelity Advisor Communications Equipment Fund | 291,734 |
| Fidelity Advisor Consumer Discretionary Fund | 8,128,128 |
| Fidelity Advisor Electronics Fund | 979,994 |
| Fidelity Advisor Energy Fund | 0 |
| Fidelity Advisor Financial Services Fund | 0 |
| Fidelity Advisor Health Care Fund | 148,777,303 |
| Fidelity Advisor Industrials Fund | 71,825,671 |
| Fidelity Advisor Technology Fund | 29,079,653 |
| Fidelity Advisor Utilities Fund | 9,798,197 |
A percentage of the dividends distributed during the fiscal year for the following funds qualify for the dividends–received deduction for corporate shareholders:
| September 2014 | December 2014 | |
| Fidelity Advisor Biotechnology Fund | ||
| Class I | 100% | 0% |
| Fidelity Advisor Communications Equipment Fund | ||
| Class I | 100% | 0% |
| Fidelity Advisor Consumer Discretionary Fund | ||
| Class I | 33% | 0% |
| Fidelity Advisor Electronics Fund | ||
| Class I | 0% | 94% |
| Fidelity Advisor Energy Fund | ||
| Class I | 41% | 100% |
| Fidelity Advisor Financial Services Fund | ||
| Class I | 100% | 100% |
| Fidelity Advisor Health Care Fund | ||
| Class I | 7% | 24% |
| Fidelity Advisor Industrials Fund | ||
| Class I | 100% | 100% |
| Fidelity Advisor Technology Fund | ||
| Class I | 7% | 8% |
| Fidelity Advisor Utilities Fund | ||
| Class I | 100% | 100% |
A percentage of the dividends distributed during the fiscal year for the following funds may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
| September 2014 | December 2014 | |
| Fidelity Advisor Biotechnology Fund | ||
| Class I | 100% | 0% |
| Fidelity Advisor Communications Equipment Fund | ||
| Class I | 100% | 0% |
| Fidelity Advisor Consumer Discretionary Fund | ||
| Class I | 35% | 0% |
| Fidelity Advisor Electronics Fund | ||
| Class I | 0% | 100% |
| Fidelity Advisor Energy Fund | ||
| Class I | 44% | 100% |
| Fidelity Advisor Financial Services Fund | ||
| Class I | 100% | 100% |
| Fidelity Advisor Health Care Fund | ||
| Class I | 10% | 38% |
| Fidelity Advisor Industrials Fund | ||
| Class I | 100% | 100% |
| Fidelity Advisor Technology Fund | ||
| Class I | 8% | 11% |
| Fidelity Advisor Utilities Fund | ||
| Class I | 100% | 100% |
The funds will notify shareholders in January 2016 of amounts for use in preparing 2015 income tax returns.
AFOCI-ANN-0915
1.762412.114
Fidelity Advisor® Real Estate Fund Class A, Class T, Class B and Class C Annual Report July 31, 2015 |
|
Contents
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.
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 call1-877-208-0098 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. © 2015 FMR LLC. All rights reserved.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Returns reflect the conversion of Class B shares to Class A shares after a maximum of seven years.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | 3.40% | 11.77% | 6.38% |
| Class T (incl. 3.50% sales charge) | 5.63% | 12.02% | 6.37% |
| Class B (incl. contingent deferred sales charge) | 3.85% | 11.98% | 6.44% |
| Class C (incl. contingent deferred sales charge) | 7.85% | 12.25% | 6.21% |
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.
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® Real Estate Fund - Class A on July 31, 2005, 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.
| Period Ending Values | ||
| $18,554 | Fidelity Advisor® Real Estate Fund - Class A | |
| $21,043 | S&P 500® Index | |
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015, as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. Consequently, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for the consumer staples sector and the real estate segment of financials yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Samuel Wald: For the year, the fund’s share classes fell short of the 11.29% return of our sector benchmark, the Dow Jones U.S. Select Real Estate Securities IndexSM. (For specific class-level results, please see the Performance section of this report.) Versus the benchmark, the fund was hampered by security selection in the retail and health care sectors. Among retail REITs, underweightings in General Growth Properties (GGP) and Macerich notably detracted. I initially avoided GGP, a sizable index constituent, preferring other retail REITs I thought had offered better risk/reward characteristics. But in March I took advantage of GGP’s weakness to add exposure here. We also lacked exposure to Macerich, another index component, for much of the period. I eventually did establish a position in the stock, as I saw more performance potential over the medium term. Elsewhere, hotel REIT FelCor Lodging Trust struggled as one of its large redevelopment projects encountered delays. The fund benefited from underweighting Host Hotels & Resorts, which lagged along with the hotel sector. Other positives included self-storage operator Extra Space Storage and apartment REIT Essex Property Trust.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.Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Simon Property Group, Inc. | 10.1 | 12.4 |
| Boston Properties, Inc. | 5.6 | 5.8 |
| Essex Property Trust, Inc. | 5.1 | 4.9 |
| Public Storage | 4.5 | 3.3 |
| HCP, Inc. | 4.4 | 5.1 |
| SL Green Realty Corp. | 4.2 | 4.6 |
| UDR, Inc. | 3.9 | 3.3 |
| Alexandria Real Estate Equities, Inc. | 3.9 | 3.8 |
| Extra Space Storage, Inc. | 3.4 | 3.3 |
| Ventas, Inc. | 3.2 | 2.6 |
| 48.3 |
Top Five REIT Sectors as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| REITs - Apartments | 18.0 | 17.2 |
| REITs - Office Property | 16.7 | 15.9 |
| REITs - Regional Malls | 15.7 | 15.7 |
| REITs - Health Care | 11.5 | 11.5 |
| REITs - Shopping Centers | 9.4 | 9.4 |
Asset Allocation (% of fund's net assets)
| As of July 31, 2015 | ||
| Stocks | 99.6% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.4% | |
| As of January 31, 2015 | ||
| Stocks | 98.5% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 1.5% | |
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 99.6% | |||
| Shares | Value | ||
| Real Estate Investment Trusts - 97.3% | |||
| REITs - Apartments - 18.0% | |||
| American Campus Communities, Inc. | 431,000 | $16,084,920 | |
| American Residential Properties, Inc. | 157,400 | 2,911,900 | |
| AvalonBay Communities, Inc. | 130,340 | 22,462,796 | |
| Camden Property Trust (SBI) | 255,300 | 20,329,539 | |
| Equity Residential (SBI) | 272,509 | 20,386,398 | |
| Essex Property Trust, Inc. | 211,047 | 47,466,581 | |
| Mid-America Apartment Communities, Inc. | 18,000 | 1,446,120 | |
| UDR, Inc. | 1,067,000 | 36,075,270 | |
| 167,163,524 | |||
| REITs - Diversified - 5.3% | |||
| Cousins Properties, Inc. | 1,314,657 | 13,646,140 | |
| Digital Realty Trust, Inc. | 255,300 | 16,408,131 | |
| Liberty Property Trust (SBI) | 432,300 | 14,711,169 | |
| Vornado Realty Trust | 51,383 | 5,012,412 | |
| 49,777,852 | |||
| REITs - Health Care - 11.5% | |||
| Community Healthcare Trust, Inc. | 38,400 | 724,608 | |
| HCP, Inc. | 1,049,095 | 40,537,031 | |
| Health Care REIT, Inc. | 177,069 | 12,283,277 | |
| Medical Properties Trust, Inc. | 319,200 | 4,363,464 | |
| Sabra Health Care REIT, Inc. | 380,600 | 10,409,410 | |
| Senior Housing Properties Trust (SBI) | 464,600 | 8,023,642 | |
| Ventas, Inc. | 451,605 | 30,298,179 | |
| 106,639,611 | |||
| REITs - Hotels - 6.5% | |||
| Ashford Hospitality Prime, Inc. | 343,300 | 4,998,448 | |
| FelCor Lodging Trust, Inc. | 2,286,089 | 21,397,793 | |
| Host Hotels & Resorts, Inc. | 639,134 | 12,386,417 | |
| LaSalle Hotel Properties (SBI) | 152,700 | 5,080,329 | |
| RLJ Lodging Trust | 543,400 | 16,209,622 | |
| 60,072,609 | |||
| REITs - Management/Investment - 0.3% | |||
| Weyerhaeuser Co. | 83,100 | 2,550,339 | |
| REITs - Manufactured Homes - 1.9% | |||
| Sun Communities, Inc. | 251,822 | 17,504,147 | |
| REITs - Office Property - 16.7% | |||
| Alexandria Real Estate Equities, Inc. | 384,733 | 35,668,596 | |
| Boston Properties, Inc. | 422,347 | 52,066,938 | |
| Mack-Cali Realty Corp. | 658,100 | 13,714,804 | |
| Parkway Properties, Inc. | 794,800 | 14,258,712 | |
| SL Green Realty Corp. | 339,565 | 39,097,514 | |
| 154,806,564 | |||
| REITs - Regional Malls - 15.7% | |||
| General Growth Properties, Inc. | 628,100 | 17,046,634 | |
| Simon Property Group, Inc. | 501,950 | 93,975,078 | |
| Taubman Centers, Inc. | 273,000 | 20,420,400 | |
| The Macerich Co. | 178,100 | 14,098,396 | |
| 145,540,508 | |||
| REITs - Shopping Centers - 9.4% | |||
| Cedar Shopping Centers, Inc. | 1,269,443 | 8,505,268 | |
| Federal Realty Investment Trust (SBI) | 214,102 | 29,287,013 | |
| Kite Realty Group Trust | 315,032 | 8,316,845 | |
| Ramco-Gershenson Properties Trust (SBI) | 367,222 | 6,220,741 | |
| Urban Edge Properties | 1,133,041 | 24,326,390 | |
| WP Glimcher, Inc. | 800,575 | 10,839,786 | |
| 87,496,043 | |||
| REITs - Storage - 7.9% | |||
| Extra Space Storage, Inc. | 425,100 | 31,253,352 | |
| Public Storage | 205,750 | 42,215,785 | |
| 73,469,137 | |||
| REITs - Warehouse/Industrial - 4.1% | |||
| DCT Industrial Trust, Inc. | 661,050 | 22,978,098 | |
| Prologis, Inc. | 257,077 | 10,439,897 | |
| Terreno Realty Corp. | 229,600 | 4,814,712 | |
| 38,232,707 | |||
| TOTAL REAL ESTATE INVESTMENT TRUSTS | 903,253,041 | ||
| Real Estate Management & Development - 2.3% | |||
| Real Estate Operating Companies - 2.3% | |||
| Forest City Enterprises, Inc. Class A (a) | 902,567 | 21,074,939 | |
| TOTAL COMMON STOCKS | |||
| (Cost $739,367,273) | 924,327,980 | ||
| Money Market Funds - 0.2% | |||
| Fidelity Cash Central Fund, 0.17% (b) | |||
| (Cost $2,109,508) | 2,109,508 | 2,109,508 | |
| TOTAL INVESTMENT PORTFOLIO - 99.8% | |||
| (Cost $741,476,781) | 926,437,488 | ||
| NET OTHER ASSETS (LIABILITIES) - 0.2% | 1,847,279 | ||
| NET ASSETS - 100% | $928,284,767 |
Legend
(a) Non-income producing
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $12,666 |
| Fidelity Securities Lending Cash Central Fund | 30,591 |
| Total | $43,257 |
Investment Valuation
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $739,367,273) | $924,327,980 | |
| Fidelity Central Funds (cost $2,109,508) | 2,109,508 | |
| Total Investments (cost $741,476,781) | $926,437,488 | |
| Receivable for investments sold | 9,020,781 | |
| Receivable for fund shares sold | 760,991 | |
| Dividends receivable | 181,194 | |
| Distributions receivable from Fidelity Central Funds | 759 | |
| Other receivables | 42,069 | |
| Total assets | 936,443,282 | |
| Liabilities | ||
| Payable for investments purchased | $4,506,571 | |
| Payable for fund shares redeemed | 2,690,753 | |
| Accrued management fee | 422,829 | |
| Distribution and service plan fees payable | 208,027 | |
| Other affiliated payables | 208,113 | |
| Other payables and accrued expenses | 122,222 | |
| Total liabilities | 8,158,515 | |
| Net Assets | $928,284,767 | |
| Net Assets consist of: | ||
| Paid in capital | $721,272,213 | |
| Undistributed net investment income | 2,441,287 | |
| Accumulated undistributed net realized gain (loss) on investments | 19,610,560 | |
| Net unrealized appreciation (depreciation) on investments | 184,960,707 | |
| Net Assets | $928,284,767 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($327,489,427 ÷ 14,302,222 shares) | $22.90 | |
| Maximum offering price per share (100/94.25 of $22.90) | $24.30 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($168,374,865 ÷ 7,359,199 shares) | $22.88 | |
| Maximum offering price per share (100/96.50 of $22.88) | $23.71 | |
| Class B: | ||
| Net Asset Value and offering price per share ($3,829,164 ÷ 169,767 shares)(a) | $22.56 | |
| Class C: | ||
| Net Asset Value and offering price per share ($79,290,709 ÷ 3,526,021 shares)(a) | $22.49 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($349,300,602 ÷ 15,130,194 shares) | $23.09 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $22,058,988 | |
| Income from Fidelity Central Funds | 43,257 | |
| Total income | 22,102,245 | |
| Expenses | ||
| Management fee | $5,032,474 | |
| Transfer agent fees | 2,184,561 | |
| Distribution and service plan fees | 2,464,552 | |
| Accounting and security lending fees | 311,972 | |
| Custodian fees and expenses | 27,307 | |
| Independent trustees' compensation | 15,782 | |
| Registration fees | 152,705 | |
| Audit | 51,517 | |
| Legal | 10,438 | |
| Miscellaneous | 9,465 | |
| Total expenses before reductions | 10,260,773 | |
| Expense reductions | (96,051) | 10,164,722 |
| Net investment income (loss) | 11,937,523 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 43,067,889 | |
| Total net realized gain (loss) | 43,067,889 | |
| Change in net unrealized appreciation (depreciation) on investment securities | 17,845,717 | |
| Net gain (loss) | 60,913,606 | |
| Net increase (decrease) in net assets resulting from operations | $72,851,129 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $11,937,523 | $10,579,301 |
| Net realized gain (loss) | 43,067,889 | 45,747,977 |
| Change in net unrealized appreciation (depreciation) | 17,845,717 | 22,594,134 |
| Net increase (decrease) in net assets resulting from operations | 72,851,129 | 78,921,412 |
| Distributions to shareholders from net investment income | (11,243,675) | (9,317,425) |
| Distributions to shareholders from net realized gain | (53,617,748) | (17,838,487) |
| Total distributions | (64,861,423) | (27,155,912) |
| Share transactions - net increase (decrease) | 137,991,224 | (20,280,229) |
| Total increase (decrease) in net assets | 145,980,930 | 31,485,271 |
| Net Assets | ||
| Beginning of period | 782,303,837 | 750,818,566 |
| End of period (including undistributed net investment income of $2,441,287 and undistributed net investment income of $2,093,231, respectively) | $928,284,767 | $782,303,837 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Real Estate Fund Class A
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $22.57 | $20.92 | $19.83 | $18.24 | $14.88 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .30 | .31 | .22 | .17 | .12 |
| Net realized and unrealized gain (loss) | 1.82 | 2.13 | 1.27 | 2.02 | 3.37 |
| Total from investment operations | 2.12 | 2.44 | 1.49 | 2.19 | 3.49 |
| Distributions from net investment income | (.30) | (.27) | (.23) | (.13) | (.13) |
| Distributions from net realized gain | (1.49) | (.52) | (.17) | (.47) | – |
| Total distributions | (1.79) | (.79) | (.40) | (.60) | (.13) |
| Net asset value, end of period | $22.90 | $22.57 | $20.92 | $19.83 | $18.24 |
| Total ReturnB,C | 9.70% | 12.34% | 7.66% | 12.81% | 23.63% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | 1.10% | 1.16% | 1.17% | 1.19% | 1.19% |
| Expenses net of fee waivers, if any | 1.10% | 1.16% | 1.17% | 1.19% | 1.19% |
| Expenses net of all reductions | 1.09% | 1.15% | 1.16% | 1.18% | 1.18% |
| Net investment income (loss) | 1.32% | 1.47% | 1.06% | .98% | .69% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $327,489 | $274,136 | $246,323 | $199,303 | $178,978 |
| Portfolio turnover rateF | 57% | 83% | 63% | 48% | 63% |
A Calculated based on average shares outstanding during the period.
B Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
C Total returns do not include the effect of the sales charges.
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 Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Real Estate Fund Class T
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $22.55 | $20.91 | $19.82 | $18.24 | $14.90 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .25 | .26 | .17 | .13 | .07 |
| Net realized and unrealized gain (loss) | 1.82 | 2.13 | 1.28 | 2.02 | 3.38 |
| Total from investment operations | 2.07 | 2.39 | 1.45 | 2.15 | 3.45 |
| Distributions from net investment income | (.25) | (.23) | (.19) | (.10) | (.11) |
| Distributions from net realized gain | (1.49) | (.52) | (.17) | (.47) | – |
| Total distributions | (1.74) | (.75) | (.36) | (.57) | (.11) |
| Net asset value, end of period | $22.88 | $22.55 | $20.91 | $19.82 | $18.24 |
| Total ReturnB,C | 9.46% | 12.07% | 7.43% | 12.52% | 23.28% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | 1.34% | 1.37% | 1.38% | 1.43% | 1.44% |
| Expenses net of fee waivers, if any | 1.34% | 1.37% | 1.38% | 1.43% | 1.44% |
| Expenses net of all reductions | 1.33% | 1.36% | 1.38% | 1.43% | 1.44% |
| Net investment income (loss) | 1.09% | 1.26% | .85% | .73% | .43% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $168,375 | $138,783 | $114,717 | $86,987 | $76,785 |
| Portfolio turnover rateF | 57% | 83% | 63% | 48% | 63% |
A Calculated based on average shares outstanding during the period.
B Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
C Total returns do not include the effect of the sales charges.
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 Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Real Estate Fund Class B
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $22.28 | $20.66 | $19.59 | $18.05 | $14.77 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .11 | .14 | .06 | .04 | (.01) |
| Net realized and unrealized gain (loss) | 1.80 | 2.10 | 1.26 | 2.00 | 3.35 |
| Total from investment operations | 1.91 | 2.24 | 1.32 | 2.04 | 3.34 |
| Distributions from net investment income | (.14) | (.11) | (.08) | (.03) | (.06) |
| Distributions from net realized gain | (1.49) | (.52) | (.17) | (.47) | – |
| Total distributions | (1.63) | (.62)B | (.25) | (.50) | (.06) |
| Net asset value, end of period | $22.56 | $22.28 | $20.66 | $19.59 | $18.05 |
| Total ReturnC,D | 8.85% | 11.45% | 6.84% | 11.99% | 22.69% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.92% | 1.92% | 1.92% | 1.93% | 1.94% |
| Expenses net of fee waivers, if any | 1.92% | 1.92% | 1.92% | 1.93% | 1.94% |
| Expenses net of all reductions | 1.91% | 1.91% | 1.91% | 1.93% | 1.93% |
| Net investment income (loss) | .50% | .70% | .31% | .23% | (.07)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $3,829 | $5,631 | $8,697 | $9,481 | $11,542 |
| Portfolio turnover rateG | 57% | 83% | 63% | 48% | 63% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $.62 per share is comprised of distributions from net investment income of $.106 and distributions from net realized gain of $.518 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Real Estate Fund Class C
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $22.23 | $20.61 | $19.55 | $18.03 | $14.76 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .13 | .15 | .07 | .04 | (.01) |
| Net realized and unrealized gain (loss) | 1.78 | 2.10 | 1.26 | 1.98 | 3.35 |
| Total from investment operations | 1.91 | 2.25 | 1.33 | 2.02 | 3.34 |
| Distributions from net investment income | (.16) | (.11) | (.10) | (.03) | (.07) |
| Distributions from net realized gain | (1.49) | (.52) | (.17) | (.47) | – |
| Total distributions | (1.65) | (.63) | (.27) | (.50) | (.07) |
| Net asset value, end of period | $22.49 | $22.23 | $20.61 | $19.55 | $18.03 |
| Total ReturnB,C | 8.85% | 11.52% | 6.89% | 11.92% | 22.69% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | 1.87% | 1.90% | 1.90% | 1.93% | 1.94% |
| Expenses net of fee waivers, if any | 1.87% | 1.90% | 1.90% | 1.93% | 1.94% |
| Expenses net of all reductions | 1.86% | 1.89% | 1.89% | 1.93% | 1.93% |
| Net investment income (loss) | .56% | .73% | .33% | .23% | (.07)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $79,291 | $64,822 | $75,461 | $55,064 | $47,406 |
| Portfolio turnover rateF | 57% | 83% | 63% | 48% | 63% |
A Calculated based on average shares outstanding during the period.
B Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
C Total returns do not include the effect of the contingent deferred sales charge.
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 Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Real Estate Fund Class I
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $22.74 | $21.07 | $19.97 | $18.36 | $14.96 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .36 | .36 | .28 | .22 | .16 |
| Net realized and unrealized gain (loss) | 1.83 | 2.15 | 1.27 | 2.03 | 3.39 |
| Total from investment operations | 2.19 | 2.51 | 1.55 | 2.25 | 3.55 |
| Distributions from net investment income | (.35) | (.32) | (.28) | (.17) | (.15) |
| Distributions from net realized gain | (1.49) | (.52) | (.17) | (.47) | – |
| Total distributions | (1.84) | (.84) | (.45) | (.64) | (.15) |
| Net asset value, end of period | $23.09 | $22.74 | $21.07 | $19.97 | $18.36 |
| Total ReturnB | 9.99% | 12.64% | 7.92% | 13.12% | 23.92% |
| Ratios to Average Net AssetsC,D | |||||
| Expenses before reductions | .85% | .89% | .90% | .93% | .93% |
| Expenses net of fee waivers, if any | .85% | .89% | .90% | .93% | .93% |
| Expenses net of all reductions | .84% | .88% | .89% | .93% | .92% |
| Net investment income (loss) | 1.57% | 1.74% | 1.33% | 1.23% | .94% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $349,301 | $298,932 | $305,619 | $283,054 | $174,655 |
| Portfolio turnover rateE | 57% | 83% | 63% | 48% | 63% |
A Calculated based on average shares outstanding during the period.
B Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Expense ratios reflect 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.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to deferred trustees compensation and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $201,808,391 |
| Gross unrealized depreciation | (20,752,048) |
| Net unrealized appreciation (depreciation) on securities | $181,056,343 |
| Tax cost | $745,381,145 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $2,457,613 |
| Undistributed long-term capital gain | $23,514,926 |
| Net unrealized appreciation (depreciation) on securities and other investments | $181,056,343 |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $11,243,675 | $ 9,317,425 |
| Long-term Capital Gains | 53,617,748 | 17,838,487 |
| Total | $64,861,423 | $ 27,155,912 |
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $610,364,553 and $510,115,573, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $816,428 | $10,105 |
| Class T | .25% | .25% | 804,112 | 222 |
| Class B | .75% | .25% | 52,136 | 39,166 |
| Class C | .75% | .25% | 791,876 | 151,873 |
| $2,464,552 | $201,366 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $100,989 |
| Class T | 15,363 |
| Class B* | 1,980 |
| Class C* | 9,965 |
| $128,297 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $783,414 | .24 |
| Class T | 360,037 | .22 |
| Class B | 15,765 | .30 |
| Class C | 200,622 | .25 |
| Class I | 824,723 | .24 |
| $ 2,184,561 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $4,287 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,316 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $30,591.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $73,880 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 $204.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $3,693 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $6,259 |
| Class T | 3,029 |
| Class B | 13 |
| Class C | 1,632 |
| Class I | 7,341 |
| $ 18,274 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $4,035,347 | $3,106,444 |
| Class T | 1,622,788 | 1,272,835 |
| Class B | 34,655 | 37,346 |
| Class C | 511,454 | 367,021 |
| Class I | 5,039,431 | 4,533,779 |
| Total | $11,243,675 | $9,317,425 |
| From net realized gain | ||
| Class A | $19,013,153 | $5,987,252 |
| Class T | 9,450,491 | 2,831,247 |
| Class B | 364,345 | 199,888 |
| Class C | 4,547,430 | 1,765,927 |
| Class I | 20,242,329 | 7,054,173 |
| Total | $53,617,748 | $17,838,487 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 6,477,452 | 4,612,676 | $150,703,408 | $96,531,161 |
| Reinvestment of distributions | 994,050 | 447,921 | 22,291,454 | 8,629,179 |
| Shares redeemed | (5,315,431) | (4,687,177) | (122,321,981) | (96,076,538) |
| Net increase (decrease) | 2,156,071 | 373,420 | $50,672,881 | $9,083,802 |
| Class T | ||||
| Shares sold | 2,562,977 | 2,099,117 | $59,571,645 | $43,800,189 |
| Reinvestment of distributions | 484,775 | 210,229 | 10,861,687 | 4,035,945 |
| Shares redeemed | (1,841,950) | (1,641,944) | (42,022,412) | (33,718,920) |
| Net increase (decrease) | 1,205,802 | 667,402 | $28,410,920 | $14,117,214 |
| Class B | ||||
| Shares sold | 16,002 | 10,023 | $364,459 | $207,585 |
| Reinvestment of distributions | 16,893 | 10,943 | 373,842 | 205,776 |
| Shares redeemed | (115,814) | (189,250) | (2,618,545) | (3,819,153) |
| Net increase (decrease) | (82,919) | (168,284) | $(1,880,244) | $(3,405,792) |
| Class C | ||||
| Shares sold | 1,502,434 | 717,656 | $34,498,632 | $14,827,663 |
| Reinvestment of distributions | 210,658 | 103,592 | 4,650,868 | 1,942,789 |
| Shares redeemed | (1,103,640) | (1,565,975) | (24,943,789) | (31,183,633) |
| Net increase (decrease) | 609,452 | (744,727) | $14,205,711 | $(14,413,181) |
| Class I | ||||
| Shares sold | 6,270,229 | 9,124,799 | $146,901,080 | $190,381,315 |
| Reinvestment of distributions | 857,158 | 444,680 | 19,361,443 | 8,636,132 |
| Shares redeemed | (5,142,590) | (10,926,683) | (119,680,567) | (224,679,719) |
| Net increase (decrease) | 1,984,797 | (1,357,204) | $46,581,956 | $(25,662,272) |
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.
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, 2015, 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 controls 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, 2015, by correspondence with the custodians and brokers; when 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, such 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, 2015, 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 18, 2015
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Each of the Trustees oversees 75 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. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. Brian B. Hogan is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. 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 Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Brian B. Hogan (1964)
Year of Election or Appointment: 2014
Trustee
Chairman of the Board of Trustees
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager.
* Determined to be an "Interested Trustee" by virtue of, among other things, his or her affiliation with the trust or various entities under common control with SelectCo.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
David A. Rosow (1942)
Year of Election or Appointment: 2013
Trustee
Mr. Rosow also serves as Trustee of other Fidelity® funds. Prior to his retirement in 2006, Mr. Rosow was the Chief Executive Officer, owner and operator of a number of private companies, which encompassed oil refining, drilling and marketing of petroleum products (including specialty petroleum products), the recreation industry, and real estate development. Previously, Mr. Rosow served as Lead Director and Chairman of the Audit Committee of Hudson United Bancorp (1996-2006), Chairman of the Board of Westport Bank and Trust (1992-1996), and as a Director of TD Banknorth (2006-2007). In addition, Mr. Rosow served as a member (2008-2014) and President (2009-2014) of the Town Council of Palm Beach, Florida. Mr. Rosow also served as a Member of the Advisory Board of other Fidelity® funds (2012-2013).
Garnett A. Smith (1947)
Year of Election or Appointment: 2013
Trustee
Mr. Smith also serves as Trustee of other Fidelity® funds. Prior to Mr. Smith's retirement, he served as Chairman and Chief Executive Officer of Inbrand Corp. (manufacturer of personal absorbent products, 1990-1997). He also served as President (1986-1990) of Inbrand Corp. Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank. In addition, Mr. Smith served as a Member of the Advisory Board of other Fidelity® funds (2012-2013) and as a board member of the Jackson Hole Land Trust (2009-2012).
Michael E. Wiley (1950)
Year of Election or Appointment: 2008
Trustee
Chairman of the Independent Trustees
Mr. Wiley also serves as Trustee of other Fidelity® funds. Mr. Wiley serves as a Director of Tesoro Corporation (independent oil refiner and marketer, 2005-present), and a Director of Bill Barrett Corporation (exploration and production, 2005-present). In addition, Mr. Wiley also serves as a Director of Post Oak Bank (privately-held bank, 2004-present). Previously, Mr. Wiley served as a Trustee of other Fidelity® funds (2008-2013), as a Director of Asia Pacific Exploration Consolidated (international oil and gas exploration and production, 2008-2013), as a member of the Board of Trustees of the University of Tulsa (2000-2006; 2007-2010), as a Senior Energy Advisor of Katzenbach Partners, LLC (consulting, 2006-2007), as an Advisory Director of Riverstone Holdings (private investment), Chairman, President, and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004), and as Director of Spinnaker Exploration Company (exploration and production, 2001-2005).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Except for Anthony R. Rochte, correspondence intended for an officer may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Correspondence intended for Mr. Rochte may be sent to SelectCo, 1225 17th Street, Denver, Colorado 80202-5541. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Christopher S. Bartel (1971)
Year of Election or Appointment: 2009
Vice President
Mr. Bartel also serves as Vice President of other funds. Mr. Bartel serves as a Director, President, and Chief Executive Officer of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2012-present), a Director of Fidelity Management & Research (Hong Kong) (investment adviser firm, 2012-present), and Senior Vice President of Global Equity Research (2010-present). Previously, Mr. Bartel served as Senior Vice President of Equity Research (2009-2010), Managing Director of Research (2006-2009), and an analyst and portfolio manager (2000-2006).
Elizabeth Paige Baumann (1968)
Year of Election or Appointment: 2012
Anti-Money Laundering (AML) Officer
Ms. Baumann also serves as AML Officer of other funds. She is Chief AML Officer of FMR LLC (diversified financial services company, 2012-present) and is an employee of Fidelity Investments. Previously, Ms. Baumann served as Vice President and Deputy Anti-Money Laundering Officer (2007-2012).
Marc Bryant (1966)
Year of Election or Appointment: 2013
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and Chief Legal Officer (CLO) of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and Chief Legal Officer of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds. Mr. Davis is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2013
President and Treasurer
Mr. Deberghes also serves as an officer of other funds. He is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005).
Joseph DeSantis (1959)
Year of Election or Appointment: 2015
Vice President
Mr. DeSantis also serves as Vice President of other funds. Mr. DeSantis serves as Group Chief Investment Officer, Equities (2010-present) and is an employee of Fidelity Investments.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
James D. Gryglewicz (1972)
Year of Election or Appointment: 2014
Chief Compliance Officer
Mr. Gryglewicz also serves as Chief Compliance Officer of other funds. Mr. Gryglewicz serves as Compliance Officer of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), Vice President of Asset Management Compliance (2009-present), and is an employee of Fidelity Investments (2004-present).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2013
Deputy Treasurer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2013-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served in other fund officer roles.
Anthony R. Rochte (1968)
Year of Election or Appointment: 2013
Vice President
Mr. Rochte also serves as Vice President of other funds. Mr. Rochte serves as President of Fidelity SelectCo, LLC (investment adviser firm, 2012-present) and is an employee of Fidelity Investments (2012-present). Prior to joining Fidelity Investments, Mr. Rochte served as Senior Managing Director and head of State Street Global Advisors' North American Intermediary Business Group (2006-2012).
Stacie M. Smith (1974)
Year of Election or Appointment: 2013
Assistant Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009).
Renee Stagnone (1975)
Year of Election or Appointment: 2013
Deputy Treasurer
Ms. Stagnone also serves as Deputy Treasurer of other funds. Ms. Stagnone is an employee of Fidelity Investments.
Joseph F. Zambello (1957)
Year of Election or Appointment: 2011
Deputy Treasurer
Mr. Zambello also serves as Deputy Treasurer of other funds. Mr. Zambello is an employee of Fidelity Investments. Previously, Mr. Zambello served as Vice President of the Program Management Group of FMR (investment adviser firm, 2009-2011) and Vice President of the Transfer Agent Oversight Group (2005-2009).
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, 2015 to July 31, 2015).
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 Expense Ratio-A | Beginning Account Value February 1, 2015 | Ending Account Value July 31, 2015 | Expenses Paid During Period-B February 1, 2015 to July 31, 2015 | |
| Class A | 1.09% | |||
| Actual | $1,000.00 | $933.40 | $5.23 | |
| Hypothetical-C | $1,000.00 | $1,019.39 | $5.46 | |
| Class T | 1.32% | |||
| Actual | $1,000.00 | $932.10 | $6.32 | |
| Hypothetical-C | $1,000.00 | $1,018.25 | $6.61 | |
| Class B | 1.91% | |||
| Actual | $1,000.00 | $929.50 | $9.14 | |
| Hypothetical-C | $1,000.00 | $1,015.32 | $9.54 | |
| Class C | 1.85% | |||
| Actual | $1,000.00 | $929.70 | $8.85 | |
| Hypothetical-C | $1,000.00 | $1,015.62 | $9.25 | |
| Class I | .84% | |||
| Actual | $1,000.00 | $934.60 | $4.03 | |
| Hypothetical-C | $1,000.00 | $1,020.63 | $4.21 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
C 5% return per year before expenses.
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 | 09/14/15 | 09/11/15 | $0.090 | $0.594 |
| Class T | 09/14/15 | 09/11/15 | $0.077 | $0.594 |
| Class B | 09/14/15 | 09/11/15 | $0.038 | $0.594 |
| Class C | 09/14/15 | 09/11/15 | $0.046 | $0.594 |
The fund hereby designates as a capital gain dividend with respect to the taxable year ended July 31, 2015, $42,683,711, or, if subsequently determined to be different, the net capital gain of such year.
A total of 0.01% 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 2016 of amounts for use in preparing 2015 income tax returns.
ARE-ANN-0915
1.789690.112
Fidelity Advisor® Real Estate Fund Class I (formerly Institutional Class) Annual Report July 31, 2015 |
|
Contents
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.
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 call1-877-208-0098 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. © 2015 FMR LLC. All rights reserved.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year.
The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred.
How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended July 31, 2015 | Past 1 year | Past 5 years | Past 10 years |
| Class I | 9.99% | 13.39% | 7.29% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Real Estate Fund - Class I on July 31, 2005.
The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
| Period Ending Values | ||
| $20,202 | Fidelity Advisor® Real Estate Fund - Class I | |
| $21,043 | S&P 500® Index | |
Management's Discussion of Fund Performance
Market Recap: The U.S. equity market gained strongly for the 12 months ending July 31, 2015, as stocks recovered from volatility in late 2014 and early 2015, supported by a still-positive economic backdrop. The S&P 500® Index returned 11.21%, with growth stocks in the index far outpacing value-oriented names on prospects for continued U.S. economic growth. Consequently, the growth-oriented Nasdaq Composite Index® rose 18.71%, outpacing the broader S&P 500®, as well as the 12.03% advance of the smaller-cap Russell 2000® Index. Within the S&P 500®, seven of 10 sectors notched a gain, with significant performance variation. Health care (+27%) led the way, aided by merger activity. Consumer discretionary (+24%) benefited from spending linked to a seven-year low in unemployment. Strong first halves for the consumer staples sector and the real estate segment of financials yielded above-market returns (19% and 12%, respectively) for the full-year period. Conversely, energy (-26%) significantly lagged, due to a roughly 55% decline for U.S. crude-oil prices. Materials (-4%) also lost ground. At period end, investors remained focused on the slowing rate of U.S. earnings growth, the possible effect of a relatively stronger U.S. dollar on exports and inflation, and whether an economic slowdown in China would create ripples for the global economy.Comments from Portfolio Manager Samuel Wald: For the year, the fund’s share classes fell short of the 11.29% return of our sector benchmark, the Dow Jones U.S. Select Real Estate Securities IndexSM. (For specific class-level results, please see the Performance section of this report.) Versus the benchmark, the fund was hampered by security selection in the retail and health care sectors. Among retail REITs, underweightings in General Growth Properties (GGP) and Macerich notably detracted. I initially avoided GGP, a sizable index constituent, preferring other retail REITs I thought had offered better risk/reward characteristics. But in March I took advantage of GGP’s weakness to add exposure here. We also lacked exposure to Macerich, another index component, for much of the period. I eventually did establish a position in the stock, as I saw more performance potential over the medium term. Elsewhere, hotel REIT FelCor Lodging Trust struggled as one of its large redevelopment projects encountered delays. The fund benefited from underweighting Host Hotels & Resorts, which lagged along with the hotel sector. Other positives included self-storage operator Extra Space Storage and apartment REIT Essex Property Trust.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.Investment Summary (Unaudited)
Top Ten Stocks as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| Simon Property Group, Inc. | 10.1 | 12.4 |
| Boston Properties, Inc. | 5.6 | 5.8 |
| Essex Property Trust, Inc. | 5.1 | 4.9 |
| Public Storage | 4.5 | 3.3 |
| HCP, Inc. | 4.4 | 5.1 |
| SL Green Realty Corp. | 4.2 | 4.6 |
| UDR, Inc. | 3.9 | 3.3 |
| Alexandria Real Estate Equities, Inc. | 3.9 | 3.8 |
| Extra Space Storage, Inc. | 3.4 | 3.3 |
| Ventas, Inc. | 3.2 | 2.6 |
| 48.3 |
Top Five REIT Sectors as of July 31, 2015
| % of fund's net assets | % of fund's net assets 6 months ago | |
| REITs - Apartments | 18.0 | 17.2 |
| REITs - Office Property | 16.7 | 15.9 |
| REITs - Regional Malls | 15.7 | 15.7 |
| REITs - Health Care | 11.5 | 11.5 |
| REITs - Shopping Centers | 9.4 | 9.4 |
Asset Allocation (% of fund's net assets)
| As of July 31, 2015 | ||
| Stocks | 99.6% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 0.4% | |
| As of January 31, 2015 | ||
| Stocks | 98.5% | |
| Short-Term Investments and Net Other Assets (Liabilities) | 1.5% | |
Investments July 31, 2015
Showing Percentage of Net Assets
| Common Stocks - 99.6% | |||
| Shares | Value | ||
| Real Estate Investment Trusts - 97.3% | |||
| REITs - Apartments - 18.0% | |||
| American Campus Communities, Inc. | 431,000 | $16,084,920 | |
| American Residential Properties, Inc. | 157,400 | 2,911,900 | |
| AvalonBay Communities, Inc. | 130,340 | 22,462,796 | |
| Camden Property Trust (SBI) | 255,300 | 20,329,539 | |
| Equity Residential (SBI) | 272,509 | 20,386,398 | |
| Essex Property Trust, Inc. | 211,047 | 47,466,581 | |
| Mid-America Apartment Communities, Inc. | 18,000 | 1,446,120 | |
| UDR, Inc. | 1,067,000 | 36,075,270 | |
| 167,163,524 | |||
| REITs - Diversified - 5.3% | |||
| Cousins Properties, Inc. | 1,314,657 | 13,646,140 | |
| Digital Realty Trust, Inc. | 255,300 | 16,408,131 | |
| Liberty Property Trust (SBI) | 432,300 | 14,711,169 | |
| Vornado Realty Trust | 51,383 | 5,012,412 | |
| 49,777,852 | |||
| REITs - Health Care - 11.5% | |||
| Community Healthcare Trust, Inc. | 38,400 | 724,608 | |
| HCP, Inc. | 1,049,095 | 40,537,031 | |
| Health Care REIT, Inc. | 177,069 | 12,283,277 | |
| Medical Properties Trust, Inc. | 319,200 | 4,363,464 | |
| Sabra Health Care REIT, Inc. | 380,600 | 10,409,410 | |
| Senior Housing Properties Trust (SBI) | 464,600 | 8,023,642 | |
| Ventas, Inc. | 451,605 | 30,298,179 | |
| 106,639,611 | |||
| REITs - Hotels - 6.5% | |||
| Ashford Hospitality Prime, Inc. | 343,300 | 4,998,448 | |
| FelCor Lodging Trust, Inc. | 2,286,089 | 21,397,793 | |
| Host Hotels & Resorts, Inc. | 639,134 | 12,386,417 | |
| LaSalle Hotel Properties (SBI) | 152,700 | 5,080,329 | |
| RLJ Lodging Trust | 543,400 | 16,209,622 | |
| 60,072,609 | |||
| REITs - Management/Investment - 0.3% | |||
| Weyerhaeuser Co. | 83,100 | 2,550,339 | |
| REITs - Manufactured Homes - 1.9% | |||
| Sun Communities, Inc. | 251,822 | 17,504,147 | |
| REITs - Office Property - 16.7% | |||
| Alexandria Real Estate Equities, Inc. | 384,733 | 35,668,596 | |
| Boston Properties, Inc. | 422,347 | 52,066,938 | |
| Mack-Cali Realty Corp. | 658,100 | 13,714,804 | |
| Parkway Properties, Inc. | 794,800 | 14,258,712 | |
| SL Green Realty Corp. | 339,565 | 39,097,514 | |
| 154,806,564 | |||
| REITs - Regional Malls - 15.7% | |||
| General Growth Properties, Inc. | 628,100 | 17,046,634 | |
| Simon Property Group, Inc. | 501,950 | 93,975,078 | |
| Taubman Centers, Inc. | 273,000 | 20,420,400 | |
| The Macerich Co. | 178,100 | 14,098,396 | |
| 145,540,508 | |||
| REITs - Shopping Centers - 9.4% | |||
| Cedar Shopping Centers, Inc. | 1,269,443 | 8,505,268 | |
| Federal Realty Investment Trust (SBI) | 214,102 | 29,287,013 | |
| Kite Realty Group Trust | 315,032 | 8,316,845 | |
| Ramco-Gershenson Properties Trust (SBI) | 367,222 | 6,220,741 | |
| Urban Edge Properties | 1,133,041 | 24,326,390 | |
| WP Glimcher, Inc. | 800,575 | 10,839,786 | |
| 87,496,043 | |||
| REITs - Storage - 7.9% | |||
| Extra Space Storage, Inc. | 425,100 | 31,253,352 | |
| Public Storage | 205,750 | 42,215,785 | |
| 73,469,137 | |||
| REITs - Warehouse/Industrial - 4.1% | |||
| DCT Industrial Trust, Inc. | 661,050 | 22,978,098 | |
| Prologis, Inc. | 257,077 | 10,439,897 | |
| Terreno Realty Corp. | 229,600 | 4,814,712 | |
| 38,232,707 | |||
| TOTAL REAL ESTATE INVESTMENT TRUSTS | 903,253,041 | ||
| Real Estate Management & Development - 2.3% | |||
| Real Estate Operating Companies - 2.3% | |||
| Forest City Enterprises, Inc. Class A (a) | 902,567 | 21,074,939 | |
| TOTAL COMMON STOCKS | |||
| (Cost $739,367,273) | 924,327,980 | ||
| Money Market Funds - 0.2% | |||
| Fidelity Cash Central Fund, 0.17% (b) | |||
| (Cost $2,109,508) | 2,109,508 | 2,109,508 | |
| TOTAL INVESTMENT PORTFOLIO - 99.8% | |||
| (Cost $741,476,781) | 926,437,488 | ||
| NET OTHER ASSETS (LIABILITIES) - 0.2% | 1,847,279 | ||
| NET ASSETS - 100% | $928,284,767 |
Legend
(a) Non-income producing
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $12,666 |
| Fidelity Securities Lending Cash Central Fund | 30,591 |
| Total | $43,257 |
Investment Valuation
All investments are categorized as Level 1 under the Fair Value Hierarchy. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| July 31, 2015 | ||
| Assets | ||
| Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $739,367,273) | $924,327,980 | |
| Fidelity Central Funds (cost $2,109,508) | 2,109,508 | |
| Total Investments (cost $741,476,781) | $926,437,488 | |
| Receivable for investments sold | 9,020,781 | |
| Receivable for fund shares sold | 760,991 | |
| Dividends receivable | 181,194 | |
| Distributions receivable from Fidelity Central Funds | 759 | |
| Other receivables | 42,069 | |
| Total assets | 936,443,282 | |
| Liabilities | ||
| Payable for investments purchased | $4,506,571 | |
| Payable for fund shares redeemed | 2,690,753 | |
| Accrued management fee | 422,829 | |
| Distribution and service plan fees payable | 208,027 | |
| Other affiliated payables | 208,113 | |
| Other payables and accrued expenses | 122,222 | |
| Total liabilities | 8,158,515 | |
| Net Assets | $928,284,767 | |
| Net Assets consist of: | ||
| Paid in capital | $721,272,213 | |
| Undistributed net investment income | 2,441,287 | |
| Accumulated undistributed net realized gain (loss) on investments | 19,610,560 | |
| Net unrealized appreciation (depreciation) on investments | 184,960,707 | |
| Net Assets | $928,284,767 | |
| Calculation of Maximum Offering Price | ||
| Class A: | ||
| Net Asset Value and redemption price per share ($327,489,427 ÷ 14,302,222 shares) | $22.90 | |
| Maximum offering price per share (100/94.25 of $22.90) | $24.30 | |
| Class T: | ||
| Net Asset Value and redemption price per share ($168,374,865 ÷ 7,359,199 shares) | $22.88 | |
| Maximum offering price per share (100/96.50 of $22.88) | $23.71 | |
| Class B: | ||
| Net Asset Value and offering price per share ($3,829,164 ÷ 169,767 shares)(a) | $22.56 | |
| Class C: | ||
| Net Asset Value and offering price per share ($79,290,709 ÷ 3,526,021 shares)(a) | $22.49 | |
| Class I: | ||
| Net Asset Value, offering price and redemption price per share ($349,300,602 ÷ 15,130,194 shares) | $23.09 |
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Year ended July 31, 2015 | ||
| Investment Income | ||
| Dividends | $22,058,988 | |
| Income from Fidelity Central Funds | 43,257 | |
| Total income | 22,102,245 | |
| Expenses | ||
| Management fee | $5,032,474 | |
| Transfer agent fees | 2,184,561 | |
| Distribution and service plan fees | 2,464,552 | |
| Accounting and security lending fees | 311,972 | |
| Custodian fees and expenses | 27,307 | |
| Independent trustees' compensation | 15,782 | |
| Registration fees | 152,705 | |
| Audit | 51,517 | |
| Legal | 10,438 | |
| Miscellaneous | 9,465 | |
| Total expenses before reductions | 10,260,773 | |
| Expense reductions | (96,051) | 10,164,722 |
| Net investment income (loss) | 11,937,523 | |
| Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
| Investment securities: | ||
| Unaffiliated issuers | 43,067,889 | |
| Total net realized gain (loss) | 43,067,889 | |
| Change in net unrealized appreciation (depreciation) on investment securities | 17,845,717 | |
| Net gain (loss) | 60,913,606 | |
| Net increase (decrease) in net assets resulting from operations | $72,851,129 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Year ended July 31, 2015 | Year ended July 31, 2014 | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net investment income (loss) | $11,937,523 | $10,579,301 |
| Net realized gain (loss) | 43,067,889 | 45,747,977 |
| Change in net unrealized appreciation (depreciation) | 17,845,717 | 22,594,134 |
| Net increase (decrease) in net assets resulting from operations | 72,851,129 | 78,921,412 |
| Distributions to shareholders from net investment income | (11,243,675) | (9,317,425) |
| Distributions to shareholders from net realized gain | (53,617,748) | (17,838,487) |
| Total distributions | (64,861,423) | (27,155,912) |
| Share transactions - net increase (decrease) | 137,991,224 | (20,280,229) |
| Total increase (decrease) in net assets | 145,980,930 | 31,485,271 |
| Net Assets | ||
| Beginning of period | 782,303,837 | 750,818,566 |
| End of period (including undistributed net investment income of $2,441,287 and undistributed net investment income of $2,093,231, respectively) | $928,284,767 | $782,303,837 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Real Estate Fund Class A
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $22.57 | $20.92 | $19.83 | $18.24 | $14.88 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .30 | .31 | .22 | .17 | .12 |
| Net realized and unrealized gain (loss) | 1.82 | 2.13 | 1.27 | 2.02 | 3.37 |
| Total from investment operations | 2.12 | 2.44 | 1.49 | 2.19 | 3.49 |
| Distributions from net investment income | (.30) | (.27) | (.23) | (.13) | (.13) |
| Distributions from net realized gain | (1.49) | (.52) | (.17) | (.47) | – |
| Total distributions | (1.79) | (.79) | (.40) | (.60) | (.13) |
| Net asset value, end of period | $22.90 | $22.57 | $20.92 | $19.83 | $18.24 |
| Total ReturnB,C | 9.70% | 12.34% | 7.66% | 12.81% | 23.63% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | 1.10% | 1.16% | 1.17% | 1.19% | 1.19% |
| Expenses net of fee waivers, if any | 1.10% | 1.16% | 1.17% | 1.19% | 1.19% |
| Expenses net of all reductions | 1.09% | 1.15% | 1.16% | 1.18% | 1.18% |
| Net investment income (loss) | 1.32% | 1.47% | 1.06% | .98% | .69% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $327,489 | $274,136 | $246,323 | $199,303 | $178,978 |
| Portfolio turnover rateF | 57% | 83% | 63% | 48% | 63% |
A Calculated based on average shares outstanding during the period.
B Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
C Total returns do not include the effect of the sales charges.
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 Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Real Estate Fund Class T
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $22.55 | $20.91 | $19.82 | $18.24 | $14.90 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .25 | .26 | .17 | .13 | .07 |
| Net realized and unrealized gain (loss) | 1.82 | 2.13 | 1.28 | 2.02 | 3.38 |
| Total from investment operations | 2.07 | 2.39 | 1.45 | 2.15 | 3.45 |
| Distributions from net investment income | (.25) | (.23) | (.19) | (.10) | (.11) |
| Distributions from net realized gain | (1.49) | (.52) | (.17) | (.47) | – |
| Total distributions | (1.74) | (.75) | (.36) | (.57) | (.11) |
| Net asset value, end of period | $22.88 | $22.55 | $20.91 | $19.82 | $18.24 |
| Total ReturnB,C | 9.46% | 12.07% | 7.43% | 12.52% | 23.28% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | 1.34% | 1.37% | 1.38% | 1.43% | 1.44% |
| Expenses net of fee waivers, if any | 1.34% | 1.37% | 1.38% | 1.43% | 1.44% |
| Expenses net of all reductions | 1.33% | 1.36% | 1.38% | 1.43% | 1.44% |
| Net investment income (loss) | 1.09% | 1.26% | .85% | .73% | .43% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $168,375 | $138,783 | $114,717 | $86,987 | $76,785 |
| Portfolio turnover rateF | 57% | 83% | 63% | 48% | 63% |
A Calculated based on average shares outstanding during the period.
B Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
C Total returns do not include the effect of the sales charges.
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 Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Real Estate Fund Class B
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $22.28 | $20.66 | $19.59 | $18.05 | $14.77 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .11 | .14 | .06 | .04 | (.01) |
| Net realized and unrealized gain (loss) | 1.80 | 2.10 | 1.26 | 2.00 | 3.35 |
| Total from investment operations | 1.91 | 2.24 | 1.32 | 2.04 | 3.34 |
| Distributions from net investment income | (.14) | (.11) | (.08) | (.03) | (.06) |
| Distributions from net realized gain | (1.49) | (.52) | (.17) | (.47) | – |
| Total distributions | (1.63) | (.62)B | (.25) | (.50) | (.06) |
| Net asset value, end of period | $22.56 | $22.28 | $20.66 | $19.59 | $18.05 |
| Total ReturnC,D | 8.85% | 11.45% | 6.84% | 11.99% | 22.69% |
| Ratios to Average Net AssetsE,F | |||||
| Expenses before reductions | 1.92% | 1.92% | 1.92% | 1.93% | 1.94% |
| Expenses net of fee waivers, if any | 1.92% | 1.92% | 1.92% | 1.93% | 1.94% |
| Expenses net of all reductions | 1.91% | 1.91% | 1.91% | 1.93% | 1.93% |
| Net investment income (loss) | .50% | .70% | .31% | .23% | (.07)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $3,829 | $5,631 | $8,697 | $9,481 | $11,542 |
| Portfolio turnover rateG | 57% | 83% | 63% | 48% | 63% |
A Calculated based on average shares outstanding during the period.
B Total distributions of $.62 per share is comprised of distributions from net investment income of $.106 and distributions from net realized gain of $.518 per share.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E 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.
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 does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Real Estate Fund Class C
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $22.23 | $20.61 | $19.55 | $18.03 | $14.76 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .13 | .15 | .07 | .04 | (.01) |
| Net realized and unrealized gain (loss) | 1.78 | 2.10 | 1.26 | 1.98 | 3.35 |
| Total from investment operations | 1.91 | 2.25 | 1.33 | 2.02 | 3.34 |
| Distributions from net investment income | (.16) | (.11) | (.10) | (.03) | (.07) |
| Distributions from net realized gain | (1.49) | (.52) | (.17) | (.47) | – |
| Total distributions | (1.65) | (.63) | (.27) | (.50) | (.07) |
| Net asset value, end of period | $22.49 | $22.23 | $20.61 | $19.55 | $18.03 |
| Total ReturnB,C | 8.85% | 11.52% | 6.89% | 11.92% | 22.69% |
| Ratios to Average Net AssetsD,E | |||||
| Expenses before reductions | 1.87% | 1.90% | 1.90% | 1.93% | 1.94% |
| Expenses net of fee waivers, if any | 1.87% | 1.90% | 1.90% | 1.93% | 1.94% |
| Expenses net of all reductions | 1.86% | 1.89% | 1.89% | 1.93% | 1.93% |
| Net investment income (loss) | .56% | .73% | .33% | .23% | (.07)% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $79,291 | $64,822 | $75,461 | $55,064 | $47,406 |
| Portfolio turnover rateF | 57% | 83% | 63% | 48% | 63% |
A Calculated based on average shares outstanding during the period.
B Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
C Total returns do not include the effect of the contingent deferred sales charge.
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 Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights — Fidelity Advisor Real Estate Fund Class I
| July 31, | |||||
| Years ended July 31, | 2015 | 2014 | 2013 | 2012 | 2011 |
| Selected Per–Share Data | |||||
| Net asset value, beginning of period | $22.74 | $21.07 | $19.97 | $18.36 | $14.96 |
| Income from Investment Operations | |||||
| Net investment income (loss)A | .36 | .36 | .28 | .22 | .16 |
| Net realized and unrealized gain (loss) | 1.83 | 2.15 | 1.27 | 2.03 | 3.39 |
| Total from investment operations | 2.19 | 2.51 | 1.55 | 2.25 | 3.55 |
| Distributions from net investment income | (.35) | (.32) | (.28) | (.17) | (.15) |
| Distributions from net realized gain | (1.49) | (.52) | (.17) | (.47) | – |
| Total distributions | (1.84) | (.84) | (.45) | (.64) | (.15) |
| Net asset value, end of period | $23.09 | $22.74 | $21.07 | $19.97 | $18.36 |
| Total ReturnB | 9.99% | 12.64% | 7.92% | 13.12% | 23.92% |
| Ratios to Average Net AssetsC,D | |||||
| Expenses before reductions | .85% | .89% | .90% | .93% | .93% |
| Expenses net of fee waivers, if any | .85% | .89% | .90% | .93% | .93% |
| Expenses net of all reductions | .84% | .88% | .89% | .93% | .92% |
| Net investment income (loss) | 1.57% | 1.74% | 1.33% | 1.23% | .94% |
| Supplemental Data | |||||
| Net assets, end of period (000 omitted) | $349,301 | $298,932 | $305,619 | $283,054 | $174,655 |
| Portfolio turnover rateE | 57% | 83% | 63% | 48% | 63% |
A Calculated based on average shares outstanding during the period.
B Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Expense ratios reflect 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.
E Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended July 31, 2015
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 Class I (formerly Institutional Class) shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fidelity SelectCo, LLC (SelectCo) Fair Value Committee (the Committee). In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
- Level 1 – quoted prices in active markets for identical investments
- Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
- Level 3 – unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. As of July 31, 2015, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to deferred trustees compensation and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
| Gross unrealized appreciation | $201,808,391 |
| Gross unrealized depreciation | (20,752,048) |
| Net unrealized appreciation (depreciation) on securities | $181,056,343 |
| Tax cost | $745,381,145 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $2,457,613 |
| Undistributed long-term capital gain | $23,514,926 |
| Net unrealized appreciation (depreciation) on securities and other investments | $181,056,343 |
The tax character of distributions paid was as follows:
| July 31, 2015 | July 31, 2014 | |
| Ordinary Income | $11,243,675 | $ 9,317,425 |
| Long-term Capital Gains | 53,617,748 | 17,838,487 |
| Total | $64,861,423 | $ 27,155,912 |
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $610,364,553 and $510,115,573, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by Fidelity Management & Research Company (FMR) and the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .55% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:
| Distribution Fee | Service Fee | Total Fees | Retained by FDC | |
| Class A | -% | .25% | $816,428 | $10,105 |
| Class T | .25% | .25% | 804,112 | 222 |
| Class B | .75% | .25% | 52,136 | 39,166 |
| Class C | .75% | .25% | 791,876 | 151,873 |
| $2,464,552 | $201,366 |
Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained by FDC | |
| Class A | $100,989 |
| Class T | 15,363 |
| Class B* | 1,980 |
| Class C* | 9,965 |
| $128,297 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.
For the period, transfer agent fees for each class were as follows:
| Amount | % of Class-Level Average Net Assets | |
| Class A | $783,414 | .24 |
| Class T | 360,037 | .22 |
| Class B | 15,765 | .30 |
| Class C | 200,622 | .25 |
| Class I | 824,723 | .24 |
| $ 2,184,561 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $4,287 for the period.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,316 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $30,591.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $73,880 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 $204.
In addition, during the period the investment adviser reimbursed/waived a portion of fund-level operating expenses in the amount of $3,693 and a portion of class-level operating expenses as follows:
| Amount | |
| Class A | $6,259 |
| Class T | 3,029 |
| Class B | 13 |
| Class C | 1,632 |
| Class I | 7,341 |
| $ 18,274 |
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Years ended July 31, | 2015 | 2014 |
| From net investment income | ||
| Class A | $4,035,347 | $3,106,444 |
| Class T | 1,622,788 | 1,272,835 |
| Class B | 34,655 | 37,346 |
| Class C | 511,454 | 367,021 |
| Class I | 5,039,431 | 4,533,779 |
| Total | $11,243,675 | $9,317,425 |
| From net realized gain | ||
| Class A | $19,013,153 | $5,987,252 |
| Class T | 9,450,491 | 2,831,247 |
| Class B | 364,345 | 199,888 |
| Class C | 4,547,430 | 1,765,927 |
| Class I | 20,242,329 | 7,054,173 |
| Total | $53,617,748 | $17,838,487 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between funds:
| Shares | Shares | Dollars | Dollars | |
| Years ended July 31, | 2015 | 2014 | 2015 | 2014 |
| Class A | ||||
| Shares sold | 6,477,452 | 4,612,676 | $150,703,408 | $96,531,161 |
| Reinvestment of distributions | 994,050 | 447,921 | 22,291,454 | 8,629,179 |
| Shares redeemed | (5,315,431) | (4,687,177) | (122,321,981) | (96,076,538) |
| Net increase (decrease) | 2,156,071 | 373,420 | $50,672,881 | $9,083,802 |
| Class T | ||||
| Shares sold | 2,562,977 | 2,099,117 | $59,571,645 | $43,800,189 |
| Reinvestment of distributions | 484,775 | 210,229 | 10,861,687 | 4,035,945 |
| Shares redeemed | (1,841,950) | (1,641,944) | (42,022,412) | (33,718,920) |
| Net increase (decrease) | 1,205,802 | 667,402 | $28,410,920 | $14,117,214 |
| Class B | ||||
| Shares sold | 16,002 | 10,023 | $364,459 | $207,585 |
| Reinvestment of distributions | 16,893 | 10,943 | 373,842 | 205,776 |
| Shares redeemed | (115,814) | (189,250) | (2,618,545) | (3,819,153) |
| Net increase (decrease) | (82,919) | (168,284) | $(1,880,244) | $(3,405,792) |
| Class C | ||||
| Shares sold | 1,502,434 | 717,656 | $34,498,632 | $14,827,663 |
| Reinvestment of distributions | 210,658 | 103,592 | 4,650,868 | 1,942,789 |
| Shares redeemed | (1,103,640) | (1,565,975) | (24,943,789) | (31,183,633) |
| Net increase (decrease) | 609,452 | (744,727) | $14,205,711 | $(14,413,181) |
| Class I | ||||
| Shares sold | 6,270,229 | 9,124,799 | $146,901,080 | $190,381,315 |
| Reinvestment of distributions | 857,158 | 444,680 | 19,361,443 | 8,636,132 |
| Shares redeemed | (5,142,590) | (10,926,683) | (119,680,567) | (224,679,719) |
| Net increase (decrease) | 1,984,797 | (1,357,204) | $46,581,956 | $(25,662,272) |
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.
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, 2015, 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 controls 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, 2015, by correspondence with the custodians and brokers; when 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, such 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, 2015, 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 18, 2015
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Each of the Trustees oversees 75 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. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
Each Trustee who is not an interested person (as defined in the 1940 Act) of the trust and the fund is referred to herein as an Independent Trustee.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. Brian B. Hogan is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. 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 Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Brian B. Hogan (1964)
Year of Election or Appointment: 2014
Trustee
Chairman of the Board of Trustees
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager.
* Determined to be an "Interested Trustee" by virtue of, among other things, his or her affiliation with the trust or various entities under common control with SelectCo.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
David A. Rosow (1942)
Year of Election or Appointment: 2013
Trustee
Mr. Rosow also serves as Trustee of other Fidelity® funds. Prior to his retirement in 2006, Mr. Rosow was the Chief Executive Officer, owner and operator of a number of private companies, which encompassed oil refining, drilling and marketing of petroleum products (including specialty petroleum products), the recreation industry, and real estate development. Previously, Mr. Rosow served as Lead Director and Chairman of the Audit Committee of Hudson United Bancorp (1996-2006), Chairman of the Board of Westport Bank and Trust (1992-1996), and as a Director of TD Banknorth (2006-2007). In addition, Mr. Rosow served as a member (2008-2014) and President (2009-2014) of the Town Council of Palm Beach, Florida. Mr. Rosow also served as a Member of the Advisory Board of other Fidelity® funds (2012-2013).
Garnett A. Smith (1947)
Year of Election or Appointment: 2013
Trustee
Mr. Smith also serves as Trustee of other Fidelity® funds. Prior to Mr. Smith's retirement, he served as Chairman and Chief Executive Officer of Inbrand Corp. (manufacturer of personal absorbent products, 1990-1997). He also served as President (1986-1990) of Inbrand Corp. Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank. In addition, Mr. Smith served as a Member of the Advisory Board of other Fidelity® funds (2012-2013) and as a board member of the Jackson Hole Land Trust (2009-2012).
Michael E. Wiley (1950)
Year of Election or Appointment: 2008
Trustee
Chairman of the Independent Trustees
Mr. Wiley also serves as Trustee of other Fidelity® funds. Mr. Wiley serves as a Director of Tesoro Corporation (independent oil refiner and marketer, 2005-present), and a Director of Bill Barrett Corporation (exploration and production, 2005-present). In addition, Mr. Wiley also serves as a Director of Post Oak Bank (privately-held bank, 2004-present). Previously, Mr. Wiley served as a Trustee of other Fidelity® funds (2008-2013), as a Director of Asia Pacific Exploration Consolidated (international oil and gas exploration and production, 2008-2013), as a member of the Board of Trustees of the University of Tulsa (2000-2006; 2007-2010), as a Senior Energy Advisor of Katzenbach Partners, LLC (consulting, 2006-2007), as an Advisory Director of Riverstone Holdings (private investment), Chairman, President, and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004), and as Director of Spinnaker Exploration Company (exploration and production, 2001-2005).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Except for Anthony R. Rochte, correspondence intended for an officer may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Correspondence intended for Mr. Rochte may be sent to SelectCo, 1225 17th Street, Denver, Colorado 80202-5541. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Christopher S. Bartel (1971)
Year of Election or Appointment: 2009
Vice President
Mr. Bartel also serves as Vice President of other funds. Mr. Bartel serves as a Director, President, and Chief Executive Officer of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2012-present), a Director of Fidelity Management & Research (Hong Kong) (investment adviser firm, 2012-present), and Senior Vice President of Global Equity Research (2010-present). Previously, Mr. Bartel served as Senior Vice President of Equity Research (2009-2010), Managing Director of Research (2006-2009), and an analyst and portfolio manager (2000-2006).
Elizabeth Paige Baumann (1968)
Year of Election or Appointment: 2012
Anti-Money Laundering (AML) Officer
Ms. Baumann also serves as AML Officer of other funds. She is Chief AML Officer of FMR LLC (diversified financial services company, 2012-present) and is an employee of Fidelity Investments. Previously, Ms. Baumann served as Vice President and Deputy Anti-Money Laundering Officer (2007-2012).
Marc Bryant (1966)
Year of Election or Appointment: 2013
Secretary and Chief Legal Officer (CLO)
Mr. Bryant also serves as Secretary and Chief Legal Officer (CLO) of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company). Previously, Mr. Bryant served as Secretary and Chief Legal Officer of Fidelity Rutland Square Trust II (2010-2014) and Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2013-2015). Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
William C. Coffey (1969)
Year of Election or Appointment: 2009
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Vice President and Associate General Counsel of FMR LLC (2005-2009).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds. Mr. Davis is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2013
President and Treasurer
Mr. Deberghes also serves as an officer of other funds. He is an employee of Fidelity Investments (2008-present). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005).
Joseph DeSantis (1959)
Year of Election or Appointment: 2015
Vice President
Mr. DeSantis also serves as Vice President of other funds. Mr. DeSantis serves as Group Chief Investment Officer, Equities (2010-present) and is an employee of Fidelity Investments.
Stephanie J. Dorsey (1969)
Year of Election or Appointment: 2010
Assistant Treasurer
Ms. Dorsey also serves as an officer of other funds. She is an employee of Fidelity Investments (2008-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Howard J. Galligan III (1966)
Year of Election or Appointment: 2014
Chief Financial Officer
Mr. Galligan also serves as Chief Financial Officer of other funds. Mr. Galligan serves as President of Fidelity Pricing and Cash Management Services (FPCMS) (2014-present) and as a Director of Strategic Advisers, Inc. (investment adviser firm, 2008-present). Previously, Mr. Galligan served as Chief Administrative Officer of Asset Management (2011-2014) and Chief Operating Officer and Senior Vice President of Investment Support for Strategic Advisers, Inc. (2003-2011).
James D. Gryglewicz (1972)
Year of Election or Appointment: 2014
Chief Compliance Officer
Mr. Gryglewicz also serves as Chief Compliance Officer of other funds. Mr. Gryglewicz serves as Compliance Officer of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), Vice President of Asset Management Compliance (2009-present), and is an employee of Fidelity Investments (2004-present).
Brian B. Hogan (1964)
Year of Election or Appointment: 2009
Vice President
Mr. Hogan also serves as Trustee or Vice President of other funds. Mr. Hogan serves as a Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present) and President of the Equity Division of FMR (investment adviser firm, 2009-present). Previously, Mr. Hogan served as Senior Vice President, Equity Research of FMR (2006-2009) and as a portfolio manager.
Chris Maher (1972)
Year of Election or Appointment: 2013
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2013
Deputy Treasurer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2013-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served in other fund officer roles.
Anthony R. Rochte (1968)
Year of Election or Appointment: 2013
Vice President
Mr. Rochte also serves as Vice President of other funds. Mr. Rochte serves as President of Fidelity SelectCo, LLC (investment adviser firm, 2012-present) and is an employee of Fidelity Investments (2012-present). Prior to joining Fidelity Investments, Mr. Rochte served as Senior Managing Director and head of State Street Global Advisors' North American Intermediary Business Group (2006-2012).
Stacie M. Smith (1974)
Year of Election or Appointment: 2013
Assistant Treasurer
Ms. Smith also serves as an officer of other funds. She is an employee of Fidelity Investments (2009-present) and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (1996-2009).
Renee Stagnone (1975)
Year of Election or Appointment: 2013
Deputy Treasurer
Ms. Stagnone also serves as Deputy Treasurer of other funds. Ms. Stagnone is an employee of Fidelity Investments.
Joseph F. Zambello (1957)
Year of Election or Appointment: 2011
Deputy Treasurer
Mr. Zambello also serves as Deputy Treasurer of other funds. Mr. Zambello is an employee of Fidelity Investments. Previously, Mr. Zambello served as Vice President of the Program Management Group of FMR (investment adviser firm, 2009-2011) and Vice President of the Transfer Agent Oversight Group (2005-2009).
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, 2015 to July 31, 2015).
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 Expense Ratio-A | Beginning Account Value February 1, 2015 | Ending Account Value July 31, 2015 | Expenses Paid During Period-B February 1, 2015 to July 31, 2015 | |
| Class A | 1.09% | |||
| Actual | $1,000.00 | $933.40 | $5.23 | |
| Hypothetical-C | $1,000.00 | $1,019.39 | $5.46 | |
| Class T | 1.32% | |||
| Actual | $1,000.00 | $932.10 | $6.32 | |
| Hypothetical-C | $1,000.00 | $1,018.25 | $6.61 | |
| Class B | 1.91% | |||
| Actual | $1,000.00 | $929.50 | $9.14 | |
| Hypothetical-C | $1,000.00 | $1,015.32 | $9.54 | |
| Class C | 1.85% | |||
| Actual | $1,000.00 | $929.70 | $8.85 | |
| Hypothetical-C | $1,000.00 | $1,015.62 | $9.25 | |
| Class I | .84% | |||
| Actual | $1,000.00 | $934.60 | $4.03 | |
| Hypothetical-C | $1,000.00 | $1,020.63 | $4.21 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
C 5% return per year before expenses.
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 I | 09/14/15 | 09/11/15 | $0.104 | $0.594 |
The fund hereby designates as a capital gain dividend with respect to the taxable year ended July 31, 2015, $42,683,711, or, if subsequently determined to be different, the net capital gain of such year.
A total of 0.01% 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 2016 of amounts for use in preparing 2015 income tax returns.
AREI-ANN-0915
1.789691.112
Item 2.
Code of Ethics
As of the end of the period, July 31, 2015, 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, 2015 FeesA
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Advisor Biotechnology Fund | $38,000 | $- | $4,700 | $1,100 |
Fidelity Advisor Communications Equipment Fund | $38,000 | $- | $4,700 | $600 |
Fidelity Advisor Consumer Discretionary Fund | $37,000 | $- | $5,800 | $700 |
Fidelity Advisor Electronics Fund | $37,000 | $- | $4,700 | $600 |
Fidelity Advisor Energy Fund | $38,000 | $- | $7,300 | $800 |
Fidelity Advisor Financial Services Fund | $38,000 | $- | $7,500 | $700 |
Fidelity Advisor Health Care Fund | $38,000 | $- | $5,800 | $1,100 |
Fidelity Advisor Industrials Fund | $37,000 | $- | $5,800 | $800 |
Fidelity Advisor Real Estate Fund | $41,000 | $- | $5,800 | $800 |
Fidelity Advisor Technology Fund | $50,000 | $- | $5,800 | $900 |
Fidelity Advisor Utilities Fund | $36,000 | $- | $6,500 | $700 |
July 31, 2014 FeesA
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Advisor Biotechnology Fund | $36,000 | $- | $4,700 | $800 |
Fidelity Advisor Communications Equipment Fund | $37,000 | $- | $4,700 | $600 |
Fidelity Advisor Consumer Discretionary Fund | $35,000 | $- | $5,800 | $600 |
Fidelity Advisor Electronics Fund | $35,000 | $- | $4,700 | $600 |
Fidelity Advisor Energy Fund | $37,000 | $- | $6,800 | $700 |
Fidelity Advisor Financial Services Fund | $37,000 | $- | $6,600 | $600 |
Fidelity Advisor Health Care Fund | $37,000 | $- | $5,800 | $800 |
Fidelity Advisor Industrials Fund | $36,000 | $- | $5,800 | $700 |
Fidelity Advisor Real Estate Fund | $40,000 | $- | $5,800 | $700 |
Fidelity Advisor Technology Fund | $38,000 | $- | $5,800 | $800 |
Fidelity Advisor Utilities Fund | $35,000 | $- | $6,000 | $600 |
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 SelectCo,
LLC (“SelectCo”) and entities controlling, controlled by, or under common control with SelectCo (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, 2015A | July 31, 2014A |
Audit-Related Fees | $- | $355,000 |
Tax Fees | $- | $- |
All Other Fees | $175,000 | $745,000 |
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, SelectCo (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, 2015 A | July 31, 2014 A |
Deloitte Entities | $610,000 | $2,005,000 |
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 SelectCo’s review of the appropriateness and permissibility under applicable law of such non-audit services prior to their provision to the Fund Service Providers.
Audit Committee Pre-Approval Policies and Procedures
The trust’s Audit Committee must pre-approve all audit and non-audit services provided by a fund’s independent registered public accounting firm relating to the operations or financial reporting of the fund. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.
The Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee’s consideration of non-audit services by the audit firms that audit the Fidelity funds. The policies and procedures require that any non-audit service provided by a fund audit firm to a Fidelity fund and any non-audit service provided by a fund auditor to a Fund Service Provider that relates directly to the operations and financial reporting of a Fidelity fund (“Covered Service”) are subject to approval by the Audit Committee before such service is provided.
All Covered Services must be approved in advance of provision of the service either: (i) by formal resolution of the Audit Committee, or (ii) by oral or written approval of the service by the Chair of the Audit Committee (or if the Chair is unavailable, such other member of the Audit Committee as may be designated by the Chair to act in the Chair’s absence). The approval contemplated by (ii) above is permitted where the Treasurer determines that action on such an engagement is necessary before the next meeting of the Audit Committee.
Non-audit services provided by a fund audit firm to a Fund Service Provider that do not relate directly to the operations and financial reporting of a Fidelity fund are reported to the Audit Committee on a periodic basis.
Non-Audit Services Approved Pursuant to Rule 2-01(c)(7)(i)(C) and (ii) of Regulation S-X (“De Minimis Exception”)
There were no non-audit services approved or required to be approved by the Audit Committee pursuant to the De Minimis Exception during the Funds’ last two fiscal years relating to services provided to (i) the Funds or (ii) any Fund Service Provider that relate directly to the operations and financial reporting of the Funds.
Item 5.
Audit Committee of Listed Registrants
Not applicable.
Item 6.
Investments
(a)
Not applicable.
(b)
Not applicable
Item 7.
Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8.
Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9.
Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10.
Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the trust’s Board of Trustees.
Item 11.
Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the trust’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the trust’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the trust’s internal control over financial reporting.
Item 12.
Exhibits
(a) | (1) | Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(a) | (3) | Not applicable. |
(b) |
| Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Advisor Series VII
By: | /s/Adrien E. Deberghes |
| Adrien E. Deberghes |
| President and Treasurer |
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Date: | September 25, 2015 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/Adrien E. Deberghes |
| Adrien E. Deberghes |
| President and Treasurer |
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Date: | September 25, 2015 |
By: | /s/Howard J. Galligan III |
| Howard J. Galligan III |
| Chief Financial Officer |
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Date: | September 25, 2015 |