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 811-3114
Fidelity Select Portfolios
(Exact name of registrant as specified in charter)
245 Summer St., Boston, MA 02210
(Address of principal executive offices) (Zip code)
William C. Coffey, 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: | February 28 |
Date of reporting period: | August 31, 2018 |
Item 1.
Reports to Stockholders
Fidelity® Select Portfolios® Automotive Portfolio Construction and Housing Portfolio Consumer Discretionary Portfolio Leisure Portfolio Multimedia Portfolio (To be renamed Communication Services Portfolio effective December 1, 2018). Retailing Portfolio Semi-Annual Report August 31, 2018 |
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Contents
Automotive Portfolio | |
Construction and Housing Portfolio | |
Consumer Discretionary Portfolio | |
Leisure Portfolio | |
Multimedia Portfolio | |
Retailing Portfolio | |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-800-544-8544 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. © 2018 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Funds. This report is not authorized for distribution to prospective investors in the Funds unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.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.
Automotive Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
General Motors Co. | 10.5 |
Honda Motor Co. Ltd. sponsored ADR | 8.9 |
Tesla, Inc. | 8.9 |
Toyota Motor Corp. sponsored ADR | 7.7 |
O'Reilly Automotive, Inc. | 6.4 |
Ford Motor Co. | 5.7 |
Aptiv PLC | 4.8 |
Magna International, Inc. Class A (sub. vtg.) | 4.5 |
Copart, Inc. | 4.2 |
Fiat Chrysler Automobiles NV | 3.7 |
65.3 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Automobiles | 49.9% | |
Auto Components | 22.0% | |
Specialty Retail | 14.1% | |
Commercial Services & Supplies | 6.8% | |
Distributors | 4.2% | |
All Others* | 3.0% |
* Includes short-term investments and net other assets (liabilities).
Automotive Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 98.7% | |||
Shares | Value | ||
Auto Components - 22.0% | |||
Auto Parts & Equipment - 21.4% | |||
Adient PLC | 4,000 | $173,160 | |
Akasol AG | 400 | 23,911 | |
Aptiv PLC | 22,958 | 2,020,534 | |
Autoliv, Inc. (a) | 5,600 | 498,904 | |
BorgWarner, Inc. | 13,000 | 569,010 | |
Dana Holding Corp. | 20,200 | 395,314 | |
Delphi Technologies PLC | 10,352 | 364,701 | |
Gentex Corp. | 30,900 | 722,442 | |
Lear Corp. | 9,000 | 1,459,800 | |
Magna International, Inc. Class A (sub. vtg.) | 34,500 | 1,868,023 | |
Stoneridge, Inc. (b) | 7,240 | 216,693 | |
Tenneco, Inc. | 6 | 257 | |
Veoneer, Inc. (b) | 4,300 | 214,742 | |
Visteon Corp. (b) | 3,840 | 423,898 | |
8,951,389 | |||
Tires & Rubber - 0.6% | |||
The Goodyear Tire & Rubber Co. | 9,800 | 222,362 | |
TOTAL AUTO COMPONENTS | 9,173,751 | ||
Automobiles - 49.2% | |||
Automobile Manufacturers - 49.2% | |||
Ferrari NV (a) | 10,400 | 1,363,336 | |
Fiat Chrysler Automobiles NV | 91,100 | 1,558,721 | |
Ford Motor Co. | 249,131 | 2,361,762 | |
General Motors Co. | 121,714 | 4,387,790 | |
Honda Motor Co. Ltd. sponsored ADR | 125,995 | 3,733,232 | |
Subaru Corp. | 6,500 | 193,110 | |
Tesla, Inc. (a)(b) | 12,373 | 3,732,439 | |
Toyota Motor Corp. sponsored ADR (a) | 25,917 | 3,215,781 | |
20,546,171 | |||
Motorcycle Manufacturers - 0.0% | |||
Harley-Davidson, Inc. | 100 | 4,262 | |
TOTAL AUTOMOBILES | 20,550,433 | ||
Chemicals - 0.1% | |||
Specialty Chemicals - 0.1% | |||
Umicore SA | 1,009 | 56,264 | |
Commercial Services & Supplies - 6.8% | |||
Diversified Support Services - 6.8% | |||
Copart, Inc. (b) | 27,400 | 1,762,094 | |
KAR Auction Services, Inc. | 17,280 | 1,083,283 | |
2,845,377 | |||
Distributors - 4.2% | |||
Distributors - 4.2% | |||
Genuine Parts Co. | 8,500 | 848,725 | |
LKQ Corp. (b) | 26,500 | 914,780 | |
1,763,505 | |||
Electronic Equipment & Components - 0.3% | |||
Electronic Manufacturing Services - 0.3% | |||
CTS Corp. | 3,200 | 118,240 | |
Household Durables - 0.4% | |||
Consumer Electronics - 0.4% | |||
Panasonic Corp. | 13,500 | 160,819 | |
Machinery - 1.6% | |||
Construction Machinery & Heavy Trucks - 1.6% | |||
Allison Transmission Holdings, Inc. | 13,700 | 680,342 | |
Specialty Retail - 14.1% | |||
Automotive Retail - 14.1% | |||
Advance Auto Parts, Inc. | 4,000 | 656,120 | |
AutoZone, Inc. (b) | 1,890 | 1,449,403 | |
CarMax, Inc. (b) | 13,500 | 1,053,675 | |
Monro, Inc. | 800 | 56,760 | |
O'Reilly Automotive, Inc. (b) | 8,025 | 2,691,746 | |
5,907,704 | |||
TOTAL COMMON STOCKS | |||
(Cost $29,614,948) | 41,256,435 | ||
Nonconvertible Preferred Stocks - 0.7% | |||
Automobiles - 0.7% | |||
Automobile Manufacturers - 0.7% | |||
Volkswagen AG | |||
(Cost $246,267) | 1,800 | 294,264 | |
Money Market Funds - 14.5% | |||
Fidelity Cash Central Fund, 1.97% (c) | 181,088 | 181,125 | |
Fidelity Securities Lending Cash Central Fund 1.98% (c)(d) | 5,868,986 | 5,869,573 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $6,050,698) | 6,050,698 | ||
TOTAL INVESTMENT IN SECURITIES - 113.9% | |||
(Cost $35,911,913) | 47,601,397 | ||
NET OTHER ASSETS (LIABILITIES) - (13.9)% | (5,813,454) | ||
NET ASSETS - 100% | $41,787,943 |
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 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 | $1,408 |
Fidelity Securities Lending Cash Central Fund | 40,026 |
Total | $41,434 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $41,256,435 | $41,095,616 | $160,819 | $-- |
Nonconvertible Preferred Stocks | 294,264 | 294,264 | -- | -- |
Money Market Funds | 6,050,698 | 6,050,698 | -- | -- |
Total Investments in Securities: | $47,601,397 | $47,440,578 | $160,819 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $946,878 |
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 | 64.0% |
Japan | 17.5% |
Netherlands | 7.0% |
Bailiwick of Jersey | 5.7% |
Canada | 4.5% |
Others (Individually Less Than 1%) | 1.3% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Automotive Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $5,692,378) — See accompanying schedule: Unaffiliated issuers (cost $29,861,215) | $41,550,699 | |
Fidelity Central Funds (cost $6,050,698) | 6,050,698 | |
Total Investment in Securities (cost $35,911,913) | $47,601,397 | |
Foreign currency held at value (cost $1) | 1 | |
Receivable for investments sold | 120,224 | |
Receivable for fund shares sold | 6,814 | |
Dividends receivable | 92,486 | |
Distributions receivable from Fidelity Central Funds | 4,505 | |
Prepaid expenses | 572 | |
Other receivables | 5,017 | |
Total assets | 47,831,016 | |
Liabilities | ||
Payable for fund shares redeemed | $122,601 | |
Accrued management fee | 19,283 | |
Other affiliated payables | 9,829 | |
Other payables and accrued expenses | 21,960 | |
Collateral on securities loaned | 5,869,400 | |
Total liabilities | 6,043,073 | |
Net Assets | $41,787,943 | |
Net Assets consist of: | ||
Paid in capital | $29,075,586 | |
Undistributed net investment income | 279,831 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 744,704 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 11,687,822 | |
Net Assets, for 1,191,449 shares outstanding | $41,787,943 | |
Net Asset Value, offering price and redemption price per share ($41,787,943 ÷ 1,191,449 shares) | $35.07 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $466,837 | |
Income from Fidelity Central Funds (including $40,026 from security lending) | 41,434 | |
Total income | 508,271 | |
Expenses | ||
Management fee | $128,723 | |
Transfer agent fees | 53,416 | |
Accounting and security lending fees | 9,985 | |
Custodian fees and expenses | 3,513 | |
Independent trustees' fees and expenses | 124 | |
Registration fees | 15,958 | |
Audit | 18,635 | |
Legal | 291 | |
Miscellaneous | 1,067 | |
Total expenses before reductions | 231,712 | |
Expense reductions | (4,124) | |
Total expenses after reductions | 227,588 | |
Net investment income (loss) | 280,683 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 1,101,922 | |
Fidelity Central Funds | 429 | |
Foreign currency transactions | 585 | |
Total net realized gain (loss) | 1,102,936 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (2,672,135) | |
Assets and liabilities in foreign currencies | (349) | |
Total change in net unrealized appreciation (depreciation) | (2,672,484) | |
Net gain (loss) | (1,569,548) | |
Net increase (decrease) in net assets resulting from operations | $(1,288,865) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $280,683 | $569,500 |
Net realized gain (loss) | 1,102,936 | 8,846,812 |
Change in net unrealized appreciation (depreciation) | (2,672,484) | (367,737) |
Net increase (decrease) in net assets resulting from operations | (1,288,865) | 9,048,575 |
Distributions to shareholders from net investment income | (80,626) | (298,505) |
Distributions to shareholders from net realized gain | (1,820,795) | (8,188,561) |
Total distributions | (1,901,421) | (8,487,066) |
Share transactions | ||
Proceeds from sales of shares | 4,529,397 | 34,198,768 |
Reinvestment of distributions | 1,828,196 | 8,170,537 |
Cost of shares redeemed | (17,518,802) | (40,862,610) |
Net increase (decrease) in net assets resulting from share transactions | (11,161,209) | 1,506,695 |
Redemption fees | – | 2,072 |
Total increase (decrease) in net assets | (14,351,495) | 2,070,276 |
Net Assets | ||
Beginning of period | 56,139,438 | 54,069,162 |
End of period | $41,787,943 | $56,139,438 |
Other Information | ||
Undistributed net investment income end of period | $279,831 | $79,774 |
Shares | ||
Sold | 122,730 | 882,784 |
Issued in reinvestment of distributions | 51,923 | 228,135 |
Redeemed | (479,382) | (1,084,888) |
Net increase (decrease) | (304,729) | 26,031 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Automotive Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $37.52 | $36.78 | $33.72 | $48.82 | $56.95 | $40.65 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .21 | .39C | .33 | .65 | .42 | .22 |
Net realized and unrealized gain (loss) | (1.24) | 6.11 | 5.22 | (9.37) | 3.05 | 16.96 |
Total from investment operations | (1.03) | 6.50 | 5.55 | (8.72) | 3.47 | 17.18 |
Distributions from net investment income | (.06) | (.20) | (.52) | (.45) | (.38) | (.15) |
Distributions from net realized gain | (1.36) | (5.56) | (1.98) | (5.93) | (11.22) | (.73) |
Total distributions | (1.42) | (5.76) | (2.49)D | (6.38) | (11.60) | (.88) |
Redemption fees added to paid in capitalB | – | –E | –E | –E | –E | –E |
Net asset value, end of period | $35.07 | $37.52 | $36.78 | $33.72 | $48.82 | $56.95 |
Total ReturnF,G | (2.77)% | 19.08% | 16.80% | (20.00)% | 8.04% | 42.33% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | .97%J | .97% | .96% | .87% | .85% | .84% |
Expenses net of fee waivers, if any | .97%J | .96% | .96% | .87% | .85% | .84% |
Expenses net of all reductions | .96%J | .96% | .95% | .86% | .85% | .83% |
Net investment income (loss) | 1.18%J | 1.04%C | .92% | 1.49% | .82% | .43% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $41,788 | $56,139 | $54,069 | $65,745 | $137,877 | $214,227 |
Portfolio turnover rateK | 18%J | 117% | 83% | 80% | 71% | 148% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net 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 .83%.
D Total distributions of $2.49 per share is comprised of distributions from net investment income of $.515 and distributions from net realized gain of $1.975 per share.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
J Annualized
K 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.
Construction and Housing Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Home Depot, Inc. | 21.8 |
Lowe's Companies, Inc. | 16.6 |
AvalonBay Communities, Inc. | 6.5 |
Essex Property Trust, Inc. | 5.2 |
Lennar Corp. Class A | 4.6 |
Vulcan Materials Co. | 3.5 |
Masco Corp. | 3.3 |
NVR, Inc. | 3.2 |
Equity Lifestyle Properties, Inc. | 2.4 |
A.O. Smith Corp. | 2.2 |
69.3 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Specialty Retail | 38.4% | |
Equity Real Estate Investment Trusts (Reits) | 18.1% | |
Building Products | 16.4% | |
Household Durables | 13.0% | |
Construction & Engineering | 7.8% | |
All Others* | 6.3% |
* Includes short-term investments and net other assets (liabilities).
Construction and Housing Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.5% | |||
Shares | Value | ||
Building Products - 16.4% | |||
Building Products - 16.4% | |||
A.O. Smith Corp. | 105,684 | $6,138,127 | |
Allegion PLC | 65,300 | 5,695,466 | |
American Woodmark Corp. (a) | 30,700 | 2,607,965 | |
Armstrong World Industries, Inc. (a) | 41,000 | 2,861,800 | |
Johnson Controls International PLC | 146,834 | 5,545,920 | |
Masco Corp. | 239,800 | 9,105,206 | |
Owens Corning | 80,543 | 4,560,345 | |
Patrick Industries, Inc. (a) | 36,600 | 2,342,400 | |
Simpson Manufacturing Co. Ltd. | 40,700 | 3,124,539 | |
Universal Forest Products, Inc. | 77,700 | 2,910,642 | |
44,892,410 | |||
Commercial Services & Supplies - 1.0% | |||
Environmental & Facility Services - 1.0% | |||
ABM Industries, Inc. | 85,205 | 2,702,703 | |
Construction & Engineering - 7.8% | |||
Construction & Engineering - 7.8% | |||
EMCOR Group, Inc. | 40,028 | 3,206,243 | |
Jacobs Engineering Group, Inc. | 82,002 | 5,960,725 | |
MasTec, Inc. (a) | 53,800 | 2,356,440 | |
Quanta Services, Inc. (a) | 136,700 | 4,728,453 | |
Valmont Industries, Inc. | 16,200 | 2,274,480 | |
Williams Scotsman Corp. (a)(b) | 163,400 | 2,851,330 | |
21,377,671 | |||
Construction Materials - 4.8% | |||
Construction Materials - 4.8% | |||
Summit Materials, Inc. | 176,200 | 3,747,774 | |
Vulcan Materials Co. | 85,831 | 9,510,075 | |
13,257,849 | |||
Equity Real Estate Investment Trusts (REITs) - 18.1% | |||
Residential REITs - 16.1% | |||
AvalonBay Communities, Inc. | 97,198 | 17,815,421 | |
Equity Lifestyle Properties, Inc. | 68,187 | 6,605,957 | |
Essex Property Trust, Inc. | 57,900 | 14,259,612 | |
Invitation Homes, Inc. | 228,000 | 5,328,360 | |
44,009,350 | |||
Specialized REITs - 2.0% | |||
Equinix, Inc. | 12,400 | 5,408,012 | |
TOTAL EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) | 49,417,362 | ||
Household Durables - 13.0% | |||
Homebuilding - 13.0% | |||
KB Home | 139,800 | 3,474,030 | |
Lennar Corp. Class A | 241,310 | 12,468,488 | |
NVR, Inc. (a) | 3,325 | 8,872,596 | |
PulteGroup, Inc. | 200,900 | 5,615,155 | |
Skyline Champion Corp. | 44,600 | 1,289,386 | |
Taylor Morrison Home Corp. (a) | 190,401 | 3,705,203 | |
35,424,858 | |||
Specialty Retail - 38.4% | |||
Home Improvement Retail - 38.4% | |||
Home Depot, Inc. | 296,831 | 59,594,759 | |
Lowe's Companies, Inc. | 417,070 | 45,356,363 | |
104,951,122 | |||
TOTAL COMMON STOCKS | |||
(Cost $175,253,292) | 272,023,975 | ||
Convertible Preferred Stocks - 0.0% | |||
Household Durables - 0.0% | |||
Homebuilding - 0.0% | |||
Blu Homes, Inc. Series A, 5.00% (a)(c)(d) | |||
(Cost $4,000,001) | 865,801 | 17,316 | |
Money Market Funds - 1.2% | |||
Fidelity Cash Central Fund, 1.97% (e) | 1,366,171 | 1,366,445 | |
Fidelity Securities Lending Cash Central Fund 1.98% (e)(f) | 2,036,796 | 2,037,000 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $3,403,445) | 3,403,445 | ||
TOTAL INVESTMENT IN SECURITIES - 100.7% | |||
(Cost $182,656,738) | 275,444,736 | ||
NET OTHER ASSETS (LIABILITIES) - (0.7)% | (2,014,485) | ||
NET ASSETS - 100% | $273,430,251 |
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 $17,316 or 0.0% of net assets.
(d) Level 3 security
(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 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 |
Blu Homes, Inc. Series A, 5.00% | 6/10/13 | $4,000,001 |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
Fund | Income earned |
Fidelity Cash Central Fund | $15,633 |
Fidelity Securities Lending Cash Central Fund | 209 |
Total | $15,842 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $272,023,975 | $272,023,975 | $-- | $-- |
Convertible Preferred Stocks | 17,316 | -- | -- | 17,316 |
Money Market Funds | 3,403,445 | 3,403,445 | -- | -- |
Total Investments in Securities: | $275,444,736 | $275,427,420 | $-- | $17,316 |
See accompanying notes which are an integral part of the financial statements.
Construction and Housing Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $2,031,180) — See accompanying schedule: Unaffiliated issuers (cost $179,253,293) | $272,041,291 | |
Fidelity Central Funds (cost $3,403,445) | 3,403,445 | |
Total Investment in Securities (cost $182,656,738) | $275,444,736 | |
Receivable for investments sold | 3,405,416 | |
Receivable for fund shares sold | 37,259 | |
Dividends receivable | 365,779 | |
Distributions receivable from Fidelity Central Funds | 3,247 | |
Prepaid expenses | 3,359 | |
Other receivables | 19,587 | |
Total assets | 279,279,383 | |
Liabilities | ||
Payable for investments purchased | $3,223,417 | |
Payable for fund shares redeemed | 388,677 | |
Accrued management fee | 122,654 | |
Other affiliated payables | 53,063 | |
Other payables and accrued expenses | 24,321 | |
Collateral on securities loaned | 2,037,000 | |
Total liabilities | 5,849,132 | |
Net Assets | $273,430,251 | |
Net Assets consist of: | ||
Paid in capital | $161,272,580 | |
Undistributed net investment income | 1,465,602 | |
Accumulated undistributed net realized gain (loss) on investments | 17,904,071 | |
Net unrealized appreciation (depreciation) on investments | 92,787,998 | |
Net Assets, for 4,442,203 shares outstanding | $273,430,251 | |
Net Asset Value, offering price and redemption price per share ($273,430,251 ÷ 4,442,203 shares) | $61.55 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $2,600,317 | |
Income from Fidelity Central Funds (including $209 from security lending) | 15,842 | |
Total income | 2,616,159 | |
Expenses | ||
Management fee | $791,018 | |
Transfer agent fees | 276,339 | |
Accounting and security lending fees | 56,994 | |
Custodian fees and expenses | 8,253 | |
Independent trustees' fees and expenses | 759 | |
Registration fees | 20,861 | |
Audit | 18,365 | |
Legal | 1,841 | |
Miscellaneous | 1,282 | |
Total expenses before reductions | 1,175,712 | |
Expense reductions | (28,502) | |
Total expenses after reductions | 1,147,210 | |
Net investment income (loss) | 1,468,949 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 19,051,800 | |
Fidelity Central Funds | (170) | |
Total net realized gain (loss) | 19,051,630 | |
Change in net unrealized appreciation (depreciation) on investment securities | 1,443,949 | |
Net gain (loss) | 20,495,579 | |
Net increase (decrease) in net assets resulting from operations | $21,964,528 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $1,468,949 | $2,608,630 |
Net realized gain (loss) | 19,051,630 | 61,746,960 |
Change in net unrealized appreciation (depreciation) | 1,443,949 | (25,870,943) |
Net increase (decrease) in net assets resulting from operations | 21,964,528 | 38,484,647 |
Distributions to shareholders from net investment income | (518,929) | (1,543,811) |
Distributions to shareholders from net realized gain | (15,117,771) | (46,308,729) |
Total distributions | (15,636,700) | (47,852,540) |
Share transactions | ||
Proceeds from sales of shares | 15,262,277 | 131,533,408 |
Reinvestment of distributions | 14,956,987 | 45,604,178 |
Cost of shares redeemed | (94,534,912) | (240,882,477) |
Net increase (decrease) in net assets resulting from share transactions | (64,315,648) | (63,744,891) |
Redemption fees | – | 5,063 |
Total increase (decrease) in net assets | (57,987,820) | (73,107,721) |
Net Assets | ||
Beginning of period | 331,418,071 | 404,525,792 |
End of period | $273,430,251 | $331,418,071 |
Other Information | ||
Undistributed net investment income end of period | $1,465,602 | $515,582 |
Shares | ||
Sold | 257,224 | 2,043,349 |
Issued in reinvestment of distributions | 259,445 | 729,117 |
Redeemed | (1,608,993) | (3,793,864) |
Net increase (decrease) | (1,092,324) | (1,021,398) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Construction and Housing Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $59.88 | $61.70 | $53.16 | $59.74 | $57.48 | $52.01 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .30 | .44 | .37 | .33 | .29 | .26 |
Net realized and unrealized gain (loss) | 4.32 | 6.58 | 10.29 | (5.02) | 8.53 | 9.65 |
Total from investment operations | 4.62 | 7.02 | 10.66 | (4.69) | 8.82 | 9.91 |
Distributions from net investment income | (.10) | (.30) | (.45) | (.23) | (.29) | (.30) |
Distributions from net realized gain | (2.86) | (8.53) | (1.67) | (1.66) | (6.28) | (4.14) |
Total distributions | (2.95)C | (8.84)D | (2.12) | (1.89) | (6.56)E | (4.44) |
Redemption fees added to paid in capitalB | – | –F | –F | –F | –F | –F |
Net asset value, end of period | $61.55 | $59.88 | $61.70 | $53.16 | $59.74 | $57.48 |
Total ReturnG,H | 8.05% | 11.07% | 20.23% | (8.11)% | 16.99% | 19.84% |
Ratios to Average Net AssetsI,J | ||||||
Expenses before reductions | .80%K | .80% | .80% | .81% | .82% | .81% |
Expenses net of fee waivers, if any | .80%K | .80% | .80% | .80% | .82% | .81% |
Expenses net of all reductions | .78%K | .79% | .79% | .80% | .82% | .81% |
Net investment income (loss) | 1.00%K | .69% | .62% | .57% | .52% | .47% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $273,430 | $331,418 | $404,526 | $449,303 | $419,479 | $376,750 |
Portfolio turnover rateL | 81%K | 56% | 87% | 80% | 71% | 53% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $2.95 per share is comprised of distributions from net investment income of $.098 and distributions from net realized gain of $2.855 per share.
D Total distributions of 8.84 per share is comprised of distributions from net investment income of $.303 and distributions from net realized gain of $8.534 per share.
E Total distributions of $6.56 per share is comprised of distributions from net investment income of $.287 and distributions from net realized gain of $6.276 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
J Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
K Annualized
L 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.
Consumer Discretionary Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Amazon.com, Inc. | 21.3 |
Home Depot, Inc. | 7.0 |
Netflix, Inc. | 4.0 |
The Walt Disney Co. | 3.6 |
McDonald's Corp. | 3.6 |
Lowe's Companies, Inc. | 3.0 |
Comcast Corp. Class A | 2.8 |
Charter Communications, Inc. Class A | 2.5 |
The Booking Holdings, Inc. | 2.5 |
NIKE, Inc. Class B | 2.4 |
52.7 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Internet & Direct Marketing Retail | 28.3% | |
Hotels, Restaurants & Leisure | 21.4% | |
Specialty Retail | 18.9% | |
Media | 9.9% | |
Textiles, Apparel & Luxury Goods | 5.5% | |
All Others* | 16.0% |
* Includes short-term investments and net other assets (liabilities).
Consumer Discretionary Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.4% | |||
Shares | Value | ||
Air Freight & Logistics - 0.1% | |||
Air Freight & Logistics - 0.1% | |||
XPO Logistics, Inc. (a) | 3,900 | $415,350 | |
Auto Components - 0.3% | |||
Auto Parts & Equipment - 0.3% | |||
Aptiv PLC | 8,200 | 721,682 | |
Lear Corp. | 3,700 | 600,140 | |
Tenneco, Inc. | 400 | 17,116 | |
1,338,938 | |||
Automobiles - 2.2% | |||
Automobile Manufacturers - 2.2% | |||
Ferrari NV | 5,500 | 720,995 | |
General Motors Co. | 67,900 | 2,447,795 | |
Tesla, Inc. (a)(b) | 17,651 | 5,324,601 | |
Thor Industries, Inc. | 15,600 | 1,488,864 | |
9,982,255 | |||
Beverages - 0.7% | |||
Distillers & Vintners - 0.5% | |||
Constellation Brands, Inc. Class A (sub. vtg.) | 11,400 | 2,373,480 | |
Soft Drinks - 0.2% | |||
Monster Beverage Corp. (a) | 13,320 | 811,055 | |
TOTAL BEVERAGES | 3,184,535 | ||
Building Products - 0.1% | |||
Building Products - 0.1% | |||
Masco Corp. | 13,900 | 527,783 | |
Chemicals - 0.1% | |||
Specialty Chemicals - 0.1% | |||
Sherwin-Williams Co. | 800 | 364,464 | |
Commercial Services & Supplies - 0.2% | |||
Diversified Support Services - 0.2% | |||
Copart, Inc. (a) | 14,000 | 900,340 | |
Distributors - 0.6% | |||
Distributors - 0.6% | |||
LKQ Corp. (a) | 60,100 | 2,074,652 | |
Pool Corp. | 4,529 | 743,934 | |
2,818,586 | |||
Diversified Consumer Services - 1.0% | |||
Education Services - 0.6% | |||
Adtalem Global Education, Inc. (a) | 10,000 | 478,500 | |
Grand Canyon Education, Inc. (a) | 15,200 | 1,810,928 | |
New Oriental Education & Technology Group, Inc. sponsored ADR | 4,100 | 322,260 | |
2,611,688 | |||
Specialized Consumer Services - 0.4% | |||
Service Corp. International | 4,600 | 193,016 | |
ServiceMaster Global Holdings, Inc. (a) | 7,600 | 458,052 | |
Weight Watchers International, Inc. (a) | 18,700 | 1,400,630 | |
2,051,698 | |||
TOTAL DIVERSIFIED CONSUMER SERVICES | 4,663,386 | ||
Electronic Equipment & Components - 0.1% | |||
Electronic Equipment & Instruments - 0.1% | |||
ADT, Inc. (b) | 33,100 | 296,245 | |
Food & Staples Retailing - 1.1% | |||
Food Distributors - 0.6% | |||
Performance Food Group Co. (a) | 81,500 | 2,697,650 | |
Hypermarkets & Super Centers - 0.5% | |||
BJ's Wholesale Club Holdings, Inc. | 37,300 | 1,100,350 | |
Costco Wholesale Corp. | 1,100 | 256,443 | |
Walmart, Inc. | 8,100 | 776,466 | |
2,133,259 | |||
TOTAL FOOD & STAPLES RETAILING | 4,830,909 | ||
Health Care Providers & Services - 0.0% | |||
Health Care Services - 0.0% | |||
National Vision Holdings, Inc. | 3,800 | 168,150 | |
Hotels, Restaurants & Leisure - 21.4% | |||
Casinos & Gaming - 3.1% | |||
Boyd Gaming Corp. | 19,100 | 695,622 | |
Caesars Entertainment Corp. (a) | 96,000 | 979,200 | |
Churchill Downs, Inc. | 1,800 | 508,680 | |
Eldorado Resorts, Inc. (a) | 51,700 | 2,484,185 | |
Las Vegas Sands Corp. | 79,852 | 5,223,918 | |
Melco Crown Entertainment Ltd. sponsored ADR | 10,100 | 241,188 | |
MGM Mirage, Inc. | 84,600 | 2,452,554 | |
Penn National Gaming, Inc. (a) | 32,223 | 1,110,405 | |
PlayAGS, Inc. (a) | 7,800 | 249,912 | |
Wynn Resorts Ltd. | 1,200 | 178,008 | |
14,123,672 | |||
Hotels, Resorts & Cruise Lines - 7.8% | |||
Accor SA | 5,500 | 275,156 | |
Bluegreen Vacations Corp. | 27,700 | 517,436 | |
Carnival Corp. | 58,000 | 3,566,420 | |
Hilton Grand Vacations, Inc. (a) | 51,187 | 1,671,767 | |
Hilton Worldwide Holdings, Inc. | 87,600 | 6,799,512 | |
Hyatt Hotels Corp. Class A | 12,300 | 951,528 | |
Marriott International, Inc. Class A | 55,633 | 7,035,906 | |
Marriott Vacations Worldwide Corp. | 21,306 | 2,535,414 | |
Royal Caribbean Cruises Ltd. | 67,125 | 8,228,183 | |
Wyndham Destinations, Inc. | 40,400 | 1,785,680 | |
Wyndham Hotels & Resorts, Inc. | 41,900 | 2,377,825 | |
35,744,827 | |||
Leisure Facilities - 1.5% | |||
Cedar Fair LP (depositary unit) | 9,913 | 526,777 | |
Drive Shack, Inc. (a) | 75,518 | 468,212 | |
Planet Fitness, Inc. (a) | 38,200 | 1,962,334 | |
Vail Resorts, Inc. | 12,289 | 3,662,736 | |
6,620,059 | |||
Restaurants - 9.0% | |||
ARAMARK Holdings Corp. | 49,700 | 2,041,676 | |
Chipotle Mexican Grill, Inc. (a) | 1,900 | 902,842 | |
Compass Group PLC | 12,000 | 258,019 | |
Darden Restaurants, Inc. | 14,900 | 1,728,996 | |
Del Frisco's Restaurant Group, Inc. (a) | 22,400 | 211,680 | |
Dine Brands Global, Inc. | 3,300 | 275,286 | |
Domino's Pizza, Inc. | 7,700 | 2,298,912 | |
Dunkin' Brands Group, Inc. | 22,100 | 1,610,869 | |
Jack in the Box, Inc. | 5,877 | 532,691 | |
McDonald's Corp. | 100,000 | 16,223,000 | |
Restaurant Brands International, Inc. | 34,610 | 1,985,102 | |
Ruth's Hospitality Group, Inc. | 8,105 | 249,634 | |
Shake Shack, Inc. Class A (a) | 2,900 | 175,305 | |
Starbucks Corp. | 139,868 | 7,475,945 | |
Texas Roadhouse, Inc. Class A | 11,200 | 772,240 | |
U.S. Foods Holding Corp. (a) | 62,667 | 2,042,318 | |
Wendy's Co. | 25,000 | 441,250 | |
Wingstop, Inc. | 6,332 | 423,927 | |
Yum! Brands, Inc. | 14,300 | 1,242,527 | |
40,892,219 | |||
TOTAL HOTELS, RESTAURANTS & LEISURE | 97,380,777 | ||
Household Durables - 2.6% | |||
Home Furnishings - 0.2% | |||
Mohawk Industries, Inc. (a) | 5,505 | 1,054,703 | |
Homebuilding - 2.3% | |||
Cavco Industries, Inc. (a) | 3,800 | 932,520 | |
D.R. Horton, Inc. | 75,900 | 3,378,309 | |
Lennar Corp.: | |||
Class A | 49,600 | 2,562,832 | |
Class B | 558 | 23,536 | |
LGI Homes, Inc. (a) | 3,600 | 207,360 | |
New Home Co. LLC (a) | 14,800 | 129,944 | |
NVR, Inc. (a) | 831 | 2,217,482 | |
Taylor Morrison Home Corp. (a) | 10,900 | 212,114 | |
TRI Pointe Homes, Inc. (a) | 46,200 | 669,438 | |
10,333,535 | |||
Household Appliances - 0.1% | |||
Techtronic Industries Co. Ltd. | 87,000 | 532,059 | |
TOTAL HOUSEHOLD DURABLES | 11,920,297 | ||
Internet & Direct Marketing Retail - 28.3% | |||
Internet & Direct Marketing Retail - 28.3% | |||
Amazon.com, Inc. (a) | 48,200 | 97,012,619 | |
Boohoo.Com PLC (a) | 61,200 | 140,437 | |
Liberty Interactive Corp. QVC Group Series A (a) | 79,810 | 1,659,250 | |
Netflix, Inc. (a) | 49,379 | 18,155,671 | |
Start Today Co. Ltd. | 3,700 | 127,540 | |
The Booking Holdings, Inc. (a) | 5,742 | 11,205,800 | |
Wayfair LLC Class A (a) | 2,700 | 364,959 | |
Zalando SE (a) | 1,900 | 99,950 | |
128,766,226 | |||
Internet Software & Services - 0.7% | |||
Internet Software & Services - 0.7% | |||
2U, Inc. (a) | 11,400 | 1,018,704 | |
Alphabet, Inc. Class A (a) | 1,800 | 2,217,240 | |
MINDBODY, Inc. (a) | 3,100 | 115,010 | |
3,350,954 | |||
IT Services - 0.4% | |||
Data Processing & Outsourced Services - 0.4% | |||
Adyen BV (c) | 293 | 205,420 | |
Global Payments, Inc. | 4,700 | 585,526 | |
PayPal Holdings, Inc. (a) | 12,100 | 1,117,193 | |
1,908,139 | |||
Leisure Products - 0.5% | |||
Leisure Products - 0.5% | |||
Mattel, Inc. (b) | 135,363 | 2,088,651 | |
Media - 9.9% | |||
Advertising - 0.0% | |||
Interpublic Group of Companies, Inc. | 5,400 | 126,090 | |
Broadcasting - 0.2% | |||
CBS Corp. Class B | 15,300 | 811,206 | |
Cable & Satellite - 5.5% | |||
Charter Communications, Inc. Class A (a) | 36,169 | 11,226,858 | |
Comcast Corp. Class A | 349,247 | 12,918,647 | |
Naspers Ltd. Class N | 3,600 | 800,053 | |
24,945,558 | |||
Movies & Entertainment - 4.2% | |||
Cinemark Holdings, Inc. | 41,681 | 1,555,535 | |
Liberty Media Corp. Liberty Formula One Group Series C (a) | 8,800 | 325,248 | |
Lions Gate Entertainment Corp. Class B | 1,300 | 29,185 | |
Live Nation Entertainment, Inc. (a) | 16,200 | 804,816 | |
The Walt Disney Co. | 147,147 | 16,483,407 | |
19,198,191 | |||
TOTAL MEDIA | 45,081,045 | ||
Multiline Retail - 4.1% | |||
Department Stores - 0.4% | |||
Future Retail Ltd. | 38,864 | 304,760 | |
Macy's, Inc. | 48,800 | 1,783,640 | |
2,088,400 | |||
General Merchandise Stores - 3.7% | |||
B&M European Value Retail S.A. | 79,508 | 425,197 | |
Dollar General Corp. | 55,900 | 6,022,107 | |
Dollar Tree, Inc. (a) | 107,121 | 8,624,312 | |
Ollie's Bargain Outlet Holdings, Inc. (a) | 9,900 | 862,290 | |
Target Corp. | 9,200 | 805,000 | |
16,738,906 | |||
TOTAL MULTILINE RETAIL | 18,827,306 | ||
Personal Products - 0.0% | |||
Personal Products - 0.0% | |||
Estee Lauder Companies, Inc. Class A | 1,300 | 182,156 | |
Real Estate Management & Development - 0.1% | |||
Real Estate Services - 0.1% | |||
Redfin Corp. (a)(b) | 15,100 | 299,131 | |
Software - 0.2% | |||
Application Software - 0.1% | |||
Adobe Systems, Inc. (a) | 1,500 | 395,265 | |
Home Entertainment Software - 0.1% | |||
Activision Blizzard, Inc. | 5,400 | 389,340 | |
TOTAL SOFTWARE | 784,605 | ||
Specialty Retail - 18.9% | |||
Apparel Retail - 5.9% | |||
Burlington Stores, Inc. (a) | 49,800 | 8,375,364 | |
Inditex SA | 11,233 | 339,446 | |
Ross Stores, Inc. | 76,980 | 7,373,144 | |
The Children's Place Retail Stores, Inc. | 6,800 | 957,100 | |
TJX Companies, Inc. | 88,009 | 9,678,350 | |
26,723,404 | |||
Automotive Retail - 2.1% | |||
AutoZone, Inc. (a) | 4,600 | 3,527,648 | |
Monro, Inc. | 9,400 | 666,930 | |
O'Reilly Automotive, Inc. (a) | 16,498 | 5,533,759 | |
9,728,337 | |||
Computer & Electronics Retail - 0.1% | |||
Best Buy Co., Inc. | 8,600 | 684,216 | |
Home Improvement Retail - 10.1% | |||
Floor & Decor Holdings, Inc. Class A (a) | 12,400 | 455,824 | |
Home Depot, Inc. | 157,400 | 31,601,198 | |
Lowe's Companies, Inc. | 126,800 | 13,789,500 | |
45,846,522 | |||
Specialty Stores - 0.7% | |||
Five Below, Inc. (a) | 500 | 58,235 | |
Tiffany & Co., Inc. | 7,200 | 883,080 | |
Ulta Beauty, Inc. (a) | 8,500 | 2,210,000 | |
3,151,315 | |||
TOTAL SPECIALTY RETAIL | 86,133,794 | ||
Technology Hardware, Storage & Peripherals - 0.2% | |||
Technology Hardware, Storage & Peripherals - 0.2% | |||
Apple, Inc. | 4,400 | 1,001,572 | |
Textiles, Apparel & Luxury Goods - 5.5% | |||
Apparel, Accessories & Luxury Goods - 3.0% | |||
adidas AG | 3,737 | 932,177 | |
Canada Goose Holdings, Inc. (a) | 6,000 | 364,460 | |
Carter's, Inc. | 10,500 | 1,112,265 | |
G-III Apparel Group Ltd. (a) | 10,300 | 468,444 | |
Kering SA | 1,525 | 828,427 | |
lululemon athletica, Inc. (a) | 2,300 | 356,339 | |
LVMH Moet Hennessy - Louis Vuitton SA | 3,600 | 1,261,985 | |
Michael Kors Holdings Ltd. (a) | 6,100 | 442,982 | |
Prada SpA | 72,900 | 328,799 | |
PVH Corp. | 41,400 | 5,926,824 | |
Swatch Group AG (Bearer) | 650 | 277,369 | |
Tapestry, Inc. | 17,400 | 882,006 | |
VF Corp. | 4,900 | 451,437 | |
13,633,514 | |||
Footwear - 2.5% | |||
NIKE, Inc. Class B | 133,550 | 10,977,810 | |
Wolverine World Wide, Inc. | 5,900 | 231,162 | |
11,208,972 | |||
TOTAL TEXTILES, APPAREL & LUXURY GOODS | 24,842,486 | ||
Tobacco - 0.1% | |||
Tobacco - 0.1% | |||
Philip Morris International, Inc. | 8,600 | 669,854 | |
TOTAL COMMON STOCKS | |||
(Cost $319,656,010) | 452,727,934 | ||
Money Market Funds - 2.4% | |||
Fidelity Cash Central Fund, 1.97% (d) | 3,914,696 | 3,915,479 | |
Fidelity Securities Lending Cash Central Fund 1.98% (d)(e) | 7,244,587 | 7,245,312 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $11,160,791) | 11,160,791 | ||
TOTAL INVESTMENT IN SECURITIES - 101.8% | |||
(Cost $330,816,801) | 463,888,725 | ||
NET OTHER ASSETS (LIABILITIES) - (1.8)% | (8,417,223) | ||
NET ASSETS - 100% | $455,471,502 |
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 $205,420 or 0.0% 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 are available on the SEC's website or upon request.
(e) 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 | $21,345 |
Fidelity Securities Lending Cash Central Fund | 70,627 |
Total | $91,972 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $452,727,934 | $451,126,503 | $1,601,431 | $-- |
Money Market Funds | 11,160,791 | 11,160,791 | -- | -- |
Total Investments in Securities: | $463,888,725 | $462,287,294 | $1,601,431 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $11,010,457 |
See accompanying notes which are an integral part of the financial statements.
Consumer Discretionary Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $7,072,329) — See accompanying schedule: Unaffiliated issuers (cost $319,656,010) | $452,727,934 | |
Fidelity Central Funds (cost $11,160,791) | 11,160,791 | |
Total Investment in Securities (cost $330,816,801) | $463,888,725 | |
Receivable for investments sold | 750,708 | |
Receivable for fund shares sold | 1,149,451 | |
Dividends receivable | 446,618 | |
Distributions receivable from Fidelity Central Funds | 13,407 | |
Prepaid expenses | 7,569 | |
Other receivables | 24,651 | |
Total assets | 466,281,129 | |
Liabilities | ||
Payable to custodian bank | $1 | |
Payable for investments purchased | 3,058,310 | |
Payable for fund shares redeemed | 212,120 | |
Accrued management fee | 197,542 | |
Other affiliated payables | 74,161 | |
Other payables and accrued expenses | 26,141 | |
Collateral on securities loaned | 7,241,352 | |
Total liabilities | 10,809,627 | |
Net Assets | $455,471,502 | |
Net Assets consist of: | ||
Paid in capital | $182,592,146 | |
Undistributed net investment income | 1,050,144 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 138,758,562 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 133,070,650 | |
Net Assets, for 9,541,738 shares outstanding | $455,471,502 | |
Net Asset Value, offering price and redemption price per share ($455,471,502 ÷ 9,541,738 shares) | $47.73 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $2,925,656 | |
Income from Fidelity Central Funds (including $70,627 from security lending) | 91,972 | |
Total income | 3,017,628 | |
Expenses | ||
Management fee | $1,366,847 | |
Transfer agent fees | 424,888 | |
Accounting and security lending fees | 96,118 | |
Custodian fees and expenses | 9,667 | |
Independent trustees' fees and expenses | 1,436 | |
Registration fees | 30,367 | |
Audit | 18,503 | |
Legal | 3,836 | |
Miscellaneous | 5,656 | |
Total expenses before reductions | 1,957,318 | |
Expense reductions | (3,282) | |
Total expenses after reductions | 1,954,036 | |
Net investment income (loss) | 1,063,592 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 6,919,351 | |
Redemptions in-kind with affiliated entities | 132,629,032 | |
Fidelity Central Funds | (9) | |
Foreign currency transactions | (2,307) | |
Total net realized gain (loss) | 139,546,067 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (107,673,803) | |
Assets and liabilities in foreign currencies | (1,610) | |
Total change in net unrealized appreciation (depreciation) | (107,675,413) | |
Net gain (loss) | 31,870,654 | |
Net increase (decrease) in net assets resulting from operations | $32,934,246 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $1,063,592 | $2,999,236 |
Net realized gain (loss) | 139,546,067 | 45,712,325 |
Change in net unrealized appreciation (depreciation) | (107,675,413) | 102,452,213 |
Net increase (decrease) in net assets resulting from operations | 32,934,246 | 151,163,774 |
Distributions to shareholders from net investment income | (241,670) | (2,342,887) |
Distributions to shareholders from net realized gain | (12,511,081) | (26,353,209) |
Total distributions | (12,752,751) | (28,696,096) |
Share transactions | ||
Proceeds from sales of shares | 94,402,275 | 143,731,533 |
Reinvestment of distributions | 12,480,847 | 28,101,673 |
Cost of shares redeemed | (491,530,164) | (303,355,779) |
Net increase (decrease) in net assets resulting from share transactions | (384,647,042) | (131,522,573) |
Total increase (decrease) in net assets | (364,465,547) | (9,054,895) |
Net Assets | ||
Beginning of period | 819,937,049 | 828,991,944 |
End of period | $455,471,502 | $819,937,049 |
Other Information | ||
Undistributed net investment income end of period | $1,050,144 | $228,222 |
Shares | ||
Sold | 2,097,903 | 3,475,740 |
Issued in reinvestment of distributions | 299,014 | 683,905 |
Redeemed | (11,638,345) | (7,779,213) |
Net increase (decrease) | (9,241,428) | (3,619,568) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Consumer Discretionary Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $43.65 | $37.00 | $32.38 | $35.23 | $33.30 | $27.40 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .09 | .16 | .21 | .24 | .15 | .04 |
Net realized and unrealized gain (loss) | 4.68 | 8.17 | 4.73 | (1.79) | 4.39 | 8.67 |
Total from investment operations | 4.77 | 8.33 | 4.94 | (1.55) | 4.54 | 8.71 |
Distributions from net investment income | (.01) | (.14) | (.32) | (.18) | (.11) | (.03) |
Distributions from net realized gain | (.67) | (1.54) | – | (1.13) | (2.51) | (2.77) |
Total distributions | (.69)C | (1.68) | (.32) | (1.30)D | (2.61)E | (2.81)F |
Redemption fees added to paid in capitalB | – | – | –G | –G | –G | –G |
Net asset value, end of period | $47.73 | $43.65 | $37.00 | $32.38 | $35.23 | $33.30 |
Total ReturnH,I | 11.14% | 22.79% | 15.29% | (4.60)% | 14.79% | 32.17% |
Ratios to Average Net AssetsJ,K | ||||||
Expenses before reductions | .78%L | .78% | .76% | .77% | .79% | .82% |
Expenses net of fee waivers, if any | .77%L | .78% | .76% | .77% | .79% | .82% |
Expenses net of all reductions | .77%L | .77% | .76% | .76% | .79% | .81% |
Net investment income (loss) | .42%L | .40% | .60% | .71% | .46% | .14% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $455,472 | $819,937 | $828,992 | $1,119,021 | $1,078,988 | $557,868 |
Portfolio turnover rateM | 26%L,N | 74% | 39%N | 69% | 109%N | 138% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $.69 per share is comprised of distributions from net investment income of $.013 and distributions from net realized gain of $.673 per share.
D Total distributions of $1.30 per share is comprised of distributions from net investment income of $.175 and distributions from net realized gain of $1.126 per share.
E Total distributions of $2.61 per share is comprised of distributions from net investment income of $.105 and distributions from net realized gain of $2.508 per share.
F Total distributions of $2.81 per share is comprised of distributions from net investment income of $.034 and distributions from net realized gain of $2.772 per share.
G Amount represents less than $.005 per share.
H Total returns for periods of less than one year are not annualized.
I Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
J Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
K Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
L Annualized
M Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
N Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Leisure Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
McDonald's Corp. | 22.4 |
Starbucks Corp. | 8.8 |
Marriott International, Inc. Class A | 8.0 |
Royal Caribbean Cruises Ltd. | 5.6 |
Las Vegas Sands Corp. | 4.3 |
Hilton Worldwide Holdings, Inc. | 4.1 |
Carnival Corp. | 4.1 |
Planet Fitness, Inc. | 2.8 |
Hilton Grand Vacations, Inc. | 2.7 |
Vail Resorts, Inc. | 2.5 |
65.3 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Hotels, Restaurants & Leisure | 93.3% | |
Diversified Consumer Services | 4.0% | |
Internet & Direct Marketing Retail | 1.1% | |
Internet Software & Services | 0.8% | |
Food & Staples Retailing | 0.4% | |
All Others* | 0.4% |
* Includes short-term investments and net other assets (liabilities).
Leisure Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.8% | |||
Shares | Value | ||
Diversified Consumer Services - 4.0% | |||
Education Services - 2.0% | |||
Adtalem Global Education, Inc. (a) | 56,450 | $2,701,133 | |
Grand Canyon Education, Inc. (a) | 57,100 | 6,802,894 | |
9,504,027 | |||
Specialized Consumer Services - 2.0% | |||
ServiceMaster Global Holdings, Inc. (a) | 70,334 | 4,239,030 | |
Weight Watchers International, Inc. (a)(b) | 74,200 | 5,557,580 | |
9,796,610 | |||
TOTAL DIVERSIFIED CONSUMER SERVICES | 19,300,637 | ||
Food & Staples Retailing - 0.4% | |||
Food Distributors - 0.4% | |||
Performance Food Group Co. (a) | 51,300 | 1,698,030 | |
Hotels, Restaurants & Leisure - 93.3% | |||
Casinos & Gaming - 12.3% | |||
Boyd Gaming Corp. | 120,100 | 4,374,042 | |
Caesars Entertainment Corp. (a) | 571,700 | 5,831,340 | |
Eldorado Resorts, Inc. (a) | 215,800 | 10,369,190 | |
Las Vegas Sands Corp. | 314,808 | 20,594,739 | |
MGM China Holdings Ltd. | 316,800 | 597,374 | |
MGM Mirage, Inc. | 244,200 | 7,079,358 | |
Penn National Gaming, Inc. (a) | 110,149 | 3,795,735 | |
Pinnacle Entertainment, Inc. (a) | 15,900 | 544,416 | |
Sands China Ltd. | 275,600 | 1,344,861 | |
Scientific Games Corp. Class A (a) | 41,300 | 1,251,390 | |
Wynn Resorts Ltd. | 19,900 | 2,951,966 | |
58,734,411 | |||
Hotels, Resorts & Cruise Lines - 32.6% | |||
Bluegreen Vacations Corp. | 29,600 | 552,928 | |
Carnival Corp. | 319,000 | 19,615,310 | |
Greentree Hospitality Group Ltd. ADR (a)(b) | 62,070 | 744,840 | |
Hilton Grand Vacations, Inc. (a) | 395,812 | 12,927,220 | |
Hilton Worldwide Holdings, Inc. | 254,097 | 19,723,009 | |
Hyatt Hotels Corp. Class A | 72,700 | 5,624,072 | |
Marriott International, Inc. Class A | 301,593 | 38,142,467 | |
Marriott Vacations Worldwide Corp. | 75,597 | 8,996,043 | |
Norwegian Cruise Line Holdings Ltd. (a) | 137,400 | 7,366,014 | |
Royal Caribbean Cruises Ltd. | 217,590 | 26,672,182 | |
Wyndham Destinations, Inc. | 159,014 | 7,028,419 | |
Wyndham Hotels & Resorts, Inc. | 154,014 | 8,740,295 | |
156,132,799 | |||
Leisure Facilities - 5.3% | |||
Planet Fitness, Inc. (a) | 262,100 | 13,464,077 | |
Vail Resorts, Inc. | 40,378 | 12,034,663 | |
25,498,740 | |||
Restaurants - 43.1% | |||
ARAMARK Holdings Corp. | 221,600 | 9,103,328 | |
Chipotle Mexican Grill, Inc. (a) | 20,850 | 9,907,503 | |
Del Frisco's Restaurant Group, Inc. (a) | 144,200 | 1,362,690 | |
Dine Brands Global, Inc. | 23,900 | 1,993,738 | |
Domino's Pizza, Inc. | 22,300 | 6,657,888 | |
Dunkin' Brands Group, Inc. (b) | 142,750 | 10,405,048 | |
McDonald's Corp. | 661,008 | 107,235,326 | |
Red Robin Gourmet Burgers, Inc. (a) | 8,600 | 355,180 | |
Restaurant Brands International, Inc. | 53,600 | 3,074,299 | |
Shake Shack, Inc. Class A (a) | 7,700 | 465,465 | |
Starbucks Corp. | 793,300 | 42,401,885 | |
U.S. Foods Holding Corp. (a) | 62,533 | 2,037,950 | |
Wendy's Co. | 359,200 | 6,339,880 | |
Yum! Brands, Inc. | 61,636 | 5,355,552 | |
206,695,732 | |||
TOTAL HOTELS, RESTAURANTS & LEISURE | 447,061,682 | ||
Internet & Direct Marketing Retail - 1.1% | |||
Internet & Direct Marketing Retail - 1.1% | |||
Amazon.com, Inc. (a) | 280 | 563,559 | |
The Booking Holdings, Inc. (a) | 2,500 | 4,878,875 | |
5,442,434 | |||
Internet Software & Services - 0.8% | |||
Internet Software & Services - 0.8% | |||
2U, Inc. (a) | 17,424 | 1,557,009 | |
Alphabet, Inc. Class A (a) | 1,700 | 2,094,060 | |
3,651,069 | |||
Multiline Retail - 0.2% | |||
General Merchandise Stores - 0.2% | |||
Dollar Tree, Inc. (a) | 11,500 | 925,865 | |
TOTAL COMMON STOCKS | |||
(Cost $311,734,474) | 478,079,717 | ||
Money Market Funds - 1.3% | |||
Fidelity Securities Lending Cash Central Fund 1.98% (c)(d) | |||
(Cost $6,362,539) | 6,361,902 | 6,362,539 | |
TOTAL INVESTMENT IN SECURITIES - 101.1% | |||
(Cost $318,097,013) | 484,442,256 | ||
NET OTHER ASSETS (LIABILITIES) - (1.1)% | (5,177,308) | ||
NET ASSETS - 100% | $479,264,948 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Investment made with cash collateral received from securities on loan.
(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 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 | $5,634 |
Fidelity Securities Lending Cash Central Fund | 17,755 |
Total | $23,389 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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 | 87.7% |
Liberia | 5.6% |
Panama | 4.1% |
Bermuda | 1.5% |
Others (Individually Less Than 1%) | 1.1% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Leisure Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $6,267,683) — See accompanying schedule: Unaffiliated issuers (cost $311,734,474) | $478,079,717 | |
Fidelity Central Funds (cost $6,362,539) | 6,362,539 | |
Total Investment in Securities (cost $318,097,013) | $484,442,256 | |
Receivable for investments sold | 1,394,961 | |
Receivable for fund shares sold | 152,339 | |
Dividends receivable | 1,097,407 | |
Distributions receivable from Fidelity Central Funds | 2,565 | |
Prepaid expenses | 5,595 | |
Other receivables | 15,393 | |
Total assets | 487,110,516 | |
Liabilities | ||
Payable to custodian bank | $226,888 | |
Payable for fund shares redeemed | 944,669 | |
Accrued management fee | 214,497 | |
Other affiliated payables | 81,796 | |
Other payables and accrued expenses | 22,393 | |
Collateral on securities loaned | 6,355,325 | |
Total liabilities | 7,845,568 | |
Net Assets | $479,264,948 | |
Net Assets consist of: | ||
Paid in capital | $272,161,858 | |
Undistributed net investment income | 2,131,339 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 38,626,508 | |
Net unrealized appreciation (depreciation) on investments | 166,345,243 | |
Net Assets, for 30,106,747 shares outstanding | $479,264,948 | |
Net Asset Value, offering price and redemption price per share ($479,264,948 ÷ 30,106,747 shares) | $15.92 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $4,463,789 | |
Income from Fidelity Central Funds (including $17,755 from security lending) | 23,389 | |
Total income | 4,487,178 | |
Expenses | ||
Management fee | $1,365,624 | |
Transfer agent fees | 415,403 | |
Accounting and security lending fees | 98,781 | |
Custodian fees and expenses | 4,645 | |
Independent trustees' fees and expenses | 1,277 | |
Registration fees | 26,605 | |
Audit | 18,791 | |
Legal | 3,349 | |
Interest | 731 | |
Miscellaneous | 2,060 | |
Total expenses before reductions | 1,937,266 | |
Expense reductions | (28,071) | |
Total expenses after reductions | 1,909,195 | |
Net investment income (loss) | 2,577,983 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 41,609,149 | |
Fidelity Central Funds | 259 | |
Foreign currency transactions | (184) | |
Total net realized gain (loss) | 41,609,224 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (36,859,560) | |
Fidelity Central Funds | 844 | |
Total change in net unrealized appreciation (depreciation) | (36,858,716) | |
Net gain (loss) | 4,750,508 | |
Net increase (decrease) in net assets resulting from operations | $7,328,491 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $2,577,983 | $5,536,085 |
Net realized gain (loss) | 41,609,224 | 64,226,711 |
Change in net unrealized appreciation (depreciation) | (36,858,716) | 31,870,985 |
Net increase (decrease) in net assets resulting from operations | 7,328,491 | 101,633,781 |
Distributions to shareholders from net investment income | (1,408,935) | (4,166,156) |
Distributions to shareholders from net realized gain | (27,008,831) | (27,657,199) |
Total distributions | (28,417,766) | (31,823,355) |
Share transactions | ||
Proceeds from sales of shares | 26,820,373 | 243,148,042 |
Reinvestment of distributions | 26,783,359 | 29,908,337 |
Cost of shares redeemed | (97,789,137) | (201,277,044) |
Net increase (decrease) in net assets resulting from share transactions | (44,185,405) | 71,779,335 |
Redemption fees | – | 9,285 |
Total increase (decrease) in net assets | (65,274,680) | 141,599,046 |
Net Assets | ||
Beginning of period | 544,539,628 | 402,940,582 |
End of period | $479,264,948 | $544,539,628 |
Other Information | ||
Undistributed net investment income end of period | $2,131,339 | $962,291 |
Shares(a) | ||
Sold | 1,669,751 | 15,077,750 |
Issued in reinvestment of distributions | 1,726,511 | 1,813,140 |
Redeemed | (6,135,705) | (12,547,940) |
Net increase (decrease) | (2,739,443) | 4,342,950 |
(a) Share activity prior to August 10, 2018 has been adjusted to reflect the impact of the 10 for 1 share split that occurred on that date.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Leisure Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share DataB | ||||||
Net asset value, beginning of period | $16.58 | $14.14 | $12.83 | $14.01 | $13.51 | $10.83 |
Income from Investment Operations | ||||||
Net investment income (loss)C | .08 | .18 | .16 | .15 | .13 | .14D |
Net realized and unrealized gain (loss) | .55 | 3.31 | 1.29 | (.62) | 1.48 | 3.51 |
Total from investment operations | .63 | 3.49 | 1.45 | (.47) | 1.61 | 3.65 |
Distributions from net investment income | (.44) | (.14) | (.14) | (.13) | (.15) | (.10) |
Distributions from net realized gain | (.85) | (.91) | – | (.58) | (.96) | (.87) |
Total distributions | (1.29) | (1.05) | (.14) | (.71) | (1.11) | (.97) |
Redemption fees added to paid in capitalC | – | – | –E | –E | –E | –E |
Net asset value, end of period | $15.92 | $16.58 | $14.14 | $12.83 | $14.01 | $13.51 |
Total ReturnF,G | 1.55% | 24.75% | 11.26% | (3.48)% | 12.91% | 34.71% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | .77%J | .77% | .80% | .79% | .80% | .82% |
Expenses net of fee waivers, if any | .77%J | .77% | .79% | .79% | .80% | .82% |
Expenses net of all reductions | .76%J | .77% | .79% | .78% | .80% | .81% |
Net investment income (loss) | 1.02%J | 1.09% | 1.17% | 1.08% | 1.00% | 1.13%D |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $479,265 | $544,540 | $402,941 | $416,771 | $445,296 | $568,149 |
Portfolio turnover rateK | 32%J | 56% | 23% | 48% | 32%L | 65% |
A For the year ended February 29.
B Per share amounts have been adjusted to reflect the impact of the 10 for 1 share split that occurred on August 10, 2018.
C Calculated based on average shares outstanding during the period.
D Net investment income per share reflects a large, non-recurring dividend which amounted to $.04 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .79%.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
J Annualized
K Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
L Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Multimedia Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Comcast Corp. Class A | 22.4 |
The Walt Disney Co. | 22.1 |
Charter Communications, Inc. Class A | 4.1 |
Netflix, Inc. | 3.5 |
Facebook, Inc. Class A | 3.4 |
Sirius XM Holdings, Inc. | 3.3 |
Live Nation Entertainment, Inc. | 3.3 |
Twenty-First Century Fox, Inc. Class A | 3.0 |
Lions Gate Entertainment Corp. Class B | 2.9 |
Liberty Broadband Corp. Class A | 2.8 |
70.8 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Media | 78.3% | |
Internet Software & Services | 8.5% | |
Internet & Direct Marketing Retail | 8.1% | |
Technology Hardware, Storage & Peripherals | 2.5% | |
Software | 1.4% | |
All Others* | 1.2% |
* Includes short-term investments and net other assets (liabilities).
Multimedia Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.8% | |||
Shares | Value | ||
Household Durables - 0.1% | |||
Consumer Electronics - 0.1% | |||
Roku, Inc. Class A | 5,600 | $333,144 | |
Internet & Direct Marketing Retail - 8.1% | |||
Internet & Direct Marketing Retail - 8.1% | |||
Amazon.com, Inc. (a) | 7,000 | 14,088,970 | |
Netflix, Inc. (a) | 51,000 | 18,751,680 | |
The Booking Holdings, Inc. (a) | 5,600 | 10,928,680 | |
43,769,330 | |||
Internet Software & Services - 8.5% | |||
Internet Software & Services - 8.5% | |||
Alphabet, Inc.: | |||
Class A (a) | 8,500 | 10,470,300 | |
Class C (a) | 8,514 | 10,371,670 | |
Facebook, Inc. Class A (a) | 103,000 | 18,100,190 | |
Tencent Holdings Ltd. | 161,900 | 6,959,623 | |
45,901,783 | |||
IT Services - 0.0% | |||
Data Processing & Outsourced Services - 0.0% | |||
Adyen BV (b) | 200 | 140,219 | |
Media - 78.3% | |||
Advertising - 1.6% | |||
Interpublic Group of Companies, Inc. | 147,100 | 3,434,785 | |
Omnicom Group, Inc. | 77,300 | 5,358,436 | |
8,793,221 | |||
Broadcasting - 2.5% | |||
CBS Corp. Class B | 207,238 | 10,987,759 | |
Cumulus Media, Inc. Class A (a)(c) | 26 | 0 | |
Discovery Communications, Inc.: | |||
Class A (a) | 450 | 12,524 | |
Class C (non-vtg.) (a) | 99,000 | 2,538,360 | |
13,538,643 | |||
Cable & Satellite - 34.0% | |||
Charter Communications, Inc. Class A (a) | 72,271 | 22,432,918 | |
Comcast Corp. Class A | 3,283,400 | 121,452,965 | |
Liberty Broadband Corp.: | |||
Class A (a) | 187,023 | 15,148,863 | |
Class C (a) | 91,440 | 7,414,870 | |
Sirius XM Holdings, Inc. (d) | 2,508,200 | 17,808,220 | |
184,257,836 | |||
Movies & Entertainment - 40.2% | |||
Liberty Media Corp.: | |||
Liberty Media Class A (a) | 336,162 | 11,758,947 | |
Liberty SiriusXM Series A (a) | 64,000 | 2,991,360 | |
Liberty SiriusXM Series C (a) | 208,886 | 9,825,997 | |
Lions Gate Entertainment Corp. Class B | 705,434 | 15,836,993 | |
Live Nation Entertainment, Inc. (a) | 357,300 | 17,750,664 | |
The Madison Square Garden Co. (a) | 49,799 | 15,036,310 | |
The Walt Disney Co. | 1,068,604 | 119,705,020 | |
Twenty-First Century Fox, Inc.: | |||
Class A | 362,107 | 16,439,658 | |
Class B | 178,500 | 8,014,650 | |
217,359,599 | |||
Publishing - 0.0% | |||
China Literature Ltd. (a)(b) | 6,800 | 47,824 | |
TOTAL MEDIA | 423,997,123 | ||
Software - 1.4% | |||
Home Entertainment Software - 1.4% | |||
Activision Blizzard, Inc. | 105,200 | 7,584,920 | |
Technology Hardware, Storage & Peripherals - 2.5% | |||
Technology Hardware, Storage & Peripherals - 2.5% | |||
Apple, Inc. | 58,800 | 13,384,644 | |
Textiles, Apparel & Luxury Goods - 0.9% | |||
Textiles - 0.9% | |||
Despegar.com Corp. | 4,716 | 79,512 | |
Pinduoduo, Inc. ADR (d) | 259,900 | 5,029,065 | |
5,108,577 | |||
TOTAL COMMON STOCKS | |||
(Cost $297,752,078) | 540,219,740 | ||
Money Market Funds - 4.5% | |||
Fidelity Cash Central Fund, 1.97% (e) | 1,470,127 | 1,470,421 | |
Fidelity Securities Lending Cash Central Fund 1.98% (e)(f) | 22,989,622 | 22,991,921 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $24,462,325) | 24,462,342 | ||
TOTAL INVESTMENT IN SECURITIES - 104.3% | |||
(Cost $322,214,403) | 564,682,082 | ||
NET OTHER ASSETS (LIABILITIES) - (4.3)% | (23,483,438) | ||
NET ASSETS - 100% | $541,198,644 |
Legend
(a) Non-income producing
(b) 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 $188,043 or 0.0% of net assets.
(c) Level 3 security
(d) Security or a portion of the security is on loan at period end.
(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 are available on the SEC's website or upon request.
(f) 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 | $36,030 |
Fidelity Securities Lending Cash Central Fund | 243,837 |
Total | $279,867 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $540,219,740 | $533,260,117 | $6,959,623 | $-- |
Money Market Funds | 24,462,342 | 24,462,342 | -- | -- |
Total Investments in Securities: | $564,682,082 | $557,722,459 | $6,959,623 | $-- |
See accompanying notes which are an integral part of the financial statements.
Multimedia Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $22,834,640) — See accompanying schedule: Unaffiliated issuers (cost $297,752,078) | $540,219,740 | |
Fidelity Central Funds (cost $24,462,325) | 24,462,342 | |
Total Investment in Securities (cost $322,214,403) | $564,682,082 | |
Receivable for fund shares sold | 579,927 | |
Dividends receivable | 30,891 | |
Distributions receivable from Fidelity Central Funds | 40,398 | |
Prepaid expenses | 5,157 | |
Other receivables | 1,409 | |
Total assets | 565,339,864 | |
Liabilities | ||
Payable to custodian bank | $1 | |
Payable for fund shares redeemed | 736,998 | |
Accrued management fee | 239,212 | |
Other affiliated payables | 96,185 | |
Other payables and accrued expenses | 78,799 | |
Collateral on securities loaned | 22,990,025 | |
Total liabilities | 24,141,220 | |
Net Assets | $541,198,644 | |
Net Assets consist of: | ||
Paid in capital | $256,084,143 | |
Undistributed net investment income | 900,437 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 41,746,385 | |
Net unrealized appreciation (depreciation) on investments | 242,467,679 | |
Net Assets, for 6,762,758 shares outstanding | $541,198,644 | |
Net Asset Value, offering price and redemption price per share ($541,198,644 ÷ 6,762,758 shares) | $80.03 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $2,555,719 | |
Income from Fidelity Central Funds (including $243,837 from security lending) | 279,867 | |
Total income | 2,835,586 | |
Expenses | ||
Management fee | $1,270,973 | |
Transfer agent fees | 468,977 | |
Accounting and security lending fees | 93,249 | |
Custodian fees and expenses | 4,734 | |
Independent trustees' fees and expenses | 1,161 | |
Registration fees | 19,366 | |
Audit | 18,640 | |
Legal | 2,781 | |
Interest | 1,462 | |
Miscellaneous | 60,418 | |
Total expenses before reductions | 1,941,761 | |
Expense reductions | (11,447) | |
Total expenses after reductions | 1,930,314 | |
Net investment income (loss) | 905,272 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 45,418,955 | |
Fidelity Central Funds | (1,509) | |
Foreign currency transactions | (760) | |
Total net realized gain (loss) | 45,416,686 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (19,266,615) | |
Fidelity Central Funds | (116) | |
Total change in net unrealized appreciation (depreciation) | (19,266,731) | |
Net gain (loss) | 26,149,955 | |
Net increase (decrease) in net assets resulting from operations | $27,055,227 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $905,272 | $1,579,243 |
Net realized gain (loss) | 45,416,686 | 55,286,541 |
Change in net unrealized appreciation (depreciation) | (19,266,731) | (33,684,418) |
Net increase (decrease) in net assets resulting from operations | 27,055,227 | 23,181,366 |
Distributions to shareholders from net investment income | (275,553) | (1,071,017) |
Distributions to shareholders from net realized gain | (26,891,380) | (29,592,267) |
Total distributions | (27,166,933) | (30,663,284) |
Share transactions | ||
Proceeds from sales of shares | 106,947,906 | 53,712,116 |
Reinvestment of distributions | 26,139,454 | 29,534,153 |
Cost of shares redeemed | (101,152,149) | (246,786,302) |
Net increase (decrease) in net assets resulting from share transactions | 31,935,211 | (163,540,033) |
Redemption fees | – | 5,340 |
Total increase (decrease) in net assets | 31,823,505 | (171,016,611) |
Net Assets | ||
Beginning of period | 509,375,139 | 680,391,750 |
End of period | $541,198,644 | $509,375,139 |
Other Information | ||
Undistributed net investment income end of period | $900,437 | $270,718 |
Shares | ||
Sold | 1,366,481 | 658,481 |
Issued in reinvestment of distributions | 365,280 | 368,028 |
Redeemed | (1,360,243) | (3,060,717) |
Net increase (decrease) | 371,518 | (2,034,208) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Multimedia Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $79.70 | $80.75 | $68.59 | $82.48 | $81.74 | $61.55 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .15 | .21 | .22 | .27 | .22 | .20 |
Net realized and unrealized gain (loss) | 4.52 | 3.14 | 17.53 | (8.82) | 7.62 | 22.46 |
Total from investment operations | 4.67 | 3.35 | 17.75 | (8.55) | 7.84 | 22.66 |
Distributions from net investment income | (.04) | (.16) | (.33) | (.23) | (.20) | (.19) |
Distributions from net realized gain | (4.29) | (4.23) | (5.26) | (5.12) | (6.89) | (2.30) |
Total distributions | (4.34)C | (4.40)D | (5.59) | (5.34)E | (7.10)F | (2.48)G |
Redemption fees added to paid in capitalB | – | –H | –H | –H | –H | .01 |
Net asset value, end of period | $80.03 | $79.70 | $80.75 | $68.59 | $82.48 | $81.74 |
Total ReturnI,J | 6.50% | 4.16% | 26.85% | (10.88)% | 10.16% | 37.01% |
Ratios to Average Net AssetsK,L | ||||||
Expenses before reductions | .82%M | .80% | .82% | .81% | .81% | .81% |
Expenses net of fee waivers, if any | .82%M | .80% | .82% | .81% | .81% | .81% |
Expenses net of all reductions | .82%M | .79% | .82% | .80% | .81% | .80% |
Net investment income (loss) | .38%M | .26% | .30% | .34% | .27% | .27% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $541,199 | $509,375 | $680,392 | $576,118 | $802,988 | $1,008,988 |
Portfolio turnover rateN | 44%M | 22% | 33% | 42% | 55% | 111% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $4.34 per share is comprised of distributions from net investment income of $.044 and distributions from net realized gain of $4.294 per share.
D Total distributions of $4.40 per share is comprised of distributions from net investment income of $.163 and distributions from net realized gain of $4.233 per share.
E Total distributions of $5.34 per share is comprised of distributions from net investment income of $.227 and distributions from net realized gain of $5.115 per share.
F Total distributions of $7.10 per share is comprised of distributions from net investment income of $.204 and distributions from net realized gain of $6.892 per share.
G Total distributions of $2.48 per share is comprised of distributions from net investment income of $.187 and distributions from net realized gain of $2.295 per share.
H Amount represents less than $.005 per share.
I Total returns for periods of less than one year are not annualized.
J Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
K Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
L Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
M Annualized
N 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.
Retailing Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Amazon.com, Inc. | 24.7 |
Home Depot, Inc. | 13.5 |
Netflix, Inc. | 7.1 |
Lowe's Companies, Inc. | 4.9 |
The Booking Holdings, Inc. | 4.6 |
TJX Companies, Inc. | 4.3 |
Dollar General Corp. | 3.1 |
Ross Stores, Inc. | 2.8 |
Dollar Tree, Inc. | 2.7 |
O'Reilly Automotive, Inc. | 2.2 |
69.9 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Internet & Direct Marketing Retail | 39.1% | |
Specialty Retail | 37.9% | |
Multiline Retail | 7.9% | |
Textiles, Apparel & Luxury Goods | 3.7% | |
Hotels, Restaurants & Leisure | 2.6% | |
All Others* | 8.8% |
* Includes short-term investments and net other assets (liabilities).
Retailing Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 96.7% | |||
Shares | Value | ||
Distributors - 0.8% | |||
Distributors - 0.8% | |||
LKQ Corp. (a) | 776,800 | $26,815,136 | |
Food & Staples Retailing - 1.2% | |||
Hypermarkets & Super Centers - 1.2% | |||
BJ's Wholesale Club Holdings, Inc. | 976,692 | 28,812,414 | |
Walmart, Inc. | 131,400 | 12,596,004 | |
41,408,418 | |||
Health Care Providers & Services - 1.0% | |||
Health Care Facilities - 0.3% | |||
Ryman Healthcare Group Ltd. | 1,105,718 | 10,307,441 | |
Health Care Services - 0.7% | |||
CVS Health Corp. | 314,000 | 23,625,360 | |
TOTAL HEALTH CARE PROVIDERS & SERVICES | 33,932,801 | ||
Hotels, Restaurants & Leisure - 2.6% | |||
Casinos & Gaming - 0.3% | |||
MGM Mirage, Inc. | 347,200 | 10,065,328 | |
Hotels, Resorts & Cruise Lines - 0.1% | |||
Hilton Grand Vacations, Inc. (a) | 133,100 | 4,347,046 | |
Leisure Facilities - 0.1% | |||
Cedar Fair LP (depositary unit) | 95,622 | 5,081,353 | |
Restaurants - 2.1% | |||
Compass Group PLC | 693,300 | 14,907,075 | |
Dunkin' Brands Group, Inc. | 269,300 | 19,629,277 | |
McDonald's Corp. | 60,700 | 9,847,361 | |
U.S. Foods Holding Corp. (a) | 807,600 | 26,319,684 | |
70,703,397 | |||
TOTAL HOTELS, RESTAURANTS & LEISURE | 90,197,124 | ||
Internet & Direct Marketing Retail - 39.1% | |||
Internet & Direct Marketing Retail - 39.1% | |||
Amazon.com, Inc. (a) | 419,430 | 844,190,956 | |
Expedia, Inc. | 287,900 | 37,570,950 | |
Liberty Interactive Corp. QVC Group Series A (a) | 2,611,800 | 54,299,322 | |
Netflix, Inc. (a) | 664,700 | 244,396,896 | |
The Booking Holdings, Inc. (a) | 79,680 | 155,499,504 | |
1,335,957,628 | |||
Internet Software & Services - 1.1% | |||
Internet Software & Services - 1.1% | |||
Alphabet, Inc. Class A (a) | 31,200 | 38,432,160 | |
Media - 0.7% | |||
Cable & Satellite - 0.4% | |||
Comcast Corp. Class A | 405,400 | 14,995,746 | |
Movies & Entertainment - 0.3% | |||
Cinemark Holdings, Inc. | 255,600 | 9,538,992 | |
TOTAL MEDIA | 24,534,738 | ||
Multiline Retail - 7.9% | |||
Department Stores - 1.0% | |||
Macy's, Inc. | 966,000 | 35,307,300 | |
General Merchandise Stores - 6.9% | |||
Big Lots, Inc. (b) | 494,600 | 21,292,530 | |
Dollar General Corp. | 972,000 | 104,713,560 | |
Dollar Tree, Inc. (a) | 1,123,600 | 90,461,036 | |
Target Corp. | 209,200 | 18,305,000 | |
234,772,126 | |||
TOTAL MULTILINE RETAIL | 270,079,426 | ||
Personal Products - 0.2% | |||
Personal Products - 0.2% | |||
Coty, Inc. Class A | 527,600 | 6,521,136 | |
Specialty Retail - 37.9% | |||
Apparel Retail - 9.9% | |||
Burlington Stores, Inc. (a) | 408,994 | 68,784,611 | |
L Brands, Inc. | 307,283 | 8,121,490 | |
Ross Stores, Inc. | 1,009,400 | 96,680,332 | |
The Children's Place Retail Stores, Inc. | 132,400 | 18,635,300 | |
TJX Companies, Inc. | 1,341,000 | 147,469,770 | |
339,691,503 | |||
Automotive Retail - 4.2% | |||
AutoZone, Inc. (a) | 88,463 | 67,840,505 | |
O'Reilly Automotive, Inc. (a) | 224,186 | 75,196,468 | |
143,036,973 | |||
Computer & Electronics Retail - 0.8% | |||
Best Buy Co., Inc. | 347,900 | 27,678,924 | |
Home Improvement Retail - 18.4% | |||
Home Depot, Inc. | 2,295,300 | 460,827,381 | |
Lowe's Companies, Inc. | 1,539,800 | 167,453,250 | |
628,280,631 | |||
Specialty Stores - 4.6% | |||
Signet Jewelers Ltd. | 172,600 | 11,080,920 | |
Tiffany & Co., Inc. | 456,900 | 56,038,785 | |
Tractor Supply Co. | 450,400 | 39,761,312 | |
Ulta Beauty, Inc. (a) | 202,500 | 52,650,000 | |
159,531,017 | |||
TOTAL SPECIALTY RETAIL | 1,298,219,048 | ||
Textiles, Apparel & Luxury Goods - 3.7% | |||
Apparel, Accessories & Luxury Goods - 3.7% | |||
adidas AG | 42,200 | 10,526,586 | |
lululemon athletica, Inc. (a) | 84,957 | 13,162,388 | |
Michael Kors Holdings Ltd. (a) | 297,000 | 21,568,140 | |
Prada SpA | 1,287,100 | 5,805,172 | |
PVH Corp. | 288,100 | 41,244,396 | |
Tapestry, Inc. | 443,200 | 22,465,808 | |
VF Corp. | 116,900 | 10,769,997 | |
125,542,487 | |||
Trading Companies & Distributors - 0.5% | |||
Trading Companies & Distributors - 0.5% | |||
Bunzl PLC | 547,500 | 17,021,157 | |
TOTAL COMMON STOCKS | |||
(Cost $1,853,249,591) | 3,308,661,259 | ||
Money Market Funds - 2.5% | |||
Fidelity Cash Central Fund, 1.97% (c) | 84,456,401 | 84,473,292 | |
Fidelity Securities Lending Cash Central Fund 1.98% (c)(d) | 3,073 | 3,073 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $84,476,365) | 84,476,365 | ||
TOTAL INVESTMENT IN SECURITIES - 99.2% | |||
(Cost $1,937,725,956) | 3,393,137,624 | ||
NET OTHER ASSETS (LIABILITIES) - 0.8% | 26,152,203 | ||
NET ASSETS - 100% | $3,419,289,827 |
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 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 | $712,257 |
Fidelity Securities Lending Cash Central Fund | 20,529 |
Total | $732,786 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $39,189,453 |
See accompanying notes which are an integral part of the financial statements.
Retailing Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $3,272) — See accompanying schedule: Unaffiliated issuers (cost $1,853,249,591) | $3,308,661,259 | |
Fidelity Central Funds (cost $84,476,365) | 84,476,365 | |
Total Investment in Securities (cost $1,937,725,956) | $3,393,137,624 | |
Cash | 469 | |
Foreign currency held at value (cost $1) | 1 | |
Receivable for investments sold | 22,030,155 | |
Receivable for fund shares sold | 14,594,268 | |
Dividends receivable | 3,822,769 | |
Distributions receivable from Fidelity Central Funds | 55,214 | |
Prepaid expenses | 25,290 | |
Other receivables | 32,196 | |
Total assets | 3,433,697,986 | |
Liabilities | ||
Payable for investments purchased | $6,773,035 | |
Payable for fund shares redeemed | 5,661,141 | |
Accrued management fee | 1,435,369 | |
Other affiliated payables | 500,409 | |
Other payables and accrued expenses | 34,481 | |
Collateral on securities loaned | 3,724 | |
Total liabilities | 14,408,159 | |
Net Assets | $3,419,289,827 | |
Net Assets consist of: | ||
Paid in capital | $1,929,648,845 | |
Undistributed net investment income | 5,551,636 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 28,678,163 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 1,455,411,183 | |
Net Assets, for 205,884,535 shares outstanding | $3,419,289,827 | |
Net Asset Value, offering price and redemption price per share ($3,419,289,827 ÷ 205,884,535 shares) | $16.61 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $15,529,019 | |
Income from Fidelity Central Funds (including $20,529 from security lending) | 732,786 | |
Total income | 16,261,805 | |
Expenses | ||
Management fee | $7,241,718 | |
Transfer agent fees | 2,314,886 | |
Accounting and security lending fees | 399,075 | |
Custodian fees and expenses | 19,447 | |
Independent trustees' fees and expenses | 6,190 | |
Registration fees | 114,499 | |
Audit | 18,821 | |
Legal | 11,060 | |
Miscellaneous | 10,345 | |
Total expenses before reductions | 10,136,041 | |
Expense reductions | (65,078) | |
Total expenses after reductions | 10,070,963 | |
Net investment income (loss) | 6,190,842 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 29,144,340 | |
Fidelity Central Funds | 3,571 | |
Foreign currency transactions | (27,774) | |
Total net realized gain (loss) | 29,120,137 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 401,170,168 | |
Assets and liabilities in foreign currencies | (1,194) | |
Total change in net unrealized appreciation (depreciation) | 401,168,974 | |
Net gain (loss) | 430,289,111 | |
Net increase (decrease) in net assets resulting from operations | $436,479,953 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $6,190,842 | $5,508,530 |
Net realized gain (loss) | 29,120,137 | 113,637,334 |
Change in net unrealized appreciation (depreciation) | 401,168,974 | 368,019,971 |
Net increase (decrease) in net assets resulting from operations | 436,479,953 | 487,165,835 |
Distributions to shareholders from net investment income | – | (4,427,075) |
Distributions to shareholders from net realized gain | (19,094,120) | (65,230,373) |
Total distributions | (19,094,120) | (69,657,448) |
Share transactions | ||
Proceeds from sales of shares | 927,558,235 | 575,718,782 |
Reinvestment of distributions | 18,271,784 | 66,546,015 |
Cost of shares redeemed | (273,292,336) | (654,809,547) |
Net increase (decrease) in net assets resulting from share transactions | 672,537,683 | (12,544,750) |
Total increase (decrease) in net assets | 1,089,923,516 | 404,963,637 |
Net Assets | ||
Beginning of period | 2,329,366,311 | 1,924,402,674 |
End of period | $3,419,289,827 | $2,329,366,311 |
Other Information | ||
Undistributed net investment income end of period | $5,551,636 | $– |
Distributions in excess of net investment income end of period | $– | $(639,206) |
Shares(a) | ||
Sold | 60,455,108 | 43,734,090 |
Issued in reinvestment of distributions | 1,332,247 | 5,085,670 |
Redeemed | (18,212,730) | (52,943,150) |
Net increase (decrease) | 43,574,625 | (4,123,390) |
(a) Share activity prior to May 11, 2018 has been adjusted to reflect the impact of the 10 for 1 share split that occurred on that date.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Retailing Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share DataB | ||||||
Net asset value, beginning of period | $14.35 | $11.56 | $9.88 | $9.53 | $8.84 | $6.66 |
Income from Investment Operations | ||||||
Net investment income (loss)C | .03 | .04 | .01 | .01D | .03E | .02F |
Net realized and unrealized gain (loss) | 2.35 | 3.23 | 1.69 | .47 | 1.38 | 2.36 |
Total from investment operations | 2.38 | 3.27 | 1.70 | .48 | 1.41 | 2.38 |
Distributions from net investment income | – | (.03) | (.02) | (.02) | (.02) | (.01) |
Distributions from net realized gain | (.12) | (.45) | – | (.11) | (.70) | (.19) |
Total distributions | (.12) | (.48) | (.02) | (.13) | (.72) | (.20) |
Redemption fees added to paid in capitalC | – | – | –G | – | –G | – |
Net asset value, end of period | $16.61 | $14.35 | $11.56 | $9.88 | $9.53 | $8.84 |
Total ReturnH,I | 16.72% | 28.66% | 17.20% | 5.11% | 17.29% | 35.82% |
Ratios to Average Net AssetsJ,K | ||||||
Expenses before reductions | .75%L | .78% | .78% | .81% | .81% | .83% |
Expenses net of fee waivers, if any | .75%L | .77% | .78% | .80% | .81% | .83% |
Expenses net of all reductions | .75%L | .77% | .78% | .80% | .81% | .82% |
Net investment income (loss) | .46%L | .29% | .07% | .14%D | .36%E | .18%F |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $3,419,290 | $2,329,366 | $1,924,403 | $1,849,996 | $915,177 | $1,063,920 |
Portfolio turnover rateM | 23%L | 24% | 17% | 11% | 31% | 72% |
A For the year ended February 29.
B Per share amounts have been adjusted to reflect the impact of the 10 for 1 share split that occurred on May 11, 2018.
C Calculated based on average shares outstanding during the period.
D Net 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 .02%.
E Net 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 .22%.
F Net 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 .08%.
G Amount represents less than $.005 per share.
H Total returns for periods of less than one year are not annualized.
I Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
J Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
K Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
L Annualized
M 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 (Unaudited)
For the period ended August 31, 2018
1. Organization.
Automotive Portfolio, Construction and Housing Portfolio, Consumer Discretionary Portfolio, Leisure Portfolio, Multimedia Portfolio, and Retailing Portfolio (the Funds) are non-diversified funds of Fidelity Select Portfolios (the Trust). 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 Funds invest primarily in securities of companies whose principal business activities fall within specific industries. Each Fund is authorized to issue an unlimited number of shares. In June 2018 the Board of Trustees approved a change in the name of Multimedia Portfolio to Communication Services Portfolio effective December 1, 2018. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds.
Effective August 10, 2018 and May 11, 2018, Leisure Portfolio and Retailing Portfolio underwent a 10 for 1 share split, respectively. The effect of the share split transaction was to multiply the number of outstanding shares of Leisure Portfolio and Retailing Portfolio by a split factor of 10:1, with a corresponding decrease in net asset value (NAV) per share. This event does not impact the overall net assets of Leisure Portfolio or Retailing Portfolio. The per share data presented in each Financial Highlights and Shares activity presented in each Statement of Changes in Net Assets for Leisure Portfolio and Retailing Portfolio have been retroactively adjusted to reflect this share split.
2. Investments in Fidelity Central Funds.
The Funds invest 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 Funds' Schedules of Investments list each of the Fidelity Central Funds held as of period end, if any, as an investment of each Fund, but do not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, each 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 .005%.
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 are available on the SEC website or upon request.
3. Significant Accounting Policies.
Each Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Funds:
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 each Fund's investments to the Fair Value Committee (the Committee) established by each Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, each 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 each 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 each Fund's investments and ratifies the fair value determinations of the Committee.
Each 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 each 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 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 August 31, 2018, including information on transfers between Levels 1 and 2, is included at the end of each applicable Fund's Schedule of Investments.
Foreign Currency. The Funds 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 Funds' 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 for certain Funds 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 Funds are 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. Certain distributions received by the Funds represent a return of capital or capital gain. The Funds determine the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. 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.
Expenses. 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, each 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. Each Fund files a U.S. federal tax return, in addition to state and local tax returns as required. Each 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 each 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 and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships, deferred trustees compensation, capital loss carryforwards, and losses deferred due to wash sales and excise tax regulations.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows for each Fund:
Tax cost | Gross unrealized appreciation | Gross unrealized depreciation | Net unrealized appreciation (depreciation) | |
Automotive Portfolio | $36,040,285 | $12,310,060 | $(748,948) | $11,561,112 |
Construction and Housing Portfolio | 183,318,337 | 99,411,736 | (7,285,337) | 92,126,399 |
Consumer Discretionary Portfolio | 331,460,452 | 142,841,360 | (10,413,087) | 132,428,273 |
Leisure Portfolio | 320,726,744 | 173,443,130 | (9,727,618) | 163,715,512 |
Multimedia Portfolio | 325,824,531 | 243,238,192 | (4,380,641) | 238,857,551 |
Retailing Portfolio | 1,939,519,887 | 1,488,283,862 | (34,666,125) | 1,453,617,737 |
Restricted Securities. The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of each applicable Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions, are noted in the table below.
Purchases ($) | Sales ($) | |
Automotive Portfolio | 4,275,204 | 17,450,815 |
Construction and Housing Portfolio | 117,709,123 | 195,455,414 |
Consumer Discretionary Portfolio | 92,536,353 | 67,781,176 |
Leisure Portfolio | 79,440,619 | 149,357,604 |
Multimedia Portfolio | 114,755,448 | 104,502,412 |
Retailing Portfolio | 971,148,197 | 297,894,784 |
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Funds with investment management related services for which the Funds pay a monthly management fee. The management fee is the sum of an individual fund fee rate and an annualized group fee rate. The individual fund fee rate is applied to each Fund's average net assets. 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, each Fund's annualized management fee rate expressed as a percentage of each Fund's average net assets was as follows:
Individual Rate | Group Rate | Total | |
Automotive Portfolio | .30% | .24% | .54% |
Construction and Housing Portfolio | .30% | .24% | .54% |
Consumer Discretionary Portfolio | .30% | .24% | .54% |
Leisure Portfolio | .30% | .24% | .54% |
Multimedia Portfolio | .30% | .24% | .54% |
Retailing Portfolio | .30% | .24% | .54% |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Funds' transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees were equivalent to the following annualized rates expressed as a percentage of average net assets:
Automotive Portfolio | .22% |
Construction and Housing Portfolio | .19% |
Consumer Discretionary Portfolio | .17% |
Leisure Portfolio | .16% |
Multimedia Portfolio | .20% |
Retailing Portfolio | .17% |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains each 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. For the period, the fees were equivalent to the following annualized rates:
% of Average Net Assets | |
Automotive Portfolio | .04 |
Construction and Housing Portfolio | .04 |
Consumer Discretionary Portfolio | .04 |
Leisure Portfolio | .04 |
Multimedia Portfolio | .04 |
Retailing Portfolio | .03 |
Brokerage Commissions. Certain Funds placed a portion of their 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. Ther commissions paid to these affiliated firms were as follows:
Amount | |
Automotive Portfolio | $228 |
Construction and Housing Portfolio | 2,547 |
Consumer Discretionary Portfolio | 931 |
Leisure Portfolio | 1,416 |
Multimedia Portfolio | 3,299 |
Retailing Portfolio | 7,721 |
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Funds, along with other registered investment companies having management contracts with Fidelity Management & Research Company (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. Each applicable 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 | |
Leisure Portfolio | Borrower | $13,567,000 | 1.94% | $731 |
Multimedia Portfolio | Borrower | $24,643,000 | 2.14% | $1,462 |
Interfund Trades. The Funds may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Redemptions In-Kind. During the period, 10,019,311 shares of Consumer Discretionary Portfolio held by an affiliated entity were redeemed in-kind for investments and cash with a value of $420,009,534. The net realized gain of $132,629,032 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. Consumer Discretionary Portfolio recognized no gain or loss for federal income tax purposes.
6. Committed Line of Credit.
Certain Funds participate 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 participating funds have agreed to pay commitment fees on their pro-rata portion of the line of credit, which are reflected in Miscellaneous expenses on the Statement of Operations, and are as follows:
Automotive Portfolio | $75 |
Construction and Housing Portfolio | 455 |
Consumer Discretionary Portfolio | 900 |
Leisure Portfolio | 734 |
Multimedia Portfolio | 678 |
Retailing Portfolio | 3,224 |
During the period, the Funds did not borrow on this line of credit.
7. Security Lending.
Certain Funds lend portfolio securities through a lending agent from time to time in order to earn additional income. On the settlement date of the loan, each applicable 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 Funds and any additional required collateral is delivered to the Funds on the next business day. The Funds or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Funds may apply collateral received from the borrower against the obligation. The Funds 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 each applicable 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 on each applicable Fund's 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 Certain Funds include an amount in addition to trade execution, which may be rebated back to the Funds to offset certain expenses. In addition, through arrangements with each applicable Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce each applicable Fund's expenses. All of the applicable expense reductions are noted in the table below.
Brokerage Service reduction | Custody expense reduction | |
Automotive Portfolio | $3,848 | $– |
Construction and Housing Portfolio | 26,873 | 21 |
Leisure Portfolio | 25,687 | – |
Multimedia Portfolio | 9,011 | – |
Retailing Portfolio | 55,628 | 583 |
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses as follows:
Amount | |
Automotive Portfolio | $276 |
Construction and Housing Portfolio | 1,608 |
Consumer Discretionary Portfolio | 3,282 |
Leisure Portfolio | 2,384 |
Multimedia Portfolio | 2,436 |
Retailing Portfolio | 8,867 |
9. Other.
The Funds' 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 Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote.
Shareholder Expense Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds 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 (March 1, 2018 to August 31, 2018).
Actual Expenses
The first line of the accompanying table for 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 fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 fund provides information about hypothetical account values and hypothetical expenses based on a fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's 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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 March 1, 2018 | Ending Account Value August 31, 2018 | Expenses Paid During Period-B March 1, 2018 to August 31, 2018 | |
Automotive Portfolio | .97% | |||
Actual | $1,000.00 | $972.30 | $4.82 | |
Hypothetical-C | $1,000.00 | $1,020.32 | $4.94 | |
Construction and Housing Portfolio | .80% | |||
Actual | $1,000.00 | $1,080.50 | $4.20 | |
Hypothetical-C | $1,000.00 | $1,021.17 | $4.08 | |
Consumer Discretionary Portfolio | .77% | |||
Actual | $1,000.00 | $1,111.40 | $4.10 | |
Hypothetical-C | $1,000.00 | $1,021.32 | $3.92 | |
Leisure Portfolio | .77% | |||
Actual | $1,000.00 | $1,015.50 | $3.91 | |
Hypothetical-C | $1,000.00 | $1,021.32 | $3.92 | |
Multimedia Portfolio | .82% | |||
Actual | $1,000.00 | $1,065.00 | $4.27 | |
Hypothetical-C | $1,000.00 | $1,021.07 | $4.18 | |
Retailing Portfolio | .75% | |||
Actual | $1,000.00 | $1,167.20 | $4.10 | |
Hypothetical-C | $1,000.00 | $1,021.42 | $3.82 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/ 365 (to reflect the one-half year period).
C 5% return per year before expenses
SELCON-SANN-1018
1.813637.113
Fidelity® Select Portfolios® Energy Portfolio Energy Service Portfolio Natural Gas Portfolio Natural Resources Portfolio Semi-Annual Report August 31, 2018 |
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Contents
Energy Portfolio | |
Energy Service Portfolio | |
Natural Gas Portfolio | |
Natural Resources Portfolio | |
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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.institutional.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.
Energy Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Chevron Corp. | 8.2 |
EOG Resources, Inc. | 6.8 |
Delek U.S. Holdings, Inc. | 5.0 |
Valero Energy Corp. | 4.9 |
Phillips 66 Co. | 4.2 |
Pioneer Natural Resources Co. | 4.0 |
Diamondback Energy, Inc. | 3.6 |
Anadarko Petroleum Corp. | 3.5 |
Occidental Petroleum Corp. | 3.5 |
Baker Hughes, a GE Co. Class A | 3.2 |
46.9 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Oil, Gas & Consumable Fuels | 87.9% | |
Energy Equipment & Services | 9.5% | |
Chemicals | 1.4% | |
Machinery | 0.5% | |
Gas Utilities | 0.2% | |
All Others* | 0.5% |
* Includes short-term investments and net other assets (liabilities).
Energy Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.6% | |||
Shares | Value | ||
Chemicals - 1.4% | |||
Commodity Chemicals - 1.4% | |||
LG Chemical Ltd. | 5,705 | $1,872,068 | |
LyondellBasell Industries NV Class A | 207,900 | 23,446,962 | |
25,319,030 | |||
Energy Equipment & Services - 9.5% | |||
Oil & Gas Drilling - 1.9% | |||
Nabors Industries Ltd. | 1,345,536 | 8,301,957 | |
Odfjell Drilling Ltd. | 1,143,380 | 5,099,171 | |
Precision Drilling Corp. (a) | 1,780,500 | 6,958,276 | |
Shelf Drilling Ltd. (a)(b) | 1,278,654 | 8,675,663 | |
Trinidad Drilling Ltd. (a) | 1,575,700 | 2,149,231 | |
Xtreme Drilling & Coil Services Corp. (a) | 1,801,400 | 2,719,355 | |
33,903,653 | |||
Oil & Gas Equipment & Services - 7.6% | |||
Baker Hughes, a GE Co. Class A | 1,709,800 | 56,372,106 | |
Dril-Quip, Inc. (a) | 40,153 | 2,114,055 | |
Halliburton Co. | 863,500 | 34,445,015 | |
Liberty Oilfield Services, Inc. Class A (c) | 389,600 | 7,651,744 | |
NCS Multistage Holdings, Inc. (a) | 225,078 | 3,662,019 | |
RigNet, Inc. (a) | 490,096 | 7,988,565 | |
Schlumberger Ltd. | 328,058 | 20,720,143 | |
Smart Sand, Inc. (a)(c) | 212,200 | 1,056,756 | |
134,010,403 | |||
TOTAL ENERGY EQUIPMENT & SERVICES | 167,914,056 | ||
Gas Utilities - 0.2% | |||
Gas Utilities - 0.2% | |||
Indraprastha Gas Ltd. | 801,497 | 3,278,005 | |
Machinery - 0.5% | |||
Industrial Machinery - 0.5% | |||
Cactus, Inc. (a) | 107,800 | 3,684,604 | |
Gardner Denver Holdings, Inc. (a) | 143,500 | 4,012,260 | |
ProPetro Holding Corp. (a) | 75,800 | 1,153,676 | |
8,850,540 | |||
Oil, Gas & Consumable Fuels - 87.9% | |||
Coal & Consumable Fuels - 0.3% | |||
Peabody Energy Corp. | 114,300 | 4,721,733 | |
Integrated Oil & Gas - 17.2% | |||
Cenovus Energy, Inc. | 17,894 | 165,914 | |
Chevron Corp. | 1,231,723 | 145,909,905 | |
Exxon Mobil Corp. | 702,748 | 56,339,307 | |
Occidental Petroleum Corp. | 781,200 | 62,394,444 | |
Suncor Energy, Inc. | 995,400 | 40,975,393 | |
305,784,963 | |||
Oil & Gas Exploration & Production - 47.6% | |||
Aker Bp ASA | 50,600 | 1,792,026 | |
Anadarko Petroleum Corp. | 973,815 | 62,713,686 | |
Berry Petroleum Corp. | 635,900 | 10,422,401 | |
Cabot Oil & Gas Corp. | 1,576,100 | 37,558,463 | |
California Resources Corp. (a) | 91,400 | 3,796,756 | |
Centennial Resource Development, Inc. Class A (a) | 717,239 | 13,821,196 | |
Concho Resources, Inc. (a) | 314,728 | 43,164,945 | |
ConocoPhillips Co. | 309,500 | 22,726,585 | |
Continental Resources, Inc. (a) | 789,500 | 52,067,525 | |
Denbury Resources, Inc. (a) | 1,225,100 | 6,823,807 | |
Devon Energy Corp. | 1,152,100 | 49,459,653 | |
Diamondback Energy, Inc. | 533,500 | 64,596,180 | |
Encana Corp. | 3,741,300 | 49,539,972 | |
Energen Corp. (a) | 59,200 | 4,590,960 | |
EOG Resources, Inc. | 1,016,964 | 120,235,654 | |
Extraction Oil & Gas, Inc. (a) | 726,612 | 8,392,369 | |
Gran Tierra Energy, Inc. (U.S.) (a) | 1,995,600 | 6,884,820 | |
Hess Corp. | 379,200 | 25,535,328 | |
Magnolia Oil & Gas Corp. (d) | 909,000 | 12,598,740 | |
Magnolia Oil & Gas Corp. Class A (a) | 593,200 | 8,221,752 | |
Noble Energy, Inc. | 731,600 | 21,743,152 | |
Parex Resources, Inc. (a) | 1,113,800 | 16,002,874 | |
Parsley Energy, Inc. Class A (a) | 1,278,700 | 35,509,499 | |
PDC Energy, Inc. (a) | 323,751 | 17,058,440 | |
Penn Virginia Corp. (a) | 20,100 | 1,787,694 | |
Pioneer Natural Resources Co. | 405,399 | 70,823,205 | |
Ring Energy, Inc.(a) | 350,822 | 4,139,700 | |
Viper Energy Partners LP | 922,959 | 35,912,335 | |
W&T Offshore, Inc. (a) | 217,400 | 1,471,798 | |
Whiting Petroleum Corp. (a) | 525,900 | 26,773,569 | |
WPX Energy, Inc. (a) | 425,400 | 8,112,378 | |
844,277,462 | |||
Oil & Gas Refining & Marketing - 19.0% | |||
Andeavor | 232,500 | 35,523,675 | |
Delek U.S. Holdings, Inc. | 1,613,031 | 87,910,190 | |
HollyFrontier Corp. | 218,400 | 16,275,168 | |
Marathon Petroleum Corp. | 336,500 | 27,690,585 | |
Phillips 66 Co. | 636,573 | 75,440,266 | |
Reliance Industries Ltd. | 461,832 | 8,075,962 | |
Valero Energy Corp. | 732,900 | 86,394,252 | |
337,310,098 | |||
Oil & Gas Storage & Transport - 3.8% | |||
Cheniere Energy, Inc. (a) | 361,900 | 24,221,967 | |
Enterprise Products Partners LP | 355,800 | 10,175,880 | |
Euronav NV | 873,941 | 7,603,287 | |
Golar LNG Ltd. | 370,500 | 9,469,980 | |
Noble Midstream Partners LP (a)(d) | 101,027 | 4,424,983 | |
Teekay LNG Partners LP | 75,500 | 1,189,125 | |
The Williams Companies, Inc. | 329,862 | 9,760,617 | |
66,845,839 | |||
TOTAL OIL, GAS & CONSUMABLE FUELS | 1,558,940,095 | ||
Semiconductors & Semiconductor Equipment - 0.1% | |||
Semiconductor Equipment - 0.1% | |||
SolarEdge Technologies, Inc. (a)(c) | 24,000 | 1,150,800 | |
TOTAL COMMON STOCKS | |||
(Cost $1,394,405,372) | 1,765,452,526 | ||
Money Market Funds - 0.6% | |||
Fidelity Cash Central Fund, 1.97% (e) | 4,974,142 | 4,975,137 | |
Fidelity Securities Lending Cash Central Fund 1.98% (e)(f) | 6,850,614 | 6,851,299 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $11,826,436) | 11,826,436 | ||
TOTAL INVESTMENT IN SECURITIES - 100.2% | |||
(Cost $1,406,231,808) | 1,777,278,962 | ||
NET OTHER ASSETS (LIABILITIES) - (0.2)% | (4,169,645) | ||
NET ASSETS - 100% | $1,773,109,317 |
Legend
(a) Non-income producing
(b) 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 $8,675,663 or 0.5% of net assets.
(c) Security or a portion of the security is on loan at period end.
(d) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $17,023,723 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 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 |
Magnolia Oil & Gas Corp. | 7/30/18 | $9,090,000 |
Noble Midstream Partners LP | 6/21/17 | $4,086,542 |
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 | $121,581 |
Fidelity Securities Lending Cash Central Fund | 69,699 |
Total | $191,280 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $40,309,609 |
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 | 87.8% |
Canada | 6.6% |
Netherlands | 1.3% |
Bermuda | 1.3% |
Curacao | 1.2% |
Others (Individually Less Than 1%) | 1.8% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Energy Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $6,685,491) — See accompanying schedule: Unaffiliated issuers (cost $1,394,405,372) | $1,765,452,526 | |
Fidelity Central Funds (cost $11,826,436) | 11,826,436 | |
Total Investment in Securities (cost $1,406,231,808) | $1,777,278,962 | |
Foreign currency held at value (cost $1,915,060) | 1,915,060 | |
Receivable for investments sold | 980,612 | |
Receivable for fund shares sold | 683,648 | |
Dividends receivable | 4,202,006 | |
Distributions receivable from Fidelity Central Funds | 31,113 | |
Prepaid expenses | 18,748 | |
Other receivables | 383,079 | |
Total assets | 1,785,493,228 | |
Liabilities | ||
Payable for fund shares redeemed | $3,152,957 | |
Accrued management fee | 803,688 | |
Other affiliated payables | 339,691 | |
Other payables and accrued expenses | 1,241,205 | |
Collateral on securities loaned | 6,846,370 | |
Total liabilities | 12,383,911 | |
Net Assets | $1,773,109,317 | |
Net Assets consist of: | ||
Paid in capital | $1,644,783,467 | |
Undistributed net investment income | 6,223,667 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (248,162,299) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 370,264,482 | |
Net Assets, for 37,344,123 shares outstanding | $1,773,109,317 | |
Net Asset Value, offering price and redemption price per share ($1,773,109,317 ÷ 37,344,123 shares) | $47.48 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $16,139,229 | |
Income from Fidelity Central Funds (including $69,699 from security lending) | 191,280 | |
Total income | 16,330,509 | |
Expenses | ||
Management fee | $4,947,387 | |
Transfer agent fees | 1,759,934 | |
Accounting and security lending fees | 282,601 | |
Custodian fees and expenses | 26,778 | |
Independent trustees' fees and expenses | 4,532 | |
Registration fees | 54,354 | |
Audit | 26,977 | |
Legal | 11,118 | |
Miscellaneous | 8,774 | |
Total expenses before reductions | 7,122,455 | |
Expense reductions | (155,879) | |
Total expenses after reductions | 6,966,576 | |
Net investment income (loss) | 9,363,933 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers (net of foreign taxes of $198,263) | 7,200,045 | |
Redemption in-kind with affiliated entities | 76,585,161 | |
Fidelity Central Funds | 327 | |
Foreign currency transactions | (63,007) | |
Total net realized gain (loss) | 83,722,526 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers (net of increase in deferred foreign taxes of $104,336) | 169,339,233 | |
Assets and liabilities in foreign currencies | (5,457) | |
Total change in net unrealized appreciation (depreciation) | 169,333,776 | |
Net gain (loss) | 253,056,302 | |
Net increase (decrease) in net assets resulting from operations | $262,420,235 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $9,363,933 | $35,506,693 |
Net realized gain (loss) | 83,722,526 | 16,320,584 |
Change in net unrealized appreciation (depreciation) | 169,333,776 | (167,310,997) |
Net increase (decrease) in net assets resulting from operations | 262,420,235 | (115,483,720) |
Distributions to shareholders from net investment income | – | (30,128,038) |
Distributions to shareholders from net realized gain | – | (5,042,802) |
Total distributions | – | (35,170,840) |
Share transactions | ||
Proceeds from sales of shares | 293,694,685 | 394,144,620 |
Reinvestment of distributions | – | 33,787,233 |
Cost of shares redeemed | (561,441,666) | (788,191,006) |
Net increase (decrease) in net assets resulting from share transactions | (267,746,981) | (360,259,153) |
Total increase (decrease) in net assets | (5,326,746) | (510,913,713) |
Net Assets | ||
Beginning of period | 1,778,436,063 | 2,289,349,776 |
End of period | $1,773,109,317 | $1,778,436,063 |
Other Information | ||
Undistributed net investment income end of period | $6,223,667 | $– |
Distributions in excess of net investment income end of period | $– | $(3,140,266) |
Shares | ||
Sold | 6,210,809 | 9,498,569 |
Issued in reinvestment of distributions | – | 813,084 |
Redeemed | (12,233,423) | (18,855,556) |
Net increase (decrease) | (6,022,614) | (8,543,903) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Energy Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $41.01 | $44.10 | $32.63 | $45.64 | $56.25 | $54.81 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .24 | .75C | .18 | .42 | .46 | .44 |
Net realized and unrealized gain (loss) | 6.23 | (3.06) | 11.58 | (12.98) | (6.37) | 7.86 |
Total from investment operations | 6.47 | (2.31) | 11.76 | (12.56) | (5.91) | 8.30 |
Distributions from net investment income | – | (.68) | (.24) | (.39) | (.46) | (.46) |
Distributions from net realized gain | – | (.10) | (.05) | (.07) | (4.23) | (6.40) |
Total distributions | – | (.78) | (.29) | (.45)D | (4.70)E | (6.86) |
Redemption fees added to paid in capitalB | – | – | –F | –F | –F | –F |
Net asset value, end of period | $47.48 | $41.01 | $44.10 | $32.63 | $45.64 | $56.25 |
Total ReturnG,H | 15.78% | (5.27)% | 36.05% | (27.61)% | (11.25)% | 15.43% |
Ratios to Average Net AssetsI,J | ||||||
Expenses before reductions | .78%K | .79% | .79% | .80% | .79% | .80% |
Expenses net of fee waivers, if any | .78%K | .79% | .79% | .80% | .79% | .80% |
Expenses net of all reductions | .76%K | .78% | .78% | .79% | .79% | .80% |
Net investment income (loss) | 1.02%K | 1.82%C | .44% | 1.03% | .85% | .76% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $1,773,109 | $1,778,436 | $2,289,350 | $1,928,897 | $2,179,828 | $1,995,808 |
Portfolio turnover rateL | 75%K,M | 59% | 93%M | 79% | 73%M | 98% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.48 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .66%.
D Total distributions of $.45 per share is comprised of distributions from net investment income of $.387 and distributions from net realized gain of $.066 per share.
E Total distributions of $4.70 per share is comprised of distributions from net investment income of $.463 and distributions from net realized gain of $4.233 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
J Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
K Annualized
L Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
M Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Energy Service Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Schlumberger Ltd. | 21.2 |
Halliburton Co. | 12.0 |
Baker Hughes, a GE Co. Class A | 5.3 |
Oceaneering International, Inc. | 4.7 |
Trinidad Drilling Ltd. | 4.6 |
Shelf Drilling Ltd. | 4.5 |
RigNet, Inc. | 3.5 |
C&J Energy Services, Inc. | 3.2 |
NCS Multistage Holdings, Inc. | 3.1 |
Smart Sand, Inc. | 2.9 |
65.0 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Energy Equipment & Services | 96.1% | |
Oil, Gas & Consumable Fuels | 3.5% | |
Construction & Engineering | 0.4% |
Energy Service Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 100.0% | |||
Shares | Value | ||
Construction & Engineering - 0.4% | |||
Construction & Engineering - 0.4% | |||
Enterprise Group, Inc. (a)(b)(c) | 5,488,737 | $1,682,371 | |
Energy Equipment & Services - 96.1% | |||
Oil & Gas Drilling - 18.8% | |||
Borr Drilling Ltd. (a)(b) | 373,964 | 1,551,838 | |
Independence Contract Drilling, Inc. (a) | 865,429 | 3,781,925 | |
Nabors Industries Ltd. | 1,707,878 | 10,537,607 | |
Odfjell Drilling Ltd. (b) | 2,107,082 | 9,397,026 | |
Parker Drilling Co. (a)(b) | 213,223 | 840,099 | |
Patterson-UTI Energy, Inc. | 184,800 | 3,165,624 | |
Rowan Companies PLC (a) | 110,900 | 1,557,036 | |
Shelf Drilling Ltd. (a)(d) | 2,630,135 | 17,845,457 | |
Transocean Ltd. (United States) (a) | 74,600 | 903,406 | |
Trinidad Drilling Ltd. (a) | 13,493,100 | 18,404,382 | |
Xtreme Drilling & Coil Services Corp. (a)(c) | 4,212,131 | 6,358,543 | |
74,342,943 | |||
Oil & Gas Equipment & Services - 77.3% | |||
Archrock, Inc. | 353,100 | 4,466,715 | |
Baker Hughes, a GE Co. Class A | 633,446 | 20,884,715 | |
C&J Energy Services, Inc. (a) | 596,451 | 12,495,648 | |
CSI Compressco LP | 1,516,306 | 8,961,368 | |
Dril-Quip, Inc. (a) | 173,100 | 9,113,715 | |
Forum Energy Technologies, Inc. (a) | 786,900 | 9,403,455 | |
Frank's International NV (b) | 405,183 | 3,577,766 | |
Halliburton Co. | 1,185,334 | 47,282,973 | |
Helix Energy Solutions Group, Inc. (a) | 532,929 | 4,988,215 | |
McCoy Global, Inc. (a) | 1,045,150 | 1,017,119 | |
McDermott International, Inc. (a) | 285,999 | 5,531,221 | |
NCS Multistage Holdings, Inc. (a)(b) | 762,738 | 12,409,747 | |
Oceaneering International, Inc. | 662,425 | 18,726,755 | |
Ranger Energy Services, Inc. Class A | 760,001 | 6,346,008 | |
RigNet, Inc. (a)(b) | 838,942 | 13,674,755 | |
Schlumberger Ltd. | 1,324,011 | 83,624,535 | |
Smart Sand, Inc. (a)(b)(c) | 2,337,421 | 11,640,357 | |
Superior Drilling Products, Inc. (a)(c) | 2,409,569 | 4,698,660 | |
Superior Energy Services, Inc. (a) | 428,700 | 3,858,300 | |
TechnipFMC PLC | 340,862 | 10,440,603 | |
TETRA Technologies, Inc. (a) | 1,412,661 | 6,484,114 | |
TETRA Technologies, Inc. warrants 12/14/21 (a) | 300,100 | 371,794 | |
Weatherford International PLC (a)(b) | 2,220,666 | 5,374,012 | |
305,372,550 | |||
TOTAL ENERGY EQUIPMENT & SERVICES | 379,715,493 | ||
Oil, Gas & Consumable Fuels - 3.5% | |||
Oil & Gas Exploration & Production - 1.8% | |||
National Energy Services Reunited Corp. (a) | 661,490 | 7,276,390 | |
Oil & Gas Storage & Transport - 1.7% | |||
Golar LNG Ltd. | 72,833 | 1,861,611 | |
StealthGas, Inc. (a) | 1,352,670 | 4,815,505 | |
6,677,116 | |||
TOTAL OIL, GAS & CONSUMABLE FUELS | 13,953,506 | ||
TOTAL COMMON STOCKS | |||
(Cost $404,810,492) | 395,351,370 | ||
Money Market Funds - 6.0% | |||
Fidelity Securities Lending Cash Central Fund 1.98% (e)(f) | |||
(Cost $23,607,813) | 23,605,849 | 23,608,210 | |
TOTAL INVESTMENT IN SECURITIES - 106.0% | |||
(Cost $428,418,305) | 418,959,580 | ||
NET OTHER ASSETS (LIABILITIES) - (6.0)% | (23,721,966) | ||
NET ASSETS - 100% | $395,237,614 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Affiliated company
(d) 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 $17,845,457 or 4.5% of net assets.
(e) Investment made with cash collateral received from securities on loan.
(f) 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 are available on the SEC's website or upon request.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
Fund | Income earned |
Fidelity Cash Central Fund | $1,660 |
Fidelity Securities Lending Cash Central Fund | 128,699 |
Total | $130,359 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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 | Realized Gain (loss) | Change in Unrealized appreciation (depreciation) | Value, end of period |
Enterprise Group, Inc. | $1,669,745 | $-- | $28,077 | $-- | $(166,552) | $207,255 | $1,682,371 |
RigNet, Inc. | 12,615,390 | 2,688,745 | 3,989,000 | -- | 243,460 | 2,116,160 | -- |
Smart Sand, Inc. | 9,281,173 | 8,726,507 | 2,346,079 | -- | (671,979) | (3,349,265) | 11,640,357 |
Superior Drilling Products, Inc. | 3,662,545 | -- | -- | -- | -- | 1,036,115 | 4,698,660 |
Trinidad Drilling Ltd. | 15,876,309 | 4,676,931 | 1,351,007 | -- | (278,232) | (519,619) | -- |
Xtreme Drilling & Coil Services Corp. | 7,164,828 | 22,836 | -- | -- | -- | (829,121) | 6,358,543 |
Total | $50,269,990 | $16,115,019 | $7,714,163 | $-- | $(873,303) | $(1,338,475) | $24,379,931 |
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $395,351,370 | $394,979,576 | $371,794 | $-- |
Money Market Funds | 23,608,210 | 23,608,210 | -- | -- |
Total Investments in Securities: | $418,959,580 | $418,587,786 | $371,794 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $24,850,765 |
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 | 51.6% |
Curacao | 21.2% |
Canada | 6.8% |
Bermuda | 6.0% |
Norway | 4.5% |
United Kingdom | 3.0% |
British Virgin Islands | 1.8% |
Panama | 1.4% |
Ireland | 1.4% |
Marshall Islands | 1.2% |
Others (Individually Less Than 1%) | 1.1% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Energy Service Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $21,767,366) — See accompanying schedule: Unaffiliated issuers (cost $361,530,163) | $370,971,439 | |
Fidelity Central Funds (cost $23,607,813) | 23,608,210 | |
Other affiliated issuers (cost $43,280,329) | 24,379,931 | |
Total Investment in Securities (cost $428,418,305) | $418,959,580 | |
Receivable for investments sold | 1,385,959 | |
Receivable for fund shares sold | 102,851 | |
Dividends receivable | 61,089 | |
Distributions receivable from Fidelity Central Funds | 46,253 | |
Prepaid expenses | 4,349 | |
Other receivables | 296,309 | |
Total assets | 420,856,390 | |
Liabilities | ||
Payable to custodian bank | $134,824 | |
Payable for investments purchased | 784,015 | |
Payable for fund shares redeemed | 740,833 | |
Accrued management fee | 180,327 | |
Other affiliated payables | 88,588 | |
Other payables and accrued expenses | 81,707 | |
Collateral on securities loaned | 23,608,482 | |
Total liabilities | 25,618,776 | |
Net Assets | $395,237,614 | |
Net Assets consist of: | ||
Paid in capital | $530,082,119 | |
Distributions in excess of net investment income | (1,376,869) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (124,006,853) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (9,460,783) | |
Net Assets, for 8,902,771 shares outstanding | $395,237,614 | |
Net Asset Value, offering price and redemption price per share ($395,237,614 ÷ 8,902,771 shares) | $44.39 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $2,016,751 | |
Income from Fidelity Central Funds (including $128,699 from security lending) | 130,359 | |
Total income | 2,147,110 | |
Expenses | ||
Management fee | $1,154,048 | |
Transfer agent fees | 466,220 | |
Accounting and security lending fees | 86,308 | |
Custodian fees and expenses | 13,214 | |
Independent trustees' fees and expenses | 1,066 | |
Registration fees | 25,880 | |
Audit | 26,717 | |
Legal | 3,210 | |
Interest | 263 | |
Miscellaneous | 2,062 | |
Total expenses before reductions | 1,778,988 | |
Expense reductions | (156,824) | |
Total expenses after reductions | 1,622,164 | |
Net investment income (loss) | 524,946 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | (8,949,880) | |
Fidelity Central Funds | (871) | |
Other affiliated issuers | (873,303) | |
Foreign currency transactions | (2,103) | |
Total net realized gain (loss) | (9,826,157) | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 33,853,557 | |
Fidelity Central Funds | (122) | |
Other affiliated issuers | (1,338,475) | |
Assets and liabilities in foreign currencies | (1,167) | |
Total change in net unrealized appreciation (depreciation) | 32,513,793 | |
Net gain (loss) | 22,687,636 | |
Net increase (decrease) in net assets resulting from operations | $23,212,582 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $524,946 | $15,574,749 |
Net realized gain (loss) | (9,826,157) | (66,289,758) |
Change in net unrealized appreciation (depreciation) | 32,513,793 | (68,938,397) |
Net increase (decrease) in net assets resulting from operations | 23,212,582 | (119,653,406) |
Distributions to shareholders from net investment income | – | (16,191,879) |
Distributions to shareholders from net realized gain | – | (13,061,204) |
Total distributions | – | (29,253,083) |
Share transactions | ||
Proceeds from sales of shares | 55,150,628 | 170,298,959 |
Reinvestment of distributions | – | 27,683,185 |
Cost of shares redeemed | (96,180,196) | (370,145,317) |
Net increase (decrease) in net assets resulting from share transactions | (41,029,568) | (172,163,173) |
Redemption fees | – | 32,793 |
Total increase (decrease) in net assets | (17,816,986) | (321,036,869) |
Net Assets | ||
Beginning of period | 413,054,600 | 734,091,469 |
End of period | $395,237,614 | $413,054,600 |
Other Information | ||
Distributions in excess of net investment income end of period | $(1,376,869) | $(1,901,815) |
Shares | ||
Sold | 1,193,759 | 3,621,446 |
Issued in reinvestment of distributions | – | 644,244 |
Redeemed | (2,117,397) | (7,858,391) |
Net increase (decrease) | (923,638) | (3,592,701) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Energy Service Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $42.04 | $54.70 | $37.54 | $54.34 | $86.13 | $74.01 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .11 | 1.41C | .17 | .45 | .45 | .21 |
Net realized and unrealized gain (loss) | 2.24 | (10.86) | 17.22 | (16.85) | (23.10) | 12.09 |
Total from investment operations | 2.35 | (9.45) | 17.39 | (16.40) | (22.65) | 12.30 |
Distributions from net investment income | – | (1.77) | (.23) | (.40) | (.39) | (.18) |
Distributions from net realized gain | – | (1.43) | – | – | (8.75) | – |
Total distributions | – | (3.21)D | (.23) | (.40) | (9.14) | (.18) |
Redemption fees added to paid in capitalB | – | –E | –E | –E | –E | –E |
Net asset value, end of period | $44.39 | $42.04 | $54.70 | $37.54 | $54.34 | $86.13 |
Total ReturnF,G | 5.59% | (17.41)% | 46.36% | (30.30)% | (27.82)% | 16.62% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | .83%J | .84% | .85% | .85% | .79% | .80% |
Expenses net of fee waivers, if any | .83%J | .84% | .85% | .84% | .79% | .80% |
Expenses net of all reductions | .76%J | .82% | .84% | .81% | .79% | .80% |
Net investment income (loss) | .49%J | 3.04%C | .36% | .92% | .56% | .26% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $395,238 | $413,055 | $734,091 | $435,375 | $698,803 | $1,047,980 |
Portfolio turnover rateK | 83%J | 62% | 96% | 58% | 55% | 34% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $1.34 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .16%.
D Total distributions of $3.21 per share is comprised of distributions from net investment income of $1.774 and distributions from net realized gain of $1.431 per share.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
J Annualized
K 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.
Natural Gas Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
EOG Resources, Inc. | 8.0 |
Schlumberger Ltd. | 6.5 |
Anadarko Petroleum Corp. | 6.4 |
Occidental Petroleum Corp. | 5.5 |
Devon Energy Corp. | 5.0 |
Noble Energy, Inc. | 4.2 |
Enbridge, Inc. | 3.7 |
RigNet, Inc. | 3.4 |
Encana Corp. | 3.2 |
The Williams Companies, Inc. | 3.2 |
49.1 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Oil, Gas & Consumable Fuels | 70.1% | |
Energy Equipment & Services | 20.1% | |
Gas Utilities | 7.1% | |
Multi-Utilities | 2.8% | |
Water Utilities | 0.2% | |
All Others* | (0.3)% |
* Includes short-term investments and net other assets (liabilities).
Natural Gas Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 100.3% | |||
Shares | Value | ||
Energy Equipment & Services - 20.1% | |||
Oil & Gas Drilling - 3.7% | |||
Borr Drilling Ltd. (a) | 24,000 | $99,593 | |
Ensign Energy Services, Inc. | 3,200 | 16,405 | |
Nabors Industries Ltd. | 313,500 | 1,934,295 | |
Shelf Drilling Ltd. (a)(b) | 984,200 | 6,677,794 | |
Trinidad Drilling Ltd. (a) | 1,020,800 | 1,392,356 | |
10,120,443 | |||
Oil & Gas Equipment & Services - 16.4% | |||
Baker Hughes, a GE Co. Class A | 179,800 | 5,928,006 | |
C&J Energy Services, Inc. (a) | 57,500 | 1,204,625 | |
Dril-Quip, Inc. (a) | 8,700 | 458,055 | |
Forum Energy Technologies, Inc. (a) | 41,300 | 493,535 | |
Halliburton Co. | 103,800 | 4,140,582 | |
McDermott International, Inc. (a) | 23,866 | 461,568 | |
NCS Multistage Holdings, Inc. (a) | 81,664 | 1,328,673 | |
Oceaneering International, Inc. | 64,000 | 1,809,280 | |
Pason Systems, Inc. | 15,600 | 254,621 | |
Ranger Energy Services, Inc. Class A | 12,036 | 100,501 | |
RigNet, Inc. (a) | 559,934 | 9,126,924 | |
Schlumberger Ltd. | 275,132 | 17,377,337 | |
Smart Sand, Inc. (a)(c) | 79,952 | 398,161 | |
Superior Energy Services, Inc. (a) | 34,300 | 308,700 | |
TETRA Technologies, Inc. (a) | 1,000 | 4,590 | |
Weatherford International PLC (a)(c) | 265,800 | 643,236 | |
44,038,394 | |||
TOTAL ENERGY EQUIPMENT & SERVICES | 54,158,837 | ||
Gas Utilities - 7.1% | |||
Gas Utilities - 7.1% | |||
Atmos Energy Corp. | 44,978 | 4,148,321 | |
South Jersey Industries, Inc. | 175,900 | 5,836,362 | |
Southwest Gas Holdings, Inc. | 60,000 | 4,639,200 | |
Spire, Inc. | 13,600 | 1,013,880 | |
Valener, Inc. | 217,900 | 3,347,812 | |
18,985,575 | |||
Multi-Utilities - 2.8% | |||
Multi-Utilities - 2.8% | |||
CenterPoint Energy, Inc. | 126,700 | 3,520,993 | |
NiSource, Inc. | 150,100 | 4,063,207 | |
7,584,200 | |||
Oil, Gas & Consumable Fuels - 70.1% | |||
Integrated Oil & Gas - 5.5% | |||
Occidental Petroleum Corp. | 185,100 | 14,783,937 | |
Oil & Gas Exploration & Production - 47.0% | |||
Advantage Oil & Gas Ltd. (a) | 665,000 | 1,977,165 | |
Anadarko Petroleum Corp. | 266,920 | 17,189,648 | |
Berry Petroleum Corp. | 99,400 | 1,629,166 | |
Cabot Oil & Gas Corp. | 78,600 | 1,873,038 | |
Callon Petroleum Co. (a) | 24,300 | 274,590 | |
Carrizo Oil & Gas, Inc. (a) | 22,400 | 542,528 | |
Cimarex Energy Co. | 54,200 | 4,578,816 | |
Concho Resources, Inc. (a) | 33,400 | 4,580,810 | |
ConocoPhillips Co. | 107,100 | 7,864,353 | |
Crew Energy, Inc. (a) | 44,000 | 62,375 | |
Devon Energy Corp. | 314,387 | 13,496,634 | |
Encana Corp. | 651,000 | 8,620,138 | |
EOG Resources, Inc. | 181,400 | 21,446,922 | |
EQT Corp. | 71,123 | 3,628,695 | |
Gulfport Energy Corp. (a) | 157,300 | 1,849,848 | |
Hess Corp. | 15,000 | 1,010,100 | |
Lekoil Ltd. (a) | 5,613,100 | 1,286,228 | |
Magnolia Oil & Gas Corp. (d) | 120,000 | 1,663,200 | |
Magnolia Oil & Gas Corp. Class A (a) | 57,900 | 802,494 | |
Marathon Oil Corp. | 45,600 | 980,856 | |
National Energy Services Reunited Corp. (a) | 285,000 | 3,135,000 | |
Newfield Exploration Co. (a) | 50,700 | 1,383,096 | |
Noble Energy, Inc. | 384,600 | 11,430,312 | |
Parsley Energy, Inc. Class A (a) | 28,000 | 777,560 | |
PDC Energy, Inc. (a) | 150,700 | 7,940,383 | |
Pioneer Natural Resources Co. | 4,800 | 838,560 | |
Range Resources Corp. | 41,400 | 679,788 | |
Savannah Petroleum PLC (a) | 4,290,700 | 1,440,734 | |
Seven Generations Energy Ltd. (a) | 62,500 | 735,632 | |
Surge Energy, Inc. (c) | 759,200 | 1,332,236 | |
WPX Energy, Inc. (a) | 73,200 | 1,395,924 | |
126,446,829 | |||
Oil & Gas Storage & Transport - 17.6% | |||
Cheniere Energy, Inc. (a) | 12,400 | 829,932 | |
Enbridge, Inc. | 288,100 | 9,826,307 | |
Enbridge, Inc. | 4,300 | 146,931 | |
Enterprise Products Partners LP | 137,100 | 3,921,060 | |
Keyera Corp. | 53,500 | 1,474,222 | |
Kinder Morgan, Inc. | 464,400 | 8,219,880 | |
ONEOK, Inc. | 54,800 | 3,611,868 | |
Pembina Pipeline Corp. | 25,300 | 862,914 | |
Targa Resources Corp. | 53,900 | 2,968,273 | |
The Williams Companies, Inc. | 289,800 | 8,575,182 | |
TransCanada Corp. | 154,000 | 6,558,866 | |
TransCanada Corp. | 8,100 | 345,060 | |
47,340,495 | |||
TOTAL OIL, GAS & CONSUMABLE FUELS | 188,571,261 | ||
Water Utilities - 0.2% | |||
Water Utilities - 0.2% | |||
Select Energy Services, Inc. Class A (a) | 47,200 | 644,280 | |
TOTAL COMMON STOCKS | |||
(Cost $310,842,306) | 269,944,153 | ||
Money Market Funds - 0.8% | |||
Fidelity Securities Lending Cash Central Fund 1.98% (e)(f) | |||
(Cost $2,263,104) | 2,262,660 | 2,262,887 | |
TOTAL INVESTMENT IN SECURITIES - 101.1% | |||
(Cost $313,105,410) | 272,207,040 | ||
NET OTHER ASSETS (LIABILITIES) - (1.1)% | (3,042,454) | ||
NET ASSETS - 100% | $269,164,586 |
Legend
(a) Non-income producing
(b) 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 $6,677,794 or 2.5% of net assets.
(c) Security or a portion of the security is on loan at period end.
(d) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $1,663,200 or 0.6% of net assets.
(e) Investment made with cash collateral received from securities on loan.
(f) 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 are available on the SEC's website or upon request.
Additional information on each restricted holding is as follows:
Security | Acquisition Date | Acquisition Cost |
Magnolia Oil & Gas Corp. | 7/30/18 | $1,200,000 |
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 | $11,031 |
Fidelity Securities Lending Cash Central Fund | 18,926 |
Total | $29,957 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $3,000,310 |
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 | 74.0% |
Canada | 13.7% |
Curacao | 6.5% |
Norway | 2.5% |
British Virgin Islands | 1.2% |
Others (Individually Less Than 1%) | 2.1% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Natural Gas Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $2,094,859) — See accompanying schedule: Unaffiliated issuers (cost $310,842,306) | $269,944,153 | |
Fidelity Central Funds (cost $2,263,104) | 2,262,887 | |
Total Investment in Securities (cost $313,105,410) | $272,207,040 | |
Receivable for investments sold | 1,036,279 | |
Receivable for fund shares sold | 70,690 | |
Dividends receivable | 286,174 | |
Distributions receivable from Fidelity Central Funds | 6,276 | |
Prepaid expenses | 2,571 | |
Other receivables | 65,364 | |
Total assets | 273,674,394 | |
Liabilities | ||
Payable to custodian bank | $399,119 | |
Payable for investments purchased | 802,056 | |
Payable for fund shares redeemed | 791,518 | |
Accrued management fee | 123,170 | |
Other affiliated payables | 68,287 | |
Other payables and accrued expenses | 65,233 | |
Collateral on securities loaned | 2,260,425 | |
Total liabilities | 4,509,808 | |
Net Assets | $269,164,586 | |
Net Assets consist of: | ||
Paid in capital | $787,024,863 | |
Distributions in excess of net investment income | (3,476,475) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (473,485,119) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (40,898,683) | |
Net Assets, for 10,696,596 shares outstanding | $269,164,586 | |
Net Asset Value, offering price and redemption price per share ($269,164,586 ÷ 10,696,596 shares) | $25.16 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $2,275,197 | |
Income from Fidelity Central Funds (including $18,926 from security lending) | 29,957 | |
Total income | 2,305,154 | |
Expenses | ||
Management fee | $722,680 | |
Transfer agent fees | 348,602 | |
Accounting and security lending fees | 52,701 | |
Custodian fees and expenses | 13,148 | |
Independent trustees' fees and expenses | 647 | |
Registration fees | 19,892 | |
Audit | 18,487 | |
Legal | 1,868 | |
Miscellaneous | 5,584 | |
Total expenses before reductions | 1,183,609 | |
Expense reductions | (43,114) | |
Total expenses after reductions | 1,140,495 | |
Net investment income (loss) | 1,164,659 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | (29,229,894) | |
Fidelity Central Funds | (145) | |
Foreign currency transactions | (1,431) | |
Total net realized gain (loss) | (29,231,470) | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 68,290,409 | |
Fidelity Central Funds | 167 | |
Assets and liabilities in foreign currencies | 1,927 | |
Total change in net unrealized appreciation (depreciation) | 68,292,503 | |
Net gain (loss) | 39,061,033 | |
Net increase (decrease) in net assets resulting from operations | $40,225,692 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $1,164,659 | $7,875,785 |
Net realized gain (loss) | (29,231,470) | (56,974,170) |
Change in net unrealized appreciation (depreciation) | 68,292,503 | (18,859,992) |
Net increase (decrease) in net assets resulting from operations | 40,225,692 | (67,958,377) |
Distributions to shareholders from net investment income | – | (8,092,750) |
Distributions to shareholders from net realized gain | (1,257,826) | (3,721,773) |
Total distributions | (1,257,826) | (11,814,523) |
Share transactions | ||
Proceeds from sales of shares | 44,040,280 | 91,904,830 |
Reinvestment of distributions | 1,185,845 | 11,138,646 |
Cost of shares redeemed | (53,397,612) | (264,791,683) |
Net increase (decrease) in net assets resulting from share transactions | (8,171,487) | (161,748,207) |
Redemption fees | – | 10,206 |
Total increase (decrease) in net assets | 30,796,379 | (241,510,901) |
Net Assets | ||
Beginning of period | 238,368,207 | 479,879,108 |
End of period | $269,164,586 | $238,368,207 |
Other Information | ||
Distributions in excess of net investment income end of period | $(3,476,475) | $(4,641,134) |
Shares | ||
Sold | 1,792,259 | 3,833,010 |
Issued in reinvestment of distributions | 54,372 | 487,783 |
Redeemed | (2,183,388) | (10,575,399) |
Net increase (decrease) | (336,757) | (6,254,606) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Natural Gas Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $21.60 | $27.76 | $17.83 | $32.05 | $39.16 | $32.86 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .13 | .61C | .13 | .33 | .34 | .35 |
Net realized and unrealized gain (loss) | 3.55 | (5.83) | 9.98 | (14.16) | (7.03) | 6.61 |
Total from investment operations | 3.68 | (5.22) | 10.11 | (13.83) | (6.69) | 6.96 |
Distributions from net investment income | – | (.65) | (.15) | (.39) | (.38) | (.33) |
Distributions from net realized gain | (.12) | (.29) | (.03) | – | (.04) | (.32) |
Total distributions | (.12) | (.94) | (.18) | (.39) | (.42) | (.66)D |
Redemption fees added to paid in capitalB | – | –E | –E | –E | –E | –E |
Net asset value, end of period | $25.16 | $21.60 | $27.76 | $17.83 | $32.05 | $39.16 |
Total ReturnF,G | 17.11% | (18.97)% | 56.75% | (43.29)% | (17.15)% | 21.28% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | .88%J | .89% | .87% | .89% | .82% | .84% |
Expenses net of fee waivers, if any | .88%J | .89% | .87% | .88% | .82% | .84% |
Expenses net of all reductions | .85%J | .87% | .87% | .88% | .82% | .84% |
Net investment income (loss) | 1.03%J | 2.52%C | .50% | 1.24% | .84% | .98% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $269,165 | $238,368 | $479,879 | $255,990 | $530,285 | $840,514 |
Portfolio turnover rateK | 105%J | 69% | 76% | 62% | 147%L | 135% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.45 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .66%.
D Total distributions of $.66 per share is comprised of distributions from net investment income of $.332 and distributions from net realized gain of $.324 per share.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
J Annualized
K Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
L Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Natural Resources Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Chevron Corp. | 8.0 |
Suncor Energy, Inc. | 5.7 |
EOG Resources, Inc. | 5.1 |
Anadarko Petroleum Corp. | 4.2 |
Phillips 66 Co. | 3.9 |
The Williams Companies, Inc. | 3.7 |
Delek U.S. Holdings, Inc. | 3.5 |
Pioneer Natural Resources Co. | 3.4 |
Devon Energy Corp. | 3.3 |
Canadian Natural Resources Ltd. | 2.9 |
43.7 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Oil, Gas & Consumable Fuels | 73.0% | |
Energy Equipment & Services | 11.2% | |
Containers & Packaging | 5.5% | |
Metals & Mining | 5.5% | |
Chemicals | 1.9% | |
All Others* | 2.9% |
* Includes short-term investments and net other assets (liabilities).
Natural Resources Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 98.9% | |||
Shares | Value | ||
Chemicals - 1.9% | |||
Commodity Chemicals - 1.9% | |||
LyondellBasell Industries NV Class A | 178,700 | $20,153,786 | |
Construction Materials - 1.3% | |||
Construction Materials - 1.3% | |||
Eagle Materials, Inc. | 66,800 | 6,167,644 | |
Summit Materials, Inc. | 333,300 | 7,089,291 | |
13,256,935 | |||
Containers & Packaging - 5.5% | |||
Metal & Glass Containers - 1.3% | |||
Ball Corp. | 329,200 | 13,786,896 | |
Paper Packaging - 4.2% | |||
Avery Dennison Corp. | 115,700 | 12,169,326 | |
Graphic Packaging Holding Co. | 328,300 | 4,668,426 | |
Packaging Corp. of America | 125,300 | 13,772,976 | |
WestRock Co. | 234,000 | 12,888,720 | |
43,499,448 | |||
TOTAL CONTAINERS & PACKAGING | 57,286,344 | ||
Energy Equipment & Services - 11.2% | |||
Oil & Gas Drilling - 1.3% | |||
Nabors Industries Ltd. | 517,520 | 3,193,098 | |
Odfjell Drilling Ltd. | 590,700 | 2,634,365 | |
Shelf Drilling Ltd. (a)(b) | 759,800 | 5,155,240 | |
Trinidad Drilling Ltd. (a) | 856,400 | 1,168,116 | |
Xtreme Drilling & Coil Services Corp. (a) | 1,059,900 | 1,600,002 | |
13,750,821 | |||
Oil & Gas Equipment & Services - 9.9% | |||
Baker Hughes, a GE Co. Class A | 840,700 | 27,717,879 | |
Dril-Quip, Inc. (a) | 113,925 | 5,998,151 | |
Halliburton Co. | 738,300 | 29,450,787 | |
Liberty Oilfield Services, Inc. Class A | 19,500 | 382,980 | |
National Oilwell Varco, Inc. | 209,400 | 9,856,458 | |
NCS Multistage Holdings, Inc. (a) | 174,500 | 2,839,115 | |
Oceaneering International, Inc. | 187,200 | 5,292,144 | |
RigNet, Inc. (a) | 270,230 | 4,404,749 | |
Schlumberger Ltd. | 169,565 | 10,709,725 | |
Tenaris SA sponsored ADR | 202,000 | 6,775,080 | |
103,427,068 | |||
TOTAL ENERGY EQUIPMENT & SERVICES | 117,177,889 | ||
Machinery - 0.1% | |||
Industrial Machinery - 0.1% | |||
ProPetro Holding Corp. (a) | 108,200 | 1,646,804 | |
Metals & Mining - 5.5% | |||
Copper - 0.5% | |||
Freeport-McMoRan, Inc. | 344,400 | 4,838,820 | |
Gold - 5.0% | |||
Agnico Eagle Mines Ltd. (Canada) | 460,500 | 15,872,253 | |
Franco-Nevada Corp. | 387,300 | 24,757,522 | |
Randgold Resources Ltd. sponsored ADR | 186,673 | 12,187,880 | |
52,817,655 | |||
TOTAL METALS & MINING | 57,656,475 | ||
Oil, Gas & Consumable Fuels - 73.0% | |||
Coal & Consumable Fuels - 0.2% | |||
Pinnacle Renewable Holds, Inc. | 157,200 | 1,883,991 | |
Integrated Oil & Gas - 15.4% | |||
Cenovus Energy, Inc. | 1,968,900 | 18,255,701 | |
Chevron Corp. | 702,798 | 83,253,453 | |
Suncor Energy, Inc. | 1,461,000 | 60,141,701 | |
161,650,855 | |||
Oil & Gas Exploration & Production - 38.2% | |||
Anadarko Petroleum Corp. | 681,400 | 43,882,160 | |
Cabot Oil & Gas Corp. | 754,100 | 17,970,203 | |
Canadian Natural Resources Ltd. | 894,200 | 30,532,990 | |
Centennial Resource Development, Inc. Class A (a) | 377,100 | 7,266,717 | |
Cimarex Energy Co. | 130,900 | 11,058,432 | |
Continental Resources, Inc. (a) | 327,700 | 21,611,815 | |
Devon Energy Corp. | 812,600 | 34,884,918 | |
Diamondback Energy, Inc. | 176,600 | 21,382,728 | |
Encana Corp. | 2,007,200 | 26,578,097 | |
EOG Resources, Inc. | 451,300 | 53,357,199 | |
EQT Corp. | 315,000 | 16,071,300 | |
Extraction Oil & Gas, Inc. (a) | 607,232 | 7,013,530 | |
Magnolia Oil & Gas Corp. (c) | 1,000,000 | 13,860,000 | |
Magnolia Oil & Gas Corp. Class A (a) | 793,400 | 10,996,524 | |
Noble Energy, Inc. | 82,700 | 2,457,844 | |
Parsley Energy, Inc. Class A (a) | 630,900 | 17,520,093 | |
PDC Energy, Inc. (a) | 135,300 | 7,128,957 | |
Pioneer Natural Resources Co. | 205,700 | 35,935,790 | |
PrairieSky Royalty Ltd. | 231,238 | 4,252,653 | |
Viper Energy Partners LP | 414,600 | 16,132,086 | |
399,894,036 | |||
Oil & Gas Refining & Marketing - 10.0% | |||
Andeavor | 134,000 | 20,473,860 | |
Delek U.S. Holdings, Inc. | 667,004 | 36,351,718 | |
Phillips 66 Co. | 341,016 | 40,413,806 | |
Reliance Industries Ltd. | 447,286 | 7,821,599 | |
105,060,983 | |||
Oil & Gas Storage & Transport - 9.2% | |||
Cheniere Energy, Inc. (a) | 313,000 | 20,949,090 | |
Enterprise Products Partners LP | 708,200 | 20,254,520 | |
GasLog Partners LP | 93,200 | 2,264,760 | |
Golar LNG Ltd. | 185,400 | 4,738,824 | |
Noble Midstream Partners LP | 155,737 | 6,821,281 | |
Noble Midstream Partners LP (a)(c) | 43,718 | 1,914,848 | |
Teekay LNG Partners LP | 50,500 | 795,375 | |
The Williams Companies, Inc. | 1,316,600 | 38,958,194 | |
96,696,892 | |||
TOTAL OIL, GAS & CONSUMABLE FUELS | 765,186,757 | ||
Paper & Forest Products - 0.4% | |||
Forest Products - 0.4% | |||
Western Forest Products, Inc. | 2,625,200 | 4,586,556 | |
TOTAL COMMON STOCKS | |||
(Cost $915,122,117) | 1,036,951,546 | ||
Money Market Funds - 1.0% | |||
Fidelity Cash Central Fund, 1.97% (d) | |||
(Cost $10,163,411) | 10,161,379 | 10,163,411 | |
TOTAL INVESTMENT IN SECURITIES - 99.9% | |||
(Cost $925,285,528) | 1,047,114,957 | ||
NET OTHER ASSETS (LIABILITIES) - 0.1% | 884,326 | ||
NET ASSETS - 100% | $1,047,999,283 |
Legend
(a) Non-income producing
(b) 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 $5,155,240 or 0.5% of net assets.
(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 $15,774,848 or 1.5% 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 are available on the SEC's website or upon request.
Additional information on each restricted holding is as follows:
Security | Acquisition Date | Acquisition Cost |
Magnolia Oil & Gas Corp. | 7/30/18 | $10,000,000 |
Noble Midstream Partners LP | 6/21/17 | $1,768,393 |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
Fund | Income earned |
Fidelity Cash Central Fund | $97,253 |
Fidelity Securities Lending Cash Central Fund | 12,986 |
Total | $110,239 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $15,458,768 |
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 | 74.8% |
Canada | 17.9% |
Netherlands | 1.9% |
Bailiwick of Jersey | 1.2% |
Curacao | 1.0% |
Bermuda | 1.0% |
Others (Individually Less Than 1%) | 2.2% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Natural Resources Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $915,122,117) | $1,036,951,546 | |
Fidelity Central Funds (cost $10,163,411) | 10,163,411 | |
Total Investment in Securities (cost $925,285,528) | $1,047,114,957 | |
Cash | 5,745 | |
Receivable for fund shares sold | 1,427,194 | |
Dividends receivable | 1,785,272 | |
Distributions receivable from Fidelity Central Funds | 11,150 | |
Prepaid expenses | 9,843 | |
Other receivables | 162,433 | |
Total assets | 1,050,516,594 | |
Liabilities | ||
Payable for fund shares redeemed | $1,031,586 | |
Accrued management fee | 472,958 | |
Transfer agent fee payable | 191,383 | |
Other affiliated payables | 28,876 | |
Other payables and accrued expenses | 792,508 | |
Total liabilities | 2,517,311 | |
Net Assets | $1,047,999,283 | |
Net Assets consist of: | ||
Paid in capital | $1,066,338,397 | |
Undistributed net investment income | 3,577,667 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (143,043,928) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 121,127,147 | |
Net Assets, for 34,348,501 shares outstanding | $1,047,999,283 | |
Net Asset Value, offering price and redemption price per share ($1,047,999,283 ÷ 34,348,501 shares) | $30.51 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $9,179,080 | |
Income from Fidelity Central Funds (including $12,986 from security lending) | 110,239 | |
Total income | 9,289,319 | |
Expenses | ||
Management fee | $2,784,174 | |
Transfer agent fees | 1,106,350 | |
Accounting and security lending fees | 171,097 | |
Custodian fees and expenses | 13,396 | |
Independent trustees' fees and expenses | 2,485 | |
Registration fees | 30,203 | |
Audit | 26,022 | |
Legal | 5,433 | |
Miscellaneous | 17,424 | |
Total expenses before reductions | 4,156,584 | |
Expense reductions | (141,565) | |
Total expenses after reductions | 4,015,019 | |
Net investment income (loss) | 5,274,300 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 3,909,467 | |
Fidelity Central Funds | 2,107 | |
Foreign currency transactions | (8,690) | |
Total net realized gain (loss) | 3,902,884 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers (net of increase in deferred foreign taxes of $374,923) | 92,004,476 | |
Fidelity Central Funds | (356) | |
Assets and liabilities in foreign currencies | (105) | |
Total change in net unrealized appreciation (depreciation) | 92,004,015 | |
Net gain (loss) | 95,906,899 | |
Net increase (decrease) in net assets resulting from operations | $101,181,199 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $5,274,300 | $13,842,090 |
Net realized gain (loss) | 3,902,884 | 33,612,671 |
Change in net unrealized appreciation (depreciation) | 92,004,015 | (80,935,670) |
Net increase (decrease) in net assets resulting from operations | 101,181,199 | (33,480,909) |
Distributions to shareholders from net investment income | (439,816) | (12,904,948) |
Distributions to shareholders from net realized gain | (33,837) | (719,094) |
Total distributions | (473,653) | (13,624,042) |
Share transactions | ||
Proceeds from sales of shares | 164,774,631 | 293,810,856 |
Reinvestment of distributions | 458,734 | 13,165,643 |
Cost of shares redeemed | (128,675,104) | (261,241,461) |
Net increase (decrease) in net assets resulting from share transactions | 36,558,261 | 45,735,038 |
Redemption fees | – | 13,793 |
Total increase (decrease) in net assets | 137,265,807 | (1,356,120) |
Net Assets | ||
Beginning of period | 910,733,476 | 912,089,596 |
End of period | $1,047,999,283 | $910,733,476 |
Other Information | ||
Undistributed net investment income end of period | $3,577,667 | $– |
Distributions in excess of net investment income end of period | $– | $(1,256,817) |
Shares | ||
Sold | 5,473,091 | 10,604,222 |
Issued in reinvestment of distributions | 16,369 | 472,915 |
Redeemed | (4,245,361) | (9,288,677) |
Net increase (decrease) | 1,244,099 | 1,788,460 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Natural Resources Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $27.51 | $29.13 | $21.80 | $31.49 | $37.85 | $34.10 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .18 | .43C | .10 | .18 | .21 | .20 |
Net realized and unrealized gain (loss) | 2.83 | (1.64) | 7.42 | (9.69) | (4.55) | 4.52 |
Total from investment operations | 3.01 | (1.21) | 7.52 | (9.51) | (4.34) | 4.72 |
Distributions from net investment income | (.01) | (.39) | (.11) | (.18) | (.15) | (.10) |
Distributions from net realized gain | –D | (.02) | (.08) | – | (1.87) | (.88) |
Total distributions | (.01) | (.41) | (.19) | (.18) | (2.02) | (.97)E |
Redemption fees added to paid in capitalB,D | – | – | – | – | – | – |
Net asset value, end of period | $30.51 | $27.51 | $29.13 | $21.80 | $31.49 | $37.85 |
Total ReturnF,G | 10.96% | (4.16)% | 34.54% | (30.22)% | (11.45)% | 13.97% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | .81%J | .83% | .84% | .86% | .82% | .84% |
Expenses net of fee waivers, if any | .80%J | .83% | .84% | .86% | .82% | .84% |
Expenses net of all reductions | .78%J | .82% | .83% | .85% | .82% | .83% |
Net investment income (loss) | 1.18%J | 1.54%C | .35% | .66% | .55% | .54% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $1,047,999 | $910,733 | $912,090 | $462,869 | $761,078 | $949,394 |
Portfolio turnover rateK | 10%J | 78% | 84% | 78% | 87% | 99% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.31 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .41%.
D Amount represents less than $.005 per share.
E Total distributions of $.97 per share is comprised of distributions from net investment income of $.095 and distributions from net realized gain of $.877 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
J Annualized
K 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 (Unaudited)
For the period ended August 31, 2018
1. Organization.
Energy Portfolio, Energy Service Portfolio, Natural Gas Portfolio, and Natural Resources Portfolio (the Funds) are non-diversified funds of Fidelity Select Portfolios (the Trust). 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 Funds invest primarily in securities of companies whose principal business activities fall within specific industries. Each Fund is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds. The Natural Resources Portfolio may also invest in certain precious metals. Certain Funds 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 Funds invest 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 Funds' Schedules of Investments list each of the Fidelity Central Funds held as of period end, if any, as an investment of each Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, each 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 .005%.
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 are available on the SEC website or upon request.
3. Significant Accounting Policies.
Each Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Funds:
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 each Fund's investments to the Fair Value Committee (the Committee) established by each Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, each 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 each 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 each Fund's investments and ratifies the fair value determinations of the Committee.
Each 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 each 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 August 31, 2018, including information on transfers between Levels 1 and 2 is included at the end of each applicable Fund's Schedule of Investments.
Foreign Currency. The Funds 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 Funds' 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 for certain Funds 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 Funds are 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. Certain distributions received by the Funds represent a return of capital or capital gain. The Funds determine the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan) for Energy Portfolio, Energy Service Portfolio and Natural Resources Portfolio, certain independent Trustees have elected 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 of $157,659 for Energy Portfolio, $53,189 for Energy Service Portfolio and $61,803 for Natural Resources Portfolio are included in the accompanying Statement of Assets and Liabilities in other receivables and other payables and accrued expenses, respectively.
Expenses. 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, each 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. Each Fund files a U.S. federal tax return, in addition to state and local tax returns as required. Each 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 each Fund's understanding of the tax rules and rates that exist in the foreign markets 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 each applicable Fund's Statement of Assets & Liabilities.
Distributions are declared and recorded on the ex-dividend date. 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, certain foreign taxes, certain deemed distributions, passive foreign investment companies (PFIC), partnerships, deferred trustees compensation, capital loss carryforwards, expiring capital loss carryforwards, and losses deferred due to wash sales and excise tax regulations.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows for each Fund:
Tax cost | Gross unrealized appreciation | Gross unrealized depreciation | Net unrealized appreciation (depreciation) | |
Energy Portfolio | $1,409,704,987 | $417,247,681 | $(49,673,706) | $367,573,975 |
Energy Service Portfolio | 432,480,367 | 44,944,992 | (58,465,779) | (13,520,787) |
Natural Gas Portfolio | 316,545,862 | 16,354,527 | (60,693,349) | (44,338,822) |
Natural Resources Portfolio | 927,411,178 | 194,696,174 | (74,992,395) | 119,703,779 |
Capital loss carryforwards are only available to offset future capital gains of the Funds to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Funds are 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 prior fiscal period end and is subject to adjustment.
Fiscal year of expiration | |
2019 | |
Natural Gas Portfolio | $(215,752,708) |
No expiration | ||||
Short-term | Long-term | Total no expiration | Total capital loss carryforward | |
Energy Portfolio | $(217,837,105) | $(112,114,619) | $(329,951,724) | $(329,951,724) |
Energy Service Portfolio | (24,382,712) | (73,471,765) | (97,854,477) | (97,854,477) |
Natural Gas Portfolio | (62,916,685) | (165,266,498) | (228,183,183) | (443,935,891) |
Natural Resources Portfolio | (65,548,621) | (80,404,143) | (145,952,764) | (145,952,764) |
Restricted Securities. The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of each applicable Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions, are noted in the table below.
Purchases ($) | Sales ($) | |
Energy Portfolio | 684,370,852 | 707,021,682 |
Energy Service Portfolio | 175,870,331 | 214,875,533 |
Natural Gas Portfolio | 140,606,136 | 147,476,484 |
Natural Resources Portfolio | 84,900,337 | 49,445,413 |
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Funds with investment management related services for which the Funds pay a monthly management fee. The management fee is the sum of an individual fund fee rate and an annualized group fee rate. The individual fund fee rate is applied to each Fund's average net assets. 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, each Fund's annualized management fee rate expressed as a percentage of each Fund's average net assets was as follows:
Individual Rate | Group Rate | Total | |
Energy Portfolio | .30% | .24% | .54% |
Energy Service Portfolio | .30% | .24% | .54% |
Natural Gas Portfolio | .30% | .24% | .54% |
Natural Resources Portfolio | .30% | .24% | .54% |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Funds' transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees were equivalent to the following annualized rates expressed as a percentage of average net assets:
Energy Portfolio | .19% |
Energy Service Portfolio | .22% |
Natural Gas Portfolio | .26% |
Natural Resources Portfolio | .21% |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains each 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. For the period, the fees were equivalent to the following annualized rates:
% of Average Net Assets | |
Energy Portfolio | .03 |
Energy Service Portfolio | .04 |
Natural Gas Portfolio | .04 |
Natural Resources Portfolio | .03 |
Brokerage Commissions. Certain Funds placed a portion of their 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 as follows:
Amount | |
Energy Portfolio | $18,513 |
Energy Service Portfolio | 9,547 |
Natural Gas Portfolio | 3,611 |
Natural Resources Portfolio | 1,363 |
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Funds, along with other registered investment companies having management contracts with Fidelity Management & Research Company (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. Each applicable 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 | |
Energy Service Portfolio | Borrower | $2,834,500 | 1.67% | $263 |
Interfund Trades. The Funds may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Redemptions In-Kind. During the period, 5,345,534 shares of Energy Portfolio held by an affiliated entity were redeemed in-kind for investments and cash with a value of $239,961,028. The net realized gain of $76,585,161 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. Energy Portfolio recognized no gain or loss for federal income tax purposes.
6. Committed Line of Credit.
Certain Funds participate 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 participating funds have agreed to pay commitment fees on their pro-rata portion of the line of credit, which are reflected in Miscellaneous expenses on the Statement of Operations, and are as follows:
Energy Portfolio | $2,623 |
Energy Service Portfolio | 628 |
Natural Gas Portfolio | 369 |
Natural Resources Portfolio | 1,402 |
During the period, the Funds did not borrow on this line of credit.
7. Security Lending.
Certain Funds lend portfolio securities through a lending agent from time to time in order to earn additional income. On the settlement date of the loan, each applicable 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 Funds and any additional required collateral is delivered to the Funds on the next business day. The Funds or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Funds may apply collateral received from the borrower against the obligation. The Funds 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 each applicable 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 on each applicable Fund's 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 Certain Funds include an amount in addition to trade execution, which may be rebated back to the Funds to offset certain expenses. In addition, through arrangements with each applicable Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce each applicable Fund's expenses. All of the applicable expense reductions are noted in the table below.
Brokerage Service reduction | Custody expense reduction | |
Energy Portfolio | $147,202 | $– |
Energy Service Portfolio | 154,950 | – |
Natural Gas Portfolio | 41,776 | – |
Natural Resources Portfolio | 137,163 | 88 |
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses as follows:
Amount | |
Energy Portfolio | $8,677 |
Energy Service Portfolio | 1,874 |
Natural Gas Portfolio | 1,338 |
Natural Resources Portfolio | 4,314 |
9. Other.
The Funds' 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 Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote.
At the end of the period, the following mutual funds managed by the investment adviser or its affiliates were the owners of record of 10% or more of the total outstanding shares of the following Funds.
Strategic Advisers Value Fund | |
Energy Portfolio | 10% |
Shareholder Expense Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds 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 (March 1, 2018 to August 31, 2018).
Actual Expenses
The first line of the accompanying table 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 under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's 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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 March 1, 2018 | Ending Account Value August 31, 2018 | Expenses Paid During Period-B March 1, 2018 to August 31, 2018 | |
Energy Portfolio | .78% | |||
Actual | $1,000.00 | $1,157.80 | $4.24 | |
Hypothetical-C | $1,000.00 | $1,021.27 | $3.97 | |
Energy Service Portfolio | .83% | |||
Actual | $1,000.00 | $1,055.90 | $4.30 | |
Hypothetical-C | $1,000.00 | $1,021.02 | $4.23 | |
Natural Gas Portfolio | .88% | |||
Actual | $1,000.00 | $1,171.10 | $4.82 | |
Hypothetical-C | $1,000.00 | $1,020.77 | $4.48 | |
Natural Resources Portfolio | .80% | |||
Actual | $1,000.00 | $1,109.60 | $4.25 | |
Hypothetical-C | $1,000.00 | $1,021.17 | $4.08 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/ 365 (to reflect the one-half year period).
C 5% return per year before expenses
SELNR-SANN-1018
1.813654.113
Fidelity® Select Portfolios® Biotechnology Portfolio Health Care Portfolio Health Care Services Portfolio Medical Technology and Devices Portfolio Pharmaceuticals Portfolio Semi-Annual Report August 31, 2018 |
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Contents
Biotechnology Portfolio | |
Health Care Portfolio | |
Health Care Services Portfolio | |
Medical Technology and Devices Portfolio | |
Pharmaceuticals Portfolio | |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-800-544-8544 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. © 2018 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Funds. This report is not authorized for distribution to prospective investors in the Funds unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.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.
Biotechnology Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Amgen, Inc. | 7.5 |
Biogen, Inc. | 4.9 |
Gilead Sciences, Inc. | 4.3 |
Celgene Corp. | 3.7 |
Alexion Pharmaceuticals, Inc. | 3.1 |
Neurocrine Biosciences, Inc. | 2.6 |
Vertex Pharmaceuticals, Inc. | 2.6 |
Regeneron Pharmaceuticals, Inc. | 2.5 |
Sarepta Therapeutics, Inc. | 2.2 |
Alnylam Pharmaceuticals, Inc. | 2.0 |
35.4 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Biotechnology | 88.9% | |
Pharmaceuticals | 8.2% | |
Health Care Equipment & Supplies | 0.7% | |
Health Care Providers & Services | 0.5% | |
Life Sciences Tools & Services | 0.5% | |
All Others* | 1.2% |
* Includes short-term investments and net other assets (liabilities).
Biotechnology Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.7% | |||
Shares | Value | ||
Biotechnology - 87.5% | |||
Biotechnology - 87.5% | |||
AbbVie, Inc. | 13,285 | $1,275,094 | |
Abeona Therapeutics, Inc. (a) | 1,094,773 | 16,859,504 | |
AC Immune SA (a) | 1,020,732 | 9,482,600 | |
ACADIA Pharmaceuticals, Inc. (a) | 2,882,880 | 40,994,554 | |
Acceleron Pharma, Inc. (a) | 2,061,980 | 111,388,160 | |
Acorda Therapeutics, Inc. (a) | 1,828,214 | 52,652,563 | |
Adamas Pharmaceuticals, Inc. (a)(b) | 416,469 | 9,591,281 | |
Adaptimmune Therapeutics PLC sponsored ADR (a)(b) | 724,842 | 8,350,180 | |
Aduro Biotech, Inc. (a) | 2,384,964 | 17,648,734 | |
Adverum Biotechnologies, Inc. (a)(b) | 807,715 | 6,138,634 | |
Aerpio Pharmaceuticals, Inc. (a) | 848,673 | 3,029,763 | |
Agenus, Inc. (a)(b) | 627,118 | 1,385,931 | |
Agios Pharmaceuticals, Inc. (a) | 422,733 | 34,123,008 | |
Aimmune Therapeutics, Inc. (a) | 1,121,571 | 31,303,047 | |
Akebia Therapeutics, Inc. (a) | 674,878 | 5,540,748 | |
Albireo Pharma, Inc. (a) | 481,000 | 16,632,980 | |
Alder Biopharmaceuticals, Inc. (a) | 1,139,495 | 20,624,860 | |
Aldeyra Therapeutics, Inc. (a) | 962,952 | 8,136,944 | |
Alexion Pharmaceuticals, Inc. (a) | 2,313,314 | 282,779,503 | |
Alkermes PLC (a) | 1,577,474 | 70,733,934 | |
Allena Pharmaceuticals, Inc. (a)(c) | 42,340 | 461,506 | |
Allena Pharmaceuticals, Inc. (c)(d) | 1,447,443 | 15,777,129 | |
Alnylam Pharmaceuticals, Inc. (a) | 1,485,678 | 182,248,120 | |
AMAG Pharmaceuticals, Inc. (a) | 364,977 | 8,905,439 | |
Amarin Corp. PLC ADR (a) | 745,631 | 2,356,194 | |
Amgen, Inc. | 3,398,082 | 678,970,762 | |
Amicus Therapeutics, Inc. (a) | 3,953,862 | 53,298,060 | |
AnaptysBio, Inc. (a) | 448,116 | 39,721,002 | |
Apellis Pharmaceuticals, Inc. (a) | 618,134 | 11,967,074 | |
Arena Pharmaceuticals, Inc. (a) | 1,188,073 | 46,144,755 | |
Argenx SE ADR (a) | 814,892 | 76,461,316 | |
Array BioPharma, Inc. (a) | 8,012,649 | 124,756,945 | |
Arrowhead Pharmaceuticals, Inc. (a)(b) | 1,106,432 | 16,330,936 | |
Arsanis, Inc. (a) | 93,374 | 213,826 | |
Ascendis Pharma A/S sponsored ADR (a) | 511,767 | 36,325,222 | |
Atara Biotherapeutics, Inc. (a)(b) | 1,515,643 | 62,065,581 | |
aTyr Pharma, Inc. (a)(b) | 970,388 | 700,523 | |
Audentes Therapeutics, Inc. (a) | 702,014 | 25,553,310 | |
AVROBIO, Inc. (b) | 436,704 | 15,000,782 | |
Bellicum Pharmaceuticals, Inc. (a)(b) | 1,294,778 | 9,361,245 | |
BioCryst Pharmaceuticals, Inc. (a) | 3,287,837 | 23,540,913 | |
Biogen, Inc. (a) | 1,257,244 | 444,423,182 | |
Biohaven Pharmaceutical Holding Co. Ltd. (a) | 979,890 | 37,098,635 | |
BioMarin Pharmaceutical, Inc. (a) | 1,187,671 | 118,743,347 | |
BioTime, Inc. warrants 10/1/18 (a) | 30,113 | 804 | |
bluebird bio, Inc. (a) | 437,819 | 73,684,938 | |
Blueprint Medicines Corp. (a) | 1,709,411 | 131,060,541 | |
Cara Therapeutics, Inc. (a)(b) | 515,775 | 10,403,182 | |
Celgene Corp. (a) | 3,584,318 | 338,538,835 | |
Chimerix, Inc. (a) | 1,871,867 | 7,468,749 | |
Cidara Therapeutics, Inc. (a)(b) | 980,786 | 4,168,341 | |
Clovis Oncology, Inc. (a) | 1,086,770 | 38,852,028 | |
Coherus BioSciences, Inc. (a) | 609,487 | 12,281,163 | |
Constellation Pharmaceuticals, Inc. (a) | 344,500 | 3,586,245 | |
Corbus Pharmaceuticals Holdings, Inc. (a)(b)(c) | 3,247,467 | 18,997,682 | |
Corvus Pharmaceuticals, Inc. (a)(b)(c) | 1,742,709 | 19,100,091 | |
Crinetics Pharmaceuticals, Inc. (a)(b) | 937,500 | 28,115,625 | |
CRISPR Therapeutics AG (a)(b) | 123,236 | 6,983,784 | |
CTI BioPharma Corp. (a) | 1,035,400 | 1,946,552 | |
Cytokinetics, Inc. (a) | 921,449 | 7,279,447 | |
CytomX Therapeutics, Inc. (a) | 120,181 | 2,702,871 | |
CytomX Therapeutics, Inc. (a)(d) | 287,485 | 6,465,538 | |
Deciphera Pharmaceuticals, Inc. (a) | 791,662 | 29,283,577 | |
Denali Therapeutics, Inc. (a)(b) | 729,752 | 14,325,032 | |
Dicerna Pharmaceuticals, Inc. (a)(b) | 787,598 | 12,483,428 | |
Dynavax Technologies Corp. (a)(b) | 1,274,698 | 17,654,567 | |
Eagle Pharmaceuticals, Inc. (a) | 220,308 | 15,229,892 | |
Editas Medicine, Inc. (a) | 151,818 | 4,984,185 | |
Emergent BioSolutions, Inc. (a) | 354,310 | 21,967,220 | |
Enanta Pharmaceuticals, Inc. (a) | 264,467 | 24,047,984 | |
Epizyme, Inc. (a) | 2,866,777 | 33,827,969 | |
Esperion Therapeutics, Inc. (a)(b) | 616,884 | 30,529,589 | |
Evelo Biosciences, Inc. (b) | 120,400 | 1,621,788 | |
Exact Sciences Corp. (a) | 1,375,200 | 102,988,728 | |
Exelixis, Inc. (a) | 1,901,840 | 35,735,574 | |
Fate Therapeutics, Inc. (a) | 2,251,987 | 29,028,112 | |
FibroGen, Inc. (a) | 1,865,419 | 114,070,372 | |
Five Prime Therapeutics, Inc. (a) | 651,600 | 9,122,400 | |
Forty Seven, Inc. | 273,700 | 4,056,234 | |
Galapagos Genomics NV sponsored ADR (a) | 468,875 | 47,525,170 | |
Genmab A/S (a) | 113,422 | 19,621,289 | |
Genomic Health, Inc. (a) | 192,123 | 11,752,164 | |
GenSight Biologics SA (a)(b)(d) | 446,320 | 1,139,745 | |
Geron Corp. (a)(b) | 8,832,465 | 50,610,024 | |
Gilead Sciences, Inc. | 5,144,607 | 389,601,088 | |
Global Blood Therapeutics, Inc. (a) | 1,404,843 | 68,767,065 | |
GlycoMimetics, Inc. (a) | 168,850 | 2,485,472 | |
GTx, Inc. (a)(b) | 762,849 | 18,247,348 | |
Halozyme Therapeutics, Inc. (a) | 2,024,450 | 37,270,125 | |
Heron Therapeutics, Inc. (a) | 1,484,379 | 57,222,810 | |
Histogenics Corp. (a) | 1,092,486 | 3,190,059 | |
Homology Medicines, Inc. (a)(b) | 35,667 | 593,856 | |
Idera Pharmaceuticals, Inc. (a)(b) | 367,669 | 3,845,818 | |
Immune Design Corp. (a) | 507,057 | 1,926,817 | |
ImmunoGen, Inc. (a) | 5,221,673 | 53,208,848 | |
Immunomedics, Inc. (a)(b) | 5,265,483 | 140,904,325 | |
Insmed, Inc. (a) | 85,600 | 1,706,008 | |
Intellia Therapeutics, Inc. (a)(b) | 122,932 | 3,802,287 | |
Intercept Pharmaceuticals, Inc. (a)(b) | 805,525 | 90,057,695 | |
Intrexon Corp. (a)(b) | 188,053 | 2,892,255 | |
Ionis Pharmaceuticals, Inc. (a) | 2,524,877 | 115,361,630 | |
Iovance Biotherapeutics, Inc. (a) | 1,142,200 | 20,216,940 | |
Ironwood Pharmaceuticals, Inc. Class A (a) | 3,802,820 | 73,166,257 | |
Jounce Therapeutics, Inc. (a)(b) | 1,053,274 | 8,268,201 | |
Karyopharm Therapeutics, Inc. (a) | 1,134,043 | 23,871,605 | |
Keryx Biopharmaceuticals, Inc. (a)(b) | 207,834 | 708,714 | |
Kezar Life Sciences, Inc.(c) | 957,446 | 16,535,092 | |
Kiniksa Pharmaceuticals Ltd. | 151,555 | 3,340,272 | |
Krystal Biotech, Inc. (c) | 935,400 | 15,349,914 | |
Kura Oncology, Inc. (a)(c) | 2,380,817 | 48,806,749 | |
La Jolla Pharmaceutical Co. (a)(b) | 1,189,798 | 27,412,946 | |
Leap Therapeutics, Inc. (a)(c) | 840,724 | 6,196,136 | |
Lexicon Pharmaceuticals, Inc. (a)(b) | 1,978,704 | 22,893,605 | |
Ligand Pharmaceuticals, Inc. Class B (a) | 229,798 | 59,676,243 | |
Loxo Oncology, Inc. (a) | 846,934 | 143,114,907 | |
Macrogenics, Inc. (a) | 1,662,631 | 36,361,740 | |
Madrigal Pharmaceuticals, Inc. (a) | 34,241 | 8,190,790 | |
MannKind Corp. (a)(b) | 1,402,861 | 1,543,147 | |
MediciNova, Inc. (a)(b) | 452,302 | 5,504,515 | |
Minerva Neurosciences, Inc. (a)(c) | 2,809,214 | 29,215,826 | |
Miragen Therapeutics, Inc. (a)(c) | 2,888,656 | 17,938,554 | |
Mirati Therapeutics, Inc. (a) | 421,688 | 23,846,456 | |
Momenta Pharmaceuticals, Inc. (a) | 1,203,956 | 31,904,834 | |
Natera, Inc. (a) | 798,331 | 22,065,869 | |
Neurocrine Biosciences, Inc. (a) | 1,897,351 | 233,279,305 | |
Novavax, Inc. (a)(b) | 3,245,621 | 5,063,169 | |
Novelion Therapeutics, Inc. (a)(b) | 24,907 | 94,148 | |
Oragenics, Inc. (a) | 155,806 | 66,997 | |
Ovid Therapeutics, Inc. (a) | 780,257 | 5,204,314 | |
Pharming Group NV (a)(b) | 19,512,456 | 28,786,985 | |
Portola Pharmaceuticals, Inc. (a)(b) | 713,003 | 21,283,140 | |
Progenics Pharmaceuticals, Inc. (a) | 1,064,948 | 8,338,543 | |
Protagonist Therapeutics, Inc. (a) | 630,863 | 6,075,211 | |
Prothena Corp. PLC (a) | 769,935 | 11,718,411 | |
PTC Therapeutics, Inc. (a) | 2,114,419 | 88,255,849 | |
Puma Biotechnology, Inc. (a) | 768,523 | 33,776,586 | |
Ra Pharmaceuticals, Inc. (a) | 64,588 | 787,974 | |
Radius Health, Inc. (a)(b) | 1,037,528 | 21,341,951 | |
Regeneron Pharmaceuticals, Inc. (a) | 567,663 | 230,896,925 | |
REGENXBIO, Inc. (a) | 835,208 | 58,840,404 | |
Regulus Therapeutics, Inc. (a)(b) | 4,283,551 | 992,499 | |
Repligen Corp. (a) | 676,586 | 37,131,040 | |
Replimune Group, Inc. (a) | 165,300 | 3,188,637 | |
Retrophin, Inc. (a) | 768,645 | 24,358,360 | |
Rigel Pharmaceuticals, Inc. (a) | 1,187,439 | 4,049,167 | |
Rocket Pharmaceuticals, Inc. (a) | 655,538 | 15,634,581 | |
Rubius Therapeutics, Inc. (a) | 82,600 | 2,074,912 | |
Sage Therapeutics, Inc. (a) | 932,893 | 153,237,004 | |
Sangamo Therapeutics, Inc. (a) | 2,095,862 | 38,249,482 | |
Sarepta Therapeutics, Inc. (a) | 1,474,403 | 203,526,590 | |
Scholar Rock Holding Corp. (c) | 39,000 | 663,390 | |
Scholar Rock Holding Corp. (c) | 1,497,946 | 24,206,058 | |
Seattle Genetics, Inc. (a) | 995,690 | 76,429,164 | |
Selecta Biosciences, Inc. (a)(b) | 279,423 | 3,788,976 | |
Seres Therapeutics, Inc. (a)(c) | 1,028,440 | 9,029,703 | |
Seres Therapeutics, Inc. (a)(c)(d) | 1,292,035 | 11,344,067 | |
Sienna Biopharmaceuticals, Inc. (a)(b) | 213,431 | 3,555,760 | |
Solid Biosciences, Inc. (a)(b) | 296,439 | 12,649,052 | |
Spark Therapeutics, Inc. (a)(b) | 1,446,320 | 89,107,775 | |
Spectrum Pharmaceuticals, Inc. (a) | 2,407,471 | 51,832,851 | |
Stemline Therapeutics, Inc. (a)(c) | 1,553,548 | 26,565,671 | |
Surface Oncology, Inc. | 258,334 | 2,505,840 | |
Syndax Pharmaceuticals, Inc. (a) | 380,253 | 2,950,763 | |
Syros Pharmaceuticals, Inc. (a) | 617,861 | 7,593,512 | |
Syros Pharmaceuticals, Inc. (a)(d) | 303,621 | 3,731,502 | |
TESARO, Inc. (a)(b) | 625,507 | 20,297,702 | |
TG Therapeutics, Inc. (a)(b) | 2,723,437 | 34,587,650 | |
Tocagen, Inc. (a)(b) | 384,600 | 3,749,850 | |
Translate Bio, Inc. | 450,000 | 4,774,500 | |
Translate Bio, Inc. | 1,014,146 | 9,684,080 | |
Trevena, Inc. (a)(b) | 1,105,549 | 1,989,988 | |
Ultragenyx Pharmaceutical, Inc. (a) | 1,433,037 | 121,421,225 | |
uniQure B.V. (a) | 244,262 | 10,364,037 | |
United Therapeutics Corp. (a) | 111,625 | 13,728,759 | |
UNITY Biotechnology, Inc. (b) | 92,800 | 1,768,768 | |
Vanda Pharmaceuticals, Inc. (a) | 977,392 | 18,888,100 | |
Verastem, Inc. (a)(b) | 3,282,179 | 32,690,503 | |
Vertex Pharmaceuticals, Inc. (a) | 1,257,689 | 231,917,852 | |
Vital Therapies, Inc. (a)(b) | 477,891 | 3,847,023 | |
Voyager Therapeutics, Inc. (a) | 1,504,262 | 32,702,656 | |
Xencor, Inc. (a) | 1,548,843 | 64,726,149 | |
Zafgen, Inc. (a)(c) | 2,712,346 | 25,821,534 | |
Zealand Pharma A/S (a)(b) | 386,544 | 5,567,457 | |
7,960,286,204 | |||
Capital Markets - 0.0% | |||
Asset Management & Custody Banks - 0.0% | |||
Arix Bioscience PLC (a)(d) | 2,049,700 | 4,716,767 | |
Diversified Financial Services - 0.3% | |||
Other Diversified Financial Services - 0.3% | |||
Allakos, Inc. (a)(b) | 684,279 | 26,577,396 | |
Neon Therapeutics, Inc. (a) | 350,000 | 4,137,000 | |
30,714,396 | |||
Health Care Equipment & Supplies - 0.7% | |||
Health Care Equipment - 0.7% | |||
Novocure Ltd. (a) | 646,289 | 29,115,319 | |
Novocure Ltd. (a)(d) | 701,713 | 31,612,171 | |
Vermillion, Inc. (a) | 77,398 | 48,761 | |
60,776,251 | |||
Health Care Providers & Services - 0.5% | |||
Health Care Services - 0.5% | |||
G1 Therapeutics, Inc. (a) | 789,800 | 47,925,064 | |
OptiNose, Inc. | 162,115 | 2,410,650 | |
Precipio, Inc. (a)(e) | 7,883 | 3,152 | |
50,338,866 | |||
Life Sciences Tools & Services - 0.5% | |||
Life Sciences Tools & Services - 0.5% | |||
Morphosys AG (a) | 141,175 | 16,665,465 | |
Morphosys AG sponsored ADR | 894,027 | 26,436,378 | |
43,101,843 | |||
Personal Products - 0.0% | |||
Personal Products - 0.0% | |||
MYOS Corp. (a) | 33,334 | 44,001 | |
Pharmaceuticals - 8.2% | |||
Pharmaceuticals - 8.2% | |||
AcelRx Pharmaceuticals, Inc. (a)(b) | 226,844 | 703,216 | |
Aclaris Therapeutics, Inc. (a) | 652,601 | 10,389,408 | |
Adimab LLC (e)(f)(g) | 1,954,526 | 79,412,391 | |
Aerie Pharmaceuticals, Inc. (a) | 621,425 | 38,124,424 | |
Afferent Pharmaceuticals, Inc. rights 12/31/24 (a)(g) | 8,274,568 | 11,832,632 | |
Akcea Therapeutics, Inc. (a)(b) | 610,000 | 16,110,100 | |
Aradigm Corp. (a) | 148,009 | 199,812 | |
Aradigm Corp. (a)(b) | 11,945 | 16,126 | |
Assembly Biosciences, Inc. (a) | 187,700 | 7,508,000 | |
Axsome Therapeutics, Inc. (a)(b) | 453,652 | 1,565,099 | |
BioXcel Therapeutics, Inc. (a)(c) | 1,107,434 | 10,188,393 | |
Chiasma, Inc. (a)(c) | 1,553,299 | 3,650,253 | |
Chiasma, Inc. warrants 12/16/24 (a) | 382,683 | 168,606 | |
Clearside Biomedical, Inc. (a) | 192,629 | 1,311,803 | |
Corcept Therapeutics, Inc. (a)(b) | 353,395 | 5,307,993 | |
CymaBay Therapeutics, Inc. (a) | 678,300 | 9,245,229 | |
Dova Pharmaceuticals, Inc. (a)(b) | 1,231,972 | 31,353,687 | |
Endocyte, Inc. (a)(b) | 504,315 | 9,945,092 | |
GW Pharmaceuticals PLC ADR (a) | 25,801 | 3,787,071 | |
Horizon Pharma PLC (a) | 302,840 | 6,402,038 | |
Idorsia Ltd. (a) | 432,921 | 10,943,064 | |
Intra-Cellular Therapies, Inc. (a) | 603,348 | 13,237,455 | |
Jazz Pharmaceuticals PLC (a) | 4,513 | 771,362 | |
Kala Pharmaceuticals, Inc. (a) | 346,000 | 4,674,460 | |
Kolltan Pharmaceuticals, Inc. rights (a)(g) | 10,639,609 | 106 | |
Melinta Therapeutics, Inc. (a) | 2,120,764 | 9,914,572 | |
MyoKardia, Inc. (a) | 1,122,701 | 69,214,517 | |
Nektar Therapeutics (a) | 1,070,351 | 71,167,638 | |
NeurogesX, Inc. (a)(g) | 2,550,000 | 26 | |
ObsEva SA (a) | 1,516,805 | 19,794,305 | |
Ocular Therapeutix, Inc. (a)(b)(c) | 2,309,799 | 15,591,143 | |
Odonate Therapeutics, Inc. (a) | 632,400 | 12,135,756 | |
Reata Pharmaceuticals, Inc. (a) | 317,697 | 27,436,313 | |
Rhythm Pharmaceuticals, Inc. | 720,494 | 22,695,561 | |
RPI International Holdings LP (a)(e)(g) | 54,958 | 8,247,547 | |
Spero Therapeutics, Inc. (a)(b) | 708,500 | 8,083,985 | |
Stemcentrx, Inc. rights 12/31/21 (a)(g) | 876,163 | 1,603,378 | |
The Medicines Company (a) | 977,308 | 38,711,170 | |
TherapeuticsMD, Inc. (a)(b) | 1,116,467 | 7,234,706 | |
Theravance Biopharma, Inc. (a)(b) | 401,500 | 11,631,455 | |
Tricida, Inc. (b) | 1,193,689 | 36,801,432 | |
UroGen Pharma Ltd. (a)(b) | 541,003 | 26,146,675 | |
Verrica Pharmaceuticals, Inc. (a)(b) | 810,100 | 14,136,245 | |
WAVE Life Sciences (a)(b) | 684,212 | 36,468,500 | |
Xeris Pharmaceuticals, Inc. | 198,421 | 5,099,420 | |
Zogenix, Inc. (a) | 598,202 | 28,893,157 | |
747,855,321 | |||
TOTAL COMMON STOCKS | |||
(Cost $5,366,095,119) | 8,897,833,649 | ||
Preferred Stocks - 1.6% | |||
Convertible Preferred Stocks - 1.6% | |||
Biotechnology - 1.4% | |||
Biotechnology - 1.4% | |||
23andMe, Inc. Series E (a)(e)(g) | 1,505,457 | 26,119,679 | |
Axcella Health, Inc. Series C (a)(e)(g) | 1,642,272 | 21,218,154 | |
Immunocore Ltd. Series A (a)(e)(g) | 73,318 | 9,637,436 | |
Moderna Therapeutics, Inc.: | |||
Series D (a)(e)(g) | 2,074,940 | 20,873,896 | |
Series E (a)(e)(g) | 2,698,970 | 27,151,638 | |
Twist Bioscience Corp.: | |||
Series C (a)(e)(g) | 8,133,875 | 17,487,831 | |
Series D (a)(e)(g) | 1,976,343 | 4,249,137 | |
126,737,771 | |||
Health Care Technology - 0.2% | |||
Health Care Technology - 0.2% | |||
Codiak Biosciences, Inc.: | |||
Series A 8.00% (a)(e)(g) | 856,366 | 3,973,538 | |
Series B 8.00% (a)(e)(g) | 2,783,187 | 12,913,988 | |
16,887,526 | |||
Pharmaceuticals - 0.0% | |||
Pharmaceuticals - 0.0% | |||
Afferent Pharmaceuticals, Inc. Series C (a)(e)(g) | 8,274,568 | 83 | |
TOTAL CONVERTIBLE PREFERRED STOCKS | 143,625,380 | ||
Nonconvertible Preferred Stocks - 0.0% | |||
Biotechnology - 0.0% | |||
Biotechnology - 0.0% | |||
Yumanity Holdings LLC Class A (a)(e)(g) | 588,700 | 4,927,419 | |
TOTAL PREFERRED STOCKS | |||
(Cost $97,346,821) | 148,552,799 | ||
Money Market Funds - 5.2% | |||
Fidelity Cash Central Fund, 1.97% (h) | 51,145,521 | 51,155,750 | |
Fidelity Securities Lending Cash Central Fund 1.98% (h)(i) | 418,353,368 | 418,395,203 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $469,510,889) | 469,550,953 | ||
TOTAL INVESTMENT IN SECURITIES - 104.5% | |||
(Cost $5,932,952,829) | 9,515,937,401 | ||
NET OTHER ASSETS (LIABILITIES) - (4.5)% | (409,964,493) | ||
NET ASSETS - 100% | $9,105,972,908 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Affiliated company
(d) 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 $74,786,919 or 0.8% of net assets.
(e) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $236,215,891 or 2.6% of net assets.
(f) Investment is owned by a wholly-owned subsidiary (Subsidiary) that is treated as a corporation for U.S. tax purposes.
(g) Level 3 security
(h) 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 are available on the SEC's website or upon request.
(i) 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 | $16,299,991 |
Adimab LLC | 9/17/14 - 6/5/15 | $31,094,459 |
Afferent Pharmaceuticals, Inc. Series C | 7/1/15 | $0 |
Axcella Health, Inc. Series C | 1/30/15 | $16,554,102 |
Codiak Biosciences, Inc. Series A 8.00% | 11/12/15 | $856,366 |
Codiak Biosciences, Inc. Series B 8.00% | 11/12/15 | $8,349,561 |
Immunocore Ltd. Series A | 7/27/15 | $13,796,921 |
Moderna Therapeutics, Inc. Series D | 11/6/13 | $9,158,071 |
Moderna Therapeutics, Inc. Series E | 12/18/14 | $11,912,324 |
Precipio, Inc. | 2/3/12 | $2,828,200 |
RPI International Holdings LP | 5/21/15 | $6,479,548 |
Twist Bioscience Corp. Series C | 5/29/15 | $12,199,999 |
Twist Bioscience Corp. Series D | 1/8/16 | $4,240,639 |
Yumanity Holdings LLC Class A | 2/8/16 | $3,978,847 |
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 | $424,871 |
Fidelity Securities Lending Cash Central Fund | 5,921,552 |
Total | $6,346,423 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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 | Realized Gain (loss) | Change in Unrealized appreciation (depreciation) | Value, end of period |
Aldeyra Therapeutics, Inc. | $8,880,729 | $-- | $845,654 | $-- | $(62,346) | $164,215 | $-- |
Allena Pharmaceuticals, Inc. | 2,253,708 | -- | 3,897,354 | -- | (143,060) | 2,248,212 | 461,506 |
Allena Pharmaceuticals, Inc. | 9,364,232 | -- | -- | -- | -- | 6,412,897 | 15,777,129 |
Arena Pharmaceuticals, Inc. | 87,894,769 | 6,144,167 | 49,315,136 | -- | 13,812,084 | (12,391,128) | -- |
Atara Biotherapeutics, Inc. | 76,813,457 | -- | 19,145,042 | -- | 4,286,665 | 110,502 | -- |
Bellicum Pharmaceuticals, Inc. | 11,972,188 | -- | 3,256,749 | -- | (3,848,207) | 4,494,012 | -- |
BioXcel Therapeutics, Inc. | -- | 14,053,226 | 1,511,970 | -- | (359,482) | (1,993,381) | 10,188,393 |
Chiasma, Inc. | 2,407,613 | -- | -- | -- | -- | 1,242,640 | 3,650,253 |
Chiasma, Inc. warrants 12/16/24 | 80,670 | -- | -- | -- | -- | 87,936 | -- |
Cidara Therapeutics, Inc. | 8,125,666 | -- | 955,757 | -- | (2,092,081) | (909,488) | -- |
Corbus Pharmaceuticals Holdings, Inc. | 24,909,636 | -- | 625,807 | -- | (425,642) | (4,860,505) | 18,997,682 |
Corvus Pharmaceuticals, Inc. | 8,827,067 | 7,671,846 | 2,593,889 | -- | (1,406,917) | 6,601,984 | 19,100,091 |
Epizyme, Inc. | 70,991,549 | 3,961,340 | 21,856,139 | -- | (11,474,350) | (7,794,432) | -- |
Fate Therapeutics, Inc. | 31,591,720 | 174,169 | 5,949,939 | -- | 2,232,169 | 979,994 | -- |
Geron Corp. | 35,032,769 | -- | 24,069,470 | -- | (8,473,802) | 48,120,527 | -- |
Infinity Pharmaceuticals, Inc. | 5,251,731 | -- | 4,603,817 | -- | (3,357,697) | 2,709,783 | -- |
Karyopharm Therapeutics, Inc. | 42,678,077 | -- | 25,367,044 | -- | (16,621,410) | 23,181,982 | -- |
Kezar Life Sciences, Inc. | -- | 16,419,733 | -- | -- | -- | 115,359 | 16,535,092 |
Krystal Biotech, Inc. | 8,961,132 | -- | -- | -- | -- | 6,388,782 | 15,349,914 |
Kura Oncology, Inc. | 53,806,464 | -- | -- | -- | -- | (4,999,715) | 48,806,749 |
Leap Therapeutics, Inc. | -- | 6,310,377 | -- | -- | -- | (114,241) | 6,196,136 |
Macrogenics, Inc. | 61,866,847 | -- | 18,686,813 | -- | (3,889,891) | (2,928,403) | -- |
Melinta Therapeutics, Inc. | 9,723,126 | 17,291,165 | 12,128,336 | -- | (77,228,250) | 72,256,867 | -- |
Minerva Neurosciences, Inc. | 16,540,724 | -- | 2,531,546 | -- | (1,015,184) | 16,221,832 | 29,215,826 |
Miragen Therapeutics, Inc. | 16,032,041 | -- | -- | -- | -- | 1,906,513 | 17,938,554 |
NeurogesX, Inc. | 26 | -- | -- | -- | -- | -- | -- |
Ocular Therapeutix, Inc. | 12,522,707 | -- | 539,576 | -- | (1,293,363) | 4,901,375 | 15,591,143 |
Scholar Rock Holding Corp. | -- | 546,000 | -- | -- | -- | 117,390 | 663,390 |
Scholar Rock Holding Corp. | 15,394,824 | -- | -- | -- | -- | 8,811,234 | 24,206,058 |
Seres Therapeutics, Inc. | 9,770,180 | -- | -- | -- | -- | (740,477) | 9,029,703 |
Seres Therapeutics, Inc. | 12,274,333 | -- | -- | -- | -- | (930,266) | 11,344,067 |
Stemline Therapeutics, Inc. | 30,800,508 | -- | 4,165,369 | -- | 728,448 | (797,916) | 26,565,671 |
Vermillion, Inc. | 5,391,860 | -- | 2,545,230 | -- | (4,348,434) | 1,550,563 | -- |
Voyager Therapeutics, Inc. | 65,380,114 | -- | 15,430,058 | -- | 4,630,290 | (21,877,690) | -- |
Zafgen, Inc. | 21,319,040 | -- | -- | -- | -- | 4,502,494 | 25,821,534 |
Total | $766,859,507 | $72,572,023 | $220,020,695 | $-- | $(110,350,460) | $152,789,451 | $315,438,891 |
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $8,897,833,649 | $8,762,678,825 | $34,058,744 | $101,096,080 |
Preferred Stocks | 148,552,799 | -- | -- | 148,552,799 |
Money Market Funds | 469,550,953 | 469,550,953 | -- | -- |
Total Investments in Securities: | $9,515,937,401 | $9,232,229,778 | $34,058,744 | $249,648,879 |
The following is a reconciliation of Investments in Securities and Derivative Instruments for which Level 3 inputs were used in determining value:
Investments in Securities: | |
Common Stocks | |
Beginning Balance | $95,437,618 |
Total Realized Gain (Loss) | 5,403,067 |
Total Unrealized Gain (Loss) | 13,256,965 |
Cost of Purchases | 14,100 |
Proceeds of Sales | (13,015,670) |
Amortization/Accretion | -- |
Transfers in to Level 3 | -- |
Transfers out of Level 3 | -- |
Ending Balance | $101,096,080 |
The change in unrealized gain (loss) for the period attributable to Level 3 securities held at August 31, 2018 | $13,256,965 |
Preferred Stocks | |
Beginning Balance | $178,519,654 |
Total Realized Gain (Loss) | -- |
Total Unrealized Gain (Loss) | (11,053,017) |
Cost of Purchases | -- |
Proceeds of Sales | (18,913,838) |
Amortization/Accretion | -- |
Transfers in to Level 3 | -- |
Transfers out of Level 3 | -- |
Ending Balance | $148,552,799 |
The change in unrealized gain (loss) for the period attributable to Level 3 securities held at August 31, 2018 | $(3,416,530) |
The information used in the above reconciliations 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 reconciliations 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.
Biotechnology Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $411,213,242) — See accompanying schedule: Unaffiliated issuers (cost $5,123,568,876) | $8,730,947,557 | |
Fidelity Central Funds (cost $469,510,889) | 469,550,953 | |
Other affiliated issuers (cost $339,873,064) | 315,438,891 | |
Total Investment in Securities (cost $5,932,952,829) | $9,515,937,401 | |
Restricted cash | 1,076 | |
Foreign currency held at value (cost $4,073,479) | 4,073,479 | |
Receivable for investments sold | 28,027,259 | |
Receivable for fund shares sold | 3,627,860 | |
Dividends receivable | 4,706,965 | |
Distributions receivable from Fidelity Central Funds | 1,115,394 | |
Prepaid expenses | 93,047 | |
Other receivables | 915,080 | |
Total assets | 9,558,497,561 | |
Liabilities | ||
Payable to custodian bank | $20 | |
Payable for investments purchased | 15,455,448 | |
Payable for fund shares redeemed | 12,704,375 | |
Accrued management fee | 3,945,189 | |
Other affiliated payables | 1,289,569 | |
Other payables and accrued expenses | 876,557 | |
Collateral on securities loaned | 418,253,495 | |
Total liabilities | 452,524,653 | |
Net Assets | $9,105,972,908 | |
Net Assets consist of: | ||
Paid in capital | $5,151,087,792 | |
Accumulated net investment loss | (9,457,346) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 381,345,771 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 3,582,996,691 | |
Net Assets, for 370,611,129 shares outstanding | $9,105,972,908 | |
Net Asset Value, offering price and redemption price per share ($9,105,972,908 ÷ 370,611,129 shares) | $24.57 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $17,733,121 | |
Income from Fidelity Central Funds (including $5,921,552 from security lending) | 6,346,423 | |
Total income | 24,079,544 | |
Expenses | ||
Management fee | $23,657,513 | |
Transfer agent fees | 7,094,647 | |
Accounting and security lending fees | 685,474 | |
Custodian fees and expenses | 74,253 | |
Independent trustees' fees and expenses | 21,682 | |
Registration fees | 58,233 | |
Audit | 37,020 | |
Legal | 47,487 | |
Miscellaneous | 41,071 | |
Total expenses before reductions | 31,717,380 | |
Expense reductions | (280,257) | |
Total expenses after reductions | 31,437,123 | |
Net investment income (loss) | (7,357,579) | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 515,064,606 | |
Fidelity Central Funds | 15,616 | |
Other affiliated issuers | (110,350,460) | |
Foreign currency transactions | 13,913 | |
Total net realized gain (loss) | 404,743,675 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 231,146,457 | |
Fidelity Central Funds | (9,411) | |
Other affiliated issuers | 152,789,451 | |
Assets and liabilities in foreign currencies | 3,067 | |
Total change in net unrealized appreciation (depreciation) | 383,929,564 | |
Net gain (loss) | 788,673,239 | |
Net increase (decrease) in net assets resulting from operations | $781,315,660 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $(7,357,579) | $(22,746,925) |
Net realized gain (loss) | 404,743,675 | 639,341,344 |
Change in net unrealized appreciation (depreciation) | 383,929,564 | 801,191,224 |
Net increase (decrease) in net assets resulting from operations | 781,315,660 | 1,417,785,643 |
Distributions to shareholders from net realized gain | (332,662,902) | (123,724,434) |
Share transactions | ||
Proceeds from sales of shares | 341,734,065 | 1,080,604,327 |
Reinvestment of distributions | 313,680,323 | 117,018,605 |
Cost of shares redeemed | (938,861,126) | (3,124,598,001) |
Net increase (decrease) in net assets resulting from share transactions | (283,446,738) | (1,926,975,069) |
Total increase (decrease) in net assets | 165,206,020 | (632,913,860) |
Net Assets | ||
Beginning of period | 8,940,766,888 | 9,573,680,748 |
End of period | $9,105,972,908 | $8,940,766,888 |
Other Information | ||
Accumulated net investment loss end of period | $(9,457,346) | $(2,099,767) |
Shares(a) | ||
Sold | 14,805,067 | 49,832,930 |
Issued in reinvestment of distributions | 15,362,176 | 5,414,020 |
Redeemed | (40,861,283) | (145,064,750) |
Net increase (decrease) | (10,694,040) | (89,817,800) |
(a) Share activity prior to August 10, 2018 has been adjusted to reflect the impact of the 10 for 1 share split that occurred on that date.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Biotechnology Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share DataB | ||||||
Net asset value, beginning of period | $23.45 | $20.32 | $16.20 | $24.80 | $22.15 | $12.05 |
Income from Investment Operations | ||||||
Net investment income (loss)C | (.02) | (.05) | (.08) | (.10) | (.09) | (.05) |
Net realized and unrealized gain (loss) | 2.02 | 3.49 | 4.80 | (6.92) | 5.12 | 10.20 |
Total from investment operations | 2.00 | 3.44 | 4.72 | (7.02) | 5.03 | 10.15 |
Distributions from net realized gain | (.88) | (.31) | (.60) | (1.58) | (2.38) | (.05) |
Total distributions | (.88) | (.31) | (.60) | (1.58) | (2.38) | (.05) |
Redemption fees added to paid in capitalC | – | – | –D | –D | –D | –D |
Net asset value, end of period | $24.57 | $23.45 | $20.32 | $16.20 | $24.80 | $22.15 |
Total ReturnE,F | 9.30% | 17.04% | 29.67% | (30.35)% | 24.21% | 84.25% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .72%I | .74% | .75% | .73% | .74% | .76% |
Expenses net of fee waivers, if any | .72%I | .74% | .75% | .73% | .74% | .76% |
Expenses net of all reductions | .72%I | .73% | .74% | .73% | .74% | .75% |
Net investment income (loss) | (.17)%I | (.25)% | (.43)% | (.39)% | (.41)% | (.32)% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $9,105,973 | $8,940,767 | $9,573,681 | $9,723,599 | $13,277,052 | $11,033,313 |
Portfolio turnover rateJ | 36%I | 26% | 28% | 35% | 61% | 35% |
A For the year ended February 29.
B Per share amounts have been adjusted to reflect the impact of the 10 for 1 share split that occurred on August 10, 2018.
C Calculated based on average shares outstanding during the period.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
I Annualized
J 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.
Health Care Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
UnitedHealth Group, Inc. | 9.8 |
Becton, Dickinson & Co. | 7.4 |
Boston Scientific Corp. | 6.4 |
Humana, Inc. | 4.7 |
Amgen, Inc. | 3.8 |
HCA Holdings, Inc. | 3.3 |
AstraZeneca PLC (United Kingdom) | 3.2 |
Baxter International, Inc. | 2.7 |
Sarepta Therapeutics, Inc. | 2.4 |
Alexion Pharmaceuticals, Inc. | 2.3 |
46.0 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Health Care Equipment & Supplies | 29.4% | |
Health Care Providers & Services | 26.1% | |
Biotechnology | 24.4% | |
Pharmaceuticals | 15.2% | |
Health Care Technology | 1.5% | |
All Others* | 3.4% |
* Includes short-term investments and net other assets (liabilities).
Health Care Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.5% | |||
Shares | Value | ||
Biotechnology - 23.7% | |||
Biotechnology - 23.7% | |||
Abeona Therapeutics, Inc. (a)(b) | 1,700,000 | $26,180,000 | |
AC Immune SA (a)(b) | 1,026,149 | 9,532,924 | |
Acceleron Pharma, Inc. (a) | 621,000 | 33,546,420 | |
Acorda Therapeutics, Inc. (a) | 970,000 | 27,936,000 | |
Alexion Pharmaceuticals, Inc. (a) | 1,500,000 | 183,360,000 | |
Alnylam Pharmaceuticals, Inc. (a) | 550,100 | 67,480,767 | |
Amgen, Inc. | 1,500,000 | 299,715,000 | |
AnaptysBio, Inc. (a) | 457,562 | 40,558,296 | |
Argenx SE ADR (a) | 545,500 | 51,184,265 | |
Array BioPharma, Inc. (a) | 1,850,600 | 28,813,842 | |
Ascendis Pharma A/S sponsored ADR (a) | 660,000 | 46,846,800 | |
Atara Biotherapeutics, Inc. (a) | 1,080,000 | 44,226,000 | |
BeiGene Ltd. ADR (a) | 463,300 | 82,249,649 | |
Biogen, Inc. (a) | 130,000 | 45,953,700 | |
bluebird bio, Inc. (a) | 269,100 | 45,289,530 | |
Blueprint Medicines Corp. (a) | 784,900 | 60,178,283 | |
Cellectis SA sponsored ADR (a) | 693,764 | 20,445,225 | |
CytomX Therapeutics, Inc. (a) | 496,820 | 11,173,482 | |
FibroGen, Inc. (a) | 380,000 | 23,237,000 | |
GlycoMimetics, Inc. (a) | 1,120,000 | 16,486,400 | |
GTx, Inc. (a) | 363,544 | 8,695,972 | |
Insmed, Inc. (a)(b) | 2,600,000 | 51,818,000 | |
Intercept Pharmaceuticals, Inc. (a) | 367,200 | 41,052,960 | |
La Jolla Pharmaceutical Co. (a) | 500,000 | 11,520,000 | |
Momenta Pharmaceuticals, Inc. (a) | 83,507 | 2,212,936 | |
Neurocrine Biosciences, Inc. (a) | 1,040,000 | 127,868,000 | |
Sage Therapeutics, Inc. (a) | 17,709 | 2,908,880 | |
Sarepta Therapeutics, Inc. (a) | 1,384,414 | 191,104,509 | |
Scholar Rock Holding Corp. (b) | 35,443 | 602,885 | |
uniQure B.V. (a) | 530,000 | 22,487,900 | |
Vertex Pharmaceuticals, Inc. (a) | 880,000 | 162,272,000 | |
Viking Therapeutics, Inc. (a) | 318,816 | 4,166,925 | |
Xencor, Inc. (a) | 1,057,812 | 44,205,963 | |
Zai Lab Ltd. ADR (b) | 550,000 | 12,501,500 | |
1,847,812,013 | |||
Diversified Consumer Services - 0.2% | |||
Specialized Consumer Services - 0.2% | |||
Carriage Services, Inc. | 651,800 | 14,841,486 | |
Diversified Financial Services - 0.0% | |||
Other Diversified Financial Services - 0.0% | |||
Allakos, Inc. (a) | 33,077 | 1,284,711 | |
Health Care Equipment & Supplies - 29.3% | |||
Health Care Equipment - 28.1% | |||
Atricure, Inc. (a) | 1,500,000 | 51,825,000 | |
Baxter International, Inc. | 2,800,000 | 208,236,000 | |
Becton, Dickinson & Co. | 2,200,000 | 576,114,000 | |
Boston Scientific Corp. (a) | 14,000,000 | 497,840,000 | |
Danaher Corp. | 400,000 | 41,416,000 | |
DexCom, Inc. (a) | 400,000 | 57,752,000 | |
Genmark Diagnostics, Inc. (a) | 2,500,000 | 21,400,000 | |
Insulet Corp. (a) | 1,099,814 | 114,677,606 | |
Integra LifeSciences Holdings Corp. (a) | 1,700,000 | 101,099,000 | |
Intuitive Surgical, Inc. (a) | 322,000 | 180,320,000 | |
Penumbra, Inc. (a) | 528,000 | 73,312,800 | |
Stryker Corp. | 1,000,000 | 169,430,000 | |
Wright Medical Group NV (a) | 3,463,600 | 100,375,128 | |
2,193,797,534 | |||
Health Care Supplies - 1.2% | |||
Align Technology, Inc. (a) | 255,000 | 98,554,950 | |
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | 2,292,352,484 | ||
Health Care Providers & Services - 25.9% | |||
Health Care Distributors & Services - 2.4% | |||
Amplifon SpA | 900,000 | 19,368,275 | |
EBOS Group Ltd. | 2,816,478 | 39,391,892 | |
Henry Schein, Inc. (a) | 1,660,000 | 128,948,800 | |
187,708,967 | |||
Health Care Facilities - 3.3% | |||
HCA Holdings, Inc. | 1,900,000 | 254,809,000 | |
Health Care Services - 1.2% | |||
G1 Therapeutics, Inc. (a) | 700,000 | 42,476,000 | |
Premier, Inc. (a) | 600,000 | 26,538,000 | |
United Drug PLC (United Kingdom) | 2,800,000 | 26,717,242 | |
95,731,242 | |||
Managed Health Care - 19.0% | |||
Centene Corp. (a) | 440,000 | 64,451,200 | |
Cigna Corp. | 800,000 | 150,672,000 | |
Humana, Inc. | 1,100,000 | 366,586,000 | |
Molina Healthcare, Inc. (a) | 380,000 | 52,440,000 | |
Notre Dame Intermedica Participacoes SA | 4,400,000 | 27,546,586 | |
UnitedHealth Group, Inc. | 2,840,000 | 762,426,399 | |
Wellcare Health Plans, Inc. (a) | 200,000 | 60,514,000 | |
1,484,636,185 | |||
TOTAL HEALTH CARE PROVIDERS & SERVICES | 2,022,885,394 | ||
Health Care Technology - 1.5% | |||
Health Care Technology - 1.5% | |||
Castlight Health, Inc. (a) | 1,875,650 | 5,626,950 | |
Castlight Health, Inc. Class B (a) | 3,040,500 | 9,121,500 | |
Teladoc Health, Inc. (a)(b) | 1,280,000 | 99,264,000 | |
114,012,450 | |||
Internet Software & Services - 0.9% | |||
Internet Software & Services - 0.9% | |||
Benefitfocus, Inc. (a)(c) | 1,600,000 | 70,560,000 | |
Life Sciences Tools & Services - 1.0% | |||
Life Sciences Tools & Services - 1.0% | |||
Lonza Group AG | 145,000 | 46,660,304 | |
Morphosys AG (a) | 250,000 | 29,512,069 | |
76,172,373 | |||
Pharmaceuticals - 15.0% | |||
Pharmaceuticals - 15.0% | |||
Allergan PLC | 180,000 | 34,507,800 | |
Amneal Pharmaceuticals, Inc. (a) | 500,000 | 11,550,000 | |
Amneal Pharmaceuticals, Inc. (d) | 1,621,622 | 37,459,468 | |
AstraZeneca PLC (United Kingdom) | 3,360,000 | 253,592,012 | |
Bristol-Myers Squibb Co. | 220,000 | 13,321,000 | |
Dechra Pharmaceuticals PLC | 2,000,000 | 80,898,480 | |
Eli Lilly & Co. | 700,000 | 73,955,000 | |
Indivior PLC (a) | 6,200,000 | 21,742,763 | |
Jazz Pharmaceuticals PLC (a) | 128,000 | 21,877,760 | |
Jiangsu Hengrui Medicine Co. Ltd. (A Shares) | 4,000,000 | 38,732,343 | |
Mylan NV (a) | 1,400,000 | 54,782,000 | |
MyoKardia, Inc. (a) | 322,616 | 19,889,276 | |
Nektar Therapeutics (a) | 1,800,000 | 119,682,000 | |
Perrigo Co. PLC | 1,454,877 | 111,312,639 | |
Recordati SpA | 620,000 | 21,712,293 | |
Roche Holding AG (participation certificate) | 550,000 | 136,374,517 | |
RPI International Holdings LP (a)(d)(e) | 199,753 | 29,976,933 | |
The Medicines Company (a)(b) | 1,000,000 | 39,610,000 | |
Theravance Biopharma, Inc. (a)(b) | 1,256,466 | 36,399,820 | |
Tonghua Dongbao Pharmaceutical Co. Ltd. Class A | 6,000,000 | 15,220,669 | |
1,172,596,773 | |||
TOTAL COMMON STOCKS | |||
(Cost $5,065,449,098) | 7,612,517,684 | ||
Convertible Preferred Stocks - 1.5% | |||
Biotechnology - 0.7% | |||
Biotechnology - 0.7% | |||
10X Genomics, Inc.: | |||
Series C (a)(d)(e) | 2,958,778 | 28,315,505 | |
Series D (d)(e) | 60,000 | 574,200 | |
BioNTech AG Series A (d)(e) | 78,748 | 23,071,062 | |
Generation Bio Series B (d)(e) | 130,800 | 1,196,258 | |
53,157,025 | |||
Health Care Equipment & Supplies - 0.1% | |||
Health Care Equipment - 0.1% | |||
Shockwave Medical, Inc. Series C (d)(e) | 7,425,890 | 9,950,693 | |
Health Care Providers & Services - 0.2% | |||
Health Care Services - 0.2% | |||
1Life Healthcare, Inc. Series G (a)(d)(e) | 1,639,892 | 18,678,370 | |
Pharmaceuticals - 0.2% | |||
Pharmaceuticals - 0.2% | |||
Harmony Biosciences II, Inc. Series A (d)(e) | 10,935,215 | 10,935,215 | |
Software - 0.3% | |||
Application Software - 0.3% | |||
Outset Medical, Inc. Series B (a)(d)(e) | 8,159,125 | 25,374,879 | |
TOTAL CONVERTIBLE PREFERRED STOCKS | |||
(Cost $80,002,165) | 118,096,182 | ||
Money Market Funds - 1.4% | |||
Fidelity Cash Central Fund, 1.97% (f) | 68,105,302 | 68,118,923 | |
Fidelity Securities Lending Cash Central Fund 1.98% (f)(g) | 43,112,360 | 43,116,671 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $111,232,837) | 111,235,594 | ||
TOTAL INVESTMENT IN SECURITIES - 100.4% | |||
(Cost $5,256,684,100) | 7,841,849,460 | ||
NET OTHER ASSETS (LIABILITIES) - (0.4)% | (30,689,550) | ||
NET ASSETS - 100% | $7,811,159,910 |
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 $185,532,582 or 2.4% of net assets.
(e) Level 3 security
(f) 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 are available on the SEC's website or upon request.
(g) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
Security | Acquisition Date | Acquisition Cost |
10X Genomics, Inc. Series C | 2/23/16 - 4/3/17 | $13,250,000 |
10X Genomics, Inc. Series D | 4/10/18 | $574,200 |
1Life Healthcare, Inc. Series G | 4/10/14 | $10,800,001 |
Amneal Pharmaceuticals, Inc. | 5/4/18 | $29,594,602 |
BioNTech AG Series A | 12/29/17 | $17,246,491 |
Generation Bio Series B | 2/21/18 | $1,196,258 |
Harmony Biosciences II, Inc. Series A | 9/22/17 | $10,935,215 |
Outset Medical, Inc. Series B | 5/5/15 | $18,500,000 |
RPI International Holdings LP | 5/21/15 - 3/23/16 | $26,504,031 |
Shockwave Medical, Inc. Series C | 9/27/17 | $7,500,000 |
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 | $624,645 |
Fidelity Securities Lending Cash Central Fund | 814,301 |
Total | $1,438,946 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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(a) | Dividend Income | Realized Gain (loss) | Change in Unrealized appreciation (depreciation) | Value, end of period |
Benefitfocus, Inc. | $43,414,800 | $7,941,024 | $10,220,979 | $-- | $(2,232,822) | $31,657,977 | $70,560,000 |
Total | $43,414,800 | $7,941,024 | $10,220,979 | $-- | $(2,232,822) | $31,657,977 | $70,560,000 |
(a) Includes the value of securities delivered through in-kind transactions, if applicable.
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $7,612,517,684 | $7,192,574,222 | $389,966,529 | $29,976,933 |
Convertible Preferred Stocks | 118,096,182 | -- | -- | 118,096,182 |
Money Market Funds | 111,235,594 | 111,235,594 | -- | -- |
Total Investments in Securities: | $7,841,849,460 | $7,303,809,816 | $389,966,529 | $148,073,115 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $231,060,617 |
The following is a reconciliation of Investments in Securities and Derivative Instruments for which Level 3 inputs were used in determining value:
Investments in Securities: | |
Other Investments in Securities | |
Beginning Balance | $28,424,852 |
Total Realized Gain (Loss) | -- |
Total Unrealized Gain (Loss) | 1,552,081 |
Cost of Purchases | -- |
Proceeds of Sales | -- |
Amortization/Accretion | -- |
Transfers in to Level 3 | -- |
Transfers out of Level 3 | -- |
Ending Balance | $29,976,933 |
The change in unrealized gain (loss) for the period attributable to Level 3 securities held at August 31, 2018 | $1,552,081 |
Convertible Preferred Stocks | |
Beginning Balance | $85,231,129 |
Total Realized Gain (Loss) | -- |
Total Unrealized Gain (Loss) | 32,290,853 |
Cost of Purchases | 574,200 |
Proceeds of Sales | -- |
Amortization/Accretion | -- |
Transfers in to Level 3 | -- |
Transfers out of Level 3 | -- |
Ending Balance | $118,096,182 |
The change in unrealized gain (loss) for the period attributable to Level 3 securities held at August 31, 2018 | $32,290,853 |
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 reconciliations 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 | 81.9% |
United Kingdom | 4.5% |
Netherlands | 3.0% |
Ireland | 2.4% |
Switzerland | 2.4% |
Cayman Islands | 2.2% |
Others (Individually Less Than 1%) | 3.6% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Health Care Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $43,007,643) — See accompanying schedule: Unaffiliated issuers (cost $5,097,995,031) | $7,660,053,866 | |
Fidelity Central Funds (cost $111,232,837) | 111,235,594 | |
Other affiliated issuers (cost $47,456,232) | 70,560,000 | |
Total Investment in Securities (cost $5,256,684,100) | $7,841,849,460 | |
Foreign currency held at value (cost $222,126) | 222,126 | |
Receivable for investments sold | 18,723,833 | |
Receivable for fund shares sold | 8,412,940 | |
Dividends receivable | 8,720,731 | |
Distributions receivable from Fidelity Central Funds | 176,710 | |
Prepaid expenses | 72,269 | |
Other receivables | 911,956 | |
Total assets | 7,879,090,025 | |
Liabilities | ||
Payable for investments purchased | $15,547,609 | |
Payable for fund shares redeemed | 4,273,698 | |
Accrued management fee | 3,362,745 | |
Other affiliated payables | 986,716 | |
Other payables and accrued expenses | 663,290 | |
Collateral on securities loaned | 43,096,057 | |
Total liabilities | 67,930,115 | |
Net Assets | $7,811,159,910 | |
Net Assets consist of: | ||
Paid in capital | $4,804,443,733 | |
Undistributed net investment income | 4,866,853 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 416,709,409 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 2,585,139,915 | |
Net Assets, for 289,229,259 shares outstanding | $7,811,159,910 | |
Net Asset Value, offering price and redemption price per share ($7,811,159,910 ÷ 289,229,259 shares) | $27.01 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $28,544,572 | |
Income from Fidelity Central Funds (including $814,301 from security lending) | 1,438,946 | |
Total income | 29,983,518 | |
Expenses | ||
Management fee | $18,930,432 | |
Transfer agent fees | 5,225,088 | |
Accounting and security lending fees | 601,700 | |
Custodian fees and expenses | 119,214 | |
Independent trustees' fees and expenses | 17,035 | |
Registration fees | 85,650 | |
Audit | 25,421 | |
Legal | 34,411 | |
Miscellaneous | 31,100 | |
Total expenses before reductions | 25,070,051 | |
Expense reductions | (533,747) | |
Total expenses after reductions | 24,536,304 | |
Net investment income (loss) | 5,447,214 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 247,133,068 | |
Redemptions in-kind with affiliated entities | 233,538,287 | |
Fidelity Central Funds | 10,333 | |
Other affiliated issuers | (2,232,822) | |
Foreign currency transactions | (288,666) | |
Total net realized gain (loss) | 478,160,200 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 708,284,223 | |
Fidelity Central Funds | (1,627) | |
Other affiliated issuers | 31,657,977 | |
Assets and liabilities in foreign currencies | (24,814) | |
Total change in net unrealized appreciation (depreciation) | 739,915,759 | |
Net gain (loss) | 1,218,075,959 | |
Net increase (decrease) in net assets resulting from operations | $1,223,523,173 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $5,447,214 | $15,688,493 |
Net realized gain (loss) | 478,160,200 | 477,734,418 |
Change in net unrealized appreciation (depreciation) | 739,915,759 | 472,747,918 |
Net increase (decrease) in net assets resulting from operations | 1,223,523,173 | 966,170,829 |
Distributions to shareholders from net investment income | (4,595,748) | (11,041,879) |
Distributions to shareholders from net realized gain | (236,709,407) | (148,657,217) |
Total distributions | (241,305,155) | (159,699,096) |
Share transactions | ||
Proceeds from sales of shares | 628,425,537 | 830,480,092 |
Reinvestment of distributions | 227,340,259 | 150,559,655 |
Cost of shares redeemed | (950,228,341) | (1,492,988,701) |
Net increase (decrease) in net assets resulting from share transactions | (94,462,545) | (511,948,954) |
Total increase (decrease) in net assets | 887,755,473 | 294,522,779 |
Net Assets | ||
Beginning of period | 6,923,404,437 | 6,628,881,658 |
End of period | $7,811,159,910 | $6,923,404,437 |
Other Information | ||
Undistributed net investment income end of period | $4,866,853 | $4,015,387 |
Shares(a) | ||
Sold | 25,195,322 | 36,864,240 |
Issued in reinvestment of distributions | 10,186,410 | 6,703,760 |
Redeemed | (40,069,553) | (66,953,880) |
Net increase (decrease) | (4,687,821) | (23,385,880) |
(a) Share activity prior to August 10, 2018 has been adjusted to reflect the impact of the 10 for 1 share split that occurred on that date.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Health Care Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share DataB | ||||||
Net asset value, beginning of period | $23.56 | $20.89 | $18.05 | $23.64 | $21.69 | $14.42 |
Income from Investment Operations | ||||||
Net investment income (loss)C | .02 | .05 | .02 | (.01) | (.04) | (.02) |
Net realized and unrealized gain (loss) | 4.26 | 3.17 | 2.93 | (3.16) | 5.00 | 9.24 |
Total from investment operations | 4.28 | 3.22 | 2.95 | (3.17) | 4.96 | 9.22 |
Distributions from net investment income | (.02) | (.04) | (.02) | – | – | –D |
Distributions from net realized gain | (.81) | (.51) | (.09) | (2.42) | (3.01) | (1.95) |
Total distributions | (.83) | (.55) | (.11) | (2.42) | (3.01) | (1.95) |
Redemption fees added to paid in capitalC | – | – | –D | –D | –D | –D |
Net asset value, end of period | $27.01 | $23.56 | $20.89 | $18.05 | $23.64 | $21.69 |
Total ReturnE,F | 18.90% | 15.49% | 16.43% | (14.90)% | 25.44% | 67.13% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .71%I | .73% | .74% | .73% | .74% | .77% |
Expenses net of fee waivers, if any | .71%I | .73% | .73% | .73% | .74% | .77% |
Expenses net of all reductions | .70%I | .72% | .73% | .72% | .74% | .76% |
Net investment income (loss) | .16%I | .23% | .12% | (.03)% | (.18)% | (.11)% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $7,811,160 | $6,923,404 | $6,628,882 | $7,439,085 | $9,831,808 | $6,180,280 |
Portfolio turnover rateJ | 65%I,K | 75% | 49%K | 76% | 98%K | 99% |
A For the year ended February 29.
B Per share amounts have been adjusted to reflect the impact of the 10 for 1 share split that occurred on August 10, 2018.
C Calculated based on average shares outstanding during the period.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Health Care Services Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
UnitedHealth Group, Inc. | 24.4 |
Humana, Inc. | 7.9 |
CVS Health Corp. | 7.6 |
Cigna Corp. | 6.7 |
HCA Holdings, Inc. | 5.0 |
Anthem, Inc. | 4.8 |
Centene Corp. | 4.8 |
Express Scripts Holding Co. | 4.7 |
Universal Health Services, Inc. Class B | 3.7 |
Molina Healthcare, Inc. | 3.7 |
73.3 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Health Care Providers & Services | 95.9% | |
Health Care Technology | 2.3% | |
Professional Services | 0.9% | |
Diversified Consumer Services | 0.4% | |
Internet Software & Services | 0.3% | |
All Others* | 0.2% |
* Includes short-term investments and net other assets (liabilities).
Health Care Services Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.8% | |||
Shares | Value | ||
Diversified Consumer Services - 0.4% | |||
Specialized Consumer Services - 0.4% | |||
Service Corp. International | 111,300 | $4,670,147 | |
Health Care Providers & Services - 95.9% | |||
Health Care Distributors & Services - 4.2% | |||
AmerisourceBergen Corp. | 409,400 | 36,833,718 | |
McKesson Corp. | 62,565 | 8,055,244 | |
44,888,962 | |||
Health Care Facilities - 11.0% | |||
Brookdale Senior Living, Inc. (a) | 1,313,300 | 13,027,936 | |
HCA Holdings, Inc. | 394,700 | 52,933,217 | |
Surgery Partners, Inc. (a)(b) | 148,882 | 2,583,103 | |
U.S. Physical Therapy, Inc. | 76,400 | 9,569,100 | |
Universal Health Services, Inc. Class B | 300,200 | 39,074,032 | |
117,187,388 | |||
Health Care Services - 22.3% | |||
Amedisys, Inc. (a) | 107,200 | 13,401,072 | |
Chemed Corp. | 38,000 | 12,294,520 | |
CVS Health Corp. | 1,077,100 | 81,041,004 | |
DaVita HealthCare Partners, Inc. (a) | 484,900 | 33,598,721 | |
Diplomat Pharmacy, Inc. (a) | 630,200 | 13,019,932 | |
Express Scripts Holding Co. (a) | 571,100 | 50,268,222 | |
LHC Group, Inc. (a) | 177,444 | 17,554,535 | |
Premier, Inc. (a) | 232,000 | 10,261,360 | |
Providence Service Corp. (a) | 84,694 | 5,686,355 | |
237,125,721 | |||
Managed Health Care - 58.4% | |||
Aetna, Inc. | 108,900 | 21,809,403 | |
Anthem, Inc. | 194,802 | 51,569,933 | |
Centene Corp. (a) | 347,450 | 50,894,476 | |
Cigna Corp. | 376,800 | 70,966,512 | |
Humana, Inc. | 250,700 | 83,548,282 | |
Molina Healthcare, Inc. (a) | 282,000 | 38,916,000 | |
Notre Dame Intermedica Participacoes SA | 1,644,300 | 10,294,284 | |
UnitedHealth Group, Inc. | 968,800 | 260,084,049 | |
Wellcare Health Plans, Inc. (a) | 110,460 | 33,421,882 | |
621,504,821 | |||
TOTAL HEALTH CARE PROVIDERS & SERVICES | 1,020,706,892 | ||
Health Care Technology - 2.3% | |||
Health Care Technology - 2.3% | |||
Evolent Health, Inc. (a) | 289,100 | 7,372,050 | |
Teladoc Health, Inc. (a)(b) | 219,629 | 17,032,229 | |
24,404,279 | |||
Internet Software & Services - 0.3% | |||
Internet Software & Services - 0.3% | |||
Benefitfocus, Inc. (a) | 65,300 | 2,879,730 | |
Professional Services - 0.9% | |||
Human Resource & Employment Services - 0.9% | |||
WageWorks, Inc. (a) | 171,200 | 9,159,200 | |
TOTAL COMMON STOCKS | |||
(Cost $607,181,733) | 1,061,820,248 | ||
Money Market Funds - 1.1% | |||
Fidelity Cash Central Fund, 1.97% (c) | 5,752,600 | 5,753,750 | |
Fidelity Securities Lending Cash Central Fund 1.98% (c)(d) | 6,067,298 | 6,067,905 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $11,821,655) | 11,821,655 | ||
TOTAL INVESTMENT IN SECURITIES - 100.9% | |||
(Cost $619,003,388) | 1,073,641,903 | ||
NET OTHER ASSETS (LIABILITIES) - (0.9)% | (9,548,589) | ||
NET ASSETS - 100% | $1,064,093,314 |
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 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 | $85,833 |
Fidelity Securities Lending Cash Central Fund | 135,918 |
Total | $221,751 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
Health Care Services Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $6,031,855) — See accompanying schedule: Unaffiliated issuers (cost $607,181,733) | $1,061,820,248 | |
Fidelity Central Funds (cost $11,821,655) | 11,821,655 | |
Total Investment in Securities (cost $619,003,388) | $1,073,641,903 | |
Foreign currency held at value (cost $29,950) | 29,950 | |
Receivable for investments sold | 7,483,727 | |
Receivable for fund shares sold | 4,770,151 | |
Dividends receivable | 370,415 | |
Distributions receivable from Fidelity Central Funds | 31,421 | |
Prepaid expenses | 8,742 | |
Other receivables | 70,828 | |
Total assets | 1,086,407,137 | |
Liabilities | ||
Payable for investments purchased | $15,024,751 | |
Payable for fund shares redeemed | 541,527 | |
Accrued management fee | 448,625 | |
Other affiliated payables | 148,354 | |
Other payables and accrued expenses | 83,666 | |
Collateral on securities loaned | 6,066,900 | |
Total liabilities | 22,313,823 | |
Net Assets | $1,064,093,314 | |
Net Assets consist of: | ||
Paid in capital | $564,831,661 | |
Undistributed net investment income | 222,497 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 44,402,202 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 454,636,954 | |
Net Assets, for 10,150,963 shares outstanding | $1,064,093,314 | |
Net Asset Value, offering price and redemption price per share ($1,064,093,314 ÷ 10,150,963 shares) | $104.83 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $3,491,979 | |
Income from Fidelity Central Funds (including $135,918 from security lending) | 221,751 | |
Total income | 3,713,730 | |
Expenses | ||
Management fee | $2,344,674 | |
Transfer agent fees | 696,154 | |
Accounting and security lending fees | 150,831 | |
Custodian fees and expenses | 6,607 | |
Independent trustees' fees and expenses | 2,070 | |
Registration fees | 28,326 | |
Audit | 18,646 | |
Legal | 4,491 | |
Interest | 815 | |
Miscellaneous | 3,726 | |
Total expenses before reductions | 3,256,340 | |
Expense reductions | (16,602) | |
Total expenses after reductions | 3,239,738 | |
Net investment income (loss) | 473,992 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 48,165,811 | |
Fidelity Central Funds | 2,618 | |
Foreign currency transactions | 15,619 | |
Total net realized gain (loss) | 48,184,048 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 117,664,294 | |
Assets and liabilities in foreign currencies | (625) | |
Total change in net unrealized appreciation (depreciation) | 117,663,669 | |
Net gain (loss) | 165,847,717 | |
Net increase (decrease) in net assets resulting from operations | $166,321,709 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $473,992 | $998,456 |
Net realized gain (loss) | 48,184,048 | 117,943,750 |
Change in net unrealized appreciation (depreciation) | 117,663,669 | 1,356,212 |
Net increase (decrease) in net assets resulting from operations | 166,321,709 | 120,298,418 |
Distributions to shareholders from net investment income | – | (817,273) |
Distributions to shareholders from net realized gain | (42,966,614) | (99,374,269) |
Total distributions | (42,966,614) | (100,191,542) |
Share transactions | ||
Proceeds from sales of shares | 149,946,240 | 183,784,680 |
Reinvestment of distributions | 40,741,463 | 94,963,099 |
Cost of shares redeemed | (79,641,557) | (229,288,607) |
Net increase (decrease) in net assets resulting from share transactions | 111,046,146 | 49,459,172 |
Redemption fees | – | 18,350 |
Total increase (decrease) in net assets | 234,401,241 | 69,584,398 |
Net Assets | ||
Beginning of period | 829,692,073 | 760,107,675 |
End of period | $1,064,093,314 | $829,692,073 |
Other Information | ||
Undistributed net investment income end of period | $222,497 | $– |
Accumulated net investment loss end of period | $– | $(251,495) |
Shares | ||
Sold | 1,539,686 | 1,992,122 |
Issued in reinvestment of distributions | 477,906 | 1,078,902 |
Redeemed | (864,764) | (2,525,002) |
Net increase (decrease) | 1,152,828 | 546,022 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Health Care Services Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $92.21 | $89.93 | $78.59 | $87.26 | $75.55 | $59.90 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .05 | .11 | .12 | (.03) | (.09) | (.07) |
Net realized and unrealized gain (loss) | 17.45 | 14.23 | 15.03 | (5.21) | 19.25 | 20.08 |
Total from investment operations | 17.50 | 14.34 | 15.15 | (5.24) | 19.16 | 20.01 |
Distributions from net investment income | – | (.10) | (.13) | (.02) | – | – |
Distributions from net realized gain | (4.88) | (11.96) | (3.68) | (3.41) | (7.45) | (4.36) |
Total distributions | (4.88) | (12.06) | (3.81) | (3.43) | (7.45) | (4.36) |
Redemption fees added to paid in capitalB | – | – | –C | –C | –C | –C |
Net asset value, end of period | $104.83 | $92.21 | $89.93 | $78.59 | $87.26 | $75.55 |
Total ReturnD,E | 20.20% | 17.03% | 19.71% | (6.30)% | 26.88% | 34.22% |
Ratios to Average Net AssetsF,G | ||||||
Expenses before reductions | .75%H | .77% | .78% | .77% | .79% | .82% |
Expenses net of fee waivers, if any | .75%H | .77% | .78% | .77% | .79% | .82% |
Expenses net of all reductions | .74%H | .76% | .78% | .77% | .79% | .82% |
Net investment income (loss) | .11%H | .12% | .15% | (.03)% | (.12)% | (.10)% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $1,064,093 | $829,692 | $760,108 | $837,518 | $878,416 | $692,486 |
Portfolio turnover rateI | 69%H | 65% | 26% | 39% | 44% | 65% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
H Annualized
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.
Medical Technology and Devices Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Becton, Dickinson & Co. | 12.4 |
Boston Scientific Corp. | 10.0 |
Intuitive Surgical, Inc. | 5.7 |
Thermo Fisher Scientific, Inc. | 5.7 |
Stryker Corp. | 5.4 |
Baxter International, Inc. | 5.0 |
Medtronic PLC | 5.0 |
Align Technology, Inc. | 3.7 |
UnitedHealth Group, Inc. | 3.4 |
Danaher Corp. | 2.6 |
58.9 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Health Care Equipment & Supplies | 73.0% | |
Life Sciences Tools & Services | 11.7% | |
Health Care Providers & Services | 8.5% | |
Health Care Technology | 3.2% | |
Biotechnology | 1.3% | |
All Others* | 2.3% |
* Includes short-term investments and net other assets (liabilities).
Medical Technology and Devices Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 98.4% | |||
Shares | Value | ||
Biotechnology - 1.3% | |||
Biotechnology - 1.3% | |||
Calyxt, Inc. (a)(b) | 660,889 | $11,188,851 | |
Natera, Inc. (a) | 1,000,000 | 27,640,000 | |
Sarepta Therapeutics, Inc. (a) | 280,000 | 38,651,200 | |
77,480,051 | |||
Health Care Equipment & Supplies - 72.4% | |||
Health Care Equipment - 68.0% | |||
Abbott Laboratories | 100,000 | 6,684,000 | |
Atricure, Inc. (a)(c) | 2,000,000 | 69,100,000 | |
Baxter International, Inc. | 4,000,000 | 297,480,000 | |
Becton, Dickinson & Co. | 2,800,000 | 733,235,999 | |
Boston Scientific Corp. (a) | 16,600,000 | 590,296,000 | |
Danaher Corp. | 1,500,000 | 155,310,000 | |
DexCom, Inc. (a) | 670,000 | 96,734,600 | |
Edwards Lifesciences Corp. (a) | 320,000 | 46,156,800 | |
Fisher & Paykel Healthcare Corp. | 4,500,000 | 48,796,308 | |
Genmark Diagnostics, Inc. (a) | 2,090,000 | 17,890,400 | |
Hologic, Inc. (a) | 1,000,000 | 39,760,000 | |
IDEXX Laboratories, Inc. (a) | 200,000 | 50,808,000 | |
Insulet Corp. (a) | 1,085,600 | 113,195,512 | |
Integra LifeSciences Holdings Corp. (a) | 2,200,000 | 130,834,000 | |
Intuitive Surgical, Inc. (a) | 600,000 | 336,000,000 | |
LivaNova PLC (a) | 440,000 | 55,242,000 | |
Masimo Corp. (a) | 840,000 | 99,027,600 | |
Medtronic PLC | 3,040,000 | 293,086,400 | |
Nakanishi, Inc. | 1,200,000 | 24,127,441 | |
Penumbra, Inc. (a) | 600,000 | 83,310,000 | |
ResMed, Inc. | 880,000 | 98,040,800 | |
Steris PLC | 500,000 | 57,210,000 | |
Stryker Corp. | 1,900,000 | 321,917,000 | |
Teleflex, Inc. | 520,000 | 128,663,600 | |
Wright Medical Group NV (a) | 4,421,839 | 128,144,894 | |
4,021,051,354 | |||
Health Care Supplies - 4.4% | |||
Align Technology, Inc. (a) | 565,000 | 218,366,850 | |
Nanosonics Ltd. (a)(b)(c) | 15,688,900 | 39,701,201 | |
258,068,051 | |||
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES | 4,279,119,405 | ||
Health Care Providers & Services - 8.4% | |||
Health Care Distributors & Services - 1.5% | |||
Henry Schein, Inc. (a) | 1,180,000 | 91,662,400 | |
Health Care Facilities - 1.5% | |||
HCA Holdings, Inc. | 664,000 | 89,049,040 | |
Managed Health Care - 5.4% | |||
Humana, Inc. | 350,000 | 116,641,000 | |
UnitedHealth Group, Inc. | 745,000 | 200,002,700 | |
316,643,700 | |||
TOTAL HEALTH CARE PROVIDERS & SERVICES | 497,355,140 | ||
Health Care Technology - 3.2% | |||
Health Care Technology - 3.2% | |||
Castlight Health, Inc. (a) | 999,300 | 2,997,900 | |
Castlight Health, Inc. Class B (a) | 1,500,000 | 4,500,000 | |
HTG Molecular Diagnostics (a)(b)(c) | 2,392,976 | 10,744,462 | |
Teladoc Health, Inc. (a)(b) | 1,280,000 | 99,264,000 | |
Veeva Systems, Inc. Class A (a) | 670,000 | 69,921,200 | |
187,427,562 | |||
Internet Software & Services - 0.9% | |||
Internet Software & Services - 0.9% | |||
Benefitfocus, Inc. (a)(b) | 1,174,205 | 51,782,441 | |
Life Sciences Tools & Services - 11.7% | |||
Life Sciences Tools & Services - 11.7% | |||
Agilent Technologies, Inc. | 1,000,000 | 67,540,000 | |
Bruker Corp. | 2,000,000 | 71,160,000 | |
Lonza Group AG | 270,000 | 86,884,705 | |
PerkinElmer, Inc. | 1,080,000 | 99,824,400 | |
Sartorius Stedim Biotech | 240,000 | 30,420,936 | |
Thermo Fisher Scientific, Inc. | 1,400,000 | 334,740,000 | |
690,570,041 | |||
Pharmaceuticals - 0.5% | |||
Pharmaceuticals - 0.5% | |||
Nektar Therapeutics (a) | 500,000 | 33,245,000 | |
TOTAL COMMON STOCKS | |||
(Cost $4,004,753,363) | 5,816,979,640 | ||
Preferred Stocks - 0.9% | |||
Convertible Preferred Stocks - 0.5% | |||
Health Care Equipment & Supplies - 0.2% | |||
Health Care Equipment - 0.2% | |||
Shockwave Medical, Inc. Series C (d)(e) | 7,425,890 | 9,950,693 | |
Health Care Providers & Services - 0.1% | |||
Health Care Services - 0.1% | |||
1Life Healthcare, Inc. Series G (a)(d)(e) | 455,526 | 5,188,441 | |
Software - 0.2% | |||
Application Software - 0.2% | |||
Outset Medical, Inc.: | |||
Series B (a)(d)(e) | 3,307,754 | 10,287,115 | |
Series D (d)(e) | 1,607,717 | 5,000,000 | |
15,287,115 | |||
TOTAL CONVERTIBLE PREFERRED STOCKS | 30,426,249 | ||
Nonconvertible Preferred Stocks - 0.4% | |||
Health Care Equipment & Supplies - 0.4% | |||
Health Care Equipment - 0.4% | |||
Sartorius AG (non-vtg.) | 140,000 | 25,415,782 | |
TOTAL PREFERRED STOCKS | |||
(Cost $25,995,660) | 55,842,031 | ||
Money Market Funds - 2.0% | |||
Fidelity Cash Central Fund, 1.97% (f) | 53,075,110 | 53,085,725 | |
Fidelity Securities Lending Cash Central Fund 1.98% (f)(g) | 62,415,027 | 62,421,269 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $115,506,994) | 115,506,994 | ||
TOTAL INVESTMENT IN SECURITIES - 101.3% | |||
(Cost $4,146,256,017) | 5,988,328,665 | ||
NET OTHER ASSETS (LIABILITIES) - (1.3)% | (77,965,717) | ||
NET ASSETS - 100% | $5,910,362,948 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Affiliated company
(d) Level 3 security
(e) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $30,426,249 or 0.5% of net assets.
(f) 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 are available on the SEC's website or upon request.
(g) 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 | $3,000,003 |
Outset Medical, Inc. Series B | 5/5/15 - 6/5/15 | $7,500,001 |
Outset Medical, Inc. Series D | 8/20/18 | $5,000,000 |
Shockwave Medical, Inc. Series C | 9/27/17 | $7,500,000 |
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 | $274,665 |
Fidelity Securities Lending Cash Central Fund | 254,895 |
Total | $529,560 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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 | Realized Gain (loss) | Change in Unrealized appreciation (depreciation) | Value, end of period |
Atricure, Inc. | $34,668,540 | $729,403 | $-- | $-- | $-- | $33,702,057 | $69,100,000 |
HTG Molecular Diagnostics | 10,983,760 | -- | -- | -- | -- | (239,298) | 10,744,462 |
Nanosonics Ltd. | 20,912,757 | 12,218,220 | -- | -- | -- | 6,570,224 | 39,701,201 |
Total | $66,565,057 | $12,947,623 | $-- | $-- | $-- | $40,032,983 | $119,545,663 |
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $5,816,979,640 | $5,816,979,640 | $-- | $-- |
Preferred Stocks | 55,842,031 | 25,415,782 | -- | 30,426,249 |
Money Market Funds | 115,506,994 | 115,506,994 | -- | -- |
Total Investments in Securities: | $5,988,328,665 | $5,957,902,416 | $-- | $30,426,249 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $175,444,019 |
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% |
Ireland | 5.0% |
Netherlands | 2.2% |
United Kingdom | 1.9% |
Switzerland | 1.5% |
Others (Individually Less Than 1%) | 2.8% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Medical Technology and Devices Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $62,589,501) — See accompanying schedule: Unaffiliated issuers (cost $3,950,756,034) | $5,753,276,008 | |
Fidelity Central Funds (cost $115,506,994) | 115,506,994 | |
Other affiliated issuers (cost $79,992,989) | 119,545,663 | |
Total Investment in Securities (cost $4,146,256,017) | $5,988,328,665 | |
Receivable for investments sold | 10,649,623 | |
Receivable for fund shares sold | 19,078,206 | |
Dividends receivable | 1,747,110 | |
Distributions receivable from Fidelity Central Funds | 96,347 | |
Prepaid expenses | 44,220 | |
Other receivables | 329,852 | |
Total assets | 6,020,274,023 | |
Liabilities | ||
Payable for investments purchased | $39,432,140 | |
Payable for fund shares redeemed | 4,570,659 | |
Accrued management fee | 2,481,151 | |
Other affiliated payables | 782,715 | |
Other payables and accrued expenses | 236,237 | |
Collateral on securities loaned | 62,408,173 | |
Total liabilities | 109,911,075 | |
Net Assets | $5,910,362,948 | |
Net Assets consist of: | ||
Paid in capital | $3,958,216,600 | |
Distributions in excess of net investment income | (4,055,960) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 114,132,004 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 1,842,070,304 | |
Net Assets, for 107,619,637 shares outstanding | $5,910,362,948 | |
Net Asset Value, offering price and redemption price per share ($5,910,362,948 ÷ 107,619,637 shares) | $54.92 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $14,931,814 | |
Income from Fidelity Central Funds (including $254,895 from security lending) | 529,560 | |
Total income | 15,461,374 | |
Expenses | ||
Management fee | $12,679,519 | |
Transfer agent fees | 3,822,918 | |
Accounting and security lending fees | 543,509 | |
Custodian fees and expenses | 50,418 | |
Independent trustees' fees and expenses | 10,899 | |
Registration fees | 112,337 | |
Audit | 18,701 | |
Legal | 20,429 | |
Miscellaneous | 18,365 | |
Total expenses before reductions | 17,277,095 | |
Expense reductions | (230,663) | |
Total expenses after reductions | 17,046,432 | |
Net investment income (loss) | (1,585,058) | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 121,098,752 | |
Fidelity Central Funds | 808 | |
Foreign currency transactions | (23,552) | |
Total net realized gain (loss) | 121,076,008 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 894,389,302 | |
Affiliated issuers | 40,032,983 | |
Assets and liabilities in foreign currencies | (10,602) | |
Total change in net unrealized appreciation (depreciation) | 934,411,683 | |
Net gain (loss) | 1,055,487,691 | |
Net increase (decrease) in net assets resulting from operations | $1,053,902,633 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $(1,585,058) | $4,308,032 |
Net realized gain (loss) | 121,076,008 | 430,133,960 |
Change in net unrealized appreciation (depreciation) | 934,411,683 | 177,625,912 |
Net increase (decrease) in net assets resulting from operations | 1,053,902,633 | 612,067,904 |
Distributions to shareholders from net investment income | – | (6,689,760) |
Distributions to shareholders from net realized gain | (168,914,875) | (221,756,409) |
Total distributions | (168,914,875) | (228,446,169) |
Share transactions | ||
Proceeds from sales of shares | 1,195,305,916 | 1,701,778,731 |
Reinvestment of distributions | 160,995,775 | 218,219,113 |
Cost of shares redeemed | (394,852,430) | (1,374,069,760) |
Net increase (decrease) in net assets resulting from share transactions | 961,449,261 | 545,928,084 |
Total increase (decrease) in net assets | 1,846,437,019 | 929,549,819 |
Net Assets | ||
Beginning of period | 4,063,925,929 | 3,134,376,110 |
End of period | $5,910,362,948 | $4,063,925,929 |
Other Information | ||
Distributions in excess of net investment income end of period | $(4,055,960) | $(2,470,902) |
Shares | ||
Sold | 23,934,206 | 37,902,629 |
Issued in reinvestment of distributions | 3,683,271 | 4,910,884 |
Redeemed | (8,162,339) | (30,209,252) |
Net increase (decrease) | 19,455,138 | 12,604,261 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Medical Technology and Devices Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $46.09 | $41.48 | $33.75 | $41.90 | $38.03 | $30.60 |
Income from Investment Operations | ||||||
Net investment income (loss)B | (.02) | .05 | .01 | (.03) | .04 | .01 |
Net realized and unrealized gain (loss) | 10.77 | 7.31 | 9.87 | (2.25) | 9.86 | 10.94 |
Total from investment operations | 10.75 | 7.36 | 9.88 | (2.28) | 9.90 | 10.95 |
Distributions from net investment income | – | (.08) | – | (.01) | (.05) | – |
Distributions from net realized gain | (1.92) | (2.67) | (2.15) | (5.86) | (5.98) | (3.52) |
Total distributions | (1.92) | (2.75) | (2.15) | (5.87) | (6.03) | (3.52) |
Redemption fees added to paid in capitalB | – | – | –C | –C | –C | –C |
Net asset value, end of period | $54.92 | $46.09 | $41.48 | $33.75 | $41.90 | $38.03 |
Total ReturnD,E | 24.39% | 18.01% | 30.13% | (6.63)% | 28.52% | 37.03% |
Ratios to Average Net AssetsF,G | ||||||
Expenses before reductions | .73%H | .76% | .76% | .76% | .77% | .80% |
Expenses net of fee waivers, if any | .73%H | .76% | .76% | .76% | .77% | .80% |
Expenses net of all reductions | .72%H | .75% | .76% | .75% | .77% | .79% |
Net investment income (loss) | (.07)%H | .11% | .01% | (.09)% | .11% | .04% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $5,910,363 | $4,063,926 | $3,134,376 | $1,915,772 | $2,107,515 | $1,720,317 |
Portfolio turnover rateI | 50%H | 77% | 55% | 46% | 106% | 75% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
H Annualized
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.
Pharmaceuticals Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Johnson & Johnson | 12.0 |
AstraZeneca PLC sponsored ADR | 9.9 |
Pfizer, Inc. | 6.7 |
Sanofi SA sponsored ADR | 6.4 |
Merck & Co., Inc. | 5.8 |
Eli Lilly & Co. | 5.4 |
Roche Holding AG (participation certificate) | 5.0 |
Bristol-Myers Squibb Co. | 4.8 |
Novartis AG sponsored ADR | 4.6 |
Allergan PLC | 4.2 |
64.8 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Pharmaceuticals | 80.2% | |
Biotechnology | 13.8% | |
Health Care Equipment & Supplies | 4.5% | |
Life Sciences Tools & Services | 0.6% | |
All Others* | 0.9% |
* Includes short-term investments and net other assets (liabilities).
Pharmaceuticals Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.1% | |||
Shares | Value | ||
Biotechnology - 13.8% | |||
Biotechnology - 13.8% | |||
Abeona Therapeutics, Inc. (a) | 134,400 | $2,069,760 | |
AC Immune SA (a) | 168,144 | 1,562,058 | |
Acceleron Pharma, Inc. (a) | 98,400 | 5,315,568 | |
Alnylam Pharmaceuticals, Inc. (a) | 37,800 | 4,636,926 | |
Amgen, Inc. | 97,000 | 19,381,570 | |
AnaptysBio, Inc. (a) | 17,300 | 1,533,472 | |
Argenx SE (a) | 25,300 | 2,355,231 | |
Array BioPharma, Inc. (a) | 30,100 | 468,657 | |
Ascendis Pharma A/S sponsored ADR (a) | 48,300 | 3,428,334 | |
Blueprint Medicines Corp. (a) | 62,400 | 4,784,208 | |
CRISPR Therapeutics AG (a)(b) | 30,400 | 1,722,768 | |
Cytokinetics, Inc. (a) | 93,800 | 741,020 | |
Epizyme, Inc. (a) | 88,500 | 1,044,300 | |
Global Blood Therapeutics, Inc. (a)(b) | 146,100 | 7,151,595 | |
GlycoMimetics, Inc. (a) | 105,200 | 1,548,544 | |
Kezar Life Sciences, Inc. | 7,700 | 132,979 | |
Leap Therapeutics, Inc. (a) | 80,100 | 590,337 | |
Loxo Oncology, Inc. (a) | 9,800 | 1,656,004 | |
Momenta Pharmaceuticals, Inc. (a) | 7,300 | 193,450 | |
Neurocrine Biosciences, Inc. (a) | 58,020 | 7,133,559 | |
Olivo Labs (a)(c)(d) | 6,851 | 0 | |
Puma Biotechnology, Inc. (a) | 44,500 | 1,955,775 | |
Sage Therapeutics, Inc. (a) | 2,700 | 443,502 | |
Sarepta Therapeutics, Inc. (a) | 153,541 | 21,194,800 | |
Shire PLC sponsored ADR | 70,800 | 12,409,116 | |
Viking Therapeutics, Inc. (a) | 182,500 | 2,385,275 | |
Xencor, Inc. (a) | 66,468 | 2,777,698 | |
108,616,506 | |||
Health Care Equipment & Supplies - 4.5% | |||
Health Care Equipment - 4.5% | |||
Becton, Dickinson & Co. | 71,000 | 18,592,770 | |
Boston Scientific Corp. (a) | 468,300 | 16,652,748 | |
35,245,518 | |||
Life Sciences Tools & Services - 0.6% | |||
Life Sciences Tools & Services - 0.6% | |||
Morphosys AG (a) | 8,500 | 1,003,410 | |
Morphosys AG sponsored ADR | 129,000 | 3,814,530 | |
4,817,940 | |||
Personal Products - 0.0% | |||
Personal Products - 0.0% | |||
MYOS Corp. (a) | 40,000 | 52,800 | |
Pharmaceuticals - 80.2% | |||
Pharmaceuticals - 80.2% | |||
Aclaris Therapeutics, Inc. (a) | 125,500 | 1,997,960 | |
Akcea Therapeutics, Inc. (a) | 20,507 | 541,590 | |
Akorn, Inc. (a) | 132,900 | 2,085,201 | |
Allergan PLC | 171,238 | 32,828,037 | |
Amneal Pharmaceuticals, Inc. (d) | 113,843 | 2,629,773 | |
Ascletis Pharma, Inc. (a) | 1,831,000 | 2,155,559 | |
AstraZeneca PLC sponsored ADR | 2,023,100 | 77,565,654 | |
Bayer AG | 69,700 | 6,504,710 | |
Bristol-Myers Squibb Co. | 626,680 | 37,945,474 | |
CymaBay Therapeutics, Inc. (a) | 153,900 | 2,097,657 | |
Eli Lilly & Co. | 400,400 | 42,302,260 | |
GlaxoSmithKline PLC sponsored ADR | 548,800 | 22,226,400 | |
Indivior PLC (a) | 432,300 | 1,516,032 | |
Johnson & Johnson | 704,350 | 94,868,901 | |
Merck & Co., Inc. | 666,936 | 45,745,140 | |
Mylan NV (a) | 294,100 | 11,508,133 | |
MyoKardia, Inc. (a) | 127,100 | 7,835,715 | |
Nektar Therapeutics (a) | 226,533 | 15,062,179 | |
Novartis AG sponsored ADR | 435,798 | 36,175,592 | |
Novo Nordisk A/S Series B sponsored ADR | 32,500 | 1,598,025 | |
Ocular Therapeutix, Inc. (a) | 182,000 | 1,228,500 | |
Perrigo Co. PLC | 177,700 | 13,595,827 | |
Pfizer, Inc. | 1,276,588 | 53,003,934 | |
Reata Pharmaceuticals, Inc. (a) | 85,500 | 7,383,780 | |
Revance Therapeutics, Inc. (a) | 108,200 | 2,964,680 | |
Roche Holding AG (participation certificate) | 157,756 | 39,116,179 | |
Sanofi SA sponsored ADR | 1,181,722 | 50,636,788 | |
Sosei Group Corp. (a)(b) | 107,600 | 1,648,233 | |
The Medicines Company (a)(b) | 159,884 | 6,333,005 | |
TherapeuticsMD, Inc. (a)(b) | 353,200 | 2,288,736 | |
Theravance Biopharma, Inc. (a)(b) | 68,697 | 1,990,152 | |
Tonghua Dongbao Pharmaceutical Co. Ltd. Class A | 595,680 | 1,511,108 | |
WAVE Life Sciences (a) | 81,200 | 4,327,960 | |
631,218,874 | |||
TOTAL COMMON STOCKS | |||
(Cost $578,308,181) | 779,951,638 | ||
Money Market Funds - 1.5% | |||
Fidelity Cash Central Fund, 1.97% (e) | 3,337,092 | 3,337,759 | |
Fidelity Securities Lending Cash Central Fund 1.98% (e)(f) | 8,927,309 | 8,928,202 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $12,266,292) | 12,265,961 | ||
TOTAL INVESTMENT IN SECURITIES - 100.6% | |||
(Cost $590,574,473) | 792,217,599 | ||
NET OTHER ASSETS (LIABILITIES) - (0.6)% | (5,099,630) | ||
NET ASSETS - 100% | $787,117,969 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Level 3 security
(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 $2,629,773 or 0.3% 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 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 |
Amneal Pharmaceuticals, Inc. | 5/4/18 | $2,077,635 |
Olivo Labs | 2/8/17 | $8,290 |
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 | $31,608 |
Fidelity Securities Lending Cash Central Fund | 190,263 |
Total | $221,871 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $779,951,638 | $734,330,749 | $45,620,889 | $-- |
Money Market Funds | 12,265,961 | 12,265,961 | -- | -- |
Total Investments in Securities: | $792,217,599 | $746,596,710 | $45,620,889 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $10,315,122 |
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 | 58.0% |
United Kingdom | 12.9% |
Switzerland | 10.0% |
France | 6.4% |
Ireland | 5.9% |
Netherlands | 1.8% |
Bailiwick of Jersey | 1.6% |
Germany | 1.4% |
Others (Individually Less Than 1%) | 2.0% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Pharmaceuticals Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $8,689,099) — See accompanying schedule: Unaffiliated issuers (cost $578,308,181) | $779,951,638 | |
Fidelity Central Funds (cost $12,266,292) | 12,265,961 | |
Total Investment in Securities (cost $590,574,473) | $792,217,599 | |
Cash | 311 | |
Receivable for investments sold | 1,398,405 | |
Receivable for fund shares sold | 435,258 | |
Dividends receivable | 3,682,726 | |
Distributions receivable from Fidelity Central Funds | 16,860 | |
Prepaid expenses | 7,713 | |
Other receivables | 144,145 | |
Total assets | 797,903,017 | |
Liabilities | ||
Payable for investments purchased | $478,450 | |
Payable for fund shares redeemed | 759,056 | |
Accrued management fee | 346,366 | |
Other affiliated payables | 148,421 | |
Other payables and accrued expenses | 133,341 | |
Collateral on securities loaned | 8,919,414 | |
Total liabilities | 10,785,048 | |
Net Assets | $787,117,969 | |
Net Assets consist of: | ||
Paid in capital | $582,151,213 | |
Undistributed net investment income | 7,383,016 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (4,063,720) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 201,647,460 | |
Net Assets, for 36,859,471 shares outstanding | $787,117,969 | |
Net Asset Value, offering price and redemption price per share ($787,117,969 ÷ 36,859,471 shares) | $21.35 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $11,407,851 | |
Income from Fidelity Central Funds (including $190,263 from security lending) | 221,871 | |
Income before foreign taxes withheld | 11,629,722 | |
Less foreign taxes withheld | (1,177,028) | |
Total income | 10,452,694 | |
Expenses | ||
Management fee | $1,995,298 | |
Transfer agent fees | 764,184 | |
Accounting and security lending fees | 132,884 | |
Custodian fees and expenses | 10,640 | |
Independent trustees' fees and expenses | 1,816 | |
Registration fees | 22,125 | |
Audit | 25,127 | |
Legal | 5,637 | |
Miscellaneous | 3,625 | |
Total expenses before reductions | 2,961,336 | |
Expense reductions | (50,025) | |
Total expenses after reductions | 2,911,311 | |
Net investment income (loss) | 7,541,383 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 27,705,617 | |
Fidelity Central Funds | (397) | |
Foreign currency transactions | 13,799 | |
Total net realized gain (loss) | 27,719,019 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 63,676,024 | |
Fidelity Central Funds | (331) | |
Assets and liabilities in foreign currencies | (14,651) | |
Total change in net unrealized appreciation (depreciation) | 63,661,042 | |
Net gain (loss) | 91,380,061 | |
Net increase (decrease) in net assets resulting from operations | $98,921,444 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $7,541,383 | $12,772,769 |
Net realized gain (loss) | 27,719,019 | 73,004,810 |
Change in net unrealized appreciation (depreciation) | 63,661,042 | (34,184,441) |
Net increase (decrease) in net assets resulting from operations | 98,921,444 | 51,593,138 |
Distributions to shareholders from net investment income | (2,408,070) | (10,710,598) |
Distributions to shareholders from net realized gain | (2,097,353) | (2,243,362) |
Total distributions | (4,505,423) | (12,953,960) |
Share transactions | ||
Proceeds from sales of shares | 31,308,380 | 58,835,440 |
Reinvestment of distributions | 4,298,665 | 12,347,170 |
Cost of shares redeemed | (87,467,725) | (366,196,350) |
Net increase (decrease) in net assets resulting from share transactions | (51,860,680) | (295,013,740) |
Total increase (decrease) in net assets | 42,555,341 | (256,374,562) |
Net Assets | ||
Beginning of period | 744,562,628 | 1,000,937,190 |
End of period | $787,117,969 | $744,562,628 |
Other Information | ||
Undistributed net investment income end of period | $7,383,016 | $2,249,703 |
Shares | ||
Sold | 1,560,442 | 3,133,485 |
Issued in reinvestment of distributions | 231,484 | 667,263 |
Redeemed | (4,493,729) | (19,523,339) |
Net increase (decrease) | (2,701,803) | (15,722,591) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Pharmaceuticals Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $18.82 | $18.11 | $18.20 | $23.08 | $21.39 | $16.13 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .20 | .27 | .22 | .24 | .14 | .26 |
Net realized and unrealized gain (loss) | 2.45 | .74 | (.13) | (2.52) | 3.76 | 6.96 |
Total from investment operations | 2.65 | 1.01 | .09 | (2.28) | 3.90 | 7.22 |
Distributions from net investment income | (.06) | (.25) | (.18) | (.17) | (.18) | (.18) |
Distributions from net realized gain | (.05) | (.05) | – | (2.43) | (2.03) | (1.77) |
Total distributions | (.12)C | (.30) | (.18) | (2.60) | (2.21) | (1.96)D |
Redemption fees added to paid in capitalB | – | – | –E | –E | –E | –E |
Net asset value, end of period | $21.35 | $18.82 | $18.11 | $18.20 | $23.08 | $21.39 |
Total ReturnF,G | 14.15% | 5.61% | .57% | (11.33)% | 20.04% | 46.77% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | .80%J | .81% | .80% | .78% | .79% | .82% |
Expenses net of fee waivers, if any | .80%J | .81% | .80% | .78% | .79% | .81% |
Expenses net of all reductions | .79%J | .80% | .79% | .77% | .79% | .81% |
Net investment income (loss) | 2.04%J | 1.44% | 1.16% | 1.09% | .66% | 1.39% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $787,118 | $744,563 | $1,000,937 | $1,693,410 | $1,892,865 | $1,634,743 |
Portfolio turnover rateK | 54%J | 89% | 77% | 77% | 72%L | 95% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $.12 per share is comprised of distributions from net investment income of $.062 and distributions from net realized gain of $.054 per share.
D Total distributions of $1.96 per share is comprised of distributions from net investment income of $.182 and distributions from net realized gain of $1.773 per share.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
J Annualized
K Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
L 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 (Unaudited)
For the period ended August 31, 2018
1. Organization.
Biotechnology Portfolio, Health Care Portfolio, Health Care Services Portfolio, Medical Technology and Devices Portfolio, and Pharmaceuticals Portfolio (the Funds) are non-diversified funds of Fidelity Select Portfolios (the Trust). 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 Funds invest primarily in securities of companies whose principal business activities fall within specific industries. Each Fund is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds.
Effective August 10, 2018, Biotechnology Portfolio and Health Care Portfolio underwent a 10 for 1 share split. The effect of the share split transaction was to multiply the number of outstanding shares of Biotechnology Portfolio and Health Care Portfolio by a split factor of 10:1, with a corresponding decrease in net asset value (NAV) per share. This event does not impact the overall net assets of Biotechnology Portfolio and Health Care Portfolio. The per share data presented in each Financial Highlights and Shares activity presented in each Statement of Changes in Net Assets for Biotechnology Portfolio and Health Care Portfolio have been retroactively adjusted to reflect this share split.
2. Investments in Fidelity Central Funds.
The Funds invest 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 Funds' Schedules of Investments list each of the Fidelity Central Funds held as of period end, if any, as an investment of each Fund, but do not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, each 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 .005%.
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 are available on the SEC website or upon request.
3. Significant Accounting Policies.
Each Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Funds:
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 each Fund's investments to the Fair Value Committee (the Committee) established by each Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, each 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 each 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 each Fund's investments and ratifies the fair value determinations of the Committee.
Each 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 each 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 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.
Biotechnology Portfolio:
Asset Type | Fair Value | Valuation Technique(s) | Unobservable Input | Amount or Range/Weighted Average | Impact to Valuation from an Increase in Input(a) |
Equities | $ 249,648,879 | Market Comparable | Transaction price | $3.79 - $132.95 / $20.69 | Increase |
Proxy premium | 22.4% - 28.2% / 25.6% | Increase | |||
Market approach | Transaction price | $2.15 - $150.07 / $36.63 | Increase | ||
Discount cash flow | Discount rate | 8.0% | Decrease | ||
Discount for lack of marketability | 10.0% | Decrease | |||
Recovery value | Recovery value | 0.0% | Increase |
(a) 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.
Health Care Portfolio:
Asset Type | Fair Value | Valuation Technique(s) | Unobservable Input | Amount or Range/Weighted Average | Impact to Valuation from an Increase in Input(a) |
Equities | $ 148,073,115 | Market Comparable | Enterprise value/Sales multiple (EV/S) | 5.2 | Increase |
Transaction price | $1.00 - $294.69 / $193.76 | Increase | |||
Discount rate | 24.0% | Decrease | |||
Market approach | Transaction price | $3.11 - $150.07 / $49.23 | Increase |
(a) 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 August 31, 2018, including information on transfers between Level 1 and Level 2, as well as a roll forward of Level 3 investments, is included at the end of each applicable Fund's Schedule of Investments.
Foreign Currency. The Funds 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 Funds' 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 for certain Funds 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 Funds are 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. Certain distributions received by the Funds represent a return of capital or capital gain. The Funds determine the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. 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) for the Funds certain independent Trustees have elected 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 of $763,387 for Biotechnology Portfolio, $558,903 for Health Care Portfolio, $59,209 for Health Care Services Portfolio, $178,196 for Medical Technology and Devices Portfolio and $106,059 for Pharmaceuticals Portfolio are included in the accompanying Statement of Assets and Liabilities in other receivables and other payables and accrued expenses, respectively.
Income Tax Information and Distributions to Shareholders. Each year, each 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. Each Fund files a U.S. federal tax return, in addition to state and local tax returns as required. Each 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 each 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 and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. These differences resulted in distribution reclassifications. In addition, the Funds 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, deferred trustees compensation, net operating losses, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows for each Fund:
Tax cost | Gross unrealized appreciation | Gross unrealized depreciation | Net unrealized appreciation (depreciation) | |
Biotechnology Portfolio | $5,950,786,146 | $3,964,938,674 | $(399,787,419) | $3,565,151,255 |
Health Care Portfolio | 5,302,262,754 | 2,627,500,115 | (87,913,409) | 2,539,586,706 |
Healthcare Services Portfolio | 621,779,606 | 458,175,003 | (6,312,706) | 451,862,297 |
Medical Technology and Devices Portfolio | 4,154,526,354 | 1,857,749,413 | (23,947,102) | 1,833,802,311 |
Pharmaceuticals Portfolio | 593,096,332 | 205,240,887 | (6,119,620) | 199,121,267 |
Capital loss carryforwards are only available to offset future capital gains of the Funds to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Funds are 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 prior fiscal period end and is subject to adjustment.
No expiration | |||
Short-term | Total no expiration | Total capital loss carryforward | |
Pharmaceuticals Portfolio | (24,390,412) | (24,390,412) | (24,390,412) |
Certain of the Funds elected to defer to the next fiscal year ordinary losses recognized during the period January 1, 2018 to February 28, 2018. Loss deferrals were as follows:
Biotechnology Portfolio | $1,355,899 |
Health Care Services Portfolio | 192,826 |
Medical Technology and Devices Portfolio | 2,294,245 |
Restricted Securities. The Funds 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 each applicable Fund's Schedule of Investments.
Consolidated Subsidiary. Biotechnology Portfolio invests in certain investments through a wholly-owned subsidiary ("Subsidiary"), which may be subject to federal and state taxes upon disposition.
As of period end, Biotechnology Portfolio held an investment of $79,413,467 in this Subsidiary, representing .87% of the Fund's net assets. The financial statements have been consolidated and include accounts of the Fund and the Subsidiary. Accordingly, all inter-company transactions and balances have been eliminated.
Any cash held by the Subsidiary is restricted as to its use and is presented as Restricted cash in the Statement of Assets and Liabilities.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions, are noted in the table below.
Purchases ($) | Sales ($) | |
Biotechnology Portfolio | 1,571,279,258 | 2,185,670,017 |
Health Care Portfolio | 2,417,350,528 | 2,254,459,087 |
Health Care Services Portfolio | 373,555,557 | 297,837,053 |
Medical Technology and Devices Portfolio | 1,968,080,823 | 1,168,356,646 |
Pharmaceuticals Portfolio | 199,357,587 | 249,825,027 |
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Funds with investment management related services for which the Funds pay a monthly management fee. The management fee is the sum of an individual fund fee rate and an annualized group fee rate. The individual fund fee rate is applied to each Fund's average net assets. 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, each Fund's annualized management fee rate expressed as a percentage of each Fund's average net assets was as follows:
Individual Rate | Group Rate | Total | |
Biotechnology Portfolio | .30% | .24% | .54% |
Health Care Portfolio | .30% | .24% | .54% |
Health Care Services Portfolio | .30% | .24% | .54% |
Medical Technology and Devices Portfolio | .30% | .24% | .54% |
Pharmaceuticals Portfolio | .30% | .24% | .54% |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Funds' transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees were equivalent to the following annualized rates expressed as a percentage of average net assets:
Biotechnology Portfolio | .16% |
Health Care Portfolio | .15% |
Health Care Services Portfolio | .16% |
Medical Technology and Devices Portfolio | .16% |
Pharmaceuticals Portfolio | .21% |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains each 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. For the period, the fees were equivalent to the following annualized rates:
% of Average Net Assets | |
Biotechnology Portfolio | .02 |
Health Care Portfolio | .02 |
Health Care Services Portfolio | .03 |
Medical Technology and Devices Portfolio | .02 |
Pharmaceuticals Portfolio | .04 |
Brokerage Commissions. Certain Funds placed a portion of their 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 as follows:
Amount | |
Biotechnology Portfolio | $130,953 |
Health Care Portfolio | 49,154 |
Health Care Services Portfolio | 7,995 |
Medical Technology and Devices Portfolio | 31,756 |
Pharmaceuticals Portfolio | 7,831 |
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Funds, along with other registered investment companies having management contracts with Fidelity Management & Research Company (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. Each applicable 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 | |
Health Care Services Portfolio | Borrower | $7,186,000 | 2.04% | $815 |
Interfund Trades. The Funds may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Redemptions In-Kind. During the period, 23,409,830* shares of Health Care Portfolio held by an affiliated entity were redeemed in-kind for investments and cash with a value of $541,001,090. The net realized gain of $233,538,287 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. Health Care Portfolio recognized no gain or loss for federal income tax purposes.
* Share activity prior to August 10, 2018 has been adjusted to reflect the impact of the 10 for 1 share split that occurred on that date.
6. Committed Line of Credit.
Certain Funds participate 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 participating funds have agreed to pay commitment fees on their pro-rata portion of the line of credit, which are reflected in Miscellaneous expenses on the Statement of Operations, and are as follows:
Biotechnology Portfolio | $12,131 |
Health Care Portfolio | 9,492 |
Health Care Services Portfolio | 1,153 |
Medical Technology and Devices Portfolio | 5,800 |
Pharmaceuticals Portfolio | 1,044 |
During the period, the Funds did not borrow on this line of credit.
7. Security Lending.
Certain Funds lend portfolio securities through a lending agent from time to time in order to earn additional income. On the settlement date of the loan, each applicable 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 Funds and any additional required collateral is delivered to the Funds on the next business day. The Funds or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Funds may apply collateral received from the borrower against the obligation. The Funds 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 each applicable 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 on each applicable Fund's 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 Certain Funds include an amount in addition to trade execution, which may be rebated back to the Funds to offset certain expenses. In addition, through arrangements with each applicable Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce each applicable Fund's expenses. All of the applicable expense reductions are noted in the table below.
Brokerage Service reduction | Custody expense reduction | |
Biotechnology Portfolio | $241,240 | $– |
Health Care Portfolio | 492,889 | 10,709 |
Health Care Services Portfolio | 12,836 | 164 |
Medical Technology and Devices Portfolio | 212,438 | 687 |
Pharmaceuticals Portfolio | 46,267 | 204 |
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses as follows:
Amount | |
Biotechnology Portfolio | $39,017 |
Health Care Portfolio | 30,149 |
Health Care Services Portfolio | 3,602 |
Medical Technology and Devices Portfolio | 17,538 |
Pharmaceuticals Portfolio | 3,554 |
9. Other.
The Funds' 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 Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote.
Shareholder Expense Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds 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 (March 1, 2018 to August 31, 2018).
Actual Expenses
The first line of the accompanying table for 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 fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 fund provides information about hypothetical account values and hypothetical expenses based on a fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's 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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 March 1, 2018 | Ending Account Value August 31, 2018 | Expenses Paid During Period-B March 1, 2018 to August 31, 2018 | |
Biotechnology Portfolio | .72% | |||
Actual | $1,000.00 | $1,093.00 | $3.80 | |
Hypothetical-C | $1,000.00 | $1,021.58 | $3.67 | |
Health Care Portfolio | .71% | |||
Actual | $1,000.00 | $1,189.00 | $3.92 | |
Hypothetical-C | $1,000.00 | $1,021.63 | $3.62 | |
Health Care Services Portfolio | .75% | |||
Actual | $1,000.00 | $1,202.00 | $4.16 | |
Hypothetical-C | $1,000.00 | $1,021.42 | $3.82 | |
Medical Technology and Devices Portfolio | .73% | |||
Actual | $1,000.00 | $1,243.90 | $4.13 | |
Hypothetical-C | $1,000.00 | $1,021.53 | $3.72 | |
Pharmaceuticals Portfolio | .80% | |||
Actual | $1,000.00 | $1,141.50 | $4.32 | |
Hypothetical-C | $1,000.00 | $1,021.17 | $4.08 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/ 365 (to reflect the one-half year period).
C 5% return per year before expenses
SELHC-SANN-1018
1.813645.113
Fidelity® Select Portfolios® Banking Portfolio Brokerage and Investment Management Portfolio Consumer Finance Portfolio Financial Services Portfolio Insurance Portfolio Semi-Annual Report August 31, 2018 |
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Contents
Banking Portfolio | |
Brokerage and Investment Management Portfolio | |
Consumer Finance Portfolio | |
Financial Services Portfolio | |
Insurance Portfolio | |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-800-544-8544 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. © 2018 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Funds. This report is not authorized for distribution to prospective investors in the Funds unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.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.
Banking Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Wells Fargo & Co. | 8.9 |
Bank of America Corp. | 8.0 |
Huntington Bancshares, Inc. | 6.6 |
U.S. Bancorp | 5.4 |
PNC Financial Services Group, Inc. | 5.2 |
Citigroup, Inc. | 5.0 |
M&T Bank Corp. | 3.3 |
Capital One Financial Corp. | 2.9 |
Essent Group Ltd. | 2.7 |
Bank of the Ozarks, Inc. | 2.7 |
50.7 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Banks | 85.9% | |
Consumer Finance | 5.5% | |
Thrifts & Mortgage Finance | 5.4% | |
Capital Markets | 2.2% | |
Software | 0.4% | |
All Others* | 0.6% |
* Includes net other assets (liabilities).
Banking Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.4% | |||
Shares | Value | ||
Banks - 85.9% | |||
Diversified Banks - 28.0% | |||
Amalgamated Bank | 170,100 | $2,966,544 | |
Bank of America Corp. | 1,732,376 | 53,582,390 | |
Citigroup, Inc. | 469,200 | 33,425,808 | |
The Bank of NT Butterfield & Son Ltd. | 42,800 | 2,261,552 | |
U.S. Bancorp | 664,500 | 35,956,095 | |
Wells Fargo & Co. | 1,014,292 | 59,315,796 | |
187,508,185 | |||
Regional Banks - 57.9% | |||
1st Source Corp. | 99,560 | 5,574,364 | |
American National Bankshares, Inc. | 7,419 | 305,292 | |
Bank of the Ozarks, Inc. | 453,900 | 18,364,794 | |
BayCom Corp. | 132,482 | 3,471,028 | |
BB&T Corp. | 69,400 | 3,585,204 | |
Cadence Bancorp Class A | 235,100 | 6,641,575 | |
Camden National Corp. | 96,332 | 4,406,226 | |
CIT Group, Inc. | 136,300 | 7,392,912 | |
Community Trust Bancorp, Inc. | 120,176 | 5,936,694 | |
ConnectOne Bancorp, Inc. | 135,400 | 3,337,610 | |
Cullen/Frost Bankers, Inc. | 39,000 | 4,324,710 | |
CVB Financial Corp. | 46,300 | 1,113,515 | |
East West Bancorp, Inc. | 201,100 | 12,747,729 | |
First Citizen Bancshares, Inc. | 37,000 | 17,575,370 | |
First Hawaiian, Inc. | 580,900 | 16,840,291 | |
First Horizon National Corp. | 864,200 | 15,918,564 | |
First Interstate Bancsystem, Inc. | 151,300 | 7,027,885 | |
Great Western Bancorp, Inc. | 226,200 | 9,848,748 | |
Hanmi Financial Corp. | 202,500 | 5,285,250 | |
Hilltop Holdings, Inc. | 368,100 | 7,638,075 | |
Hope Bancorp, Inc. | 465,720 | 8,154,757 | |
Huntington Bancshares, Inc. | 2,710,300 | 43,933,963 | |
Investors Bancorp, Inc. | 279,800 | 3,581,440 | |
Lakeland Financial Corp. | 117,000 | 5,764,590 | |
M&T Bank Corp. | 126,500 | 22,409,475 | |
Northrim Bancorp, Inc. | 44,500 | 1,982,475 | |
PacWest Bancorp | 158,136 | 7,984,287 | |
PNC Financial Services Group, Inc. | 243,191 | 34,907,636 | |
Popular, Inc. | 116,537 | 5,866,473 | |
Preferred Bank, Los Angeles | 94,200 | 5,765,982 | |
Prosperity Bancshares, Inc. | 127,500 | 9,542,100 | |
Regions Financial Corp. | 35,500 | 690,830 | |
Sierra Bancorp | 17,814 | 528,541 | |
Signature Bank | 148,600 | 17,198,964 | |
SunTrust Banks, Inc. | 118,100 | 8,687,436 | |
SVB Financial Group (a) | 12,400 | 4,002,100 | |
Trico Bancshares | 121,871 | 4,738,344 | |
UMB Financial Corp. | 104,800 | 7,885,152 | |
Univest Corp. of Pennsylvania | 146,900 | 4,186,650 | |
Valley National Bancorp | 496,500 | 5,982,825 | |
WesBanco, Inc. | 172,100 | 8,493,135 | |
Wintrust Financial Corp. | 89,600 | 7,934,080 | |
Zions Bancorporation | 207,150 | 11,039,024 | |
388,596,095 | |||
TOTAL BANKS | 576,104,280 | ||
Capital Markets - 2.2% | |||
Asset Management & Custody Banks - 2.2% | |||
Northern Trust Corp. | 27,000 | 2,901,420 | |
State Street Corp. | 137,600 | 11,958,816 | |
14,860,236 | |||
Consumer Finance - 5.5% | |||
Consumer Finance - 5.5% | |||
Capital One Financial Corp. | 196,700 | 19,491,003 | |
Discover Financial Services | 400 | 31,248 | |
OneMain Holdings, Inc. (a) | 242,700 | 8,907,090 | |
SLM Corp. (a) | 295,700 | 3,465,604 | |
Synchrony Financial | 149,900 | 4,747,333 | |
36,642,278 | |||
Software - 0.4% | |||
Application Software - 0.4% | |||
Cardlytics, Inc. (a) | 135,994 | 2,772,918 | |
Thrifts & Mortgage Finance - 5.4% | |||
Thrifts & Mortgage Finance - 5.4% | |||
Beneficial Bancorp, Inc. | 291,953 | 5,138,373 | |
Essent Group Ltd. (a) | 423,829 | 18,377,225 | |
Meridian Bancorp, Inc. Maryland | 195,265 | 3,495,244 | |
MGIC Investment Corp. (a) | 251,700 | 3,201,624 | |
NMI Holdings, Inc. (a) | 269,514 | 5,821,502 | |
36,033,968 | |||
TOTAL COMMON STOCKS | |||
(Cost $483,484,811) | 666,413,680 | ||
TOTAL INVESTMENT IN SECURITIES - 99.4% | |||
(Cost $483,484,811) | 666,413,680 | ||
NET OTHER ASSETS (LIABILITIES) - 0.6% | 4,243,463 | ||
NET ASSETS - 100% | $670,657,143 |
Legend
(a) Non-income producing
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 | $23,680 |
Fidelity Securities Lending Cash Central Fund | 697 |
Total | $24,377 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
Banking Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $483,484,811) | $666,413,680 | |
Receivable for investments sold | 13,654,515 | |
Receivable for fund shares sold | 329,886 | |
Dividends receivable | 880,644 | |
Distributions receivable from Fidelity Central Funds | 3,643 | |
Prepaid expenses | 8,352 | |
Other receivables | 20,075 | |
Total assets | 681,310,795 | |
Liabilities | ||
Payable to custodian bank | $797,922 | |
Payable for investments purchased | 5,776,553 | |
Payable for fund shares redeemed | 3,630,699 | |
Accrued management fee | 305,326 | |
Other affiliated payables | 120,191 | |
Other payables and accrued expenses | 22,961 | |
Total liabilities | 10,653,652 | |
Net Assets | $670,657,143 | |
Net Assets consist of: | ||
Paid in capital | $416,954,195 | |
Undistributed net investment income | 4,624,689 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 66,149,390 | |
Net unrealized appreciation (depreciation) on investments | 182,928,869 | |
Net Assets, for 19,472,190 shares outstanding | $670,657,143 | |
Net Asset Value, offering price and redemption price per share ($670,657,143 ÷ 19,472,190 shares) | $34.44 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $7,352,192 | |
Income from Fidelity Central Funds | 24,377 | |
Total income | 7,376,569 | |
Expenses | ||
Management fee | $1,955,132 | |
Transfer agent fees | 641,639 | |
Accounting and security lending fees | 128,094 | |
Custodian fees and expenses | 5,201 | |
Independent trustees' fees and expenses | 1,857 | |
Registration fees | 36,054 | |
Audit | 18,629 | |
Legal | 4,561 | |
Interest | 2,100 | |
Miscellaneous | 3,838 | |
Total expenses before reductions | 2,797,105 | |
Expense reductions | (43,156) | |
Total expenses after reductions | 2,753,949 | |
Net investment income (loss) | 4,622,620 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 68,317,167 | |
Fidelity Central Funds | (335) | |
Foreign currency transactions | 568 | |
Total net realized gain (loss) | 68,317,400 | |
Change in net unrealized appreciation (depreciation) on investment securities | (70,940,624) | |
Net gain (loss) | (2,623,224) | |
Net increase (decrease) in net assets resulting from operations | $1,999,396 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $4,622,620 | $12,317,869 |
Net realized gain (loss) | 68,317,400 | 103,324,632 |
Change in net unrealized appreciation (depreciation) | (70,940,624) | (46,490,051) |
Net increase (decrease) in net assets resulting from operations | 1,999,396 | 69,152,450 |
Distributions to shareholders from net investment income | (3,595,602) | (7,600,446) |
Distributions to shareholders from net realized gain | (56,014,493) | (13,137,423) |
Total distributions | (59,610,095) | (20,737,869) |
Share transactions | ||
Proceeds from sales of shares | 94,017,703 | 415,824,225 |
Reinvestment of distributions | 55,944,707 | 19,534,739 |
Cost of shares redeemed | (251,939,214) | (915,429,348) |
Net increase (decrease) in net assets resulting from share transactions | (101,976,804) | (480,070,384) |
Redemption fees | – | 41,261 |
Total increase (decrease) in net assets | (159,587,503) | (431,614,542) |
Net Assets | ||
Beginning of period | 830,244,646 | 1,261,859,188 |
End of period | $670,657,143 | $830,244,646 |
Other Information | ||
Undistributed net investment income end of period | $4,624,689 | $3,597,671 |
Shares | ||
Sold | 2,720,013 | 12,143,322 |
Issued in reinvestment of distributions | 1,723,497 | 553,617 |
Redeemed | (7,520,695) | (27,674,968) |
Net increase (decrease) | (3,077,185) | (14,978,029) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Banking Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $36.82 | $33.63 | $21.70 | $26.24 | $26.11 | $20.58 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .22 | .42 | .33 | .33 | .30 | .29 |
Net realized and unrealized gain (loss) | .04C | 3.68 | 11.85 | (3.43) | 1.04 | 5.97 |
Total from investment operations | .26 | 4.10 | 12.18 | (3.10) | 1.34 | 6.26 |
Distributions from net investment income | (.16) | (.33) | (.25) | (.28) | (.34) | (.20) |
Distributions from net realized gain | (2.48) | (.58) | – | (1.16) | (.87) | (.53) |
Total distributions | (2.64) | (.91) | (.25) | (1.44) | (1.21) | (.73) |
Redemption fees added to paid in capitalB | – | –D | –D | –D | –D | –D |
Net asset value, end of period | $34.44 | $36.82 | $33.63 | $21.70 | $26.24 | $26.11 |
Total ReturnE,F | 1.13% | 12.31% | 56.16% | (12.57)% | 5.30% | 30.48% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .77%I | .77% | .79% | .79% | .80% | .81% |
Expenses net of fee waivers, if any | .77%I | .77% | .79% | .79% | .80% | .81% |
Expenses net of all reductions | .76%I | .77% | .79% | .79% | .79% | .80% |
Net investment income (loss) | 1.28%I | 1.26% | 1.20% | 1.27% | 1.14% | 1.22% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $670,657 | $830,245 | $1,261,859 | $565,479 | $584,635 | $809,980 |
Portfolio turnover rateJ | 41%I | 35% | 34% | 63% | 65% | 91% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
I Annualized
J 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.
Brokerage and Investment Management Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
S&P Global, Inc. | 8.3 |
BlackRock, Inc. Class A | 7.8 |
TD Ameritrade Holding Corp. | 7.7 |
Charles Schwab Corp. | 7.0 |
Morgan Stanley | 6.8 |
LPL Financial | 5.0 |
MSCI, Inc. | 5.0 |
Ameriprise Financial, Inc. | 4.6 |
CME Group, Inc. | 4.3 |
Cboe Global Markets, Inc. | 4.2 |
60.7 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Capital Markets | 99.6% | |
All Others* | 0.4% |
* Includes short-term investments and net other assets (liabilities).
Brokerage and Investment Management Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.6% | |||
Shares | Value | ||
Capital Markets - 99.6% | |||
Asset Management & Custody Banks - 25.3% | |||
Ameriprise Financial, Inc. | 119,000 | $16,893,240 | |
Apollo Global Management LLC Class A | 428,800 | 14,806,464 | |
BlackRock, Inc. Class A | 59,900 | 28,695,694 | |
Eaton Vance Corp. (non-vtg.) | 104,100 | 5,489,193 | |
State Street Corp. | 152,200 | 13,227,702 | |
T. Rowe Price Group, Inc. | 116,400 | 13,489,596 | |
92,601,889 | |||
Financial Exchanges & Data - 29.6% | |||
Cboe Global Markets, Inc. | 153,638 | 15,486,710 | |
CME Group, Inc. | 90,200 | 15,760,646 | |
MarketAxess Holdings, Inc. | 20,900 | 3,967,238 | |
Moody's Corp. | 51,000 | 9,079,020 | |
MSCI, Inc. | 100,600 | 18,134,156 | |
S&P Global, Inc. | 146,300 | 30,291,416 | |
The NASDAQ OMX Group, Inc. | 162,200 | 15,480,368 | |
108,199,554 | |||
Investment Banking & Brokerage - 44.7% | |||
Charles Schwab Corp. | 504,980 | 25,647,934 | |
E*TRADE Financial Corp. (a) | 162,600 | 9,570,636 | |
Gain Capital Holdings, Inc. (b) | 511,900 | 3,772,703 | |
Investment Technology Group, Inc. | 454,600 | 9,946,648 | |
LPL Financial | 274,400 | 18,176,256 | |
Moelis & Co. Class A | 176,300 | 10,234,215 | |
Morgan Stanley | 507,700 | 24,790,991 | |
PJT Partners, Inc. | 223,712 | 12,957,399 | |
Raymond James Financial, Inc. | 108,000 | 10,048,320 | |
TD Ameritrade Holding Corp. | 479,100 | 28,060,887 | |
Virtu Financial, Inc. Class A | 459,400 | 10,014,920 | |
163,220,909 | |||
TOTAL CAPITAL MARKETS | 364,022,352 | ||
TOTAL COMMON STOCKS | |||
(Cost $276,297,513) | 364,022,352 | ||
Money Market Funds - 0.2% | |||
Fidelity Cash Central Fund, 1.97% (c) | 705,615 | 705,756 | |
Fidelity Securities Lending Cash Central Fund 1.98% (c)(d) | 188,386 | 188,405 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $894,161) | 894,161 | ||
TOTAL INVESTMENT IN SECURITIES - 99.8% | |||
(Cost $277,191,674) | 364,916,513 | ||
NET OTHER ASSETS (LIABILITIES) - 0.2% | 682,609 | ||
NET ASSETS - 100% | $365,599,122 |
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 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 | $14,038 |
Fidelity Securities Lending Cash Central Fund | 33,058 |
Total | $47,096 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
Brokerage and Investment Management Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $184,250) — See accompanying schedule: Unaffiliated issuers (cost $276,297,513) | $364,022,352 | |
Fidelity Central Funds (cost $894,161) | 894,161 | |
Total Investment in Securities (cost $277,191,674) | $364,916,513 | |
Receivable for investments sold | 1,116,459 | |
Receivable for fund shares sold | 32,125 | |
Dividends receivable | 701,101 | |
Distributions receivable from Fidelity Central Funds | 2,531 | |
Prepaid expenses | 4,719 | |
Other receivables | 58,625 | |
Total assets | 366,832,073 | |
Liabilities | ||
Payable for fund shares redeemed | $754,229 | |
Accrued management fee | 164,740 | |
Other affiliated payables | 68,538 | |
Other payables and accrued expenses | 57,944 | |
Collateral on securities loaned | 187,500 | |
Total liabilities | 1,232,951 | |
Net Assets | $365,599,122 | |
Net Assets consist of: | ||
Paid in capital | $272,512,809 | |
Undistributed net investment income | 2,567,302 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 2,793,280 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 87,725,731 | |
Net Assets, for 4,719,582 shares outstanding | $365,599,122 | |
Net Asset Value, offering price and redemption price per share ($365,599,122 ÷ 4,719,582 shares) | $77.46 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $4,153,315 | |
Income from Fidelity Central Funds | 47,096 | |
Total income | 4,200,411 | |
Expenses | ||
Management fee | $1,133,438 | |
Transfer agent fees | 361,270 | |
Accounting and security lending fees | 82,390 | |
Custodian fees and expenses | 3,393 | |
Independent trustees' fees and expenses | 1,077 | |
Registration fees | 23,772 | |
Audit | 18,789 | |
Legal | 2,134 | |
Interest | 573 | |
Miscellaneous | 1,734 | |
Total expenses before reductions | 1,628,570 | |
Expense reductions | (32,286) | |
Total expenses after reductions | 1,596,284 | |
Net investment income (loss) | 2,604,127 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 3,100,300 | |
Fidelity Central Funds | 950 | |
Foreign currency transactions | (27) | |
Total net realized gain (loss) | 3,101,223 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (21,842,413) | |
Assets and liabilities in foreign currencies | (1,430) | |
Total change in net unrealized appreciation (depreciation) | (21,843,843) | |
Net gain (loss) | (18,742,620) | |
Net increase (decrease) in net assets resulting from operations | $(16,138,493) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $2,604,127 | $6,530,952 |
Net realized gain (loss) | 3,101,223 | 45,743,147 |
Change in net unrealized appreciation (depreciation) | (21,843,843) | 51,881,187 |
Net increase (decrease) in net assets resulting from operations | (16,138,493) | 104,155,286 |
Distributions to shareholders from net investment income | (1,024,259) | (4,145,029) |
Distributions to shareholders from net realized gain | (20,392,564) | (25,376,935) |
Total distributions | (21,416,823) | (29,521,964) |
Share transactions | ||
Proceeds from sales of shares | 30,082,002 | 145,843,098 |
Reinvestment of distributions | 20,158,727 | 27,880,043 |
Cost of shares redeemed | (109,067,132) | (191,663,677) |
Net increase (decrease) in net assets resulting from share transactions | (58,826,403) | (17,940,536) |
Redemption fees | – | 5,197 |
Total increase (decrease) in net assets | (96,381,719) | 56,697,983 |
Net Assets | ||
Beginning of period | 461,980,841 | 405,282,858 |
End of period | $365,599,122 | $461,980,841 |
Other Information | ||
Undistributed net investment income end of period | $2,567,302 | $987,434 |
Shares | ||
Sold | 367,132 | 1,846,524 |
Issued in reinvestment of distributions | 260,415 | 357,771 |
Redeemed | (1,376,910) | (2,432,909) |
Net increase (decrease) | (749,363) | (228,614) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Brokerage and Investment Management Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $84.47 | $71.13 | $54.65 | $74.78 | $71.99 | $55.99 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .50 | 1.15 | .89 | .72 | .96 | .99 |
Net realized and unrealized gain (loss) | (3.58) | 17.88 | 16.44 | (16.77) | 4.39 | 15.41 |
Total from investment operations | (3.08) | 19.03 | 17.33 | (16.05) | 5.35 | 16.40 |
Distributions from net investment income | (.19) | (.82) | (.83) | (.74) | (.83) | (.39) |
Distributions from net realized gain | (3.74) | (4.87) | (.01) | (3.34) | (1.73) | (.02) |
Total distributions | (3.93) | (5.69) | (.85)C | (4.08) | (2.56) | (.40)D |
Redemption fees added to paid in capitalB | – | –E | –E | –E | –E | –E |
Net asset value, end of period | $77.46 | $84.47 | $71.13 | $54.65 | $74.78 | $71.99 |
Total ReturnF,G | (3.64)% | 27.51% | 31.76% | (22.23)% | 7.43% | 29.29% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | .78%J | .79% | .82% | .79% | .79% | .82% |
Expenses net of fee waivers, if any | .78%J | .79% | .82% | .79% | .79% | .82% |
Expenses net of all reductions | .76%J | .78% | .80% | .78% | .79% | .80% |
Net investment income (loss) | 1.24%J | 1.49% | 1.43% | 1.02% | 1.32% | 1.52% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $365,599 | $461,981 | $405,283 | $310,570 | $577,953 | $834,222 |
Portfolio turnover rateK | 27%J | 75% | 146% | 67% | 31% | 182% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $.85 per share is comprised of distributions from net investment income of $.831 and distributions from net realized gain of $.014 per share.
D Total distributions of $.40 per share is comprised of distributions from net investment income of $.388 and distributions from net realized gain of $.016 per share.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
J Annualized
K 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.
Consumer Finance Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
MasterCard, Inc. Class A | 7.4 |
Capital One Financial Corp. | 6.6 |
Synchrony Financial | 6.4 |
Visa, Inc. Class A | 6.3 |
Ally Financial, Inc. | 5.9 |
Credit Acceptance Corp. | 3.9 |
American Express Co. | 3.9 |
Discover Financial Services | 3.7 |
AGNC Investment Corp. | 3.5 |
JPMorgan Chase & Co. | 3.5 |
51.1 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Consumer Finance | 43.6% | |
IT Services | 22.3% | |
Thrifts & Mortgage Finance | 11.7% | |
Mortgage Real Estate Investment Trusts | 11.2% | |
Banks | 9.0% | |
All Others* | 2.2% |
* Includes short-term investments and net other assets (liabilities).
Consumer Finance Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.8% | |||
Shares | Value | ||
Banks - 9.0% | |||
Diversified Banks - 6.3% | |||
Bank of America Corp. | 32,400 | $1,002,132 | |
JPMorgan Chase & Co. | 32,600 | 3,735,308 | |
Wells Fargo & Co. | 34,300 | 2,005,864 | |
6,743,304 | |||
Regional Banks - 2.7% | |||
Huntington Bancshares, Inc. | 91,500 | 1,483,215 | |
Signature Bank | 11,700 | 1,354,158 | |
2,837,373 | |||
TOTAL BANKS | 9,580,677 | ||
Consumer Finance - 43.6% | |||
Consumer Finance - 43.6% | |||
Ally Financial, Inc. | 232,700 | 6,254,976 | |
American Express Co. | 38,900 | 4,122,622 | |
Capital One Financial Corp. | 70,600 | 6,995,754 | |
Credit Acceptance Corp. (a) | 9,175 | 4,190,314 | |
Discover Financial Services | 50,800 | 3,968,496 | |
First Cash Financial Services, Inc. | 24,411 | 1,984,614 | |
LendingClub Corp. (a) | 80,800 | 291,688 | |
Navient Corp. | 104,600 | 1,426,744 | |
Nelnet, Inc. Class A | 300 | 17,295 | |
OneMain Holdings, Inc. (a) | 97,500 | 3,578,250 | |
Santander Consumer U.S.A. Holdings, Inc. | 141,200 | 3,047,096 | |
SLM Corp. (a) | 309,800 | 3,630,856 | |
Synchrony Financial | 216,600 | 6,859,722 | |
46,368,427 | |||
IT Services - 22.3% | |||
Data Processing & Outsourced Services - 22.3% | |||
Adyen BV (b) | 1,600 | 1,121,749 | |
Alliance Data Systems Corp. | 2,200 | 524,876 | |
Fidelity National Information Services, Inc. | 7,200 | 778,824 | |
FleetCor Technologies, Inc. (a) | 11,700 | 2,500,758 | |
MasterCard, Inc. Class A | 36,700 | 7,911,052 | |
PayPal Holdings, Inc. (a) | 23,600 | 2,178,988 | |
Total System Services, Inc. | 7,400 | 718,836 | |
Visa, Inc. Class A | 45,336 | 6,659,405 | |
Wirecard AG | 1,900 | 421,898 | |
Worldpay, Inc. (a) | 9,500 | 925,205 | |
23,741,591 | |||
Mortgage Real Estate Investment Trusts - 11.2% | |||
Mortgage REITs - 11.2% | |||
AGNC Investment Corp. | 198,800 | 3,781,176 | |
Annaly Capital Management, Inc. | 119,115 | 1,265,001 | |
Capstead Mortgage Corp. | 100 | 840 | |
Invesco Mortgage Capital, Inc. | 84,457 | 1,370,737 | |
MFA Financial, Inc. | 234,900 | 1,799,334 | |
New Residential Investment Corp. | 185,650 | 3,447,521 | |
Redwood Trust, Inc. | 16,000 | 271,680 | |
11,936,289 | |||
Thrifts & Mortgage Finance - 11.7% | |||
Thrifts & Mortgage Finance - 11.7% | |||
BofI Holding, Inc. (a) | 48,800 | 1,817,312 | |
Dime Community Bancshares, Inc. | 23,400 | 424,710 | |
Flagstar Bancorp, Inc. (a) | 100 | 3,305 | |
Meridian Bancorp, Inc. Maryland | 63,200 | 1,131,280 | |
MGIC Investment Corp. (a) | 258,128 | 3,283,388 | |
New York Community Bancorp, Inc. | 22,300 | 240,171 | |
Northwest Bancshares, Inc. | 30,700 | 559,354 | |
Oritani Financial Corp. | 29,600 | 479,520 | |
Radian Group, Inc. | 59,365 | 1,206,890 | |
TFS Financial Corp. | 118,800 | 1,834,272 | |
Washington Federal, Inc. | 42,400 | 1,445,840 | |
12,426,042 | |||
TOTAL COMMON STOCKS | |||
(Cost $72,809,954) | 104,053,026 | ||
Money Market Funds - 2.3% | |||
Fidelity Cash Central Fund, 1.97% (c) | |||
(Cost $2,477,801) | 2,477,305 | 2,477,801 | |
TOTAL INVESTMENT IN SECURITIES - 100.1% | |||
(Cost $75,287,755) | 106,530,827 | ||
NET OTHER ASSETS (LIABILITIES) - (0.1)% | (107,601) | ||
NET ASSETS - 100% | $106,423,226 |
Legend
(a) Non-income producing
(b) 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 $1,121,749 or 1.1% of net assets.
(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 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 | $8,562 |
Fidelity Securities Lending Cash Central Fund | 5,049 |
Total | $13,611 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
Consumer Finance Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $72,809,954) | $104,053,026 | |
Fidelity Central Funds (cost $2,477,801) | 2,477,801 | |
Total Investment in Securities (cost $75,287,755) | $106,530,827 | |
Cash | 56 | |
Receivable for fund shares sold | 28,630 | |
Dividends receivable | 81,824 | |
Distributions receivable from Fidelity Central Funds | 3,612 | |
Prepaid expenses | 1,080 | |
Other receivables | 1,418 | |
Total assets | 106,647,447 | |
Liabilities | ||
Payable for fund shares redeemed | $135,152 | |
Accrued management fee | 46,857 | |
Transfer agent fee payable | 18,682 | |
Other affiliated payables | 3,381 | |
Other payables and accrued expenses | 20,149 | |
Total liabilities | 224,221 | |
Net Assets | $106,423,226 | |
Net Assets consist of: | ||
Paid in capital | $75,619,645 | |
Undistributed net investment income | 467,100 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (906,591) | |
Net unrealized appreciation (depreciation) on investments | 31,243,072 | |
Net Assets, for 6,404,977 shares outstanding | $106,423,226 | |
Net Asset Value, offering price and redemption price per share ($106,423,226 ÷ 6,404,977 shares) | $16.62 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $1,015,823 | |
Income from Fidelity Central Funds | 13,611 | |
Total income | 1,029,434 | |
Expenses | ||
Management fee | $274,937 | |
Transfer agent fees | 112,678 | |
Accounting and security lending fees | 20,147 | |
Custodian fees and expenses | 1,902 | |
Independent trustees' fees and expenses | 251 | |
Registration fees | 19,701 | |
Audit | 19,835 | |
Legal | 514 | |
Miscellaneous | 784 | |
Total expenses before reductions | 450,749 | |
Expense reductions | (12,452) | |
Total expenses after reductions | 438,297 | |
Net investment income (loss) | 591,137 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 886,118 | |
Fidelity Central Funds | (42) | |
Foreign currency transactions | 293 | |
Total net realized gain (loss) | 886,369 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 4,982,411 | |
Fidelity Central Funds | 89 | |
Total change in net unrealized appreciation (depreciation) | 4,982,500 | |
Net gain (loss) | 5,868,869 | |
Net increase (decrease) in net assets resulting from operations | $6,460,006 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $591,137 | $1,353,349 |
Net realized gain (loss) | 886,369 | 14,541,035 |
Change in net unrealized appreciation (depreciation) | 4,982,500 | 116,425 |
Net increase (decrease) in net assets resulting from operations | 6,460,006 | 16,010,809 |
Distributions to shareholders from net investment income | – | (1,603,897) |
Distributions to shareholders from net realized gain | (4,270,027) | – |
Share transactions | ||
Proceeds from sales of shares | 8,205,789 | 22,638,327 |
Reinvestment of distributions | 4,089,139 | 1,541,855 |
Cost of shares redeemed | (12,166,902) | (36,306,154) |
Net increase (decrease) in net assets resulting from share transactions | 128,026 | (12,125,972) |
Redemption fees | – | 1,316 |
Total increase (decrease) in net assets | 2,318,005 | 2,282,256 |
Net Assets | ||
Beginning of period | 104,105,221 | 101,822,965 |
End of period | $106,423,226 | $104,105,221 |
Other Information | ||
Undistributed net investment income end of period | $467,100 | $– |
Distributions in excess of net investment income end of period | $– | $(124,037) |
Shares | ||
Sold | 509,263 | 1,464,790 |
Issued in reinvestment of distributions | 270,625 | 97,268 |
Redeemed | (764,735) | (2,436,648) |
Net increase (decrease) | 15,153 | (874,590) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Consumer Finance Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $16.29 | $14.02 | $10.94 | $14.01 | $16.16 | $15.37 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .09 | .20 | .21 | .20 | .22 | .34 |
Net realized and unrealized gain (loss) | .92 | 2.33C | 3.38 | (1.99) | .95 | 3.18 |
Total from investment operations | 1.01 | 2.53 | 3.59 | (1.79) | 1.17 | 3.52 |
Distributions from net investment income | – | (.26) | (.23) | (.20) | (.30) | (.40) |
Distributions from net realized gain | (.68) | – | (.28) | (1.08) | (3.03) | (2.33) |
Total distributions | (.68) | (.26) | (.51) | (1.28) | (3.32)D | (2.73) |
Redemption fees added to paid in capitalB | – | –E | –E | –E | –E | –E |
Net asset value, end of period | $16.62 | $16.29 | $14.02 | $10.94 | $14.01 | $16.16 |
Total ReturnF,G | 6.62% | 18.07%C | 33.57% | (14.01)% | 7.69% | 24.31% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | .88%J | .90% | .94% | .90% | .88% | .85% |
Expenses net of fee waivers, if any | .88%J | .89% | .94% | .89% | .88% | .85% |
Expenses net of all reductions | .86%J | .89% | .93% | .89% | .88% | .83% |
Net investment income (loss) | 1.16%J | 1.38% | 1.72% | 1.53% | 1.45% | 2.07% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $106,423 | $104,105 | $101,823 | $86,643 | $134,569 | $250,222 |
Portfolio turnover rateK | 21%J | 81% | 44% | 48% | 71% | 89% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.28 per share. Excluding these litigation proceeds, the total return would have been 16.18%.
D Total distributions of $3.32 per share is comprised of distributions from net investment income of $.296 and distributions from net realized gain of $3.026 per share.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
J Annualized
K 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 Services Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Bank of America Corp. | 6.1 |
Citigroup, Inc. | 5.6 |
Capital One Financial Corp. | 4.8 |
TD Ameritrade Holding Corp. | 4.0 |
Huntington Bancshares, Inc. | 4.0 |
PNC Financial Services Group, Inc. | 3.8 |
The Travelers Companies, Inc. | 3.5 |
Hartford Financial Services Group, Inc. | 3.5 |
American International Group, Inc. | 3.3 |
Goldman Sachs Group, Inc. | 3.3 |
41.9 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Banks | 34.7% | |
Insurance | 22.1% | |
Capital Markets | 20.8% | |
Consumer Finance | 10.3% | |
Diversified Financial Services | 3.0% | |
All Others* | 9.1% |
* Includes short-term investments and net other assets (liabilities).
Financial Services Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.5% | |||
Shares | Value | ||
Banks - 34.7% | |||
Diversified Banks - 16.8% | |||
Bank of America Corp. | 1,400,000 | $43,302,000 | |
Citigroup, Inc. | 560,000 | 39,894,400 | |
JPMorgan Chase & Co. | 160,500 | 18,390,090 | |
Wells Fargo & Co. | 310,000 | 18,128,800 | |
119,715,290 | |||
Regional Banks - 17.9% | |||
Bank of the Ozarks, Inc. | 150,000 | 6,069,000 | |
CoBiz, Inc. | 210,000 | 4,840,500 | |
East West Bancorp, Inc. | 140,000 | 8,874,600 | |
First Citizen Bancshares, Inc. | 9,500 | 4,512,595 | |
First Hawaiian, Inc. | 100,000 | 2,899,000 | |
First Horizon National Corp. | 739,684 | 13,624,979 | |
Huntington Bancshares, Inc. | 1,766,800 | 28,639,828 | |
M&T Bank Corp. | 80,000 | 14,172,000 | |
PNC Financial Services Group, Inc. | 186,500 | 26,770,210 | |
Popular, Inc. | 124,500 | 6,267,330 | |
Preferred Bank, Los Angeles | 10,415 | 637,502 | |
Signature Bank | 50,000 | 5,787,000 | |
SunTrust Banks, Inc. | 15,000 | 1,103,400 | |
United Community Bank, Inc. | 28,000 | 849,520 | |
Wintrust Financial Corp. | 25,000 | 2,213,750 | |
127,261,214 | |||
TOTAL BANKS | 246,976,504 | ||
Capital Markets - 20.8% | |||
Asset Management & Custody Banks - 6.5% | |||
Apollo Global Management LLC Class A | 200,000 | 6,906,000 | |
Bank of New York Mellon Corp. | 346,800 | 18,085,620 | |
Northern Trust Corp. | 161,900 | 17,397,774 | |
Oaktree Capital Group LLC Class A | 88,663 | 3,604,151 | |
45,993,545 | |||
Financial Exchanges & Data - 2.1% | |||
Cboe Global Markets, Inc. | 113,300 | 11,420,640 | |
IntercontinentalExchange, Inc. | 50,000 | 3,811,500 | |
15,232,140 | |||
Investment Banking & Brokerage - 12.2% | |||
E*TRADE Financial Corp. (a) | 319,000 | 18,776,340 | |
Goldman Sachs Group, Inc. | 98,200 | 23,352,942 | |
Hamilton Lane, Inc. Class A | 100,000 | 4,878,000 | |
Investment Technology Group, Inc. | 200,000 | 4,376,000 | |
PJT Partners, Inc. | 65,000 | 3,764,800 | |
TD Ameritrade Holding Corp. | 490,800 | 28,746,156 | |
Virtu Financial, Inc. Class A(b) | 150,000 | 3,270,000 | |
87,164,238 | |||
TOTAL CAPITAL MARKETS | 148,389,923 | ||
Consumer Finance - 10.3% | |||
Consumer Finance - 10.3% | |||
Capital One Financial Corp. | 343,500 | 34,037,415 | |
OneMain Holdings, Inc. (a) | 250,000 | 9,175,000 | |
SLM Corp. (a) | 1,250,000 | 14,650,000 | |
Synchrony Financial | 490,700 | 15,540,469 | |
73,402,884 | |||
Diversified Financial Services - 3.0% | |||
Multi-Sector Holdings - 3.0% | |||
Berkshire Hathaway, Inc. Class B (a) | 103,100 | 21,519,032 | |
Insurance - 22.1% | |||
Life & Health Insurance - 5.1% | |||
MetLife, Inc. | 436,500 | 20,030,985 | |
Torchmark Corp. | 182,700 | 16,062,984 | |
36,093,969 | |||
Multi-Line Insurance - 6.8% | |||
American International Group, Inc. | 441,600 | 23,479,872 | |
Hartford Financial Services Group, Inc. | 490,800 | 24,721,596 | |
48,201,468 | |||
Property & Casualty Insurance - 7.8% | |||
Aspen Insurance Holdings Ltd. | 20,000 | 823,000 | |
Axis Capital Holdings Ltd. | 85,000 | 4,889,200 | |
Beazley PLC | 500,000 | 3,853,698 | |
FNF Group | 300,000 | 12,030,000 | |
Hiscox Ltd. | 225,000 | 4,915,166 | |
RSA Insurance Group PLC | 500,000 | 4,094,189 | |
The Travelers Companies, Inc. | 192,800 | 25,372,480 | |
55,977,733 | |||
Reinsurance - 2.4% | |||
Reinsurance Group of America, Inc. | 118,700 | 16,956,295 | |
TOTAL INSURANCE | 157,229,465 | ||
IT Services - 1.2% | |||
Data Processing & Outsourced Services - 1.2% | |||
Visa, Inc. Class A | 60,000 | 8,813,400 | |
Mortgage Real Estate Investment Trusts - 1.5% | |||
Mortgage REITs - 1.5% | |||
AGNC Investment Corp. | 275,000 | 5,230,500 | |
MFA Financial, Inc. | 739,356 | 5,663,467 | |
10,893,967 | |||
Professional Services - 0.9% | |||
Research & Consulting Services - 0.9% | |||
Equifax, Inc. | 50,000 | 6,698,500 | |
Software - 0.7% | |||
Application Software - 0.7% | |||
Black Knight, Inc. (a) | 93,300 | 4,982,220 | |
Thrifts & Mortgage Finance - 2.3% | |||
Thrifts & Mortgage Finance - 2.3% | |||
Essent Group Ltd. (a) | 125,000 | 5,420,000 | |
MGIC Investment Corp. (a) | 586,800 | 7,464,096 | |
NMI Holdings, Inc. (a) | 62,200 | 1,343,520 | |
Radian Group, Inc. | 100,000 | 2,033,000 | |
16,260,616 | |||
TOTAL COMMON STOCKS | |||
(Cost $567,031,475) | 695,166,511 | ||
Money Market Funds - 2.3% | |||
Fidelity Cash Central Fund, 1.97% (c) | 14,743,438 | 14,746,387 | |
Fidelity Securities Lending Cash Central Fund 1.98% (c)(d) | 1,365,613 | 1,365,750 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $16,112,137) | 16,112,137 | ||
TOTAL INVESTMENT IN SECURITIES - 99.8% | |||
(Cost $583,143,612) | 711,278,648 | ||
NET OTHER ASSETS (LIABILITIES) - 0.2% | 1,344,702 | ||
NET ASSETS - 100% | $712,623,350 |
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 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 | $127,080 |
Fidelity Securities Lending Cash Central Fund | 1,724 |
Total | $128,804 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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 Services Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $1,323,260) — See accompanying schedule: Unaffiliated issuers (cost $567,031,475) | $695,166,511 | |
Fidelity Central Funds (cost $16,112,137) | 16,112,137 | |
Total Investment in Securities (cost $583,143,612) | $711,278,648 | |
Cash | 983,322 | |
Receivable for investments sold | 3,644,594 | |
Receivable for fund shares sold | 241,486 | |
Dividends receivable | 855,571 | |
Distributions receivable from Fidelity Central Funds | 28,386 | |
Prepaid expenses | 12,368 | |
Other receivables | 37,177 | |
Total assets | 717,081,552 | |
Liabilities | ||
Payable for investments purchased | $983,192 | |
Payable for fund shares redeemed | 1,637,428 | |
Accrued management fee | 323,426 | |
Other affiliated payables | 123,255 | |
Other payables and accrued expenses | 25,151 | |
Collateral on securities loaned | 1,365,750 | |
Total liabilities | 4,458,202 | |
Net Assets | $712,623,350 | |
Net Assets consist of: | ||
Paid in capital | $420,422,038 | |
Undistributed net investment income | 4,711,173 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 159,355,740 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 128,134,399 | |
Net Assets, for 63,055,468 shares outstanding | $712,623,350 | |
Net Asset Value, offering price and redemption price per share ($712,623,350 ÷ 63,055,468 shares) | $11.30 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $7,861,713 | |
Income from Fidelity Central Funds | 128,804 | |
Total income | 7,990,517 | |
Expenses | ||
Management fee | $2,381,074 | |
Transfer agent fees | 732,417 | |
Accounting and security lending fees | 149,832 | |
Custodian fees and expenses | 7,658 | |
Independent trustees' fees and expenses | 2,459 | |
Registration fees | 32,586 | |
Audit | 19,052 | |
Legal | 5,777 | |
Interest | 1,277 | |
Miscellaneous | 5,179 | |
Total expenses before reductions | 3,337,311 | |
Expense reductions | (58,130) | |
Total expenses after reductions | 3,279,181 | |
Net investment income (loss) | 4,711,336 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 40,334,963 | |
Redemptions in-kind with affiliated entities | 122,035,415 | |
Fidelity Central Funds | (385) | |
Foreign currency transactions | 3,205 | |
Total net realized gain (loss) | 162,373,198 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (190,882,324) | |
Assets and liabilities in foreign currencies | 171 | |
Total change in net unrealized appreciation (depreciation) | (190,882,153) | |
Net gain (loss) | (28,508,955) | |
Net increase (decrease) in net assets resulting from operations | $(23,797,619) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $4,711,336 | $9,547,835 |
Net realized gain (loss) | 162,373,198 | 63,339,801 |
Change in net unrealized appreciation (depreciation) | (190,882,153) | 116,792,492 |
Net increase (decrease) in net assets resulting from operations | (23,797,619) | 189,680,128 |
Distributions to shareholders from net investment income | (2,043,089) | (7,413,422) |
Distributions to shareholders from net realized gain | (28,147,911) | (42,209,545) |
Total distributions | (30,191,000) | (49,622,967) |
Share transactions | ||
Proceeds from sales of shares | 77,060,062 | 503,440,101 |
Reinvestment of distributions | 29,268,133 | 48,197,971 |
Cost of shares redeemed | (647,970,524) | (403,096,639) |
Net increase (decrease) in net assets resulting from share transactions | (541,642,329) | 148,541,433 |
Total increase (decrease) in net assets | (595,630,948) | 288,598,594 |
Net Assets | ||
Beginning of period | 1,308,254,298 | 1,019,655,704 |
End of period | $712,623,350 | $1,308,254,298 |
Other Information | ||
Undistributed net investment income end of period | $4,711,173 | $2,042,926 |
Shares(a) | ||
Sold | 6,852,942 | 46,843,520 |
Issued in reinvestment of distributions | 2,682,442 | 4,434,960 |
Redeemed | (58,625,306) | (38,077,110) |
Net increase (decrease) | (49,089,922) | 13,201,370 |
(a) Share activity prior to August 10, 2018 has been adjusted to reflect the impact of the 10 for 1 share split that occurred on that date.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Financial Services Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share DataB | ||||||
Net asset value, beginning of period | $11.67 | $10.31 | $7.50 | $8.88 | $8.09 | $6.56 |
Income from Investment Operations | ||||||
Net investment income (loss)C | .06 | .09 | .10 | .09 | .08 | .11 |
Net realized and unrealized gain (loss) | (.16) | 1.76 | 2.81 | (1.33) | .88 | 1.50 |
Total from investment operations | (.10) | 1.85 | 2.91 | (1.24) | .96 | 1.61 |
Distributions from net investment income | (.02) | (.07) | (.10) | (.08) | (.09) | (.08) |
Distributions from net realized gain | (.25) | (.42) | – | (.06) | (.08) | – |
Total distributions | (.27) | (.49) | (.10) | (.14) | (.17) | (.08) |
Redemption fees added to paid in capitalC | – | – | –D | –D | –D | –D |
Net asset value, end of period | $11.30 | $11.67 | $10.31 | $7.50 | $8.88 | $8.09 |
Total ReturnE,F | (.72)% | 18.33% | 38.78% | (14.18)% | 11.87% | 24.56% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .76%I | .77% | .77% | .76% | .78% | .83% |
Expenses net of fee waivers, if any | .76%I | .77% | .77% | .76% | .78% | .83% |
Expenses net of all reductions | .75%I | .76% | .76% | .75% | .78% | .81% |
Net investment income (loss) | 1.07%I | .87% | 1.10% | 1.01% | .99% | 1.43% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $712,623 | $1,308,254 | $1,019,656 | $1,043,574 | $1,385,490 | $779,524 |
Portfolio turnover rateJ | 47%I,K | 54% | 84%K | 55% | 42%K | 197% |
A For the year ended February 29.
B Per share amounts have been adjusted to reflect the impact of the 10 for 1 share split that occurred on August 10, 2018.
C Calculated based on average shares outstanding during the period.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Insurance Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Chubb Ltd. | 11.8 |
The Travelers Companies, Inc. | 8.7 |
American International Group, Inc. | 8.5 |
MetLife, Inc. | 7.4 |
Marsh & McLennan Companies, Inc. | 5.4 |
Berkshire Hathaway, Inc. Class B | 4.6 |
Prudential Financial, Inc. | 3.5 |
Allstate Corp. | 3.2 |
AFLAC, Inc. | 3.1 |
Principal Financial Group, Inc. | 2.9 |
59.1 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Insurance | 89.4% | |
Diversified Financial Services | 6.0% | |
Capital Markets | 3.3% | |
Software | 0.5% | |
Consumer Finance | 0.3% | |
All Others* | 0.5% |
* Includes short-term investments and net other assets (liabilities).
Insurance Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.5% | |||
Shares | Value | ||
Banks - 0.0% | |||
Regional Banks - 0.0% | |||
Hilltop Holdings, Inc. | 500 | $10,375 | |
Capital Markets - 3.3% | |||
Asset Management & Custody Banks - 3.3% | |||
Apollo Global Management LLC Class A | 79,344 | 2,739,748 | |
Ares Management LP | 220,214 | 4,690,558 | |
Brighthouse Financial, Inc. (a) | 18,306 | 759,882 | |
8,190,188 | |||
Consumer Finance - 0.3% | |||
Consumer Finance - 0.3% | |||
OneMain Holdings, Inc. (a) | 21,900 | 803,730 | |
Diversified Financial Services - 6.0% | |||
Multi-Sector Holdings - 4.6% | |||
Berkshire Hathaway, Inc. Class B (a) | 54,500 | 11,375,240 | |
Other Diversified Financial Services - 1.4% | |||
Cannae Holdings, Inc. (a) | 16,099 | 312,965 | |
Voya Financial, Inc. | 61,100 | 3,059,277 | |
3,372,242 | |||
TOTAL DIVERSIFIED FINANCIAL SERVICES | 14,747,482 | ||
Insurance - 89.4% | |||
Insurance Brokers - 15.2% | |||
Aon PLC | 43,800 | 6,375,528 | |
Arthur J. Gallagher & Co. | 97,500 | 7,033,650 | |
Brown & Brown, Inc. | 217,000 | 6,614,160 | |
Marsh & McLennan Companies, Inc. | 157,300 | 13,312,299 | |
Willis Group Holdings PLC | 28,228 | 4,157,138 | |
37,492,775 | |||
Life & Health Insurance - 24.9% | |||
AFLAC, Inc. | 164,200 | 7,592,608 | |
CNO Financial Group, Inc. | 130,600 | 2,822,266 | |
FBL Financial Group, Inc. Class A | 300 | 24,405 | |
Genworth Financial, Inc. Class A (a) | 282,100 | 1,311,765 | |
MetLife, Inc. | 395,175 | 18,134,581 | |
Primerica, Inc. | 30,200 | 3,691,950 | |
Principal Financial Group, Inc. | 128,000 | 7,064,320 | |
Prudential Financial, Inc. | 87,389 | 8,585,969 | |
Sony Financial Holdings, Inc. | 306,600 | 6,112,132 | |
Torchmark Corp. | 28,400 | 2,496,928 | |
Unum Group | 91,761 | 3,384,146 | |
61,221,070 | |||
Multi-Line Insurance - 12.5% | |||
American International Group, Inc. | 395,300 | 21,018,101 | |
Hartford Financial Services Group, Inc. | 115,400 | 5,812,698 | |
Loews Corp. | 62,100 | 3,124,251 | |
Zurich Insurance Group AG | 2,296 | 699,282 | |
30,654,332 | |||
Property & Casualty Insurance - 33.7% | |||
Allstate Corp. | 78,900 | 7,934,973 | |
AmTrust Financial Services, Inc. | 55,800 | 811,332 | |
Arch Capital Group Ltd. (a) | 119,700 | 3,659,229 | |
Argo Group International Holdings, Ltd. | 12,168 | 775,102 | |
Aspen Insurance Holdings Ltd. | 64,200 | 2,641,830 | |
Assured Guaranty Ltd. | 66,700 | 2,717,358 | |
Axis Capital Holdings Ltd. | 11,100 | 638,472 | |
Chubb Ltd. | 214,805 | 29,050,226 | |
First American Financial Corp. | 57,000 | 3,241,020 | |
FNF Group | 66,800 | 2,678,680 | |
Hanover Insurance Group, Inc. | 26,800 | 3,282,732 | |
Markel Corp. (a) | 2,850 | 3,445,080 | |
MBIA, Inc. (a)(b) | 59,000 | 605,930 | |
Mercury General Corp. | 200 | 10,780 | |
The Travelers Companies, Inc. | 162,500 | 21,385,000 | |
82,877,744 | |||
Reinsurance - 3.1% | |||
Everest Re Group Ltd. | 3,400 | 758,268 | |
Maiden Holdings Ltd. | 700 | 2,660 | |
Muenchener Rueckversicherungs AG | 9,500 | 2,048,840 | |
Reinsurance Group of America, Inc. | 31,433 | 4,490,204 | |
Third Point Reinsurance Ltd. (a) | 29,400 | 393,960 | |
7,693,932 | |||
TOTAL INSURANCE | 219,939,853 | ||
Software - 0.5% | |||
Application Software - 0.5% | |||
Black Knight, Inc. (a) | 20,457 | 1,092,404 | |
TOTAL COMMON STOCKS | |||
(Cost $135,809,769) | 244,784,032 | ||
Nonconvertible Preferred Stocks - 0.0% | |||
Insurance - 0.0% | |||
Life & Health Insurance - 0.0% | |||
Torchmark Corp. 6.125% | |||
(Cost $76,079) | 3,059 | 78,861 | |
Money Market Funds - 0.6% | |||
Fidelity Cash Central Fund, 1.97% (c) | 1,063,914 | 1,064,127 | |
Fidelity Securities Lending Cash Central Fund 1.98% (c)(d) | 475,159 | 475,207 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $1,539,334) | 1,539,334 | ||
TOTAL INVESTMENT IN SECURITIES - 100.1% | |||
(Cost $137,425,182) | 246,402,227 | ||
NET OTHER ASSETS (LIABILITIES) - (0.1)% | (226,270) | ||
NET ASSETS - 100% | $246,175,957 |
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 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 | $67,751 |
Fidelity Securities Lending Cash Central Fund | 14,237 |
Total | $81,988 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $11,053,224 |
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 | 77.2% |
Switzerland | 12.1% |
Bermuda | 4.8% |
United Kingdom | 2.6% |
Japan | 2.5% |
Others (Individually Less Than 1%) | 0.8% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Insurance Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $453,934) — See accompanying schedule: Unaffiliated issuers (cost $135,885,848) | $244,862,893 | |
Fidelity Central Funds (cost $1,539,334) | 1,539,334 | |
Total Investment in Securities (cost $137,425,182) | $246,402,227 | |
Receivable for investments sold | 877,479 | |
Receivable for fund shares sold | 40,601 | |
Dividends receivable | 423,529 | |
Distributions receivable from Fidelity Central Funds | 7,127 | |
Prepaid expenses | 3,367 | |
Other receivables | 3,919 | |
Total assets | 247,758,249 | |
Liabilities | ||
Payable for fund shares redeemed | 921,946 | |
Accrued management fee | 112,410 | |
Other affiliated payables | 51,313 | |
Other payables and accrued expenses | 21,473 | |
Collateral on securities loaned | 475,150 | |
Total liabilities | 1,582,292 | |
Net Assets | $246,175,957 | |
Net Assets consist of: | ||
Paid in capital | $109,273,202 | |
Undistributed net investment income | 2,144,714 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 25,781,578 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 108,976,463 | |
Net Assets, for 3,584,621 shares outstanding | $246,175,957 | |
Net Asset Value, offering price and redemption price per share ($246,175,957 ÷ 3,584,621 shares) | $68.68 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $3,182,268 | |
Income from Fidelity Central Funds | 81,988 | |
Total income | 3,264,256 | |
Expenses | ||
Management fee | $748,955 | |
Transfer agent fees | 280,432 | |
Accounting and security lending fees | 54,051 | |
Custodian fees and expenses | 3,451 | |
Independent trustees' fees and expenses | 730 | |
Registration fees | 20,570 | |
Audit | 18,787 | |
Legal | 2,235 | |
Miscellaneous | 1,693 | |
Total expenses before reductions | 1,130,904 | |
Expense reductions | (11,821) | |
Total expenses after reductions | 1,119,083 | |
Net investment income (loss) | 2,145,173 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 26,863,675 | |
Fidelity Central Funds | 818 | |
Foreign currency transactions | (4,418) | |
Total net realized gain (loss) | 26,860,075 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (31,381,597) | |
Fidelity Central Funds | (679) | |
Assets and liabilities in foreign currencies | (2,089) | |
Total change in net unrealized appreciation (depreciation) | (31,384,365) | |
Net gain (loss) | (4,524,290) | |
Net increase (decrease) in net assets resulting from operations | $(2,379,117) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $2,145,173 | $6,380,706 |
Net realized gain (loss) | 26,860,075 | 104,187,408 |
Change in net unrealized appreciation (depreciation) | (31,384,365) | (62,969,761) |
Net increase (decrease) in net assets resulting from operations | (2,379,117) | 47,598,353 |
Distributions to shareholders from net investment income | (1,376,256) | (4,424,878) |
Distributions to shareholders from net realized gain | (38,382,245) | (38,464,528) |
Total distributions | (39,758,501) | (42,889,406) |
Share transactions | ||
Proceeds from sales of shares | 15,576,193 | 99,965,121 |
Reinvestment of distributions | 37,992,154 | 40,826,311 |
Cost of shares redeemed | (106,997,296) | (451,552,577) |
Net increase (decrease) in net assets resulting from share transactions | (53,428,949) | (310,761,145) |
Redemption fees | – | 7,580 |
Total increase (decrease) in net assets | (95,566,567) | (306,044,618) |
Net Assets | ||
Beginning of period | 341,742,524 | 647,787,142 |
End of period | $246,175,957 | $341,742,524 |
Other Information | ||
Undistributed net investment income end of period | $2,144,714 | $1,375,797 |
Shares | ||
Sold | 223,966 | 1,208,317 |
Issued in reinvestment of distributions | 567,047 | 512,930 |
Redeemed | (1,560,305) | (5,404,508) |
Net increase (decrease) | (769,292) | (3,683,261) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Insurance Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $78.49 | $80.60 | $63.15 | $66.87 | $66.08 | $56.81 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .54 | 1.08 | .99 | .89 | .96 | .75 |
Net realized and unrealized gain (loss) | (.99) | 6.76 | 18.64 | (2.50) | 7.13 | 13.75 |
Total from investment operations | (.45) | 7.84 | 19.63 | (1.61) | 8.09 | 14.50 |
Distributions from net investment income | (.32) | (.96) | (.89) | (.74) | (.96) | (.61) |
Distributions from net realized gain | (9.04) | (8.99) | (1.29) | (1.37) | (6.34) | (4.62) |
Total distributions | (9.36) | (9.95) | (2.18) | (2.11) | (7.30) | (5.23) |
Redemption fees added to paid in capitalB | – | –C | –C | –C | –C | –C |
Net asset value, end of period | $68.68 | $78.49 | $80.60 | $63.15 | $66.87 | $66.08 |
Total ReturnD,E | (.27)% | 9.62% | 31.60% | (2.54)% | 13.01% | 25.82% |
Ratios to Average Net AssetsF,G | ||||||
Expenses before reductions | .82%H | .79% | .80% | .80% | .81% | .83% |
Expenses net of fee waivers, if any | .82%H | .79% | .79% | .80% | .81% | .83% |
Expenses net of all reductions | .81%H | .79% | .79% | .80% | .81% | .82% |
Net investment income (loss) | 1.55%H | 1.30% | 1.37% | 1.32% | 1.44% | 1.17% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $246,176 | $341,743 | $647,787 | $459,854 | $401,818 | $430,482 |
Portfolio turnover rateI | - %H,J | 21% | 16% | 25% | 26% | 126% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
H Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Amount represents less than .005%.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements (Unaudited)
For the period ended August 31, 2018
1. Organization.
Banking Portfolio, Brokerage and Investment Management Portfolio, Financial Services Portfolio, Consumer Finance Portfolio, and Insurance Portfolio (the Funds) are non-diversified funds of Fidelity Select Portfolios (the Trust). 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 Funds are non-diversified with the exception of Financial Services and Banking. The Funds invest primarily in securities of companies whose principal business activities fall within specific industries. Each Fund is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds.
Effective August 10, 2018, Financial Services Portfolio underwent a 10 for 1 share split. The effect of the share split transaction was to multiply the number of outstanding shares of Financial Services Portfolio by a split factor of 10:1, with a corresponding decrease in net asset value (NAV) per share. This event does not impact the overall net assets of Financial Services Portfolio. The per share data presented in the Financial Highlights and Share activity presented in the Statements of Changes in Net Assets for Financial Services Portfolio have been retroactively adjusted to reflect this share split.
2. Investments in Fidelity Central Funds.
The Funds invest 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 Funds' Schedules of Investments list each of the Fidelity Central Funds held as of period end, if any, as an investment of each Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, each 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 .005%.
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 are available on the SEC website or upon request.
3. Significant Accounting Policies.
Each Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Funds:
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 each Fund's investments to the Fair Value Committee (the Committee) established by each Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, each 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 each 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 each Fund's investments and ratifies the fair value determinations of the Committee.
Each 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 each 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 August 31, 2018, including information on transfers between Levels 1 and 2 is included at the end of each applicable Fund's Schedule of Investments.
Foreign Currency. The Funds 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 Funds' 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 for certain Funds 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 Funds are 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. Certain distributions received by the Funds represent a return of capital or capital gain. The Funds determine the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. 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) for Brokerage and Investment Management Portfolio, certain independent Trustees have elected 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 of $36,949 are included in the accompanying Statement of Assets and Liabilities in other receivables and other payables and accrued expenses, respectively.
Income Tax Information and Distributions to Shareholders. Each year, each 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. Each Fund files a U.S. federal tax return, in addition to state and local tax returns as required. Each 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 each 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 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, equity-debt classifications, certain deemed dividends, partnerships, deferred trustees' compensation, capital loss carryforwards, expiring capital loss carryforwards, and losses deferred due to wash sales and excise tax regulations.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows for each Fund:
Tax cost | Gross unrealized appreciation | Gross unrealized depreciation | Net unrealized appreciation (depreciation) | |
Banking Portfolio | $485,037,984 | $190,415,697 | $(9,040,001) | $181,375,696 |
Brokerage and Investment Management Portfolio | 277,346,399 | 96,467,623 | (8,897,509) | 87,570,114 |
Consumer Finance Portfolio | 75,681,199 | 32,172,505 | (1,322,877) | 30,849,628 |
Financial Services Portfolio | 584,257,771 | 138,161,160 | (11,140,283) | 127,020,877 |
Insurance Portfolio | 138,049,199 | 108,742,255 | (389,227) | 108,353,028 |
Restricted Securities. The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of each applicable Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions are noted in the table below.
Purchases ($) | Sales ($) | |
Banking Portfolio | 146,739,202 | 300,481,563 |
Brokerage and Investment Management Portfolio | 54,901,375 | 131,409,049 |
Consumer Finance Portfolio | 10,518,726 | 15,929,093 |
Financial Services Portfolio | 207,472,564 | 336,408,505 |
Insurance Portfolio | – | 81,358,403 |
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Funds with investment management related services for which the Funds pay a monthly management fee. The management fee is the sum of an individual fund fee rate and an annualized group fee rate. The individual fund fee rate is applied to each Fund's average net assets. 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, each Fund's annualized management fee rate expressed as a percentage of each Fund's average net assets was as follows:
Individual Rate | Group Rate | Total | |
Banking Portfolio | .30% | .24% | .54% |
Brokerage and Investment Management Portfolio | .30% | .24% | .54% |
Consumer Finance Portfolio | .30% | .24% | .54% |
Financial Services Portfolio | .30% | .24% | .54% |
Insurance Portfolio | .30% | .24% | .54% |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Funds' transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees were equivalent to the following annualized rates expressed as a percentage of average net assets:
Banking Portfolio | .18% |
Brokerage and Investment Management Portfolio | .17% |
Consumer Finance Portfolio | .22% |
Financial Services Portfolio | .17% |
Insurance Portfolio | .20% |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains each 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. For the period, the fees were equivalent to the following annualized rates:
% of Average Net Assets | |
Banking Portfolio | .04 |
Brokerage and Investment Management Portfolio | .04 |
Consumer Finance Portfolio | .04 |
Financial Services Portfolio | .03 |
Insurance Portfolio | .04 |
Brokerage Commissions. Certain Funds placed a portion of their 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 as follows:
Amount | |
Banking Portfolio | $4,425 |
Brokerage and Investment Management Portfolio | 2,782 |
Consumer Finance Portfolio | 159 |
Financial Services Portfolio | 4,958 |
Insurance Portfolio | 149 |
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Funds, along with other registered investment companies having management contracts with Fidelity Management & Research Company (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. Each applicable 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 | |
Banking Portfolio | Borrower | $7,430,000 | 2.04% | $2,100 |
Brokerage and Investment Management Portfolio | Borrower | $10,628,000 | 1.94% | $573 |
Financial Services Portfolio | Borrower | $11,816,500 | 1.95% | $1,277 |
Interfund Trades. The Funds may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Redemptions In-Kind. During the period, 42,927,330* shares of Financial Services Portfolio held by an affiliated entity were redeemed in-kind for investments and cash with a value of $473,016,260. The net realized gain of $122,035,415 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. Financial Services Portfolio recognized no gain or loss for federal income tax purposes.
* Share activity prior to August 10, 2018 has been adjusted to reflect the impact of the 10 for 1 share split occurred on that date.
6. Committed Line of Credit.
Certain Funds participate 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 participating funds have agreed to pay commitment fees on their pro-rata portion of the line of credit, which are reflected in Miscellaneous expenses on the Statement of Operations, and are as follows:
Banking Portfolio | $1,089 |
Brokerage and Investment Management Portfolio | 624 |
Consumer Finance Portfolio | 144 |
Financial Services Portfolio | 1,537 |
Insurance Portfolio | 445 |
During the period, the Funds did not borrow on this line of credit.
7. Security Lending.
Certain Funds lend portfolio securities through a lending agent from time to time in order to earn additional income. On the settlement date of the loan, each applicable 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 Funds and any additional required collateral is delivered to the Funds on the next business day. The Funds or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Funds may apply collateral received from the borrower against the obligation. The Funds 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 each applicable 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 on each applicable Fund's Statement of Operations as a component of income from Fidelity Central Funds. Security lending activity was as follows:
%Total Security Lending Income | |
Banking Portfolio | $697 |
Brokerage and Investment Management Portfolio | 33,058 |
Consumer Finance Portfolio | 5,049 |
Financial Services Portfolio | 1,724 |
Insurance Portfolio | 14,237 |
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of Certain Funds include an amount in addition to trade execution, which may be rebated back to the Funds to offset certain expenses. In addition, through arrangements with each applicable Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce each applicable Fund's expenses. All of the applicable expense reductions are noted in the table below.
Brokerage Service reduction | Custody expense reduction | |
Banking Portfolio | $39,453 | $– |
Brokerage and Investment Management Portfolio | 30,308 | – |
Consumer Finance Portfolio | 11,996 | – |
Financial Services Portfolio | 52,579 | – |
Insurance Portfolio | 10,153 | 14 |
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses as follows:
Amount | |
Banking Portfolio | $3,703 |
Brokerage and Investment Management Portfolio | 1,978 |
Consumer Finance Portfolio | 456 |
Financial Services Portfolio | 5,551 |
Insurance Portfolio | 1,654 |
9. Other.
The Funds' 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 Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote.
Shareholder Expense Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds 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 (March 1, 2018 to August 31, 2018).
Actual Expenses
The first line of the accompanying table for 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 fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 fund provides information about hypothetical account values and hypothetical expenses based on a fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's 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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 March 1, 2018 | Ending Account Value August 31, 2018 | Expenses Paid During Period-B March 1, 2018 to August 31, 2018 | |
Banking Portfolio | .77% | |||
Actual | $1,000.00 | $1,011.30 | $3.90 | |
Hypothetical-C | $1,000.00 | $1,021.32 | $3.92 | |
Brokerage and Investment Management Portfolio | .78% | |||
Actual | $1,000.00 | $963.60 | $3.86 | |
Hypothetical-C | $1,000.00 | $1,021.27 | $3.97 | |
Consumer Finance Portfolio | .88% | |||
Actual | $1,000.00 | $1,066.20 | $4.58 | |
Hypothetical-C | $1,000.00 | $1,020.77 | $4.48 | |
Financial Services Portfolio | .76% | |||
Actual | $1,000.00 | $992.80 | $3.82 | |
Hypothetical-C | $1,000.00 | $1,021.37 | $3.87 | |
Insurance Portfolio | .82% | |||
Actual | $1,000.00 | $997.30 | $4.13 | |
Hypothetical-C | $1,000.00 | $1,021.07 | $4.18 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/ 365 (to reflect the one-half year period).
C 5% return per year before expenses
SELFIN-SANN-1018
1.813666.113
Fidelity® Select Portfolios® Air Transportation Portfolio Defense and Aerospace Portfolio Environment and Alternative Energy Portfolio Industrials Portfolio Transportation Portfolio Semi-Annual Report August 31, 2018 |
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Contents
Air Transportation Portfolio | |
Defense and Aerospace Portfolio | |
Environment and Alternative Energy Portfolio | |
Industrials Portfolio | |
Transportation Portfolio | |
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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.institutional.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.
Air Transportation Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Delta Air Lines, Inc. | 12.2 |
United Parcel Service, Inc. Class B | 10.5 |
Southwest Airlines Co. | 10.3 |
United Technologies Corp. | 9.9 |
The Boeing Co. | 6.2 |
Expeditors International of Washington, Inc. | 4.8 |
American Airlines Group, Inc. | 4.3 |
Alaska Air Group, Inc. | 3.6 |
FedEx Corp. | 3.6 |
SkyWest, Inc. | 3.4 |
68.8 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Airlines | 43.3% | |
Aerospace & Defense | 29.5% | |
Air Freight & Logistics | 21.1% | |
Road & Rail | 2.1% | |
Trading Companies & Distributors | 0.4% | |
All Others* | 3.6% |
* Includes short-term investments and net other assets (liabilities).
Air Transportation Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 96.6% | |||
Shares | Value | ||
Aerospace & Defense - 29.5% | |||
Aerospace & Defense - 29.5% | |||
Astronics Corp. (a) | 8,800 | $382,888 | |
Bombardier, Inc. Class B (sub. vtg.) (a) | 2,448,700 | 8,087,277 | |
CAE, Inc. | 377,100 | 7,527,552 | |
Hexcel Corp. | 10,400 | 687,648 | |
Moog, Inc. Class A | 84,900 | 6,699,459 | |
Spirit AeroSystems Holdings, Inc. Class A | 85,100 | 7,276,050 | |
Textron, Inc. | 113,500 | 7,834,905 | |
The Boeing Co. | 61,210 | 20,982,176 | |
TransDigm Group, Inc. | 19,600 | 6,860,000 | |
United Technologies Corp. | 255,500 | 33,649,350 | |
99,987,305 | |||
Air Freight & Logistics - 21.1% | |||
Air Freight & Logistics - 21.1% | |||
Air Transport Services Group, Inc. (a) | 157,800 | 3,211,230 | |
Atlas Air Worldwide Holdings, Inc. (a) | 5,600 | 341,040 | |
C.H. Robinson Worldwide, Inc. | 29,100 | 2,795,928 | |
Expeditors International of Washington, Inc. | 223,100 | 16,348,768 | |
FedEx Corp. | 49,400 | 12,051,130 | |
Forward Air Corp. | 16,050 | 1,031,373 | |
United Parcel Service, Inc. Class B | 289,300 | 35,549,184 | |
71,328,653 | |||
Airlines - 43.3% | |||
Airlines - 43.3% | |||
Air Canada (a) | 266,400 | 5,474,979 | |
Alaska Air Group, Inc. | 182,200 | 12,296,678 | |
Allegiant Travel Co. | 4,600 | 626,750 | |
American Airlines Group, Inc. | 356,800 | 14,443,264 | |
Dart Group PLC | 97,786 | 1,241,124 | |
Delta Air Lines, Inc. | 704,802 | 41,216,821 | |
Hawaiian Holdings, Inc. | 57,200 | 2,373,800 | |
JetBlue Airways Corp. (a) | 227,700 | 4,344,516 | |
Mesa Air Group, Inc. | 68,400 | 943,236 | |
SkyWest, Inc. | 176,700 | 11,538,510 | |
Southwest Airlines Co. | 567,600 | 34,793,880 | |
Spirit Airlines, Inc. (a) | 224,500 | 10,668,240 | |
United Continental Holdings, Inc. (a) | 75,800 | 6,626,436 | |
146,588,234 | |||
Machinery - 0.2% | |||
Industrial Machinery - 0.2% | |||
Park-Ohio Holdings Corp. | 16,990 | 704,236 | |
Road & Rail - 2.1% | |||
Railroads - 2.1% | |||
Genesee & Wyoming, Inc. Class A (a) | 15,400 | 1,353,506 | |
Norfolk Southern Corp. | 33,600 | 5,841,024 | |
7,194,530 | |||
Trading Companies & Distributors - 0.4% | |||
Trading Companies & Distributors - 0.4% | |||
HD Supply Holdings, Inc. (a) | 29,700 | 1,354,023 | |
TOTAL COMMON STOCKS | |||
(Cost $222,096,774) | 327,156,981 | ||
Money Market Funds - 3.4% | |||
Fidelity Cash Central Fund, 1.97% (b) | |||
(Cost $11,418,834) | 11,416,551 | 11,418,834 | |
TOTAL INVESTMENT IN SECURITIES - 100.0% | |||
(Cost $233,515,608) | 338,575,815 | ||
NET OTHER ASSETS (LIABILITIES) - 0.0% | 3,465 | ||
NET ASSETS - 100% | $338,579,280 |
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 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 | $85,259 |
Fidelity Securities Lending Cash Central Fund | 302 |
Total | $85,561 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
Air Transportation Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $222,096,774) | $327,156,981 | |
Fidelity Central Funds (cost $11,418,834) | 11,418,834 | |
Total Investment in Securities (cost $233,515,608) | $338,575,815 | |
Receivable for fund shares sold | 230,402 | |
Dividends receivable | 734,627 | |
Distributions receivable from Fidelity Central Funds | 17,362 | |
Prepaid expenses | 3,861 | |
Other receivables | 7,663 | |
Total assets | 339,569,730 | |
Liabilities | ||
Payable for fund shares redeemed | $753,506 | |
Accrued management fee | 148,835 | |
Transfer agent fee payable | 55,343 | |
Other affiliated payables | 10,740 | |
Other payables and accrued expenses | 22,026 | |
Total liabilities | 990,450 | |
Net Assets | $338,579,280 | |
Net Assets consist of: | ||
Paid in capital | $218,615,415 | |
Undistributed net investment income | 1,148,313 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 13,755,345 | |
Net unrealized appreciation (depreciation) on investments | 105,060,207 | |
Net Assets, for 4,087,827 shares outstanding | $338,579,280 | |
Net Asset Value, offering price and redemption price per share ($338,579,280 ÷ 4,087,827 shares) | $82.83 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $2,423,636 | |
Income from Fidelity Central Funds | 85,561 | |
Total income | 2,509,197 | |
Expenses | ||
Management fee | $912,241 | |
Transfer agent fees | 344,261 | |
Accounting and security lending fees | 65,738 | |
Custodian fees and expenses | 4,119 | |
Independent trustees' fees and expenses | 859 | |
Registration fees | 24,160 | |
Audit | 18,788 | |
Legal | 1,949 | |
Miscellaneous | 1,442 | |
Total expenses before reductions | 1,373,557 | |
Expense reductions | (16,033) | |
Total expenses after reductions | 1,357,524 | |
Net investment income (loss) | 1,151,673 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 14,642,108 | |
Fidelity Central Funds | 665 | |
Foreign currency transactions | (1,044) | |
Total net realized gain (loss) | 14,641,729 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 2,140,358 | |
Fidelity Central Funds | (702) | |
Total change in net unrealized appreciation (depreciation) | 2,139,656 | |
Net gain (loss) | 16,781,385 | |
Net increase (decrease) in net assets resulting from operations | $17,933,058 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $1,151,673 | $2,348,661 |
Net realized gain (loss) | 14,641,729 | 58,361,433 |
Change in net unrealized appreciation (depreciation) | 2,139,656 | 7,767,249 |
Net increase (decrease) in net assets resulting from operations | 17,933,058 | 68,477,343 |
Distributions to shareholders from net investment income | (633,560) | (1,727,901) |
Distributions to shareholders from net realized gain | (19,282,846) | (33,467,895) |
Total distributions | (19,916,406) | (35,195,796) |
Share transactions | ||
Proceeds from sales of shares | 27,048,373 | 112,568,755 |
Reinvestment of distributions | 19,165,002 | 33,832,861 |
Cost of shares redeemed | (88,180,283) | (191,306,787) |
Net increase (decrease) in net assets resulting from share transactions | (41,966,908) | (44,905,171) |
Redemption fees | – | 10,516 |
Total increase (decrease) in net assets | (43,950,256) | (11,613,108) |
Net Assets | ||
Beginning of period | 382,529,536 | 394,142,644 |
End of period | $338,579,280 | $382,529,536 |
Other Information | ||
Undistributed net investment income end of period | $1,148,313 | $630,200 |
Shares | ||
Sold | 339,050 | 1,390,397 |
Issued in reinvestment of distributions | 258,080 | 414,264 |
Redeemed | (1,138,381) | (2,358,846) |
Net increase (decrease) | (541,251) | (554,185) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Air Transportation Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $82.64 | $76.04 | $60.60 | $73.09 | $61.02 | $43.97 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .27 | .48C | .32 | .18 | .20D | .12 |
Net realized and unrealized gain (loss) | 4.32 | 13.85 | 15.61 | (6.82) | 13.09 | 18.28 |
Total from investment operations | 4.59 | 14.33 | 15.93 | (6.64) | 13.29 | 18.40 |
Distributions from net investment income | (.14) | (.38) | (.25) | (.17) | (.08) | (.06) |
Distributions from net realized gain | (4.26) | (7.36) | (.24) | (5.68) | (1.14) | (1.30) |
Total distributions | (4.40) | (7.73)E | (.49) | (5.85) | (1.23)F | (1.36) |
Redemption fees added to paid in capitalB | – | –G | –G | –G | .01 | .01 |
Net asset value, end of period | $82.83 | $82.64 | $76.04 | $60.60 | $73.09 | $61.02 |
Total ReturnH,I | 6.17% | 19.07% | 26.30% | (9.24)% | 21.93% | 42.26% |
Ratios to Average Net AssetsJ,K | ||||||
Expenses before reductions | .81%L | .82% | .85% | .83% | .83% | .87% |
Expenses net of fee waivers, if any | .81%L | .82% | .85% | .83% | .83% | .87% |
Expenses net of all reductions | .80%L | .82% | .84% | .82% | .83% | .86% |
Net investment income (loss) | .68%L | .59%C | .48% | .27% | .30%D | .22% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $338,579 | $382,530 | $394,143 | $325,630 | $715,925 | $350,960 |
Portfolio turnover rateM | 35%L | 86% | 106% | 97% | 65%N | 125% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.22 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .31%.
D Net investment income per share reflects a large, non-recurring dividend which amounted to $.22 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been (.04) %.
E Total distributions of $7.73 per share is comprised of distributions from net investment income of $.377 and distributions from net realized gain of $7.357 per share.
F Total distributions of $1.23 per share is comprised of distributions from net investment income of $.084 and distributions from net realized gain of $1.144 per share.
G Amount represents less than $.005 per share.
H Total returns for periods of less than one year are not annualized.
I Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
J Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
K Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
L Annualized
M Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
N Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Defense and Aerospace Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
The Boeing Co. | 14.9 |
Northrop Grumman Corp. | 10.7 |
United Technologies Corp. | 10.2 |
General Dynamics Corp. | 8.6 |
Huntington Ingalls Industries, Inc. | 5.5 |
Teledyne Technologies, Inc. | 5.0 |
HEICO Corp. Class A | 5.0 |
Spirit AeroSystems Holdings, Inc. Class A | 4.9 |
TransDigm Group, Inc. | 4.9 |
Lockheed Martin Corp. | 4.4 |
74.1 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Aerospace & Defense | 96.1% | |
IT Services | 1.7% | |
Machinery | 0.7% | |
Trading Companies & Distributors | 0.6% | |
All Others* | 0.9% |
* Includes short-term investments and net other assets (liabilities).
Defense and Aerospace Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.1% | |||
Shares | Value | ||
Aerospace & Defense - 96.1% | |||
Aerospace & Defense - 96.1% | |||
Airbus Group NV | 182,400 | $22,515,592 | |
Astronics Corp. (a) | 1,699,753 | 73,956,253 | |
Astronics Corp. Class B (a) | 144,569 | 6,288,752 | |
BAE Systems PLC | 4,574,286 | 35,994,974 | |
Bombardier, Inc. Class B (sub. vtg.) (a) | 25,720,500 | 84,946,632 | |
Elbit Systems Ltd. | 549,085 | 70,063,246 | |
Elbit Systems Ltd. (Israel) (b) | 30,000 | 3,871,290 | |
Engility Holdings, Inc. (a) | 735,355 | 25,524,172 | |
FACC AG | 235,920 | 5,942,418 | |
General Dynamics Corp. | 1,273,600 | 246,314,240 | |
HEICO Corp. Class A | 1,914,977 | 142,665,787 | |
Hexcel Corp. | 810,344 | 53,579,945 | |
Huntington Ingalls Industries, Inc. | 645,675 | 157,848,167 | |
KEYW Holding Corp. (a) | 247,482 | 2,106,072 | |
KLX, Inc. (a) | 903,583 | 66,720,569 | |
Kongsberg Gruppen ASA | 70,500 | 1,331,624 | |
Leonardo SpA | 1,108,243 | 12,413,693 | |
Lockheed Martin Corp. | 397,415 | 127,335,740 | |
Magellan Aerospace Corp. | 99,600 | 1,335,632 | |
Moog, Inc. Class A | 1,126,917 | 88,925,020 | |
Northrop Grumman Corp. | 1,030,050 | 307,459,625 | |
Raytheon Co. | 348,526 | 69,510,025 | |
Saab AB (B Shares) | 72,300 | 3,343,375 | |
Senior Engineering Group PLC | 2,089,200 | 8,618,585 | |
Spirit AeroSystems Holdings, Inc. Class A | 1,645,850 | 140,720,175 | |
Teledyne Technologies, Inc. (a) | 607,200 | 144,064,272 | |
The Boeing Co. | 1,252,419 | 429,316,709 | |
TransDigm Group, Inc. | 399,876 | 139,956,600 | |
United Technologies Corp. | 2,217,701 | 292,071,222 | |
2,764,740,406 | |||
IT Services - 1.7% | |||
IT Consulting & Other Services - 1.7% | |||
Leidos Holdings, Inc. | 692,130 | 48,982,040 | |
Machinery - 0.7% | |||
Industrial Machinery - 0.7% | |||
Woodward, Inc. | 257,500 | 20,744,200 | |
Trading Companies & Distributors - 0.6% | |||
Trading Companies & Distributors - 0.6% | |||
Air Lease Corp. Class A | 359,820 | 16,627,282 | |
TOTAL COMMON STOCKS | |||
(Cost $1,999,249,932) | 2,851,093,928 | ||
Money Market Funds - 0.8% | |||
Fidelity Cash Central Fund, 1.97% (c) | 22,988,279 | 22,992,877 | |
Fidelity Securities Lending Cash Central Fund 1.98%(c)(d) | 65,055 | 65,061 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $23,057,873) | 23,057,938 | ||
TOTAL INVESTMENT IN SECURITIES - 99.9% | |||
(Cost $2,022,307,805) | 2,874,151,866 | ||
NET OTHER ASSETS (LIABILITIES) - 0.1% | 2,297,142 | ||
NET ASSETS - 100% | $2,876,449,008 |
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 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 | $208,002 |
Fidelity Securities Lending Cash Central Fund | 25,324 |
Total | $233,326 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $2,851,093,928 | $2,792,583,362 | $58,510,566 | $-- |
Money Market Funds | 23,057,938 | 23,057,938 | -- | -- |
Total Investments in Securities: | $2,874,151,866 | $2,815,641,300 | $58,510,566 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $35,002,194 |
See accompanying notes which are an integral part of the financial statements.
Defense and Aerospace Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $63,800) — See accompanying schedule: Unaffiliated issuers (cost $1,999,249,932) | $2,851,093,928 | |
Fidelity Central Funds (cost $23,057,873) | 23,057,938 | |
Total Investment in Securities (cost $2,022,307,805) | $2,874,151,866 | |
Foreign currency held at value (cost $5,772,979) | 5,772,979 | |
Receivable for investments sold | 3,242,196 | |
Receivable for fund shares sold | 3,190,654 | |
Dividends receivable | 6,682,806 | |
Distributions receivable from Fidelity Central Funds | 39,380 | |
Prepaid expenses | 31,626 | |
Other receivables | 135,035 | |
Total assets | 2,893,246,542 | |
Liabilities | ||
Payable for investments purchased | $7,213,332 | |
Payable for fund shares redeemed | 7,634,776 | |
Accrued management fee | 1,290,662 | |
Other affiliated payables | 471,724 | |
Other payables and accrued expenses | 122,165 | |
Collateral on securities loaned | 64,875 | |
Total liabilities | 16,797,534 | |
Net Assets | $2,876,449,008 | |
Net Assets consist of: | ||
Paid in capital | $1,884,748,366 | |
Undistributed net investment income | 9,869,198 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 129,953,067 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 851,878,377 | |
Net Assets, for 160,875,059 shares outstanding | $2,876,449,008 | |
Net Asset Value, offering price and redemption price per share ($2,876,449,008 ÷ 160,875,059 shares) | $17.88 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $20,724,298 | |
Income from Fidelity Central Funds | 233,326 | |
Total income | 20,957,624 | |
Expenses | ||
Management fee | $7,952,866 | |
Transfer agent fees | 2,503,558 | |
Accounting and security lending fees | 435,344 | |
Custodian fees and expenses | 20,017 | |
Independent trustees' fees and expenses | 7,267 | |
Registration fees | 114,229 | |
Audit | 18,827 | |
Legal | 12,507 | |
Miscellaneous | 12,279 | |
Total expenses before reductions | 11,076,894 | |
Expense reductions | (81,195) | |
Total expenses after reductions | 10,995,699 | |
Net investment income (loss) | 9,961,925 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 130,447,270 | |
Fidelity Central Funds | 1,505 | |
Foreign currency transactions | (53,222) | |
Total net realized gain (loss) | 130,395,553 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (154,870,498) | |
Fidelity Central Funds | (214) | |
Assets and liabilities in foreign currencies | 33,901 | |
Total change in net unrealized appreciation (depreciation) | (154,836,811) | |
Net gain (loss) | (24,441,258) | |
Net increase (decrease) in net assets resulting from operations | $(14,479,333) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $9,961,925 | $12,340,019 |
Net realized gain (loss) | 130,395,553 | 165,203,147 |
Change in net unrealized appreciation (depreciation) | (154,836,811) | 566,827,986 |
Net increase (decrease) in net assets resulting from operations | (14,479,333) | 744,371,152 |
Distributions to shareholders from net investment income | (3,367,990) | (9,697,066) |
Distributions to shareholders from net realized gain | (84,904,205) | (75,569,005) |
Total distributions | (88,272,195) | (85,266,071) |
Share transactions | ||
Proceeds from sales of shares | 607,426,771 | 1,383,656,760 |
Reinvestment of distributions | 82,914,292 | 81,021,871 |
Cost of shares redeemed | (784,929,877) | (651,462,161) |
Net increase (decrease) in net assets resulting from share transactions | (94,588,814) | 813,216,470 |
Total increase (decrease) in net assets | (197,340,342) | 1,472,321,551 |
Net Assets | ||
Beginning of period | 3,073,789,350 | 1,601,467,799 |
End of period | $2,876,449,008 | $3,073,789,350 |
Other Information | ||
Undistributed net investment income end of period | $9,869,198 | $3,275,263 |
Shares(a) | ||
Sold | 34,233,010 | 86,581,500 |
Issued in reinvestment of distributions | 4,789,967 | 5,021,580 |
Redeemed | (44,741,098) | (40,778,400) |
Net increase (decrease) | (5,718,121) | 50,824,680 |
(a) Share activity prior to August 10, 2018 has been adjusted to reflect the impact of the 10 for 1 share split that occurred on that date.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Defense and Aerospace Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share DataB | ||||||
Net asset value, beginning of period | $18.45 | $13.83 | $10.81 | $12.90 | $12.26 | $9.17 |
Income from Investment Operations | ||||||
Net investment income (loss)C | .06 | .09D | .13E | .11 | .11F | .08 |
Net realized and unrealized gain (loss) | (.12) | 5.14 | 3.52 | (1.47) | 1.31 | 3.64 |
Total from investment operations | (.06) | 5.23 | 3.65 | (1.36) | 1.42 | 3.72 |
Distributions from net investment income | (.02) | (.07) | (.12) | (.10) | (.10) | (.06) |
Distributions from net realized gain | (.49) | (.54) | (.51) | (.63) | (.68) | (.57) |
Total distributions | (.51) | (.61) | (.63) | (.73) | (.78) | (.63) |
Redemption fees added to paid in capitalC | – | –G | –G | –G | –G | –G |
Net asset value, end of period | $17.88 | $18.45 | $13.83 | $10.81 | $12.90 | $12.26 |
Total ReturnH,I | (.22)% | 38.46% | 34.36% | (11.08)% | 12.53% | 40.85% |
Ratios to Average Net AssetsJ,K | ||||||
Expenses before reductions | .75%L | .76% | .79% | .80% | .79% | .81% |
Expenses net of fee waivers, if any | .75%L | .76% | .79% | .79% | .79% | .81% |
Expenses net of all reductions | .75%L | .76% | .79% | .79% | .79% | .81% |
Net investment income (loss) | .68%L | .58%D | 1.03%E | .92% | .90%F | .70% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $2,876,449 | $3,073,789 | $1,601,468 | $885,398 | $948,156 | $1,023,393 |
Portfolio turnover rateM | 24%L | 32% | 24% | 52% | 20% | 48% |
A For the year ended February 29.
B Per share amounts have been adjusted to reflect the impact of the 10 for 1 share split that occurred on August 10, 2018.
C Calculated based on average shares outstanding during the period.
D Net 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 .14%.
E Net investment income per share reflects a large, non-recurring dividend which amounted to $.05 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .64%.
F Net 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 .34%.
G Amount represents less than $.005 per share.
H Total returns for periods of less than one year are not annualized.
I Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
J Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
K Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
L Annualized
M 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.
Environment and Alternative Energy Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
3M Co. | 9.8 |
Honeywell International, Inc. | 9.3 |
Danaher Corp. | 5.6 |
Ingersoll-Rand PLC | 4.0 |
Eaton Corp. PLC | 3.7 |
Waste Management, Inc. | 3.7 |
TE Connectivity Ltd. | 3.3 |
Zoetis, Inc. Class A | 3.0 |
Comfort Systems U.S.A., Inc. | 2.9 |
Innospec, Inc. | 2.9 |
48.2 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Energy Efficiency | 36.3% | |
Environmental Support Services | 18.8% | |
Renewable & Alternative Energy | 15.7% | |
Water Infrastructure & Technologies | 9.3% | |
Waste Management & Technologies | 8.3% | |
All Others* | 11.6% |
* Includes short-term investments and net other assets (liabilities).
Environment and Alternative Energy Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.1% | |||
Shares | Value | ||
Energy Efficiency - 36.3% | |||
Buildings Energy Efficiency - 11.8% | |||
Acuity Brands, Inc. | 14,170 | $2,165,743 | |
Apogee Enterprises, Inc. | 24,540 | 1,207,859 | |
Comfort Systems U.S.A., Inc. | 78,070 | 4,481,218 | |
Ingersoll-Rand PLC | 61,860 | 6,265,799 | |
Lennox International, Inc. | 14,111 | 3,144,072 | |
Owens Corning | 18,170 | 1,028,785 | |
18,293,476 | |||
Diversified Energy Efficiency - 9.3% | |||
Honeywell International, Inc. | 89,947 | 14,306,970 | |
Industrial Energy Efficiency - 6.5% | |||
EMCOR Group, Inc. | 31,448 | 2,518,985 | |
EnerSys | 20,500 | 1,701,295 | |
Minerals Technologies, Inc. | 21,810 | 1,464,542 | |
ON Semiconductor Corp. (a) | 86,080 | 1,836,947 | |
Regal Beloit Corp. | 30,684 | 2,568,251 | |
10,090,020 | |||
Power Network Efficiency - 3.7% | |||
Eaton Corp. PLC | 69,470 | 5,775,736 | |
Transport Energy Efficiency - 5.0% | |||
BorgWarner, Inc. | 36,630 | 1,603,295 | |
Innospec, Inc. | 56,607 | 4,392,703 | |
nVent Electric PLC | 60,310 | 1,694,108 | |
7,690,106 | |||
TOTAL ENERGY EFFICIENCY | 56,156,308 | ||
Environmental Support Services - 18.8% | |||
Diversified Environmental - 18.0% | |||
3M Co. | 71,372 | 15,053,779 | |
Air Products & Chemicals, Inc. | 25,410 | 4,225,429 | |
Dover Corp. | 28,910 | 2,482,502 | |
MKS Instruments, Inc. | 20,780 | 1,930,462 | |
Parker Hannifin Corp. | 22,860 | 4,014,216 | |
27,706,388 | |||
Environmental Consultancies - 0.8% | |||
AECOM (a) | 38,630 | 1,299,513 | |
TOTAL ENVIRONMENTAL SUPPORT SERVICES | 29,005,901 | ||
Food Agriculture & Forestry - 4.4% | |||
Logistics, Food Safety and Packaging - 3.7% | |||
Bemis Co., Inc. | 21,160 | 1,042,765 | |
Zoetis, Inc. Class A | 52,100 | 4,720,260 | |
5,763,025 | |||
Sustainable and Efficient Agriculture - 0.7% | |||
United Natural Foods, Inc. (a) | 30,000 | 1,065,300 | |
TOTAL FOOD AGRICULTURE & FORESTRY | 6,828,325 | ||
Miscellaneous Environmental - 2.1% | |||
Other Environmental - 2.1% | |||
Delphi Technologies PLC | 22,380 | 788,447 | |
Johnson & Johnson | 10,830 | 1,458,693 | |
Philips Lighting NV (b) | 37,880 | 1,065,814 | |
3,312,954 | |||
Pollution Control - 4.2% | |||
Pollution Control Solutions - 4.2% | |||
Cummins, Inc. | 27,782 | 3,939,488 | |
Tenneco, Inc. | 59,468 | 2,544,636 | |
6,484,124 | |||
Renewable & Alternative Energy - 15.7% | |||
Biofuels - 0.6% | |||
China Agri-Industries Holdings Ltd. | 599,880 | 238,462 | |
Cosan SA Industria e Comercio | 83,340 | 712,045 | |
950,507 | |||
Other Renewables Equipment - 1.9% | |||
Andritz AG | 50,332 | 2,979,566 | |
Renewable Energy Developers and Independent Power Producers - 9.8% | |||
Colbun SA | 6,716,660 | 1,412,063 | |
Empresa Nacional de Electricidad SA sponsored ADR | 50,790 | 976,184 | |
Enel Chile SA sponsored ADR | 146,630 | 714,088 | |
Enersis SA sponsored | 233,960 | 1,735,983 | |
Fortive Corp. | 41,000 | 3,443,180 | |
Hollysys Automation Technologies Ltd. | 57,771 | 1,253,631 | |
Mercury Nz Ltd. | 141,470 | 307,465 | |
NHPC Ltd. | 1,106,516 | 395,045 | |
TE Connectivity Ltd. | 55,440 | 5,082,739 | |
15,320,378 | |||
Solar Energy Generation Equipment - 1.5% | |||
Advanced Energy Industries, Inc. (a) | 30,310 | 1,805,870 | |
Oci Co. Ltd. | 3,820 | 395,576 | |
2,201,446 | |||
Wind Power Generation Equipment - 1.9% | |||
Vestas Wind Systems A/S | 41,770 | 2,910,541 | |
TOTAL RENEWABLE & ALTERNATIVE ENERGY | 24,362,438 | ||
Waste Management & Technologies - 8.3% | |||
General Waste Management - 3.7% | |||
Waste Management, Inc. | 62,060 | 5,641,254 | |
Recycling and Value Added Waste Processing - 4.6% | |||
Copart, Inc. (a) | 31,848 | 2,048,145 | |
Interface, Inc. | 127,243 | 2,996,573 | |
Steel Dynamics, Inc. | 45,920 | 2,099,922 | |
7,144,640 | |||
TOTAL WASTE MANAGEMENT & TECHNOLOGIES | 12,785,894 | ||
Water Infrastructure & Technologies - 9.3% | |||
Diversified Water Infrastructure and Technology - 5.6% | |||
Danaher Corp. | 84,020 | 8,699,431 | |
Water Infrastructure - 3.7% | |||
Crane Co. | 43,617 | 3,981,360 | |
HD Supply Holdings, Inc. (a) | 37,310 | 1,700,963 | |
5,682,323 | |||
TOTAL WATER INFRASTRUCTURE & TECHNOLOGIES | 14,381,754 | ||
TOTAL COMMON STOCKS | |||
(Cost $129,781,485) | 153,317,698 | ||
Cash Equivalents - 0.7% | |||
Fidelity Cash Central Fund, 1.97% (c) | |||
(Cost $1,121,373) | 1,121,149 | 1,121,373 | |
TOTAL INVESTMENT IN SECURITIES - 99.8% | |||
(Cost $130,902,858) | 154,439,071 | ||
NET OTHER ASSETS (LIABILITIES) - 0.2% | 233,474 | ||
NET ASSETS - 100% | $154,672,545 |
Legend
(a) Non-income producing
(b) 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 $1,065,814 or 0.7% of net assets.
(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 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 | $18,718 |
Fidelity Securities Lending Cash Central Fund | 2,202 |
Total | $20,920 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $9,609,649 |
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 | 77.7% |
Ireland | 8.8% |
Switzerland | 3.3% |
Chile | 3.1% |
Austria | 1.9% |
Denmark | 1.9% |
Others (Individually Less Than 1%) | 3.3% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Environment and Alternative Energy Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $129,781,485) | $153,317,698 | |
Fidelity Central Funds (cost $1,121,373) | 1,121,373 | |
Total Investment in Securities (cost $130,902,858) | $154,439,071 | |
Receivable for fund shares sold | 123,780 | |
Dividends receivable | 390,687 | |
Distributions receivable from Fidelity Central Funds | 2,725 | |
Prepaid expenses | 1,891 | |
Other receivables | 4,472 | |
Total assets | 154,962,626 | |
Liabilities | ||
Payable for fund shares redeemed | $163,253 | |
Accrued management fee | 68,908 | |
Transfer agent fee payable | 28,900 | |
Other affiliated payables | 4,972 | |
Other payables and accrued expenses | 24,048 | |
Total liabilities | 290,081 | |
Net Assets | $154,672,545 | |
Net Assets consist of: | ||
Paid in capital | $122,495,813 | |
Undistributed net investment income | 883,684 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 7,756,664 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 23,536,384 | |
Net Assets, for 6,025,425 shares outstanding | $154,672,545 | |
Net Asset Value, offering price and redemption price per share ($154,672,545 ÷ 6,025,425 shares) | $25.67 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $1,564,720 | |
Income from Fidelity Central Funds | 20,920 | |
Total income | 1,585,640 | |
Expenses | ||
Management fee | $434,330 | |
Transfer agent fees | 181,916 | |
Accounting and security lending fees | 31,317 | |
Custodian fees and expenses | 7,208 | |
Independent trustees' fees and expenses | 413 | |
Registration fees | 19,637 | |
Audit | 27,983 | |
Legal | 830 | |
Interest | 1,058 | |
Miscellaneous | 6,795 | |
Total expenses before reductions | 711,487 | |
Expense reductions | (11,664) | |
Total expenses after reductions | 699,823 | |
Net investment income (loss) | 885,817 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 8,073,701 | |
Fidelity Central Funds | 44 | |
Foreign currency transactions | (31,199) | |
Total net realized gain (loss) | 8,042,546 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (9,189,294) | |
Assets and liabilities in foreign currencies | (2,486) | |
Total change in net unrealized appreciation (depreciation) | (9,191,780) | |
Net gain (loss) | (1,149,234) | |
Net increase (decrease) in net assets resulting from operations | $(263,417) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $885,817 | $1,837,955 |
Net realized gain (loss) | 8,042,546 | 10,608,491 |
Change in net unrealized appreciation (depreciation) | (9,191,780) | 14,663,771 |
Net increase (decrease) in net assets resulting from operations | (263,417) | 27,110,217 |
Distributions to shareholders from net investment income | (430,973) | (1,447,374) |
Distributions to shareholders from net realized gain | (3,675,945) | (9,452,414) |
Total distributions | (4,106,918) | (10,899,788) |
Share transactions | ||
Proceeds from sales of shares | 17,603,868 | 111,369,434 |
Reinvestment of distributions | 3,858,687 | 10,265,405 |
Cost of shares redeemed | (50,802,385) | (87,147,383) |
Net increase (decrease) in net assets resulting from share transactions | (29,339,830) | 34,487,456 |
Redemption fees | – | 11,308 |
Total increase (decrease) in net assets | (33,710,165) | 50,709,193 |
Net Assets | ||
Beginning of period | 188,382,710 | 137,673,517 |
End of period | $154,672,545 | $188,382,710 |
Other Information | ||
Undistributed net investment income end of period | $883,684 | $428,840 |
Shares | ||
Sold | 697,086 | 4,413,503 |
Issued in reinvestment of distributions | 153,733 | 413,420 |
Redeemed | (1,985,075) | (3,430,336) |
Net increase (decrease) | (1,134,256) | 1,396,587 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Environment and Alternative Energy Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $26.31 | $23.89 | $18.20 | $20.94 | $23.36 | $18.12 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .14 | .27 | .20 | .17 | .16 | .14 |
Net realized and unrealized gain (loss) | (.13) | 3.83 | 5.78 | (2.34) | .31 | 5.27 |
Total from investment operations | .01 | 4.10 | 5.98 | (2.17) | .47 | 5.41 |
Distributions from net investment income | (.07) | (.22) | (.16) | (.13) | (.14) | (.17) |
Distributions from net realized gain | (.58) | (1.46) | (.13) | (.44) | (2.75) | – |
Total distributions | (.65) | (1.68) | (.29) | (.57) | (2.89) | (.17) |
Redemption fees added to paid in capitalB | – | –C | –C | –C | –C | –C |
Net asset value, end of period | $25.67 | $26.31 | $23.89 | $18.20 | $20.94 | $23.36 |
Total ReturnD,E | .09% | 17.73% | 33.02% | (10.63)% | 2.19% | 29.97% |
Ratios to Average Net AssetsF,G | ||||||
Expenses before reductions | .89%H | .87% | .94% | .95% | .92% | .97% |
Expenses net of fee waivers, if any | .88%H | .87% | .94% | .95% | .92% | .97% |
Expenses net of all reductions | .87%H | .86% | .94% | .95% | .92% | .97% |
Net investment income (loss) | 1.10%H | 1.07% | .94% | .86% | .71% | .70% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $154,673 | $188,383 | $137,674 | $73,432 | $88,573 | $102,869 |
Portfolio turnover rateI | 59%H | 47% | 82% | 20% | 160% | 28% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
H Annualized
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.
Industrials Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
United Technologies Corp. | 6.3 |
Honeywell International, Inc. | 5.6 |
Union Pacific Corp. | 5.2 |
General Electric Co. | 4.7 |
Northrop Grumman Corp. | 4.1 |
The Boeing Co. | 3.7 |
General Dynamics Corp. | 3.5 |
Ingersoll-Rand PLC | 3.2 |
Fortive Corp. | 3.0 |
Caterpillar, Inc. | 2.9 |
42.2 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Aerospace & Defense | 26.8% | |
Machinery | 20.7% | |
Industrial Conglomerates | 12.3% | |
Road & Rail | 10.0% | |
Electrical Equipment | 7.6% | |
All Others* | 22.6% |
* Includes short-term investments and net other assets (liabilities).
Industrials Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.7% | |||
Shares | Value | ||
Aerospace & Defense - 26.8% | |||
Aerospace & Defense - 26.8% | |||
Bombardier, Inc. Class B (sub. vtg.) (a) | 2,394,100 | $7,906,951 | |
General Dynamics Corp. | 130,597 | 25,257,460 | |
Huntington Ingalls Industries, Inc. | 54,600 | 13,348,062 | |
Moog, Inc. Class A | 53,200 | 4,198,012 | |
Northrop Grumman Corp. | 97,500 | 29,102,775 | |
Raytheon Co. | 85,000 | 16,952,400 | |
Spirit AeroSystems Holdings, Inc. Class A | 66,400 | 5,677,200 | |
Teledyne Technologies, Inc. (a) | 16,740 | 3,971,732 | |
Textron, Inc. | 110,700 | 7,641,621 | |
The Boeing Co. | 77,700 | 26,634,783 | |
TransDigm Group, Inc. | 16,500 | 5,775,000 | |
United Technologies Corp. | 343,171 | 45,195,619 | |
191,661,615 | |||
Air Freight & Logistics - 3.5% | |||
Air Freight & Logistics - 3.5% | |||
FedEx Corp. | 67,300 | 16,417,835 | |
XPO Logistics, Inc. (a) | 80,700 | 8,594,550 | |
25,012,385 | |||
Airlines - 4.8% | |||
Airlines - 4.8% | |||
Delta Air Lines, Inc. | 194,800 | 11,391,904 | |
Southwest Airlines Co. | 244,500 | 14,987,850 | |
Spirit Airlines, Inc. (a) | 172,900 | 8,216,208 | |
34,595,962 | |||
Building Products - 2.6% | |||
Building Products - 2.6% | |||
A.O. Smith Corp. | 91,378 | 5,307,234 | |
Jeld-Wen Holding, Inc. (a) | 88,200 | 2,145,024 | |
Lennox International, Inc. | 23,800 | 5,302,878 | |
Masco Corp. | 159,600 | 6,060,012 | |
18,815,148 | |||
Commercial Services & Supplies - 3.3% | |||
Diversified Support Services - 1.6% | |||
Cintas Corp. | 54,000 | 11,521,980 | |
Environmental & Facility Services - 1.7% | |||
Waste Connection, Inc. (United States) | 156,400 | 12,416,596 | |
TOTAL COMMERCIAL SERVICES & SUPPLIES | 23,938,576 | ||
Construction & Engineering - 4.1% | |||
Construction & Engineering - 4.1% | |||
Fluor Corp. | 202,500 | 11,625,525 | |
Jacobs Engineering Group, Inc. | 182,700 | 13,280,463 | |
KBR, Inc. | 201,500 | 4,227,470 | |
29,133,458 | |||
Electrical Equipment - 7.6% | |||
Electrical Components & Equipment - 7.1% | |||
Acuity Brands, Inc. | 31,900 | 4,875,596 | |
AMETEK, Inc. | 102,954 | 7,923,340 | |
Emerson Electric Co. | 215,800 | 16,558,334 | |
Fortive Corp. | 257,410 | 21,617,292 | |
50,974,562 | |||
Heavy Electrical Equipment - 0.5% | |||
Melrose Industries PLC | 1,090,518 | 3,151,365 | |
TOTAL ELECTRICAL EQUIPMENT | 54,125,927 | ||
Industrial Conglomerates - 12.3% | |||
Industrial Conglomerates - 12.3% | |||
3M Co. | 16,300 | 3,437,996 | |
General Electric Co. | 2,576,339 | 33,337,827 | |
Honeywell International, Inc. | 253,959 | 40,394,719 | |
ITT, Inc. | 180,100 | 10,645,711 | |
87,816,253 | |||
Machinery - 20.7% | |||
Agricultural & Farm Machinery - 1.7% | |||
Deere & Co. | 83,400 | 11,992,920 | |
Construction Machinery & Heavy Trucks - 7.5% | |||
Allison Transmission Holdings, Inc. | 327,600 | 16,268,616 | |
Caterpillar, Inc. | 150,900 | 20,952,465 | |
PACCAR, Inc. | 111,900 | 7,656,198 | |
WABCO Holdings, Inc. (a) | 41,600 | 5,120,128 | |
Wabtec Corp. | 37,800 | 4,094,496 | |
54,091,903 | |||
Industrial Machinery - 11.5% | |||
Flowserve Corp. | 107,508 | 5,603,317 | |
Gardner Denver Holdings, Inc. (a) | 386,500 | 10,806,540 | |
IDEX Corp. | 33,198 | 5,086,266 | |
Ingersoll-Rand PLC | 227,300 | 23,023,217 | |
Lincoln Electric Holdings, Inc. | 54,200 | 5,103,472 | |
Parker Hannifin Corp. | 43,500 | 7,638,600 | |
Snap-On, Inc. | 96,500 | 17,059,270 | |
The Weir Group PLC | 128,300 | 3,117,941 | |
Xylem, Inc. | 65,900 | 5,002,469 | |
82,441,092 | |||
TOTAL MACHINERY | 148,525,915 | ||
Professional Services - 2.6% | |||
Research & Consulting Services - 2.6% | |||
Equifax, Inc. | 5,500 | 736,835 | |
IHS Markit Ltd. (a) | 225,308 | 12,391,940 | |
Nielsen Holdings PLC | 210,100 | 5,462,600 | |
18,591,375 | |||
Road & Rail - 10.0% | |||
Railroads - 8.4% | |||
Genesee & Wyoming, Inc. Class A (a) | 36,500 | 3,207,985 | |
Kansas City Southern | 39,400 | 4,568,824 | |
Norfolk Southern Corp. | 84,500 | 14,689,480 | |
Union Pacific Corp. | 249,200 | 37,534,504 | |
60,000,793 | |||
Trucking - 1.6% | |||
J.B. Hunt Transport Services, Inc. | 39,520 | 4,772,040 | |
Knight-Swift Transportation Holdings, Inc. Class A | 192,400 | 6,566,612 | |
11,338,652 | |||
TOTAL ROAD & RAIL | 71,339,445 | ||
Trading Companies & Distributors - 1.4% | |||
Trading Companies & Distributors - 1.4% | |||
Bunzl PLC | 116,900 | 3,634,289 | |
Univar, Inc. (a) | 224,500 | 6,245,590 | |
9,879,879 | |||
TOTAL COMMON STOCKS | |||
(Cost $563,034,112) | 713,435,938 | ||
Money Market Funds - 0.4% | |||
Fidelity Cash Central Fund, 1.97% (b) | |||
(Cost $2,751,056) | 2,750,506 | 2,751,056 | |
TOTAL INVESTMENT IN SECURITIES - 100.1% | |||
(Cost $565,785,168) | 716,186,994 | ||
NET OTHER ASSETS (LIABILITIES) - (0.1)% | (550,365) | ||
NET ASSETS - 100% | $715,636,629 |
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 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 | $39,115 |
Fidelity Securities Lending Cash Central Fund | 13,169 |
Total | $52,284 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $8,860,617 |
See accompanying notes which are an integral part of the financial statements.
Industrials Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $563,034,112) | $713,435,938 | |
Fidelity Central Funds (cost $2,751,056) | 2,751,056 | |
Total Investment in Securities (cost $565,785,168) | $716,186,994 | |
Cash | 513 | |
Receivable for fund shares sold | 177,504 | |
Dividends receivable | 1,472,940 | |
Distributions receivable from Fidelity Central Funds | 5,282 | |
Prepaid expenses | 10,423 | |
Other receivables | 107,531 | |
Total assets | 717,961,187 | |
Liabilities | ||
Payable for investments purchased | $743,349 | |
Payable for fund shares redeemed | 1,031,644 | |
Accrued management fee | 322,301 | |
Other affiliated payables | 122,787 | |
Other payables and accrued expenses | 104,477 | |
Total liabilities | 2,324,558 | |
Net Assets | $715,636,629 | |
Net Assets consist of: | ||
Paid in capital | $467,065,203 | |
Undistributed net investment income | 2,882,839 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 95,286,788 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 150,401,799 | |
Net Assets, for 19,748,329 shares outstanding | $715,636,629 | |
Net Asset Value, offering price and redemption price per share ($715,636,629 ÷ 19,748,329 shares) | $36.24 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $6,046,319 | |
Income from Fidelity Central Funds | 52,284 | |
Total income | 6,098,603 | |
Expenses | ||
Management fee | $2,177,253 | |
Transfer agent fees | 701,035 | |
Accounting and security lending fees | 140,002 | |
Custodian fees and expenses | 11,329 | |
Independent trustees' fees and expenses | 2,162 | |
Registration fees | 17,923 | |
Audit | 17,791 | |
Legal | 10,925 | |
Miscellaneous | 3,873 | |
Total expenses before reductions | 3,082,293 | |
Expense reductions | (58,804) | |
Total expenses after reductions | 3,023,489 | |
Net investment income (loss) | 3,075,114 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 16,435,876 | |
Redemptions in-kind with affiliated entities | 79,998,333 | |
Fidelity Central Funds | (764) | |
Foreign currency transactions | (39,568) | |
Total net realized gain (loss) | 96,393,877 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (90,210,379) | |
Assets and liabilities in foreign currencies | (21) | |
Total change in net unrealized appreciation (depreciation) | (90,210,400) | |
Net gain (loss) | 6,183,477 | |
Net increase (decrease) in net assets resulting from operations | $9,258,591 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $3,075,114 | $5,526,016 |
Net realized gain (loss) | 96,393,877 | 75,756,347 |
Change in net unrealized appreciation (depreciation) | (90,210,400) | 33,436,197 |
Net increase (decrease) in net assets resulting from operations | 9,258,591 | 114,718,560 |
Distributions to shareholders from net investment income | (1,535,114) | (5,401,531) |
Distributions to shareholders from net realized gain | (41,220,630) | (43,099,432) |
Total distributions | (42,755,744) | (48,500,963) |
Share transactions | ||
Proceeds from sales of shares | 40,954,471 | 196,779,599 |
Net asset value of shares issued in exchange for the net assets of Industrial Equipment Portfolio (note 10) | – | 186,045,666 |
Reinvestment of distributions | 41,172,040 | 46,751,393 |
Cost of shares redeemed | (409,942,790) | (425,264,580) |
Net increase (decrease) in net assets resulting from share transactions | (327,816,279) | 4,312,078 |
Total increase (decrease) in net assets | (361,313,432) | 70,529,675 |
Net Assets | ||
Beginning of period | 1,076,950,061 | 1,006,420,386 |
End of period | $715,636,629 | $1,076,950,061 |
Other Information | ||
Undistributed net investment income end of period | $2,882,839 | $1,342,839 |
Shares | ||
Sold | 1,154,878 | 5,592,749 |
Issued in exchange for the shares of Industrial Equipment Portfolio (note 10) | – | 4,761,855 |
Issued in reinvestment of distributions | 1,199,652 | 1,349,204 |
Redeemed | (11,743,031) | (12,414,624) |
Net increase (decrease) | (9,388,501) | (710,816) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Industrials Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $36.96 | $33.72 | $28.10 | $32.69 | $33.69 | $28.04 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .14 | .21 | .26 | .24 | .22 | .23 |
Net realized and unrealized gain (loss) | .64 | 4.95 | 6.76 | (2.90) | 2.44 | 7.36 |
Total from investment operations | .78 | 5.16 | 7.02 | (2.66) | 2.66 | 7.59 |
Distributions from net investment income | (.05) | (.22) | (.19) | (.20) | (.23) | (.20) |
Distributions from net realized gain | (1.45) | (1.71) | (1.21) | (1.73) | (3.43) | (1.74) |
Total distributions | (1.50) | (1.92)C | (1.40) | (1.93) | (3.66) | (1.94) |
Redemption fees added to paid in capitalB | – | – | –D | –D | –D | –D |
Net asset value, end of period | $36.24 | $36.96 | $33.72 | $28.10 | $32.69 | $33.69 |
Total ReturnE,F | 2.35% | 15.73% | 25.18% | (8.29)% | 8.74% | 27.80% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .77%I | .77% | .77% | .77% | .78% | .81% |
Expenses net of fee waivers, if any | .76%I | .77% | .77% | .76% | .78% | .81% |
Expenses net of all reductions | .75%I | .77% | .77% | .76% | .78% | .81% |
Net investment income (loss) | .76%I | .60% | .83% | .79% | .68% | .74% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $715,637 | $1,076,950 | $1,006,420 | $978,550 | $1,142,689 | $1,217,117 |
Portfolio turnover rateJ | 43%I,K | 64%L | 62%K | 75%K | 72%K | 58% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $1.92 per share is comprised of distributions from net investment income of $.216 and distributions from net realized gain of $1.705 per share.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Portfolio turnover rate excludes securities received or delivered in-kind.
L Portfolio rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Transportation Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Union Pacific Corp. | 14.7 |
United Parcel Service, Inc. Class B | 10.9 |
CSX Corp. | 10.3 |
FedEx Corp. | 7.0 |
Delta Air Lines, Inc. | 5.7 |
Southwest Airlines Co. | 5.0 |
Norfolk Southern Corp. | 4.9 |
American Airlines Group, Inc. | 4.2 |
C.H. Robinson Worldwide, Inc. | 3.1 |
J.B. Hunt Transport Services, Inc. | 2.9 |
68.7 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Road & Rail | 43.5% | |
Air Freight & Logistics | 26.1% | |
Airlines | 22.7% | |
Machinery | 1.6% | |
Transportation Infrastructure | 1.1% | |
All Others* | 5.0% |
* Includes short-term investments and net other assets (liabilities).
Transportation Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 96.3% | |||
Shares | Value | ||
Air Freight & Logistics - 26.1% | |||
Air Freight & Logistics - 26.1% | |||
Air Transport Services Group, Inc. (a) | 23,000 | $468,050 | |
C.H. Robinson Worldwide, Inc. | 168,396 | 16,179,488 | |
Echo Global Logistics, Inc. (a) | 150,900 | 5,009,880 | |
Expeditors International of Washington, Inc. | 201,600 | 14,773,248 | |
FedEx Corp. | 148,250 | 36,165,588 | |
Forward Air Corp. | 21,544 | 1,384,417 | |
Hub Group, Inc. Class A (a) | 88,400 | 4,671,940 | |
United Parcel Service, Inc. Class B | 461,100 | 56,659,968 | |
135,312,579 | |||
Airlines - 22.7% | |||
Airlines - 22.7% | |||
Alaska Air Group, Inc. | 80,000 | 5,399,200 | |
American Airlines Group, Inc. | 542,700 | 21,968,496 | |
Delta Air Lines, Inc. | 505,502 | 29,561,757 | |
Hawaiian Holdings, Inc. | 33,700 | 1,398,550 | |
JetBlue Airways Corp. (a) | 97,700 | 1,864,116 | |
Mesa Air Group, Inc. | 102,600 | 1,414,854 | |
SkyWest, Inc. | 212,400 | 13,869,720 | |
Southwest Airlines Co. | 422,000 | 25,868,600 | |
Spirit Airlines, Inc. (a) | 247,500 | 11,761,200 | |
United Continental Holdings, Inc. (a) | 52,400 | 4,580,808 | |
117,687,301 | |||
Auto Components - 0.4% | |||
Auto Parts & Equipment - 0.4% | |||
Hertz Global Holdings, Inc. (a) | 107,700 | 1,896,597 | |
Machinery - 1.6% | |||
Construction Machinery & Heavy Trucks - 1.2% | |||
Allison Transmission Holdings, Inc. | 123,300 | 6,123,078 | |
Industrial Machinery - 0.4% | |||
Park-Ohio Holdings Corp. | 48,670 | 2,017,372 | |
TOTAL MACHINERY | 8,140,450 | ||
Marine - 0.7% | |||
Marine - 0.7% | |||
Kirby Corp. (a) | 37,800 | 3,299,940 | |
Matson, Inc. | 6,600 | 246,576 | |
3,546,516 | |||
Road & Rail - 43.5% | |||
Railroads - 34.4% | |||
CSX Corp. | 720,019 | 53,396,609 | |
Genesee & Wyoming, Inc. Class A (a) | 151,300 | 13,297,757 | |
Kansas City Southern | 85,700 | 9,937,772 | |
Norfolk Southern Corp. | 144,950 | 25,198,108 | |
Union Pacific Corp. | 506,695 | 76,318,400 | |
178,148,646 | |||
Trucking - 9.1% | |||
AMERCO | 6,700 | 2,511,763 | |
Avis Budget Group, Inc. (a) | 75,000 | 2,333,250 | |
J.B. Hunt Transport Services, Inc. | 126,400 | 15,262,800 | |
Knight-Swift Transportation Holdings, Inc. Class A | 318,600 | 10,873,818 | |
Landstar System, Inc. | 91,800 | 10,630,440 | |
Roadrunner Transportation Systems, Inc. (a) | 122,700 | 159,510 | |
Ryder System, Inc. | 40,100 | 3,081,284 | |
Universal Logistics Holdings, Inc. | 29,490 | 1,079,334 | |
YRC Worldwide, Inc. (a) | 97,600 | 934,032 | |
46,866,231 | |||
TOTAL ROAD & RAIL | 225,014,877 | ||
Trading Companies & Distributors - 0.2% | |||
Trading Companies & Distributors - 0.2% | |||
HD Supply Holdings, Inc. (a) | 28,600 | 1,303,874 | |
Transportation Infrastructure - 1.1% | |||
Airport Services - 1.1% | |||
Macquarie Infrastructure Co. LLC (b) | 124,900 | 5,875,296 | |
TOTAL COMMON STOCKS | |||
(Cost $291,511,210) | 498,777,490 | ||
Money Market Funds - 3.5% | |||
Fidelity Cash Central Fund, 1.97% (c) | 17,652,158 | 17,655,689 | |
Fidelity Securities Lending Cash Central Fund 1.98% (c)(d) | 270,948 | 270,975 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $17,926,672) | 17,926,664 | ||
TOTAL INVESTMENT IN SECURITIES - 99.8% | |||
(Cost $309,437,882) | 516,704,154 | ||
NET OTHER ASSETS (LIABILITIES) - 0.2% | 1,036,261 | ||
NET ASSETS - 100% | $517,740,415 |
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 are available on the SEC's website or upon request.
(d) Includes 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 | $125,630 |
Fidelity Securities Lending Cash Central Fund | 3,459 |
Total | $129,089 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
Transportation Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $263,424) — See accompanying schedule: Unaffiliated issuers (cost $291,511,210) | $498,777,490 | |
Fidelity Central Funds (cost $17,926,672) | 17,926,664 | |
Total Investment in Securities (cost $309,437,882) | $516,704,154 | |
Receivable for fund shares sold | 761,212 | |
Dividends receivable | 1,234,669 | |
Distributions receivable from Fidelity Central Funds | 30,898 | |
Prepaid expenses | 5,271 | |
Other receivables | 5,687 | |
Total assets | 518,741,891 | |
Liabilities | ||
Payable for fund shares redeemed | $391,209 | |
Accrued management fee | 226,730 | |
Transfer agent fee payable | 75,238 | |
Other affiliated payables | 16,316 | |
Other payables and accrued expenses | 21,783 | |
Collateral on securities loaned | 270,200 | |
Total liabilities | 1,001,476 | |
Net Assets | $517,740,415 | |
Net Assets consist of: | ||
Paid in capital | $291,341,262 | |
Undistributed net investment income | 2,363,754 | |
Accumulated undistributed net realized gain (loss) on investments | 16,769,127 | |
Net unrealized appreciation (depreciation) on investments | 207,266,272 | |
Net Assets, for 4,869,540 shares outstanding | $517,740,415 | |
Net Asset Value, offering price and redemption price per share ($517,740,415 ÷ 4,869,540 shares) | $106.32 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $4,151,270 | |
Income from Fidelity Central Funds | 129,089 | |
Total income | 4,280,359 | |
Expenses | ||
Management fee | $1,311,786 | |
Transfer agent fees | 459,898 | |
Accounting and security lending fees | 94,579 | |
Custodian fees and expenses | 3,706 | |
Independent trustees' fees and expenses | 1,210 | |
Registration fees | 21,153 | |
Audit | 26,311 | |
Legal | 2,887 | |
Interest | 728 | |
Miscellaneous | 2,385 | |
Total expenses before reductions | 1,924,643 | |
Expense reductions | (12,475) | |
Total expenses after reductions | 1,912,168 | |
Net investment income (loss) | 2,368,191 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 18,205,312 | |
Fidelity Central Funds | 169 | |
Total net realized gain (loss) | 18,205,481 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 37,774,580 | |
Fidelity Central Funds | (8) | |
Total change in net unrealized appreciation (depreciation) | 37,774,572 | |
Net gain (loss) | 55,980,053 | |
Net increase (decrease) in net assets resulting from operations | $58,348,244 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $2,368,191 | $4,414,310 |
Net realized gain (loss) | 18,205,481 | 54,399,996 |
Change in net unrealized appreciation (depreciation) | 37,774,572 | (491,145) |
Net increase (decrease) in net assets resulting from operations | 58,348,244 | 58,323,161 |
Distributions to shareholders from net investment income | (1,231,216) | (3,594,752) |
Distributions to shareholders from net realized gain | (22,777,459) | (25,696,815) |
Total distributions | (24,008,675) | (29,291,567) |
Share transactions | ||
Proceeds from sales of shares | 49,088,510 | 129,618,153 |
Reinvestment of distributions | 22,758,349 | 27,926,461 |
Cost of shares redeemed | (100,601,223) | (317,501,802) |
Net increase (decrease) in net assets resulting from share transactions | (28,754,364) | (159,957,188) |
Redemption fees | – | 13,501 |
Total increase (decrease) in net assets | 5,585,205 | (130,912,093) |
Net Assets | ||
Beginning of period | 512,155,210 | 643,067,303 |
End of period | $517,740,415 | $512,155,210 |
Other Information | ||
Undistributed net investment income end of period | $2,363,754 | $1,226,779 |
Shares | ||
Sold | 481,168 | 1,302,357 |
Issued in reinvestment of distributions | 245,082 | 280,882 |
Redeemed | (1,026,172) | (3,330,145) |
Net increase (decrease) | (299,922) | (1,746,906) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Transportation Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $99.07 | $92.98 | $73.25 | $94.04 | $76.28 | $57.75 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .49 | .78 | .63 | .50 | .46 | .45 |
Net realized and unrealized gain (loss) | 11.60 | 10.83 | 20.86 | (15.81) | 19.67 | 20.44 |
Total from investment operations | 12.09 | 11.61 | 21.49 | (15.31) | 20.13 | 20.89 |
Distributions from net investment income | (.25) | (.67) | (.38) | (.52) | (.34) | (.27) |
Distributions from net realized gain | (4.59) | (4.85) | (1.39) | (4.95) | (2.04) | (2.09) |
Total distributions | (4.84) | (5.52) | (1.77) | (5.48)C | (2.38) | (2.36) |
Redemption fees added to paid in capitalB | – | –D | .01 | –D | .01 | –D |
Net asset value, end of period | $106.32 | $99.07 | $92.98 | $73.25 | $94.04 | $76.28 |
Total ReturnE,F | 12.91% | 12.48% | 29.40% | (16.28)% | 26.80% | 36.60% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .79%I | .80% | .83% | .81% | .81% | .85% |
Expenses net of fee waivers, if any | .79%I | .80% | .83% | .81% | .81% | .85% |
Expenses net of all reductions | .79%I | .80% | .82% | .80% | .81% | .84% |
Net investment income (loss) | .97%I | .80% | .76% | .60% | .53% | .68% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $517,740 | $512,155 | $643,067 | $408,171 | $1,146,633 | $450,237 |
Portfolio turnover rateJ | 55%I | 47% | 104% | 80% | 72%K | 78% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $5.48 per share is comprised of distributions from net investment income of $.521 and distributions from net realized gain of $4.954 per share.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K 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 (Unaudited)
For the period ended August 31, 2018
1. Organization.
Air Transportation Portfolio, Defense and Aerospace Portfolio, Environment and Alternative Energy Portfolio, Industrials Portfolio, and Transportation Portfolio (the Funds) are non-diversified funds of Fidelity Select Portfolios (the Trust). 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 Funds invest primarily in securities of companies whose principal business activities fall within specific industries. Each Fund is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds.
Effective August 10, 2018, Defense and Aerospace Portfolio underwent a 10 for 1 share split. The effect of the share split transaction was to multiply the number of outstanding shares of Defense and Aerospace Portfolio by a split factor of 10:1, with a corresponding decrease in net asset value (NAV) per share. This event does not impact the overall net assets of Defense and Aerospace Portfolio. The per share data presented in the Financial Highlights and Share activity presented in the Statements of Changes in Net Assets for Defense and Aerospace Portfolio have been retroactively adjusted to reflect this share split.
2. Investments in Fidelity Central Funds.
The Funds invest 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 Funds' Schedules of Investments list each of the Fidelity Central Funds held as of period end, if any, as an investment of each Fund, but do not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, each 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 .005%.
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 are available on the SEC website or upon request.
3. Significant Accounting Policies.
Each Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Funds:
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 each Fund's investments to the Fair Value Committee (the Committee) established by each Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, each 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 each 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 each Fund's investments and ratifies the fair value determinations of the Committee.
Each 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 each 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 August 31, 2018, including information on transfers between Levels 1 and 2 is included at the end of each applicable Fund's Schedule of Investments.
Foreign Currency. The Funds 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 Funds' 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 for certain Funds 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 Funds are 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. Certain distributions received by the Funds represent a return of capital or capital gain. The Funds determine the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. 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) for Defense and Aerospace Portfolio and Industrials Portfolio, certain independent Trustees have elected 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 of $87,234 for Defense and Aerospace Portfolio and $78,628 for Industrials Portfolio are included in the accompanying Statement of Assets and Liabilities in other receivables and other payables and accrued expenses, respectively.
Income Tax Information and Distributions to Shareholders. Each year, each 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. Each Fund files a U.S. federal tax return, in addition to state and local tax returns as required. Each 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 each 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 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), deferred trustees compensation and losses deferred due to wash sales.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows for each Fund:
Tax cost | Gross unrealized appreciation | Gross unrealized depreciation | Net unrealized appreciation (depreciation) | |
Air Transportation Portfolio | $233,956,535 | $106,133,338 | $(1,514,058) | $104,619,280 |
Defense and Aerospace Portfolio | 2,023,356,781 | 880,279,043 | (29,483,958) | 850,795,085 |
Environment and Alternative Energy Portfolio | 131,222,847 | 28,356,336 | (5,140,112) | 23,216,224 |
Industrials Portfolio | 566,462,251 | 169,773,161 | (20,048,418) | 149,724,743 |
Transportation Portfolio | 311,502,736 | 210,968,391 | (5,766,973) | 205,201,418 |
Restricted Securities. The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of each applicable Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions, are noted in the table below.
Purchases ($) | Sales ($) | |
Air Transportation Portfolio | 58,293,477 | 119,254,456 |
Defense and Aerospace Portfolio | 347,269,549 | 516,422,043 |
Environment and Alternative Energy Portfolio | 46,473,952 | 77,197,992 |
Industrials Portfolio | 176,291,559 | 265,598,291 |
Transportation Portfolio | 130,551,587 | 180,391,209 |
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Funds with investment management related services for which the Funds pay a monthly management fee. The management fee is the sum of an individual fund fee rate and an annualized group fee rate. The individual fund fee rate is applied to each Fund's average net assets. 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, each Fund's annualized management fee rate expressed as a percentage of each Fund's average net assets was as follows:
Individual Rate | Group Rate | Total | |
Air Transportation Portfolio | .30% | .24% | .54% |
Defense and Aerospace Portfolio | .30% | .24% | .54% |
Environment and Alternative Energy Portfolio | .30% | .24% | .54% |
Industrials Portfolio | .30% | .24% | .54% |
Transportation Portfolio | .30% | .24% | .54% |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Funds' transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees were equivalent to the following annualized rates expressed as a percentage of average net assets:
Air Transportation Portfolio | .20% |
Defense and Aerospace Portfolio | .17% |
Environment and Alternative Energy Portfolio | .23% |
Industrials Portfolio | .17% |
Transportation Portfolio | .19% |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains each 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. For the period, the fees were equivalent to the following annualized rates:
% of Average Net Assets | |
Air Transportation Portfolio | .04 |
Defense and Aerospace Portfolio | .03 |
Environment and Alternative Energy Portfolio | .04 |
Industrials Portfolio | .03 |
Transportation Portfolio | .04 |
Brokerage Commissions. Certain Funds placed a portion of their 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 as follows:
Amount | |
Air Transportation Portfolio | $1,270 |
Defense and Aerospace Portfolio | 9,177 |
Environment and Alternative Energy Portfolio | 700 |
Industrials Portfolio | 6,104 |
Transportation Portfolio | 4,012 |
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Funds, along with other registered investment companies having management contracts with Fidelity Management & Research Company (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. Each applicable 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 | |
Environment and Alternative Energy Portfolio | Borrower | $7,051,333 | 1.80% | $1,058 |
Transportation Portfolio | Borrower | 13,468,000 | 1.95% | 728 |
Interfund Trades. The Funds may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Redemptions In-Kind. During the period, 8,024,186 shares of Industrials Portfolio held by an affiliated entity were redeemed in-kind for investments and cash with a value of $278,038,031. The net realized gain of $79,998,333 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. Industrials Portfolio recognized no gain or loss for federal income tax purposes.
6. Committed Line of Credit.
Certain Funds participate 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 participating funds have agreed to pay commitment fees on their pro-rata portion of the line of credit, which are reflected in Miscellaneous expenses on the Statement of Operations, and are as follows:
Air Transportation Portfolio | $509 |
Defense and Aerospace Portfolio | 4,036 |
Environment and Alternative Energy Portfolio | 243 |
Industrials Portfolio | 1,280 |
Transportation Portfolio | 712 |
During the period, the Funds did not borrow on this line of credit.
7. Security Lending.
Certain Funds lend portfolio securities through a lending agent from time to time in order to earn additional income. On the settlement date of the loan, each applicable 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 Funds and any additional required collateral is delivered to the Funds on the next business day. The Funds or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Funds may apply collateral received from the borrower against the obligation. The Funds 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 each applicable 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 on each applicable Fund's Statement of Operations as a component of income from Fidelity Central Funds. Security lending activity was as follows:
Total Security Lending Income | |
Air Transportation Portfolio | $302 |
Defense and Aerospace Portfolio | 25,324 |
Environment and Alternative Energy Portfolio | 2,202 |
Industrials Portfolio | 13,169 |
Transportation Portfolio | 3,459 |
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of Certain Funds include an amount in addition to trade execution, which may be rebated back to the Funds to offset certain expenses. In addition, through arrangements with each applicable Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce each applicable Fund's expenses. All of the applicable expense reductions are noted in the table below.
Brokerage Service reduction | Custody expense reduction | |
Air Transportation Portfolio | $14,196 | $35 |
Defense and Aerospace Portfolio | 69,740 | 451 |
Environment and Alternative Energy Portfolio | 10,848 | – |
Industrials Portfolio | 54,042 | – |
Transportation Portfolio | 9,894 | 99 |
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses as follows:
Amount | |
Air Transportation Portfolio | $1,802 |
Defense and Aerospace Portfolio | 11,004 |
Environment and Alternative Energy Portfolio | 816 |
Industrials Portfolio | 4,762 |
Transportation Portfolio | 2,482 |
9. Other.
The Funds' 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 Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote.
10. Prior Year Merger Information.
On January 26, 2018, Industrials Portfolio acquired all of the assets and assumed all of the liabilities of Industrial Equipment Portfolio ("Target Fund") pursuant to an Agreement and Plan of Reorganization approved by the Board of Trustees ("The Board"). The acquisition was accomplished by an exchange of shares then outstanding of the Target Fund at its respective net asset value on the acquisition date. The reorganization provides shareholders of the Target Fund access to a larger portfolio with a similar investment objective. The reorganization qualified as a tax-free reorganization for federal income tax purposes with no gain or loss recognized to the funds or their shareholders. The Target Fund's net assets of $186,045,666, including securities of $186,126,516 and unrealized appreciation of $32,401,431 was combined with the Fund's net assets of $965,428,804 for total net assets after the acquisition of $1,151,474,470.
Pro forma results of operations of the combined entity for the entire period ended February 28, 2018, as though the acquisition had occurred as of the beginning of the year (rather than on the actual acquisition date), are as follows:
Net investment income (loss) | $6,705,094 |
Total net realized gain (loss) | 101,913,604 |
Total change in net unrealized appreciation (depreciation) | 40,445,283 |
Net increase (decrease) in net assets resulting from operations | $149,063,981 |
Because the combined investment portfolios have been managed as a single portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the acquired fund that have been included in the Industrial Portfolio's accompanying Statement of Operations since January 26, 2018.
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management 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 (March 1, 2018 to August 31, 2018).
Actual Expenses
The first line of the accompanying table for 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 fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 fund provides information about hypothetical account values and hypothetical expenses based on a fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's 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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 RatioA | Beginning Account Value March 1, 2018 | Ending Account Value August 31, 2018 | Expenses Paid During Period-B March 1, 2018 to August 31, 2018 | |
Air Transportation Portfolio | .81% | |||
Actual | $1,000.00 | $1,061.70 | $4.21 | |
Hypothetical-C | $1,000.00 | $1,021.12 | $4.13 | |
Defense and Aerospace Portfolio | .75% | |||
Actual | $1,000.00 | $997.80 | $3.78 | |
Hypothetical-C | $1,000.00 | $1,021.42 | $3.82 | |
Environment and Alternative Energy Portfolio | .88% | |||
Actual | $1,000.00 | $1,000.90 | $4.44 | |
Hypothetical-C | $1,000.00 | $1,020.77 | $4.48 | |
Industrials Portfolio | .76% | |||
Actual | $1,000.00 | $1,023.50 | $3.88 | |
Hypothetical-C | $1,000.00 | $1,021.37 | $3.87 | |
Transportation Portfolio | .79% | |||
Actual | $1,000.00 | $1,129.10 | $4.24 | |
Hypothetical-C | $1,000.00 | $1,021.22 | $4.02 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/ 365 (to reflect the one-half year period).
C 5% return per year before expenses
SELCI-SANN-1018
1.813660.113
Fidelity® Select Portfolios® Utilities Portfolio Semi-Annual Report August 31, 2018 |
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Contents
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-800-544-8544 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. © 2018 FMR LLC. All rights reserved.
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.institutional.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.
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
NextEra Energy, Inc. | 8.2 |
PG&E Corp. | 7.0 |
Exelon Corp. | 6.3 |
Dominion Resources, Inc. | 6.2 |
FirstEnergy Corp. | 6.1 |
Evergy, Inc. | 6.0 |
Public Service Enterprise Group, Inc. | 5.5 |
Edison International | 4.7 |
Entergy Corp. | 4.5 |
Sempra Energy | 4.0 |
58.5 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Electric Utilities | 58.5% | |
Multi-Utilities | 20.1% | |
Independent Power and Renewable Electricity Producers | 6.5% | |
Diversified Telecommunication Services | 3.2% | |
Media | 3.1% | |
All Others* | 8.6% |
* Includes short-term investments and net other assets (liabilities).
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.2% | |||
Shares | Value | ||
Diversified Telecommunication Services - 3.2% | |||
Integrated Telecommunication Services - 3.2% | |||
AT&T, Inc. | 759,217 | $24,249,391 | |
Electric Utilities - 58.5% | |||
Electric Utilities - 58.5% | |||
American Electric Power Co., Inc. | 398,700 | 28,598,751 | |
Duke Energy Corp. | 227,776 | 18,504,522 | |
Edison International | 545,800 | 35,875,434 | |
El Paso Electric Co. | 116,255 | 7,126,432 | |
Entergy Corp. | 411,900 | 34,430,721 | |
Evergy, Inc. | 805,422 | 45,949,325 | |
Eversource Energy | 369,900 | 23,092,857 | |
Exelon Corp. | 1,105,392 | 48,316,684 | |
FirstEnergy Corp. | 1,262,503 | 47,192,362 | |
NextEra Energy, Inc. | 369,870 | 62,914,887 | |
PG&E Corp. | 1,174,739 | 54,249,447 | |
PPL Corp. | 809,668 | 24,079,526 | |
Vistra Energy Corp. (a) | 868,807 | 20,451,717 | |
450,782,665 | |||
Equity Real Estate Investment Trusts (REITs) - 2.4% | |||
Specialized REITs - 2.4% | |||
InfraReit, Inc. | 873,615 | 18,249,817 | |
Gas Utilities - 2.3% | |||
Gas Utilities - 2.3% | |||
South Jersey Industries, Inc. | 529,586 | 17,571,663 | |
Independent Power and Renewable Electricity Producers - 6.5% | |||
Independent Power Producers & Energy Traders - 4.5% | |||
NRG Energy, Inc. | 265,302 | 9,389,038 | |
NRG Yield, Inc. Class C | 298,300 | 5,921,255 | |
The AES Corp. | 1,417,404 | 19,078,258 | |
34,388,551 | |||
Renewable Electricity - 2.0% | |||
NextEra Energy Partners LP | 327,301 | 15,874,099 | |
TOTAL INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS | 50,262,650 | ||
Media - 3.1% | |||
Cable & Satellite - 3.1% | |||
Comcast Corp. Class A | 647,100 | 23,936,229 | |
Multi-Utilities - 20.1% | |||
Multi-Utilities - 20.1% | |||
Avangrid, Inc. | 231,931 | 11,443,476 | |
Dominion Resources, Inc. | 673,800 | 47,684,826 | |
Public Service Enterprise Group, Inc. | 811,270 | 42,469,985 | |
SCANA Corp. | 590,427 | 22,636,971 | |
Sempra Energy | 266,742 | 30,963,411 | |
155,198,669 | |||
Oil, Gas & Consumable Fuels - 1.1% | |||
Oil & Gas Storage & Transport - 1.1% | |||
Cheniere Energy Partners LP Holdings LLC | 274,042 | 8,684,391 | |
TOTAL COMMON STOCKS | |||
(Cost $628,820,533) | 748,935,475 | ||
Money Market Funds - 2.3% | |||
Fidelity Cash Central Fund, 1.97% (b) | |||
(Cost $17,519,007) | 17,515,504 | 17,519,007 | |
TOTAL INVESTMENT IN SECURITIES - 99.5% | |||
(Cost $646,339,540) | 766,454,482 | ||
NET OTHER ASSETS (LIABILITIES) - 0.5% | 4,192,930 | ||
NET ASSETS - 100% | $770,647,412 |
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 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 | $149,606 |
Fidelity Securities Lending Cash Central Fund | 1,896 |
Total | $151,502 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $628,820,533) | $748,935,475 | |
Fidelity Central Funds (cost $17,519,007) | 17,519,007 | |
Total Investment in Securities (cost $646,339,540) | $766,454,482 | |
Cash | 620 | |
Receivable for investments sold | 824,628 | |
Receivable for fund shares sold | 1,781,638 | |
Dividends receivable | 2,665,196 | |
Distributions receivable from Fidelity Central Funds | 22,992 | |
Prepaid expenses | 7,360 | |
Other receivables | 68,124 | |
Total assets | 771,825,040 | |
Liabilities | ||
Payable for fund shares redeemed | 685,819 | |
Accrued management fee | 339,473 | |
Transfer agent fee payable | 107,799 | |
Other affiliated payables | 22,067 | |
Other payables and accrued expenses | 22,470 | |
Total liabilities | 1,177,628 | |
Net Assets | $770,647,412 | |
Net Assets consist of: | ||
Paid in capital | $560,496,071 | |
Undistributed net investment income | 8,009,274 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 82,027,125 | |
Net unrealized appreciation (depreciation) on investments | 120,114,942 | |
Net Assets, for 8,748,192 shares outstanding | $770,647,412 | |
Net Asset Value, offering price and redemption price per share ($770,647,412 ÷ 8,748,192 shares) | $88.09 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $10,479,283 | |
Income from Fidelity Central Funds | 151,502 | |
Total income | 10,630,785 | |
Expenses | ||
Management fee | $1,906,646 | |
Transfer agent fees | 633,388 | |
Accounting and security lending fees | 125,697 | |
Custodian fees and expenses | 4,454 | |
Independent trustees' fees and expenses | 1,731 | |
Registration fees | 39,001 | |
Audit | 18,765 | |
Legal | 4,188 | |
Miscellaneous | 3,394 | |
Total expenses before reductions | 2,737,264 | |
Expense reductions | (116,461) | |
Total expenses after reductions | 2,620,803 | |
Net investment income (loss) | 8,009,982 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 61,677,138 | |
Redemptions in-kind with affiliated entities | 26,295,315 | |
Fidelity Central Funds | 1,428 | |
Foreign currency transactions | (543) | |
Total net realized gain (loss) | 87,973,338 | |
Change in net unrealized appreciation (depreciation) on investment securities | 3,298,570 | |
Net gain (loss) | 91,271,908 | |
Net increase (decrease) in net assets resulting from operations | $99,281,890 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $8,009,982 | $14,714,702 |
Net realized gain (loss) | 87,973,338 | 36,453,162 |
Change in net unrealized appreciation (depreciation) | 3,298,570 | (21,215,157) |
Net increase (decrease) in net assets resulting from operations | 99,281,890 | 29,952,707 |
Distributions to shareholders from net investment income | (1,233,874) | (12,115,593) |
Distributions to shareholders from net realized gain | (2,288,788) | (29,852,182) |
Total distributions | (3,522,662) | (41,967,775) |
Share transactions | ||
Proceeds from sales of shares | 165,704,942 | 273,622,475 |
Reinvestment of distributions | 3,352,286 | 39,960,296 |
Cost of shares redeemed | (211,148,258) | (280,726,603) |
Net increase (decrease) in net assets resulting from share transactions | (42,091,030) | 32,856,168 |
Redemption fees | – | 79 |
Total increase (decrease) in net assets | 53,668,198 | 20,841,179 |
Net Assets | ||
Beginning of period | 716,979,214 | 696,138,035 |
End of period | $770,647,412 | $716,979,214 |
Other Information | ||
Undistributed net investment income end of period | $8,009,274 | $1,233,166 |
Shares | ||
Sold | 1,967,280 | 3,316,107 |
Issued in reinvestment of distributions | 41,906 | 481,973 |
Redeemed | (2,602,140) | (3,492,131) |
Net increase (decrease) | (592,954) | 305,949 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Utilities Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $76.75 | $77.05 | $66.88 | $72.85 | $70.64 | $61.04 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .94 | 1.62 | 1.52 | 1.39 | 1.41 | 1.49 |
Net realized and unrealized gain (loss) | 10.77 | 2.56 | 10.44 | (4.49) | 6.40 | 9.80 |
Total from investment operations | 11.71 | 4.18 | 11.96 | (3.10) | 7.81 | 11.29 |
Distributions from net investment income | (.13) | (1.29) | (1.77) | (1.60) | (1.20) | (1.07) |
Distributions from net realized gain | (.24) | (3.19) | (.02) | (1.27) | (4.42) | (.62) |
Total distributions | (.37) | (4.48) | (1.79) | (2.87) | (5.61)C | (1.69) |
Redemption fees added to paid in capitalB | – | –D | –D | –D | .01 | –D |
Net asset value, end of period | $88.09 | $76.75 | $77.05 | $66.88 | $72.85 | $70.64 |
Total ReturnE,F | 15.31% | 4.99% | 18.21% | (4.19)% | 11.22% | 18.71% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .77%I | .78% | .79% | .80% | .80% | .82% |
Expenses net of fee waivers, if any | .77%I | .78% | .79% | .79% | .80% | .82% |
Expenses net of all reductions | .74%I | .77% | .78% | .78% | .80% | .80% |
Net investment income (loss) | 2.27%I | 2.00% | 2.09% | 2.05% | 1.89% | 2.28% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $770,647 | $716,979 | $696,138 | $808,235 | $988,426 | $695,932 |
Portfolio turnover rateJ | 127%I,K | 66% | 70%K | 74% | 129%K | 160% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $5.61 per share is comprised of distributions from net investment income of $1.199 and distributions from net realized gain of $4.415 per share.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K 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 (Unaudited)
For the period ended August 31, 2018
1. Organization.
Utilities Portfolio (the Fund) is a non-diversified fund of Fidelity Select Portfolios (the Trust) and is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds. 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 invests primarily in securities of companies whose principal business activities fall within specific industries.
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 .005%.
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 are available on the SEC website or upon request.
3. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Fair Value Committee (the Committee) established by the Fund's investment adviser. 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. 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. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. 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. 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 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, redemptions in kind, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows:
Gross unrealized appreciation | $119,800,188 |
Gross unrealized depreciation | (5,279,923) |
Net unrealized appreciation (depreciation) | $114,520,265 |
Tax cost | $651,934,217 |
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions, aggregated $504,556,918 and $442,919,001, 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 .24% 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 annualized management fee rate was .54% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .18% of average net assets.
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. For the period, the fees were equivalent to an annualized rate of .04%.
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 $11,200 for the period.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Redemptions In-Kind. During the period, 1,469,597 shares of the Fund held by an affiliated entity were redeemed in-kind for investments and cash with a value of $117,288,521. The net realized gain of $26,295,315 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. 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 $989 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. The Fund or borrower may terminate the loan at any time, and 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 $1,896.
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 $112,890 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses in the amount of $3,571.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including and (2) ongoing costs, including management 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 (March 1, 2018 to August 31, 2018).
Actual Expenses
The first line of the accompanying table 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 under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's 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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 March 1, 2018 | Ending Account Value August 31, 2018 | Expenses Paid During Period-B March 1, 2018 to August 31, 2018 | |
Actual | .77% | $1,000.00 | $1,153.10 | $4.18 |
Hypothetical-C | $1,000.00 | $1,021.32 | $3.92 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
C 5% return per year before expenses
SELUTL-SANN-1018
1.813630.113
Fidelity® Select Portfolios® Chemicals Portfolio Gold Portfolio Materials Portfolio Semi-Annual Report August 31, 2018 |
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Contents
Chemicals Portfolio | |
Gold Portfolio | |
Materials Portfolio | |
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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.institutional.fidelity.com, or http://www.401k.com, as applicable.
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Chemicals Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
DowDuPont, Inc. | 25.0 |
LyondellBasell Industries NV Class A | 9.3 |
The Chemours Co. LLC | 7.0 |
Sherwin-Williams Co. | 5.1 |
Platform Specialty Products Corp. | 4.9 |
Linde AG | 4.8 |
Westlake Chemical Corp. | 4.8 |
Olin Corp. | 4.6 |
Air Products& Chemicals, Inc. | 4.5 |
Celanese Corp. Class A | 3.1 |
73.1 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Chemicals | 96.0% | |
Trading Companies & Distributors | 2.2% | |
Metals & Mining | 0.4% | |
Building Products | 0.3% | |
Biotechnology | 0.2% | |
All Others* | 0.9% |
* Includes short-term investments and net other assets (liabilities).
Chemicals Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 96.4% | |||
Shares | Value | ||
Biotechnology - 0.2% | |||
Biotechnology - 0.2% | |||
Calyxt, Inc. (a)(b) | 187,310 | $3,171,158 | |
Building Products - 0.3% | |||
Building Products - 0.3% | |||
GCP Applied Technologies, Inc. (a) | 186,100 | 4,689,720 | |
Chemicals - 93.1% | |||
Commodity Chemicals - 24.6% | |||
Cabot Corp. | 317,800 | 20,631,576 | |
Ciner Resources LP | 301,818 | 8,336,213 | |
LyondellBasell Industries NV Class A | 1,261,098 | 142,226,632 | |
Olin Corp. | 2,271,097 | 69,790,811 | |
Orion Engineered Carbons SA | 443,700�� | 15,973,200 | |
Tronox Ltd. Class A | 2,879,866 | 46,625,031 | |
Westlake Chemical Corp. | 780,564 | 73,817,937 | |
377,401,400 | |||
Diversified Chemicals - 36.9% | |||
Ashland Global Holdings, Inc. | 196,995 | 16,586,979 | |
DowDuPont, Inc. | 5,448,580 | 382,108,915 | |
Eastman Chemical Co. | 400,457 | 38,856,343 | |
Huntsman Corp. | 120,800 | 3,683,192 | |
Ingevity Corp. (a) | 154,600 | 15,616,146 | |
The Chemours Co. LLC | 2,466,100 | 107,521,960 | |
564,373,535 | |||
Fertilizers & Agricultural Chemicals - 5.8% | |||
CF Industries Holdings, Inc. | 215,500 | 11,195,225 | |
FMC Corp. | 506,300 | 43,263,335 | |
The Mosaic Co. | 1,076,300 | 33,655,901 | |
88,114,461 | |||
Industrial Gases - 9.3% | |||
Air Products & Chemicals, Inc. | 411,011 | 68,347,019 | |
Linde AG | 326,800 | 74,425,155 | |
142,772,174 | |||
Specialty Chemicals - 16.5% | |||
Axalta Coating Systems Ltd. (a) | 1,416,000 | 43,188,000 | |
Celanese Corp. Class A | 402,800 | 47,059,124 | |
Covestro AG (c) | 55,700 | 4,744,294 | |
Platform Specialty Products Corp. (a) | 5,665,543 | 75,125,100 | |
Sherwin-Williams Co. | 170,433 | 77,645,866 | |
Venator Materials PLC | 430,000 | 5,194,400 | |
252,956,784 | |||
TOTAL CHEMICALS | 1,425,618,354 | ||
Metals & Mining - 0.4% | |||
Diversified Metals & Mining - 0.4% | |||
Elkem ASA (a) | 1,236,486 | 6,490,477 | |
Oil, Gas & Consumable Fuels - 0.2% | |||
Oil & Gas Refining & Marketing - 0.2% | |||
S-Oil Corp. | 23,200 | 2,485,655 | |
Trading Companies & Distributors - 2.2% | |||
Trading Companies & Distributors - 2.2% | |||
Univar, Inc. (a) | 1,206,294 | 33,559,099 | |
TOTAL COMMON STOCKS | |||
(Cost $1,016,159,015) | 1,476,014,463 | ||
Nonconvertible Preferred Stocks - 2.9% | |||
Chemicals - 2.9% | |||
Commodity Chemicals - 2.9% | |||
Braskem SA (PN-A) | |||
(Cost $43,777,178) | 3,034,200 | 44,107,678 | |
Money Market Funds - 0.6% | |||
Fidelity Cash Central Fund, 1.97% (d) | 7,945,938 | 7,947,527 | |
Fidelity Securities Lending Cash Central Fund 1.98% (d)(e) | 1,256,245 | 1,256,371 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $9,204,017) | 9,203,898 | ||
TOTAL INVESTMENT IN SECURITIES - 99.9% | |||
(Cost $1,069,140,210) | 1,529,326,039 | ||
NET OTHER ASSETS (LIABILITIES) - 0.1% | 2,293,438 | ||
NET ASSETS - 100% | $1,531,619,477 |
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 $4,744,294 or 0.3% 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 are available on the SEC's website or upon request.
(e) 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 | $131,400 |
Fidelity Securities Lending Cash Central Fund | 4,749 |
Total | $136,149 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $111,393,266 |
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 | 75.0% |
Netherlands | 9.3% |
Germany | 5.1% |
Australia | 3.0% |
Brazil | 2.9% |
Bermuda | 2.8% |
Luxembourg | 1.0% |
Others (Individually Less Than 1%) | 0.9% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Chemicals Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $1,215,574) — See accompanying schedule: Unaffiliated issuers (cost $1,059,936,193) | $1,520,122,141 | |
Fidelity Central Funds (cost $9,204,017) | 9,203,898 | |
Total Investment in Securities (cost $1,069,140,210) | $1,529,326,039 | |
Receivable for investments sold | 2,999,884 | |
Receivable for fund shares sold | 427,698 | |
Dividends receivable | 4,128,506 | |
Distributions receivable from Fidelity Central Funds | 10,423 | |
Prepaid expenses | 18,444 | |
Other receivables | 190,809 | |
Total assets | 1,537,101,803 | |
Liabilities | ||
Payable for fund shares redeemed | $3,098,583 | |
Accrued management fee | 690,726 | |
Other affiliated payables | 281,181 | |
Other payables and accrued expenses | 155,336 | |
Collateral on securities loaned | 1,256,500 | |
Total liabilities | 5,482,326 | |
Net Assets | $1,531,619,477 | |
Net Assets consist of: | ||
Paid in capital | $1,013,462,636 | |
Undistributed net investment income | 10,075,653 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 47,902,866 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 460,178,322 | |
Net Assets, for 92,075,517 shares outstanding | $1,531,619,477 | |
Net Asset Value, offering price and redemption price per share ($1,531,619,477 ÷ 92,075,517 shares) | $16.63 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $19,149,053 | |
Income from Fidelity Central Funds | 136,149 | |
Total income | 19,285,202 | |
Expenses | ||
Management fee | $4,483,964 | |
Transfer agent fees | 1,503,159 | |
Accounting and security lending fees | 257,145 | |
Custodian fees and expenses | 39,702 | |
Independent trustees' fees and expenses | 4,223 | |
Registration fees | 41,092 | |
Audit | 30,033 | |
Legal | 8,747 | |
Interest | 4,308 | |
Miscellaneous | (18,758) | |
Total expenses before reductions | 6,353,615 | |
Expense reductions | (110,921) | |
Total expenses after reductions | 6,242,694 | |
Net investment income (loss) | 13,042,508 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 46,874,003 | |
Fidelity Central Funds | (280) | |
Foreign currency transactions | 28,537 | |
Total net realized gain (loss) | 46,902,260 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (26,532,772) | |
Fidelity Central Funds | (119) | |
Assets and liabilities in foreign currencies | (15,358) | |
Total change in net unrealized appreciation (depreciation) | (26,548,249) | |
Net gain (loss) | 20,354,011 | |
Net increase (decrease) in net assets resulting from operations | $33,396,519 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $13,042,508 | $19,973,215 |
Net realized gain (loss) | 46,902,260 | 192,613,270 |
Change in net unrealized appreciation (depreciation) | (26,548,249) | 56,793,943 |
Net increase (decrease) in net assets resulting from operations | 33,396,519 | 269,380,428 |
Distributions to shareholders from net investment income | (4,085,171) | (15,828,578) |
Distributions to shareholders from net realized gain | (100,460,805) | (130,959,179) |
Total distributions | (104,545,976) | (146,787,757) |
Share transactions | ||
Proceeds from sales of shares | 94,724,043 | 708,415,147 |
Reinvestment of distributions | 99,130,870 | 140,010,917 |
Cost of shares redeemed | (381,306,718) | (807,440,266) |
Net increase (decrease) in net assets resulting from share transactions | (187,451,805) | 40,985,798 |
Total increase (decrease) in net assets | (258,601,262) | 163,578,469 |
Net Assets | ||
Beginning of period | 1,790,220,739 | 1,626,642,270 |
End of period | $1,531,619,477 | $1,790,220,739 |
Other Information | ||
Undistributed net investment income end of period | $10,075,653 | $1,118,316 |
Shares(a) | ||
Sold | 5,742,869 | 41,391,320 |
Issued in reinvestment of distributions | 6,336,669 | 8,462,680 |
Redeemed | (23,219,961) | (46,796,860) |
Net increase (decrease) | (11,140,423) | 3,057,140 |
(a) Share activity prior to August 10, 2018 has been adjusted to reflect the impact of the 10 for 1 share split that occurred on that date.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Chemicals Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share DataB | ||||||
Net asset value, beginning of period | $17.34 | $16.24 | $12.32 | $15.33 | $14.82 | $12.30 |
Income from Investment Operations | ||||||
Net investment income (loss)C | .13 | .19 | .18 | .19 | .16 | .12 |
Net realized and unrealized gain (loss) | .19 | 2.36 | 4.44 | (2.34) | .91 | 3.21 |
Total from investment operations | .32 | 2.55 | 4.62 | (2.15) | 1.07 | 3.33 |
Distributions from net investment income | (.04) | (.16) | (.17) | (.18) | (.14) | (.12) |
Distributions from net realized gain | (.99) | (1.29) | (.53) | (.68) | (.42) | (.69) |
Total distributions | (1.03) | (1.45) | (.70) | (.86) | (.56) | (.81) |
Redemption fees added to paid in capitalC | – | – | –D | –D | –D | – |
Net asset value, end of period | $16.63 | $17.34 | $16.24 | $12.32 | $15.33 | $14.82 |
Total ReturnE,F | 2.22% | 16.31% | 38.02% | (14.46)% | 7.52% | 27.77% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .77%I | .77% | .80% | .80% | .79% | .81% |
Expenses net of fee waivers, if any | .76%I | .77% | .80% | .80% | .79% | .81% |
Expenses net of all reductions | .75%I | .77% | .79% | .79% | .79% | .80% |
Net investment income (loss) | 1.57%I | 1.12% | 1.26% | 1.36% | 1.10% | .91% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $1,531,619 | $1,790,221 | $1,626,642 | $1,046,827 | $1,625,067 | $1,429,434 |
Portfolio turnover rateJ | 65%I | 62% | 85% | 79% | 80%K | 109% |
A For the year ended February 29.
B Per Share amounts have been adjusted to reflect the impact of the 10 for 1 share split that occurred on August 10, 2018.
C Calculated based on average shares outstanding during the period.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K 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 (Unaudited)
For the period ended August 31, 2018
1. Organization.
Chemicals Portfolio (the Fund) is a non-diversified fund of Fidelity Select Portfolios (the Trust) and is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds. 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 invests primarily in securities of companies whose principal business activities fall within specific industries.
Effective August 10, 2018, Chemicals Portfolio underwent a 10 for 1 share split. The effect of the share split transaction was to multiply the number of outstanding shares of Chemicals Portfolio by a split factor of 10:1, with a corresponding decrease in net asset value (NAV) per share. This event does not impact the overall net assets of Chemicals Portfolio. The per share data presented in the Financial Highlights and Shares activity presented in the Statements of Changes in Net Assets for Chemicals Portfolio have been retroactively adjusted to reflect this share split.
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 .005%.
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 are available on the SEC website or upon request.
3. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Fair Value Committee (the Committee) established by the Fund's investment adviser. 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. 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. 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. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. 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), certain independent Trustees have elected 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 of $107,031 are included in the accompanying Statement of Assets and Liabilities in other receivables and other payables and accrued expenses, respectively.
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. 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 and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships, deferred trustees compensation and losses deferred due to wash sales.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows:
Gross unrealized appreciation | $474,900,634 |
Gross unrealized depreciation | (17,675,878) |
Net unrealized appreciation (depreciation) | $457,224,756 |
Tax cost | $1,072,101,283 |
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 $529,855,713 and $768,024,900, 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 .24% 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 annualized management fee rate was .54% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .18% of average net assets.
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. For the period, the fees were equivalent to an annualized rate of .03%.
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 $21,829 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 Fidelity Management & Research Company (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 | $7,017,091 | 2.01% | $4,308 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
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 $2,468 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. The Fund or borrower may terminate the loan at any time, and 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 $4,749.
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 $102,518 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses in the amount of $8,403.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Gold Portfolio
Consolidated Investment Summary (Unaudited)
The information in the following tables is based on the consolidated investments of the Fund.Top Ten Holdings as of August 31, 2018
% of fund's net assets | |
Newmont Mining Corp. | 10.1 |
Randgold Resources Ltd. sponsored ADR | 6.7 |
B2Gold Corp. | 6.1 |
Silver Bullion | 5.9 |
Barrick Gold Corp. | 5.9 |
Agnico Eagle Mines Ltd. (Canada) | 5.5 |
Franco-Nevada Corp. | 5.1 |
Goldcorp, Inc. | 3.5 |
Newcrest Mining Ltd. | 2.7 |
OceanaGold Corp. | 2.6 |
54.1 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Gold | 88.8% | |
Commodities & Related Investments* | 8.3% | |
Silver | 1.1% | |
Precious Metals & Minerals | 0.4% | |
Diversified Metals & Mining | 0.3% | |
Copper | 0.2% | |
All Others** | 0.9% |
* Includes gold bullion and/or silver bullion.
** Includes Short-Term investments and Net Other Assets (Liabilities).
Geographic Diversification (% of fund's net assets)
As of August 31, 2018 | ||
Canada | 59.0% | |
United States of America* | 21.9% | |
Bailiwick of Jersey | 6.8% | |
Australia | 4.1% | |
South Africa | 4.0% | |
Cayman Islands | 1.8% | |
Peru | 1.6% | |
United Kingdom | 0.4% | |
China | 0.4% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Gold Portfolio
Consolidated Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 90.8% | |||
Shares | Value | ||
Australia - 4.1% | |||
Metals & Mining - 4.1% | |||
Gold - 4.1% | |||
Dacian Gold Ltd. (a) | 72,596 | $121,601 | |
Evolution Mining Ltd. | 1,126,243 | 2,145,589 | |
Gold Road Resources Ltd. (a) | 1,080,000 | 485,258 | |
Newcrest Mining Ltd. | 2,059,162 | 28,703,629 | |
Northern Star Resources Ltd. (b) | 443,118 | 2,217,160 | |
Perseus Mining Ltd.: | |||
(Australia) (a) | 1,717,134 | 444,401 | |
(Canada) (a) | 1,300,000 | 338,697 | |
Resolute Mng Ltd. | 3,836,949 | 3,489,354 | |
Saracen Mineral Holdings Ltd. (a) | 2,032,787 | 2,761,990 | |
Silver Lake Resources Ltd. (a) | 2,840,985 | 1,000,768 | |
St Barbara Ltd. | 682,257 | 1,932,470 | |
43,640,917 | |||
Bailiwick of Jersey - 6.8% | |||
Metals & Mining - 6.8% | |||
Diversified Metals & Mining - 0.1% | |||
Glencore Xstrata PLC | 65,000 | 264,226 | |
Gold - 6.7% | |||
Randgold Resources Ltd. sponsored ADR | 1,095,895 | 71,550,985 | |
TOTAL METALS & MINING | 71,815,211 | ||
Canada - 59.0% | |||
Metals & Mining - 59.0% | |||
Copper - 0.1% | |||
First Quantum Minerals Ltd. | 82,200 | 1,031,122 | |
Lundin Mining Corp. | 40,000 | 190,651 | |
1,221,773 | |||
Diversified Metals & Mining - 0.2% | |||
Ivanhoe Mines Ltd. (a) | 1,075,000 | 1,911,111 | |
Sabina Gold & Silver Corp. (a) | 5,500 | 5,774 | |
1,916,885 | |||
Gold - 57.3% | |||
Agnico Eagle Mines Ltd. (Canada) | 1,697,001 | 58,491,268 | |
Alacer Gold Corp. (a) | 2,554,063 | 4,618,842 | |
Alamos Gold, Inc. | 4,776,012 | 21,007,133 | |
Argonaut Gold, Inc. (a) | 5,781,462 | 8,063,035 | |
B2Gold Corp. (a) | 27,675,793 | 64,894,963 | |
Barrick Gold Corp. | 6,096,569 | 62,367,200 | |
Centerra Gold, Inc. (a) | 447,500 | 1,913,448 | |
Continental Gold, Inc. (a)(c) | 9,596,700 | 25,885,352 | |
Detour Gold Corp. (a) | 2,320,600 | 18,956,012 | |
Detour Gold Corp. (a)(d) | 785,900 | 6,419,689 | |
Eldorado Gold Corp. (a) | 7,260,935 | 7,010,558 | |
Franco-Nevada Corp. | 851,900 | 54,456,320 | |
Gold Standard Ventures Corp. (a) | 3,114,300 | 4,844,467 | |
Goldcorp, Inc. | 3,470,500 | 37,497,356 | |
Guyana Goldfields, Inc. (a) | 4,735,800 | 13,390,883 | |
Guyana Goldfields, Inc. (a)(d) | 155,000 | 438,276 | |
IAMGOLD Corp. (a) | 3,217,000 | 13,114,513 | |
Kinross Gold Corp. (a) | 5,031,291 | 15,036,042 | |
Kirkland Lake Gold Ltd. | 794,319 | 14,845,548 | |
New Gold, Inc. (a) | 5,236,375 | 5,136,061 | |
Novagold Resources, Inc. (a) | 1,879,500 | 6,913,103 | |
OceanaGold Corp. | 9,222,232 | 27,278,020 | |
Osisko Gold Royalties Ltd. | 1,180,293 | 9,360,944 | |
Premier Gold Mines Ltd. (a)(c) | 16,800,022 | 24,202,331 | |
Pretium Resources, Inc. (a) | 1,687,683 | 14,031,694 | |
Pretium Resources, Inc. (a)(d) | 225,000 | 1,870,690 | |
Sandstorm Gold Ltd. (a) | 1,880,475 | 7,291,344 | |
Seabridge Gold, Inc. (a) | 1,424,090 | 16,092,217 | |
SEMAFO, Inc. (a) | 7,340,000 | 18,392,184 | |
SSR Mining, Inc. (a) | 1,313,700 | 11,435,733 | |
Tahoe Resources, Inc. (a) | 2,639,438 | 9,081,285 | |
Teranga Gold Corp. (a) | 975,814 | 2,931,181 | |
Torex Gold Resources, Inc. (a) | 2,627,600 | 17,738,817 | |
Yamana Gold, Inc. | 1,765,620 | 4,897,735 | |
609,904,244 | |||
Precious Metals & Minerals - 0.3% | |||
Osisko Mining, Inc. (a) | 1,873,200 | 2,971,283 | |
Silver - 1.1% | |||
MAG Silver Corp. (a) | 608,901 | 4,679,906 | |
Pan American Silver Corp. | 6,000 | 93,540 | |
Wheaton Precious Metals Corp. | 403,000 | 6,905,042 | |
11,678,488 | |||
TOTAL METALS & MINING | 627,692,673 | ||
Cayman Islands - 1.8% | |||
Metals & Mining - 1.8% | |||
Gold - 1.8% | |||
Endeavour Mining Corp. (a) | 1,235,940 | 18,761,664 | |
China - 0.4% | |||
Metals & Mining - 0.4% | |||
Gold - 0.4% | |||
Zijin Mng Group Co. Ltd. (H Shares) | 12,097,000 | 4,515,905 | |
Peru - 1.6% | |||
Metals & Mining - 1.6% | |||
Gold - 1.6% | |||
Compania de Minas Buenaventura SA sponsored ADR | 1,389,397 | 17,492,508 | |
South Africa - 4.0% | |||
Metals & Mining - 4.0% | |||
Gold - 4.0% | |||
AngloGold Ashanti Ltd. sponsored ADR | 3,375,808 | 26,702,641 | |
Gold Fields Ltd. sponsored ADR | 3,209,426 | 7,991,471 | |
Harmony Gold Mining Co. Ltd. | 1,484,000 | 2,409,867 | |
Harmony Gold Mining Co. Ltd. sponsored ADR | 1,520,400 | 2,523,864 | |
Sibanye-Stillwater ADR | 1,181,660 | 2,788,718 | |
42,416,561 | |||
United Kingdom - 0.4% | |||
Metals & Mining - 0.4% | |||
Gold - 0.3% | |||
Acacia Mining PLC (a) | 1,436,536 | 2,048,637 | |
Pan African Resources PLC | 550,000 | 52,338 | |
Solgold PLC (a) | 4,152,758 | 1,154,834 | |
3,255,809 | |||
Precious Metals & Minerals - 0.1% | |||
Fresnillo PLC | 109,600 | 1,274,840 | |
TOTAL METALS & MINING | 4,530,649 | ||
United States of America - 12.7% | |||
Metals & Mining - 12.7% | |||
Copper - 0.1% | |||
Freeport-McMoRan, Inc. | 40,500 | 569,025 | |
Gold - 12.6% | |||
McEwen Mining, Inc. | 1,056,410 | 2,081,128 | |
Newmont Mining Corp. | 3,484,678 | 108,129,559 | |
Royal Gold, Inc. | 319,367 | 24,354,927 | |
134,565,614 | |||
TOTAL METALS & MINING | 135,134,639 | ||
TOTAL COMMON STOCKS | |||
(Cost $1,154,813,321) | 966,000,727 | ||
Troy Ounces | |||
Commodities - 8.3% | |||
Gold Bullion (a) | 21,010 | 25,201,915 | |
Silver Bullion (a) | 4,372,000 | 63,453,022 | |
TOTAL COMMODITIES | |||
(Cost $96,875,832) | 88,654,937 | ||
Shares | |||
Money Market Funds - 0.9% | |||
Fidelity Cash Central Fund, 1.97% (e) | |||
(Cost $9,960,090) | 9,958,099 | 9,960,090 | |
TOTAL INVESTMENT IN SECURITIES - 100.0% | |||
(Cost $1,261,649,243) | 1,064,615,754 | ||
NET OTHER ASSETS (LIABILITIES) - 0.0% | (466,050) | ||
NET ASSETS - 100% | $1,064,149,704 |
Legend
(a) Non-income producing
(b) Level 3 security
(c) Affiliated company
(d) 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 $8,728,655 or 0.8% 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 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 | $73,969 |
Fidelity Securities Lending Cash Central Fund | 807 |
Total | $74,776 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Consolidated Statement of Operations if applicable.
Consolidated Subsidiary
Affiliate | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Realized Gain (loss) | Change in Unrealized appreciation (depreciation) | Value, end of period |
Fidelity Select Cayman Gold Ltd. | $85,477,120 | $23,753,050 | $10,407,332 | $-- | $(977,973) | $(9,288,637) | $88,556,228 |
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 | Realized Gain (loss) | Change in Unrealized appreciation (depreciation) | Value, end of period |
Continental Gold, Inc. | $28,390,023 | $95,681 | $-- | $-- | $-- | $(2,600,352) | $25,885,352 |
Premier Gold Mines Ltd. | 40,731,717 | 320,755 | -- | -- | -- | (16,850,141) | 24,202,331 |
Total | $69,121,740 | $416,436 | $-- | $-- | $-- | $(19,450,493) | $50,087,683 |
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 Consolidated Financial Statements.
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $966,000,727 | $961,373,700 | $2,409,867 | $2,217,160 |
Commodities | 88,654,937 | 88,654,937 | -- | -- |
Money Market Funds | 9,960,090 | 9,960,090 | -- | -- |
Total Investments in Securities: | $1,064,615,754 | $1,059,988,727 | $2,409,867 | $2,217,160 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 Consolidated Financial Statements:
Transfers | Total |
Level 1 to Level 2 | $0 |
Level 2 to Level 1 | $61,930,951 |
See accompanying notes which are an integral part of the consolidated financial statements.
Gold Portfolio
Consolidated Financial Statements
Consolidated Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $1,078,209,251) | $915,913,044 | |
Fidelity Central Funds (cost $9,960,090) | 9,960,090 | |
Commodities (cost $96,875,832) | 88,654,937 | |
Other affiliated issuers (cost $76,604,070) | 50,087,683 | |
Total Investment in Securities (cost $1,261,649,243) | $1,064,615,754 | |
Cash | 5,901 | |
Foreign currency held at value (cost $176,481) | 175,269 | |
Receivable for investments sold | 735,873 | |
Receivable for fund shares sold | 906,650 | |
Dividends receivable | 898,936 | |
Distributions receivable from Fidelity Central Funds | 18,132 | |
Prepaid expenses | 13,021 | |
Other receivables | 111,979 | |
Total assets | 1,067,481,515 | |
Liabilities | ||
Payable for investments purchased | $1,064,371 | |
Payable for fund shares redeemed | 1,157,639 | |
Accrued management fee | 503,712 | |
Transfer agent fee payable | 226,277 | |
Distribution and service plan fees payable | 86,517 | |
Other affiliated payables | 43,068 | |
Other payables and accrued expenses | 250,227 | |
Total liabilities | 3,331,811 | |
Net Assets | $1,064,149,704 | |
Net Assets consist of: | ||
Paid in capital | $2,666,826,464 | |
Accumulated net investment loss | (6,983,314) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (1,398,654,208) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (197,039,238) | |
Net Assets | $1,064,149,704 | |
Calculation of Maximum Offering Price | ||
Class A: | ||
Net Asset Value and redemption price per share ($43,743,947 ÷ 2,779,997 shares) | $15.74 | |
Maximum offering price per share (100/94.25 of $15.74) | $16.70 | |
Class M: | ||
Net Asset Value and redemption price per share ($14,541,578 ÷ 943,834 shares) | $15.41 | |
Maximum offering price per share (100/96.50 of $15.41) | $15.97 | |
Class C: | ||
Net Asset Value and offering price per share ($79,684,558 ÷ 5,422,694 shares)(a) | $14.69 | |
Gold: | ||
Net Asset Value, offering price and redemption price per share ($877,994,883 ÷ 54,288,785 shares) | $16.17 | |
Class I: | ||
Net Asset Value, offering price and redemption price per share ($48,184,738 ÷ 2,979,420 shares) | $16.17 |
(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 consolidated financial statements.
Consolidated Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $6,123,661 | |
Income from Fidelity Central Funds | 74,776 | |
Income before foreign taxes withheld | 6,198,437 | |
Less foreign taxes withheld | (340,440) | |
Total income | 5,857,997 | |
Expenses | ||
Management fee | $3,480,329 | |
Transfer agent fees | 1,389,474 | |
Distribution and service plan fees | 586,186 | |
Accounting and security lending fees | 283,219 | |
Custodian fees and expenses | 137,926 | |
Independent trustees' fees and expenses | 3,129 | |
Registration fees | 57,528 | |
Audit | 31,834 | |
Legal | 6,916 | |
Miscellaneous | 49,736 | |
Total expenses before reductions | 6,026,277 | |
Expense reductions | (150,893) | |
Total expenses after reductions | 5,875,384 | |
Net investment income (loss) | (17,387) | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investments: | ||
Unaffiliated issuers | (23,875,738) | |
Fidelity Central Funds | 586 | |
Commodities | (449,575) | |
Foreign currency transactions | (19,433) | |
Total net realized gain (loss) | (24,344,160) | |
Change in net unrealized appreciation (depreciation) on: | ||
Investments: | ||
Investments | (119,224,877) | |
Fidelity Central Funds | (4) | |
Other affiliated issuers | (19,450,493) | |
Assets and liabilities in foreign currencies | (4,725) | |
Commodities | (9,587,874) | |
Total change in net unrealized appreciation (depreciation) | (148,267,973) | |
Net gain (loss) | (172,612,133) | |
Net increase (decrease) in net assets resulting from operations | $(172,629,520) |
See accompanying notes which are an integral part of the consolidated financial statements.
Consolidated Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $(17,387) | $(5,136,354) |
Net realized gain (loss) | (24,344,160) | (19,797,959) |
Change in net unrealized appreciation (depreciation) | (148,267,973) | (128,650,104) |
Net increase (decrease) in net assets resulting from operations | (172,629,520) | (153,584,417) |
Distributions to shareholders from net realized gain | – | (3,130,282) |
Share transactions - net increase (decrease) | (10,092,258) | (136,518,156) |
Total increase (decrease) in net assets | (182,721,778) | (293,232,855) |
Net Assets | ||
Beginning of period | 1,246,871,482 | 1,540,104,337 |
End of period | $1,064,149,704 | $1,246,871,482 |
Other Information | ||
Accumulated net investment loss end of period | $(6,983,314) | $(6,965,927) |
See accompanying notes which are an integral part of the consolidated financial statements.
Consolidated Financial Highlights
Gold Portfolio Class A
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $18.30 | $20.54 | $17.70 | $18.11 | $22.01 | $30.25 |
Income from Investment Operations | ||||||
Net investment income (loss)B | (.02) | (.12) | (.16) | (.06) | (.10) | –C |
Net realized and unrealized gain (loss) | (2.54) | (2.09) | 3.59 | (.35) | (3.80) | (8.25) |
Total from investment operations | (2.56) | (2.21) | 3.43 | (.41) | (3.90) | (8.25) |
Distributions from net realized gain | – | (.03) | (.60) | – | – | – |
Total distributions | – | (.03) | (.60) | – | – | – |
Redemption fees added to paid in capitalB | – | – | .01 | –C | –C | .01 |
Net asset value, end of period | $15.74 | $18.30 | $20.54 | $17.70 | $18.11 | $22.01 |
Total ReturnD,E,F | (13.99)% | (10.77)% | 19.97% | (2.26)% | (17.72)% | (27.24)% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | 1.21%I | 1.18% | 1.19% | 1.23% | 1.23% | 1.21% |
Expenses net of fee waivers, if any | 1.19%I | 1.16% | 1.16% | 1.20% | 1.19% | 1.19% |
Expenses net of all reductions | 1.19%I | 1.16% | 1.16% | 1.20% | 1.19% | 1.18% |
Net investment income (loss) | (.24)%I | (.58)% | (.71)% | (.44)% | (.51)% | - %J |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $43,744 | $61,703 | $83,589 | $53,509 | $46,898 | $60,270 |
Portfolio turnover rateK | 16%I | 13% | 28% | 20% | 20% | 56% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Annualized
J Amount represents less than .005%.
K Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the consolidated financial statements.
Gold Portfolio Class M
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $17.94 | $20.19 | $17.37 | $17.83 | $21.73 | $29.95 |
Income from Investment Operations | ||||||
Net investment income (loss)B | (.05) | (.17) | (.22) | (.11) | (.15) | (.06) |
Net realized and unrealized gain (loss) | (2.48) | (2.05) | 3.54 | (.35) | (3.75) | (8.17) |
Total from investment operations | (2.53) | (2.22) | 3.32 | (.46) | (3.90) | (8.23) |
Distributions from net realized gain | – | (.03) | (.51) | – | – | – |
Total distributions | – | (.03) | (.51) | – | – | – |
Redemption fees added to paid in capitalB | – | – | .01 | –C | –C | .01 |
Net asset value, end of period | $15.41 | $17.94 | $20.19 | $17.37 | $17.83 | $21.73 |
Total ReturnD,E,F | (14.10)% | (11.04)% | 19.62% | (2.58)% | (17.95)% | (27.45)% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | 1.50%I | 1.48% | 1.49% | 1.52% | 1.50% | 1.49% |
Expenses net of fee waivers, if any | 1.48%I | 1.47% | 1.46% | 1.48% | 1.46% | 1.47% |
Expenses net of all reductions | 1.47%I | 1.47% | 1.46% | 1.48% | 1.46% | 1.46% |
Net investment income (loss) | (.53)%I | (.88)% | (1.01)% | (.72)% | (.79)% | (.28)% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $14,542 | $19,355 | $25,170 | $17,720 | $16,200 | $18,402 |
Portfolio turnover rateJ | 16%I | 13% | 28% | 20% | 20% | 56% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the consolidated financial statements.
Gold Portfolio Class C
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $17.15 | $19.36 | $16.68 | $17.20 | $21.06 | $29.15 |
Income from Investment Operations | ||||||
Net investment income (loss)B | (.08) | (.24) | (.29) | (.16) | (.23) | (.16) |
Net realized and unrealized gain (loss) | (2.38) | (1.95) | 3.42 | (.36) | (3.63) | (7.94) |
Total from investment operations | (2.46) | (2.19) | 3.13 | (.52) | (3.86) | (8.10) |
Distributions from net realized gain | – | (.02) | (.45) | – | – | – |
Total distributions | – | (.02) | (.45) | – | – | – |
Redemption fees added to paid in capitalB | – | – | –C | –C | –C | .01 |
Net asset value, end of period | $14.69 | $17.15 | $19.36 | $16.68 | $17.20 | $21.06 |
Total ReturnD,E,F | (14.34)% | (11.35)% | 19.19% | (3.02)% | (18.33)% | (27.75)% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | 1.86%I | 1.85% | 1.88% | 1.97% | 1.96% | 1.96% |
Expenses net of fee waivers, if any | 1.84%I | 1.83% | 1.85% | 1.93% | 1.92% | 1.94% |
Expenses net of all reductions | 1.84%I | 1.83% | 1.84% | 1.93% | 1.92% | 1.93% |
Net investment income (loss) | (.89)%I | (1.25)% | (1.40)% | (1.17)% | (1.25)% | (.76)% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $79,685 | $92,724 | $101,215 | $52,732 | $39,429 | $33,811 |
Portfolio turnover rateJ | 16%I | 13% | 28% | 20% | 20% | 56% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the consolidated financial statements.
Gold Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $18.78 | $21.02 | $18.12 | $18.50 | $22.41 | $30.72 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .01 | (.05) | (.09) | (.03) | (.04) | .06 |
Net realized and unrealized gain (loss) | (2.62) | (2.14) | 3.66 | (.35) | (3.87) | (8.38) |
Total from investment operations | (2.61) | (2.19) | 3.57 | (.38) | (3.91) | (8.32) |
Distributions from net realized gain | – | (.05) | (.68) | – | – | – |
Total distributions | – | (.05) | (.68) | – | – | – |
Redemption fees added to paid in capitalB | – | – | .01 | –C | –C | .01 |
Net asset value, end of period | $16.17 | $18.78 | $21.02 | $18.12 | $18.50 | $22.41 |
Total ReturnD,E | (13.90)% | (10.47)% | 20.38% | (2.05)% | (17.45)% | (27.05)% |
Ratios to Average Net AssetsF,G | ||||||
Expenses before reductions | .87%H | .86% | .87% | .97% | .94% | .94% |
Expenses net of fee waivers, if any | .85%H | .85% | .84% | .93% | .90% | .92% |
Expenses net of all reductions | .85%H | .84% | .84% | .93% | .90% | .91% |
Net investment income (loss) | .10%H | (.26)% | (.39)% | (.17)% | (.22)% | .27% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $877,995 | $1,011,412 | $1,271,458 | $1,076,206 | $992,944 | $1,275,913 |
Portfolio turnover rateI | 16%H | 13% | 28% | 20% | 20% | 56% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the consolidated financial statements.
Gold Portfolio Class I
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $18.78 | $21.02 | $18.13 | $18.50 | $22.41 | $30.69 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .01 | (.05) | (.09) | (.02) | (.04) | .07 |
Net realized and unrealized gain (loss) | (2.62) | (2.14) | 3.67 | (.35) | (3.87) | (8.36) |
Total from investment operations | (2.61) | (2.19) | 3.58 | (.37) | (3.91) | (8.29) |
Distributions from net realized gain | – | (.05) | (.70) | – | – | – |
Total distributions | – | (.05) | (.70) | – | – | – |
Redemption fees added to paid in capitalB | – | – | .01 | –C | –C | .01 |
Net asset value, end of period | $16.17 | $18.78 | $21.02 | $18.13 | $18.50 | $22.41 |
Total ReturnD,E | (13.90)% | (10.47)% | 20.41% | (2.00)% | (17.45)% | (26.98)% |
Ratios to Average Net AssetsF,G | ||||||
Expenses before reductions | .85%H | .85% | .87% | .92% | .90% | .87% |
Expenses net of fee waivers, if any | .83%H | .83% | .84% | .88% | .86% | .85% |
Expenses net of all reductions | .83%H | .83% | .84% | .88% | .86% | .84% |
Net investment income (loss) | .11%H | (.24)% | (.39)% | (.12)% | (.18)% | .34% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $48,185 | $61,677 | $58,673 | $52,607 | $23,667 | $107,830 |
Portfolio turnover rateI | 16%H | 13% | 28% | 20% | 20% | 56% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the consolidated financial statements.
Notes to Consolidated Financial Statements (Unaudited)
For the period ended August 31, 2018
1. Organization.
Gold Portfolio (the Fund) is a non-diversified fund of Fidelity Select Portfolios (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 invests primarily in securities of companies whose principal business activities fall within specific industries. The Fund offers Class A, Class M, Class C, Gold and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
2. Consolidated Subsidiary.
The Fund invests in certain commodity-related investments through Fidelity Select Gold Cayman Ltd, a wholly owned subsidiary (the "Subsidiary"). As of period end, the Fund held an investment of $88,556,228 in the Subsidiary, representing 8.3% of the Fund's net assets.
The financial statements have been consolidated and include accounts of the Fund and the Subsidiary. Accordingly, all inter-company transactions and balances have been eliminated.
3. 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 Consolidated 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 .005%.
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 are available on the SEC website or upon request.
4. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. The consolidated 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 consolidated financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the consolidated financial statements were issued have been evaluated in the preparation of the consolidated 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 Fair Value Committee (the Committee) established by the Fund's investment adviser. 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 commodities are valued at their last traded price at 4:00 p.m. Eastern time each business day and are categorized as Level 1 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 August 31, 2018, information on transfers between Levels 1 and 2 is included at the end of the Fund's Consolidated 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 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. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. 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), certain independent Trustees have elected 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 of $99,231 are included in the accompanying Statement of Assets and Liabilities in other receivables and other payables and accrued expenses, respectively.
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. 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 Subsidiary is classified as a controlled foreign corporation under Subchapter N of the Internal Revenue Code. Therefore, the Fund is required to increase its taxable income by its share of the Subsidiary's income. Net investment losses of the Subsidiary cannot be deducted by the Fund in the current period nor carried forward to offset taxable income in future periods.
Distributions are declared and recorded on the ex-dividend date. Income 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 consolidated 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), controlled foreign corporations, deferred trustees compensation, net operating losses, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes on an unconsolidated basis were as follows:
Gross unrealized appreciation | $185,860,702 |
Gross unrealized depreciation | (487,478,848) |
Net unrealized appreciation (depreciation) | $(301,618,146) |
Tax cost | $1,366,135,191 |
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 prior fiscal period end and is subject to adjustment.
No expiration | |
Short-term | $(141,667,626) |
Long-term | (1,122,388,025) |
Total capital loss carryforward | $(1,264,055,651) |
The Fund elected to defer to its next fiscal year $6,867,607 of ordinary losses recognized during the period January 1, 2018 to February 28, 2018.
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 Consolidated Schedule of Investments.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $100,086,355 and $110,878,557, 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 .24% 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.
FMR, either through itself or through an affiliate provides investment management related services to the Subsidiary for which the Subsidiary pays a monthly management fee at the annual rate of .30% of its net assets. Under the management contract with the subsidiary, FMR pays all other expenses of the Subsidiary, except custodian fees.
For the reporting period, the total consolidated annual management fee rate which includes the management fee of the Fund and the Subsidiary was .56% of the Fund's average net assets.
During the period, the investment adviser waived a portion of the Fund's management fee representing the amount of the management fee paid by the Subsidiary to FMR as described in the Expense Reductions note.
Effective October 1, 2018, the management fee paid by the Subsidiary was eliminated.
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% | $67,908 | $– |
Class M | .25% | .25% | 45,146 | – |
Class C | .75% | .25% | 473,132 | 89,982 |
$586,186 | $89,982 |
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 M 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 M and Class C redemptions. The deferred sales charges are 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class M shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained by FDC | |
Class A | $6,827 |
Class M | 1,922 |
Class C(a) | 2,642 |
$11,391 |
(a) When 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(a) | |
Class A | $83,315 | .31 |
Class M | 30,846 | .34 |
Class C | 96,632 | .20 |
Gold | 1,118,334 | .22 |
Class I | 60,347 | .20 |
$1,389,474 |
(a) Annualized
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. For the period, the fees were equivalent to an annualized rate of .05%.
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 Consolidated Statement of Operations. The commissions paid to these affiliated firms were $855 for the period.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
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 $1,822 and is reflected in Miscellaneous expenses on the Consolidated 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. The Fund or borrower may terminate the loan at any time, and 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 Consolidated Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $807.
9. Expense Reductions.
The investment adviser has contractually agreed to waive the Fund's management fee in an amount equal to the management fee paid by the Subsidiary to FMR. During the period, this waiver reduced the Fund's management fee by $130,972.
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 $13,615 for the period. Through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $299.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $6,007.
Effective October 1, 2018, the waiver of the management fee paid by the Subsidiary was eliminated.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended August 31, 2018 | Year ended February 28, 2018 | |
From net realized gain | ||
Class A | $– | $127,654 |
Class M | – | 32,220 |
Class C | – | 80,827 |
Gold | – | 2,740,284 |
Class I | – | 149,297 |
Total | $– | $3,130,282 |
11. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
Shares | Shares | Dollars | Dollars | |
Six months ended August 31, 2018 | Year ended February 28, 2018 | Six months ended August 31, 2018 | Year ended February 28, 2018 | |
Class A | ||||
Shares sold | 234,547 | 960,171 | $4,291,842 | $19,302,127 |
Reinvestment of distributions | – | 5,732 | – | 125,534 |
Shares redeemed | (826,281) | (1,663,786) | (15,210,736) | (33,274,700) |
Net increase (decrease) | (591,734) | (697,883) | $(10,918,894) | $(13,847,039) |
Class M | ||||
Shares sold | 63,649 | 233,072 | $1,128,531 | $4,622,741 |
Reinvestment of distributions | – | 1,488 | – | 32,029 |
Shares redeemed | (198,434) | (402,307) | (3,578,040) | (7,900,562) |
Net increase (decrease) | (134,785) | (167,747) | $(2,449,509) | $(3,245,792) |
Class C | ||||
Shares sold | 539,636 | 1,214,001 | $9,493,630 | $22,977,515 |
Reinvestment of distributions | – | 3,724 | – | 76,868 |
Shares redeemed | (524,917) | (1,038,456) | (8,822,934) | (19,487,828) |
Net increase (decrease) | 14,719 | 179,269 | $670,696 | $3,566,555 |
Gold | ||||
Shares sold | 8,583,356 | 17,998,314 | $157,950,404 | $372,447,330 |
Reinvestment of distributions | – | 117,013 | – | 2,622,272 |
Shares redeemed | (8,155,858) | (24,743,063) | (149,880,656) | (508,056,164) |
Net increase (decrease) | 427,498 | (6,627,736) | $8,069,748 | $(132,986,562) |
Class I | ||||
Shares sold | 632,017 | 1,883,552 | $11,801,168 | $38,579,606 |
Reinvestment of distributions | – | 6,152 | – | 137,796 |
Shares redeemed | (937,523) | (1,396,712) | (17,265,467) | (28,722,720) |
Net increase (decrease) | (305,506) | 492,992 | $(5,464,299) | $9,994,682 |
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.
Materials Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
DowDuPont, Inc. | 25.0 |
LyondellBasell Industries NV Class A | 7.2 |
The Chemours Co. LLC | 6.3 |
Linde AG | 4.9 |
Sherwin-Williams Co. | 4.4 |
Air Products & Chemicals, Inc. | 3.8 |
Westlake Chemical Corp. | 3.8 |
Platform Specialty Products Corp. | 3.7 |
Olin Corp. | 3.3 |
Martin Marietta Materials, Inc. | 3.1 |
65.5 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Chemicals | 78.8% | |
Metals & Mining | 9.9% | |
Containers & Packaging | 5.4% | |
Construction Materials | 3.9% | |
Trading Companies & Distributors | 1.5% | |
All Others* | 0.5% |
* Includes short-term investments and net other assets (liabilities).
Materials Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.7% | |||
Shares | Value | ||
Building Products - 0.1% | |||
Building Products - 0.1% | |||
GCP Applied Technologies, Inc. (a) | 65,800 | $1,658,160 | |
Chemicals - 76.8% | |||
Commodity Chemicals - 17.5% | |||
Cabot Corp. | 135,256 | 8,780,820 | |
Ciner Resources LP | 136,500 | 3,770,130 | |
LyondellBasell Industries NV Class A | 964,815 | 108,811,836 | |
Olin Corp. | 1,654,090 | 50,830,186 | |
Orion Engineered Carbons SA | 399,000 | 14,364,000 | |
Tronox Ltd. Class A | 1,354,003 | 21,921,309 | |
Westlake Chemical Corp. | 604,367 | 57,154,987 | |
265,633,268 | |||
Diversified Chemicals - 34.3% | |||
Ashland Global Holdings, Inc. | 109,500 | 9,219,900 | |
DowDuPont, Inc. | 5,416,883 | 379,886,003 | |
Eastman Chemical Co. | 251,748 | 24,427,108 | |
Huntsman Corp. | 131,400 | 4,006,386 | |
Ingevity Corp. (a) | 83,300 | 8,414,133 | |
The Chemours Co. LLC | 2,198,631 | 95,860,312 | |
521,813,842 | |||
Fertilizers & Agricultural Chemicals - 3.3% | |||
FMC Corp. | 347,000 | 29,651,150 | |
The Mosaic Co. | 663,400 | 20,744,518 | |
50,395,668 | |||
Industrial Gases - 8.7% | |||
Air Products & Chemicals, Inc. | 349,800 | 58,168,242 | |
Linde AG | 323,611 | 73,698,894 | |
131,867,136 | |||
Specialty Chemicals - 13.0% | |||
Axalta Coating Systems Ltd. (a) | 1,032,700 | 31,497,350 | |
Celanese Corp. Class A | 275,300 | 32,163,299 | |
Covestro AG (b) | 62,700 | 5,340,525 | |
Platform Specialty Products Corp. (a) | 4,227,515 | 56,056,849 | |
Sherwin-Williams Co. | 148,500 | 67,653,630 | |
Venator Materials PLC | 383,000 | 4,626,640 | |
197,338,293 | |||
TOTAL CHEMICALS | 1,167,048,207 | ||
Construction Materials - 3.9% | |||
Construction Materials - 3.9% | |||
CRH PLC sponsored ADR | 227,500 | 7,534,800 | |
Martin Marietta Materials, Inc. | 240,300 | 47,752,416 | |
Summit Materials, Inc. | 190,628 | 4,054,658 | |
59,341,874 | |||
Containers & Packaging - 5.4% | |||
Metal & Glass Containers - 1.2% | |||
Aptargroup, Inc. | 110,500 | 11,570,455 | |
Berry Global Group, Inc. (a) | 133,700 | 6,381,501 | |
17,951,956 | |||
Paper Packaging - 4.2% | |||
Avery Dennison Corp. | 87,900 | 9,245,322 | |
Graphic Packaging Holding Co. | 544,195 | 7,738,453 | |
Packaging Corp. of America | 201,600 | 22,159,872 | |
WestRock Co. | 445,618 | 24,544,639 | |
63,688,286 | |||
TOTAL CONTAINERS & PACKAGING | 81,640,242 | ||
Metals & Mining - 9.9% | |||
Copper - 2.2% | |||
Freeport-McMoRan, Inc. | 2,419,600 | 33,995,380 | |
Diversified Metals & Mining - 1.3% | |||
Alcoa Corp. (a) | 327,600 | 14,633,892 | |
Elkem ASA (a) | 997,398 | 5,235,473 | |
19,869,365 | |||
Gold - 2.5% | |||
Newmont Mining Corp. | 933,600 | 28,969,608 | |
Royal Gold, Inc. | 113,700 | 8,670,762 | |
37,640,370 | |||
Steel - 3.9% | |||
AK Steel Holding Corp. (a)(c) | 565,100 | 2,509,044 | |
Commercial Metals Co. | 879,500 | 18,997,200 | |
Nucor Corp. | 72,800 | 4,550,000 | |
Ryerson Holding Corp. (a) | 508,603 | 5,289,471 | |
Steel Dynamics, Inc. | 596,300 | 27,268,799 | |
58,614,514 | |||
TOTAL METALS & MINING | 150,119,629 | ||
Oil, Gas & Consumable Fuels - 0.1% | |||
Oil & Gas Refining & Marketing - 0.1% | |||
S-Oil Corp. | 15,670 | 1,678,888 | |
Trading Companies & Distributors - 1.5% | |||
Trading Companies & Distributors - 1.5% | |||
Univar, Inc. (a) | 828,733 | 23,055,352 | |
TOTAL COMMON STOCKS | |||
(Cost $1,243,333,078) | 1,484,542,352 | ||
Nonconvertible Preferred Stocks - 2.0% | |||
Chemicals - 2.0% | |||
Commodity Chemicals - 2.0% | |||
Braskem SA (PN-A) | |||
(Cost $32,364,812) | 2,121,800 | 30,844,266 | |
Money Market Funds - 0.2% | |||
Fidelity Cash Central Fund, 1.97% (d) | 1,418,336 | 1,418,620 | |
Fidelity Securities Lending Cash Central Fund 1.98% (d)(e) | 1,906,909 | 1,907,100 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $3,325,720) | 3,325,720 | ||
TOTAL INVESTMENT IN SECURITIES - 99.9% | |||
(Cost $1,279,023,610) | 1,518,712,338 | ||
NET OTHER ASSETS (LIABILITIES) - 0.1% | 1,477,357 | ||
NET ASSETS - 100% | $1,520,189,695 |
Legend
(a) Non-income producing
(b) 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 $5,340,525 or 0.4% of net assets.
(c) Security or a portion of the security is on loan at period end.
(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 are available on the SEC's website or upon request.
(e) 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 | $58,334 |
Fidelity Securities Lending Cash Central Fund | 2,977 |
Total | $61,311 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $96,772,567 |
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 | 79.9% |
Netherlands | 7.2% |
Germany | 5.3% |
Bermuda | 2.1% |
Brazil | 2.0% |
Australia | 1.4% |
Others (Individually Less Than 1%) | 2.1% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Materials Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $1,881,672) — See accompanying schedule: Unaffiliated issuers (cost $1,275,697,890) | $1,515,386,618 | |
Fidelity Central Funds (cost $3,325,720) | 3,325,720 | |
Total Investment in Securities (cost $1,279,023,610) | $1,518,712,338 | |
Foreign currency held at value (cost $19,607) | 19,733 | |
Receivable for investments sold | 2,400,338 | |
Receivable for fund shares sold | 339,808 | |
Dividends receivable | 3,763,407 | |
Distributions receivable from Fidelity Central Funds | 2,458 | |
Prepaid expenses | 19,048 | |
Other receivables | 201,583 | |
Total assets | 1,525,458,713 | |
Liabilities | ||
Payable for fund shares redeemed | $2,089,531 | |
Accrued management fee | 687,456 | |
Distribution and service plan fees payable | 113,165 | |
Other affiliated payables | 299,054 | |
Other payables and accrued expenses | 172,712 | |
Collateral on securities loaned | 1,907,100 | |
Total liabilities | 5,269,018 | |
Net Assets | $1,520,189,695 | |
Net Assets consist of: | ||
Paid in capital | $1,165,152,424 | |
Undistributed net investment income | 10,870,867 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 104,483,707 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 239,682,697 | |
Net Assets | $1,520,189,695 | |
Calculation of Maximum Offering Price | ||
Class A: | ||
Net Asset Value and redemption price per share ($171,874,501 ÷ 2,068,426 shares) | $83.09 | |
Maximum offering price per share (100/94.25 of $83.09) | $88.16 | |
Class M: | ||
Net Asset Value and redemption price per share ($34,079,678 ÷ 413,976 shares) | $82.32 | |
Maximum offering price per share (100/96.50 of $82.32) | $85.31 | |
Class C: | ||
Net Asset Value and offering price per share ($74,893,821 ÷ 937,011 shares)(a) | $79.93 | |
Materials: | ||
Net Asset Value, offering price and redemption price per share ($805,134,822 ÷ 9,634,766 shares) | $83.57 | |
Class I: | ||
Net Asset Value, offering price and redemption price per share ($434,206,873 ÷ 5,206,643 shares) | $83.39 |
(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
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $18,127,939 | |
Income from Fidelity Central Funds | 61,311 | |
Total income | 18,189,250 | |
Expenses | ||
Management fee | $4,477,522 | |
Transfer agent fees | 1,628,871 | |
Distribution and service plan fees | 725,236 | |
Accounting and security lending fees | 256,893 | |
Custodian fees and expenses | 33,218 | |
Independent trustees' fees and expenses | 4,260 | |
Registration fees | 56,518 | |
Audit | 22,940 | |
Legal | 8,836 | |
Interest | 5,464 | |
Miscellaneous | 74,295 | |
Total expenses before reductions | 7,294,053 | |
Expense reductions | (147,537) | |
Total expenses after reductions | 7,146,516 | |
Net investment income (loss) | 11,042,734 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 62,890,244 | |
Redemptions in-kind with affiliated entities | 42,386,899 | |
Fidelity Central Funds | 407 | |
Foreign currency transactions | (14,432) | |
Total net realized gain (loss) | 105,263,118 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (139,964,160) | |
Assets and liabilities in foreign currencies | (3,743) | |
Total change in net unrealized appreciation (depreciation) | (139,967,903) | |
Net gain (loss) | (34,704,785) | |
Net increase (decrease) in net assets resulting from operations | $(23,662,051) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $11,042,734 | $13,943,613 |
Net realized gain (loss) | 105,263,118 | 168,615,627 |
Change in net unrealized appreciation (depreciation) | (139,967,903) | 43,205,875 |
Net increase (decrease) in net assets resulting from operations | (23,662,051) | 225,765,115 |
Distributions to shareholders from net investment income | (2,217,383) | (13,925,069) |
Distributions to shareholders from net realized gain | (85,805,447) | (80,094,510) |
Total distributions | (88,022,830) | (94,019,579) |
Share transactions - net increase (decrease) | (250,723,200) | 182,977,431 |
Total increase (decrease) in net assets | (362,408,081) | 314,722,967 |
Net Assets | ||
Beginning of period | 1,882,597,776 | 1,567,874,809 |
End of period | $1,520,189,695 | $1,882,597,776 |
Other Information | ||
Undistributed net investment income end of period | $10,870,867 | $2,045,516 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Materials Portfolio Class A
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $88.50 | $81.27 | $62.94 | $80.43 | $86.46 | $73.44 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .48 | .55 | .70 | .79 | .51 | .36 |
Net realized and unrealized gain (loss) | (1.65) | 11.18 | 18.26 | (16.80) | 1.05 | 14.56 |
Total from investment operations | (1.17) | 11.73 | 18.96 | (16.01) | 1.56 | 14.92 |
Distributions from net investment income | (.08) | (.50) | (.63) | (.58) | (.43) | (.30) |
Distributions from net realized gain | (4.16) | (4.00) | – | (.91) | (7.17) | (1.60) |
Total distributions | (4.24) | (4.50) | (.63) | (1.48)C | (7.59)D | (1.90) |
Redemption fees added to paid in capitalB | – | – | –E | –E | –E | –E |
Net asset value, end of period | $83.09 | $88.50 | $81.27 | $62.94 | $80.43 | $86.46 |
Total ReturnF,G,H | (1.22)% | 14.65% | 30.18% | (20.01)% | 2.20% | 20.46% |
Ratios to Average Net AssetsI,J | ||||||
Expenses before reductions | 1.06%K | 1.07% | 1.08% | 1.06% | 1.06% | 1.10% |
Expenses net of fee waivers, if any | 1.06%K | 1.07% | 1.08% | 1.06% | 1.06% | 1.10% |
Expenses net of all reductions | 1.05%K | 1.06% | 1.07% | 1.06% | 1.06% | 1.09% |
Net investment income (loss) | 1.15%K | .64% | .96% | 1.09% | .61% | .45% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $171,875 | $201,933 | $229,086 | $202,747 | $319,740 | $336,777 |
Portfolio turnover rateL | 81%K,M | 67% | 49%M | 64% | 76%M | 53% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $1.48 per share is comprised of distributions from net investment income of $.575 and distributions from net realized gain of $.906 per share.
D Total distributions of $7.59 per share is comprised of distributions from net investment income of $.425 and distributions from net realized gain of $7.167 per share.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Total returns do not include the effect of the sales charges.
I Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Annualized
L Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
M Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Materials Portfolio Class M
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $87.79 | $80.66 | $62.52 | $79.95 | $85.99 | $73.05 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .36 | .30 | .47 | .56 | .25 | .12 |
Net realized and unrealized gain (loss) | (1.63) | 11.08 | 18.12 | (16.69) | 1.06 | 14.48 |
Total from investment operations | (1.27) | 11.38 | 18.59 | (16.13) | 1.31 | 14.60 |
Distributions from net investment income | (.04) | (.25) | (.45) | (.40) | (.18) | (.06) |
Distributions from net realized gain | (4.16) | (4.00) | – | (.91) | (7.17) | (1.60) |
Total distributions | (4.20) | (4.25) | (.45) | (1.30)C | (7.35) | (1.66) |
Redemption fees added to paid in capitalB | – | – | –D | –D | –D | –D |
Net asset value, end of period | $82.32 | $87.79 | $80.66 | $62.52 | $79.95 | $85.99 |
Total ReturnE,F,G | (1.35)% | 14.30% | 29.78% | (20.27)% | 1.90% | 20.10% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | 1.35%J | 1.36% | 1.39% | 1.38% | 1.37% | 1.40% |
Expenses net of fee waivers, if any | 1.35%J | 1.36% | 1.39% | 1.37% | 1.37% | 1.40% |
Expenses net of all reductions | 1.33%J | 1.35% | 1.38% | 1.37% | 1.37% | 1.39% |
Net investment income (loss) | .86%J | .35% | .65% | .77% | .31% | .15% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $34,080 | $40,107 | $40,935 | $30,118 | $45,252 | $45,223 |
Portfolio turnover rateK | 81%J,L | 67% | 49%L | 64% | 76%L | 53% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $1.30 per share is comprised of distributions from net investment income of $.395 and distributions from net realized gain of $.906 per share.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
G Total returns do not include the effect of the sales charges.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Annualized
K Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
L Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Materials Portfolio Class C
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $85.52 | $78.72 | $61.09 | $78.12 | $84.38 | $71.96 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .16 | (.09) | .15 | .24 | (.12) | (.23) |
Net realized and unrealized gain (loss) | (1.59) | 10.80 | 17.68 | (16.28) | 1.03 | 14.23 |
Total from investment operations | (1.43) | 10.71 | 17.83 | (16.04) | .91 | 14.00 |
Distributions from net investment income | – | (.02) | (.20) | (.08) | – | – |
Distributions from net realized gain | (4.16) | (3.89) | – | (.91) | (7.17) | (1.58) |
Total distributions | (4.16) | (3.91) | (.20) | (.99) | (7.17) | (1.58) |
Redemption fees added to paid in capitalB | – | – | –C | –C | –C | –C |
Net asset value, end of period | $79.93 | $85.52 | $78.72 | $61.09 | $78.12 | $84.38 |
Total ReturnD,E,F | (1.58)% | 13.78% | 29.21% | (20.61)% | 1.43% | 19.56% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | 1.82%I | 1.82% | 1.83% | 1.81% | 1.82% | 1.85% |
Expenses net of fee waivers, if any | 1.82%I | 1.82% | 1.82% | 1.81% | 1.82% | 1.85% |
Expenses net of all reductions | 1.80%I | 1.82% | 1.82% | 1.81% | 1.82% | 1.84% |
Net investment income (loss) | .40%I | (.11)% | .21% | .34% | (.14)% | (.30)% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $74,894 | $85,792 | $80,225 | $66,896 | $107,697 | $106,879 |
Portfolio turnover rateJ | 81%I,K | 67% | 49%K | 64% | 76%K | 53% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Materials Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $88.90 | $81.64 | $63.20 | $80.77 | $86.81 | $73.68 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .60 | .79 | .90 | .98 | .73 | .58 |
Net realized and unrealized gain (loss) | (1.65) | 11.24 | 18.34 | (16.89) | 1.05 | 14.63 |
Total from investment operations | (1.05) | 12.03 | 19.24 | (15.91) | 1.78 | 15.21 |
Distributions from net investment income | (.12) | (.77) | (.80) | (.76) | (.65) | (.48) |
Distributions from net realized gain | (4.16) | (4.00) | – | (.91) | (7.17) | (1.60) |
Total distributions | (4.28) | (4.77) | (.80) | (1.66)C | (7.82) | (2.08) |
Redemption fees added to paid in capitalB | – | – | –D | –D | –D | –D |
Net asset value, end of period | $83.57 | $88.90 | $81.64 | $63.20 | $80.77 | $86.81 |
Total ReturnE,F | (1.07)% | 14.96% | 30.52% | (19.81)% | 2.46% | 20.80% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .79%I | .79% | .81% | .81% | .80% | .82% |
Expenses net of fee waivers, if any | .79%I | .79% | .81% | .81% | .80% | .82% |
Expenses net of all reductions | .77%I | .79% | .81% | .80% | .80% | .82% |
Net investment income (loss) | 1.43%I | .91% | 1.22% | 1.34% | .87% | .73% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $805,135 | $1,043,704 | $882,504 | $711,985 | $1,107,689 | $1,231,942 |
Portfolio turnover rateJ | 81%I,K | 67% | 49%K | 64% | 76%K | 53% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $1.66 per share is comprised of distributions from net investment income of $.756 and distributions from net realized gain of $.906 per share.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Materials Portfolio Class I
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $88.73 | $81.49 | $63.07 | $80.60 | $86.66 | $73.57 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .60 | .80 | .91 | 1.00 | .74 | .59 |
Net realized and unrealized gain (loss) | (1.66) | 11.22 | 18.31 | (16.86) | 1.05 | 14.60 |
Total from investment operations | (1.06) | 12.02 | 19.22 | (15.86) | 1.79 | 15.19 |
Distributions from net investment income | (.12) | (.78) | (.80) | (.77) | (.68) | (.50) |
Distributions from net realized gain | (4.16) | (4.00) | – | (.91) | (7.17) | (1.60) |
Total distributions | (4.28) | (4.78) | (.80) | (1.67)C | (7.85) | (2.10) |
Redemption fees added to paid in capitalB | – | – | –D | –D | –D | –D |
Net asset value, end of period | $83.39 | $88.73 | $81.49 | $63.07 | $80.60 | $86.66 |
Total ReturnE,F | (1.08)% | 14.97% | 30.55% | (19.79)% | 2.49% | 20.81% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .79%I | .79% | .79% | .78% | .78% | .81% |
Expenses net of fee waivers, if any | .78%I | .79% | .79% | .78% | .78% | .81% |
Expenses net of all reductions | .77%I | .78% | .78% | .78% | .78% | .81% |
Net investment income (loss) | 1.43%I | .92% | 1.25% | 1.37% | .89% | .74% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $434,207 | $511,062 | $335,124 | $306,145 | $468,371 | $333,963 |
Portfolio turnover rateJ | 81%I,K | 67% | 49%K | 64% | 76%K | 53% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $1.67 per share is comprised of distributions from net investment income of $.767 and distributions from net realized gain of $.906 per share.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K 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 (Unaudited)
For the period ended August 31, 2018
1. Organization.
Materials Portfolio (the Fund) is a non-diversified fund of Fidelity Select Portfolios (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 invests primarily in securities of companies whose principal business activities fall within specific industries. The Fund offers Class A, Class M, Class C, Materials and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
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 .005%.
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 are available on the SEC website or upon request.
3. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Fair Value Committee (the Committee) established by the Fund's investment adviser. 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 August 31, 2018 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. 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. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. 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), certain independent Trustees have elected 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 of $127,140 are included in the accompanying Statement of Assets and Liabilities in other receivables and other payables and accrued expenses, respectively.
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. 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 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, partnerships, capital loss carryforwards and losses deferred due to wash sales.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows:
Gross unrealized appreciation | $275,663,298 |
Gross unrealized depreciation | (38,604,181) |
Net unrealized appreciation (depreciation) | $237,059,117 |
Tax cost | $1,281,653,221 |
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 | |
2019 | $(80,787) |
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 $665,738,991 and $993,906,583, 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 .24% 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 annualized management fee rate was .54% 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% | $232,673 | $2,455 |
Class M | .25% | .25% | 91,394 | – |
Class C | .75% | .25% | 401,169 | 35,787 |
$725,236 | $38,242 |
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 M 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 M and Class C redemptions. The deferred sales charges are 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class M shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained by FDC | |
Class A | $18,573 |
Class M | 2,174 |
Class C(a) | 3,460 |
$24,207 |
(a) When 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(a) | |
Class A | $202,214 | .22 |
Class M | 46,410 | .25 |
Class C | 88,070 | .22 |
Materials | 855,219 | .19 |
Class I | 436,958 | .19 |
$1,628,871 |
(a) Annualized
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. For the period, the fees were equivalent to an annualized rate of .03%.
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 $27,333 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 Fidelity Management & Research Company (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 | $5,217,947 | 1.98% | $5,464 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Redemptions In-Kind. During the period, 1,531,828 shares of Materials Portfolio held by an affiliated entity were redeemed in-kind for investments and cash with a value of $126,544,324. The net realized gain of $42,386,899 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 the Notes to Financial Statements. Materials Portfolio 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 $2,513 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. The Fund or borrower may terminate the loan at any time, and 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 $2,977.
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 $139,077 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $8,460.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended August 31, 2018 | Year ended February 28, 2018 | |
From net investment income | ||
Class A | $169,902 | $1,122,417 |
Class M | 15,735 | 111,276 |
Class C | – | 21,712 |
Materials | 1,370,665 | 8,651,332 |
Class I | 661,081 | 4,018,332 |
Total | $2,217,383 | $13,925,069 |
From net realized gain | ||
Class A | $9,181,276 | $8,907,618 |
Class M | 1,870,675 | 1,755,252 |
Class C | 4,092,761 | 3,835,607 |
Materials | 47,927,189 | 44,912,504 |
Class I | 22,733,546 | 20,683,529 |
Total | $85,805,447 | $80,094,510 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
Shares | Shares | Dollars | Dollars | |
Six months ended August 31, 2018 | Year ended February 28, 2018 | Six months ended August 31, 2018 | Year ended February 28, 2018 | |
Class A | ||||
Shares sold | 127,671 | 680,092 | $10,783,153 | $58,507,834 |
Reinvestment of distributions | 112,688 | 113,874 | 9,160,427 | 9,780,873 |
Shares redeemed | (453,770) | (1,331,034) | (38,090,933) | (112,075,163) |
Net increase (decrease) | (213,411) | (537,068) | $(18,147,353) | $(43,786,456) |
Class M | ||||
Shares sold | 28,269 | 208,725 | $2,361,246 | $17,686,478 |
Reinvestment of distributions | 23,368 | 21,925 | 1,883,930 | 1,863,640 |
Shares redeemed | (94,484) | (281,358) | (7,885,997) | (23,392,261) |
Net increase (decrease) | (42,847) | (50,708) | $(3,640,821) | $(3,842,143) |
Class C | ||||
Shares sold | 28,686 | 181,208 | $2,337,640 | $15,047,250 |
Reinvestment of distributions | 50,103 | 44,268 | 3,929,104 | 3,679,464 |
Shares redeemed | (144,936) | (241,477) | (11,712,378) | (20,012,880) |
Net increase (decrease) | (66,147) | (16,001) | $(5,445,634) | $(1,286,166) |
Materials | ||||
Shares sold | 336,509 | 3,151,404 | $28,564,167 | $281,933,571 |
Reinvestment of distributions | 568,531 | 582,560 | 46,426,234 | 50,400,849 |
Shares redeemed | (3,010,158)(a) | (2,803,708) | (251,460,810)(a) | (242,311,502) |
Net increase (decrease) | (2,105,118) | 930,256 | $(176,470,409) | $90,022,918 |
Class I | ||||
Shares sold | 630,772 | 2,807,810 | $53,334,930 | $243,189,109 |
Reinvestment of distributions | 268,927 | 269,534 | 21,917,589 | 23,282,439 |
Shares redeemed | (1,452,861) | (1,429,768) | (122,271,502) | (124,602,270) |
Net increase (decrease) | (553,162) | 1,647,576 | $(47,018,983) | $141,869,278 |
(a) Amount includes in-kind redemptions (see the Redemptions In-Kind note for additional details).
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.
Shareholder Expense Example
As a shareholder of a 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 Funds 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 (March 1, 2018 to August 31, 2018).
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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 RatioA | Beginning Account Value March 1, 2018 | Ending Account Value August 31, 2018 | Expenses Paid During Period-B March 1, 2018 to August 31, 2018 | |
Chemicals Portfolio | .76% | |||
Actual | $1,000.00 | $1,022.20 | $3.87 | |
Hypothetical-C | $1,000.00 | $1,021.37 | $3.87 | |
Gold Portfolio | ||||
Class A | 1.19% | |||
Actual | $1,000.00 | $860.10 | $5.58 | |
Hypothetical-C | $1,000.00 | $1,019.21 | $6.06 | |
Class M | 1.48% | |||
Actual | $1,000.00 | $859.00 | $6.93 | |
Hypothetical-C | $1,000.00 | $1,017.74 | $7.53 | |
Class C | 1.84% | |||
Actual | $1,000.00 | $856.60 | $8.61 | |
Hypothetical-C | $1,000.00 | $1,015.93 | $9.35 | |
Gold | .85% | |||
Actual | $1,000.00 | $861.00 | $3.99 | |
Hypothetical-C | $1,000.00 | $1,020.92 | $4.33 | |
Class I | .83% | |||
Actual | $1,000.00 | $861.00 | $3.89 | |
Hypothetical-C | $1,000.00 | $1,021.02 | $4.23 | |
Materials Portfolio | ||||
Class A | 1.06% | |||
Actual | $1,000.00 | $987.80 | $5.31 | |
Hypothetical-C | $1,000.00 | $1,019.86 | $5.40 | |
Class M | 1.35% | |||
Actual | $1,000.00 | $986.50 | $6.76 | |
Hypothetical-C | $1,000.00 | $1,018.40 | $6.87 | |
Class C | 1.82% | |||
Actual | $1,000.00 | $984.20 | $9.10 | |
Hypothetical-C | $1,000.00 | $1,016.03 | $9.25 | |
Materials | .79% | |||
Actual | $1,000.00 | $989.30 | $3.96 | |
Hypothetical-C | $1,000.00 | $1,021.22 | $4.02 | |
Class I | .78% | |||
Actual | $1,000.00 | $989.20 | $3.91 | |
Hypothetical-C | $1,000.00 | $1,021.27 | $3.97 |
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 184/ 365 (to reflect the one-half year period).
C 5% return per year before expenses
SELMT-SANN-1018
1.846035.111
Fidelity Advisor Focus Funds® Fidelity Advisor® Consumer Staples Fund Fidelity Advisor® Gold Fund Fidelity Advisor® Materials Fund Fidelity Advisor® Telecommunications Fund Semi-Annual Report August 31, 2018 Each Advisor fund listed above is a class of the Fidelity® Select Portfolios® |
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Contents
Consumer Staples Portfolio | |
Gold Portfolio | |
Materials Portfolio | |
Telecommunications Portfolio | |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third-party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2018 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Funds. This report is not authorized for distribution to prospective investors in the Funds unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.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.
Consumer Staples Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
The Coca-Cola Co. | 9.8 |
Procter & Gamble Co. | 9.4 |
Philip Morris International, Inc. | 6.7 |
PepsiCo, Inc. | 5.7 |
Coty, Inc. Class A | 5.7 |
Spectrum Brands Holdings, Inc. | 4.6 |
Altria Group, Inc. | 3.9 |
Monster Beverage Corp. | 3.8 |
Costco Wholesale Corp. | 3.7 |
Mondelez International, Inc. | 3.6 |
56.9 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Beverages | 26.5% | |
Food Products | 20.3% | |
Household Products | 16.6% | |
Tobacco | 12.5% | |
Personal Products | 10.6% | |
All Others* | 13.5% |
* Includes short-term investments and net other assets (liabilities).
Consumer Staples Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.8% | |||
Shares | Value | ||
Beverages - 26.5% | |||
Brewers - 0.9% | |||
Beijing Yanjing Brewery Co. Ltd. Class A | 10,571,440 | $9,362,104 | |
China Resources Beer Holdings Co. Ltd. | 140,000 | 595,764 | |
Molson Coors Brewing Co. Class B | 55,100 | 3,677,374 | |
13,635,242 | |||
Distillers & Vintners - 2.3% | |||
Constellation Brands, Inc. Class A (sub. vtg.) | 134,600 | 28,023,720 | |
Kweichow Moutai Co. Ltd. (A Shares) | 13,453 | 1,298,117 | |
Pernod Ricard SA | 48,400 | 7,640,521 | |
36,962,358 | |||
Soft Drinks - 23.3% | |||
Coca-Cola Bottling Co. Consolidated | 80,244 | 13,606,173 | |
Coca-Cola European Partners PLC | 593,253 | 25,296,308 | |
Coca-Cola FEMSA S.A.B. de CV sponsored ADR (a) | 71,000 | 4,289,820 | |
Coca-Cola West Co. Ltd. | 137,300 | 3,892,494 | |
Fever-Tree Drinks PLC | 15,976 | 771,111 | |
Keurig Dr. Pepper, Inc. | 637,000 | 14,523,600 | |
Monster Beverage Corp. (b) | 990,802 | 60,329,934 | |
PepsiCo, Inc. | 805,700 | 90,246,457 | |
The Coca-Cola Co. | 3,501,618 | 156,067,112 | |
369,023,009 | |||
TOTAL BEVERAGES | 419,620,609 | ||
Food & Staples Retailing - 10.2% | |||
Drug Retail - 2.1% | |||
Rite Aid Corp. (a)(b) | 1,367,770 | 1,873,845 | |
Walgreens Boots Alliance, Inc. | 458,924 | 31,463,829 | |
33,337,674 | |||
Food Distributors - 1.7% | |||
Sysco Corp. | 340,500 | 25,476,210 | |
United Natural Foods, Inc. (b) | 15,500 | 550,405 | |
26,026,615 | |||
Food Retail - 1.2% | |||
Kroger Co. | 356,970 | 11,244,555 | |
Sprouts Farmers Market LLC (b) | 309,100 | 8,181,877 | |
19,426,432 | |||
Hypermarkets & Super Centers - 5.2% | |||
BJ's Wholesale Club Holdings, Inc. | 21,600 | 637,200 | |
Costco Wholesale Corp. | 249,500 | 58,165,935 | |
Walmart, Inc. | 251,200 | 24,080,032 | |
82,883,167 | |||
TOTAL FOOD & STAPLES RETAILING | 161,673,888 | ||
Food Products - 20.3% | |||
Agricultural Products - 1.6% | |||
Bunge Ltd. | 188,135 | 12,225,012 | |
Darling International, Inc. (b) | 458,000 | 9,059,240 | |
Ingredion, Inc. | 44,300 | 4,477,401 | |
25,761,653 | |||
Packaged Foods & Meats - 18.7% | |||
ConAgra Foods, Inc. | 571,600 | 21,006,300 | |
Danone SA | 339,991 | 26,774,258 | |
JBS SA | 4,970,800 | 11,471,734 | |
Kellogg Co. | 329,900 | 23,683,521 | |
Mondelez International, Inc. | 1,341,358 | 57,302,814 | |
Nomad Foods Ltd. (b) | 222,500 | 4,639,125 | |
Post Holdings, Inc. (b) | 72,900 | 7,090,254 | |
The Hain Celestial Group, Inc. (b) | 314,199 | 8,973,523 | |
The Hershey Co. | 131,900 | 13,258,588 | |
The J.M. Smucker Co. | 245,200 | 25,348,776 | |
The Kraft Heinz Co. | 715,000 | 41,663,050 | |
The Simply Good Foods Co. (b) | 1,445,399 | 26,017,182 | |
TreeHouse Foods, Inc. (b) | 567,359 | 29,559,404 | |
296,788,529 | |||
TOTAL FOOD PRODUCTS | 322,550,182 | ||
Health Care Providers & Services - 1.0% | |||
Health Care Services - 1.0% | |||
CVS Health Corp. | 218,803 | 16,462,738 | |
Hotels, Restaurants & Leisure - 1.1% | |||
Restaurants - 1.1% | |||
Compass Group PLC | 49,911 | 1,073,168 | |
U.S. Foods Holding Corp. (b) | 512,016 | 16,686,601 | |
17,759,769 | |||
Household Durables - 0.1% | |||
Housewares & Specialties - 0.1% | |||
Newell Brands, Inc. | 79,000 | 1,715,880 | |
Household Products - 16.6% | |||
Household Products - 16.6% | |||
Colgate-Palmolive Co. | 379,780 | 25,221,190 | |
Essity AB Class B | 347,800 | 9,013,368 | |
Procter & Gamble Co. | 1,791,150 | 148,575,893 | |
Reckitt Benckiser Group PLC | 81,700 | 6,959,386 | |
Spectrum Brands Holdings, Inc. | 849,599 | 73,787,673 | |
263,557,510 | |||
Internet & Direct Marketing Retail - 0.2% | |||
Internet & Direct Marketing Retail - 0.2% | |||
The Honest Co., Inc. (b)(c)(d) | 212,235 | 2,440,703 | |
Multiline Retail - 0.7% | |||
General Merchandise Stores - 0.7% | |||
Dollar Tree, Inc. (b) | 139,700 | 11,247,247 | |
Personal Products - 10.6% | |||
Personal Products - 10.6% | |||
Avon Products, Inc. (b) | 8,584,907 | 17,169,814 | |
Coty, Inc. Class A | 7,268,197 | 89,834,915 | |
Estee Lauder Companies, Inc. Class A | 100,339 | 14,059,501 | |
Herbalife Nutrition Ltd. (b) | 58,320 | 3,300,329 | |
Ontex Group NV | 189,100 | 5,425,986 | |
Unilever NV (Certificaten Van Aandelen) (Bearer) (b) | 665,630 | 38,274,645 | |
168,065,190 | |||
Tobacco - 12.5% | |||
Tobacco - 12.5% | |||
Altria Group, Inc. | 1,044,645 | 61,132,625 | |
British American Tobacco PLC sponsored ADR | 612,526 | 29,634,008 | |
Philip Morris International, Inc. | 1,368,591 | 106,599,553 | |
197,366,186 | |||
TOTAL COMMON STOCKS | |||
(Cost $1,456,097,634) | 1,582,459,902 | ||
Money Market Funds - 0.5% | |||
Fidelity Cash Central Fund, 1.97% (e) | 7,826,643 | 7,828,209 | |
Fidelity Securities Lending Cash Central Fund 1.98% (e)(f) | 1,015,871 | 1,015,972 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $8,844,181) | 8,844,181 | ||
TOTAL INVESTMENT IN SECURITIES - 100.3% | |||
(Cost $1,464,941,815) | 1,591,304,083 | ||
NET OTHER ASSETS (LIABILITIES) - (0.3)% | (5,088,026) | ||
NET ASSETS - 100% | $1,586,216,057 |
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $2,440,703 or 0.2% of net assets.
(d) Level 3 security
(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 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 |
The Honest Co., Inc. | 8/28/18 | $2,381,277 |
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 | $17,956 |
Fidelity Securities Lending Cash Central Fund | 152,236 |
Total | $170,192 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $1,582,459,902 | $1,508,010,910 | $72,008,289 | $2,440,703 |
Money Market Funds | 8,844,181 | 8,844,181 | -- | -- |
Total Investments in Securities: | $1,591,304,083 | $1,516,855,091 | $72,008,289 | $2,440,703 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $65,011,602 |
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 | 87.2% |
United Kingdom | 4.1% |
Netherlands | 2.4% |
France | 2.2% |
Others (Individually Less Than 1%) | 4.1% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Consumer Staples Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $960,832) — See accompanying schedule: Unaffiliated issuers (cost $1,456,097,634) | $1,582,459,902 | |
Fidelity Central Funds (cost $8,844,181) | 8,844,181 | |
Total Investment in Securities (cost $1,464,941,815) | $1,591,304,083 | |
Receivable for fund shares sold | 1,696,260 | |
Dividends receivable | 4,660,764 | |
Distributions receivable from Fidelity Central Funds | 11,970 | |
Prepaid expenses | 21,531 | |
Other receivables | 250,070 | |
Total assets | 1,597,944,678 | |
Liabilities | ||
Payable for investments purchased | $6,385,354 | |
Payable for fund shares redeemed | 2,800,924 | |
Accrued management fee | 727,931 | |
Distribution and service plan fees payable | 232,777 | |
Other affiliated payables | 300,355 | |
Other payables and accrued expenses | 246,280 | |
Collateral on securities loaned | 1,035,000 | |
Total liabilities | 11,728,621 | |
Net Assets | $1,586,216,057 | |
Net Assets consist of: | ||
Paid in capital | $1,330,664,538 | |
Undistributed net investment income | 31,431,872 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 97,738,748 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 126,380,899 | |
Net Assets | $1,586,216,057 | |
Calculation of Maximum Offering Price | ||
Class A: | ||
Net Asset Value and redemption price per share ($253,996,526 ÷ 3,152,188 shares) | $80.58 | |
Maximum offering price per share (100/94.25 of $80.58) | $85.50 | |
Class M: | ||
Net Asset Value and redemption price per share ($66,344,241 ÷ 831,928 shares) | $79.75 | |
Maximum offering price per share (100/96.50 of $79.75) | $82.64 | |
Class C: | ||
Net Asset Value and offering price per share ($176,139,861 ÷ 2,252,081 shares)(a) | $78.21 | |
Consumer Staples: | ||
Net Asset Value, offering price and redemption price per share ($890,171,345 ÷ 10,933,217 shares) | $81.42 | |
Class I: | ||
Net Asset Value, offering price and redemption price per share ($199,564,084 ÷ 2,456,210 shares) | $81.25 |
(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
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $25,572,364 | |
Special dividends | 14,074,448 | |
Income from Fidelity Central Funds | 170,192 | |
Total income | 39,817,004 | |
Expenses | ||
Management fee | $4,750,595 | |
Transfer agent fees | 1,654,750 | |
Distribution and service plan fees | 1,493,145 | |
Accounting and security lending fees | 274,070 | |
Custodian fees and expenses | 28,880 | |
Independent trustees' fees and expenses | 4,647 | |
Registration fees | 58,055 | |
Audit | 30,033 | |
Legal | 12,380 | |
Interest | 9,852 | |
Miscellaneous | 35,577 | |
Total expenses before reductions | 8,351,984 | |
Expense reductions | (208,078) | |
Total expenses after reductions | 8,143,906 | |
Net investment income (loss) | 31,673,098 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers (net of foreign taxes of $427) | 29,717,187 | |
Redemptions in-kind with affiliated entities | 70,956,466 | |
Fidelity Central Funds | (658) | |
Foreign currency transactions | (16,821) | |
Total net realized gain (loss) | 100,656,174 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (165,182,010) | |
Assets and liabilities in foreign currencies | (35,376) | |
Total change in net unrealized appreciation (depreciation) | (165,217,386) | |
Net gain (loss) | (64,561,212) | |
Net increase (decrease) in net assets resulting from operations | $(32,888,114) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $31,673,098 | $45,723,582 |
Net realized gain (loss) | 100,656,174 | 299,980,969 |
Change in net unrealized appreciation (depreciation) | (165,217,386) | (369,315,122) |
Net increase (decrease) in net assets resulting from operations | (32,888,114) | (23,610,571) |
Distributions to shareholders from net investment income | (5,502,409) | (43,177,465) |
Distributions to shareholders from net realized gain | (124,430,625) | (165,062,987) |
Total distributions | (129,933,034) | (208,240,452) |
Share transactions - net increase (decrease) | (443,075,042) | (437,546,127) |
Total increase (decrease) in net assets | (605,896,190) | (669,397,150) |
Net Assets | ||
Beginning of period | 2,192,112,247 | 2,861,509,397 |
End of period | $1,586,216,057 | $2,192,112,247 |
Other Information | ||
Undistributed net investment income end of period | $31,431,872 | $5,261,183 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Consumer Staples Portfolio Class A
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $87.07 | $96.18 | $89.78 | $101.33 | $87.93 | $85.67 |
Income from Investment Operations | ||||||
Net investment income (loss)B | 1.41C | 1.54 | 1.28 | 1.34 | 1.37 | 1.43 |
Net realized and unrealized gain (loss) | (2.56) | (2.80) | 9.12 | (4.86) | 17.28 | 7.51 |
Total from investment operations | (1.15) | (1.26) | 10.40 | (3.52) | 18.65 | 8.94 |
Distributions from net investment income | (.21) | (1.55) | (1.37) | (1.31) | (1.28) | (1.44) |
Distributions from net realized gain | (5.13) | (6.30) | (2.64) | (6.72) | (3.98) | (5.24) |
Total distributions | (5.34) | (7.85) | (4.00)D | (8.03) | (5.25)E | (6.68) |
Redemption fees added to paid in capitalB | – | – | –F | –F | –F | –F |
Net asset value, end of period | $80.58 | $87.07 | $96.18 | $89.78 | $101.33 | $87.93 |
Total ReturnG,H,I | (1.34)% | (1.68)% | 11.91% | (3.51)% | 21.95% | 10.53% |
Ratios to Average Net AssetsJ,K | ||||||
Expenses before reductions | 1.06%L | 1.05% | 1.04% | 1.04% | 1.05% | 1.06% |
Expenses net of fee waivers, if any | 1.06%L | 1.05% | 1.04% | 1.04% | 1.05% | 1.06% |
Expenses net of all reductions | 1.03%L | 1.04% | 1.03% | 1.04% | 1.05% | 1.06% |
Net investment income (loss) | 2.70%C,L | 1.60% | 1.37% | 1.45% | 1.45% | 1.61% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $253,997 | $317,366 | $522,014 | $470,249 | $414,151 | $329,459 |
Portfolio turnover rateM | 46%L,N | 76% | 56%N | 63% | 42%N | 31% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.64 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 1.90%.
D Total distributions of $4.00 per share is comprised of distributions from net investment income of $1.365 and distributions from net realized gain of $2.636 per share.
E Total distributions of $5.25 per share is comprised of distributions from net investment income of $1.275 and distributions from net realized gain of $3.976 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I Total returns do not include the effect of the sales charges.
J Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Annualized
M Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
N Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Consumer Staples Portfolio Class M
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $86.30 | $95.42 | $89.10 | $100.61 | $87.37 | $85.18 |
Income from Investment Operations | ||||||
Net investment income (loss)B | 1.28C | 1.27 | 1.01 | 1.08 | 1.10 | 1.18 |
Net realized and unrealized gain (loss) | (2.53) | (2.78) | 9.07 | (4.83) | 17.15 | 7.46 |
Total from investment operations | (1.25) | (1.51) | 10.08 | (3.75) | 18.25 | 8.64 |
Distributions from net investment income | (.17) | (1.31) | (1.12) | (1.04) | (1.04) | (1.21) |
Distributions from net realized gain | (5.13) | (6.30) | (2.64) | (6.72) | (3.98) | (5.24) |
Total distributions | (5.30) | (7.61) | (3.76) | (7.76) | (5.01)D | (6.45) |
Redemption fees added to paid in capitalB | – | – | –E | –E | –E | –E |
Net asset value, end of period | $79.75 | $86.30 | $95.42 | $89.10 | $100.61 | $87.37 |
Total ReturnF,G,H | (1.48)% | (1.94)% | 11.61% | (3.78)% | 21.60% | 10.23% |
Ratios to Average Net AssetsI,J | ||||||
Expenses before reductions | 1.33%K | 1.32% | 1.32% | 1.32% | 1.32% | 1.33% |
Expenses net of fee waivers, if any | 1.33%K | 1.32% | 1.32% | 1.32% | 1.32% | 1.33% |
Expenses net of all reductions | 1.31%K | 1.31% | 1.31% | 1.31% | 1.32% | 1.33% |
Net investment income (loss) | 2.43%C,K | 1.33% | 1.09% | 1.17% | 1.18% | 1.34% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $66,344 | $76,572 | $89,925 | $76,586 | $81,489 | $61,421 |
Portfolio turnover rateL | 46%K,M | 76% | 56%M | 63% | 42%M | 31% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.64 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 1.62%.
D Total distributions of $5.01 per share is comprised of distributions from net investment income of $1.036 and distributions from net realized gain of $3.976 per share.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Total returns do not include the effect of the sales charges.
I Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Annualized
L Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
M Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Consumer Staples Portfolio Class C
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $84.85 | $93.89 | $87.77 | $99.27 | $86.32 | $84.28 |
Income from Investment Operations | ||||||
Net investment income (loss)B | 1.08C | .81 | .56 | .63 | .65 | .75 |
Net realized and unrealized gain (loss) | (2.50) | (2.73) | 8.92 | (4.75) | 16.93 | 7.36 |
Total from investment operations | (1.42) | (1.92) | 9.48 | (4.12) | 17.58 | 8.11 |
Distributions from net investment income | (.09) | (.82) | (.73) | (.65) | (.65) | (.84) |
Distributions from net realized gain | (5.13) | (6.30) | (2.64) | (6.72) | (3.98) | (5.24) |
Total distributions | (5.22) | (7.12) | (3.36)D | (7.38)E | (4.63) | (6.07)F |
Redemption fees added to paid in capitalB | – | – | –G | –G | –G | –G |
Net asset value, end of period | $78.21 | $84.85 | $93.89 | $87.77 | $99.27 | $86.32 |
Total ReturnH,I,J | (1.71)% | (2.41)% | 11.07% | (4.23)% | 21.03% | 9.70% |
Ratios to Average Net AssetsK,L | ||||||
Expenses before reductions | 1.80%M | 1.79% | 1.80% | 1.80% | 1.80% | 1.82% |
Expenses net of fee waivers, if any | 1.80%M | 1.79% | 1.79% | 1.80% | 1.80% | 1.82% |
Expenses net of all reductions | 1.78%M | 1.78% | 1.79% | 1.79% | 1.80% | 1.81% |
Net investment income (loss) | 1.95%C,M | .86% | .61% | .69% | .70% | .85% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $176,140 | $228,874 | $308,350 | $250,576 | $228,151 | $164,669 |
Portfolio turnover rateN | 46%M,O | 76% | 56%O | 63% | 42%O | 31% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.63 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 1.15%.
D Total distributions of $3.36 per share is comprised of distributions from net investment income of $.726 and distributions from net realized gain of $2.636 per share.
E Total distributions of $7.38 per share is comprised of distributions from net investment income of $.651 and distributions from net realized gain of $6.724 per share.
F Total distributions of $6.07 per share is comprised of distributions from net investment income of $.837 and distributions from net realized gain of $5.237 per share.
G Amount represents less than $.005 per share.
H Total returns for periods of less than one year are not annualized.
I Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
J Total returns do not include the effect of the contingent deferred sales charge.
K Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
L Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
M Annualized
N Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
O Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Consumer Staples Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $87.85 | $97.01 | $90.48 | $102.03 | $88.51 | $86.17 |
Income from Investment Operations | ||||||
Net investment income (loss)B | 1.55C | 1.82 | 1.56 | 1.61 | 1.64 | 1.69 |
Net realized and unrealized gain (loss) | (2.60) | (2.82) | 9.20 | (4.89) | 17.40 | 7.55 |
Total from investment operations | (1.05) | (1.00) | 10.76 | (3.28) | 19.04 | 9.24 |
Distributions from net investment income | (.26) | (1.86) | (1.60) | (1.55) | (1.54) | (1.66) |
Distributions from net realized gain | (5.13) | (6.30) | (2.64) | (6.72) | (3.98) | (5.24) |
Total distributions | (5.38)D | (8.16) | (4.23)E | (8.27) | (5.52) | (6.90) |
Redemption fees added to paid in capitalB | – | – | –F | –F | –F | –F |
Net asset value, end of period | $81.42 | $87.85 | $97.01 | $90.48 | $102.03 | $88.51 |
Total ReturnG,H | (1.20)% | (1.40)% | 12.24% | (3.25)% | 22.27% | 10.82% |
Ratios to Average Net AssetsI,J | ||||||
Expenses before reductions | .77%K | .76% | .76% | .77% | .77% | .79% |
Expenses net of fee waivers, if any | .77%K | .76% | .76% | .77% | .77% | .79% |
Expenses net of all reductions | .74%K | .76% | .76% | .76% | .77% | .79% |
Net investment income (loss) | 2.99%C,K | 1.89% | 1.64% | 1.72% | 1.73% | 1.88% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $890,171 | $1,328,696 | $1,665,604 | $2,039,983 | $2,173,970 | $1,328,594 |
Portfolio turnover rateL | 46%K,M | 76% | 56%M | 63% | 42%M | 31% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.65 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 2.19%.
D Total distributions of $5.38 per share is comprised of distributions from net investment income of $.255 and distributions from net realized gain of $5.129 per share.
E Total distributions of $4.23 per share is comprised of distributions from net investment income of $1.596 and distributions from net realized gain of $2.636 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Annualized
L Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
M Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Consumer Staples Portfolio Class I
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $87.68 | $96.82 | $90.34 | $101.91 | $88.33 | $85.92 |
Income from Investment Operations | ||||||
Net investment income (loss)B | 1.53C | 1.81 | 1.54 | 1.60 | 1.59 | 1.66 |
Net realized and unrealized gain (loss) | (2.58) | (2.82) | 9.19 | (4.89) | 17.40 | 7.53 |
Total from investment operations | (1.05) | (1.01) | 10.73 | (3.29) | 18.99 | 9.19 |
Distributions from net investment income | (.25) | (1.83) | (1.61) | (1.55) | (1.44) | (1.54) |
Distributions from net realized gain | (5.13) | (6.30) | (2.64) | (6.72) | (3.98) | (5.24) |
Total distributions | (5.38) | (8.13) | (4.25) | (8.28)D | (5.41)E | (6.78) |
Redemption fees added to paid in capitalB | – | – | –F | –F | –F | –F |
Net asset value, end of period | $81.25 | $87.68 | $96.82 | $90.34 | $101.91 | $88.33 |
Total ReturnG,H | (1.21)% | (1.41)% | 12.22% | (3.26)% | 22.26% | 10.80% |
Ratios to Average Net AssetsI,J | ||||||
Expenses before reductions | .78%K | .78% | .78% | .78% | .80% | .82% |
Expenses net of fee waivers, if any | .78%K | .78% | .78% | .77% | .80% | .82% |
Expenses net of all reductions | .75%K | .77% | .77% | .77% | .80% | .82% |
Net investment income (loss) | 2.98%C,K | 1.88% | 1.63% | 1.71% | 1.70% | 1.85% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $199,564 | $240,605 | $275,616 | $216,836 | $198,538 | $154,271 |
Portfolio turnover rateL | 46%K,M | 76% | 56%M | 63% | 42%M | 31% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.65 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 2.18%.
D Total distributions of $8.28 per share is comprised of distributions from net investment income of $1.553 and distributions from net realized gain of $6.724 per share.
E Total distributions of $5.41 per share is comprised of distributions from net investment income of $1.436 and distributions from net realized gain of $3.976 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Annualized
L Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
M 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 (Unaudited)
For the period ended August 31, 2018
1. Organization.
Consumer Staples Portfolio (the Fund) is a non-diversified fund of Fidelity Select Portfolios (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 invests primarily in securities of companies whose principal business activities fall within specific industries. The Fund offers Class A, Class M, Class C, Consumer Staples and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
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 .005%.
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 are available on the SEC website or upon request.
3. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Fair Value Committee (the Committee) established by the Fund's investment adviser. 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 August 31, 2018 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. 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. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. 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. 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), certain independent Trustees have elected 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 of $202,926 are included in the accompanying Statement of Assets and Liabilities in other receivables and other payables and accrued expenses, respectively.
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. 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.
Distributions are declared and recorded on the ex-dividend date. Income 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, deferred trustees compensation and losses deferred due to wash sales.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows:
Gross unrealized appreciation | $253,676,583 |
Gross unrealized depreciation | (143,035,809) |
Net unrealized appreciation (depreciation) | $110,640,774 |
Tax cost | $1,480,663,309 |
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 $411,423,638 and $637,699,848, 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 .24% 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 annualized management fee rate was .54% 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% | $342,253 | $– |
Class M | .25% | .25% | 172,624 | – |
Class C | .75% | .25% | 978,268 | – |
$1,493,145 | $– |
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 M 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 M and Class C redemptions. The deferred sales charges are 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class M shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained by FDC | |
Class A | $51,470 |
Class M | 5,544 |
Class C(a) | 9,558 |
$66,572 |
(a) When 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(a) | |
Class A | $293,893 | .21 |
Class M | 81,784 | .24 |
Class C | 202,615 | .21 |
Consumer Staples | 880,207 | .18 |
Class I | 196,251 | .18 |
$1,654,750 |
(a) Annualized
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. For the period, the fees were equivalent to an annualized rate of .03%.
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 $14,144 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 Fidelity Management & Research Company (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 | $6,460,346 | 2.03% | $9,480 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Redemptions In-Kind. During the period, 3,404,232 shares of the Fund held by an affiliated entity were redeemed in-kind for investments and cash with a value of $278,330,010. The net realized gain of $70,956,466 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 the Notes to Financial Statements. 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 $2,849 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. The Fund or borrower may terminate the loan at any time, and 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 $152,236.
8. Bank Borrowings.
The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity requirements. The Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average loan balance during the period for which loans were outstanding amounted to $1,854,000. The weighted average interest rate was 2.41%. The interest expense amounted to $372 under the bank borrowing program. At period end, there were no bank borrowings outstanding.
9. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $197,013 for the period. Through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $11,065.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended August 31, 2018 | Year ended February 28, 2018 | |
From net investment income | ||
Class A | $721,963 | $5,661,958 |
Class M | 142,243 | 1,157,943 |
Class C | 226,481 | 2,342,161 |
Consumer Staples | 3,754,714 | 28,193,421 |
Class I | 657,008 | 5,821,982 |
Total | $5,502,409 | $43,177,465 |
From net realized gain | ||
Class A | $17,887,146 | $23,291,142 |
Class M | 4,388,806 | 5,598,245 |
Class C | 13,208,104 | 18,434,923 |
Consumer Staples | 75,521,271 | 96,942,698 |
Class I | 13,425,298 | 20,795,979 |
Total | $124,430,625 | $165,062,987 |
11. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
Shares | Shares | Dollars | Dollars | |
Six months ended August 31, 2018 | Year ended February 28, 2018 | Six months ended August 31, 2018 | Year ended February 28, 2018 | |
Class A | ||||
Shares sold | 244,595 | 878,413 | $19,582,905 | $84,134,789 |
Reinvestment of distributions | 225,478 | 304,910 | 18,225,432 | 28,169,668 |
Shares redeemed | (962,841) | (2,965,599) | (76,714,660) | (284,396,390) |
Net increase (decrease) | (492,768) | (1,782,276) | $(38,906,323) | $(172,091,933) |
Class M | ||||
Shares sold | 41,857 | 105,204 | $3,320,749 | $10,021,877 |
Reinvestment of distributions | 56,261 | 73,231 | 4,505,507 | 6,708,282 |
Shares redeemed | (153,471) | (233,572) | (12,265,431) | (22,022,226) |
Net increase (decrease) | (55,353) | (55,137) | $(4,439,175) | $(5,292,067) |
Class C | ||||
Shares sold | 110,877 | 324,616 | $8,544,252 | $30,510,004 |
Reinvestment of distributions | 162,819 | 218,231 | 12,810,467 | 19,684,994 |
Shares redeemed | (718,996) | (1,129,562) | (55,736,967) | (104,331,925) |
Net increase (decrease) | (445,300) | (586,715) | $(34,382,248) | $(54,136,927) |
Consumer Staples | ||||
Shares sold | 604,025 | 1,946,234 | $48,555,556 | $188,435,249 |
Reinvestment of distributions | 915,645 | 1,262,390 | 74,698,279 | 117,653,205 |
Shares redeemed | (5,711,197)(a) | (5,253,889) | (464,703,654)(a) | (504,239,846) |
Net increase (decrease) | (4,191,527) | (2,045,265) | $(341,449,819) | $(198,151,392) |
Class I | ||||
Shares sold | 483,882 | 2,545,385 | $38,338,970 | $246,802,163 |
Reinvestment of distributions | 158,651 | 261,308 | 12,915,778 | 24,362,082 |
Shares redeemed | (930,548) | (2,909,251) | (75,152,225) | (279,038,053) |
Net increase (decrease) | (288,015) | (102,558) | $(23,897,477) | $(7,873,808) |
(a) Amount includes in-kind redemptions (see the Redemptions In-Kind note for additional details).
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.
Gold Portfolio
Consolidated Investment Summary (Unaudited)
The information in the following tables is based on the consolidated investments of the Fund.Top Ten Holdings as of August 31, 2018
% of fund's net assets | |
Newmont Mining Corp. | 10.1 |
Randgold Resources Ltd. sponsored ADR | 6.7 |
B2Gold Corp. | 6.1 |
Silver Bullion | 5.9 |
Barrick Gold Corp. | 5.9 |
Agnico Eagle Mines Ltd. (Canada) | 5.5 |
Franco-Nevada Corp. | 5.1 |
Goldcorp, Inc. | 3.5 |
Newcrest Mining Ltd. | 2.7 |
OceanaGold Corp. | 2.6 |
54.1 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Gold | 88.8% | |
Commodities & Related Investments* | 8.3% | |
Silver | 1.1% | |
Precious Metals & Minerals | 0.4% | |
Diversified Metals & Mining | 0.3% | |
Copper | 0.2% | |
All Others** | 0.9% |
* Includes gold bullion and/or silver bullion.
** Includes Short-Term investments and Net Other Assets (Liabilities).
Geographic Diversification (% of fund's net assets)
As of August 31, 2018 | ||
Canada | 59.0% | |
United States of America* | 21.9% | |
Bailiwick of Jersey | 6.8% | |
Australia | 4.1% | |
South Africa | 4.0% | |
Cayman Islands | 1.8% | |
Peru | 1.6% | |
United Kingdom | 0.4% | |
China | 0.4% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Gold Portfolio
Consolidated Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 90.8% | |||
Shares | Value | ||
Australia - 4.1% | |||
Metals & Mining - 4.1% | |||
Gold - 4.1% | |||
Dacian Gold Ltd. (a) | 72,596 | $121,601 | |
Evolution Mining Ltd. | 1,126,243 | 2,145,589 | |
Gold Road Resources Ltd. (a) | 1,080,000 | 485,258 | |
Newcrest Mining Ltd. | 2,059,162 | 28,703,629 | |
Northern Star Resources Ltd. (b) | 443,118 | 2,217,160 | |
Perseus Mining Ltd.: | |||
(Australia) (a) | 1,717,134 | 444,401 | |
(Canada) (a) | 1,300,000 | 338,697 | |
Resolute Mng Ltd. | 3,836,949 | 3,489,354 | |
Saracen Mineral Holdings Ltd. (a) | 2,032,787 | 2,761,990 | |
Silver Lake Resources Ltd. (a) | 2,840,985 | 1,000,768 | |
St Barbara Ltd. | 682,257 | 1,932,470 | |
43,640,917 | |||
Bailiwick of Jersey - 6.8% | |||
Metals & Mining - 6.8% | |||
Diversified Metals & Mining - 0.1% | |||
Glencore Xstrata PLC | 65,000 | 264,226 | |
Gold - 6.7% | |||
Randgold Resources Ltd. sponsored ADR | 1,095,895 | 71,550,985 | |
TOTAL METALS & MINING | 71,815,211 | ||
Canada - 59.0% | |||
Metals & Mining - 59.0% | |||
Copper - 0.1% | |||
First Quantum Minerals Ltd. | 82,200 | 1,031,122 | |
Lundin Mining Corp. | 40,000 | 190,651 | |
1,221,773 | |||
Diversified Metals & Mining - 0.2% | |||
Ivanhoe Mines Ltd. (a) | 1,075,000 | 1,911,111 | |
Sabina Gold & Silver Corp. (a) | 5,500 | 5,774 | |
1,916,885 | |||
Gold - 57.3% | |||
Agnico Eagle Mines Ltd. (Canada) | 1,697,001 | 58,491,268 | |
Alacer Gold Corp. (a) | 2,554,063 | 4,618,842 | |
Alamos Gold, Inc. | 4,776,012 | 21,007,133 | |
Argonaut Gold, Inc. (a) | 5,781,462 | 8,063,035 | |
B2Gold Corp. (a) | 27,675,793 | 64,894,963 | |
Barrick Gold Corp. | 6,096,569 | 62,367,200 | |
Centerra Gold, Inc. (a) | 447,500 | 1,913,448 | |
Continental Gold, Inc. (a)(c) | 9,596,700 | 25,885,352 | |
Detour Gold Corp. (a) | 2,320,600 | 18,956,012 | |
Detour Gold Corp. (a)(d) | 785,900 | 6,419,689 | |
Eldorado Gold Corp. (a) | 7,260,935 | 7,010,558 | |
Franco-Nevada Corp. | 851,900 | 54,456,320 | |
Gold Standard Ventures Corp. (a) | 3,114,300 | 4,844,467 | |
Goldcorp, Inc. | 3,470,500 | 37,497,356 | |
Guyana Goldfields, Inc. (a) | 4,735,800 | 13,390,883 | |
Guyana Goldfields, Inc. (a)(d) | 155,000 | 438,276 | |
IAMGOLD Corp. (a) | 3,217,000 | 13,114,513 | |
Kinross Gold Corp. (a) | 5,031,291 | 15,036,042 | |
Kirkland Lake Gold Ltd. | 794,319 | 14,845,548 | |
New Gold, Inc. (a) | 5,236,375 | 5,136,061 | |
Novagold Resources, Inc. (a) | 1,879,500 | 6,913,103 | |
OceanaGold Corp. | 9,222,232 | 27,278,020 | |
Osisko Gold Royalties Ltd. | 1,180,293 | 9,360,944 | |
Premier Gold Mines Ltd. (a)(c) | 16,800,022 | 24,202,331 | |
Pretium Resources, Inc. (a) | 1,687,683 | 14,031,694 | |
Pretium Resources, Inc. (a)(d) | 225,000 | 1,870,690 | |
Sandstorm Gold Ltd. (a) | 1,880,475 | 7,291,344 | |
Seabridge Gold, Inc. (a) | 1,424,090 | 16,092,217 | |
SEMAFO, Inc. (a) | 7,340,000 | 18,392,184 | |
SSR Mining, Inc. (a) | 1,313,700 | 11,435,733 | |
Tahoe Resources, Inc. (a) | 2,639,438 | 9,081,285 | |
Teranga Gold Corp. (a) | 975,814 | 2,931,181 | |
Torex Gold Resources, Inc. (a) | 2,627,600 | 17,738,817 | |
Yamana Gold, Inc. | 1,765,620 | 4,897,735 | |
609,904,244 | |||
Precious Metals & Minerals - 0.3% | |||
Osisko Mining, Inc. (a) | 1,873,200 | 2,971,283 | |
Silver - 1.1% | |||
MAG Silver Corp. (a) | 608,901 | 4,679,906 | |
Pan American Silver Corp. | 6,000 | 93,540 | |
Wheaton Precious Metals Corp. | 403,000 | 6,905,042 | |
11,678,488 | |||
TOTAL METALS & MINING | 627,692,673 | ||
Cayman Islands - 1.8% | |||
Metals & Mining - 1.8% | |||
Gold - 1.8% | |||
Endeavour Mining Corp. (a) | 1,235,940 | 18,761,664 | |
China - 0.4% | |||
Metals & Mining - 0.4% | |||
Gold - 0.4% | |||
Zijin Mng Group Co. Ltd. (H Shares) | 12,097,000 | 4,515,905 | |
Peru - 1.6% | |||
Metals & Mining - 1.6% | |||
Gold - 1.6% | |||
Compania de Minas Buenaventura SA sponsored ADR | 1,389,397 | 17,492,508 | |
South Africa - 4.0% | |||
Metals & Mining - 4.0% | |||
Gold - 4.0% | |||
AngloGold Ashanti Ltd. sponsored ADR | 3,375,808 | 26,702,641 | |
Gold Fields Ltd. sponsored ADR | 3,209,426 | 7,991,471 | |
Harmony Gold Mining Co. Ltd. | 1,484,000 | 2,409,867 | |
Harmony Gold Mining Co. Ltd. sponsored ADR | 1,520,400 | 2,523,864 | |
Sibanye-Stillwater ADR | 1,181,660 | 2,788,718 | |
42,416,561 | |||
United Kingdom - 0.4% | |||
Metals & Mining - 0.4% | |||
Gold - 0.3% | |||
Acacia Mining PLC (a) | 1,436,536 | 2,048,637 | |
Pan African Resources PLC | 550,000 | 52,338 | |
Solgold PLC (a) | 4,152,758 | 1,154,834 | |
3,255,809 | |||
Precious Metals & Minerals - 0.1% | |||
Fresnillo PLC | 109,600 | 1,274,840 | |
TOTAL METALS & MINING | 4,530,649 | ||
United States of America - 12.7% | |||
Metals & Mining - 12.7% | |||
Copper - 0.1% | |||
Freeport-McMoRan, Inc. | 40,500 | 569,025 | |
Gold - 12.6% | |||
McEwen Mining, Inc. | 1,056,410 | 2,081,128 | |
Newmont Mining Corp. | 3,484,678 | 108,129,559 | |
Royal Gold, Inc. | 319,367 | 24,354,927 | |
134,565,614 | |||
TOTAL METALS & MINING | 135,134,639 | ||
TOTAL COMMON STOCKS | |||
(Cost $1,154,813,321) | 966,000,727 | ||
Troy Ounces | |||
Commodities - 8.3% | |||
Gold Bullion (a) | 21,010 | 25,201,915 | |
Silver Bullion (a) | 4,372,000 | 63,453,022 | |
TOTAL COMMODITIES | |||
(Cost $96,875,832) | 88,654,937 | ||
Shares | |||
Money Market Funds - 0.9% | |||
Fidelity Cash Central Fund, 1.97% (e) | |||
(Cost $9,960,090) | 9,958,099 | 9,960,090 | |
TOTAL INVESTMENT IN SECURITIES - 100.0% | |||
(Cost $1,261,649,243) | 1,064,615,754 | ||
NET OTHER ASSETS (LIABILITIES) - 0.0% | (466,050) | ||
NET ASSETS - 100% | $1,064,149,704 |
Legend
(a) Non-income producing
(b) Level 3 security
(c) Affiliated company
(d) 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 $8,728,655 or 0.8% 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 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 | $73,969 |
Fidelity Securities Lending Cash Central Fund | 807 |
Total | $74,776 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Consolidated Statement of Operations if applicable.
Consolidated Subsidiary
Affiliate | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Realized Gain (loss) | Change in Unrealized appreciation (depreciation) | Value, end of period |
Fidelity Select Cayman Gold Ltd. | $85,477,120 | $23,753,050 | $10,407,332 | $-- | $(977,973) | $(9,288,637) | $88,556,228 |
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 | Realized Gain (loss) | Change in Unrealized appreciation (depreciation) | Value, end of period |
Continental Gold, Inc. | $28,390,023 | $95,681 | $-- | $-- | $-- | $(2,600,352) | $25,885,352 |
Premier Gold Mines Ltd. | 40,731,717 | 320,755 | -- | -- | -- | (16,850,141) | 24,202,331 |
Total | $69,121,740 | $416,436 | $-- | $-- | $-- | $(19,450,493) | $50,087,683 |
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 Consolidated Financial Statements.
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
Common Stocks | $966,000,727 | $961,373,700 | $2,409,867 | $2,217,160 |
Commodities | 88,654,937 | 88,654,937 | -- | -- |
Money Market Funds | 9,960,090 | 9,960,090 | -- | -- |
Total Investments in Securities: | $1,064,615,754 | $1,059,988,727 | $2,409,867 | $2,217,160 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 Consolidated Financial Statements:
Transfers | Total |
Level 1 to Level 2 | $0 |
Level 2 to Level 1 | $61,930,951 |
See accompanying notes which are an integral part of the consolidated financial statements.
Gold Portfolio
Consolidated Financial Statements
Consolidated Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $1,078,209,251) | $915,913,044 | |
Fidelity Central Funds (cost $9,960,090) | 9,960,090 | |
Commodities (cost $96,875,832) | 88,654,937 | |
Other affiliated issuers (cost $76,604,070) | 50,087,683 | |
Total Investment in Securities (cost $1,261,649,243) | $1,064,615,754 | |
Cash | 5,901 | |
Foreign currency held at value (cost $176,481) | 175,269 | |
Receivable for investments sold | 735,873 | |
Receivable for fund shares sold | 906,650 | |
Dividends receivable | 898,936 | |
Distributions receivable from Fidelity Central Funds | 18,132 | |
Prepaid expenses | 13,021 | |
Other receivables | 111,979 | |
Total assets | 1,067,481,515 | |
Liabilities | ||
Payable for investments purchased | $1,064,371 | |
Payable for fund shares redeemed | 1,157,639 | |
Accrued management fee | 503,712 | |
Transfer agent fee payable | 226,277 | |
Distribution and service plan fees payable | 86,517 | |
Other affiliated payables | 43,068 | |
Other payables and accrued expenses | 250,227 | |
Total liabilities | 3,331,811 | |
Net Assets | $1,064,149,704 | |
Net Assets consist of: | ||
Paid in capital | $2,666,826,464 | |
Accumulated net investment loss | (6,983,314) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (1,398,654,208) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (197,039,238) | |
Net Assets | $1,064,149,704 | |
Calculation of Maximum Offering Price | ||
Class A: | ||
Net Asset Value and redemption price per share ($43,743,947 ÷ 2,779,997 shares) | $15.74 | |
Maximum offering price per share (100/94.25 of $15.74) | $16.70 | |
Class M: | ||
Net Asset Value and redemption price per share ($14,541,578 ÷ 943,834 shares) | $15.41 | |
Maximum offering price per share (100/96.50 of $15.41) | $15.97 | |
Class C: | ||
Net Asset Value and offering price per share ($79,684,558 ÷ 5,422,694 shares)(a) | $14.69 | |
Gold: | ||
Net Asset Value, offering price and redemption price per share ($877,994,883 ÷ 54,288,785 shares) | $16.17 | |
Class I: | ||
Net Asset Value, offering price and redemption price per share ($48,184,738 ÷ 2,979,420 shares) | $16.17 |
(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 consolidated financial statements.
Consolidated Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $6,123,661 | |
Income from Fidelity Central Funds | 74,776 | |
Income before foreign taxes withheld | 6,198,437 | |
Less foreign taxes withheld | (340,440) | |
Total income | 5,857,997 | |
Expenses | ||
Management fee | $3,480,329 | |
Transfer agent fees | 1,389,474 | |
Distribution and service plan fees | 586,186 | |
Accounting and security lending fees | 283,219 | |
Custodian fees and expenses | 137,926 | |
Independent trustees' fees and expenses | 3,129 | |
Registration fees | 57,528 | |
Audit | 31,834 | |
Legal | 6,916 | |
Miscellaneous | 49,736 | |
Total expenses before reductions | 6,026,277 | |
Expense reductions | (150,893) | |
Total expenses after reductions | 5,875,384 | |
Net investment income (loss) | (17,387) | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investments: | ||
Unaffiliated issuers | (23,875,738) | |
Fidelity Central Funds | 586 | |
Commodities | (449,575) | |
Foreign currency transactions | (19,433) | |
Total net realized gain (loss) | (24,344,160) | |
Change in net unrealized appreciation (depreciation) on: | ||
Investments: | ||
Investments | (119,224,877) | |
Fidelity Central Funds | (4) | |
Other affiliated issuers | (19,450,493) | |
Assets and liabilities in foreign currencies | (4,725) | |
Commodities | (9,587,874) | |
Total change in net unrealized appreciation (depreciation) | (148,267,973) | |
Net gain (loss) | (172,612,133) | |
Net increase (decrease) in net assets resulting from operations | $(172,629,520) |
See accompanying notes which are an integral part of the consolidated financial statements.
Consolidated Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $(17,387) | $(5,136,354) |
Net realized gain (loss) | (24,344,160) | (19,797,959) |
Change in net unrealized appreciation (depreciation) | (148,267,973) | (128,650,104) |
Net increase (decrease) in net assets resulting from operations | (172,629,520) | (153,584,417) |
Distributions to shareholders from net realized gain | – | (3,130,282) |
Share transactions - net increase (decrease) | (10,092,258) | (136,518,156) |
Total increase (decrease) in net assets | (182,721,778) | (293,232,855) |
Net Assets | ||
Beginning of period | 1,246,871,482 | 1,540,104,337 |
End of period | $1,064,149,704 | $1,246,871,482 |
Other Information | ||
Accumulated net investment loss end of period | $(6,983,314) | $(6,965,927) |
See accompanying notes which are an integral part of the consolidated financial statements.
Consolidated Financial Highlights
Gold Portfolio Class A
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $18.30 | $20.54 | $17.70 | $18.11 | $22.01 | $30.25 |
Income from Investment Operations | ||||||
Net investment income (loss)B | (.02) | (.12) | (.16) | (.06) | (.10) | –C |
Net realized and unrealized gain (loss) | (2.54) | (2.09) | 3.59 | (.35) | (3.80) | (8.25) |
Total from investment operations | (2.56) | (2.21) | 3.43 | (.41) | (3.90) | (8.25) |
Distributions from net realized gain | – | (.03) | (.60) | – | – | – |
Total distributions | – | (.03) | (.60) | – | – | – |
Redemption fees added to paid in capitalB | – | – | .01 | –C | –C | .01 |
Net asset value, end of period | $15.74 | $18.30 | $20.54 | $17.70 | $18.11 | $22.01 |
Total ReturnD,E,F | (13.99)% | (10.77)% | 19.97% | (2.26)% | (17.72)% | (27.24)% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | 1.21%I | 1.18% | 1.19% | 1.23% | 1.23% | 1.21% |
Expenses net of fee waivers, if any | 1.19%I | 1.16% | 1.16% | 1.20% | 1.19% | 1.19% |
Expenses net of all reductions | 1.19%I | 1.16% | 1.16% | 1.20% | 1.19% | 1.18% |
Net investment income (loss) | (.24)%I | (.58)% | (.71)% | (.44)% | (.51)% | - %J |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $43,744 | $61,703 | $83,589 | $53,509 | $46,898 | $60,270 |
Portfolio turnover rateK | 16%I | 13% | 28% | 20% | 20% | 56% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Annualized
J Amount represents less than .005%.
K Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the consolidated financial statements.
Gold Portfolio Class M
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $17.94 | $20.19 | $17.37 | $17.83 | $21.73 | $29.95 |
Income from Investment Operations | ||||||
Net investment income (loss)B | (.05) | (.17) | (.22) | (.11) | (.15) | (.06) |
Net realized and unrealized gain (loss) | (2.48) | (2.05) | 3.54 | (.35) | (3.75) | (8.17) |
Total from investment operations | (2.53) | (2.22) | 3.32 | (.46) | (3.90) | (8.23) |
Distributions from net realized gain | – | (.03) | (.51) | – | – | – |
Total distributions | – | (.03) | (.51) | – | – | – |
Redemption fees added to paid in capitalB | – | – | .01 | –C | –C | .01 |
Net asset value, end of period | $15.41 | $17.94 | $20.19 | $17.37 | $17.83 | $21.73 |
Total ReturnD,E,F | (14.10)% | (11.04)% | 19.62% | (2.58)% | (17.95)% | (27.45)% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | 1.50%I | 1.48% | 1.49% | 1.52% | 1.50% | 1.49% |
Expenses net of fee waivers, if any | 1.48%I | 1.47% | 1.46% | 1.48% | 1.46% | 1.47% |
Expenses net of all reductions | 1.47%I | 1.47% | 1.46% | 1.48% | 1.46% | 1.46% |
Net investment income (loss) | (.53)%I | (.88)% | (1.01)% | (.72)% | (.79)% | (.28)% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $14,542 | $19,355 | $25,170 | $17,720 | $16,200 | $18,402 |
Portfolio turnover rateJ | 16%I | 13% | 28% | 20% | 20% | 56% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the consolidated financial statements.
Gold Portfolio Class C
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $17.15 | $19.36 | $16.68 | $17.20 | $21.06 | $29.15 |
Income from Investment Operations | ||||||
Net investment income (loss)B | (.08) | (.24) | (.29) | (.16) | (.23) | (.16) |
Net realized and unrealized gain (loss) | (2.38) | (1.95) | 3.42 | (.36) | (3.63) | (7.94) |
Total from investment operations | (2.46) | (2.19) | 3.13 | (.52) | (3.86) | (8.10) |
Distributions from net realized gain | – | (.02) | (.45) | – | – | – |
Total distributions | – | (.02) | (.45) | – | – | – |
Redemption fees added to paid in capitalB | – | – | –C | –C | –C | .01 |
Net asset value, end of period | $14.69 | $17.15 | $19.36 | $16.68 | $17.20 | $21.06 |
Total ReturnD,E,F | (14.34)% | (11.35)% | 19.19% | (3.02)% | (18.33)% | (27.75)% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | 1.86%I | 1.85% | 1.88% | 1.97% | 1.96% | 1.96% |
Expenses net of fee waivers, if any | 1.84%I | 1.83% | 1.85% | 1.93% | 1.92% | 1.94% |
Expenses net of all reductions | 1.84%I | 1.83% | 1.84% | 1.93% | 1.92% | 1.93% |
Net investment income (loss) | (.89)%I | (1.25)% | (1.40)% | (1.17)% | (1.25)% | (.76)% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $79,685 | $92,724 | $101,215 | $52,732 | $39,429 | $33,811 |
Portfolio turnover rateJ | 16%I | 13% | 28% | 20% | 20% | 56% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the consolidated financial statements.
Gold Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $18.78 | $21.02 | $18.12 | $18.50 | $22.41 | $30.72 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .01 | (.05) | (.09) | (.03) | (.04) | .06 |
Net realized and unrealized gain (loss) | (2.62) | (2.14) | 3.66 | (.35) | (3.87) | (8.38) |
Total from investment operations | (2.61) | (2.19) | 3.57 | (.38) | (3.91) | (8.32) |
Distributions from net realized gain | – | (.05) | (.68) | – | – | – |
Total distributions | – | (.05) | (.68) | – | – | – |
Redemption fees added to paid in capitalB | – | – | .01 | –C | –C | .01 |
Net asset value, end of period | $16.17 | $18.78 | $21.02 | $18.12 | $18.50 | $22.41 |
Total ReturnD,E | (13.90)% | (10.47)% | 20.38% | (2.05)% | (17.45)% | (27.05)% |
Ratios to Average Net AssetsF,G | ||||||
Expenses before reductions | .87%H | .86% | .87% | .97% | .94% | .94% |
Expenses net of fee waivers, if any | .85%H | .85% | .84% | .93% | .90% | .92% |
Expenses net of all reductions | .85%H | .84% | .84% | .93% | .90% | .91% |
Net investment income (loss) | .10%H | (.26)% | (.39)% | (.17)% | (.22)% | .27% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $877,995 | $1,011,412 | $1,271,458 | $1,076,206 | $992,944 | $1,275,913 |
Portfolio turnover rateI | 16%H | 13% | 28% | 20% | 20% | 56% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the consolidated financial statements.
Gold Portfolio Class I
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $18.78 | $21.02 | $18.13 | $18.50 | $22.41 | $30.69 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .01 | (.05) | (.09) | (.02) | (.04) | .07 |
Net realized and unrealized gain (loss) | (2.62) | (2.14) | 3.67 | (.35) | (3.87) | (8.36) |
Total from investment operations | (2.61) | (2.19) | 3.58 | (.37) | (3.91) | (8.29) |
Distributions from net realized gain | – | (.05) | (.70) | – | – | – |
Total distributions | – | (.05) | (.70) | – | – | – |
Redemption fees added to paid in capitalB | – | – | .01 | –C | –C | .01 |
Net asset value, end of period | $16.17 | $18.78 | $21.02 | $18.13 | $18.50 | $22.41 |
Total ReturnD,E | (13.90)% | (10.47)% | 20.41% | (2.00)% | (17.45)% | (26.98)% |
Ratios to Average Net AssetsF,G | ||||||
Expenses before reductions | .85%H | .85% | .87% | .92% | .90% | .87% |
Expenses net of fee waivers, if any | .83%H | .83% | .84% | .88% | .86% | .85% |
Expenses net of all reductions | .83%H | .83% | .84% | .88% | .86% | .84% |
Net investment income (loss) | .11%H | (.24)% | (.39)% | (.12)% | (.18)% | .34% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $48,185 | $61,677 | $58,673 | $52,607 | $23,667 | $107,830 |
Portfolio turnover rateI | 16%H | 13% | 28% | 20% | 20% | 56% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Annualized
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the consolidated financial statements.
Notes to Consolidated Financial Statements (Unaudited)
For the period ended August 31, 2018
1. Organization.
Gold Portfolio (the Fund) is a non-diversified fund of Fidelity Select Portfolios (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 invests primarily in securities of companies whose principal business activities fall within specific industries. The Fund offers Class A, Class M, Class C, Gold and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
2. Consolidated Subsidiary.
The Fund invests in certain commodity-related investments through Fidelity Select Gold Cayman Ltd, a wholly owned subsidiary (the "Subsidiary"). As of period end, the Fund held an investment of $88,556,228 in the Subsidiary, representing 8.3% of the Fund's net assets.
The financial statements have been consolidated and include accounts of the Fund and the Subsidiary. Accordingly, all inter-company transactions and balances have been eliminated.
3. 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 Consolidated 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 .005%.
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 are available on the SEC website or upon request.
4. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. The consolidated 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 consolidated financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the consolidated financial statements were issued have been evaluated in the preparation of the consolidated 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 Fair Value Committee (the Committee) established by the Fund's investment adviser. 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 commodities are valued at their last traded price at 4:00 p.m. Eastern time each business day and are categorized as Level 1 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 August 31, 2018, information on transfers between Levels 1 and 2 is included at the end of the Fund's Consolidated 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 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. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. 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), certain independent Trustees have elected 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 of $99,231 are included in the accompanying Statement of Assets and Liabilities in other receivables and other payables and accrued expenses, respectively.
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. 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 Subsidiary is classified as a controlled foreign corporation under Subchapter N of the Internal Revenue Code. Therefore, the Fund is required to increase its taxable income by its share of the Subsidiary's income. Net investment losses of the Subsidiary cannot be deducted by the Fund in the current period nor carried forward to offset taxable income in future periods.
Distributions are declared and recorded on the ex-dividend date. Income 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 consolidated 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), controlled foreign corporations, deferred trustees compensation, net operating losses, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes on an unconsolidated basis were as follows:
Gross unrealized appreciation | $185,860,702 |
Gross unrealized depreciation | (487,478,848) |
Net unrealized appreciation (depreciation) | $(301,618,146) |
Tax cost | $1,366,135,191 |
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 prior fiscal period end and is subject to adjustment.
No expiration | |
Short-term | $(141,667,626) |
Long-term | (1,122,388,025) |
Total capital loss carryforward | $(1,264,055,651) |
The Fund elected to defer to its next fiscal year $6,867,607 of ordinary losses recognized during the period January 1, 2018 to February 28, 2018.
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 Consolidated Schedule of Investments.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $100,086,355 and $110,878,557, 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 .24% 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.
FMR, either through itself or through an affiliate provides investment management related services to the Subsidiary for which the Subsidiary pays a monthly management fee at the annual rate of .30% of its net assets. Under the management contract with the subsidiary, FMR pays all other expenses of the Subsidiary, except custodian fees.
For the reporting period, the total consolidated annual management fee rate which includes the management fee of the Fund and the Subsidiary was .56% of the Fund's average net assets.
During the period, the investment adviser waived a portion of the Fund's management fee representing the amount of the management fee paid by the Subsidiary to FMR as described in the Expense Reductions note.
Effective October 1, 2018, the management fee paid by the Subsidiary was eliminated.
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% | $67,908 | $– |
Class M | .25% | .25% | 45,146 | – |
Class C | .75% | .25% | 473,132 | 89,982 |
$586,186 | $89,982 |
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 M 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 M and Class C redemptions. The deferred sales charges are 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class M shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained by FDC | |
Class A | $6,827 |
Class M | 1,922 |
Class C(a) | 2,642 |
$11,391 |
(a) When 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(a) | |
Class A | $83,315 | .31 |
Class M | 30,846 | .34 |
Class C | 96,632 | .20 |
Gold | 1,118,334 | .22 |
Class I | 60,347 | .20 |
$1,389,474 |
(a) Annualized
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. For the period, the fees were equivalent to an annualized rate of .05%.
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 Consolidated Statement of Operations. The commissions paid to these affiliated firms were $855 for the period.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
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 $1,822 and is reflected in Miscellaneous expenses on the Consolidated 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. The Fund or borrower may terminate the loan at any time, and 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 Consolidated Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $807.
9. Expense Reductions.
The investment adviser has contractually agreed to waive the Fund's management fee in an amount equal to the management fee paid by the Subsidiary to FMR. During the period, this waiver reduced the Fund's management fee by $130,972.
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 $13,615 for the period. Through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $299.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $6,007.
Effective October 1, 2018, the waiver of the management fee paid by the Subsidiary was eliminated.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended August 31, 2018 | Year ended February 28, 2018 | |
From net realized gain | ||
Class A | $– | $127,654 |
Class M | – | 32,220 |
Class C | – | 80,827 |
Gold | – | 2,740,284 |
Class I | – | 149,297 |
Total | $– | $3,130,282 |
11. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
Shares | Shares | Dollars | Dollars | |
Six months ended August 31, 2018 | Year ended February 28, 2018 | Six months ended August 31, 2018 | Year ended February 28, 2018 | |
Class A | ||||
Shares sold | 234,547 | 960,171 | $4,291,842 | $19,302,127 |
Reinvestment of distributions | – | 5,732 | – | 125,534 |
Shares redeemed | (826,281) | (1,663,786) | (15,210,736) | (33,274,700) |
Net increase (decrease) | (591,734) | (697,883) | $(10,918,894) | $(13,847,039) |
Class M | ||||
Shares sold | 63,649 | 233,072 | $1,128,531 | $4,622,741 |
Reinvestment of distributions | – | 1,488 | – | 32,029 |
Shares redeemed | (198,434) | (402,307) | (3,578,040) | (7,900,562) |
Net increase (decrease) | (134,785) | (167,747) | $(2,449,509) | $(3,245,792) |
Class C | ||||
Shares sold | 539,636 | 1,214,001 | $9,493,630 | $22,977,515 |
Reinvestment of distributions | – | 3,724 | – | 76,868 |
Shares redeemed | (524,917) | (1,038,456) | (8,822,934) | (19,487,828) |
Net increase (decrease) | 14,719 | 179,269 | $670,696 | $3,566,555 |
Gold | ||||
Shares sold | 8,583,356 | 17,998,314 | $157,950,404 | $372,447,330 |
Reinvestment of distributions | – | 117,013 | – | 2,622,272 |
Shares redeemed | (8,155,858) | (24,743,063) | (149,880,656) | (508,056,164) |
Net increase (decrease) | 427,498 | (6,627,736) | $8,069,748 | $(132,986,562) |
Class I | ||||
Shares sold | 632,017 | 1,883,552 | $11,801,168 | $38,579,606 |
Reinvestment of distributions | – | 6,152 | – | 137,796 |
Shares redeemed | (937,523) | (1,396,712) | (17,265,467) | (28,722,720) |
Net increase (decrease) | (305,506) | 492,992 | $(5,464,299) | $9,994,682 |
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.
Materials Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
DowDuPont, Inc. | 25.0 |
LyondellBasell Industries NV Class A | 7.2 |
The Chemours Co. LLC | 6.3 |
Linde AG | 4.9 |
Sherwin-Williams Co. | 4.4 |
Air Products & Chemicals, Inc. | 3.8 |
Westlake Chemical Corp. | 3.8 |
Platform Specialty Products Corp. | 3.7 |
Olin Corp. | 3.3 |
Martin Marietta Materials, Inc. | 3.1 |
65.5 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Chemicals | 78.8% | |
Metals & Mining | 9.9% | |
Containers & Packaging | 5.4% | |
Construction Materials | 3.9% | |
Trading Companies & Distributors | 1.5% | |
All Others* | 0.5% |
* Includes short-term investments and net other assets (liabilities).
Materials Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.7% | |||
Shares | Value | ||
Building Products - 0.1% | |||
Building Products - 0.1% | |||
GCP Applied Technologies, Inc. (a) | 65,800 | $1,658,160 | |
Chemicals - 76.8% | |||
Commodity Chemicals - 17.5% | |||
Cabot Corp. | 135,256 | 8,780,820 | |
Ciner Resources LP | 136,500 | 3,770,130 | |
LyondellBasell Industries NV Class A | 964,815 | 108,811,836 | |
Olin Corp. | 1,654,090 | 50,830,186 | |
Orion Engineered Carbons SA | 399,000 | 14,364,000 | |
Tronox Ltd. Class A | 1,354,003 | 21,921,309 | |
Westlake Chemical Corp. | 604,367 | 57,154,987 | |
265,633,268 | |||
Diversified Chemicals - 34.3% | |||
Ashland Global Holdings, Inc. | 109,500 | 9,219,900 | |
DowDuPont, Inc. | 5,416,883 | 379,886,003 | |
Eastman Chemical Co. | 251,748 | 24,427,108 | |
Huntsman Corp. | 131,400 | 4,006,386 | |
Ingevity Corp. (a) | 83,300 | 8,414,133 | |
The Chemours Co. LLC | 2,198,631 | 95,860,312 | |
521,813,842 | |||
Fertilizers & Agricultural Chemicals - 3.3% | |||
FMC Corp. | 347,000 | 29,651,150 | |
The Mosaic Co. | 663,400 | 20,744,518 | |
50,395,668 | |||
Industrial Gases - 8.7% | |||
Air Products & Chemicals, Inc. | 349,800 | 58,168,242 | |
Linde AG | 323,611 | 73,698,894 | |
131,867,136 | |||
Specialty Chemicals - 13.0% | |||
Axalta Coating Systems Ltd. (a) | 1,032,700 | 31,497,350 | |
Celanese Corp. Class A | 275,300 | 32,163,299 | |
Covestro AG (b) | 62,700 | 5,340,525 | |
Platform Specialty Products Corp. (a) | 4,227,515 | 56,056,849 | |
Sherwin-Williams Co. | 148,500 | 67,653,630 | |
Venator Materials PLC | 383,000 | 4,626,640 | |
197,338,293 | |||
TOTAL CHEMICALS | 1,167,048,207 | ||
Construction Materials - 3.9% | |||
Construction Materials - 3.9% | |||
CRH PLC sponsored ADR | 227,500 | 7,534,800 | |
Martin Marietta Materials, Inc. | 240,300 | 47,752,416 | |
Summit Materials, Inc. | 190,628 | 4,054,658 | |
59,341,874 | |||
Containers & Packaging - 5.4% | |||
Metal & Glass Containers - 1.2% | |||
Aptargroup, Inc. | 110,500 | 11,570,455 | |
Berry Global Group, Inc. (a) | 133,700 | 6,381,501 | |
17,951,956 | |||
Paper Packaging - 4.2% | |||
Avery Dennison Corp. | 87,900 | 9,245,322 | |
Graphic Packaging Holding Co. | 544,195 | 7,738,453 | |
Packaging Corp. of America | 201,600 | 22,159,872 | |
WestRock Co. | 445,618 | 24,544,639 | |
63,688,286 | |||
TOTAL CONTAINERS & PACKAGING | 81,640,242 | ||
Metals & Mining - 9.9% | |||
Copper - 2.2% | |||
Freeport-McMoRan, Inc. | 2,419,600 | 33,995,380 | |
Diversified Metals & Mining - 1.3% | |||
Alcoa Corp. (a) | 327,600 | 14,633,892 | |
Elkem ASA (a) | 997,398 | 5,235,473 | |
19,869,365 | |||
Gold - 2.5% | |||
Newmont Mining Corp. | 933,600 | 28,969,608 | |
Royal Gold, Inc. | 113,700 | 8,670,762 | |
37,640,370 | |||
Steel - 3.9% | |||
AK Steel Holding Corp. (a)(c) | 565,100 | 2,509,044 | |
Commercial Metals Co. | 879,500 | 18,997,200 | |
Nucor Corp. | 72,800 | 4,550,000 | |
Ryerson Holding Corp. (a) | 508,603 | 5,289,471 | |
Steel Dynamics, Inc. | 596,300 | 27,268,799 | |
58,614,514 | |||
TOTAL METALS & MINING | 150,119,629 | ||
Oil, Gas & Consumable Fuels - 0.1% | |||
Oil & Gas Refining & Marketing - 0.1% | |||
S-Oil Corp. | 15,670 | 1,678,888 | |
Trading Companies & Distributors - 1.5% | |||
Trading Companies & Distributors - 1.5% | |||
Univar, Inc. (a) | 828,733 | 23,055,352 | |
TOTAL COMMON STOCKS | |||
(Cost $1,243,333,078) | 1,484,542,352 | ||
Nonconvertible Preferred Stocks - 2.0% | |||
Chemicals - 2.0% | |||
Commodity Chemicals - 2.0% | |||
Braskem SA (PN-A) | |||
(Cost $32,364,812) | 2,121,800 | 30,844,266 | |
Money Market Funds - 0.2% | |||
Fidelity Cash Central Fund, 1.97% (d) | 1,418,336 | 1,418,620 | |
Fidelity Securities Lending Cash Central Fund 1.98% (d)(e) | 1,906,909 | 1,907,100 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $3,325,720) | 3,325,720 | ||
TOTAL INVESTMENT IN SECURITIES - 99.9% | |||
(Cost $1,279,023,610) | 1,518,712,338 | ||
NET OTHER ASSETS (LIABILITIES) - 0.1% | 1,477,357 | ||
NET ASSETS - 100% | $1,520,189,695 |
Legend
(a) Non-income producing
(b) 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 $5,340,525 or 0.4% of net assets.
(c) Security or a portion of the security is on loan at period end.
(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 are available on the SEC's website or upon request.
(e) 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 | $58,334 |
Fidelity Securities Lending Cash Central Fund | 2,977 |
Total | $61,311 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $96,772,567 |
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 | 79.9% |
Netherlands | 7.2% |
Germany | 5.3% |
Bermuda | 2.1% |
Brazil | 2.0% |
Australia | 1.4% |
Others (Individually Less Than 1%) | 2.1% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Materials Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $1,881,672) — See accompanying schedule: Unaffiliated issuers (cost $1,275,697,890) | $1,515,386,618 | |
Fidelity Central Funds (cost $3,325,720) | 3,325,720 | |
Total Investment in Securities (cost $1,279,023,610) | $1,518,712,338 | |
Foreign currency held at value (cost $19,607) | 19,733 | |
Receivable for investments sold | 2,400,338 | |
Receivable for fund shares sold | 339,808 | |
Dividends receivable | 3,763,407 | |
Distributions receivable from Fidelity Central Funds | 2,458 | |
Prepaid expenses | 19,048 | |
Other receivables | 201,583 | |
Total assets | 1,525,458,713 | |
Liabilities | ||
Payable for fund shares redeemed | $2,089,531 | |
Accrued management fee | 687,456 | |
Distribution and service plan fees payable | 113,165 | |
Other affiliated payables | 299,054 | |
Other payables and accrued expenses | 172,712 | |
Collateral on securities loaned | 1,907,100 | |
Total liabilities | 5,269,018 | |
Net Assets | $1,520,189,695 | |
Net Assets consist of: | ||
Paid in capital | $1,165,152,424 | |
Undistributed net investment income | 10,870,867 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 104,483,707 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 239,682,697 | |
Net Assets | $1,520,189,695 | |
Calculation of Maximum Offering Price | ||
Class A: | ||
Net Asset Value and redemption price per share ($171,874,501 ÷ 2,068,426 shares) | $83.09 | |
Maximum offering price per share (100/94.25 of $83.09) | $88.16 | |
Class M: | ||
Net Asset Value and redemption price per share ($34,079,678 ÷ 413,976 shares) | $82.32 | |
Maximum offering price per share (100/96.50 of $82.32) | $85.31 | |
Class C: | ||
Net Asset Value and offering price per share ($74,893,821 ÷ 937,011 shares)(a) | $79.93 | |
Materials: | ||
Net Asset Value, offering price and redemption price per share ($805,134,822 ÷ 9,634,766 shares) | $83.57 | |
Class I: | ||
Net Asset Value, offering price and redemption price per share ($434,206,873 ÷ 5,206,643 shares) | $83.39 |
(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
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $18,127,939 | |
Income from Fidelity Central Funds | 61,311 | |
Total income | 18,189,250 | |
Expenses | ||
Management fee | $4,477,522 | |
Transfer agent fees | 1,628,871 | |
Distribution and service plan fees | 725,236 | |
Accounting and security lending fees | 256,893 | |
Custodian fees and expenses | 33,218 | |
Independent trustees' fees and expenses | 4,260 | |
Registration fees | 56,518 | |
Audit | 22,940 | |
Legal | 8,836 | |
Interest | 5,464 | |
Miscellaneous | 74,295 | |
Total expenses before reductions | 7,294,053 | |
Expense reductions | (147,537) | |
Total expenses after reductions | 7,146,516 | |
Net investment income (loss) | 11,042,734 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 62,890,244 | |
Redemptions in-kind with affiliated entities | 42,386,899 | |
Fidelity Central Funds | 407 | |
Foreign currency transactions | (14,432) | |
Total net realized gain (loss) | 105,263,118 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (139,964,160) | |
Assets and liabilities in foreign currencies | (3,743) | |
Total change in net unrealized appreciation (depreciation) | (139,967,903) | |
Net gain (loss) | (34,704,785) | |
Net increase (decrease) in net assets resulting from operations | $(23,662,051) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $11,042,734 | $13,943,613 |
Net realized gain (loss) | 105,263,118 | 168,615,627 |
Change in net unrealized appreciation (depreciation) | (139,967,903) | 43,205,875 |
Net increase (decrease) in net assets resulting from operations | (23,662,051) | 225,765,115 |
Distributions to shareholders from net investment income | (2,217,383) | (13,925,069) |
Distributions to shareholders from net realized gain | (85,805,447) | (80,094,510) |
Total distributions | (88,022,830) | (94,019,579) |
Share transactions - net increase (decrease) | (250,723,200) | 182,977,431 |
Total increase (decrease) in net assets | (362,408,081) | 314,722,967 |
Net Assets | ||
Beginning of period | 1,882,597,776 | 1,567,874,809 |
End of period | $1,520,189,695 | $1,882,597,776 |
Other Information | ||
Undistributed net investment income end of period | $10,870,867 | $2,045,516 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Materials Portfolio Class A
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $88.50 | $81.27 | $62.94 | $80.43 | $86.46 | $73.44 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .48 | .55 | .70 | .79 | .51 | .36 |
Net realized and unrealized gain (loss) | (1.65) | 11.18 | 18.26 | (16.80) | 1.05 | 14.56 |
Total from investment operations | (1.17) | 11.73 | 18.96 | (16.01) | 1.56 | 14.92 |
Distributions from net investment income | (.08) | (.50) | (.63) | (.58) | (.43) | (.30) |
Distributions from net realized gain | (4.16) | (4.00) | – | (.91) | (7.17) | (1.60) |
Total distributions | (4.24) | (4.50) | (.63) | (1.48)C | (7.59)D | (1.90) |
Redemption fees added to paid in capitalB | – | – | –E | –E | –E | –E |
Net asset value, end of period | $83.09 | $88.50 | $81.27 | $62.94 | $80.43 | $86.46 |
Total ReturnF,G,H | (1.22)% | 14.65% | 30.18% | (20.01)% | 2.20% | 20.46% |
Ratios to Average Net AssetsI,J | ||||||
Expenses before reductions | 1.06%K | 1.07% | 1.08% | 1.06% | 1.06% | 1.10% |
Expenses net of fee waivers, if any | 1.06%K | 1.07% | 1.08% | 1.06% | 1.06% | 1.10% |
Expenses net of all reductions | 1.05%K | 1.06% | 1.07% | 1.06% | 1.06% | 1.09% |
Net investment income (loss) | 1.15%K | .64% | .96% | 1.09% | .61% | .45% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $171,875 | $201,933 | $229,086 | $202,747 | $319,740 | $336,777 |
Portfolio turnover rateL | 81%K,M | 67% | 49%M | 64% | 76%M | 53% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $1.48 per share is comprised of distributions from net investment income of $.575 and distributions from net realized gain of $.906 per share.
D Total distributions of $7.59 per share is comprised of distributions from net investment income of $.425 and distributions from net realized gain of $7.167 per share.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Total returns do not include the effect of the sales charges.
I Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Annualized
L Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
M Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Materials Portfolio Class M
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $87.79 | $80.66 | $62.52 | $79.95 | $85.99 | $73.05 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .36 | .30 | .47 | .56 | .25 | .12 |
Net realized and unrealized gain (loss) | (1.63) | 11.08 | 18.12 | (16.69) | 1.06 | 14.48 |
Total from investment operations | (1.27) | 11.38 | 18.59 | (16.13) | 1.31 | 14.60 |
Distributions from net investment income | (.04) | (.25) | (.45) | (.40) | (.18) | (.06) |
Distributions from net realized gain | (4.16) | (4.00) | – | (.91) | (7.17) | (1.60) |
Total distributions | (4.20) | (4.25) | (.45) | (1.30)C | (7.35) | (1.66) |
Redemption fees added to paid in capitalB | – | – | –D | –D | –D | –D |
Net asset value, end of period | $82.32 | $87.79 | $80.66 | $62.52 | $79.95 | $85.99 |
Total ReturnE,F,G | (1.35)% | 14.30% | 29.78% | (20.27)% | 1.90% | 20.10% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | 1.35%J | 1.36% | 1.39% | 1.38% | 1.37% | 1.40% |
Expenses net of fee waivers, if any | 1.35%J | 1.36% | 1.39% | 1.37% | 1.37% | 1.40% |
Expenses net of all reductions | 1.33%J | 1.35% | 1.38% | 1.37% | 1.37% | 1.39% |
Net investment income (loss) | .86%J | .35% | .65% | .77% | .31% | .15% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $34,080 | $40,107 | $40,935 | $30,118 | $45,252 | $45,223 |
Portfolio turnover rateK | 81%J,L | 67% | 49%L | 64% | 76%L | 53% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $1.30 per share is comprised of distributions from net investment income of $.395 and distributions from net realized gain of $.906 per share.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
G Total returns do not include the effect of the sales charges.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Annualized
K Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
L Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Materials Portfolio Class C
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $85.52 | $78.72 | $61.09 | $78.12 | $84.38 | $71.96 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .16 | (.09) | .15 | .24 | (.12) | (.23) |
Net realized and unrealized gain (loss) | (1.59) | 10.80 | 17.68 | (16.28) | 1.03 | 14.23 |
Total from investment operations | (1.43) | 10.71 | 17.83 | (16.04) | .91 | 14.00 |
Distributions from net investment income | – | (.02) | (.20) | (.08) | – | – |
Distributions from net realized gain | (4.16) | (3.89) | – | (.91) | (7.17) | (1.58) |
Total distributions | (4.16) | (3.91) | (.20) | (.99) | (7.17) | (1.58) |
Redemption fees added to paid in capitalB | – | – | –C | –C | –C | –C |
Net asset value, end of period | $79.93 | $85.52 | $78.72 | $61.09 | $78.12 | $84.38 |
Total ReturnD,E,F | (1.58)% | 13.78% | 29.21% | (20.61)% | 1.43% | 19.56% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | 1.82%I | 1.82% | 1.83% | 1.81% | 1.82% | 1.85% |
Expenses net of fee waivers, if any | 1.82%I | 1.82% | 1.82% | 1.81% | 1.82% | 1.85% |
Expenses net of all reductions | 1.80%I | 1.82% | 1.82% | 1.81% | 1.82% | 1.84% |
Net investment income (loss) | .40%I | (.11)% | .21% | .34% | (.14)% | (.30)% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $74,894 | $85,792 | $80,225 | $66,896 | $107,697 | $106,879 |
Portfolio turnover rateJ | 81%I,K | 67% | 49%K | 64% | 76%K | 53% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
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 Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Materials Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $88.90 | $81.64 | $63.20 | $80.77 | $86.81 | $73.68 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .60 | .79 | .90 | .98 | .73 | .58 |
Net realized and unrealized gain (loss) | (1.65) | 11.24 | 18.34 | (16.89) | 1.05 | 14.63 |
Total from investment operations | (1.05) | 12.03 | 19.24 | (15.91) | 1.78 | 15.21 |
Distributions from net investment income | (.12) | (.77) | (.80) | (.76) | (.65) | (.48) |
Distributions from net realized gain | (4.16) | (4.00) | – | (.91) | (7.17) | (1.60) |
Total distributions | (4.28) | (4.77) | (.80) | (1.66)C | (7.82) | (2.08) |
Redemption fees added to paid in capitalB | – | – | –D | –D | –D | –D |
Net asset value, end of period | $83.57 | $88.90 | $81.64 | $63.20 | $80.77 | $86.81 |
Total ReturnE,F | (1.07)% | 14.96% | 30.52% | (19.81)% | 2.46% | 20.80% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .79%I | .79% | .81% | .81% | .80% | .82% |
Expenses net of fee waivers, if any | .79%I | .79% | .81% | .81% | .80% | .82% |
Expenses net of all reductions | .77%I | .79% | .81% | .80% | .80% | .82% |
Net investment income (loss) | 1.43%I | .91% | 1.22% | 1.34% | .87% | .73% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $805,135 | $1,043,704 | $882,504 | $711,985 | $1,107,689 | $1,231,942 |
Portfolio turnover rateJ | 81%I,K | 67% | 49%K | 64% | 76%K | 53% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $1.66 per share is comprised of distributions from net investment income of $.756 and distributions from net realized gain of $.906 per share.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Materials Portfolio Class I
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $88.73 | $81.49 | $63.07 | $80.60 | $86.66 | $73.57 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .60 | .80 | .91 | 1.00 | .74 | .59 |
Net realized and unrealized gain (loss) | (1.66) | 11.22 | 18.31 | (16.86) | 1.05 | 14.60 |
Total from investment operations | (1.06) | 12.02 | 19.22 | (15.86) | 1.79 | 15.19 |
Distributions from net investment income | (.12) | (.78) | (.80) | (.77) | (.68) | (.50) |
Distributions from net realized gain | (4.16) | (4.00) | – | (.91) | (7.17) | (1.60) |
Total distributions | (4.28) | (4.78) | (.80) | (1.67)C | (7.85) | (2.10) |
Redemption fees added to paid in capitalB | – | – | –D | –D | –D | –D |
Net asset value, end of period | $83.39 | $88.73 | $81.49 | $63.07 | $80.60 | $86.66 |
Total ReturnE,F | (1.08)% | 14.97% | 30.55% | (19.79)% | 2.49% | 20.81% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .79%I | .79% | .79% | .78% | .78% | .81% |
Expenses net of fee waivers, if any | .78%I | .79% | .79% | .78% | .78% | .81% |
Expenses net of all reductions | .77%I | .78% | .78% | .78% | .78% | .81% |
Net investment income (loss) | 1.43%I | .92% | 1.25% | 1.37% | .89% | .74% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $434,207 | $511,062 | $335,124 | $306,145 | $468,371 | $333,963 |
Portfolio turnover rateJ | 81%I,K | 67% | 49%K | 64% | 76%K | 53% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Total distributions of $1.67 per share is comprised of distributions from net investment income of $.767 and distributions from net realized gain of $.906 per share.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K 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 (Unaudited)
For the period ended August 31, 2018
1. Organization.
Materials Portfolio (the Fund) is a non-diversified fund of Fidelity Select Portfolios (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 invests primarily in securities of companies whose principal business activities fall within specific industries. The Fund offers Class A, Class M, Class C, Materials and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
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 .005%.
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 are available on the SEC website or upon request.
3. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Fair Value Committee (the Committee) established by the Fund's investment adviser. 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 August 31, 2018 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. 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. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. 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), certain independent Trustees have elected 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 of $127,140 are included in the accompanying Statement of Assets and Liabilities in other receivables and other payables and accrued expenses, respectively.
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. 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 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, partnerships, capital loss carryforwards and losses deferred due to wash sales.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows:
Gross unrealized appreciation | $275,663,298 |
Gross unrealized depreciation | (38,604,181) |
Net unrealized appreciation (depreciation) | $237,059,117 |
Tax cost | $1,281,653,221 |
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 | |
2019 | $(80,787) |
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 $665,738,991 and $993,906,583, 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 .24% 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 annualized management fee rate was .54% 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% | $232,673 | $2,455 |
Class M | .25% | .25% | 91,394 | – |
Class C | .75% | .25% | 401,169 | 35,787 |
$725,236 | $38,242 |
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 M 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 M and Class C redemptions. The deferred sales charges are 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class M shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained by FDC | |
Class A | $18,573 |
Class M | 2,174 |
Class C(a) | 3,460 |
$24,207 |
(a) When 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(a) | |
Class A | $202,214 | .22 |
Class M | 46,410 | .25 |
Class C | 88,070 | .22 |
Materials | 855,219 | .19 |
Class I | 436,958 | .19 |
$1,628,871 |
(a) Annualized
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. For the period, the fees were equivalent to an annualized rate of .03%.
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 $27,333 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 Fidelity Management & Research Company (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 | $5,217,947 | 1.98% | $5,464 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Redemptions In-Kind. During the period, 1,531,828 shares of Materials Portfolio held by an affiliated entity were redeemed in-kind for investments and cash with a value of $126,544,324. The net realized gain of $42,386,899 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 the Notes to Financial Statements. Materials Portfolio 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 $2,513 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. The Fund or borrower may terminate the loan at any time, and 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 $2,977.
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 $139,077 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $8,460.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended August 31, 2018 | Year ended February 28, 2018 | |
From net investment income | ||
Class A | $169,902 | $1,122,417 |
Class M | 15,735 | 111,276 |
Class C | – | 21,712 |
Materials | 1,370,665 | 8,651,332 |
Class I | 661,081 | 4,018,332 |
Total | $2,217,383 | $13,925,069 |
From net realized gain | ||
Class A | $9,181,276 | $8,907,618 |
Class M | 1,870,675 | 1,755,252 |
Class C | 4,092,761 | 3,835,607 |
Materials | 47,927,189 | 44,912,504 |
Class I | 22,733,546 | 20,683,529 |
Total | $85,805,447 | $80,094,510 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
Shares | Shares | Dollars | Dollars | |
Six months ended August 31, 2018 | Year ended February 28, 2018 | Six months ended August 31, 2018 | Year ended February 28, 2018 | |
Class A | ||||
Shares sold | 127,671 | 680,092 | $10,783,153 | $58,507,834 |
Reinvestment of distributions | 112,688 | 113,874 | 9,160,427 | 9,780,873 |
Shares redeemed | (453,770) | (1,331,034) | (38,090,933) | (112,075,163) |
Net increase (decrease) | (213,411) | (537,068) | $(18,147,353) | $(43,786,456) |
Class M | ||||
Shares sold | 28,269 | 208,725 | $2,361,246 | $17,686,478 |
Reinvestment of distributions | 23,368 | 21,925 | 1,883,930 | 1,863,640 |
Shares redeemed | (94,484) | (281,358) | (7,885,997) | (23,392,261) |
Net increase (decrease) | (42,847) | (50,708) | $(3,640,821) | $(3,842,143) |
Class C | ||||
Shares sold | 28,686 | 181,208 | $2,337,640 | $15,047,250 |
Reinvestment of distributions | 50,103 | 44,268 | 3,929,104 | 3,679,464 |
Shares redeemed | (144,936) | (241,477) | (11,712,378) | (20,012,880) |
Net increase (decrease) | (66,147) | (16,001) | $(5,445,634) | $(1,286,166) |
Materials | ||||
Shares sold | 336,509 | 3,151,404 | $28,564,167 | $281,933,571 |
Reinvestment of distributions | 568,531 | 582,560 | 46,426,234 | 50,400,849 |
Shares redeemed | (3,010,158)(a) | (2,803,708) | (251,460,810)(a) | (242,311,502) |
Net increase (decrease) | (2,105,118) | 930,256 | $(176,470,409) | $90,022,918 |
Class I | ||||
Shares sold | 630,772 | 2,807,810 | $53,334,930 | $243,189,109 |
Reinvestment of distributions | 268,927 | 269,534 | 21,917,589 | 23,282,439 |
Shares redeemed | (1,452,861) | (1,429,768) | (122,271,502) | (124,602,270) |
Net increase (decrease) | (553,162) | 1,647,576 | $(47,018,983) | $141,869,278 |
(a) Amount includes in-kind redemptions (see the Redemptions In-Kind note for additional details).
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.
Telecommunications Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Verizon Communications, Inc. | 21.8 |
AT&T, Inc. | 19.2 |
T-Mobile U.S., Inc. | 7.9 |
Vonage Holdings Corp. | 3.8 |
Comcast Corp. Class A | 3.5 |
Iridium Communications, Inc. | 3.3 |
Zayo Group Holdings, Inc. | 3.1 |
Liberty Broadband Corp. Class A | 3.0 |
Liberty Global PLC Class C | 2.9 |
Cogent Communications Group, Inc. | 2.8 |
71.3 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Diversified Telecommunication Services | 64.7% | |
Wireless Telecommunication Services | 17.2% | |
Media | 12.3% | |
Software | 1.9% | |
Equity Real Estate Investment Trusts (Reits) | 1.6% | |
All Others* | 2.3% |
* Includes short-term investments and net other assets (liabilities).
Telecommunications Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 98.9% | |||
Shares | Value | ||
Communications Equipment - 0.7% | |||
Communications Equipment - 0.7% | |||
Quantenna Communications, Inc. (a) | 116,400 | $2,126,628 | |
Diversified Telecommunication Services - 64.7% | |||
Alternative Carriers - 17.7% | |||
CenturyLink, Inc. | 283,400 | 6,053,424 | |
Cogent Communications Group, Inc. | 149,439 | 8,174,313 | |
Globalstar, Inc. (a)(b) | 2,683,148 | 1,368,137 | |
Iliad SA | 23,367 | 3,018,817 | |
Iridium Communications, Inc. (a) | 478,511 | 9,689,848 | |
ORBCOMM, Inc. (a) | 328,649 | 3,546,123 | |
Vonage Holdings Corp. (a) | 788,571 | 11,181,937 | |
Zayo Group Holdings, Inc. (a) | 269,800 | 9,351,268 | |
52,383,867 | |||
Integrated Telecommunication Services - 47.0% | |||
AT&T, Inc. | 1,782,920 | 56,946,465 | |
Atlantic Tele-Network, Inc. | 77,500 | 5,675,325 | |
Bandwidth, Inc. (a) | 21,200 | 965,872 | |
Cincinnati Bell, Inc. (a) | 323,902 | 4,210,726 | |
Consolidated Communications Holdings, Inc. (b) | 381,700 | 4,507,877 | |
Frontier Communications Corp. (b) | 361,375 | 1,879,150 | |
Masmovil Ibercom SA (a) | 5,912 | 667,707 | |
Verizon Communications, Inc. | 1,185,697 | 64,466,346 | |
139,319,468 | |||
TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES | 191,703,335 | ||
Equity Real Estate Investment Trusts (REITs) - 1.6% | |||
Specialized REITs - 1.6% | |||
American Tower Corp. | 20,790 | 3,100,205 | |
Equinix, Inc. | 3,900 | 1,700,907 | |
4,801,112 | |||
Internet Software & Services - 0.5% | |||
Internet Software & Services - 0.5% | |||
Gogo, Inc. (a)(b) | 315,847 | 1,418,153 | |
Media - 12.3% | |||
Cable & Satellite - 12.3% | |||
Altice U.S.A., Inc. Class A | 107,555 | 1,927,386 | |
Comcast Corp. Class A | 281,900 | 10,427,481 | |
DISH Network Corp. Class A (a) | 27,900 | 986,265 | |
GCI Liberty, Inc. (a) | 60,600 | 2,974,248 | |
Liberty Broadband Corp. Class A (a) | 108,600 | 8,796,600 | |
Liberty Global PLC Class C (a) | 337,536 | 8,738,807 | |
Liberty Latin America Ltd. (a) | 71,734 | 1,408,138 | |
Megacable Holdings S.A.B. de CV unit | 289,200 | 1,360,380 | |
36,619,305 | |||
Software - 1.9% | |||
Home Entertainment Software - 1.9% | |||
Activision Blizzard, Inc. | 76,500 | 5,515,650 | |
Wireless Telecommunication Services - 17.2% | |||
Wireless Telecommunication Services - 17.2% | |||
Millicom International Cellular SA | 13,600 | 778,736 | |
Shenandoah Telecommunications Co. | 171,167 | 6,530,021 | |
Sprint Corp. (a)(b) | 1,237,185 | 7,559,200 | |
T-Mobile U.S., Inc. (a) | 356,597 | 23,549,666 | |
Telephone & Data Systems, Inc. | 217,964 | 6,547,639 | |
U.S. Cellular Corp. (a) | 137,700 | 5,888,052 | |
50,853,314 | |||
TOTAL COMMON STOCKS | |||
(Cost $249,651,306) | 293,037,497 | ||
Money Market Funds - 2.4% | |||
Fidelity Securities Lending Cash Central Fund 1.98% (c)(d) | |||
(Cost $6,965,611) | 6,965,611 | 6,966,308 | |
TOTAL INVESTMENT IN SECURITIES - 101.3% | |||
(Cost $256,616,917) | 300,003,805 | ||
NET OTHER ASSETS (LIABILITIES) - (1.3)% | (3,710,012) | ||
NET ASSETS - 100% | $296,293,793 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Investment made with cash collateral received from securities on loan.
(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 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 | $12,788 |
Fidelity Securities Lending Cash Central Fund | 216,389 |
Total | $229,177 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
Telecommunications Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $5,706,998) — See accompanying schedule: Unaffiliated issuers (cost $249,651,306) | $293,037,497 | |
Fidelity Central Funds (cost $6,965,611) | 6,966,308 | |
Total Investment in Securities (cost $256,616,917) | $300,003,805 | |
Foreign currency held at value (cost $59,946) | 59,946 | |
Receivable for investments sold | 7,475,138 | |
Receivable for fund shares sold | 135,076 | |
Dividends receivable | 164,034 | |
Distributions receivable from Fidelity Central Funds | 23,154 | |
Prepaid expenses | 3,570 | |
Other receivables | 22,687 | |
Total assets | 307,887,410 | |
Liabilities | ||
Payable to custodian bank | $3,587,478 | |
Payable for investments purchased | 535,971 | |
Payable for fund shares redeemed | 281,877 | |
Accrued management fee | 133,709 | |
Distribution and service plan fees payable | 12,394 | |
Other affiliated payables | 59,483 | |
Other payables and accrued expenses | 24,324 | |
Collateral on securities loaned | 6,958,381 | |
Total liabilities | 11,593,617 | |
Net Assets | $296,293,793 | |
Net Assets consist of: | ||
Paid in capital | $234,298,050 | |
Undistributed net investment income | 4,262,349 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 14,349,787 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 43,383,607 | |
Net Assets | $296,293,793 | |
Calculation of Maximum Offering Price | ||
Class A: | ||
Net Asset Value and redemption price per share ($17,415,904 ÷ 297,514 shares) | $58.54 | |
Maximum offering price per share (100/94.25 of $58.54) | $62.11 | |
Class M: | ||
Net Asset Value and redemption price per share ($5,286,974 ÷ 90,847 shares) | $58.20 | |
Maximum offering price per share (100/96.50 of $58.20) | $60.31 | |
Class C: | ||
Net Asset Value and offering price per share ($7,980,729 ÷ 137,360 shares)(a) | $58.10 | |
Telecommunications: | ||
Net Asset Value, offering price and redemption price per share ($255,305,976 ÷ 4,332,030 shares) | $58.93 | |
Class I: | ||
Net Asset Value, offering price and redemption price per share ($10,304,210 ÷ 175,248 shares) | $58.80 |
(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
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $3,484,334 | |
Non-Cash dividends | 1,891,158 | |
Income from Fidelity Central Funds | 229,177 | |
Total income | 5,604,669 | |
Expenses | ||
Management fee | $818,077 | |
Transfer agent fees | 314,979 | |
Distribution and service plan fees | 73,614 | |
Accounting and security lending fees | 61,346 | |
Custodian fees and expenses | 4,734 | |
Independent trustees' fees and expenses | 784 | |
Registration fees | 40,807 | |
Audit | 32,507 | |
Legal | 2,504 | |
Miscellaneous | 2,973 | |
Total expenses before reductions | 1,352,325 | |
Expense reductions | (22,117) | |
Total expenses after reductions | 1,330,208 | |
Net investment income (loss) | 4,274,461 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 2,539,150 | |
Redemptions in-kind with affiliated entities | 14,071,812 | |
Fidelity Central Funds | 141 | |
Foreign currency transactions | 3,643 | |
Total net realized gain (loss) | 16,614,746 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (1,246,052) | |
Fidelity Central Funds | (430) | |
Assets and liabilities in foreign currencies | 16 | |
Total change in net unrealized appreciation (depreciation) | (1,246,466) | |
Net gain (loss) | 15,368,280 | |
Net increase (decrease) in net assets resulting from operations | $19,642,741 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $4,274,461 | $8,944,753 |
Net realized gain (loss) | 16,614,746 | 61,414,644 |
Change in net unrealized appreciation (depreciation) | (1,246,466) | (86,618,502) |
Net increase (decrease) in net assets resulting from operations | 19,642,741 | (16,259,105) |
Distributions to shareholders from net investment income | (1,320,142) | (9,787,526) |
Distributions to shareholders from net realized gain | (3,903,199) | (66,377,876) |
Total distributions | (5,223,341) | (76,165,402) |
Share transactions - net increase (decrease) | (78,425,135) | (304,973,804) |
Total increase (decrease) in net assets | (64,005,735) | (397,398,311) |
Net Assets | ||
Beginning of period | 360,299,528 | 757,697,839 |
End of period | $296,293,793 | $360,299,528 |
Other Information | ||
Undistributed net investment income end of period | $4,262,349 | $1,308,030 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Telecommunications Portfolio Class A
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $55.58 | $69.61 | $62.32 | $63.26 | $58.71 | $51.58 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .71C | 1.05 | .88 | .81 | .76 | 1.76D |
Net realized and unrealized gain (loss) | 3.05 | (3.38) | 10.68 | (.76) | 5.83 | 6.48 |
Total from investment operations | 3.76 | (2.33) | 11.56 | .05 | 6.59 | 8.24 |
Distributions from net investment income | (.18) | (1.31) | (1.11) | (.54) | (2.04) | (1.11) |
Distributions from net realized gain | (.62) | (10.39) | (3.16) | (.45) | – | (.01) |
Total distributions | (.80) | (11.70) | (4.27) | (.99) | (2.04) | (1.11)E |
Redemption fees added to paid in capitalB | – | – | –F | –F | –F | –F |
Net asset value, end of period | $58.54 | $55.58 | $69.61 | $62.32 | $63.26 | $58.71 |
Total ReturnG,H,I | 6.84% | (4.06)% | 18.65% | .16% | 11.54% | 16.00% |
Ratios to Average Net AssetsJ,K | ||||||
Expenses before reductions | 1.17%L | 1.14% | 1.14% | 1.15% | 1.15% | 1.18% |
Expenses net of fee waivers, if any | 1.17%L | 1.14% | 1.14% | 1.15% | 1.15% | 1.18% |
Expenses net of all reductions | 1.15%L | 1.12% | 1.12% | 1.15% | 1.15% | 1.15% |
Net investment income (loss) | 1.92%C,L | 1.59% | 1.28% | 1.33% | 1.26% | 3.08%D |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $17,416 | $17,816 | $31,966 | $13,032 | $11,052 | $7,712 |
Portfolio turnover rateM | 79%L,N | 66% | 105%N | 51% | 94%N | 111% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.35 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 1.30%.
D Net investment income per share reflects a large, non-recurring dividend which amounted to $.95 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.43%.
E Total distributions of $1.11 per share is comprised of distributions from net investment income of $1.106 and distributions from net realized gain of $.005 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I Total returns do not include the effect of the sales charges.
J Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Annualized
M Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
N Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Telecommunications Portfolio Class M
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $55.31 | $69.33 | $61.95 | $63.04 | $58.50 | $51.41 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .61C | .81 | .65 | .61 | .57 | 1.59D |
Net realized and unrealized gain (loss) | 3.04 | (3.36) | 10.62 | (.76) | 5.81 | 6.44 |
Total from investment operations | 3.65 | (2.55) | 11.27 | (.15) | 6.38 | 8.03 |
Distributions from net investment income | (.14) | (1.07) | (.73) | (.49) | (1.84) | (.94) |
Distributions from net realized gain | (.62) | (10.39) | (3.16) | (.45) | – | (.01) |
Total distributions | (.76) | (11.47)E | (3.89) | (.94) | (1.84) | (.94)F |
Redemption fees added to paid in capitalB | – | – | –G | –G | –G | –G |
Net asset value, end of period | $58.20 | $55.31 | $69.33 | $61.95 | $63.04 | $58.50 |
Total ReturnH,I,J | 6.67% | (4.40)% | 18.26% | (.16)% | 11.19% | 15.64% |
Ratios to Average Net AssetsK,L | ||||||
Expenses before reductions | 1.51%M | 1.49% | 1.46% | 1.47% | 1.47% | 1.48% |
Expenses net of fee waivers, if any | 1.50%M | 1.49% | 1.46% | 1.47% | 1.47% | 1.48% |
Expenses net of all reductions | 1.49%M | 1.48% | 1.44% | 1.46% | 1.46% | 1.45% |
Net investment income (loss) | 1.59%C,M | 1.24% | .96% | 1.01% | .94% | 2.78%D |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $5,287 | $4,847 | $6,933 | $8,280 | $5,095 | $4,344 |
Portfolio turnover rateN | 79%M,O | 66% | 105%O | 51% | 94%O | 111% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.35 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been .96%.
D Net investment income per share reflects a large, non-recurring dividend which amounted to $.94 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.13%.
E Total distributions of $11.47 per share is comprised of distributions from net investment income of $1.073 and distributions from net realized gain of $10.393 per share.
F Total distributions of $.94 per share is comprised of distributions from net investment income of $.939 and distributions from net realized gain of $.005 per share.
G Amount represents less than $.005 per share.
H Total returns for periods of less than one year are not annualized.
I Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
J Total returns do not include the effect of the sales charges.
K Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
L Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
M Annualized
N Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
O Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Telecommunications Portfolio Class C
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $55.29 | $69.24 | $62.10 | $63.04 | $58.54 | $51.47 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .51C | .57 | .37 | .36 | .34 | 1.36D |
Net realized and unrealized gain (loss) | 3.02 | (3.36) | 10.62 | (.75) | 5.80 | 6.46 |
Total from investment operations | 3.53 | (2.79) | 10.99 | (.39) | 6.14 | 7.82 |
Distributions from net investment income | (.11) | (.77) | (.69) | (.10) | (1.64) | (.74) |
Distributions from net realized gain | (.62) | (10.39) | (3.16) | (.45) | – | (.01) |
Total distributions | (.72)E | (11.16) | (3.85) | (.55) | (1.64) | (.75) |
Redemption fees added to paid in capitalB | – | – | –F | –F | –F | –F |
Net asset value, end of period | $58.10 | $55.29 | $69.24 | $62.10 | $63.04 | $58.54 |
Total ReturnG,H,I | 6.46% | (4.75)% | 17.77% | (.57)% | 10.75% | 15.20% |
Ratios to Average Net AssetsJ,K | ||||||
Expenses before reductions | 1.88%L | 1.86% | 1.88% | 1.89% | 1.85% | 1.88% |
Expenses net of fee waivers, if any | 1.88%L | 1.86% | 1.88% | 1.89% | 1.85% | 1.88% |
Expenses net of all reductions | 1.86%L | 1.85% | 1.86% | 1.88% | 1.85% | 1.85% |
Net investment income (loss) | 1.21%C,L | .87% | .54% | .60% | .56% | 2.38%D |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $7,981 | $8,396 | $13,528 | $7,735 | $7,074 | $5,523 |
Portfolio turnover rateM | 79%L,N | 66% | 105%N | 51% | 94%N | 111% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.35 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been .59%.
D Net investment income per share reflects a large, non-recurring dividend which amounted to $.94 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .73%.
E Total distributions of $.72 per share is comprised of distributions from net investment income of $.109 and distributions from net realized gain of $.615 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I Total returns do not include the effect of the contingent deferred sales charge.
J Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Annualized
M Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
N Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Telecommunications Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $55.88 | $69.97 | $62.58 | $63.54 | $58.94 | $51.75 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .81C | 1.28 | 1.12 | 1.02 | .96 | 1.96D |
Net realized and unrealized gain (loss) | 3.07 | (3.42) | 10.74 | (.77)�� | 5.85 | 6.51 |
Total from investment operations | 3.88 | (2.14) | 11.86 | .25 | 6.81 | 8.47 |
Distributions from net investment income | (.21) | (1.56) | (1.31) | (.76) | (2.21) | (1.28) |
Distributions from net realized gain | (.62) | (10.39) | (3.16) | (.45) | – | (.01) |
Total distributions | (.83) | (11.95) | (4.47) | (1.21) | (2.21) | (1.28)E |
Redemption fees added to paid in capitalB | – | – | –F | –F | –F | –F |
Net asset value, end of period | $58.93 | $55.88 | $69.97 | $62.58 | $63.54 | $58.94 |
Total ReturnG,H | 7.03% | (3.76)% | 19.06% | .49% | 11.90% | 16.40% |
Ratios to Average Net AssetsI,J | ||||||
Expenses before reductions | .84%K | .82% | .80% | .82% | .83% | .85% |
Expenses net of fee waivers, if any | .84%K | .82% | .80% | .81% | .83% | .85% |
Expenses net of all reductions | .82%K | .80% | .78% | .81% | .82% | .82% |
Net investment income (loss) | 2.25%C,K | 1.92% | 1.62% | 1.67% | 1.58% | 3.41%D |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $255,306 | $320,908 | $690,720 | $689,600 | $346,174 | $343,548 |
Portfolio turnover rateL | 79%K,M | 66% | 105%M | 51% | 94%M | 111% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.35 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 1.63%.
D Net investment income per share reflects a large, non-recurring dividend which amounted to $.95 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.76%.
E Total distributions of $1.28 per share is comprised of distributions from net investment income of $1.275 and distributions from net realized gain of $.005 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Annualized
L Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
M Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Telecommunications Portfolio Class I
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $55.74 | $69.82 | $62.46 | $63.38 | $58.80 | $51.65 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .82C | 1.26 | 1.12 | 1.02 | .94 | 1.93D |
Net realized and unrealized gain (loss) | 3.07 | (3.39) | 10.70 | (.76) | 5.83 | 6.48 |
Total from investment operations | 3.89 | (2.13) | 11.82 | .26 | 6.77 | 8.41 |
Distributions from net investment income | (.21) | (1.56) | (1.30) | (.73) | (2.19) | (1.25) |
Distributions from net realized gain | (.62) | (10.39) | (3.16) | (.45) | – | (.01) |
Total distributions | (.83) | (11.95) | (4.46) | (1.18) | (2.19) | (1.26) |
Redemption fees added to paid in capitalB | – | – | –E | –E | –E | –E |
Net asset value, end of period | $58.80 | $55.74 | $69.82 | $62.46 | $63.38 | $58.80 |
Total ReturnF,G | 7.06% | (3.75)% | 19.03% | .51% | 11.85% | 16.30% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | .79%J | .82% | .80% | .82% | .86% | .91% |
Expenses net of fee waivers, if any | .79%J | .82% | .80% | .82% | .86% | .91% |
Expenses net of all reductions | .77%J | .80% | .78% | .81% | .85% | .88% |
Net investment income (loss) | 2.30%C,J | 1.91% | 1.62% | 1.67% | 1.55% | 3.35%D |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $10,304 | $8,332 | $14,550 | $6,197 | $2,505 | $1,604 |
Portfolio turnover rateK | 79%J,L | 66% | 105%L | 51% | 94%L | 111% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.35 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 1.68%.
D Net investment income per share reflects a large, non-recurring dividend which amounted to $.95 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.70%.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Annualized
K Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
L 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 (Unaudited)
For the period ended August 31, 2018
1. Organization.
Telecommunications Portfolio (the Fund) is a non-diversified fund of Fidelity Select Portfolios (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 invests primarily in securities of companies whose principal business activities fall within specific industries. The Fund offers Class A, Class M, Class C, Telecommunications and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
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 .005%.
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 are available on the SEC website or upon request.
3. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Fair Value Committee (the Committee) established by the Fund's investment adviser. 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 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. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. Large, non-recurring dividends recognized by the Fund are presented separately on the Statement of Operations as "Non-cash dividends" and the impact of these dividends is presented in the Financial Highlights. 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. 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 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, certain deemed distributions and losses deferred due to wash sales.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows:
Gross unrealized appreciation | $67,320,888 |
Gross unrealized depreciation | (28,248,756) |
Net unrealized appreciation (depreciation) | $39,072,132 |
Tax cost | $260,931,673 |
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions, aggregated $118,920,468 and $132,065,519, 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 .24% 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 annualized management fee rate was .54% 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% | $21,835 | $– |
Class M | .25% | .25% | 12,148 | – |
Class C | .75% | .25% | 39,631 | – |
$73,614 | $– |
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 M 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 M and Class C redemptions. The deferred sales charges are 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class M shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained by FDC | |
Class A | $3,682 |
Class M | 767 |
Class C(a) | 399 |
$4,848 |
(a) When 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(a) | |
Class A | $24,559 | .28 |
Class M | 8,987 | .37 |
Class C | 9,563 | .24 |
Telecommunications | 265,418 | .20 |
Class I | 6,452 | .15 |
$314,979 |
(a) Annualized
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. For the period, the fees were equivalent to an annualized rate of .04%.
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 $4,789 for the period.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Redemptions In-Kind. During the period, 1,218,775 shares of Telecommunications Portfolio held by an affiliated entity were redeemed in-kind for investments and cash with a value of $67,398,250. The net realized gain of $14,071,812 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 the Notes to Financial Statements. Telecommunications Portfolio 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 $473 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. The Fund or borrower may terminate the loan at any time, and 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 $216,389.
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 $20,331 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $1,786.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended August 31, 2018 | Year ended February 28, 2018 | |
From net investment income | ||
Class A | $59,247 | $396,755 |
Class M | 12,383 | 86,824 |
Class C | 16,258 | 113,266 |
Telecommunications | 1,203,204 | 8,955,299 |
Class I | 29,050 | 235,382 |
Total | $1,320,142 | $9,787,526 |
From net realized gain | ||
Class A | $199,182 | $3,147,334 |
Class M | 53,174 | 841,588 |
Class C | 91,732 | 1,545,756 |
Telecommunications | 3,474,038 | 59,280,788 |
Class I | 85,073 | 1,562,410 |
Total | $3,903,199 | $66,377,876 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
Shares | Shares | Dollars | Dollars | |
Six months ended August 31, 2018 | Year ended February 28, 2018 | Six months ended August 31, 2018 | Year ended February 28, 2018 | |
Class A | ||||
Shares sold | 31,132 | 76,520 | $1,728,530 | $4,987,299 |
Reinvestment of distributions | 4,510 | 57,962 | 249,523 | 3,454,010 |
Shares redeemed | (58,702) | (273,126) | (3,246,716) | (18,205,397) |
Net increase (decrease) | (23,060) | (138,644) | $(1,268,663) | $(9,764,088) |
Class M | ||||
Shares sold | 10,260 | 21,912 | $572,652 | $1,457,815 |
Reinvestment of distributions | 1,188 | 15,649 | 65,401 | 926,496 |
Shares redeemed | (8,246) | (49,923) | (453,003) | (3,308,018) |
Net increase (decrease) | 3,202 | (12,362) | $185,050 | $(923,707) |
Class C | ||||
Shares sold | 12,398 | 31,294 | $688,339 | $2,045,854 |
Reinvestment of distributions | 1,797 | 25,537 | 98,976 | 1,513,170 |
Shares redeemed | (28,694) | (100,350) | (1,587,106) | (6,561,447) |
Net increase (decrease) | (14,499) | (43,519) | $(799,791) | $(3,002,423) |
Telecommunications | ||||
Shares sold | 271,268 | 1,189,602 | $15,379,969 | $77,745,057 |
Reinvestment of distributions | 80,586 | 1,082,670 | 4,482,975 | 65,288,273 |
Shares redeemed | (1,762,203)(a) | (6,401,925) | (97,903,849)(a) | (430,649,733) |
Net increase (decrease) | (1,410,349) | (4,129,653) | $(78,040,905) | $(287,616,403) |
Class I | ||||
Shares sold | 174,096 | 250,120 | $10,082,986 | $16,564,921 |
Reinvestment of distributions | 1,746 | 25,845 | 96,874 | 1,544,599 |
Shares redeemed | (150,079) | (334,874) | (8,680,686) | (21,776,703) |
Net increase (decrease) | 25,763 | (58,909) | $1,499,174 | $(3,667,183) |
(a) Amount includes in-kind redemptions (see the Redemptions In-Kind note for additional details)
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.
Shareholder Expense Example
As a shareholder of a 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 Funds 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 (March 1, 2018 to August 31, 2018).
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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 RatioA | Beginning Account Value March 1, 2018 | Ending Account Value August 31, 2018 | Expenses Paid During Period-B March 1, 2018 to August 31, 2018 | |
Consumer Staples Portfolio | ||||
Class A | 1.06% | |||
Actual | $1,000.00 | $986.60 | $5.31 | |
Hypothetical-C | $1,000.00 | $1,019.86 | $5.40 | |
Class M | 1.33% | |||
Actual | $1,000.00 | $985.20 | $6.66 | |
Hypothetical-C | $1,000.00 | $1,018.50 | $6.77 | |
Class C | 1.80% | |||
Actual | $1,000.00 | $982.90 | $9.00 | |
Hypothetical-C | $1,000.00 | $1,016.13 | $9.15 | |
Consumer Staples | .77% | |||
Actual | $1,000.00 | $988.00 | $3.86 | |
Hypothetical-C | $1,000.00 | $1,021.32 | $3.92 | |
Class I | .78% | |||
Actual | $1,000.00 | $987.90 | $3.91 | |
Hypothetical-C | $1,000.00 | $1,021.27 | $3.97 | |
Gold Portfolio | ||||
Class A | 1.19% | |||
Actual | $1,000.00 | $860.10 | $5.58 | |
Hypothetical-C | $1,000.00 | $1,019.21 | $6.06 | |
Class M | 1.48% | |||
Actual | $1,000.00 | $859.00 | $6.93 | |
Hypothetical-C | $1,000.00 | $1,017.74 | $7.53 | |
Class C | 1.84% | |||
Actual | $1,000.00 | $856.60 | $8.61 | |
Hypothetical-C | $1,000.00 | $1,015.93 | $9.35 | |
Gold | .85% | |||
Actual | $1,000.00 | $861.00 | $3.99 | |
Hypothetical-C | $1,000.00 | $1,020.92 | $4.33 | |
Class I | .83% | |||
Actual | $1,000.00 | $861.00 | $3.89 | |
Hypothetical-C | $1,000.00 | $1,021.02 | $4.23 | |
Materials Portfolio | ||||
Class A | 1.06% | |||
Actual | $1,000.00 | $987.80 | $5.31 | |
Hypothetical-C | $1,000.00 | $1,019.86 | $5.40 | |
Class M | 1.35% | |||
Actual | $1,000.00 | $986.50 | $6.76 | |
Hypothetical-C | $1,000.00 | $1,018.40 | $6.87 | |
Class C | 1.82% | |||
Actual | $1,000.00 | $984.20 | $9.10 | |
Hypothetical-C | $1,000.00 | $1,016.03 | $9.25 | |
Materials | .79% | |||
Actual | $1,000.00 | $989.30 | $3.96 | |
Hypothetical-C | $1,000.00 | $1,021.22 | $4.02 | |
Class I | .78% | |||
Actual | $1,000.00 | $989.20 | $3.91 | |
Hypothetical-C | $1,000.00 | $1,021.27 | $3.97 | |
Telecommunications Portfolio | ||||
Class A | 1.17% | |||
Actual | $1,000.00 | $1,068.40 | $6.10 | |
Hypothetical-C | $1,000.00 | $1,019.31 | $5.96 | |
Class M | 1.50% | |||
Actual | $1,000.00 | $1,066.70 | $7.81 | |
Hypothetical-C | $1,000.00 | $1,017.64 | $7.63 | |
Class C | 1.88% | |||
Actual | $1,000.00 | $1,064.60 | $9.78 | |
Hypothetical-C | $1,000.00 | $1,015.73 | $9.55 | |
Telecommunications | .84% | |||
Actual | $1,000.00 | $1,070.30 | $4.38 | |
Hypothetical-C | $1,000.00 | $1,020.97 | $4.28 | |
Class I | .79% | |||
Actual | $1,000.00 | $1,070.60 | $4.12 | |
Hypothetical-C | $1,000.00 | $1,021.22 | $4.02 |
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 184/ 365 (to reflect the one-half year period).
C 5% return per year before expenses
ASGMT-SANN-1018
1.855654.111
Fidelity® Select Portfolios® Telecommunications Portfolio Wireless Portfolio Semi-Annual Report August 31, 2018 |
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Contents
Telecommunications Portfolio | |
Wireless Portfolio | |
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Other third-party marks appearing herein are the property of their respective owners.
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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.institutional.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.
Telecommunications Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Verizon Communications, Inc. | 21.8 |
AT&T, Inc. | 19.2 |
T-Mobile U.S., Inc. | 7.9 |
Vonage Holdings Corp. | 3.8 |
Comcast Corp. Class A | 3.5 |
Iridium Communications, Inc. | 3.3 |
Zayo Group Holdings, Inc. | 3.1 |
Liberty Broadband Corp. Class A | 3.0 |
Liberty Global PLC Class C | 2.9 |
Cogent Communications Group, Inc. | 2.8 |
71.3 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Diversified Telecommunication Services | 64.7% | |
Wireless Telecommunication Services | 17.2% | |
Media | 12.3% | |
Software | 1.9% | |
Equity Real Estate Investment Trusts (Reits) | 1.6% | |
All Others* | 2.3% |
* Includes short-term investments and net other assets (liabilities).
Telecommunications Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 98.9% | |||
Shares | Value | ||
Communications Equipment - 0.7% | |||
Communications Equipment - 0.7% | |||
Quantenna Communications, Inc. (a) | 116,400 | $2,126,628 | |
Diversified Telecommunication Services - 64.7% | |||
Alternative Carriers - 17.7% | |||
CenturyLink, Inc. | 283,400 | 6,053,424 | |
Cogent Communications Group, Inc. | 149,439 | 8,174,313 | |
Globalstar, Inc. (a)(b) | 2,683,148 | 1,368,137 | |
Iliad SA | 23,367 | 3,018,817 | |
Iridium Communications, Inc. (a) | 478,511 | 9,689,848 | |
ORBCOMM, Inc. (a) | 328,649 | 3,546,123 | |
Vonage Holdings Corp. (a) | 788,571 | 11,181,937 | |
Zayo Group Holdings, Inc. (a) | 269,800 | 9,351,268 | |
52,383,867 | |||
Integrated Telecommunication Services - 47.0% | |||
AT&T, Inc. | 1,782,920 | 56,946,465 | |
Atlantic Tele-Network, Inc. | 77,500 | 5,675,325 | |
Bandwidth, Inc. (a) | 21,200 | 965,872 | |
Cincinnati Bell, Inc. (a) | 323,902 | 4,210,726 | |
Consolidated Communications Holdings, Inc. (b) | 381,700 | 4,507,877 | |
Frontier Communications Corp. (b) | 361,375 | 1,879,150 | |
Masmovil Ibercom SA (a) | 5,912 | 667,707 | |
Verizon Communications, Inc. | 1,185,697 | 64,466,346 | |
139,319,468 | |||
TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES | 191,703,335 | ||
Equity Real Estate Investment Trusts (REITs) - 1.6% | |||
Specialized REITs - 1.6% | |||
American Tower Corp. | 20,790 | 3,100,205 | |
Equinix, Inc. | 3,900 | 1,700,907 | |
4,801,112 | |||
Internet Software & Services - 0.5% | |||
Internet Software & Services - 0.5% | |||
Gogo, Inc. (a)(b) | 315,847 | 1,418,153 | |
Media - 12.3% | |||
Cable & Satellite - 12.3% | |||
Altice U.S.A., Inc. Class A | 107,555 | 1,927,386 | |
Comcast Corp. Class A | 281,900 | 10,427,481 | |
DISH Network Corp. Class A (a) | 27,900 | 986,265 | |
GCI Liberty, Inc. (a) | 60,600 | 2,974,248 | |
Liberty Broadband Corp. Class A (a) | 108,600 | 8,796,600 | |
Liberty Global PLC Class C (a) | 337,536 | 8,738,807 | |
Liberty Latin America Ltd. (a) | 71,734 | 1,408,138 | |
Megacable Holdings S.A.B. de CV unit | 289,200 | 1,360,380 | |
36,619,305 | |||
Software - 1.9% | |||
Home Entertainment Software - 1.9% | |||
Activision Blizzard, Inc. | 76,500 | 5,515,650 | |
Wireless Telecommunication Services - 17.2% | |||
Wireless Telecommunication Services - 17.2% | |||
Millicom International Cellular SA | 13,600 | 778,736 | |
Shenandoah Telecommunications Co. | 171,167 | 6,530,021 | |
Sprint Corp. (a)(b) | 1,237,185 | 7,559,200 | |
T-Mobile U.S., Inc. (a) | 356,597 | 23,549,666 | |
Telephone & Data Systems, Inc. | 217,964 | 6,547,639 | |
U.S. Cellular Corp. (a) | 137,700 | 5,888,052 | |
50,853,314 | |||
TOTAL COMMON STOCKS | |||
(Cost $249,651,306) | 293,037,497 | ||
Money Market Funds - 2.4% | |||
Fidelity Securities Lending Cash Central Fund 1.98% (c)(d) | |||
(Cost $6,965,611) | 6,965,611 | 6,966,308 | |
TOTAL INVESTMENT IN SECURITIES - 101.3% | |||
(Cost $256,616,917) | 300,003,805 | ||
NET OTHER ASSETS (LIABILITIES) - (1.3)% | (3,710,012) | ||
NET ASSETS - 100% | $296,293,793 |
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 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 | $12,788 |
Fidelity Securities Lending Cash Central Fund | 216,389 |
Total | $229,177 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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.
Telecommunications Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $5,706,998) — See accompanying schedule: Unaffiliated issuers (cost $249,651,306) | $293,037,497 | |
Fidelity Central Funds (cost $6,965,611) | 6,966,308 | |
Total Investment in Securities (cost $256,616,917) | $300,003,805 | |
Foreign currency held at value (cost $59,946) | 59,946 | |
Receivable for investments sold | 7,475,138 | |
Receivable for fund shares sold | 135,076 | |
Dividends receivable | 164,034 | |
Distributions receivable from Fidelity Central Funds | 23,154 | |
Prepaid expenses | 3,570 | |
Other receivables | 22,687 | |
Total assets | 307,887,410 | |
Liabilities | ||
Payable to custodian bank | $3,587,478 | |
Payable for investments purchased | 535,971 | |
Payable for fund shares redeemed | 281,877 | |
Accrued management fee | 133,709 | |
Distribution and service plan fees payable | 12,394 | |
Other affiliated payables | 59,483 | |
Other payables and accrued expenses | 24,324 | |
Collateral on securities loaned | 6,958,381 | |
Total liabilities | 11,593,617 | |
Net Assets | $296,293,793 | |
Net Assets consist of: | ||
Paid in capital | $234,298,050 | |
Undistributed net investment income | 4,262,349 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 14,349,787 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 43,383,607 | |
Net Assets | $296,293,793 | |
Calculation of Maximum Offering Price | ||
Class A: | ||
Net Asset Value and redemption price per share ($17,415,904 ÷ 297,514 shares) | $58.54 | |
Maximum offering price per share (100/94.25 of $58.54) | $62.11 | |
Class M: | ||
Net Asset Value and redemption price per share ($5,286,974 ÷ 90,847 shares) | $58.20 | |
Maximum offering price per share (100/96.50 of $58.20) | $60.31 | |
Class C: | ||
Net Asset Value and offering price per share ($7,980,729 ÷ 137,360 shares)(a) | $58.10 | |
Telecommunications: | ||
Net Asset Value, offering price and redemption price per share ($255,305,976 ÷ 4,332,030 shares) | $58.93 | |
Class I: | ||
Net Asset Value, offering price and redemption price per share ($10,304,210 ÷ 175,248 shares) | $58.80 |
(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
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $3,484,334 | |
Non-Cash dividends | 1,891,158 | |
Income from Fidelity Central Funds | 229,177 | |
Total income | 5,604,669 | |
Expenses | ||
Management fee | $818,077 | |
Transfer agent fees | 314,979 | |
Distribution and service plan fees | 73,614 | |
Accounting and security lending fees | 61,346 | |
Custodian fees and expenses | 4,734 | |
Independent trustees' fees and expenses | 784 | |
Registration fees | 40,807 | |
Audit | 32,507 | |
Legal | 2,504 | |
Miscellaneous | 2,973 | |
Total expenses before reductions | 1,352,325 | |
Expense reductions | (22,117) | |
Total expenses after reductions | 1,330,208 | |
Net investment income (loss) | 4,274,461 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 2,539,150 | |
Redemptions in-kind with affiliated entities | 14,071,812 | |
Fidelity Central Funds | 141 | |
Foreign currency transactions | 3,643 | |
Total net realized gain (loss) | 16,614,746 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (1,246,052) | |
Fidelity Central Funds | (430) | |
Assets and liabilities in foreign currencies | 16 | |
Total change in net unrealized appreciation (depreciation) | (1,246,466) | |
Net gain (loss) | 15,368,280 | |
Net increase (decrease) in net assets resulting from operations | $19,642,741 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $4,274,461 | $8,944,753 |
Net realized gain (loss) | 16,614,746 | 61,414,644 |
Change in net unrealized appreciation (depreciation) | (1,246,466) | (86,618,502) |
Net increase (decrease) in net assets resulting from operations | 19,642,741 | (16,259,105) |
Distributions to shareholders from net investment income | (1,320,142) | (9,787,526) |
Distributions to shareholders from net realized gain | (3,903,199) | (66,377,876) |
Total distributions | (5,223,341) | (76,165,402) |
Share transactions - net increase (decrease) | (78,425,135) | (304,973,804) |
Total increase (decrease) in net assets | (64,005,735) | (397,398,311) |
Net Assets | ||
Beginning of period | 360,299,528 | 757,697,839 |
End of period | $296,293,793 | $360,299,528 |
Other Information | ||
Undistributed net investment income end of period | $4,262,349 | $1,308,030 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Telecommunications Portfolio Class A
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $55.58 | $69.61 | $62.32 | $63.26 | $58.71 | $51.58 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .71C | 1.05 | .88 | .81 | .76 | 1.76D |
Net realized and unrealized gain (loss) | 3.05 | (3.38) | 10.68 | (.76) | 5.83 | 6.48 |
Total from investment operations | 3.76 | (2.33) | 11.56 | .05 | 6.59 | 8.24 |
Distributions from net investment income | (.18) | (1.31) | (1.11) | (.54) | (2.04) | (1.11) |
Distributions from net realized gain | (.62) | (10.39) | (3.16) | (.45) | – | (.01) |
Total distributions | (.80) | (11.70) | (4.27) | (.99) | (2.04) | (1.11)E |
Redemption fees added to paid in capitalB | – | – | –F | –F | –F | –F |
Net asset value, end of period | $58.54 | $55.58 | $69.61 | $62.32 | $63.26 | $58.71 |
Total ReturnG,H,I | 6.84% | (4.06)% | 18.65% | .16% | 11.54% | 16.00% |
Ratios to Average Net AssetsJ,K | ||||||
Expenses before reductions | 1.17%L | 1.14% | 1.14% | 1.15% | 1.15% | 1.18% |
Expenses net of fee waivers, if any | 1.17%L | 1.14% | 1.14% | 1.15% | 1.15% | 1.18% |
Expenses net of all reductions | 1.15%L | 1.12% | 1.12% | 1.15% | 1.15% | 1.15% |
Net investment income (loss) | 1.92%C,L | 1.59% | 1.28% | 1.33% | 1.26% | 3.08%D |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $17,416 | $17,816 | $31,966 | $13,032 | $11,052 | $7,712 |
Portfolio turnover rateM | 79%L,N | 66% | 105%N | 51% | 94%N | 111% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.35 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 1.30%.
D Net investment income per share reflects a large, non-recurring dividend which amounted to $.95 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.43%.
E Total distributions of $1.11 per share is comprised of distributions from net investment income of $1.106 and distributions from net realized gain of $.005 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I Total returns do not include the effect of the sales charges.
J Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Annualized
M Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
N Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Telecommunications Portfolio Class M
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $55.31 | $69.33 | $61.95 | $63.04 | $58.50 | $51.41 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .61C | .81 | .65 | .61 | .57 | 1.59D |
Net realized and unrealized gain (loss) | 3.04 | (3.36) | 10.62 | (.76) | 5.81 | 6.44 |
Total from investment operations | 3.65 | (2.55) | 11.27 | (.15) | 6.38 | 8.03 |
Distributions from net investment income | (.14) | (1.07) | (.73) | (.49) | (1.84) | (.94) |
Distributions from net realized gain | (.62) | (10.39) | (3.16) | (.45) | – | (.01) |
Total distributions | (.76) | (11.47)E | (3.89) | (.94) | (1.84) | (.94)F |
Redemption fees added to paid in capitalB | – | – | –G | –G | –G | –G |
Net asset value, end of period | $58.20 | $55.31 | $69.33 | $61.95 | $63.04 | $58.50 |
Total ReturnH,I,J | 6.67% | (4.40)% | 18.26% | (.16)% | 11.19% | 15.64% |
Ratios to Average Net AssetsK,L | ||||||
Expenses before reductions | 1.51%M | 1.49% | 1.46% | 1.47% | 1.47% | 1.48% |
Expenses net of fee waivers, if any | 1.50%M | 1.49% | 1.46% | 1.47% | 1.47% | 1.48% |
Expenses net of all reductions | 1.49%M | 1.48% | 1.44% | 1.46% | 1.46% | 1.45% |
Net investment income (loss) | 1.59%C,M | 1.24% | .96% | 1.01% | .94% | 2.78%D |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $5,287 | $4,847 | $6,933 | $8,280 | $5,095 | $4,344 |
Portfolio turnover rateN | 79%M,O | 66% | 105%O | 51% | 94%O | 111% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.35 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been .96%.
D Net investment income per share reflects a large, non-recurring dividend which amounted to $.94 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.13%.
E Total distributions of $11.47 per share is comprised of distributions from net investment income of $1.073 and distributions from net realized gain of $10.393 per share.
F Total distributions of $.94 per share is comprised of distributions from net investment income of $.939 and distributions from net realized gain of $.005 per share.
G Amount represents less than $.005 per share.
H Total returns for periods of less than one year are not annualized.
I Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
J Total returns do not include the effect of the sales charges.
K Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
L Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
M Annualized
N Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
O Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Telecommunications Portfolio Class C
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $55.29 | $69.24 | $62.10 | $63.04 | $58.54 | $51.47 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .51C | .57 | .37 | .36 | .34 | 1.36D |
Net realized and unrealized gain (loss) | 3.02 | (3.36) | 10.62 | (.75) | 5.80 | 6.46 |
Total from investment operations | 3.53 | (2.79) | 10.99 | (.39) | 6.14 | 7.82 |
Distributions from net investment income | (.11) | (.77) | (.69) | (.10) | (1.64) | (.74) |
Distributions from net realized gain | (.62) | (10.39) | (3.16) | (.45) | – | (.01) |
Total distributions | (.72)E | (11.16) | (3.85) | (.55) | (1.64) | (.75) |
Redemption fees added to paid in capitalB | – | – | –F | –F | –F | –F |
Net asset value, end of period | $58.10 | $55.29 | $69.24 | $62.10 | $63.04 | $58.54 |
Total ReturnG,H,I | 6.46% | (4.75)% | 17.77% | (.57)% | 10.75% | 15.20% |
Ratios to Average Net AssetsJ,K | ||||||
Expenses before reductions | 1.88%L | 1.86% | 1.88% | 1.89% | 1.85% | 1.88% |
Expenses net of fee waivers, if any | 1.88%L | 1.86% | 1.88% | 1.89% | 1.85% | 1.88% |
Expenses net of all reductions | 1.86%L | 1.85% | 1.86% | 1.88% | 1.85% | 1.85% |
Net investment income (loss) | 1.21%C,L | .87% | .54% | .60% | .56% | 2.38%D |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $7,981 | $8,396 | $13,528 | $7,735 | $7,074 | $5,523 |
Portfolio turnover rateM | 79%L,N | 66% | 105%N | 51% | 94%N | 111% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.35 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been .59%.
D Net investment income per share reflects a large, non-recurring dividend which amounted to $.94 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .73%.
E Total distributions of $.72 per share is comprised of distributions from net investment income of $.109 and distributions from net realized gain of $.615 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I Total returns do not include the effect of the contingent deferred sales charge.
J Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Annualized
M Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
N Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Telecommunications Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $55.88 | $69.97 | $62.58 | $63.54 | $58.94 | $51.75 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .81C | 1.28 | 1.12 | 1.02 | .96 | 1.96D |
Net realized and unrealized gain (loss) | 3.07 | (3.42) | 10.74 | (.77) | 5.85 | 6.51 |
Total from investment operations | 3.88 | (2.14) | 11.86 | .25 | 6.81 | 8.47 |
Distributions from net investment income | (.21) | (1.56) | (1.31) | (.76) | (2.21) | (1.28) |
Distributions from net realized gain | (.62) | (10.39) | (3.16) | (.45) | – | (.01) |
Total distributions | (.83) | (11.95) | (4.47) | (1.21) | (2.21) | (1.28)E |
Redemption fees added to paid in capitalB | – | – | –F | –F | –F | –F |
Net asset value, end of period | $58.93 | $55.88 | $69.97 | $62.58 | $63.54 | $58.94 |
Total ReturnG,H | 7.03% | (3.76)% | 19.06% | .49% | 11.90% | 16.40% |
Ratios to Average Net AssetsI,J | ||||||
Expenses before reductions | .84%K | .82% | .80% | .82% | .83% | .85% |
Expenses net of fee waivers, if any | .84%K | .82% | .80% | .81% | .83% | .85% |
Expenses net of all reductions | .82%K | .80% | .78% | .81% | .82% | .82% |
Net investment income (loss) | 2.25%C,K | 1.92% | 1.62% | 1.67% | 1.58% | 3.41%D |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $255,306 | $320,908 | $690,720 | $689,600 | $346,174 | $343,548 |
Portfolio turnover rateL | 79%K,M | 66% | 105%M | 51% | 94%M | 111% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.35 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 1.63%.
D Net investment income per share reflects a large, non-recurring dividend which amounted to $.95 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.76%.
E Total distributions of $1.28 per share is comprised of distributions from net investment income of $1.275 and distributions from net realized gain of $.005 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Annualized
L Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
M Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Telecommunications Portfolio Class I
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $55.74 | $69.82 | $62.46 | $63.38 | $58.80 | $51.65 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .82C | 1.26 | 1.12 | 1.02 | .94 | 1.93D |
Net realized and unrealized gain (loss) | 3.07 | (3.39) | 10.70 | (.76) | 5.83 | 6.48 |
Total from investment operations | 3.89 | (2.13) | 11.82 | .26 | 6.77 | 8.41 |
Distributions from net investment income | (.21) | (1.56) | (1.30) | (.73) | (2.19) | (1.25) |
Distributions from net realized gain | (.62) | (10.39) | (3.16) | (.45) | – | (.01) |
Total distributions | (.83) | (11.95) | (4.46) | (1.18) | (2.19) | (1.26) |
Redemption fees added to paid in capitalB | – | – | –E | –E | –E | –E |
Net asset value, end of period | $58.80 | $55.74 | $69.82 | $62.46 | $63.38 | $58.80 |
Total ReturnF,G | 7.06% | (3.75)% | 19.03% | .51% | 11.85% | 16.30% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | .79%J | .82% | .80% | .82% | .86% | .91% |
Expenses net of fee waivers, if any | .79%J | .82% | .80% | .82% | .86% | .91% |
Expenses net of all reductions | .77%J | .80% | .78% | .81% | .85% | .88% |
Net investment income (loss) | 2.30%C,J | 1.91% | 1.62% | 1.67% | 1.55% | 3.35%D |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $10,304 | $8,332 | $14,550 | $6,197 | $2,505 | $1,604 |
Portfolio turnover rateK | 79%J,L | 66% | 105%L | 51% | 94%L | 111% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.35 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 1.68%.
D Net investment income per share reflects a large, non-recurring dividend which amounted to $.95 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.70%.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
J Annualized
K Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
L 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 (Unaudited)
For the period ended August 31, 2018
1. Organization.
Telecommunications Portfolio (the Fund) is a non-diversified fund of Fidelity Select Portfolios (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 invests primarily in securities of companies whose principal business activities fall within specific industries. The Fund offers Class A, Class M, Class C, Telecommunications and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
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 .005%.
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 are available on the SEC website or upon request.
3. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Fair Value Committee (the Committee) established by the Fund's investment adviser. 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 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. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. Large, non-recurring dividends recognized by the Fund are presented separately on the Statement of Operations as "Non-cash dividends" and the impact of these dividends is presented in the Financial Highlights. 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. 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 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, certain deemed distributions and losses deferred due to wash sales.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows:
Gross unrealized appreciation | $67,320,888 |
Gross unrealized depreciation | (28,248,756) |
Net unrealized appreciation (depreciation) | $39,072,132 |
Tax cost | $260,931,673 |
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions, aggregated $118,920,468 and $132,065,519, 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 .24% 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 annualized management fee rate was .54% 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% | $21,835 | $– |
Class M | .25% | .25% | 12,148 | – |
Class C | .75% | .25% | 39,631 | – |
$73,614 | $– |
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 M 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 M and Class C redemptions. The deferred sales charges are 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class M shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained by FDC | |
Class A | $3,682 |
Class M | 767 |
Class C(a) | 399 |
$4,848 |
(a) When 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(a) | |
Class A | $24,559 | .28 |
Class M | 8,987 | .37 |
Class C | 9,563 | .24 |
Telecommunications | 265,418 | .20 |
Class I | 6,452 | .15 |
$314,979 |
(a) Annualized
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. For the period, the fees were equivalent to an annualized rate of .04%.
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 $4,789 for the period.
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Redemptions In-Kind. During the period, 1,218,775 shares of Telecommunications Portfolio held by an affiliated entity were redeemed in-kind for investments and cash with a value of $67,398,250. The net realized gain of $14,071,812 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 the Notes to Financial Statements. Telecommunications Portfolio 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 $473 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. The Fund or borrower may terminate the loan at any time, and 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 $216,389.
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 $20,331 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $1,786.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended August 31, 2018 | Year ended February 28, 2018 | |
From net investment income | ||
Class A | $59,247 | $396,755 |
Class M | 12,383 | 86,824 |
Class C | 16,258 | 113,266 |
Telecommunications | 1,203,204 | 8,955,299 |
Class I | 29,050 | 235,382 |
Total | $1,320,142 | $9,787,526 |
From net realized gain | ||
Class A | $199,182 | $3,147,334 |
Class M | 53,174 | 841,588 |
Class C | 91,732 | 1,545,756 |
Telecommunications | 3,474,038 | 59,280,788 |
Class I | 85,073 | 1,562,410 |
Total | $3,903,199 | $66,377,876 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
Shares | Shares | Dollars | Dollars | |
Six months ended August 31, 2018 | Year ended February 28, 2018 | Six months ended August 31, 2018 | Year ended February 28, 2018 | |
Class A | ||||
Shares sold | 31,132 | 76,520 | $1,728,530 | $4,987,299 |
Reinvestment of distributions | 4,510 | 57,962 | 249,523 | 3,454,010 |
Shares redeemed | (58,702) | (273,126) | (3,246,716) | (18,205,397) |
Net increase (decrease) | (23,060) | (138,644) | $(1,268,663) | $(9,764,088) |
Class M | ||||
Shares sold | 10,260 | 21,912 | $572,652 | $1,457,815 |
Reinvestment of distributions | 1,188 | 15,649 | 65,401 | 926,496 |
Shares redeemed | (8,246) | (49,923) | (453,003) | (3,308,018) |
Net increase (decrease) | 3,202 | (12,362) | $185,050 | $(923,707) |
Class C | ||||
Shares sold | 12,398 | 31,294 | $688,339 | $2,045,854 |
Reinvestment of distributions | 1,797 | 25,537 | 98,976 | 1,513,170 |
Shares redeemed | (28,694) | (100,350) | (1,587,106) | (6,561,447) |
Net increase (decrease) | (14,499) | (43,519) | $(799,791) | $(3,002,423) |
Telecommunications | ||||
Shares sold | 271,268 | 1,189,602 | $15,379,969 | $77,745,057 |
Reinvestment of distributions | 80,586 | 1,082,670 | 4,482,975 | 65,288,273 |
Shares redeemed | (1,762,203)(a) | (6,401,925) | (97,903,849)(a) | (430,649,733) |
Net increase (decrease) | (1,410,349) | (4,129,653) | $(78,040,905) | $(287,616,403) |
Class I | ||||
Shares sold | 174,096 | 250,120 | $10,082,986 | $16,564,921 |
Reinvestment of distributions | 1,746 | 25,845 | 96,874 | 1,544,599 |
Shares redeemed | (150,079) | (334,874) | (8,680,686) | (21,776,703) |
Net increase (decrease) | 25,763 | (58,909) | $1,499,174 | $(3,667,183) |
(a) Amount includes in-kind redemptions (see the Redemptions In-Kind note for additional details)
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.
Wireless Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Apple, Inc. | 15.9 |
AT&T, Inc. | 10.5 |
Qualcomm, Inc. | 8.5 |
Verizon Communications, Inc. | 7.6 |
American Tower Corp. | 6.2 |
T-Mobile U.S., Inc. | 4.8 |
Alphabet, Inc. Class A | 3.8 |
Vodafone Group PLC sponsored ADR | 2.6 |
Orange SA ADR | 2.4 |
Liberty Global PLC Class A | 2.2 |
64.5 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Diversified Telecommunication Services | 30.0% | |
Technology Hardware, Storage & Peripherals | 15.9% | |
Semiconductors & Semiconductor Equipment | 13.0% | |
Wireless Telecommunication Services | 12.0% | |
Equity Real Estate Investment Trusts (Reits) | 6.2% | |
All Others* | 22.9% |
* Includes short-term investments and net other assets (liabilities).
Wireless Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 95.9% | |||
Shares | Value | ||
Aerospace & Defense - 0.9% | |||
Aerospace & Defense - 0.9% | |||
Harris Corp. | 14,500 | $2,356,395 | |
Communications Equipment - 4.4% | |||
Communications Equipment - 4.4% | |||
CommScope Holding Co., Inc. (a) | 65,300 | 2,069,357 | |
Motorola Solutions, Inc. | 11,468 | 1,472,032 | |
Nokia Corp. sponsored ADR | 391,700 | 2,173,935 | |
Quantenna Communications, Inc. (a) | 147,000 | 2,685,690 | |
Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 323,900 | 2,723,999 | |
ViaSat, Inc. (a) | 1 | 63 | |
11,125,076 | |||
Diversified Telecommunication Services - 29.0% | |||
Alternative Carriers - 1.3% | |||
Iliad SA | 25,195 | 3,254,979 | |
Integrated Telecommunication Services - 27.7% | |||
AT&T, Inc. | 842,700 | 26,915,838 | |
BCE, Inc. | 92,800 | 3,785,244 | |
BT Group PLC sponsored ADR (b) | 371,900 | 5,280,980 | |
Chunghwa Telecom Co. Ltd. sponsored ADR (b) | 12,900 | 453,951 | |
Euskaltel, S.A. (c) | 43,000 | 366,106 | |
Masmovil Ibercom SA (a) | 22,870 | 2,582,960 | |
Orange SA ADR (b) | 374,300 | 6,048,688 | |
Telecom Italia SpA (a) | 2,505,500 | 1,595,554 | |
Telecom Italia SpA sponsored ADR (a) | 25,400 | 163,830 | |
Telefonica SA sponsored ADR (b) | 502,997 | 4,079,306 | |
Verizon Communications, Inc. | 356,801 | 19,399,270 | |
70,671,727 | |||
TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES | 73,926,706 | ||
Equity Real Estate Investment Trusts (REITs) - 6.2% | |||
Specialized REITs - 6.2% | |||
American Tower Corp. | 106,192 | 15,835,351 | |
Crown Castle International Corp. | 1 | 114 | |
15,835,465 | |||
Internet Software & Services - 4.2% | |||
Internet Software & Services - 4.2% | |||
Alphabet, Inc. Class A (a) | 8,000 | 9,854,400 | |
Gogo, Inc. (a)(b) | 222,600 | 999,474 | |
10,853,874 | |||
Media - 4.7% | |||
Cable & Satellite - 4.7% | |||
Altice Europe NV Class A | 134,099 | 403,459 | |
Altice U.S.A., Inc. Class A | 55,825 | 1,000,384 | |
DISH Network Corp. Class A (a) | 82,100 | 2,902,235 | |
Liberty Global PLC Class A (a) | 205,800 | 5,517,498 | |
Telenet Group Holding NV | 40,479 | 2,213,041 | |
12,036,617 | |||
Semiconductors & Semiconductor Equipment - 13.0% | |||
Semiconductors - 13.0% | |||
Marvell Technology Group Ltd. | 126,200 | 2,609,816 | |
Qorvo, Inc. (a) | 67,825 | 5,432,104 | |
Qualcomm, Inc. | 315,650 | 21,688,312 | |
Skyworks Solutions, Inc. | 30,300 | 2,766,390 | |
STMicroelectronics NV (NY Shares) unit (b) | 33,500 | 693,115 | |
33,189,737 | |||
Software - 4.2% | |||
Application Software - 1.9% | |||
RingCentral, Inc. (a) | 52,700 | 4,909,005 | |
Home Entertainment Software - 2.0% | |||
Activision Blizzard, Inc. | 68,200 | 4,917,220 | |
Systems Software - 0.3% | |||
BlackBerry Ltd. (a) | 77,101 | 820,638 | |
TOTAL SOFTWARE | 10,646,863 | ||
Technology Hardware, Storage & Peripherals - 15.9% | |||
Technology Hardware, Storage & Peripherals - 15.9% | |||
Apple, Inc. | 178,105 | 40,542,042 | |
Textiles, Apparel & Luxury Goods - 1.4% | |||
Textiles - 1.4% | |||
China Tower Corp. Ltd. Class H | 23,708,000 | 3,624,730 | |
Wireless Telecommunication Services - 12.0% | |||
Wireless Telecommunication Services - 12.0% | |||
China Mobile Ltd. sponsored ADR | 89,200 | 4,280,708 | |
Millicom International Cellular SA | 24,400 | 1,397,144 | |
Rogers Communications, Inc. Class B (non-vtg.) | 6,900 | 357,531 | |
Shenandoah Telecommunications Co. | 10,100 | 385,315 | |
SoftBank Corp. | 53,200 | 4,925,647 | |
Spok Holdings, Inc. | 1 | 15 | |
Sprint Corp. (a) | 32 | 196 | |
T-Mobile U.S., Inc. (a) | 187,175 | 12,361,037 | |
U.S. Cellular Corp. (a) | 5,800 | 248,008 | |
Vodafone Group PLC sponsored ADR | 306,781 | 6,629,537 | |
30,585,138 | |||
TOTAL COMMON STOCKS | |||
(Cost $198,142,472) | 244,722,643 | ||
Nonconvertible Preferred Stocks - 1.0% | |||
Diversified Telecommunication Services - 1.0% | |||
Integrated Telecommunication Services - 1.0% | |||
Telefonica Brasil SA | |||
(Cost $3,403,491) | 248,800 | 2,444,569 | |
Money Market Funds - 5.7% | |||
Fidelity Cash Central Fund, 1.97% (d) | 3,904,343 | 3,905,124 | |
Fidelity Securities Lending Cash Central Fund 1.98% (d)(e) | 10,650,365 | 10,651,430 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $14,556,606) | 14,556,554 | ||
TOTAL INVESTMENT IN SECURITIES - 102.6% | |||
(Cost $216,102,569) | 261,723,766 | ||
NET OTHER ASSETS (LIABILITIES) - (2.6)% | (6,555,195) | ||
NET ASSETS - 100% | $255,168,571 |
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 $366,106 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 are available on the SEC's website or upon request.
(e) 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 | $11,123 |
Fidelity Securities Lending Cash Central Fund | 115,245 |
Total | $126,368 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $244,722,643 | $238,201,442 | $6,521,201 | $-- |
Nonconvertible Preferred Stocks | 2,444,569 | 2,444,569 | -- | -- |
Money Market Funds | 14,556,554 | 14,556,554 | -- | -- |
Total Investments in Securities: | $261,723,766 | $255,202,565 | $6,521,201 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $25,236,480 |
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 | 73.1% |
United Kingdom | 6.9% |
France | 3.7% |
Spain | 2.7% |
Canada | 1.9% |
Japan | 1.9% |
Hong Kong | 1.7% |
China | 1.4% |
Sweden | 1.1% |
Bermuda | 1.0% |
Brazil | 1.0% |
Others (Individually Less Than 1%) | 3.6% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Wireless Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $10,259,710) — See accompanying schedule: Unaffiliated issuers (cost $201,545,963) | $247,167,212 | |
Fidelity Central Funds (cost $14,556,606) | 14,556,554 | |
Total Investment in Securities (cost $216,102,569) | $261,723,766 | |
Foreign currency held at value (cost $45,841) | 45,841 | |
Receivable for investments sold | 4,115,558 | |
Receivable for fund shares sold | 401,379 | |
Dividends receivable | 351,698 | |
Distributions receivable from Fidelity Central Funds | 23,298 | |
Prepaid expenses | 2,806 | |
Other receivables | 24,790 | |
Total assets | 266,689,136 | |
Liabilities | ||
Payable for investments purchased | $456,641 | |
Payable for fund shares redeemed | 227,864 | |
Accrued management fee | 113,298 | |
Other affiliated payables | 49,142 | |
Other payables and accrued expenses | 24,538 | |
Collateral on securities loaned | 10,649,082 | |
Total liabilities | 11,520,565 | |
Net Assets | $255,168,571 | |
Net Assets consist of: | ||
Paid in capital | $184,755,883 | |
Undistributed net investment income | 2,929,863 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 21,884,194 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 45,598,631 | |
Net Assets, for 24,070,944 shares outstanding | $255,168,571 | |
Net Asset Value, offering price and redemption price per share ($255,168,571 ÷ 24,070,944 shares) | $10.60 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $2,780,434 | |
Non-Cash dividends | 1,069,049 | |
Income from Fidelity Central Funds | 126,368 | |
Total income | 3,975,851 | |
Expenses | ||
Management fee | $681,983 | |
Transfer agent fees | 253,426 | |
Accounting and security lending fees | 50,417 | |
Custodian fees and expenses | 7,850 | |
Independent trustees' fees and expenses | 632 | |
Registration fees | 26,040 | |
Audit | 25,899 | |
Legal | 3,030 | |
Interest | 707 | |
Miscellaneous | 1,003 | |
Total expenses before reductions | 1,050,987 | |
Expense reductions | (13,462) | |
Total expenses after reductions | 1,037,525 | |
Net investment income (loss) | 2,938,326 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 23,124,021 | |
Fidelity Central Funds | 694 | |
Foreign currency transactions | (8,443) | |
Total net realized gain (loss) | 23,116,272 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (16,799,366) | |
Fidelity Central Funds | (33) | |
Assets and liabilities in foreign currencies | (22,755) | |
Total change in net unrealized appreciation (depreciation) | (16,822,154) | |
Net gain (loss) | 6,294,118 | |
Net increase (decrease) in net assets resulting from operations | $9,232,444 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $2,938,326 | $4,522,126 |
Net realized gain (loss) | 23,116,272 | 11,020,350 |
Change in net unrealized appreciation (depreciation) | (16,822,154) | 25,972,235 |
Net increase (decrease) in net assets resulting from operations | 9,232,444 | 41,514,711 |
Distributions to shareholders from net investment income | (478,020) | (3,603,116) |
Distributions to shareholders from net realized gain | (1,937,240) | (6,240,342) |
Total distributions | (2,415,260) | (9,843,458) |
Share transactions | ||
Proceeds from sales of shares | 15,100,257 | 174,215,147 |
Reinvestment of distributions | 2,295,061 | 9,361,647 |
Cost of shares redeemed | (44,786,324) | (178,872,137) |
Net increase (decrease) in net assets resulting from share transactions | (27,391,006) | 4,704,657 |
Redemption fees | – | 7,555 |
Total increase (decrease) in net assets | (20,573,822) | 36,383,465 |
Net Assets | ||
Beginning of period | 275,742,393 | 239,358,928 |
End of period | $255,168,571 | $275,742,393 |
Other Information | ||
Undistributed net investment income end of period | $2,929,863 | $469,557 |
Shares | ||
Sold | 1,477,420 | 17,791,191 |
Issued in reinvestment of distributions | 228,592 | 947,168 |
Redeemed | (4,428,468) | (18,220,551) |
Net increase (decrease) | (2,722,456) | 517,808 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Wireless Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $10.29 | $9.11 | $7.85 | $9.54 | $10.57 | $8.60 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .12C | .16 | .10 | .11 | .17 | .56D |
Net realized and unrealized gain (loss) | .29 | 1.39 | 1.71 | (1.11) | .48 | 1.51 |
Total from investment operations | .41 | 1.55 | 1.81 | (1.00) | .65 | 2.07 |
Distributions from net investment income | (.02) | (.14) | (.09) | (.12) | (.62) | (.10) |
Distributions from net realized gain | (.08) | (.24) | (.46) | (.57) | (1.06) | – |
Total distributions | (.10) | (.37)E | (.55) | (.69) | (1.68) | (.10) |
Redemption fees added to paid in capitalB | – | – | –F | –F | –F | –F |
Net asset value, end of period | $10.60 | $10.29 | $9.11 | $7.85 | $9.54 | $10.57 |
Total ReturnG,H | 4.00% | 17.21% | 24.09% | (11.07)% | 7.55% | 24.11% |
Ratios to Average Net AssetsI,J | ||||||
Expenses before reductions | .83%K | .83% | .87% | .86% | .86% | .88% |
Expenses net of fee waivers, if any | .83%K | .83% | .87% | .86% | .86% | .88% |
Expenses net of all reductions | .82%K | .82% | .86% | .85% | .85% | .86% |
Net investment income (loss) | 1.90%C,K | 1.61% | 1.23% | 1.23% | 1.76% | 5.91%D |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $255,169 | $275,742 | $239,359 | $207,492 | $270,449 | $290,057 |
Portfolio turnover rateL | 70%K | 85% | 98% | 78% | 48% | 120% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.04 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 1.48%.
D Net investment income per share reflects a large, non-recurring dividend which amounted to $.45 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.23%.
E Total distributions of $.37 per share is comprised of distributions from net investment income of $.136 and distributions from net realized gain of $.235 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
J Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
K Annualized
L 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 (Unaudited)
For the period ended August 31, 2018
1. Organization.
Wireless Portfolio (the Fund) is a non-diversified fund of Fidelity Select Portfolios (the Trust) and is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds. 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 invests primarily in securities of companies whose principal business activities fall within specific industries.
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 .005%.
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 are available on the SEC website or upon request.
3. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Fair Value Committee (the Committee) established by the Fund's investment adviser. 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 August 31, 2018, 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 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. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. Large, non-recurring dividends recognized by the Fund are presented separately on the Statement of Operations as "Non-cash dividends" and the impact of these dividends is presented in the Financial Highlights. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. 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. 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 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 and losses deferred due to wash sales.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows:
Gross unrealized appreciation | $62,495,031 |
Gross unrealized depreciation | (19,011,254) |
Net unrealized appreciation (depreciation) | $43,483,777 |
Tax cost | $218,239,989 |
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 $87,344,719 and $119,337,922, 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 .24% 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 annualized management fee rate was .54% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .20% of average net assets.
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. For the period, the fees were equivalent to an annualized rate of .04%.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $1,247 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 Fidelity Management & Research Company (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 | $6,554,000 | 1.94% | $707 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
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 $365 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. The Fund or borrower may terminate the loan at any time, and 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 $115,245.
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 $12,232 for the period.
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses in the amount of $1,230.
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Shareholder Expense Example
As a shareholder of a 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 Funds 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 (March 1, 2018 to August 31, 2018).
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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 RatioA | Beginning Account Value March 1, 2018 | Ending Account Value August 31, 2018 | Expenses Paid During Period-B March 1, 2018 to August 31, 2018 | |
Telecommunications Portfolio | ||||
Class A | 1.17% | |||
Actual | $1,000.00 | $1,068.40 | $6.10 | |
Hypothetical-C | $1,000.00 | $1,019.31 | $5.96 | |
Class M | 1.50% | |||
Actual | $1,000.00 | $1,066.70 | $7.81 | |
Hypothetical-C | $1,000.00 | $1,017.64 | $7.63 | |
Class C | 1.88% | |||
Actual | $1,000.00 | $1,064.60 | $9.78 | |
Hypothetical-C | $1,000.00 | $1,015.73 | $9.55 | |
Telecommunications | .84% | |||
Actual | $1,000.00 | $1,070.30 | $4.38 | |
Hypothetical-C | $1,000.00 | $1,020.97 | $4.28 | |
Class I | .79% | |||
Actual | $1,000.00 | $1,070.60 | $4.12 | |
Hypothetical-C | $1,000.00 | $1,021.22 | $4.02 | |
Wireless Portfolio | .83% | |||
Actual | $1,000.00 | $1,040.00 | $4.27 | |
Hypothetical-C | $1,000.00 | $1,021.02 | $4.23 |
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 184/ 365 (to reflect the one-half year period).
C 5% return per year before expenses
SELTS-SANN-1018
1.846053.111
Fidelity® Select Portfolios® Communications Equipment Portfolio Computers Portfolio IT Services Portfolio Semiconductors Portfolio Software and IT Services Portfolio Technology Portfolio Semi-Annual Report August 31, 2018 |
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Contents
Communications Equipment Portfolio | |
Computers Portfolio | |
IT Services Portfolio | |
Semiconductors Portfolio | |
Software and IT Services Portfolio | |
Technology Portfolio | |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-800-544-8544 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. © 2018 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Funds. This report is not authorized for distribution to prospective investors in the Funds unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.institutional.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.
Communications Equipment Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Cisco Systems, Inc. | 23.4 |
Nokia Corp. sponsored ADR | 6.3 |
F5 Networks, Inc. | 5.6 |
CommScope Holding Co., Inc. | 5.6 |
Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 4.9 |
Juniper Networks, Inc. | 4.3 |
Palo Alto Networks, Inc. | 4.1 |
Arista Networks, Inc. | 2.7 |
Lumentum Holdings, Inc. | 2.2 |
Viavi Solutions, Inc. | 2.1 |
61.2 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Communications Equipment | 82.8% | |
Semiconductors & Semiconductor Equipment | 4.6% | |
Electronic Equipment & Components | 2.9% | |
Internet Software & Services | 2.6% | |
Software | 1.9% | |
All Others* | 5.2% |
* Includes short-term investments and net other assets (liabilities).
Communications Equipment Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 98.1% | |||
Shares | Value | ||
Aerospace & Defense - 0.4% | |||
Aerospace & Defense - 0.4% | |||
Harris Corp. | 6,300 | $1,023,813 | |
Communications Equipment - 82.8% | |||
Communications Equipment - 82.8% | |||
ADTRAN, Inc. | 239,400 | 4,117,680 | |
Arista Networks, Inc. (a) | 21,100 | 6,308,478 | |
Arris International PLC (a) | 151,053 | 3,913,783 | |
Calix Networks, Inc. (a) | 50,221 | 391,724 | |
Ciena Corp. (a) | 20,900 | 660,022 | |
Cisco Systems, Inc. | 1,152,899 | 55,073,984 | |
CommScope Holding Co., Inc. (a) | 414,071 | 13,121,910 | |
Comtech Telecommunications Corp. | 27,300 | 978,705 | |
EchoStar Holding Corp. Class A (a) | 38,600 | 1,852,800 | |
Extreme Networks, Inc. (a) | 83,200 | 521,664 | |
F5 Networks, Inc. (a) | 69,435 | 13,131,547 | |
Finisar Corp. (a) | 232,600 | 4,745,040 | |
Infinera Corp. (a) | 263,114 | 2,354,870 | |
InterDigital, Inc. | 48,100 | 3,973,060 | |
Juniper Networks, Inc. | 356,512 | 10,135,636 | |
Lumentum Holdings, Inc. (a) | 76,820 | 5,216,078 | |
Mitel Networks Corp. (a) | 354,900 | 3,903,900 | |
Motorola Solutions, Inc. | 32,659 | 4,192,109 | |
NETGEAR, Inc. (a) | 30,350 | 2,150,298 | |
NetScout Systems, Inc. (a) | 76,600 | 1,915,000 | |
Nokia Corp. sponsored ADR (b) | 2,660,503 | 14,765,792 | |
Oclaro, Inc. (a) | 451,200 | 4,304,448 | |
Palo Alto Networks, Inc. (a) | 42,200 | 9,754,530 | |
Plantronics, Inc. | 41,734 | 2,805,359 | |
Quantenna Communications, Inc. (a) | 172,900 | 3,158,883 | |
Radware Ltd. (a) | 20,743 | 574,581 | |
Sierra Wireless, Inc. (a)(b) | 21,100 | 397,909 | |
Sonus Networks, Inc. (a) | 391,560 | 2,709,595 | |
Telefonaktiebolaget LM Ericsson (B Shares) sponsored ADR | 1,387,880 | 11,672,071 | |
ViaSat, Inc. (a)(b) | 23,500 | 1,476,270 | |
Viavi Solutions, Inc. (a) | 439,800 | 4,925,760 | |
195,203,486 | |||
Electronic Equipment & Components - 2.9% | |||
Electronic Components - 0.4% | |||
Corning, Inc. | 23,800 | 797,538 | |
Electronic Manufacturing Services - 1.7% | |||
Fabrinet | 32,400 | 1,550,988 | |
IPG Photonics Corp. (a) | 1,600 | 280,768 | |
Jabil, Inc. | 42,400 | 1,253,344 | |
TE Connectivity Ltd. | 9,500 | 870,960 | |
3,956,060 | |||
Technology Distributors - 0.8% | |||
CDW Corp. | 10,800 | 945,648 | |
Dell Technologies, Inc. (a) | 10,659 | 1,025,076 | |
1,970,724 | |||
TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 6,724,322 | ||
Internet Software & Services - 2.6% | |||
Internet Software & Services - 2.6% | |||
Alphabet, Inc.: | |||
Class A (a) | 2,660 | 3,276,588 | |
Class C (a) | 1,305 | 1,589,738 | |
LogMeIn, Inc. | 13,708 | 1,178,203 | |
6,044,529 | |||
IT Services - 1.6% | |||
Data Processing & Outsourced Services - 0.4% | |||
WNS Holdings Ltd. sponsored ADR (a) | 19,300 | 1,000,319 | |
IT Consulting & Other Services - 1.2% | |||
Amdocs Ltd. | 16,700 | 1,090,176 | |
Cognizant Technology Solutions Corp. Class A | 8,650 | 678,420 | |
Presidio, Inc. | 73,900 | 1,117,368 | |
2,885,964 | |||
TOTAL IT SERVICES | 3,886,283 | ||
Media - 0.6% | |||
Cable & Satellite - 0.6% | |||
Comcast Corp. Class A | 38,100 | 1,409,319 | |
Semiconductors & Semiconductor Equipment - 4.6% | |||
Semiconductors - 4.6% | |||
Acacia Communications, Inc. (a) | 102,000 | 4,158,540 | |
Analog Devices, Inc. | 8,100 | 800,685 | |
Broadcom, Inc. | 4,723 | 1,034,479 | |
Marvell Technology Group Ltd. | 3,698 | 76,475 | |
Maxim Integrated Products, Inc. | 3,500 | 211,645 | |
NXP Semiconductors NV (a) | 12,500 | 1,164,250 | |
ON Semiconductor Corp. (a) | 32,400 | 691,416 | |
Qualcomm, Inc. | 39,219 | 2,694,737 | |
10,832,227 | |||
Software - 1.9% | |||
Application Software - 0.8% | |||
Citrix Systems, Inc. (a) | 9,000 | 1,026,180 | |
Micro Focus International PLC | 49,700 | 843,750 | |
SailPoint Technologies Holding, Inc. (a) | 2,300 | 71,139 | |
1,941,069 | |||
Systems Software - 1.1% | |||
Check Point Software Technologies Ltd. (a) | 9,900 | 1,150,281 | |
Oracle Corp. | 29,300 | 1,423,394 | |
2,573,675 | |||
TOTAL SOFTWARE | 4,514,744 | ||
Technology Hardware, Storage & Peripherals - 0.7% | |||
Technology Hardware, Storage & Peripherals - 0.7% | |||
HP, Inc. | 43,111 | 1,062,686 | |
Samsung Electronics Co. Ltd. | 13,850 | 601,629 | |
1,664,315 | |||
TOTAL COMMON STOCKS | |||
(Cost $161,904,598) | 231,303,038 | ||
Money Market Funds - 3.1% | |||
Fidelity Cash Central Fund, 1.97% (c) | 3,469,270 | 3,469,964 | |
Fidelity Securities Lending Cash Central Fund 1.98% (c)(d) | 3,793,877 | 3,794,257 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $7,264,221) | 7,264,221 | ||
TOTAL INVESTMENT IN SECURITIES - 101.2% | |||
(Cost $169,168,819) | 238,567,259 | ||
NET OTHER ASSETS (LIABILITIES) - (1.2)% | (2,886,733) | ||
NET ASSETS - 100% | $235,680,526 |
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 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 | $17,409 |
Fidelity Securities Lending Cash Central Fund | 116,290 |
Total | $133,699 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $231,303,038 | $230,459,288 | $843,750 | $-- |
Money Market Funds | 7,264,221 | 7,264,221 | -- | -- |
Total Investments in Securities: | $238,567,259 | $237,723,509 | $843,750 | $-- |
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 | 81.4% |
Finland | 6.3% |
Sweden | 4.9% |
United Kingdom | 2.1% |
Canada | 1.9% |
Others (Individually Less Than 1%) | 3.4% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Communications Equipment Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $3,661,497) — See accompanying schedule: Unaffiliated issuers (cost $161,904,598) | $231,303,038 | |
Fidelity Central Funds (cost $7,264,221) | 7,264,221 | |
Total Investment in Securities (cost $169,168,819) | $238,567,259 | |
Cash | 135,000 | |
Receivable for investments sold | 1,691,937 | |
Receivable for fund shares sold | 527,169 | |
Dividends receivable | 89,835 | |
Distributions receivable from Fidelity Central Funds | 6,419 | |
Prepaid expenses | 2,241 | |
Other receivables | 8,031 | |
Total assets | 241,027,891 | |
Liabilities | ||
Payable for investments purchased | $1,171,251 | |
Payable for fund shares redeemed | 211,594 | |
Accrued management fee | 101,503 | |
Other affiliated payables | 45,562 | |
Other payables and accrued expenses | 22,940 | |
Collateral on securities loaned | 3,794,515 | |
Total liabilities | 5,347,365 | |
Net Assets | $235,680,526 | |
Net Assets consist of: | ||
Paid in capital | $166,984,368 | |
Undistributed net investment income | 720,014 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (1,422,296) | |
Net unrealized appreciation (depreciation) on investments | 69,398,440 | |
Net Assets, for 5,803,901 shares outstanding | $235,680,526 | |
Net Asset Value, offering price and redemption price per share ($235,680,526 ÷ 5,803,901 shares) | $40.61 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $1,936,491 | |
Income from Fidelity Central Funds (including $116,290 from security lending) | 133,699 | |
Total income | 2,070,190 | |
Expenses | ||
Management fee | $611,984 | |
Transfer agent fees | 231,828 | |
Accounting and security lending fees | 46,271 | |
Custodian fees and expenses | 5,573 | |
Independent trustees' fees and expenses | 545 | |
Registration fees | 25,469 | |
Audit | 18,758 | |
Legal | 2,321 | |
Miscellaneous | 1,607 | |
Total expenses before reductions | 944,356 | |
Expense reductions | (16,365) | |
Total expenses after reductions | 927,991 | |
Net investment income (loss) | 1,142,199 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 1,395,847 | |
Fidelity Central Funds | (257) | |
Foreign currency transactions | (930) | |
Total net realized gain (loss) | 1,394,660 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 19,878,511 | |
Assets and liabilities in foreign currencies | 75 | |
Total change in net unrealized appreciation (depreciation) | 19,878,586 | |
Net gain (loss) | 21,273,246 | |
Net increase (decrease) in net assets resulting from operations | $22,415,445 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $1,142,199 | $921,400 |
Net realized gain (loss) | 1,394,660 | 12,965,036 |
Change in net unrealized appreciation (depreciation) | 19,878,586 | 15,653,779 |
Net increase (decrease) in net assets resulting from operations | 22,415,445 | 29,540,215 |
Distributions to shareholders from net investment income | – | (1,789,780) |
Distributions to shareholders from net realized gain | (12,879,990) | (1,551,482) |
Total distributions | (12,879,990) | (3,341,262) |
Share transactions | ||
Proceeds from sales of shares | 51,369,518 | 19,613,235 |
Reinvestment of distributions | 12,122,143 | 3,127,012 |
Cost of shares redeemed | (46,524,522) | (44,412,551) |
Net increase (decrease) in net assets resulting from share transactions | 16,967,139 | (21,672,304) |
Redemption fees | – | 509 |
Total increase (decrease) in net assets | 26,502,594 | 4,527,158 |
Net Assets | ||
Beginning of period | 209,177,932 | 204,650,774 |
End of period | $235,680,526 | $209,177,932 |
Other Information | ||
Undistributed net investment income end of period | $720,014 | $– |
Distributions in excess of net investment income end of period | $– | $(422,185) |
Shares | ||
Sold | 1,354,885 | 523,886 |
Issued in reinvestment of distributions | 332,752 | 89,704 |
Redeemed | (1,228,866) | (1,266,244) |
Net increase (decrease) | 458,771 | (652,654) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Communications Equipment Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $39.13 | $34.12 | $26.71 | $32.99 | $31.24 | $24.31 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .19 | .17 | .38 | .31 | .28 | .18 |
Net realized and unrealized gain (loss) | 3.65 | 5.45C | 7.39 | (5.64) | 3.52 | 6.95 |
Total from investment operations | 3.84 | 5.62 | 7.77 | (5.33) | 3.80 | 7.13 |
Distributions from net investment income | – | (.33) | (.36) | (.30) | (.30) | (.20) |
Distributions from net realized gain | (2.36) | (.28) | – | (.65) | (1.75) | – |
Total distributions | (2.36) | (.61) | (.36) | (.95) | (2.05) | (.20) |
Redemption fees added to paid in capitalB | – | –D | –D | –D | –D | –D |
Net asset value, end of period | $40.61 | $39.13 | $34.12 | $26.71 | $32.99 | $31.24 |
Total ReturnE,F | 10.50% | 16.71%C | 29.24% | (16.38)% | 12.49% | 29.41% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .83%I | .85% | .88% | .90% | .89% | .92% |
Expenses net of fee waivers, if any | .83%I | .85% | .88% | .89% | .89% | .92% |
Expenses net of all reductions | .82%I | .85% | .88% | .89% | .89% | .90% |
Net investment income (loss) | 1.01%I | .48% | 1.27% | 1.04% | .89% | .69% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $235,681 | $209,178 | $204,651 | $169,455 | $263,631 | $347,345 |
Portfolio turnover rateJ | 41%I | 56% | 38% | 30% | 42%K | 65% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.01 per share. Excluding these litigation proceeds, the total return would have been 16.67%.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Computers Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Apple, Inc. | 23.4 |
Sony Corp. | 14.9 |
Samsung Electronics Co. Ltd. | 11.5 |
HP, Inc. | 4.8 |
NetApp, Inc. | 4.8 |
Dell Technologies, Inc. | 4.8 |
Seagate Technology LLC | 3.3 |
Western Digital Corp. | 3.1 |
Logitech International SA (Reg.) | 2.9 |
Microsoft Corp. | 2.6 |
76.1 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Technology Hardware, Storage & Peripherals | 63.0% | |
Household Durables | 15.3% | |
Electronic Equipment & Components | 6.1% | |
IT Services | 4.1% | |
Semiconductors & Semiconductor Equipment | 3.7% | |
All Others* | 7.8% |
* Includes short-term investments and net other assets (liabilities).
Computers Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 96.8% | |||
Shares | Value | ||
Electronic Equipment & Components - 6.1% | |||
Electronic Components - 1.3% | |||
LG Display Co. Ltd. | 394,852 | $7,512,604 | |
Technology Distributors - 4.8% | |||
Dell Technologies, Inc. (a) | 283,735 | 27,286,795 | |
TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 34,799,399 | ||
Household Durables - 15.3% | |||
Consumer Electronics - 15.3% | |||
LG Electronics, Inc. | 30,825 | 2,122,508 | |
Sony Corp. | 1,499,106 | 85,243,129 | |
87,365,637 | |||
Internet Software & Services - 2.0% | |||
Internet Software & Services - 2.0% | |||
Alphabet, Inc.: | |||
Class A (a) | 9,231 | 11,370,746 | |
Class C (a) | 19 | 23,146 | |
11,393,892 | |||
IT Services - 4.1% | |||
Data Processing & Outsourced Services - 4.1% | |||
MasterCard, Inc. Class A | 41,717 | 8,992,517 | |
PayPal Holdings, Inc. (a) | 61,095 | 5,640,901 | |
Visa, Inc. Class A | 60,726 | 8,920,042 | |
23,553,460 | |||
Semiconductors & Semiconductor Equipment - 3.7% | |||
Semiconductor Equipment - 0.5% | |||
ASML Holding NV | 13,566 | 2,781,708 | |
Semiconductors - 3.2% | |||
Mellanox Technologies Ltd. (a) | 165,297 | 13,752,710 | |
Qualcomm, Inc. | 325 | 22,331 | |
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR | 107,322 | 4,679,239 | |
18,454,280 | |||
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | 21,235,988 | ||
Software - 2.6% | |||
Systems Software - 2.6% | |||
Microsoft Corp. | 133,632 | 15,010,883 | |
Technology Hardware, Storage & Peripherals - 63.0% | |||
Technology Hardware, Storage & Peripherals - 63.0% | |||
Apple, Inc. | 588,840 | 134,037,647 | |
Canon, Inc. | 227,698 | 7,306,060 | |
Cray, Inc. (a) | 23,289 | 505,371 | |
Fujifilm Holdings Corp. | 286,949 | 12,135,482 | |
Hewlett Packard Enterprise Co. | 725,288 | 11,989,011 | |
HP, Inc. | 1,129,209 | 27,835,002 | |
Logitech International SA (Reg.) | 335,597 | 16,564,313 | |
NCR Corp. (a) | 124,104 | 3,525,795 | |
NetApp, Inc. | 315,354 | 27,375,881 | |
Pure Storage, Inc. Class A (a) | 118,006 | 3,167,281 | |
Quanta Computer, Inc. | 5,098,819 | 8,779,027 | |
Samsung Electronics Co. Ltd. | 1,514,950 | 65,807,746 | |
Seagate Technology LLC | 353,531 | 18,928,050 | |
Super Micro Computer, Inc. (a) | 58,065 | 1,190,913 | |
Western Digital Corp. | 278,171 | 17,591,534 | |
Xerox Corp. | 160,869 | 4,481,810 | |
361,220,923 | |||
TOTAL COMMON STOCKS | |||
(Cost $308,551,034) | 554,580,182 | ||
Money Market Funds - 1.4% | |||
Fidelity Cash Central Fund, 1.97% (b) | |||
(Cost $7,999,571) | 7,997,972 | 7,999,571 | |
TOTAL INVESTMENT IN SECURITIES - 98.2% | |||
(Cost $316,550,605) | 562,579,753 | ||
NET OTHER ASSETS (LIABILITIES) - 1.8% | 10,427,945 | ||
NET ASSETS - 100% | $573,007,698 |
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 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 | $24,138 |
Total | $24,138 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $554,580,182 | $454,518,389 | $100,061,793 | $-- |
Money Market Funds | 7,999,571 | 7,999,571 | -- | -- |
Total Investments in Securities: | $562,579,753 | $462,517,960 | $100,061,793 | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $91,798,379 |
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 | 57.1% |
Japan | 18.3% |
Korea (South) | 13.2% |
Ireland | 3.3% |
Switzerland | 2.9% |
Israel | 2.4% |
Taiwan | 2.3% |
Others (Individually Less Than 1%) | 0.5% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Computers Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $308,551,034) | $554,580,182 | |
Fidelity Central Funds (cost $7,999,571) | 7,999,571 | |
Total Investment in Securities (cost $316,550,605) | $562,579,753 | |
Receivable for investments sold | 10,675,860 | |
Receivable for fund shares sold | 228,868 | |
Dividends receivable | 216,425 | |
Distributions receivable from Fidelity Central Funds | 3,386 | |
Prepaid expenses | 5,615 | |
Other receivables | 171,859 | |
Total assets | 573,881,766 | |
Liabilities | ||
Payable for fund shares redeemed | $455,382 | |
Accrued management fee | 248,486 | |
Transfer agent fee payable | 74,464 | |
Other affiliated payables | 17,426 | |
Other payables and accrued expenses | 78,310 | |
Total liabilities | 874,068 | |
Net Assets | $573,007,698 | |
Net Assets consist of: | ||
Paid in capital | $280,198,944 | |
Undistributed net investment income | 2,143,480 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 44,737,145 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 245,928,129 | |
Net Assets, for 5,543,153 shares outstanding | $573,007,698 | |
Net Asset Value, offering price and redemption price per share ($573,007,698 ÷ 5,543,153 shares) | $103.37 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $4,237,373 | |
Income from Fidelity Central Funds | 24,138 | |
Total income | 4,261,511 | |
Expenses | ||
Management fee | $1,452,800 | |
Transfer agent fees | 447,625 | |
Accounting fees and expenses | 102,507 | |
Custodian fees and expenses | 21,768 | |
Independent trustees' fees and expenses | 1,314 | |
Registration fees | 20,422 | |
Audit | 19,049 | |
Legal | 3,440 | |
Miscellaneous | 10,941 | |
Total expenses before reductions | 2,079,866 | |
Expense reductions | (2,412) | |
Total expenses after reductions | 2,077,454 | |
Net investment income (loss) | 2,184,057 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 45,792,300 | |
Fidelity Central Funds | 70 | |
Foreign currency transactions | 12,929 | |
Total net realized gain (loss) | 45,805,299 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 12,750,860 | |
Assets and liabilities in foreign currencies | (9,743) | |
Total change in net unrealized appreciation (depreciation) | 12,741,117 | |
Net gain (loss) | 58,546,416 | |
Net increase (decrease) in net assets resulting from operations | $60,730,473 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $2,184,057 | $3,955,582 |
Net realized gain (loss) | 45,805,299 | 45,050,304 |
Change in net unrealized appreciation (depreciation) | 12,741,117 | 66,098,365 |
Net increase (decrease) in net assets resulting from operations | 60,730,473 | 115,104,251 |
Distributions to shareholders from net investment income | – | (4,051,079) |
Distributions to shareholders from net realized gain | (1,809,040) | (53,152,316) |
Total distributions | (1,809,040) | (57,203,395) |
Share transactions | ||
Proceeds from sales of shares | 14,155,559 | 135,247,709 |
Reinvestment of distributions | 1,723,451 | 54,503,094 |
Cost of shares redeemed | (40,124,255) | (182,074,270) |
Net increase (decrease) in net assets resulting from share transactions | (24,245,245) | 7,676,533 |
Redemption fees | – | 8,857 |
Total increase (decrease) in net assets | 34,676,188 | 65,586,246 |
Net Assets | ||
Beginning of period | 538,331,510 | 472,745,264 |
End of period | $573,007,698 | $538,331,510 |
Other Information | ||
Undistributed net investment income end of period | $2,143,480 | $– |
Distributions in excess of net investment income end of period | $– | $(40,577) |
Shares | ||
Sold | 147,766 | 1,547,276 |
Issued in reinvestment of distributions | 18,842 | 617,683 |
Redeemed | (424,023) | (2,059,450) |
Net increase (decrease) | (257,415) | 105,509 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Computers Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $92.81 | $83.01 | $62.46 | $83.28 | $75.46 | $64.51 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .39 | .67 | .73 | .69 | .45 | .59 |
Net realized and unrealized gain (loss) | 10.49 | 19.24 | 24.69 | (18.42) | 9.61 | 15.76 |
Total from investment operations | 10.88 | 19.91 | 25.42 | (17.73) | 10.06 | 16.35 |
Distributions from net investment income | – | (.73)C | (.88) | (.80) | (.47) | (.53) |
Distributions from net realized gain | (.32) | (9.38)C | (4.00) | (2.29) | (1.77) | (4.87) |
Total distributions | (.32) | (10.11) | (4.87)D | (3.09) | (2.24) | (5.40) |
Redemption fees added to paid in capitalB | – | –E | –E | –E | –E | –E |
Net asset value, end of period | $103.37 | $92.81 | $83.01 | $62.46 | $83.28 | $75.46 |
Total ReturnF,G | 11.76% | 24.82% | 41.57% | (21.56)% | 13.36% | 27.13% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | .77%J | .79% | .81% | .80% | .80% | .82% |
Expenses net of fee waivers, if any | .77%J | .79% | .81% | .80% | .80% | .82% |
Expenses net of all reductions | .77%J | .78% | .81% | .79% | .80% | .82% |
Net investment income (loss) | .81%J | .75% | 1.01% | .91% | .57% | .86% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $573,008 | $538,332 | $472,745 | $388,554 | $808,852 | $679,323 |
Portfolio turnover rateK | 33%J | 57% | 49% | 31% | 46% | 35% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C The amounts shown reflect certain reclassifications related to book to tax differences that were made in the year shown.
D Total distributions of $4.87 per share is comprised of distributions from net investment income of $.879 and distributions from net realized gain of $3.995 per share.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
J Annualized
K 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.
IT Services Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Visa, Inc. Class A | 17.8 |
MasterCard, Inc. Class A | 12.9 |
PayPal Holdings, Inc. | 6.1 |
Cognizant Technology Solutions Corp. Class A | 5.4 |
IBM Corp. | 4.2 |
Accenture PLC Class A | 4.2 |
Worldpay, Inc. | 3.2 |
EPAM Systems, Inc. | 2.9 |
Leidos Holdings, Inc. | 2.8 |
FleetCor Technologies, Inc. | 2.7 |
62.2 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
IT Services | 88.4% | |
Software | 6.2% | |
Internet Software & Services | 3.4% | |
Professional Services | 1.0% | |
All Others* | 1.0% |
* Includes short-term investments and net other assets (liabilities).
IT Services Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.0% | |||
Shares | Value | ||
Internet Software & Services - 3.4% | |||
Internet Software & Services - 3.4% | |||
DocuSign, Inc. (a) | 6,700 | $418,348 | |
GoDaddy, Inc. (b) | 841,027 | 68,510,059 | |
Wix.com Ltd. (b) | 276,417 | 30,709,929 | |
99,638,336 | |||
IT Services - 88.4% | |||
Data Processing & Outsourced Services - 59.4% | |||
Adyen BV (c) | 1,500 | 1,051,640 | |
Alliance Data Systems Corp. | 304,548 | 72,659,062 | |
Amadeus IT Holding SA Class A | 800 | 74,214 | |
Automatic Data Processing, Inc. | 326,000 | 47,840,500 | |
Convergys Corp. | 8,200 | 202,786 | |
CoreLogic, Inc. (b) | 2,700 | 137,268 | |
Euronet Worldwide, Inc. (b) | 2,800 | 273,840 | |
EVERTEC, Inc. | 13,800 | 331,890 | |
ExlService Holdings, Inc. (b) | 3,570 | 228,766 | |
Fidelity National Information Services, Inc. | 356,000 | 38,508,520 | |
First Data Corp. Class A (b) | 2,916,630 | 75,015,724 | |
Fiserv, Inc. (b) | 373,700 | 29,922,159 | |
FleetCor Technologies, Inc. (b) | 370,800 | 79,254,792 | |
Genpact Ltd. | 2,325,380 | 71,249,643 | |
Global Payments, Inc. | 615,081 | 76,626,791 | |
Jack Henry & Associates, Inc. | 1,600 | 253,504 | |
MasterCard, Inc. Class A | 1,731,900 | 373,328,364 | |
Paychex, Inc. | 77,300 | 5,662,225 | |
PayPal Holdings, Inc. (b) | 1,908,800 | 176,239,504 | |
Syntel, Inc. (b) | 7,700 | 313,698 | |
The Western Union Co. | 5,000 | 94,600 | |
Total System Services, Inc. | 146,800 | 14,260,152 | |
Travelport Worldwide Ltd. | 316,024 | 5,868,566 | |
Ttec Holdings, Inc. | 2,000 | 52,400 | |
Visa, Inc. Class A | 3,524,248 | 517,676,787 | |
WEX, Inc. (b) | 700 | 133,154 | |
WNS Holdings Ltd. sponsored ADR (b) | 905,992 | 46,957,565 | |
Worldpay, Inc. (b) | 936,800 | 91,234,952 | |
1,725,453,066 | |||
IT Consulting & Other Services - 29.0% | |||
Accenture PLC Class A | 713,580 | 120,644,971 | |
Acxiom Corp. (b) | 6,100 | 278,709 | |
Amdocs Ltd. | 157,100 | 10,255,488 | |
Booz Allen Hamilton Holding Corp. Class A | 1,023,900 | 52,382,724 | |
Capgemini SA | 302,300 | 38,861,591 | |
Cognizant Technology Solutions Corp. Class A | 1,991,632 | 156,203,698 | |
Conduent, Inc. (b) | 370,300 | 8,583,554 | |
DXC Technology Co. | 610,800 | 55,637,772 | |
Endava PLC ADR (b) | 203,700 | 5,341,014 | |
EPAM Systems, Inc. (b) | 588,500 | 84,114,305 | |
IBM Corp. | 840,450 | 123,109,116 | |
Leidos Holdings, Inc. | 1,152,525 | 81,564,194 | |
Luxoft Holding, Inc. (b) | 893,192 | 41,622,747 | |
Netcompany Group A/S | 47,700 | 1,931,114 | |
Perspecta, Inc. | 14,868 | 345,830 | |
Science Applications International Corp. | 800 | 72,176 | |
Teradata Corp. (b) | 3,500 | 145,145 | |
Virtusa Corp. (b) | 1,044,070 | 60,827,518 | |
841,921,666 | |||
TOTAL IT SERVICES | 2,567,374,732 | ||
Professional Services - 1.0% | |||
Human Resource & Employment Services - 0.5% | |||
WageWorks, Inc. (b) | 285,100 | 15,252,850 | |
Research & Consulting Services - 0.5% | |||
ICF International, Inc. | 174,511 | 14,248,823 | |
TOTAL PROFESSIONAL SERVICES | 29,501,673 | ||
Software - 6.2% | |||
Application Software - 6.2% | |||
Adobe Systems, Inc. (b) | 139,969 | 36,883,231 | |
Black Knight, Inc. (b) | 1,027,100 | 54,847,140 | |
Ceridian HCM Holding, Inc. (a) | 119,673 | 4,607,411 | |
Intuit, Inc. | 269,400 | 59,125,218 | |
Paylocity Holding Corp. (b) | 14,400 | 1,143,936 | |
SS&C Technologies Holdings, Inc. | 369,100 | 21,902,394 | |
178,509,330 | |||
TOTAL COMMON STOCKS | |||
(Cost $1,556,687,635) | 2,875,024,071 | ||
Money Market Funds - 1.1% | |||
Fidelity Cash Central Fund, 1.97% (d) | 28,772,865 | 28,778,619 | |
Fidelity Securities Lending Cash Central Fund 1.98% (d)(e) | 3,211,436 | 3,211,757 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $31,990,376) | 31,990,376 | ||
TOTAL INVESTMENT IN SECURITIES - 100.1% | |||
(Cost $1,588,678,011) | 2,907,014,447 | ||
NET OTHER ASSETS (LIABILITIES) - (0.1)% | (2,675,986) | ||
NET ASSETS - 100% | $2,904,338,461 |
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(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 $1,051,640 or 0.0% 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 are available on the SEC's website or upon request.
(e) 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 | $203,826 |
Fidelity Securities Lending Cash Central Fund | 2,901 |
Total | $206,727 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $2,875,024,071 | $2,875,024,071 | $-- | $-- |
Money Market Funds | 31,990,376 | 31,990,376 | -- | -- |
Total Investments in Securities: | $2,907,014,447 | $2,907,014,447 | $-- | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $40,044,950 |
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 | 87.1% |
Ireland | 4.2% |
Bermuda | 2.7% |
Bailiwick of Jersey | 1.6% |
British Virgin Islands | 1.4% |
France | 1.3% |
Israel | 1.0% |
Others (Individually Less Than 1%) | 0.7% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
IT Services Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $3,114,804) — See accompanying schedule: Unaffiliated issuers (cost $1,556,687,635) | $2,875,024,071 | |
Fidelity Central Funds (cost $31,990,376) | 31,990,376 | |
Total Investment in Securities (cost $1,588,678,011) | $2,907,014,447 | |
Receivable for investments sold | 3,759,258 | |
Receivable for fund shares sold | 5,160,164 | |
Dividends receivable | 2,251,295 | |
Distributions receivable from Fidelity Central Funds | 54,492 | |
Prepaid expenses | 24,491 | |
Other receivables | 37,876 | |
Total assets | 2,918,302,023 | |
Liabilities | ||
Payable for investments purchased | $7,249,096 | |
Payable for fund shares redeemed | 1,795,508 | |
Accrued management fee | 1,245,743 | |
Other affiliated payables | 430,728 | |
Other payables and accrued expenses | 30,687 | |
Collateral on securities loaned | 3,211,800 | |
Total liabilities | 13,963,562 | |
Net Assets | $2,904,338,461 | |
Net Assets consist of: | ||
Paid in capital | $1,524,092,539 | |
Undistributed net investment income | 703,364 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 61,215,022 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 1,318,327,536 | |
Net Assets, for 43,383,411 shares outstanding | $2,904,338,461 | |
Net Asset Value, offering price and redemption price per share ($2,904,338,461 ÷ 43,383,411 shares) | $66.95 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $9,793,873 | |
Income from Fidelity Central Funds (including $2,901 from security lending) | 206,727 | |
Total income | 10,000,600 | |
Expenses | ||
Management fee | $6,771,491 | |
Transfer agent fees | 2,070,431 | |
Accounting and security lending fees | 373,632 | |
Custodian fees and expenses | 14,492 | |
Independent trustees' fees and expenses | 5,933 | |
Registration fees | 51,562 | |
Audit | 26,597 | |
Legal | 10,769 | |
Miscellaneous | 9,979 | |
Total expenses before reductions | 9,334,886 | |
Expense reductions | (41,021) | |
Total expenses after reductions | 9,293,865 | |
Net investment income (loss) | 706,735 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 63,203,882 | |
Fidelity Central Funds | (1,386) | |
Foreign currency transactions | (686) | |
Total net realized gain (loss) | 63,201,810 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 319,103,872 | |
Assets and liabilities in foreign currencies | (1,566) | |
Total change in net unrealized appreciation (depreciation) | 319,102,306 | |
Net gain (loss) | 382,304,116 | |
Net increase (decrease) in net assets resulting from operations | $383,010,851 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $706,735 | $1,434,598 |
Net realized gain (loss) | 63,201,810 | 90,645,455 |
Change in net unrealized appreciation (depreciation) | 319,102,306 | 484,745,291 |
Net increase (decrease) in net assets resulting from operations | 383,010,851 | 576,825,344 |
Distributions to shareholders from net investment income | (391,622) | (863,213) |
Distributions to shareholders from net realized gain | (35,167,426) | (62,255,457) |
Total distributions | (35,559,048) | (63,118,670) |
Share transactions | ||
Proceeds from sales of shares | 463,344,202 | 451,323,420 |
Reinvestment of distributions | 33,806,078 | 60,224,569 |
Cost of shares redeemed | (224,415,324) | (404,904,553) |
Net increase (decrease) in net assets resulting from share transactions | 272,734,956 | 106,643,436 |
Total increase (decrease) in net assets | 620,186,759 | 620,350,110 |
Net Assets | ||
Beginning of period | 2,284,151,702 | 1,663,801,592 |
End of period | $2,904,338,461 | $2,284,151,702 |
Other Information | ||
Undistributed net investment income end of period | $703,364 | $388,251 |
Shares | ||
Sold | 7,551,087 | 8,580,519 |
Issued in reinvestment of distributions | 595,807 | 1,157,339 |
Redeemed | (3,682,353) | (7,927,102) |
Net increase (decrease) | 4,464,541 | 1,810,756 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
IT Services Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $58.69 | $44.84 | $37.16 | $38.88 | $37.86 | $27.53 |
Income from Investment Operations | ||||||
Net investment income (loss)B | .02 | .04 | .13C | (.02) | (.03) | (.03) |
Net realized and unrealized gain (loss) | 9.15 | 15.50 | 7.68 | (.15) | 4.06 | 11.42 |
Total from investment operations | 9.17 | 15.54 | 7.81 | (.17) | 4.03 | 11.39 |
Distributions from net investment income | (.01) | (.02) | (.13) | – | (.01) | – |
Distributions from net realized gain | (.90) | (1.67) | – | (1.55) | (3.01) | (1.06) |
Total distributions | (.91) | (1.69) | (.13) | (1.55) | (3.01)D | (1.06) |
Redemption fees added to paid in capitalB | – | – | –E | –E | –E | –E |
Net asset value, end of period | $66.95 | $58.69 | $44.84 | $37.16 | $38.88 | $37.86 |
Total ReturnF,G | 15.90% | 35.17% | 21.05% | (.59)% | 11.16% | 41.66% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | .74%J | .77% | .79% | .81% | .81% | .84% |
Expenses net of fee waivers, if any | .74%J | .77% | .79% | .81% | .81% | .84% |
Expenses net of all reductions | .74%J | .77% | .79% | .80% | .81% | .83% |
Net investment income (loss) | .06%J | .08% | .33%C | (.06)% | (.07)% | (.09)% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $2,904,338 | $2,284,152 | $1,663,802 | $1,894,175 | $941,998 | $1,653,572 |
Portfolio turnover rateK | 20%J | 26% | 27% | 24% | 56% | 74% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.13 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .02%.
D Total distributions of $3.01 per share is comprised of distributions from net investment income of $.005 and distributions from net realized gain of $3.009 per share.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
J Annualized
K 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.
Semiconductors Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Intel Corp. | 13.5 |
Broadcom, Inc. | 11.0 |
NVIDIA Corp. | 10.8 |
Qualcomm, Inc. | 8.4 |
Applied Materials, Inc. | 6.2 |
NXP Semiconductors NV | 5.0 |
Lam Research Corp. | 5.0 |
Micron Technology, Inc. | 4.9 |
Marvell Technology Group Ltd. | 4.9 |
Analog Devices, Inc. | 4.0 |
73.7 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Semiconductors & Semiconductor Equipment | 90.6% | |
Electronic Equipment & Components | 4.8% | |
Technology Hardware, Storage & Peripherals | 1.9% | |
Communications Equipment | 1.2% | |
All Others* | 1.5% |
* Includes short-term investments and net other assets (liabilities).
Semiconductors Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 98.5% | |||
Shares | Value | ||
Communications Equipment - 1.2% | |||
Communications Equipment - 1.2% | |||
Finisar Corp. (a) | 874,300 | $17,835,720 | |
Quantenna Communications, Inc. (a) | 1,365,095 | 24,940,286 | |
42,776,006 | |||
Electronic Equipment & Components - 4.8% | |||
Electronic Manufacturing Services - 4.5% | |||
Flextronics International Ltd. (a) | 1,705,900 | 23,524,361 | |
Jabil, Inc. | 3,027,937 | 89,505,818 | |
TTM Technologies, Inc. (a) | 2,494,439 | 46,646,009 | |
159,676,188 | |||
Technology Distributors - 0.3% | |||
SYNNEX Corp. | 55,800 | 5,410,926 | |
Tech Data Corp. (a) | 93,800 | 6,823,950 | |
12,234,876 | |||
TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 171,911,064 | ||
Semiconductors & Semiconductor Equipment - 90.6% | |||
Semiconductor Equipment - 14.1% | |||
Advanced Energy Industries, Inc. (a) | 571,000 | 34,020,180 | |
Applied Materials, Inc. | 5,157,600 | 221,879,952 | |
Ichor Holdings Ltd. (a)(b) | 520,500 | 13,496,565 | |
Lam Research Corp. | 1,025,073 | 177,429,886 | |
MKS Instruments, Inc. | 434,000 | 40,318,600 | |
PDF Solutions, Inc. (a)(b) | 816,320 | 7,118,310 | |
Xperi Corp. | 526,300 | 8,262,910 | |
502,526,403 | |||
Semiconductors - 76.5% | |||
Alpha & Omega Semiconductor Ltd. (a) | 823,700 | 11,704,777 | |
Ambarella, Inc. (a)(b) | 284,900 | 10,914,519 | |
Analog Devices, Inc. | 1,453,596 | 143,687,965 | |
Broadcom, Inc. | 1,787,500 | 391,516,125 | |
Cirrus Logic, Inc. (a) | 405,100 | 17,804,145 | |
Inphi Corp. (a)(b) | 1,613,795 | 59,823,381 | |
Intel Corp. | 9,937,171 | 481,257,187 | |
MACOM Technology Solutions Holdings, Inc. (a)(b) | 2,702,800 | 62,299,540 | |
Marvell Technology Group Ltd. | 8,466,019 | 175,077,273 | |
MaxLinear, Inc. Class A (a) | 2,891,931 | 55,756,430 | |
Microchip Technology, Inc. (b) | 1,108,000 | 95,321,240 | |
Micron Technology, Inc. (a) | 3,351,140 | 176,001,873 | |
NVIDIA Corp. | 1,379,592 | 387,223,883 | |
NXP Semiconductors NV (a) | 1,907,069 | 177,624,407 | |
O2Micro International Ltd. sponsored ADR (a) | 739,800 | 1,716,336 | |
ON Semiconductor Corp. (a) | 4,536,546 | 96,809,892 | |
Qorvo, Inc. (a) | 308,524 | 24,709,687 | |
Qualcomm, Inc. | 4,386,184 | 301,374,703 | |
Renesas Electronics Corp. (a) | 2,429,425 | 18,366,637 | |
Sanken Electric Co. Ltd. | 1,108,000 | 6,352,228 | |
SK Hynix, Inc. | 108,510 | 8,074,819 | |
Synaptics, Inc. (a) | 366,300 | 17,677,638 | |
Tower Semiconductor Ltd. (a) | 627,500 | 13,679,500 | |
2,734,774,185 | |||
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | 3,237,300,588 | ||
Technology Hardware, Storage & Peripherals - 1.9% | |||
Technology Hardware, Storage & Peripherals - 1.9% | |||
Samsung Electronics Co. Ltd. | 1,168,389 | 50,753,521 | |
Super Micro Computer, Inc. (a) | 408,696 | 8,382,355 | |
Western Digital Corp. | 111,800 | 7,070,232 | |
66,206,108 | |||
TOTAL COMMON STOCKS | |||
(Cost $2,772,208,974) | 3,518,193,766 | ||
Money Market Funds - 4.9% | |||
Fidelity Cash Central Fund, 1.97% (c) | 41,394,964 | 41,403,243 | |
Fidelity Securities Lending Cash Central Fund 1.98% (c)(d) | 134,788,895 | 134,802,374 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $176,205,617) | 176,205,617 | ||
TOTAL INVESTMENT IN SECURITIES - 103.4% | |||
(Cost $2,948,414,591) | 3,694,399,383 | ||
NET OTHER ASSETS (LIABILITIES) - (3.4)% | (121,584,641) | ||
NET ASSETS - 100% | $3,572,814,742 |
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 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 | $448,833 |
Fidelity Securities Lending Cash Central Fund | 615,353 |
Total | $1,064,186 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
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 | Realized Gain (loss) | Change in Unrealized appreciation (depreciation) | Value, end of period |
MACOM Technology Solutions Holdings, Inc. | $73,590,990 | $3,055,620 | $19,590,806 | $-- | $(11,662,420) | $16,906,156 | $-- |
Quantenna Communications, Inc. | 48,428,806 | -- | 33,435,990 | -- | 1,584,861 | 8,362,609 | -- |
Total | $122,019,796 | $3,055,620 | $53,026,796 | $-- | $(10,077,559) | $25,268,765 | $-- |
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $3,518,193,766 | $3,518,193,766 | $-- | $-- |
Money Market Funds | 176,205,617 | 176,205,617 | -- | -- |
Total Investments in Securities: | $3,694,399,383 | $3,694,399,383 | $-- | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $107,256,020 |
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 | 85.7% |
Bermuda | 5.2% |
Netherlands | 5.0% |
Korea (South) | 1.6% |
Others (Individually Less Than 1%) | 2.5% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiconductors Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $133,657,800) — See accompanying schedule: Unaffiliated issuers (cost $2,772,208,974) | $3,518,193,766 | |
Fidelity Central Funds (cost $176,205,617) | 176,205,617 | |
Total Investment in Securities (cost $2,948,414,591) | $3,694,399,383 | |
Receivable for investments sold | 29,834,275 | |
Receivable for fund shares sold | 2,363,774 | |
Dividends receivable | 6,911,168 | |
Distributions receivable from Fidelity Central Funds | 111,252 | |
Prepaid expenses | 38,430 | |
Other receivables | 548,048 | |
Total assets | 3,734,206,330 | |
Liabilities | ||
Payable for investments purchased | $14,676,852 | |
Payable for fund shares redeemed | 9,529,786 | |
Accrued management fee | 1,592,743 | |
Other affiliated payables | 546,678 | |
Other payables and accrued expenses | 248,496 | |
Collateral on securities loaned | 134,797,033 | |
Total liabilities | 161,391,588 | |
Net Assets | $3,572,814,742 | |
Net Assets consist of: | ||
Paid in capital | $2,567,921,184 | |
Undistributed net investment income | 2,865,117 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 256,043,479 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 745,984,962 | |
Net Assets, for 307,869,933 shares outstanding | $3,572,814,742 | |
Net Asset Value, offering price and redemption price per share ($3,572,814,742 ÷ 307,869,933 shares) | $11.60 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $25,829,690 | |
Income from Fidelity Central Funds (including $615,353 from security lending) | 1,064,186 | |
Total income | 26,893,876 | |
Expenses | ||
Management fee | $9,838,393 | |
Transfer agent fees | 2,789,236 | |
Accounting and security lending fees | 528,676 | |
Custodian fees and expenses | 53,818 | |
Independent trustees' fees and expenses | 8,986 | |
Registration fees | 52,742 | |
Audit | 18,946 | |
Legal | 19,774 | |
Interest | 4,037 | |
Miscellaneous | 15,950 | |
Total expenses before reductions | 13,330,558 | |
Expense reductions | (590,824) | |
Total expenses after reductions | 12,739,734 | |
Net investment income (loss) | 14,154,142 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 274,104,703 | |
Fidelity Central Funds | 10,240 | |
Other affiliated issuers | (10,077,558) | |
Foreign currency transactions | (81,914) | |
Total net realized gain (loss) | 263,955,471 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (153,270,216) | |
Fidelity Central Funds | (10,727) | |
Other affiliated issuers | 25,268,764 | |
Assets and liabilities in foreign currencies | 2,814 | |
Total change in net unrealized appreciation (depreciation) | (128,009,365) | |
Net gain (loss) | 135,946,106 | |
Net increase (decrease) in net assets resulting from operations | $150,100,248 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $14,154,142 | $15,302,171 |
Net realized gain (loss) | 263,955,471 | 561,183,337 |
Change in net unrealized appreciation (depreciation) | (128,009,365) | 363,549,432 |
Net increase (decrease) in net assets resulting from operations | 150,100,248 | 940,034,940 |
Distributions to shareholders from net investment income | – | (33,424,828) |
Distributions to shareholders from net realized gain | (201,973,110) | (438,241,980) |
Total distributions | (201,973,110) | (471,666,808) |
Share transactions | ||
Proceeds from sales of shares | 374,492,595 | 1,113,948,684 |
Reinvestment of distributions | 193,238,602 | 451,720,104 |
Cost of shares redeemed | (595,608,986) | (1,393,950,572) |
Net increase (decrease) in net assets resulting from share transactions | (27,877,789) | 171,718,216 |
Redemption fees | – | 107,527 |
Total increase (decrease) in net assets | (79,750,651) | 640,193,875 |
Net Assets | ||
Beginning of period | 3,652,565,393 | 3,012,371,518 |
End of period | $3,572,814,742 | $3,652,565,393 |
Other Information | ||
Undistributed net investment income end of period | $2,865,117 | $– |
Distributions in excess of net investment income end of period | $– | $(11,289,025) |
Shares(a) | ||
Sold | 32,167,177 | 100,161,140 |
Issued in reinvestment of distributions | 17,538,508 | 41,600,750 |
Redeemed | (52,249,282) | (128,899,350) |
Net increase (decrease) | (2,543,597) | 12,862,540 |
(a) Share activity prior to May 11, 2018 has been adjusted to reflect the impact of the 10 for 1 share split that occurred on that date.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Semiconductors Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share DataB | ||||||
Net asset value, beginning of period | $11.77 | $10.12 | $6.99 | $8.95 | $6.83 | $4.98 |
Income from Investment Operations | ||||||
Net investment income (loss)C | .04 | .05 | .10 | .07 | .05 | .04 |
Net realized and unrealized gain (loss) | .45 | 3.24 | 3.40 | (.88) | 2.33 | 1.85 |
Total from investment operations | .49 | 3.29 | 3.50 | (.81) | 2.38 | 1.89 |
Distributions from net investment income | – | (.12) | (.07) | (.08) | (.05) | (.03) |
Distributions from net realized gain | (.66) | (1.52) | (.30) | (1.07) | (.21) | (.01) |
Total distributions | (.66) | (1.64) | (.37) | (1.15) | (.26) | (.04) |
Redemption fees added to paid in capitalC | – | –D | –D | –D | –D | –D |
Net asset value, end of period | $11.60 | $11.77 | $10.12 | $6.99 | $8.95 | $6.83 |
Total ReturnE,F | 4.43% | 34.20% | 51.79% | (10.44)% | 34.91% | 38.01% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .73%I | .75% | .77% | .77% | .78% | .82% |
Expenses net of fee waivers, if any | .73%I | .75% | .77% | .77% | .78% | .82% |
Expenses net of all reductions | .70%I | .74% | .75% | .74% | .77% | .79% |
Net investment income (loss) | .78%I | .47% | 1.19% | .88% | .61% | .63% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $3,572,815 | $3,652,565 | $3,012,372 | $1,338,175 | $2,395,039 | $1,253,853 |
Portfolio turnover rateJ | 154%I | 110% | 110% | 179% | 132%K | 186% |
A For the year ended February 29.
B Per share amounts have been adjusted to reflect the impact of the 10 for 1 share split that occurred on May 11, 2018.
C Calculated based on average shares outstanding during the period.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
I Annualized
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Software and IT Services Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Microsoft Corp. | 19.7 |
Facebook, Inc. Class A | 9.7 |
Alphabet, Inc. Class C | 9.2 |
Alphabet, Inc. Class A | 7.8 |
Adobe Systems, Inc. | 4.2 |
Visa, Inc. Class A | 3.6 |
Salesforce.com, Inc. | 3.1 |
Oracle Corp. | 2.3 |
PayPal Holdings, Inc. | 2.1 |
Cognizant Technology Solutions Corp. Class A | 2.1 |
63.8 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Software | 40.0% | |
Internet Software & Services | 31.8% | |
IT Services | 18.8% | |
Electronic Equipment & Components | 1.2% | |
Semiconductors & Semiconductor Equipment | 1.2% | |
All Others* | 7.0% |
* Includes short-term investments and net other assets (liabilities).
Software and IT Services Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 94.5% | |||
Shares | Value | ||
Electronic Equipment & Components - 1.2% | |||
Electronic Equipment & Instruments - 0.5% | |||
Trimble, Inc. (a) | 762,900 | $32,118,090 | |
Technology Distributors - 0.7% | |||
Dell Technologies, Inc. (a) | 532,200 | 51,181,674 | |
TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 83,299,764 | ||
Health Care Technology - 0.2% | |||
Health Care Technology - 0.2% | |||
Inovalon Holdings, Inc. Class A (a)(b) | 1,009,800 | 11,107,800 | |
Internet & Direct Marketing Retail - 0.8% | |||
Internet & Direct Marketing Retail - 0.8% | |||
The Booking Holdings, Inc. (a) | 28,000 | 54,643,400 | |
Internet Software & Services - 31.8% | |||
Internet Software & Services - 31.8% | |||
Akamai Technologies, Inc. (a) | 1,381,900 | 103,835,966 | |
Alibaba Group Holding Ltd. sponsored ADR (a) | 325,800 | 57,018,258 | |
Alphabet, Inc.: | |||
Class A (a) | 436,400 | 537,557,520 | |
Class C (a) | 519,160 | 632,435,520 | |
eBay, Inc. (a) | 899,500 | 31,131,695 | |
Facebook, Inc. Class A (a) | 3,799,500 | 667,686,135 | |
Instructure, Inc. (a) | 475,681 | 19,479,137 | |
Match Group, Inc. (a)(b) | 473,500 | 23,698,675 | |
MercadoLibre, Inc. | 156,900 | 53,724,129 | |
Mix Telematics Ltd. | 5,844,696 | 3,801,324 | |
SPS Commerce, Inc. (a) | 393,500 | 38,669,245 | |
Twitter, Inc. (a) | 336,500 | 11,838,070 | |
2,180,875,674 | |||
IT Services - 18.8% | |||
Data Processing & Outsourced Services - 12.8% | |||
Alliance Data Systems Corp. | 292,800 | 69,856,224 | |
ExlService Holdings, Inc. (a) | 510,100 | 32,687,208 | |
Fidelity National Information Services, Inc. | 351,100 | 37,978,487 | |
FleetCor Technologies, Inc. (a) | 332,500 | 71,068,550 | |
Global Payments, Inc. | 163,700 | 20,393,746 | |
MasterCard, Inc. Class A | 653,100 | 140,782,236 | |
MoneyGram International, Inc. (a) | 533,000 | 3,469,830 | |
NIC, Inc. | 2,370,900 | 39,831,120 | |
PayPal Holdings, Inc. (a) | 1,593,900 | 147,164,787 | |
The Western Union Co. | 580,226 | 10,977,876 | |
Total System Services, Inc. | 608,500 | 59,109,690 | |
Visa, Inc. Class A | 1,664,820 | 244,545,410 | |
877,865,164 | |||
IT Consulting & Other Services - 6.0% | |||
Capgemini SA | 400,800 | 51,524,068 | |
Cognizant Technology Solutions Corp. Class A | 1,823,300 | 143,001,419 | |
Gartner, Inc. (a) | 373,900 | 55,995,264 | |
IBM Corp. | 869,500 | 127,364,360 | |
Leidos Holdings, Inc. | 528,200 | 37,380,714 | |
415,265,825 | |||
TOTAL IT SERVICES | 1,293,130,989 | ||
Professional Services - 0.1% | |||
Research & Consulting Services - 0.1% | |||
Nielsen Holdings PLC | 180,700 | 4,698,200 | |
Semiconductors & Semiconductor Equipment - 1.2% | |||
Semiconductors - 1.2% | |||
Broadcom, Inc. | 61,900 | 13,557,957 | |
Qualcomm, Inc. | 956,500 | 65,721,115 | |
79,279,072 | |||
Software - 40.0% | |||
Application Software - 12.5% | |||
Adobe Systems, Inc. (a) | 1,110,400 | 292,601,504 | |
Autodesk, Inc. (a) | 480,000 | 74,088,000 | |
Citrix Systems, Inc. (a) | 465,350 | 53,059,207 | |
Constellation Software, Inc. | 52,000 | 39,651,096 | |
Deem, Inc. (a)(c)(d) | 124,895 | 62,448 | |
Micro Focus International PLC | 1,885,700 | 32,013,279 | |
Monotype Imaging Holdings, Inc. | 1,403,600 | 28,914,160 | |
Nuance Communications, Inc. (a) | 878,200 | 14,332,224 | |
Salesforce.com, Inc. (a) | 1,393,026 | 212,687,210 | |
Ultimate Software Group, Inc. (a) | 170,900 | 52,922,603 | |
Workday, Inc. Class A (a) | 392,500 | 60,656,950 | |
860,988,681 | |||
Home Entertainment Software - 3.1% | |||
Activision Blizzard, Inc. | 1,540,600 | 111,077,260 | |
Electronic Arts, Inc. (a) | 878,000 | 99,573,980 | |
210,651,240 | |||
Systems Software - 24.4% | |||
Check Point Software Technologies Ltd. (a) | 217,800 | 25,306,182 | |
Microsoft Corp. | 12,029,100 | 1,351,228,802 | |
Oracle Corp. | 3,335,800 | 162,053,164 | |
Red Hat, Inc. (a) | 416,800 | 61,573,864 | |
Symantec Corp. | 3,669,300 | 73,973,088 | |
1,674,135,100 | |||
TOTAL SOFTWARE | 2,745,775,021 | ||
Technology Hardware, Storage & Peripherals - 0.4% | |||
Technology Hardware, Storage & Peripherals - 0.4% | |||
Apple, Inc. | 113,900 | 25,927,057 | |
TOTAL COMMON STOCKS | |||
(Cost $3,439,692,815) | 6,478,736,977 | ||
Money Market Funds - 5.9% | |||
Fidelity Cash Central Fund, 1.97% (e) | 373,555,021 | 373,629,732 | |
Fidelity Securities Lending Cash Central Fund 1.98% (e)(f) | 35,038,170 | 35,041,673 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $408,658,899) | 408,671,405 | ||
TOTAL INVESTMENT IN SECURITIES - 100.4% | |||
(Cost $3,848,351,714) | 6,887,408,382 | ||
NET OTHER ASSETS (LIABILITIES) - (0.4)% | (28,795,463) | ||
NET ASSETS - 100% | $6,858,612,919 |
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 $62,448 or 0.0% of net assets.
(d) Level 3 security
(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 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 |
Deem, Inc. | 9/19/13 | $8,064,516 |
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 | $2,248,934 |
Fidelity Securities Lending Cash Central Fund | 105,656 |
Total | $2,354,590 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $6,478,736,977 | $6,442,859,926 | $35,814,603 | $62,448 |
Money Market Funds | 408,671,405 | 408,671,405 | -- | -- |
Total Investments in Securities: | $6,887,408,382 | $6,851,531,331 | $35,814,603 | $62,448 |
See accompanying notes which are an integral part of the financial statements.
Software and IT Services Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $33,689,975) — See accompanying schedule: Unaffiliated issuers (cost $3,439,692,815) | $6,478,736,977 | |
Fidelity Central Funds (cost $408,658,899) | 408,671,405 | |
Total Investment in Securities (cost $3,848,351,714) | $6,887,408,382 | |
Receivable for fund shares sold | 8,670,632 | |
Dividends receivable | 7,222,220 | |
Distributions receivable from Fidelity Central Funds | 612,569 | |
Prepaid expenses | 59,130 | |
Other receivables | 455,684 | |
Total assets | 6,904,428,617 | |
Liabilities | ||
Payable for fund shares redeemed | $6,568,238 | |
Accrued management fee | 3,005,684 | |
Other affiliated payables | 897,955 | |
Other payables and accrued expenses | 305,396 | |
Collateral on securities loaned | 35,038,425 | |
Total liabilities | 45,815,698 | |
Net Assets | $6,858,612,919 | |
Net Assets consist of: | ||
Paid in capital | $3,588,301,129 | |
Undistributed net investment income | 1,653,564 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 229,687,571 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 3,038,970,655 | |
Net Assets, for 346,181,785 shares outstanding | $6,858,612,919 | |
Net Asset Value, offering price and redemption price per share ($6,858,612,919 ÷ 346,181,785 shares) | $19.81 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $20,985,164 | |
Income from Fidelity Central Funds (including $105,656 from security lending) | 2,354,590 | |
Total income | 23,339,754 | |
Expenses | ||
Management fee | $16,261,575 | |
Transfer agent fees | 4,514,168 | |
Accounting and security lending fees | 564,768 | |
Custodian fees and expenses | 35,804 | |
Independent trustees' fees and expenses | 14,251 | |
Registration fees | 116,777 | |
Audit | 26,117 | |
Legal | 25,481 | |
Miscellaneous | 23,931 | |
Total expenses before reductions | 21,582,872 | |
Expense reductions | (152,616) | |
Total expenses after reductions | 21,430,256 | |
Net investment income (loss) | 1,909,498 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 231,265,914 | |
Fidelity Central Funds | (637) | |
Foreign currency transactions | (7,434) | |
Total net realized gain (loss) | 231,257,843 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 508,340,937 | |
Assets and liabilities in foreign currencies | (12,460) | |
Total change in net unrealized appreciation (depreciation) | 508,328,477 | |
Net gain (loss) | 739,586,320 | |
Net increase (decrease) in net assets resulting from operations | $741,495,818 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $1,909,498 | $(4,237,571) |
Net realized gain (loss) | 231,257,843 | 370,990,830 |
Change in net unrealized appreciation (depreciation) | 508,328,477 | 1,088,676,746 |
Net increase (decrease) in net assets resulting from operations | 741,495,818 | 1,455,430,005 |
Distributions to shareholders from net realized gain | (104,858,816) | (340,316,912) |
Share transactions | ||
Proceeds from sales of shares | 1,028,054,855 | 1,063,695,918 |
Reinvestment of distributions | 99,493,598 | 323,675,323 |
Cost of shares redeemed | (444,929,211) | (1,118,562,434) |
Net increase (decrease) in net assets resulting from share transactions | 682,619,242 | 268,808,807 |
Total increase (decrease) in net assets | 1,319,256,244 | 1,383,921,900 |
Net Assets | ||
Beginning of period | 5,539,356,675 | 4,155,434,775 |
End of period | $6,858,612,919 | $5,539,356,675 |
Other Information | ||
Undistributed net investment income end of period | $1,653,564 | $– |
Accumulated net investment loss end of period | $– | $(255,934) |
Shares(a) | ||
Sold | 54,859,885 | 65,901,780 |
Issued in reinvestment of distributions | 5,832,323 | 20,589,570 |
Redeemed | (24,120,623) | (71,893,660) |
Net increase (decrease) | 36,571,585 | 14,597,690 |
(a) Share activity prior to May 11, 2018 has been adjusted to reflect the impact of the 10 for 1 share split that occurred on that date.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Software and IT Services Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share DataB | ||||||
Net asset value, beginning of period | $17.89 | $14.09 | $11.11 | $11.94 | $12.44 | $8.80 |
Income from Investment Operations | ||||||
Net investment income (loss)C | .01 | (.02) | (.01) | .01 | (.02) | .01 |
Net realized and unrealized gain (loss) | 2.25 | 5.01 | 3.50 | (.20) | .73 | 4.19 |
Total from investment operations | 2.26 | 4.99 | 3.49 | (.19) | .71 | 4.20 |
Distributions from net investment income | – | – | (.01) | (.01) | – | – |
Distributions from net realized gain | (.34) | (1.19) | (.50) | (.63) | (1.21) | (.56) |
Total distributions | (.34) | (1.19) | (.51) | (.64) | (1.21) | (.56) |
Redemption fees added to paid in capitalC | – | – | –D | –D | –D | –D |
Net asset value, end of period | $19.81 | $17.89 | $14.09 | $11.11 | $11.94 | $12.44 |
Total ReturnE,F | 12.91% | 36.76% | 31.83% | (1.84)% | 6.33% | 48.18% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .72%I | .73% | .76% | .77% | .77% | .79% |
Expenses net of fee waivers, if any | .71%I | .73% | .76% | .76% | .77% | .79% |
Expenses net of all reductions | .71%I | .73% | .75% | .76% | .77% | .78% |
Net investment income (loss) | .06%I | (.09)% | (.11)% | .10% | (.15)% | .06% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $6,858,613 | $5,539,357 | $4,155,435 | $2,971,370 | $3,012,792 | $3,844,505 |
Portfolio turnover rateJ | 28%I | 31% | 44% | 36% | 53% | 87% |
A For the year ended February 29.
B Per share amounts have been adjusted to reflect the impact of the 10 for 1 share split that occurred on May 11, 2018.
C Calculated based on average shares outstanding during the period.
D Amount represents less than $.005 per share.
E Total returns for periods of less than one year are not annualized.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
I Annualized
J 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.
Technology Portfolio
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Microsoft Corp. | 13.5 |
NVIDIA Corp. | 6.3 |
Apple, Inc. | 5.0 |
Activision Blizzard, Inc. | 3.8 |
Facebook, Inc. Class A | 3.4 |
Adobe Systems, Inc. | 3.1 |
Parametric Technology Corp. | 3.1 |
PayPal Holdings, Inc. | 3.0 |
Salesforce.com, Inc. | 3.0 |
Electronic Arts, Inc. | 2.7 |
46.9 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Software | 42.1% | |
Semiconductors & Semiconductor Equipment | 20.2% | |
Internet Software & Services | 12.2% | |
IT Services | 6.0% | |
Electronic Equipment & Components | 5.1% | |
All Others* | 14.4% |
* Includes short-term investments and net other assets (liabilities).
Technology Portfolio
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 96.0% | |||
Shares | Value | ||
Air Freight & Logistics - 0.0% | |||
Air Freight & Logistics - 0.0% | |||
Best, Inc. ADR (a) | 103,776 | $772,093 | |
Automobiles - 2.2% | |||
Automobile Manufacturers - 2.2% | |||
Tesla, Inc. (a)(b) | 479,856 | 144,753,361 | |
Communications Equipment - 0.3% | |||
Communications Equipment - 0.3% | |||
CommScope Holding Co., Inc. (b) | 399,800 | 12,669,662 | |
Lumentum Holdings, Inc. (a)(b) | 108,600 | 7,373,940 | |
20,043,602 | |||
Consumer Finance - 0.0% | |||
Consumer Finance - 0.0% | |||
51 Credit Card, Inc. | 2,336,000 | 2,357,206 | |
Diversified Consumer Services - 0.0% | |||
Education Services - 0.0% | |||
China Online Education Group sponsored ADR (a)(b) | 5,848 | 53,392 | |
Diversified Financial Services - 0.1% | |||
Other Diversified Financial Services - 0.1% | |||
Jianpu Technology, Inc. ADR (a)(b) | 1,744,900 | 8,986,235 | |
Electrical Equipment - 0.1% | |||
Electrical Components & Equipment - 0.1% | |||
BizLink Holding, Inc. | 1,124,505 | 5,848,775 | |
Electronic Equipment & Components - 5.1% | |||
Electronic Components - 2.3% | |||
E Ink Holdings, Inc. | 5,176,000 | 6,194,456 | |
LG Innotek Co. Ltd. | 382,271 | 49,182,227 | |
Murata Manufacturing Co. Ltd. | 227,900 | 39,350,747 | |
Samsung Electro-Mechanics Co. Ltd. | 239,600 | 34,585,784 | |
Taiyo Yuden Co. Ltd. | 226,400 | 6,673,207 | |
Yageo Corp. | 478,000 | 10,879,932 | |
146,866,353 | |||
Electronic Equipment & Instruments - 1.8% | |||
Chroma ATE, Inc. | 4,224,644 | 23,350,850 | |
Hitachi High-Technologies Corp. | 464,300 | 18,240,208 | |
Trimble, Inc. (b) | 1,872,221 | 78,820,504 | |
120,411,562 | |||
Technology Distributors - 1.0% | |||
Dell Technologies, Inc. (b) | 658,152 | 63,294,478 | |
TOTAL ELECTRONIC EQUIPMENT & COMPONENTS | 330,572,393 | ||
Equity Real Estate Investment Trusts (REITs) - 0.4% | |||
Diversified REITs - 0.4% | |||
Ant International Co. Ltd. Class C (c)(d) | 4,366,389 | 24,495,442 | |
Internet & Direct Marketing Retail - 1.7% | |||
Internet & Direct Marketing Retail - 1.7% | |||
Amazon.com, Inc. (b) | 27,100 | 54,544,441 | |
China Internet Plus Holdings Ltd. Class B (b)(c)(d) | 759,582 | 3,615,610 | |
Netflix, Inc. (b) | 133,100 | 48,938,208 | |
107,098,259 | |||
Internet Software & Services - 11.6% | |||
Internet Software & Services - 11.6% | |||
Alibaba Group Holding Ltd. sponsored ADR (b) | 360,600 | 63,108,606 | |
Alphabet, Inc.: | |||
Class A (b) | 102,903 | 126,755,915 | |
Class C (b) | 104,168 | 126,896,416 | |
Envestnet, Inc. (b) | 334 | 21,109 | |
Facebook, Inc. Class A (b) | 1,274,974 | 224,051,181 | |
GoDaddy, Inc. (b) | 424,700 | 34,596,062 | |
MercadoLibre, Inc. | 90,300 | 30,919,623 | |
NetEase, Inc. ADR | 308,300 | 60,953,993 | |
Nutanix, Inc.: | |||
Class A (b) | 296,700 | 16,710,144 | |
Class B (b)(e) | 72,872 | 4,104,151 | |
Okta, Inc. (b) | 152,300 | 9,416,709 | |
Xunlei Ltd. sponsored ADR (a)(b) | 2,502,605 | 23,824,800 | |
Yandex NV Series A (b) | 1,016,200 | 32,650,506 | |
754,009,215 | |||
IT Services - 6.0% | |||
Data Processing & Outsourced Services - 5.5% | |||
Adyen BV (e) | 3,500 | 2,453,826 | |
FleetCor Technologies, Inc. (b) | 223,100 | 47,685,394 | |
Global Payments, Inc. | 183,600 | 22,872,888 | |
PayPal Holdings, Inc. (b) | 2,102,800 | 194,151,524 | |
Square, Inc. (b) | 1,039,800 | 92,167,872 | |
359,331,504 | |||
IT Consulting & Other Services - 0.5% | |||
DXC Technology Co. | 343,900 | 31,325,851 | |
TOTAL IT SERVICES | 390,657,355 | ||
Life Sciences Tools & Services - 0.0% | |||
Life Sciences Tools & Services - 0.0% | |||
JHL Biotech, Inc. (b)(c) | 1,015,442 | 1,629,158 | |
Machinery - 0.8% | |||
Industrial Machinery - 0.8% | |||
Minebea Mitsumi, Inc. | 2,588,819 | 48,602,974 | |
Professional Services - 0.4% | |||
Human Resource & Employment Services - 0.4% | |||
SMS Co., Ltd. | 1,318,800 | 25,020,524 | |
Semiconductors & Semiconductor Equipment - 20.2% | |||
Semiconductor Equipment - 2.3% | |||
ASM Pacific Technology Ltd. | 832,500 | 8,782,418 | |
ASML Holding NV | 63,600 | 13,041,180 | |
ASML Holding NV (Netherlands) | 84,900 | 17,359,944 | |
Ferrotec Holdings Corp. (a) | 500,000 | 6,417,064 | |
Lam Research Corp. | 204,500 | 35,396,905 | |
Screen Holdings Co. Ltd. | 229,600 | 17,378,598 | |
Sino-American Silicon Products, Inc. | 18,465,000 | 52,987,674 | |
151,363,783 | |||
Semiconductors - 17.9% | |||
Advanced Micro Devices, Inc. (b) | 3,198,900 | 80,516,313 | |
ams AG | 900,889 | 71,364,723 | |
ChipMOS TECHNOLOGIES, Inc. sponsored ADR (a)(b) | 283,218 | 3,863,094 | |
Cree, Inc. (b) | 408,800 | 19,667,368 | |
Himax Technologies, Inc. sponsored ADR (a) | 6,303,283 | 40,530,110 | |
International Quantum Epitaxy PLC (a)(b) | 4,428,951 | 5,592,624 | |
MACOM Technology Solutions Holdings, Inc. (a)(b) | 680,400 | 15,683,220 | |
Marvell Technology Group Ltd. | 6,770,554 | 140,015,057 | |
Nanya Technology Corp. | 28,977,000 | 65,861,113 | |
NVIDIA Corp. | 1,447,950 | 406,410,606 | |
NXP Semiconductors NV (b) | 673,600 | 62,739,104 | |
Qorvo, Inc. (b) | 386,061 | 30,919,625 | |
Qualcomm, Inc. | 2,389,800 | 164,203,158 | |
Semtech Corp. (b) | 337,476 | 20,164,191 | |
Silicon Laboratories, Inc. (b) | 116,100 | 11,377,800 | |
Skyworks Solutions, Inc. | 167,600 | 15,301,880 | |
Win Semiconductors Corp. | 830,000 | 4,506,457 | |
1,158,716,443 | |||
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT | 1,310,080,226 | ||
Software - 42.1% | |||
Application Software - 18.6% | |||
Adobe Systems, Inc. (b) | 773,039 | 203,703,507 | |
Atlassian Corp. PLC (b) | 4,825 | 434,298 | |
Autodesk, Inc. (b) | 1,039,400 | 160,431,390 | |
Citrix Systems, Inc. (b) | 793,048 | 90,423,333 | |
Ellie Mae, Inc. (b) | 122,900 | 12,949,973 | |
HubSpot, Inc. (b) | 86,900 | 12,487,530 | |
Intuit, Inc. | 355,000 | 77,911,850 | |
Kingsoft Corp. Ltd. | 12,878,000 | 23,397,392 | |
Parametric Technology Corp. (b) | 1,991,232 | 199,003,726 | |
RealPage, Inc. (b) | 13,500 | 842,400 | |
Salesforce.com, Inc. (b) | 1,268,492 | 193,673,359 | |
Snap, Inc. Class A (a)(b) | 990,800 | 10,799,720 | |
Splunk, Inc. (b) | 158,900 | 20,363,035 | |
SS&C Technologies Holdings, Inc. | 10,800 | 640,872 | |
Ultimate Software Group, Inc. (b) | 495,101 | 153,317,927 | |
Workday, Inc. Class A (b) | 174,000 | 26,889,960 | |
Zendesk, Inc. (b) | 303,175 | 20,885,726 | |
1,208,155,998 | |||
Home Entertainment Software - 8.5% | |||
Activision Blizzard, Inc. | 3,396,700 | 244,902,070 | |
Electronic Arts, Inc. (b) | 1,550,600 | 175,853,546 | |
Nintendo Co. Ltd. | 164,200 | 59,103,823 | |
Nintendo Co. Ltd. ADR | 553,800 | 24,893,310 | |
Take-Two Interactive Software, Inc. (b) | 339,500 | 45,343,620 | |
550,096,369 | |||
Systems Software - 15.0% | |||
Microsoft Corp. | 7,805,640 | 876,807,538 | |
Oracle Corp. | 340,400 | 16,536,632 | |
Red Hat, Inc. (b) | 460,900 | 68,088,757 | |
ServiceNow, Inc. (b) | 72,200 | 14,177,192 | |
975,610,119 | |||
TOTAL SOFTWARE | 2,733,862,486 | ||
Technology Hardware, Storage & Peripherals - 5.0% | |||
Technology Hardware, Storage & Peripherals - 5.0% | |||
Apple, Inc. | 1,435,797 | 326,830,471 | |
Textiles, Apparel & Luxury Goods - 0.0% | |||
Textiles - 0.0% | |||
Pinduoduo, Inc. ADR (a) | 32,700 | 632,745 | |
TOTAL COMMON STOCKS | |||
(Cost $4,807,372,401) | 6,236,305,912 | ||
Convertible Preferred Stocks - 1.4% | |||
Food & Staples Retailing - 0.3% | |||
Food Retail - 0.3% | |||
Roofoods Ltd. Series F (c)(d) | 41,041 | 16,438,562 | |
Internet & Direct Marketing Retail - 0.5% | |||
Internet & Direct Marketing Retail - 0.5% | |||
China Internet Plus Holdings Ltd.: | |||
Series A-11 (b)(c)(d) | 2,802,162 | 13,338,291 | |
Series B (b)(c)(d) | 3,918,573 | 18,652,407 | |
31,990,698 | |||
Internet Software & Services - 0.6% | |||
Internet Software & Services - 0.6% | |||
Lyft, Inc. Series I (c)(d) | 343,794 | 16,279,987 | |
Uber Technologies, Inc. Series D, 8.00% (b)(c)(d) | 515,696 | 25,150,494 | |
41,430,481 | |||
TOTAL CONVERTIBLE PREFERRED STOCKS | |||
(Cost $62,776,544) | 89,859,741 | ||
Money Market Funds - 5.6% | |||
Fidelity Cash Central Fund, 1.97% (f) | 148,971,285 | 149,001,079 | |
Fidelity Securities Lending Cash Central Fund 1.98% (f)(g) | 214,112,495 | 214,133,906 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $363,134,985) | 363,134,985 | ||
TOTAL INVESTMENT IN SECURITIES - 103.0% | |||
(Cost $5,233,283,930) | 6,689,300,638 | ||
NET OTHER ASSETS (LIABILITIES) - (3.0)% | (196,394,840) | ||
NET ASSETS - 100% | $6,492,905,798 |
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) Level 3 security
(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 $117,970,794 or 1.8% 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 $6,557,977 or 0.1% of net assets.
(f) 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 are available on the SEC's website or upon request.
(g) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
Security | Acquisition Date | Acquisition Cost |
Ant International Co. Ltd. Class C | 5/16/18 | $24,495,442 |
China Internet Plus Holdings Ltd. Class B | 11/16/16 | $2,140,730 |
China Internet Plus Holdings Ltd. Series A-11 | 1/26/15 | $8,857,214 |
China Internet Plus Holdings Ltd. Series B | 12/11/15 | $15,128,435 |
Lyft, Inc. Series I | 6/27/18 | $16,279,987 |
Roofoods Ltd. Series F | 9/12/17 | $14,510,890 |
Uber Technologies, Inc. Series D, 8.00% | 6/6/14 | $8,000,018 |
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 | $615,935 |
Fidelity Securities Lending Cash Central Fund | 4,959,450 |
Total | $5,575,385 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $6,236,305,912 | $6,130,101,935 | $76,463,767 | $29,740,210 |
Convertible Preferred Stocks | 89,859,741 | -- | -- | 89,859,741 |
Money Market Funds | 363,134,985 | 363,134,985 | -- | -- |
Total Investments in Securities: | $6,689,300,638 | $6,493,236,920 | $76,463,767 | $119,599,951 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $730,538,236 |
The following is a reconciliation of Investments in Securities and Derivative Instruments for which Level 3 inputs were used in determining value:
Investments in Securities: | |
Convertible Preferred Stocks | |
Beginning Balance | $70,174,412 |
Total Realized Gain (Loss) | -- |
Total Unrealized Gain (Loss) | 3,405,342 |
Cost of Purchases | 16,279,987 |
Proceeds of Sales | -- |
Amortization/Accretion | -- |
Transfers in to Level 3 | -- |
Transfers out of Level 3 | -- |
Ending Balance | $89,859,741 |
The change in unrealized gain (loss) for the period attributable to Level 3 securities held at August 31, 2018 | $3,405,342 |
Other Investments in Securities | |
Beginning Balance | $6,373,324 |
Total Realized Gain (Loss) | -- |
Total Unrealized Gain (Loss) | (1,128,556) |
Cost of Purchases | 24,495,442 |
Proceeds of Sales | -- |
Amortization/Accretion | -- |
Transfers in to Level 3 | -- |
Transfers out of Level 3 | -- |
Ending Balance | $29,740,210 |
The change in unrealized gain (loss) for the period attributable to Level 3 securities held at August 31, 2018 | $(1,128,556) |
The information used in the above reconciliations 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 reconciliations 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 | 82.0% |
Cayman Islands | 4.5% |
Japan | 3.9% |
Taiwan | 2.6% |
Bermuda | 2.2% |
Netherlands | 2.0% |
Korea (South) | 1.3% |
Austria | 1.1% |
Others (Individually Less Than 1%) | 0.4% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Technology Portfolio
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $206,912,182) — See accompanying schedule: Unaffiliated issuers (cost $4,870,148,945) | $6,326,165,653 | |
Fidelity Central Funds (cost $363,134,985) | 363,134,985 | |
Total Investment in Securities (cost $5,233,283,930) | $6,689,300,638 | |
Foreign currency held at value (cost $7,195,589) | 7,200,625 | |
Receivable for investments sold | 19,805,888 | |
Receivable for fund shares sold | 8,362,735 | |
Dividends receivable | 3,445,361 | |
Distributions receivable from Fidelity Central Funds | 569,770 | |
Prepaid expenses | 73,666 | |
Other receivables | 640,420 | |
Total assets | 6,729,399,103 | |
Liabilities | ||
Payable to custodian bank | $445,281 | |
Payable for fund shares redeemed | 17,704,928 | |
Accrued management fee | 2,868,803 | |
Other affiliated payables | 888,534 | |
Other payables and accrued expenses | 463,213 | |
Collateral on securities loaned | 214,122,546 | |
Total liabilities | 236,493,305 | |
Net Assets | $6,492,905,798 | |
Net Assets consist of: | ||
Paid in capital | $3,932,786,067 | |
Undistributed net investment income | 7,769,722 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 1,096,321,212 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 1,456,028,797 | |
Net Assets, for 342,008,510 shares outstanding | $6,492,905,798 | |
Net Asset Value, offering price and redemption price per share ($6,492,905,798 ÷ 342,008,510 shares) | $18.98 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $25,378,151 | |
Income from Fidelity Central Funds (including $4,959,450 from security lending) | 5,575,385 | |
Total income | 30,953,536 | |
Expenses | ||
Management fee | $17,707,956 | |
Transfer agent fees | 4,918,083 | |
Accounting and security lending fees | 614,184 | |
Custodian fees and expenses | 160,858 | |
Independent trustees' fees and expenses | 16,490 | |
Registration fees | 127,826 | |
Audit | 26,515 | |
Legal | 31,707 | |
Interest | 37,481 | |
Miscellaneous | 29,219 | |
Total expenses before reductions | 23,670,319 | |
Expense reductions | (733,849) | |
Total expenses after reductions | 22,936,470 | |
Net investment income (loss) | 8,017,066 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 644,553,035 | |
Redemptions in-kind with affiliated entities | 473,405,337 | |
Fidelity Central Funds | 17,176 | |
Foreign currency transactions | (241,591) | |
Total net realized gain (loss) | 1,117,733,957 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (633,301,307) | |
Assets and liabilities in foreign currencies | 9,003 | |
Total change in net unrealized appreciation (depreciation) | (633,292,304) | |
Net gain (loss) | 484,441,653 | |
Net increase (decrease) in net assets resulting from operations | $492,458,719 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $8,017,066 | $574,919 |
Net realized gain (loss) | 1,117,733,957 | 1,012,836,343 |
Change in net unrealized appreciation (depreciation) | (633,292,304) | 1,037,513,581 |
Net increase (decrease) in net assets resulting from operations | 492,458,719 | 2,050,924,843 |
Distributions to shareholders from net investment income | – | (272,638) |
Distributions to shareholders from net realized gain | (689,644,842) | (484,814,934) |
Total distributions | (689,644,842) | (485,087,572) |
Share transactions | ||
Proceeds from sales of shares | 948,851,413 | 3,144,473,009 |
Reinvestment of distributions | 663,173,144 | 464,201,228 |
Cost of shares redeemed | (2,164,232,795) | (2,051,700,173) |
Net increase (decrease) in net assets resulting from share transactions | (552,208,238) | 1,556,974,064 |
Total increase (decrease) in net assets | (749,394,361) | 3,122,811,335 |
Net Assets | ||
Beginning of period | 7,242,300,159 | 4,119,488,824 |
End of period | $6,492,905,798 | $7,242,300,159 |
Other Information | ||
Undistributed net investment income end of period | $7,769,722 | $– |
Distributions in excess of net investment income end of period | $– | $(247,344) |
Shares(a) | ||
Sold | 51,158,588 | 181,368,690 |
Issued in reinvestment of distributions | 38,624,064 | 27,683,120 |
Redeemed | (121,935,172) | (115,214,270) |
Net increase (decrease) | (32,152,520) | 93,837,540 |
(a) Share activity prior to August 10, 2018 has been adjusted to reflect the impact of the 10 for 1 share split that occurred on that date.
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Technology Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016 A | 2015 | 2014 | |
Selected Per–Share DataB | ||||||
Net asset value, beginning of period | $19.36 | $14.70 | $10.78 | $12.09 | $13.07 | $10.41 |
Income from Investment Operations | ||||||
Net investment income (loss)C | .02 | – | .01 | .01 | .02 | .01 |
Net realized and unrealized gain (loss) | 1.43 | 6.15 | 4.11 | (.82) | 1.03 | 3.63 |
Total from investment operations | 1.45 | 6.15 | 4.12 | (.81) | 1.05 | 3.64 |
Distributions from net investment income | – | – | (.01) | (.01) | (.02) | (.01)D |
Distributions from net realized gain | (1.83) | (1.49) | (.19) | (.49) | (2.01) | (.97)D |
Total distributions | (1.83) | (1.49) | (.20) | (.50) | (2.03) | (.98) |
Redemption fees added to paid in capitalC | – | – | –E | –E | –E | –E |
Net asset value, end of period | $18.98 | $19.36 | $14.70 | $10.78 | $12.09 | $13.07 |
Total ReturnF,G | 8.49% | 43.71% | 38.52% | (7.16)% | 9.97% | 36.20% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | .72%J | .75% | .77% | .78% | .78% | .80% |
Expenses net of fee waivers, if any | .72%J | .75% | .77% | .77% | .78% | .80% |
Expenses net of all reductions | .70%J | .74% | .76% | .76% | .78% | .77% |
Net investment income (loss) | .24%J | .01% | .11% | .11% | .13% | .05% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $6,492,906 | $7,242,300 | $4,119,489 | $2,777,346 | $2,824,848 | $2,411,391 |
Portfolio turnover rateK | 104%J,L | 71% | 82% | 130% | 144% | 181% |
A For the year ended February 29.
B Per share amounts have been adjusted to reflect the impact of the 10 for 1 share split that occurred on August 10, 2018.
C Calculated based on average shares outstanding during the period.
D The amounts shown reflect certain reclassifications related to book to tax differences that were made in the year shown.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
I Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
J Annualized
K Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
L 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 (Unaudited)
For the period ended August 31, 2018
1. Organization.
Communications Equipment Portfolio, Computers Portfolio, IT Services Portfolio, Semiconductors Portfolio, Software and IT Services Portfolio, and Technology Portfolio (the Funds) are non-diversified funds of Fidelity Select Portfolios (the Trust). 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 Funds invest primarily in securities of companies whose principal business activities fall within specific industries. Each Fund is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds. Certain Funds investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
Effective May 11, 2018, May 11, 2018 and August 10, 2018, Semiconductors Portfolio, Software and IT Services Portfolio and Technology Portfolio underwent a 10 for 1 share split, respectively. The effect of the share split transaction was to multiply the number of outstanding shares of Semiconductors Portfolio, Software and IT Services Portfolio and Technology Portfolio by a split factor of 10:1, with a corresponding decrease in net asset value (NAV) per share. This event does not impact the overall net assets of Semiconductors Portfolio, Software and IT Services Portfolio and Technology Portfolio. The per share data presented in the Financial Highlights and Shares activity presented in the Statement of Changes in Net Assets for Semiconductors Portfolio, Software and IT Services Portfolio and Technology Portfolio have been retroactively adjusted to reflect this share split.
2. Investments in Fidelity Central Funds.
The Funds invest 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 Funds' Schedules of Investments list each of the Fidelity Central Funds held as of period end, if any, as an investment of each Fund, but do not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, each 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 .005%.
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 are available on the SEC website or upon request.
3. Significant Accounting Policies.
Each Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Funds:
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 each Fund's investments to the Fair Value Committee (the Committee) established by each Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, each 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 each 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 each Fund's investments and ratifies the fair value determinations of the Committee.
Each 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 each 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.
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 | Valuation Technique (s) | Unobservable Input | Amount or Range / Weighted Average | Impact to Valuation from an Increase in Input(a) |
Equities | $119,599,951 | Market comparable | Enterprise value/Sales multiple (EV/S) | 2.2 | Increase |
Enterprise value/Gross Profit multiple (EV/GP) | 4.1 | Increase | |||
Discount rate | 57.0% - 73.0% / 62.1% | Decrease | |||
Discount for lack of marketability | 10.0% - 15.0% / 11.6% | Decrease |
(a) 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 August 31, 2018, 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 each applicable Fund's Schedule of Investments.
Foreign Currency. The Funds 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 Funds' 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 for certain Funds 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 Funds are 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. Certain distributions received by the Funds represent a return of capital or capital gain. The Funds determine the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. 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) for Computers Portfolio, Semiconductors Portfolio, Software and IT Services Portfolio and Technology Portfolio, certain independent Trustees have elected 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 in other receivables and other payables and accrued expenses, respectively.
Income Tax Information and Distributions to Shareholders. Each year, each 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. Each Fund files a U.S. federal tax return, in addition to state and local tax returns as required. Each 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 each 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 and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. 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, market discount, passive foreign investment companies (PFIC), deferred trustees compensation, net operating losses, and losses deferred due to wash sales and excise tax regulations.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows for each Fund:
Tax cost | Gross unrealized appreciation | Gross unrealized depreciation | Net unrealized appreciation (depreciation) | |
Communications Equipment Portfolio | $171,418,667 | $70,385,804 | $(3,237,212) | $67,148,592 |
Computers Portfolio | 316,754,581 | 250,976,202 | (5,151,030) | 245,825,172 |
IT Services Portfolio | 1,590,573,813 | 1,329,249,696 | (12,809,062) | 1,316,440,634 |
Semiconductors Portfolio | 2,963,672,925 | 822,254,593 | (91,528,135) | 730,726,458 |
Software and IT Services Portfolio | 3,849,378,507 | 3,106,129,023 | (68,099,148) | 3,038,029,875 |
Technology Portfolio | 5,238,607,712 | 1,613,328,937 | (162,636,011) | 1,450,692,926 |
Certain of the Funds elected to defer to the next fiscal year capital losses recognized during the period November 1, 2017 to February 28, 2018, and ordinary losses recognized during the period January 1, 2018 to February 28, 2018. Loss deferrals were as follows:
Capital losses | Ordinary losses | |
Communications Equipment Portfolio | $– | $(422,185) |
Computers Portfolio | (879,210) | – |
Semiconductors Portfolio | – | (11,103,403) |
Restricted Securities. The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of each applicable Fund's Schedule of Investments.
4. Purchases and Sales of Investments.
Purchases and sales of securities other than short-term securities and in-kind transactions, are noted in the table below.
Purchases ($) | Sales ($) | |
Communications Equipment Portfolio | 49,010,591 | 45,755,097 |
Computers Portfolio | 86,871,105 | 122,507,021 |
IT Services Portfolio | 471,862,299 | 248,667,522 |
Semiconductors Portfolio | 2,721,831,340 | 2,875,960,880 |
Software and IT Services Portfolio | 1,170,156,585 | 798,437,988 |
Technology Portfolio | 3,357,460,210 | 3,476,737,085 |
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity SelectCo, LLC (the investment adviser) and its affiliates provide the Funds with investment management related services for which the Funds pay a monthly management fee. The management fee is the sum of an individual fund fee rate and an annualized group fee rate. The individual fund fee rate is applied to each Fund's average net assets. 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, each Fund's annualized management fee rate expressed as a percentage of each Fund's average net assets was as follows:
Individual Rate | Group Rate | Total | |
Communications Equipment Portfolio | .30% | .24% | .54% |
Computers Portfolio | .30% | .24% | .54% |
IT Services Portfolio | .30% | .24% | .54% |
Semiconductors Portfolio | .30% | .24% | .54% |
Software and IT Services Portfolio | .30% | .24% | .54% |
Technology Portfolio | .30% | .24% | .54% |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Funds' transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees were equivalent to the following annualized rates expressed as a percentage of average net assets:
Communications Equipment Portfolio | .20% |
Computers Portfolio | .17% |
IT Services Portfolio | .16% |
Semiconductors Portfolio | .15% |
Software and IT Services Portfolio | .15% |
Technology Portfolio | .15% |
Accounting and Security Lending Fees. FSC maintains each 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. For the period, the fees were equivalent to the following annualized rates:
% of Average Net Assets | |
Communications Equipment Portfolio | .04 |
Computers Portfolio | .04 |
IT Services Portfolio | .03 |
Semiconductors Portfolio | .03 |
Software and IT Services Portfolio | .02 |
Technology Portfolio | .02 |
Brokerage Commissions. Certain Funds placed a portion of their 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 as follows:
Amount | |
Communications Equipment Portfolio | $2,329 |
Computers Portfolio | 1,519 |
IT Services Portfolio | 12,028 |
Semiconductors Portfolio | 81,071 |
Software and IT Services Portfolio | 28,041 |
Technology Portfolio | 77,450 |
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Funds, along with other registered investment companies having management contracts with Fidelity Management & Research Company (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. Each applicable 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 | |
Semiconductors Portfolio | Borrower | $12,143,000 | 1.99% | $4,037 |
Technology Portfolio | Borrower | $41,786,750 | 2.02% | $37,481 |
Interfund Trades. The Funds may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Redemptions In-Kind. During the period, 68,677,500* shares of Technology Portfolio held by an affiliated entity were redeemed in-kind for investments and cash with a value of $1,186,541,219. The net realized gain of $473,405,337 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. Technology Portfolio recognized no gain or loss for federal income tax purposes.
*Share activity prior to August 10, 2018 has been adjusted to reflect the impact of the 10 to 1 share split that occurred on that date.
6. Committed Line of Credit.
Certain Funds participate 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 participating funds have agreed to pay commitment fees on their pro-rata portion of the line of credit, which are reflected in Miscellaneous expenses on the Statement of Operations, and are as follows:
Communications Equipment Portfolio | $296 |
Computers Portfolio | 741 |
IT Services Portfolio | 3,187 |
Semiconductors Portfolio | 5,027 |
Software and IT Services Portfolio | 7,642 |
Technology Portfolio | 9,301 |
During the period, the Funds did not borrow on this line of credit.
7. Security Lending.
Certain Funds lend portfolio securities through a lending agent from time to time in order to earn additional income. On the settlement date of the loan, each applicable 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 Funds and any additional required collateral is delivered to the Funds on the next business day. The Funds or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Funds may apply collateral received from the borrower against the obligation. The Funds 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 each applicable 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 on each applicable Fund's 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 Certain Funds include an amount in addition to trade execution, which may be rebated back to the Funds to offset certain expenses. In addition, through arrangements with each applicable Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce each applicable Fund's expenses. All of the applicable expense reductions are noted in the table below.
Brokerage Service reduction | Custody expense reduction | |
Communications Equipment Portfolio | $15,518 | $– |
IT Services Portfolio | 31,462 | 223 |
Semiconductors Portfolio | 573,366 | 1,691 |
Software and IT Services Portfolio | 129,516 | 669 |
Technology Portfolio | 702,593 | 2,634 |
In addition, during the period the investment adviser reimbursed and/or waived a portion of operating expenses as follows:
Amount | |
Communications Equipment Portfolio | $847 |
Computers Portfolio | 2,412 |
IT Services Portfolio | 9,336 |
Semiconductors Portfolio | 15,767 |
Software and IT Services Portfolio | 22,431 |
Technology Portfolio | 28,622 |
9. Other.
The Funds' 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 Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote.
Shareholder Expense Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds 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 (March 1, 2018 to August 31, 2018).
Actual Expenses
The first line of the accompanying table for 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 fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 fund provides information about hypothetical account values and hypothetical expenses based on a fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's 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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 RatioB | Beginning Account Value March 1, 2018 | Ending Account Value August 31, 2018 | Expenses Paid During Period-A March 1, 2018 to August 31, 2018 | |
Communications Equipment Portfolio | .83% | |||
Actual | $1,000.00 | $1,105.00 | $4.40 | |
Hypothetical-B | $1,000.00 | $1,021.02 | $4.23 | |
Computers Portfolio | .77% | |||
Actual | $1,000.00 | $1,117.60 | $4.11 | |
Hypothetical-B | $1,000.00 | $1,021.32 | $3.92 | |
IT Services Portfolio | .74% | |||
Actual | $1,000.00 | $1,159.00 | $4.03 | |
Hypothetical-B | $1,000.00 | $1,021.48 | $3.77 | |
Semiconductors Portfolio | .73% | |||
Actual | $1,000.00 | $1,044.30 | $3.76 | |
Hypothetical-B | $1,000.00 | $1,021.53 | $3.72 | |
Software and IT Services Portfolio | .71% | |||
Actual | $1,000.00 | $1,129.10 | $3.81 | |
Hypothetical-B | $1,000.00 | $1,021.63 | $3.62 | |
Technology Portfolio | .72% | |||
Actual | $1,000.00 | $1,084.90 | $3.78 | |
Hypothetical-B | $1,000.00 | $1,021.58 | $3.67 |
A Expenses are equal to each Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/ 365 (to reflect the one-half year period).
B 5% return per year before expenses
SELTEC-SANN-1018
1.813673.113
Fidelity® Select Portfolios® Consumer Staples Portfolio Semi-Annual Report August 31, 2018 |
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Contents
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov.
You may also call 1-800-544-8544 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. © 2018 FMR LLC. All rights reserved.
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.institutional.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.
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
The Coca-Cola Co. | 9.8 |
Procter & Gamble Co. | 9.4 |
Philip Morris International, Inc. | 6.7 |
PepsiCo, Inc. | 5.7 |
Coty, Inc. Class A | 5.7 |
Spectrum Brands Holdings, Inc. | 4.6 |
Altria Group, Inc. | 3.9 |
Monster Beverage Corp. | 3.8 |
Costco Wholesale Corp. | 3.7 |
Mondelez International, Inc. | 3.6 |
56.9 |
Top Industries (% of fund's net assets)
As of August 31, 2018 | ||
Beverages | 26.5% | |
Food Products | 20.3% | |
Household Products | 16.6% | |
Tobacco | 12.5% | |
Personal Products | 10.6% | |
All Others* | 13.5% |
* Includes short-term investments and net other assets (liabilities).
Schedule of Investments August 31, 2018 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.8% | |||
Shares | Value | ||
Beverages - 26.5% | |||
Brewers - 0.9% | |||
Beijing Yanjing Brewery Co. Ltd. Class A | 10,571,440 | $9,362,104 | |
China Resources Beer Holdings Co. Ltd. | 140,000 | 595,764 | |
Molson Coors Brewing Co. Class B | 55,100 | 3,677,374 | |
13,635,242 | |||
Distillers & Vintners - 2.3% | |||
Constellation Brands, Inc. Class A (sub. vtg.) | 134,600 | 28,023,720 | |
Kweichow Moutai Co. Ltd. (A Shares) | 13,453 | 1,298,117 | |
Pernod Ricard SA | 48,400 | 7,640,521 | |
36,962,358 | |||
Soft Drinks - 23.3% | |||
Coca-Cola Bottling Co. Consolidated | 80,244 | 13,606,173 | |
Coca-Cola European Partners PLC | 593,253 | 25,296,308 | |
Coca-Cola FEMSA S.A.B. de CV sponsored ADR (a) | 71,000 | 4,289,820 | |
Coca-Cola West Co. Ltd. | 137,300 | 3,892,494 | |
Fever-Tree Drinks PLC | 15,976 | 771,111 | |
Keurig Dr. Pepper, Inc. | 637,000 | 14,523,600 | |
Monster Beverage Corp. (b) | 990,802 | 60,329,934 | |
PepsiCo, Inc. | 805,700 | 90,246,457 | |
The Coca-Cola Co. | 3,501,618 | 156,067,112 | |
369,023,009 | |||
TOTAL BEVERAGES | 419,620,609 | ||
Food & Staples Retailing - 10.2% | |||
Drug Retail - 2.1% | |||
Rite Aid Corp. (a)(b) | 1,367,770 | 1,873,845 | |
Walgreens Boots Alliance, Inc. | 458,924 | 31,463,829 | |
33,337,674 | |||
Food Distributors - 1.7% | |||
Sysco Corp. | 340,500 | 25,476,210 | |
United Natural Foods, Inc. (b) | 15,500 | 550,405 | |
26,026,615 | |||
Food Retail - 1.2% | |||
Kroger Co. | 356,970 | 11,244,555 | |
Sprouts Farmers Market LLC (b) | 309,100 | 8,181,877 | |
19,426,432 | |||
Hypermarkets & Super Centers - 5.2% | |||
BJ's Wholesale Club Holdings, Inc. | 21,600 | 637,200 | |
Costco Wholesale Corp. | 249,500 | 58,165,935 | |
Walmart, Inc. | 251,200 | 24,080,032 | |
82,883,167 | |||
TOTAL FOOD & STAPLES RETAILING | 161,673,888 | ||
Food Products - 20.3% | |||
Agricultural Products - 1.6% | |||
Bunge Ltd. | 188,135 | 12,225,012 | |
Darling International, Inc. (b) | 458,000 | 9,059,240 | |
Ingredion, Inc. | 44,300 | 4,477,401 | |
25,761,653 | |||
Packaged Foods & Meats - 18.7% | |||
ConAgra Foods, Inc. | 571,600 | 21,006,300 | |
Danone SA | 339,991 | 26,774,258 | |
JBS SA | 4,970,800 | 11,471,734 | |
Kellogg Co. | 329,900 | 23,683,521 | |
Mondelez International, Inc. | 1,341,358 | 57,302,814 | |
Nomad Foods Ltd. (b) | 222,500 | 4,639,125 | |
Post Holdings, Inc. (b) | 72,900 | 7,090,254 | |
The Hain Celestial Group, Inc. (b) | 314,199 | 8,973,523 | |
The Hershey Co. | 131,900 | 13,258,588 | |
The J.M. Smucker Co. | 245,200 | 25,348,776 | |
The Kraft Heinz Co. | 715,000 | 41,663,050 | |
The Simply Good Foods Co. (b) | 1,445,399 | 26,017,182 | |
TreeHouse Foods, Inc. (b) | 567,359 | 29,559,404 | |
296,788,529 | |||
TOTAL FOOD PRODUCTS | 322,550,182 | ||
Health Care Providers & Services - 1.0% | |||
Health Care Services - 1.0% | |||
CVS Health Corp. | 218,803 | 16,462,738 | |
Hotels, Restaurants & Leisure - 1.1% | |||
Restaurants - 1.1% | |||
Compass Group PLC | 49,911 | 1,073,168 | |
U.S. Foods Holding Corp. (b) | 512,016 | 16,686,601 | |
17,759,769 | |||
Household Durables - 0.1% | |||
Housewares & Specialties - 0.1% | |||
Newell Brands, Inc. | 79,000 | 1,715,880 | |
Household Products - 16.6% | |||
Household Products - 16.6% | |||
Colgate-Palmolive Co. | 379,780 | 25,221,190 | |
Essity AB Class B | 347,800 | 9,013,368 | |
Procter & Gamble Co. | 1,791,150 | 148,575,893 | |
Reckitt Benckiser Group PLC | 81,700 | 6,959,386 | |
Spectrum Brands Holdings, Inc. | 849,599 | 73,787,673 | |
263,557,510 | |||
Internet & Direct Marketing Retail - 0.2% | |||
Internet & Direct Marketing Retail - 0.2% | |||
The Honest Co., Inc. (b)(c)(d) | 212,235 | 2,440,703 | |
Multiline Retail - 0.7% | |||
General Merchandise Stores - 0.7% | |||
Dollar Tree, Inc. (b) | 139,700 | 11,247,247 | |
Personal Products - 10.6% | |||
Personal Products - 10.6% | |||
Avon Products, Inc. (b) | 8,584,907 | 17,169,814 | |
Coty, Inc. Class A | 7,268,197 | 89,834,915 | |
Estee Lauder Companies, Inc. Class A | 100,339 | 14,059,501 | |
Herbalife Nutrition Ltd. (b) | 58,320 | 3,300,329 | |
Ontex Group NV | 189,100 | 5,425,986 | |
Unilever NV (Certificaten Van Aandelen) (Bearer) (b) | 665,630 | 38,274,645 | |
168,065,190 | |||
Tobacco - 12.5% | |||
Tobacco - 12.5% | |||
Altria Group, Inc. | 1,044,645 | 61,132,625 | |
British American Tobacco PLC sponsored ADR | 612,526 | 29,634,008 | |
Philip Morris International, Inc. | 1,368,591 | 106,599,553 | |
197,366,186 | |||
TOTAL COMMON STOCKS | |||
(Cost $1,456,097,634) | 1,582,459,902 | ||
Money Market Funds - 0.5% | |||
Fidelity Cash Central Fund, 1.97% (e) | 7,826,643 | 7,828,209 | |
Fidelity Securities Lending Cash Central Fund 1.98% (e)(f) | 1,015,871 | 1,015,972 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $8,844,181) | 8,844,181 | ||
TOTAL INVESTMENT IN SECURITIES - 100.3% | |||
(Cost $1,464,941,815) | 1,591,304,083 | ||
NET OTHER ASSETS (LIABILITIES) - (0.3)% | (5,088,026) | ||
NET ASSETS - 100% | $1,586,216,057 |
Legend
(a) Security or a portion of the security is on loan at period end.
(b) Non-income producing
(c) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $2,440,703 or 0.2% of net assets.
(d) Level 3 security
(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 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 |
The Honest Co., Inc. | 8/28/18 | $2,381,277 |
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 | $17,956 |
Fidelity Securities Lending Cash Central Fund | 152,236 |
Total | $170,192 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations if applicable.
Investment Valuation
The following is a summary of the inputs used, as of August 31, 2018, 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 | $1,582,459,902 | $1,508,010,910 | $72,008,289 | $2,440,703 |
Money Market Funds | 8,844,181 | 8,844,181 | -- | -- |
Total Investments in Securities: | $1,591,304,083 | $1,516,855,091 | $72,008,289 | $2,440,703 |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. 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 | $65,011,602 |
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 | 87.2% |
United Kingdom | 4.1% |
Netherlands | 2.4% |
France | 2.2% |
Others (Individually Less Than 1%) | 4.1% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $960,832) — See accompanying schedule: Unaffiliated issuers (cost $1,456,097,634) | $1,582,459,902 | |
Fidelity Central Funds (cost $8,844,181) | 8,844,181 | |
Total Investment in Securities (cost $1,464,941,815) | $1,591,304,083 | |
Receivable for fund shares sold | 1,696,260 | |
Dividends receivable | 4,660,764 | |
Distributions receivable from Fidelity Central Funds | 11,970 | |
Prepaid expenses | 21,531 | |
Other receivables | 250,070 | |
Total assets | 1,597,944,678 | |
Liabilities | ||
Payable for investments purchased | $6,385,354 | |
Payable for fund shares redeemed | 2,800,924 | |
Accrued management fee | 727,931 | |
Distribution and service plan fees payable | 232,777 | |
Other affiliated payables | 300,355 | |
Other payables and accrued expenses | 246,280 | |
Collateral on securities loaned | 1,035,000 | |
Total liabilities | 11,728,621 | |
Net Assets | $1,586,216,057 | |
Net Assets consist of: | ||
Paid in capital | $1,330,664,538 | |
Undistributed net investment income | 31,431,872 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 97,738,748 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 126,380,899 | |
Net Assets | $1,586,216,057 | |
Calculation of Maximum Offering Price | ||
Class A: | ||
Net Asset Value and redemption price per share ($253,996,526 ÷ 3,152,188 shares) | $80.58 | |
Maximum offering price per share (100/94.25 of $80.58) | $85.50 | |
Class M: | ||
Net Asset Value and redemption price per share ($66,344,241 ÷ 831,928 shares) | $79.75 | |
Maximum offering price per share (100/96.50 of $79.75) | $82.64 | |
Class C: | ||
Net Asset Value and offering price per share ($176,139,861 ÷ 2,252,081 shares)(a) | $78.21 | |
Consumer Staples: | ||
Net Asset Value, offering price and redemption price per share ($890,171,345 ÷ 10,933,217 shares) | $81.42 | |
Class I: | ||
Net Asset Value, offering price and redemption price per share ($199,564,084 ÷ 2,456,210 shares) | $81.25 |
(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
Six months ended August 31, 2018 (Unaudited) | ||
Investment Income | ||
Dividends | $25,572,364 | |
Special dividends | 14,074,448 | |
Income from Fidelity Central Funds | 170,192 | |
Total income | 39,817,004 | |
Expenses | ||
Management fee | $4,750,595 | |
Transfer agent fees | 1,654,750 | |
Distribution and service plan fees | 1,493,145 | |
Accounting and security lending fees | 274,070 | |
Custodian fees and expenses | 28,880 | |
Independent trustees' fees and expenses | 4,647 | |
Registration fees | 58,055 | |
Audit | 30,033 | |
Legal | 12,380 | |
Interest | 9,852 | |
Miscellaneous | 35,577 | |
Total expenses before reductions | 8,351,984 | |
Expense reductions | (208,078) | |
Total expenses after reductions | 8,143,906 | |
Net investment income (loss) | 31,673,098 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers (net of foreign taxes of $427) | 29,717,187 | |
Redemptions in-kind with affiliated entities | 70,956,466 | |
Fidelity Central Funds | (658) | |
Foreign currency transactions | (16,821) | |
Total net realized gain (loss) | 100,656,174 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (165,182,010) | |
Assets and liabilities in foreign currencies | (35,376) | |
Total change in net unrealized appreciation (depreciation) | (165,217,386) | |
Net gain (loss) | (64,561,212) | |
Net increase (decrease) in net assets resulting from operations | $(32,888,114) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Six months ended August 31, 2018 (Unaudited) | Year ended February 28, 2018 | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $31,673,098 | $45,723,582 |
Net realized gain (loss) | 100,656,174 | 299,980,969 |
Change in net unrealized appreciation (depreciation) | (165,217,386) | (369,315,122) |
Net increase (decrease) in net assets resulting from operations | (32,888,114) | (23,610,571) |
Distributions to shareholders from net investment income | (5,502,409) | (43,177,465) |
Distributions to shareholders from net realized gain | (124,430,625) | (165,062,987) |
Total distributions | (129,933,034) | (208,240,452) |
Share transactions - net increase (decrease) | (443,075,042) | (437,546,127) |
Total increase (decrease) in net assets | (605,896,190) | (669,397,150) |
Net Assets | ||
Beginning of period | 2,192,112,247 | 2,861,509,397 |
End of period | $1,586,216,057 | $2,192,112,247 |
Other Information | ||
Undistributed net investment income end of period | $31,431,872 | $5,261,183 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Consumer Staples Portfolio Class A
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $87.07 | $96.18 | $89.78 | $101.33 | $87.93 | $85.67 |
Income from Investment Operations | ||||||
Net investment income (loss)B | 1.41C | 1.54 | 1.28 | 1.34 | 1.37 | 1.43 |
Net realized and unrealized gain (loss) | (2.56) | (2.80) | 9.12 | (4.86) | 17.28 | 7.51 |
Total from investment operations | (1.15) | (1.26) | 10.40 | (3.52) | 18.65 | 8.94 |
Distributions from net investment income | (.21) | (1.55) | (1.37) | (1.31) | (1.28) | (1.44) |
Distributions from net realized gain | (5.13) | (6.30) | (2.64) | (6.72) | (3.98) | (5.24) |
Total distributions | (5.34) | (7.85) | (4.00)D | (8.03) | (5.25)E | (6.68) |
Redemption fees added to paid in capitalB | – | – | –F | –F | –F | –F |
Net asset value, end of period | $80.58 | $87.07 | $96.18 | $89.78 | $101.33 | $87.93 |
Total ReturnG,H,I | (1.34)% | (1.68)% | 11.91% | (3.51)% | 21.95% | 10.53% |
Ratios to Average Net AssetsJ,K | ||||||
Expenses before reductions | 1.06%L | 1.05% | 1.04% | 1.04% | 1.05% | 1.06% |
Expenses net of fee waivers, if any | 1.06%L | 1.05% | 1.04% | 1.04% | 1.05% | 1.06% |
Expenses net of all reductions | 1.03%L | 1.04% | 1.03% | 1.04% | 1.05% | 1.06% |
Net investment income (loss) | 2.70%C,L | 1.60% | 1.37% | 1.45% | 1.45% | 1.61% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $253,997 | $317,366 | $522,014 | $470,249 | $414,151 | $329,459 |
Portfolio turnover rateM | 46%L,N | 76% | 56%N | 63% | 42%N | 31% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.64 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 1.90%.
D Total distributions of $4.00 per share is comprised of distributions from net investment income of $1.365 and distributions from net realized gain of $2.636 per share.
E Total distributions of $5.25 per share is comprised of distributions from net investment income of $1.275 and distributions from net realized gain of $3.976 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I Total returns do not include the effect of the sales charges.
J Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
K Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
L Annualized
M Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
N Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Consumer Staples Portfolio Class M
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $86.30 | $95.42 | $89.10 | $100.61 | $87.37 | $85.18 |
Income from Investment Operations | ||||||
Net investment income (loss)B | 1.28C | 1.27 | 1.01 | 1.08 | 1.10 | 1.18 |
Net realized and unrealized gain (loss) | (2.53) | (2.78) | 9.07 | (4.83) | 17.15 | 7.46 |
Total from investment operations | (1.25) | (1.51) | 10.08 | (3.75) | 18.25 | 8.64 |
Distributions from net investment income | (.17) | (1.31) | (1.12) | (1.04) | (1.04) | (1.21) |
Distributions from net realized gain | (5.13) | (6.30) | (2.64) | (6.72) | (3.98) | (5.24) |
Total distributions | (5.30) | (7.61) | (3.76) | (7.76) | (5.01)D | (6.45) |
Redemption fees added to paid in capitalB | – | – | –E | –E | –E | –E |
Net asset value, end of period | $79.75 | $86.30 | $95.42 | $89.10 | $100.61 | $87.37 |
Total ReturnF,G,H | (1.48)% | (1.94)% | 11.61% | (3.78)% | 21.60% | 10.23% |
Ratios to Average Net AssetsI,J | ||||||
Expenses before reductions | 1.33%K | 1.32% | 1.32% | 1.32% | 1.32% | 1.33% |
Expenses net of fee waivers, if any | 1.33%K | 1.32% | 1.32% | 1.32% | 1.32% | 1.33% |
Expenses net of all reductions | 1.31%K | 1.31% | 1.31% | 1.31% | 1.32% | 1.33% |
Net investment income (loss) | 2.43%C,K | 1.33% | 1.09% | 1.17% | 1.18% | 1.34% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $66,344 | $76,572 | $89,925 | $76,586 | $81,489 | $61,421 |
Portfolio turnover rateL | 46%K,M | 76% | 56%M | 63% | 42%M | 31% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.64 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 1.62%.
D Total distributions of $5.01 per share is comprised of distributions from net investment income of $1.036 and distributions from net realized gain of $3.976 per share.
E Amount represents less than $.005 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H Total returns do not include the effect of the sales charges.
I Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Annualized
L Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
M Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Consumer Staples Portfolio Class C
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $84.85 | $93.89 | $87.77 | $99.27 | $86.32 | $84.28 |
Income from Investment Operations | ||||||
Net investment income (loss)B | 1.08C | .81 | .56 | .63 | .65 | .75 |
Net realized and unrealized gain (loss) | (2.50) | (2.73) | 8.92 | (4.75) | 16.93 | 7.36 |
Total from investment operations | (1.42) | (1.92) | 9.48 | (4.12) | 17.58 | 8.11 |
Distributions from net investment income | (.09) | (.82) | (.73) | (.65) | (.65) | (.84) |
Distributions from net realized gain | (5.13) | (6.30) | (2.64) | (6.72) | (3.98) | (5.24) |
Total distributions | (5.22) | (7.12) | (3.36)D | (7.38)E | (4.63) | (6.07)F |
Redemption fees added to paid in capitalB | – | – | –G | –G | –G | –G |
Net asset value, end of period | $78.21 | $84.85 | $93.89 | $87.77 | $99.27 | $86.32 |
Total ReturnH,I,J | (1.71)% | (2.41)% | 11.07% | (4.23)% | 21.03% | 9.70% |
Ratios to Average Net AssetsK,L | ||||||
Expenses before reductions | 1.80%M | 1.79% | 1.80% | 1.80% | 1.80% | 1.82% |
Expenses net of fee waivers, if any | 1.80%M | 1.79% | 1.79% | 1.80% | 1.80% | 1.82% |
Expenses net of all reductions | 1.78%M | 1.78% | 1.79% | 1.79% | 1.80% | 1.81% |
Net investment income (loss) | 1.95%C,M | .86% | .61% | .69% | .70% | .85% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $176,140 | $228,874 | $308,350 | $250,576 | $228,151 | $164,669 |
Portfolio turnover rateN | 46%M,O | 76% | 56%O | 63% | 42%O | 31% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.63 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 1.15%.
D Total distributions of $3.36 per share is comprised of distributions from net investment income of $.726 and distributions from net realized gain of $2.636 per share.
E Total distributions of $7.38 per share is comprised of distributions from net investment income of $.651 and distributions from net realized gain of $6.724 per share.
F Total distributions of $6.07 per share is comprised of distributions from net investment income of $.837 and distributions from net realized gain of $5.237 per share.
G Amount represents less than $.005 per share.
H Total returns for periods of less than one year are not annualized.
I Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
J Total returns do not include the effect of the contingent deferred sales charge.
K Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
L Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
M Annualized
N Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
O Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Consumer Staples Portfolio
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $87.85 | $97.01 | $90.48 | $102.03 | $88.51 | $86.17 |
Income from Investment Operations | ||||||
Net investment income (loss)B | 1.55C | 1.82 | 1.56 | 1.61 | 1.64 | 1.69 |
Net realized and unrealized gain (loss) | (2.60) | (2.82) | 9.20 | (4.89) | 17.40 | 7.55 |
Total from investment operations | (1.05) | (1.00) | 10.76 | (3.28) | 19.04 | 9.24 |
Distributions from net investment income | (.26) | (1.86) | (1.60) | (1.55) | (1.54) | (1.66) |
Distributions from net realized gain | (5.13) | (6.30) | (2.64) | (6.72) | (3.98) | (5.24) |
Total distributions | (5.38)D | (8.16) | (4.23)E | (8.27) | (5.52) | (6.90) |
Redemption fees added to paid in capitalB | – | – | –F | –F | –F | –F |
Net asset value, end of period | $81.42 | $87.85 | $97.01 | $90.48 | $102.03 | $88.51 |
Total ReturnG,H | (1.20)% | (1.40)% | 12.24% | (3.25)% | 22.27% | 10.82% |
Ratios to Average Net AssetsI,J | ||||||
Expenses before reductions | .77%K | .76% | .76% | .77% | .77% | .79% |
Expenses net of fee waivers, if any | .77%K | .76% | .76% | .77% | .77% | .79% |
Expenses net of all reductions | .74%K | .76% | .76% | .76% | .77% | .79% |
Net investment income (loss) | 2.99%C,K | 1.89% | 1.64% | 1.72% | 1.73% | 1.88% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $890,171 | $1,328,696 | $1,665,604 | $2,039,983 | $2,173,970 | $1,328,594 |
Portfolio turnover rateL | 46%K,M | 76% | 56%M | 63% | 42%M | 31% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.65 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 2.19%.
D Total distributions of $5.38 per share is comprised of distributions from net investment income of $.255 and distributions from net realized gain of $5.129 per share.
E Total distributions of $4.23 per share is comprised of distributions from net investment income of $1.596 and distributions from net realized gain of $2.636 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Annualized
L Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
M Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Consumer Staples Portfolio Class I
Six months ended (Unaudited) August 31, | Years endedFebruary 28, | |||||
2018 | 2018 | 2017 | 2016A | 2015 | 2014 | |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $87.68 | $96.82 | $90.34 | $101.91 | $88.33 | $85.92 |
Income from Investment Operations | ||||||
Net investment income (loss)B | 1.53C | 1.81 | 1.54 | 1.60 | 1.59 | 1.66 |
Net realized and unrealized gain (loss) | (2.58) | (2.82) | 9.19 | (4.89) | 17.40 | 7.53 |
Total from investment operations | (1.05) | (1.01) | 10.73 | (3.29) | 18.99 | 9.19 |
Distributions from net investment income | (.25) | (1.83) | (1.61) | (1.55) | (1.44) | (1.54) |
Distributions from net realized gain | (5.13) | (6.30) | (2.64) | (6.72) | (3.98) | (5.24) |
Total distributions | (5.38) | (8.13) | (4.25) | (8.28)D | (5.41)E | (6.78) |
Redemption fees added to paid in capitalB | – | – | –F | –F | –F | –F |
Net asset value, end of period | $81.25 | $87.68 | $96.82 | $90.34 | $101.91 | $88.33 |
Total ReturnG,H | (1.21)% | (1.41)% | 12.22% | (3.26)% | 22.26% | 10.80% |
Ratios to Average Net AssetsI,J | ||||||
Expenses before reductions | .78%K | .78% | .78% | .78% | .80% | .82% |
Expenses net of fee waivers, if any | .78%K | .78% | .78% | .77% | .80% | .82% |
Expenses net of all reductions | .75%K | .77% | .77% | .77% | .80% | .82% |
Net investment income (loss) | 2.98%C,K | 1.88% | 1.63% | 1.71% | 1.70% | 1.85% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $199,564 | $240,605 | $275,616 | $216,836 | $198,538 | $154,271 |
Portfolio turnover rateL | 46%K,M | 76% | 56%M | 63% | 42%M | 31% |
A For the year ended February 29.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.65 per share. This dividend is not annualized in the ratio of net investment income (loss) to average net assets. Excluding this dividend the ratio would have been 2.18%.
D Total distributions of $8.28 per share is comprised of distributions from net investment income of $1.553 and distributions from net realized gain of $6.724 per share.
E Total distributions of $5.41 per share is comprised of distributions from net investment income of $1.436 and distributions from net realized gain of $3.976 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
J Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
K Annualized
L Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
M 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 (Unaudited)
For the period ended August 31, 2018
1. Organization.
Consumer Staples Portfolio (the Fund) is a non-diversified fund of Fidelity Select Portfolios (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 invests primarily in securities of companies whose principal business activities fall within specific industries. The Fund offers Class A, Class M, Class C, Consumer Staples and Class I shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class.
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 .005%.
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 are available on the SEC website or upon request.
3. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Fair Value Committee (the Committee) established by the Fund's investment adviser. 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 August 31, 2018 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. 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. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. 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. 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), certain independent Trustees have elected 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 of $202,926 are included in the accompanying Statement of Assets and Liabilities in other receivables and other payables and accrued expenses, respectively.
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. 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.
Distributions are declared and recorded on the ex-dividend date. Income 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, deferred trustees compensation and losses deferred due to wash sales.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows:
Gross unrealized appreciation | $253,676,583 |
Gross unrealized depreciation | (143,035,809) |
Net unrealized appreciation (depreciation) | $110,640,774 |
Tax cost | $1,480,663,309 |
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 $411,423,638 and $637,699,848, 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 .24% 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 annualized management fee rate was .54% 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% | $342,253 | $– |
Class M | .25% | .25% | 172,624 | – |
Class C | .75% | .25% | 978,268 | – |
$1,493,145 | $– |
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 M 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 M and Class C redemptions. The deferred sales charges are 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class M shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained by FDC | |
Class A | $51,470 |
Class M | 5,544 |
Class C(a) | 9,558 |
$66,572 |
(a) When 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(a) | |
Class A | $293,893 | .21 |
Class M | 81,784 | .24 |
Class C | 202,615 | .21 |
Consumer Staples | 880,207 | .18 |
Class I | 196,251 | .18 |
$1,654,750 |
(a) Annualized
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. For the period, the fees were equivalent to an annualized rate of .03%.
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 $14,144 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 Fidelity Management & Research Company (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 | $6,460,346 | 2.03% | $9,480 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Redemptions In-Kind. During the period, 3,404,232 shares of the Fund held by an affiliated entity were redeemed in-kind for investments and cash with a value of $278,330,010. The net realized gain of $70,956,466 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 the Notes to Financial Statements. 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 $2,849 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. The Fund or borrower may terminate the loan at any time, and 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 $152,236.
8. Bank Borrowings.
The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity requirements. The Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average loan balance during the period for which loans were outstanding amounted to $1,854,000. The weighted average interest rate was 2.41%. The interest expense amounted to $372 under the bank borrowing program. At period end, there were no bank borrowings outstanding.
9. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $197,013 for the period. Through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses.
In addition, during the period the investment adviser reimbursed and/or waived a portion of fund-level operating expenses in the amount of $11,065.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
Six months ended August 31, 2018 | Year ended February 28, 2018 | |
From net investment income | ||
Class A | $721,963 | $5,661,958 |
Class M | 142,243 | 1,157,943 |
Class C | 226,481 | 2,342,161 |
Consumer Staples | 3,754,714 | 28,193,421 |
Class I | 657,008 | 5,821,982 |
Total | $5,502,409 | $43,177,465 |
From net realized gain | ||
Class A | $17,887,146 | $23,291,142 |
Class M | 4,388,806 | 5,598,245 |
Class C | 13,208,104 | 18,434,923 |
Consumer Staples | 75,521,271 | 96,942,698 |
Class I | 13,425,298 | 20,795,979 |
Total | $124,430,625 | $165,062,987 |
11. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
Shares | Shares | Dollars | Dollars | |
Six months ended August 31, 2018 | Year ended February 28, 2018 | Six months ended August 31, 2018 | Year ended February 28, 2018 | |
Class A | ||||
Shares sold | 244,595 | 878,413 | $19,582,905 | $84,134,789 |
Reinvestment of distributions | 225,478 | 304,910 | 18,225,432 | 28,169,668 |
Shares redeemed | (962,841) | (2,965,599) | (76,714,660) | (284,396,390) |
Net increase (decrease) | (492,768) | (1,782,276) | $(38,906,323) | $(172,091,933) |
Class M | ||||
Shares sold | 41,857 | 105,204 | $3,320,749 | $10,021,877 |
Reinvestment of distributions | 56,261 | 73,231 | 4,505,507 | 6,708,282 |
Shares redeemed | (153,471) | (233,572) | (12,265,431) | (22,022,226) |
Net increase (decrease) | (55,353) | (55,137) | $(4,439,175) | $(5,292,067) |
Class C | ||||
Shares sold | 110,877 | 324,616 | $8,544,252 | $30,510,004 |
Reinvestment of distributions | 162,819 | 218,231 | 12,810,467 | 19,684,994 |
Shares redeemed | (718,996) | (1,129,562) | (55,736,967) | (104,331,925) |
Net increase (decrease) | (445,300) | (586,715) | $(34,382,248) | $(54,136,927) |
Consumer Staples | ||||
Shares sold | 604,025 | 1,946,234 | $48,555,556 | $188,435,249 |
Reinvestment of distributions | 915,645 | 1,262,390 | 74,698,279 | 117,653,205 |
Shares redeemed | (5,711,197)(a) | (5,253,889) | (464,703,654)(a) | (504,239,846) |
Net increase (decrease) | (4,191,527) | (2,045,265) | $(341,449,819) | $(198,151,392) |
Class I | ||||
Shares sold | 483,882 | 2,545,385 | $38,338,970 | $246,802,163 |
Reinvestment of distributions | 158,651 | 261,308 | 12,915,778 | 24,362,082 |
Shares redeemed | (930,548) | (2,909,251) | (75,152,225) | (279,038,053) |
Net increase (decrease) | (288,015) | (102,558) | $(23,897,477) | $(7,873,808) |
(a) Amount includes in-kind redemptions (see the Redemptions In-Kind note for additional details).
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.
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 (March 1, 2018 to August 31, 2018).
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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 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 March 1, 2018 | Ending Account Value August 31, 2018 | Expenses Paid During Period-B March 1, 2018 to August 31, 2018 | |
Class A | 1.06% | |||
Actual | $1,000.00 | $986.60 | $5.31 | |
Hypothetical-C | $1,000.00 | $1,019.86 | $5.40 | |
Class M | 1.33% | |||
Actual | $1,000.00 | $985.20 | $6.66 | |
Hypothetical-C | $1,000.00 | $1,018.50 | $6.77 | |
Class C | 1.80% | |||
Actual | $1,000.00 | $982.90 | $9.00 | |
Hypothetical-C | $1,000.00 | $1,016.13 | $9.15 | |
Consumer Staples | .77% | |||
Actual | $1,000.00 | $988.00 | $3.86 | |
Hypothetical-C | $1,000.00 | $1,021.32 | $3.92 | |
Class I | .78% | |||
Actual | $1,000.00 | $987.90 | $3.91 | |
Hypothetical-C | $1,000.00 | $1,021.27 | $3.97 |
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 184/365 (to reflect the one-half year period).
C 5% return per year before expenses
SELCS-SANN-1018
1.846045.111
Item 2.
Code of Ethics
Not applicable.
Item 3.
Audit Committee Financial Expert
Not applicable.
Item 4.
Principal Accountant Fees and Services
Not applicable.
Item 5.
Audit Committee of Listed Registrants
Not applicable.
Item 6.
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 Fidelity Select Portfolios’s Board of Trustees.
Item 11.
Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Fidelity Select Portfolios’s (the “Trust”) disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the Trust’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the 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.
Disclosure of Securities Lending Activities for Closed-End Management
Investment Companies
Not applicable.
Item 13.
Exhibits
(a) | (1) | Not applicable. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(a) | (3) | Not applicable. |
(b) | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Select Portfolios
By: | /s/Stacie M. Smith |
Stacie M. Smith | |
President and Treasurer | |
Date: | October 24, 2018 |
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/Stacie M. Smith |
Stacie M. Smith | |
President and Treasurer | |
Date: | October 24, 2018 |
By: | /s/John J. Burke III |
John J. Burke III | |
Chief Financial Officer | |
Date: | October 24, 2018 |